The Auditor-General has decided to put the Westland District Council's processes leading to $1.2 million flood protection and remedial works at the Franz Josef Glacier sewerage ponds under the microscope.
Controversy about the decision making led to complaints with both Internal Affairs and the Commerce Commission, and were passed on to the Office of the Auditor-General in July.
Yesterday, the office announced that Deputy Auditor-General Greg Schollum would carry out an inquiry, which would examine the procurement of the works including: How the council determined that emergency works were needed; the procurement and contract management practices adopted by the council for the works; and how any potential conflicts of interest were managed.
Franz Josef residents raised concerns with the process adopted by the council, including a lack of "facts and figures", management plan and the absence of a tender process after the work to extend the stopbank around the sewerage ponds, vulnerable to flooding from the Waiho (Waiau) River, and develop a new soak pit to make the ponds compliant with consent conditions, had been pushed through as emergency work in an extraordinary meeting on July 5.
Mayor Bruce Smith and southern ward councillors Gray Eatwell and Helen Lash were taken to task at a meeting of the Franz Josef Community Council later that night.
Community council chairman Graham Berry said at the time they were disappointed with the lack of consultation and the fact the district council had no plans drawn up for the scope of the works or tender documents.
A lot of questions were raised at the meeting over the work not being put out to tender. The council's own procurement policy stipulated that work costing more than $100,000 must go to tender.
A conflict of interest was also questioned at the time in relation to Cr Durham Havill, who as the portfolio holder, had organised a lot of the work at Franz Josef.
His brother Geoffrey Havill operated the D11 bulldozer used for the work. The dozer was allegedly owned by South Island Plant Hire Ltd, formerly owned by Blakely Mining Ltd.
Cr Havill was open with the council about the situation at the July meeting and refrained from voting.
In a statement yesterday, the Office of the Auditor-General said concerns had been expressed to them about the council's procurement of the works, including the processes it followed and whether the council had appropriately managed any potential conflicts of interest.
"These types of concerns can undermine confidence in the council's decision-making processes. We decided an inquiry was necessary to better understand what happened.
"We will not make any public comment while our work is under way, but will publish a report once we have completed the inquiry."
The mayor yesterday welcomed the investigation, saying he was "100% confident" there had been no conflict of interest.
"We'll naturally co-operate with any inquiries . . . and I'll look forward to the report."
Mr Smith said the points raised by the complainants in a letter to the Auditor-General had "no substance whatsoever".
"It is a waste of time, a waste of money and always caused by the same ones in the community."
- by Janna Sherman of the Hokitika Guardian
