Council failings highlighted in Sportsville study
Thames-Coromandel District Council should never have signed off Whitianga's "Sportsville" complex which has cost $2.065 million more than the budgeted $6m, according to a review of the project.
Steve Baker, the district's chief financial officer, summarised the findings of a Deloitte report on the budget blowout in a presentation to the council yesterday.
"Basically they are saying that council should never, ever have signed off on this," Mr Baker said.
The independent reports, from professional services company Deloitte and a human resources consultant, were commissioned late last year by the council's audit committee after the council received two requests from council staff for invoices totalling $2.069 million to be paid.
Thames-Coromandel Mayor Glenn Leach said the council had approved changing facilities and public toilets but instead the development had been made big enough for a grandstand with seating for 1000 and corporate boxes.
The project will see the town of 4100 get a park on the corner of Moewai Park Rd and SH25, consisting of 10ha of playing fields: three rugby or rugby league grounds, two soccer fields, five netball courts, three tennis courts serviced by changing facilities and public toilets alongside 220 car parks. The project is overseen by the Mercury Bay Recreation Trust.
But despite concerns over cost over-runs, Deloitte yesterday resisted attempts to have the full report released to the public as it had been written only for a public-excluded portion of the council meeting.
This was over-ruled by councillors and the mayor.
Mr 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."
The council was told by its lawyer there was some risk in relation to employment claims in releasing the full report, but staff could blank out some names. "But the reality is there's no secret to who was doing what job."
The Deloitte report found that the council's high-level reporting and monitoring system would not effectively identify potential budget variations.
"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."
Deloitte partner Graham Naylor said a review of the council's Track 24 project management system had identified a large number of cost items entered 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 . . . "
The findings of the report will be made available to the public ahead of a community meeting to be held on February 27 at Whitianga Town Hall at 1pm.
Mercury Bay area manager Sam Marshall said the project was about 65 per cent complete with the ablution block on track to be completed by May 2013.
"Structural beams are currently being installed across all three modules of the building which will then allow the roof to be put on in a couple of weeks."