MP wades into wastewater mess

00:34, Aug 27 2014

Northland MP Mike Sabin is calling for the Office of the Auditor-General to prevent pending litigation action by the Kaipara District Council by negotiating a settlement with the council.

The Kaipara District Council commissioners said yesterday they were seeking legal action for negligence against Audit NZ in the High Court. It is understood this would be the first time a council has sued the Office of the Auditor-General.

They are also seeking claims against Kaipara's former chief executive, Jack McKerchar, through the Employment Relations Authority.

After an independent investigation into the controversial Mangawhai community wastewater scheme, Auditor-General Lyn Provost last year admitted Audit NZ had not lived up to the minimum professional standards and expectations required of an auditor.

Audit NZ was the council's official auditor from 2006 and 2009.

The $58-million wastewater scheme contributed to a debt blowout of more than $80m and rate strikes by many of those affected by the huge rate increases.

The Government appointed commissioners to replace elected councillors to assist the district in working its way out of the debt.

"I implore the Office of Auditor-General to do the honourable thing in accepting they have contributed to the failings, by sitting down with the commissioners and negotiating an appropriate settlement," Sabin said. 

Provost's inquiry had been nothing short of damning for Audit NZ, highlighting significant areas of deficiency, non-compliance and failure to identify audit risks.

"While Lyn Provost was not the auditor-general at the time, I am hopeful she will show leadership with this issue and draw a line under this preventable saga by settling the matter with the commissioners, thus preventing further litigation placing even more burden on wary ratepayers," Sabin said.

No court action is being taken against former councillors, but pressure is being applied on Provost to exercise her powers under the Local Government Act to hold them responsible.

The council is yet to consider whether it will take action against consultant consortiums involved in the matter. 


Dargaville News