PHOTO
Rising audit costs is money which can’t be spent fixing the basics, like “pipes under the ground”, says Waimakariri Mayor Dan Gordon.
The Waimakariri District Council budgeted $496,370 in this year’s annual plan to cover the costs of auditing its 2026 annual report and next year’s Long Term Plan.
“It’s incredibly frustrating that our audit costs are now heading towards $450,000, which is around 0.39% of our total rates take in a Long Term Plan year, Mr Gordon said.
“Every dollar we’re required to spend on audit compliance is a dollar we can’t spend doing good in our community.”
The 2027/37 Long Term Plan will include the council’s in-house water services business unit, but the council will also need to prepare a water services audit for the Commerce Commission and a separate water services annual report.
“Councils have little choice when it comes to these costs,” Mr Gordon said.
“Local government continues to be handed new requirements and costs by central government. At the same time, we’re told to prepare for rates capping.”
Mr Gordon said the burden of unfunded mandates hit smaller councils harder, with the extra costs churning through council budgets before roads are fixed or pipes are upgraded.
“We accept the need for strong financial oversight. We take our responsibilities seriously, highly value our credit rating and are accountable to our ratepayers every day.”
Mr Gordon said he will be writing to the Local Government Minister after the election to raise concern about the impact of “unfunded mandates” and will raise the issue with Local Government New Zealand and other mayors.
He suggested Audit New Zealand could adopt a stepped approach for councils which had a consistent record of good audits, rather than imposing the same level of scrutiny and cost each year.
“If central government is serious about keeping rates affordable, it also needs to look at the costs it places on to councils.”
The cost of auditing the council’s 2027-37 Long Term Plan has been set at $117,480, while the 2026 annual report audit cost $314,858.
Speaking at a council meeting on Tuesday, October 20, Audit Office audit director Dereck Ollsson said the new audit fee was a 10 percent increase on the fee charged for the 2024/34 Long Term Plan audit.
The increase was due to inflation, he said.
“We are always looking at how we can use technology and AI to simplify the audit process.
“But from a legislative point of view, there are still requirements we are required to measure.”
Mr Ollsson said he was aware councils were under pressure from reform, “but it seems that in every cycle there’s something which keeps councils up at night”.
■ LDR is local body journalism co-funded by RNZ and NZ On Air.
