Thames-Coromandel District Council should never have signed off Whitianga's multi-million dollar "Sportsville" complex, says a consultant's report on the project.
The report outlines the $2 million budget blow out for the project, which was expected to cost $6 million.
Deloitte partner Graham Naylor delivered a seven-page summary of his 57 page report on the budget this afternoon which made several recommendations around the council's expenditure procedures.
Steve Baker, chief financial officer of the council, summarised the findings of the three month old report in a presentation to the council this afternoon.
"Basically they are saying that council should never, ever have signed off on this," Mr Baker said.
The council's high level reporting and monitoring system would not effectively identify potential budget variations, Mr Naylor, who was not at the meeting but sits on the council's audit committee, said in the report.
"We recommend that financial reporting to the council be changed to include more detailed capital expenditure information. Reporting should be performed on the status of significant capital projects that ratepayers will be sensitive to. Commentary should be included for variations from budget on an annual basis and also on a whole of project basis. Project progress and quality should also have been covered."
Mr Naylor said a review of the council's Track 24 project management system had identified a large number of cost items eneterd into and approved by the same staff member.
"Given the poor financial reporting and monitoring of council's capital expenditure identified in this report the risk of fraud is heightened due to poor segregation of duties."
After nearly an hour's debate the council decided to release the full report.
Mayor Glenn Leach said: "The reason we went to Deloitte, was to get credibility.
"We went to Deloitte because a report done internally by ourselves would not have been looked upon as anything other than an internal cover up.
"I don't know why they didn't say no one should read it."
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