Council’s procurement report finds mistakes, no illegality

Jim Boult. Photo: ODT files
Jim Boult. Photo: ODT files
An internal report on the Queenstown Lakes District Council’s procurement practices, and in particular the contracting of a former senior manager to undertake bylaw reviews, has found staff made mistakes but did not break the law.

Mayor Jim Boult said in a media statement yesterday the report was clear there was "no ill or unlawful intent or activity, or desire to furnish mates with work".

However, it showed there was a need to modernise guidelines for staff and tighten training, and expedite a review of the council’s procurement policy.

Mr Boult requested the report last month following media questions about whether the council breached its procurement rules when it awarded Arrowtown consultancy firm ZQN.7 Ltd contracts worth a total of $630,000 without putting them out to public tender.

ZQN.7 is owned by former senior council staff member — and newly appointed Queenstown Chamber of Commerce chief executive — Ruth Stokes and her husband.

At the time Ms Stokes’ company carried out the work, between March 2018 and May last year, it employed another former council manager, Jendi Paterson.

The council has already admitted breaching its policies in relation to one of the contracts.

Contracts worth more than $50,000 are required to be put to public tender, but it directly appointed ZQN.7 to one contract worth $52,000.

Mr Boult said the error was the result of key staff leaving, the scope of works increasing for ZQN.7’s work and the lengthy process of working through bylaw reviews with councillors.

Some staff had "unintentionally misconstrued" the procurement process in relation to the $50,000 threshold.

"Many staff have believed it was OK to directly appoint suppliers without a competitive process and have structured contracts to be managed efficiently, not appreciating the total value of the work to be completed."

Councillors discussed the report in a workshop on Monday and "broadly accepted" its findings and recommendations, one of which was to expedite an already-planned review of the procurement policy, he said.

The report would also be reviewed by the council’s audit, finance and risk committee.

Mr Boult said the council, councillors and staff were "committed to transparency and access to information regarding procurement and all matters of council business".

He had asked staff to explore making contracts awarded a matter of public record by default with appropriate redactions for commercial sensitivity.

"As a first step on this path, the report into procurement practice has been publicly released.

"No entity always gets things right, but it’s important that when errors are made we resolve them, learn from them, and always continue to strive to improve."

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