Michael Ross said he took ‘‘absolutely’’ seriously the recommendations from AuditNZ’s interim management report, received by the council’s Finance, Audit and Risk Committee yesterday.
However, he said there were mechanisms outside the scope of the audit of councils’ systems and processes that would guard against something like Dunedin City Council’s $1.5million vehicle fraud, in 2014. Investigators found 152 cars had been sold and the proceeds pocketed by a DCC officer over more than a decade.
The Waitaki audit identified one ‘‘urgent’’ change and five ‘‘necessary’’ changes for the district council but Mr Ross said he did not believe the report painted a negative picture and he had confidence in the council’s processes.
The rigorous stocktakes required by the auditors would not benefit the Waitaki council which, for example, had installed a vehicle management package in council cars where GPS tracking allowed the council to know where each car was, around the clock.
‘‘To go around and have to do stocktakes on piles of gravel and this and that — some of it just gets a bit over the top,’’ Mr Ross said.
‘‘Often we disagree with Audit New Zealand around whether we should be doing different things, just because our appetite for risk is different from what theirs is.’’
In the report to the finance committee yesterday, council chief financial officer Paul Hope noted the council ‘‘officers accept that many of the matters raised in the interim management report are valid and require attention’’.
Some changes to council practices had been made as soon as they were identified in a debriefing session with auditors in June. Others required a longer-term solution and others, he argued, were not necessary.
He said while he understood what the auditors were saying, there were times, especially in ‘‘minor’’ issues, ‘‘we don’t actually see much value in it’’.
‘‘They have one view, the officers have another, and we report it to the elected members and the elected members can really decide for themselves and give us direction about which ones they are concerned about and which ones they accept our position and just accept that there is a difference.’’
The urgent issue — issues with the council’s processes for ‘‘expenditures’’ — had been raised by the auditors since 2009, but the council inherited new issues when the corporate software system the council purchased in 2011 was still ‘‘under development’’ and its online ordering system was cumbersome.
The council had developed a workaround solution and there were checks and balances for any purchases made by the council at the end of the process.
‘‘What they’re saying is it is better to have those checks and controls to start earlier through the process and to have a system that’s in place that perhaps does some of that work, rather than relying on people.
‘‘So, if someone raises an order, it flags up automatically if it’s over their [authorised spending] limit, rather than checking that at the end.
‘‘We do accept that’s a better way to operate the system, but we are still confident that we are only paying the people we should, and that they are being properly approved, except we are doing that in a relatively manual way at the moment.’’
He said the council’s issue with expenditures would be fixed before the end of the next financial year.
