In Queenstown yesterday, Dr Nick Smith said the 10 corrective action requests and four strong recommendations issued to the council by International Accreditation New Zealand were "concerning''.
"It's a sign of the level of growth pressures ... [but] I don't rule out intervention, which is ultimately what we chose to do in Christchurch.''
In July 2015, the Christchurch City Council was stripped of its accreditation by IANZ, removing its ability to issue building consents.
The Government then appointed a Crown manager to address the consenting issues.
Dr Smith said that intervention worked in Christchurch, but that his preference was for the QLDC to address the issues and ensure systems were in place "urgently''.
"The consequence for Queenstown [of losing accreditation] is rather extreme.
"But the council needs to urgently get their house in order, or that option will come on to the table.''
The pressures on the council and government regulatory systems had come about because the sector was "expanding very rapidly''.
Labour force figures showed the number of people in the building sector had doubled in three years.
"As a consequence, half your building workforce were doing something different three years ago.
"There's pressure in terms of both quantity and quality ... You've got good pace, but at the same time, you've got to make sure those quality assurance systems [are in place].''
Queenstown Lakes Mayor Vanessa van Uden said the council was also "extremely concerned'' about the results of the IANZ audit and was committed to fixing the problems.
Although staffing was one of the major causes of the failings identified by IANZ "we still need to do it properly''.
"That's a requirement. There is no debate there.
"The simple fact that the council chose to put this in the public arena is about saying to our community that we are taking this seriously and we are going to deal with it.
"We have no intention of losing accreditation at all.
"Our guys are working really, really hard [and] it would be wrong for any of us to be having a go at those people working in that department day, on day, on day.
"We just need to get on and do it now [and] we need to make it stick.''
The council has until Friday to respond to IANZ with its action plan.
The Crown auditor will then follow up with the council in July and undertake another full assessment in October.
