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Office of the Ombudsman

I have received a reply from the Ombudsman regarding my complaint dated 15 May 2014 about the process followed in regard to the awarding of Business Development grant of $20,000 to Guru Digital Ltd in November and December 2013.

Simply enter Ombudsman into the Search facility above to obtain the full history of the complaint, and the manner in which the Ombudsman has dealt with the matter to date.

The following constitutes the response by TCDC (Mr Day, it would appear!) to my complaint now conveyed by Letitia Parry – Manager – Office of the Ombudsman, asking for my comment:

The Council has said":

“Mr Barclay is correct on the original closing date there were four applications received. However, in the interests of attracting a larger pool of potential applicans and in response to feedback received from them a decision was made to extend the closing date.

Mr Barclay is correct Guru is an existing business, and it has provided contract services to Council assisting in the development of our website and intranet. However Mr Barclay is incorrect when he asserts that Guru failed to meet the second inasmuch as it was competing for Council work with Tarck24 Limited. Twentfour Group Limited has had extensive commercial ties with Council over a number of years. It has been heavily involved in the development of software known as Track24 which is used by Council for capital expenditure recording. It has also developed and marketed a submission package known as “Submit” in conjunction with Council. There is in no way any competition between these two entities for Council contracts.

Guru are located on land formerly occupied by Placemakers. Mr Barclay has been provided with copies of documents that indicate that the fund was provided for compliance costs. Unfortunately, there is no real detail that clarifies what was meant by compliance costs, or mention of what may have been outside the scope of the fund in terms of excluded expenditure. Ultimately Mr Day took a broad view on the matter and paid the fund based on invoices that has been paid by Guru to improve the premises with a view to making it more attractive to likeminded entrepreneurial businesses. The development at the site was also aligned to the Council economic development strategy and the Thames Urban Development Strategy.

It is unclear exactly what Mr Barclay is alluding to, Guru were already tenants when the application for the fund was made. At the time there was some discussion in a general sense between Council and other entities, including Guru, about relocation of the information centre and bus terminal, both of which are seeking alternative locations. This however in no way influenced the decision on the award of the fund. It is pertinent to note that the decision was not the decision of Mr Day, it was the decision of the panel.

The suggestion by Mr Barclay seems to be that compliance costs would be those incurred by the successful applicant making application to Council for perhaps a resource consent. There was no mention that the fund would be paid for an applicant that was making application for to Council for some sort of consent or permit in the application process nor in the fund criteria. The proposition was always that the fund would be paid to the successful applicant as a payment.

It is unclear which emails Mr Barclay is referring to. However, the Mayor and Chief Executive were involved in the decision making process on the award of the fund. It is correct to say that neither of them was involved in the actual payment of the fund. Their involvement would not be expected or required, and does not depart for normal practice in terms of financial delegation. We do not agree that the absence of their involvement constitutes illicit use of funds. Mr Day acted well within his financial delegation and sought ratification as contemplated in the Council resolution of March 2013.(sic.) Mr Barclay then seems to suggest that there was some sort of arrangement or process to ensure that Guru received the fund, this is plainly incorrect."

I will refrain from publishing two additional pages relating to my request for the release of the Weighting Matrix adopted in the selection process. Day continues to refuse to release the information and outlines his reasons under 7(2)(f), 7(2)(b)(ii) and 7(2)(j) of the OIA. He uses a plethora of “commercial sensitivity” reasons for the refusal, but I have minimal interest in pursuing the matter.

Here is my reply to his response on the other issues dated 5 February 2015:

Dear Ms Parry

Thank you.  I do wish to comment on the reply provided by the Council to each of the points that I raised in my letter dated 15 May 2014. I acknowledge at the outset that some are more important than others, but as a general comment can I say that Council and Mr Day in particular appear have adopted a cavalier approach to the criteria agreed by Council on 19 March 2013. And this begs the question – what right does Mr Day, with or without the support of the Chief Executive Officer, to vary criteria that were agreed to by Council?

  1. Surely the four applicants who met the closing date were entitled to believe that only their applications were eligible for consideration.
  2. Regardless of Mr Day’s claims to the contrary, Guru were in competition with Track24 – both were qualified to quote for Council IT work, and must therefore be regarded as ‘in competition.’ The fact that both were directly awarded contracts outside of normal tendering processes is immaterial.
  3. Mr Day appears to accept most of 3, but is in denial when it comes to “compliance costs.” I would submit that every council and staff member in this Country would be aware of the meaning of “compliance costs”, and on this occasion, it was clearly stated that this method of allocation was to be adopted “in order to spread allocations as widely as possible.” That was the clear intent suggested to, and adopted by Council. There was never any intent that the entire $20,000 be allocated to one applicant. That allocation to Guru Digital for the purpose of renovating rented premises was never suggested or implied, and to claim that Mr Day “took a broad view” is evidence of the cavalier attitude of which I complain.
  4. The undisclosed reasons alluded to in my complaint related specifically to purposes that Mr Day has now indicated in his reply.  But the Placemaker site was, and remains privately owned - there was never any credible proposal that it be anything other than a commercial entity, let alone “aligned with the Council economic development strategy, and Thames Urban Development Strategy.” This suggestion is irrelevant to my complaint.
  5. I repeat that payment of ‘compliance costs’ would and should have been through internal transfer, rather than in cash, and it is clear that this was the intent of Council in agreeing to the establishment of the Fund, or else the paper that went to Council was deliberately misleading.
  6. I note the response to the request for the weighting matrix of each applicant. I accept the rationale put forward by Mr Day, and confirm that I no longer have any interest in obtaining this information.
  7. Mr Day is being devious in his response to these claims – the emails were mine – OIA requests on 21,22 and 26 March that should be easily located on the Council’s register. I stand by my claim that the paperwork related to the grant was not signed off until after these requests were made, long after the two transfers to Guru Digital, and submit therefore that they were to that extent “illicit” as earlier suggested

This matter has now dragged on for nearly two years since the Council decision on 13 March 2013 to set up the Fund, and the amount involved remains relatively trivial. The effect of any sanction that may result should you find in my favour is therefore likely to be minimal, but that does not in my opinion gainsay the question of principle. Council staff are too often able to ‘cover their tracks,’ but not in my opinion on this occasion.

I look forward to your response.

Followed by this further comment on 6 February 2015:

Dear Ms Parry

Further to my letter dated 4 February, I attach hereto copies of the email correspondence from 22 to 26 March 2014 that was referred to in my earlier letter dated 15 May 2014, and which Mr Day has referred to in his response in these terms – “It is unclear which emails Mr Barclay is referring to.” It should not be too much trouble for them to be located on the TCDC system.

Please note that the Email dated 22 March was not sent until 24 March – thus the reference to the two dates.

Arising from these emails, I would like to bring to your attention the following statement at the end of Para 2 – Page 2 - “It is pertinent to note that the decision was not the decision of Mr Day, it was a decision of the panel.”

This statement appears to be a complete contradiction of the statement in Para a) of Mr Day’s email to me on 9 April (Attached) “I made the final decision in mid-November 2013.”

I don’t wish to draw the obvious conclusion from these contradictory statements, but I believe that it speaks convincingly of the general credibility of the overall process followed through this whole debacle – precisely what lies at the core of my complaint.

The unwillingness of Council staff, and Deputy CEO Mr Day in particular to accept that these are unacceptable deficiencies, and to proffer only platitudes in response simply exacerbates the fault in my opinion.

I trust that you will take the entire correspondence into account in arriving at your decision. 

Yours sincerely

Bill Barclay

I see no reason to attach the emails to this post – the above excerpts should suffice to show exactly the manner in which TCDC, and Mr Day in particular have behaved to date. However, I am prepared to publish them in the interests of tranparency, and should sufficient interest be shown in same.




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