Mystery over Brownlee's CCC audit review

Last updated 14:26 06/08/2014
QUESTIONS RAISED: In a media release earlier this year, Gerry Brownlee said the Crown had concerns about 'some of the assumptions' made in the report.

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The Government is dodging questions about a report it commissioned to review an audit of the Christchurch City Council's financial position.

In May, Earthquake Recovery Minister Gerry Brownlee criticised the accuracy of some of the data released in the KordaMentha report into the council's books and revealed he had commissioned Morrison Low to review it.

The KordaMentha report showed a $534 million budget shortfall, $413m of which is from the council's revised cost of repairing roads and sewers.

Brownlee believed the budget blowout was based on an outdated estimate of the cost of repairing infrastructure.

In a media release issued on May 7, Brownlee said the Crown had concerns about ''some of the assumptions'' made in the report. He instructed the Canterbury Earthquake Recovery Authority (Cera) to contract financial consultants Morrison Low to provide an ''independent assessment of how the council's financial position, as presented in the KordaMentha report, relates to the Crown's role in the rebuild''.

''We expect to receive Morrison Low's report in about 14 days and will be in a position to respond after that,'' he said at the time.

However, there is no report and the result of Morrison Low's work remains unclear.

A spokesman for Brownlee said the work was ''very useful to both parties' understanding of some complex issues''.

''This work was collaborative between Morrison Low, Cera and KordaMentha, and didn't result in a single report.''

The advice provided by Morrison Low would feed into the agreed review of the cost sharing agreement that is scheduled to be completed by December, the spokesman said.

Parliamentary documents show Cera spent more than $660,000 on services provided by Morrison Low in the 2012-2013 financial year. The firm is currently contracted to perform an audit of the Stronger Christchurch Infrastructure Rebuild Team aspect of the horizontal infrastructure rebuild.

Labour MP Clayton Cosgrove said Brownlee had been ''quite vigorous'' in his criticism and needed to answer questions about what Morrison Low had been paid to do and what their work concluded about the initial report.

''Either it's very embarrassing if his own consultants have found that the [KordaMentha] numbers added up... or they don't and he has a responsibility to release that information.''

Brownlee could not just ''walk around writing cheques'' and not be transparent about the results, he said. 

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''He was insistent on an independent report and now he should come clean on with the taxpayer and the people of Canterbury and tell us what these guys have done.''

- The Press


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