‘Shortcomings’ but no fraud, says council audit
The Buller District Council has been cleared of fraud allegations, but management and councillors did not oversee the spending of millions of dollars as closely as they should have, an independent audit has found.
The council’s project management office (PMO) was set up in January 2021 to manage shovel-ready and Provincial Growth Fund projects, including roading and Three Waters infrastructure.
Its budget tripled to $20 million a year after severe flooding in the district in July 2021 and February 2022.
The council announced in October it had commissioned KPMG to conduct an independent forensic audit of the PMO. Three reviews had already been done, costing $73,468, but they did not examine financial statements in detail.
The KPMG audit looked into whistleblower allegations about fraud, irregular use of public funds, mismanagement, and conflicts of interest relating to roading projects and unplanned expenditure of $3m on water projects.
Council chief executive Simon Pickford said it found no evidence of behaviour serious enough to lay a complaint with an enforcement agency, like police or the Serious Fraud Office.
However, it did pinpoint shortcomings by the council concerning the management of capital projects overseen by the PMO.
“The shortcomings relate to governance and operational matters,” he said.
Pickford acknowledged significant public interest in the report, but said its release would need to protect individuals like staff members and whistleblowers.
He had prepared an action plan and a timeline to fix issues identified in the report.
Buller mayor Jamie Cleine said councillors received the report in confidence in March. He acknowledged that it had taken a “frustratingly long” time to release any findings to the public.
Councillors were meeting KPMG representatives today to identify areas for improvement, he said.
The failures identified by KPMG related to the PMO not being overseen adequately by management and councillors, Cleine said.
He confirmed that the original reviews happened after the National Emergency Management Agency refused to pay a $90,000 bill for consultants used by the PMO.
Several whistleblowers also made statements under the Protected Disclosures (Protection of Whistleblowers) Act, which were looked into by KPMG.
KPMG was working on a redacted version of the report to protect individuals, which would be released to the public, so people could be confident that the council was not “filtering” the findings, Cleine said.
He said councillors had approved Pickford’s action plan, which included communicating the findings to staff, contractors, funders and whistleblowers.