Five bodies have been recovered from the badly damaged building that went on fire in the suburb of Newtown on May 16. A 48-year-old man has been charged with two counts of arson - one in relation to a couch fire on the third floor of the hostel and the second in relation to the blaze set on the building itself.
The Ministry of Business, Innovation and Employment (MBIE) told it that riskier buildings, such as boarding houses, were even more in need of the better on-site checks.
Overall, the council was running at under 4 percent of buildings audited a year, when it should be at 20-33 percent.
"This number is well below what we would expect for an effective auditing regime," MBIE said in September last year in an assessment it gave the council.
It also was doing too little enforcement when it found faults, the ministry found.
The council released the MBIE assessment on Tuesday in response to RNZ questions for over a week.
At the same time, it admitted last auditing Loafers in 2018 - when it found blockages at fire exits and smokestop doors wedged open, and a non-compliant card-access system - and 2012.
Councils have long known that short-term accommodation is the highest risk, and MBIE's guidelines say to audit these once a year.
MBIE registered its "disappointment" at the council's audits, said it was not doing enough enforcement either, and faulted it in five others ways, while passing it in others.
"It is disappointing to see that these on-site audits do not currently feature as highly in WCC's administration and enforcement of the compliance schedule/BWoF (building warrant of fitness) system," the ministry said.
The audits were "a fundamental activity of the BWoF system".
"The frequency [of audits] of a given building should reflect the perceived risk for the use of that building."
Audits were a double-check that independent companies, hired to do check on safety systems like fire alarm, smokestop doors, evacuation routes and sprinklers are getting it right when they sign off on them.
This system of checks by private contractors has previously been found to be patchy, partly because it has not been closely monitored or regulated.
MBIE has since 2020 been trying to improve its monitoring. Loafers had 13 systems that had been signed off. There was nothing to suggest these were signed off inaccurately. The audits provide the back-up to this.
The lack of audits by Wellington City were slapped with the ministry's lowest, dark-red score requiring "corrective action" by the council.
Six other weaknesses copped a slightly lower orange, "strong recommendations", score.
These six included being too soft on enforcement. The council issued zero Notices to Fix over BWOFs in the three years from May 2019. It was unable to tell the ministry how many infringement notices it issued, but it was less than five.
"Use of enforcement is often an indicator of a council's willingness to use the tools available to ensure compliance," the ministry said.
"We recommend WCC review and establish a robust system of auditing and enforcement that achieves both legislative requirements and public expectations for compliance schedules and BWoFs."
The council claimed yesterday it was auditing between a fifth and a third of the city's 2800 commercial buildings each year.
But by the ministry's assessment, audits had been running at 3.3 percent - and that figure concurs with the council's own data (193 on-site checks in two-and-a-quarter years). RNZ has asked the council to clarify its claim.
The council late yesterday clarified that it had begun tightening its audits only after the ministry told it off, in the months before Loafers Lodge caught ablaze.
A new policy aimed at audits on a three-year cycle to hit the 20-33 percent target, was adopted at the end of last year, it told RNZ.
However, the ministry appeared to pull its punches in its report to Wellington City.
Having earlier in 2022 said to all councils that "buildings with sleeping uses such as backpackers' hostels - annual audits are recommended", it told Wellington in September "it might be appropriate to have annual audits for budget accommodation (eg backpackers' hostel) and five-yearly audits for low-occupancy industrial buildings."
The ministry did not aim to do anything more about it: Its team "have no plans to follow-up further in relation to the strong recommendations in the report", but if the council wanted to tell it what it was doing about it, that would be welcome, MBIE told the council.
