Council lobbying for auditor fee reduction

Photo: ODT files
Photo: ODT files
The Waitaki District Council will have to swallow an increased fee for this year’s audit — though it hopes to get it reduced — as it has run out of time to appoint another auditor.

But it will continue to lobby for reasonable audit fees and has joined a group of Canterbury councils who are pressing the auditor-general about the increased fees.

The council has been in dispute with Audit New Zealand over rising fees for audits over the next three years, and baulked at what was an increase in fees of more than 75% over the period.

At a council performance, audit and risk committee meeting earlier this week, council finance and corporate development group manager Paul Hope said it was rather unusual to raise the issue around auditor fees and it was disappointing he had to, but the council had to be made aware of the proposed increase.

"We got a letter very late in the process and the proposed fees were significantly higher than expected for the three- year period," Mr Hope said.

Council staff had tried to come to an agreement for this year’s audit with a payment of $213,000, which was still a 17% increase on last year, he said.

It was hoped Audit NZ would agree to a further $40,000 reduction from an initial fee to bring the fee charge to $213,000.

Council staff were struggling to understand the number of hours it was being billed for and whether the amount of money paid was value for money for the Waitaki community, he said.

The auditor-general had written to councils across the country last year informing them of fee rises for audits, so a rise was expected for Waitaki. But the council did not expect it to be that high.

Council chief executive Alex Parmley said he was among a group of Canterbury-based council representatives who had approached the auditor-general about the fee rises.

"We raised concerns with the auditor-general about the value an audit adds to the community. We realise it is a very important document for a council ... but not much traction was achieved."

Waitaki and other Canterbury councils had received a significant increase in fees for their audits, while other Otago-based councils had not received the same increase, he said.

Cr Tim Blackler asked if it was possible to switch to another auditor.

Mr Hope said to find another auditor would be exceptionally challenging at this late stage.

Mr Parmley said the council group talking to the auditor-general was asking for the audit process to be opened up to competition.

The council decided it would not accept the proposed Audit NZ fees for the next three years. It would look to negotiate a revised price for the 2023 financial year.

It also wanted to outline agreed areas of focus and timeframes and receive regular updates on the audit and hours spent on the audit.

The council agreed to the recommendation that if reasonable audit fees could not be agreed for later years, it would seek approval from the auditor-general to change its appointed auditor.