The Dunedin City Council is financially backing next year's iD Dunedin Fashion Week, after initially declining support as it asked for more information.
The event is under review by auditors Deloitte amid council concerns about the viability and governance of the event.
The decision to fund the flagship event follows two consecutive years of financial losses.
A letter obtained by the Otago Daily Times, from the council to iD chairwoman Cherry Lucas revealed the application for $95,000 funding was initially declined.
The letter, sent on July 4, said the funding was declined due to ''concerns around the viability and governance of iD Dunedin Fashion Inc''.
Yesterday, the council grants subcommittee announced it would give the money for iD's 19th fashion week.
This follows an appeal by show organisers.
Grants subcommittee member and chairman of the first meeting that discussed the application Cr Andrew Whiley said concerns around governance arose after learning iD had engaged Deloitte in a governance review.
''We had no real idea ahead of them telling us that that was what they were doing,'' he said.
That became a factor in the initial rejection.
The viability of the event was put into question because organisers were unable to provide audited financial records for this year's show, Cr Whiley said.
''Even though they ran a great event they knew it was going to be a tough economic situation.
''So we had no financials from the 2017 event, not even the draft.''
This was understandable because the event's financial year did not end until June 30, he said.
During the appeal process draft financial records were provided.
An audited financial report and a copy of Deloitte's review of the events' governance were likely to be conditions of next year's grant, Cr Whiley said.
Ms Lucas said the organisation engaged Deloitte in a ''strategic review'' of the organisation in May.
She did not know why the council focused specifically on the review of the organisation's governance and referred Otago Daily Times questions to the council.
Last year, the event had a loss of about $55,000, compared to a $124,126 net profit in 2015.
In March, Ms Lucas said she knew this year's event would experience ''a significant loss'' because many iD regulars attended Adele concerts in Auckland rather than the fashion week.
When asked last week if the council had declined the application, Cr Whiley said that was ''not quite the case''.
The council needed more information, and valued the significance of the event for Dunedin, he said.
The committee could only approve or decline an application, and if additional information was sought the application had to be declined.
The chairman of the grants subcommittee which considered the appeal, Cr Aaron Hawkins, said the council had confidence in the future of the event.
''In effect, what they did was ask for more information, and iD provided that and the subcommittee yesterday had confidence, in light of that, that the event would do well.''
