South Wairarapa Council Document Gets Adverse Audit Opinion

Tuesday, 4 March 2025, 8:57 pm
Article: Emily Ireland - Local Democracy Reporter

Audit NZ has issued South Wairarapa District Council’s Long-Term Plan consultation document with an “adverse opinion”, the worst result in the auditing framework.

A council press release, issued on Tuesday afternoon, said the situation was temporary and had been created by “the convergence of legislative changes”.

It said information on three waters infrastructure had been included in the council’s document to “ensure transparency about the investment required for South Wairarapa over the next nine years”.

“As a result of this approach, the consultation document has been issued with an Adverse Audit Opinion,” the press release said.

“This reflects a difference in perspective between the auditors and council regarding how financial information, particularly future debt levels, is presented.

“However, council firmly believes that the consultation document and supporting information are appropriate, as the auditor’s concerns do not affect the first two years of the plan."

A new 2027-37 Long-Term Plan would cover the years thereafter.

To avoid an Adverse Opinion, South Wairarapa District Council was advised to consider one of the following adjustments: removing water infrastructure investment projections from 2026/27 onwards; reducing the capital investment plan; or increasing projected rates over the later years of the plan to demonstrate how council would fund the necessary investments.

“After careful consideration, council determined that implementing any of these changes would not provide an accurate or transparent representation of the district’s financial position,” the press release said.

“Instead, council prioritised ensuring that the consultation document reflects a true and complete picture for the community.”

At a public-excluded meeting last week, elected members also expressed the view that making the suggested changes would not allow the community to fully understand the financial challenges that the Local Water Done Well (LWDW) legislation sought to address.

Under the current timeline, the council expected to finish community consultation and make a decision on the LWDW framework by the end of May 2025.

The final Long-Term Plan, set for adoption in late June, would incorporate the transition of water services to a new entity, either a South Wairarapa District Council-owned CCO or a joint Wairarapa-Tararua CCO.

“Given this transition, the audit concerns regarding a potential future breach of the debt ceiling relate to circumstances that are unlikely to arise,” the council press release said.

An adverse opinion on the consultation document does not prevent council from proceeding with public consultation, nor does it impact council’s ability to borrow the funds required to continue delivering services.

The council planned to adopt the consultation document on Wednesday and launch consultation on both the Long-Term Plan and Local Water Done Well on March 7.

Both of these consultation documents, along with supporting information would be available on haveyoursay.swdc.govt.nz.

– LDR is local body journalism co-funded by RNZ and NZ On Air.

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