Council ‘learned lesson’ over spending
‘‘There are substantial checks and balances to make sure it won’t happen again.’’
Monique Davidson
The Horowhenua District Council says it has learnt its lesson after being reprimanded by the Office of the Auditor-general for its procurement process with contractors, where almost $900,000 was spent.
The Office of the Auditor-general this week released a letter it wrote to the council outlining its concerns about the council engaging with external consultants to provide services in relation to the Levin Landfill.
The landfill has an uncertain future, as the council is yet to decide whether to close it.
It is not operating while a decision is made.
The concerns were about the council using consultants via direct procurement, which did not follow council policies when engaging with the contractors, the costs of about $895,000 were significant and incurred without appropriate authority, and a potential conflict of interest had not been managed.
The council has since improved its procurement policies.
The matter began in May 2020 under then-chief executive David Clapperton, who did not respond to a request for comment.
The new chief executive, Monique Davidson, said the council accepted the report’s findings and the council could have done better.
Davidson said the matter happened two years ago and since the complaint was made a year ago, the council had put a lot of energy into reviewing and refreshing its procurement process.
‘‘There are substantial checks and balances to make sure it won’t happen again,’’ she said.
The council’s changes include appointing a procurement officer and updating its procurement policy, which provides clear guidance.
Davidson would not comment on whether what had happened was right, but she said it was clear the council had not followed the procurement process.
‘‘The organisation has learnt its lesson.
‘‘My job, and what I’m focused on, is ensuring we uphold the procurement strategy and continue to demonstrate to the community why they should trust us.’’
She said it was challenging for her to comment on the cost because the landfill was an ‘‘enormously complex’’ topic and she wasn’t involved at the time, but Morrison Solutions’ work was completed to a high standard.
According to the Office of the Auditor-general’s letter, the value of
the initial work was estimated to be $7500, with an estimated maximum of $20,000, which was a low-value procurement and a preferred supplier could be used or quotes obtained.
Morrison Solutions was not a preferred supplier and could not be engaged through that process, but Clapperton decided Morrison Solutions would provide the services and he dealt directly with the firm, the letter said.
Morrison Solutions stated the work had the potential to be substantial, including the first couple of tasks costing up to $20,000, so it was reasonable if the council considered the cost would exceed the threshold for lowvalue procurement.
The landfill matters were complex and may have signalled a high-risk procurement, which should have been supported by a plan.
There was no plan and no business case.
The letter said Clapperton explained the reasons for the procurement, but this was not documented and not available to anyone seeking assurance about the process.
There was a proposed scope of work but no written contract, only verbal agreements.
Clapperton told the Office of the Auditor-general, costs were monitored, but the letter said it was likely the scale of the costs was not evident.
‘‘The absence of a written and clear rationale for the work and selection of the provider, and a contract, means there is less confidence that the money has been well spent than if those steps had been taken,’’ the letter said.
There was a concern about a potential conflict of interest between Clapperton and Morrison Solutions, but none were found and Clapperton had not worked with anyone from the company.
‘‘Having clear documentation supporting the decisions in the procurement provides visibility and supports trust that decisions have been made in the public’s best interests.’’