Auditor General Again Drops The Ball
Saturday, April 8, 2017 at 12:02PM
Bill Barclay

Readers will be aware of my long-standing complaint of the manner in which the Auditor General defines his/her role in providing oversight that rate-payers, and tax-payers should be entitled to expect in regard to the manner in which their councils operate. Oversight is lacking to the point of being more or less non-existant, and as a result, complaints generally receive the 'hear-no-evil, see-no-evil, speak-no-evil' method response. 

In today's NZH we have another example of this ridiculous running for cover when questions were asked by the Herald  regarding the failure to report inadequacies in the oversight of Government funding by Sport NZ when it came to the allocation of $805,000 to a trust run by a North Shore developer to set up a training base for Yachting NZ on Takapuna Beach - a move strongly opposed by the Community Board, and finally dropped. 

Here is the story:

"Sport NZ paid out $805,000 to HAT, led by Auckland developer Peter Wall, without a sod being turned or resource consent granted. Nor, as the OAG discovered, a funding agreement being put in place with HAT.

Documents obtained by the Herald through the Official Information Act revealed Sport NZ were unable to provide OAG staff with any documentation supporting the additional payments to HAT.

The OAG found Sport NZ's business case to support investment in the centre to be "limited" and criticised the absence of any formal contract with HAT.

"In our view, the lack of a funding agreement and associated reporting to date does not represent good practice," the OAG wrote to Miskimmin in June last year.

Despite these issues being identified, the OAG rated both Sport NZ's management control environment and financial information systems as "very good" and its annual review briefing to the government select committee.

The OAG also suggested follow-up questions the committee may like to ask of Sport NZ, but none of these referenced the messy yachting centre deal.

And here is the 'kicker':

The OAG's parliamentary group sector manager, Henry Broughton, said in a statement the findings from the investigation into Sport NZ was a separate matter to the annual audit."

"We do not provide a clean bill of health as such, but rather our annual audits provide assurance ... about whether a public entity's financial statements comply with generally accepted accounting practice in New Zealand and fairly reflect its financial position."

That really says it all in a nutshell. A total abrogation of responsibility, and a definition that the Parliamentary Committee providing oversight of the OAG should surely be investigating, and taking appropriate action.

We can have no confidence that the OAG is providing adequate oversight of ours or any other Council if this case. Internal auditing by private audit firms does not substitute because of the generally limited scope of their role, and the fact that their liability is limited by over-lapping of responsibility with the OAG. And councils generally lack the professional competence necessary to disentangle the resulting reports. Exhibit 'A' is now in the process of being episodically revealed in the West Coast Council. 




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