A special investigation into how Whitianga's 10ha ''Sportsville'' complex went from costing $6 million to more than $8 million does not go far enough, one critic says.
Colin McCabe, of Whangamata, was disappointed with Deloitte partner Graham Naylor's report, which the firm tried to keep confidential on Wednesday because it had been ordered by and written for the Thames-Coromandel District Council's audit committee.
Mr Naylor found that the project, whose genesis was more than a decade ago, ''appeared to be based on rough costings prepared by the project manager'' Gordon Reynolds.
Mr McCabe questioned the integrity of the report because Mr Naylor sat on the audit committee as an adviser when the project was conceived.
''It seems that by Mr Naylor being offered and his (some would say foolhardy) acceptance of this job, we've ended up putting 'the fox in charge of the chook house','' Mr McCabe said.
''The general vagueness of the report would suggest it's probably not worth the paper it's printed on, let alone the $39,000 we (as ratepayers) have had to pay for it and I foresee the next instalment will be an investigation by the Auditor-General.
''The report has no specifics, no one is named as at fault although the word fraud is used!'' Mr Naylor was reluctant to answer Waikato Times questions.
''I don't think I should answer any questions. The problem I have is that ethically I have an obligation to treat client matters with confidentiality.''
Before hanging up, to check in with Deloitte's communications department, Mr Naylor was reminded we were discussing a public report detailing the over spend of millions of dollars of ratepayer funds.
''I have not sat on the committee since 2010. It was approved in June and I finished in October.''
Asked if there were any issues with the financing of the project in the four months he was involved, Mr Naylor said: ''I don't think there was any issue.''
The project was conceived by Whitianga Waterways developer Hopper Developments, which said it would gift the land in lieu of development fees.
Mr Naylor's report found the $6 million project ''appeared to be based on rough costings'' prepared by project manager Mr Reynolds.
''The costings excluded $680,000 of grass/turf costs and also included a building of amenities ... which equated to $2 million.''
The report also found ''costs were generally reported verbally with no supporting figures. When actual figures were reported to the project team, reporting was brief and and not in accordance with best practice.
The report also found a large number of cost items had been entered into and approved by Mr Reynolds, who was using a stand-alone spread sheet system instead of the council's Track 24 project management system.
''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.''
Mayor Glenn Leach, who was elected after the project got the green light, said it was as if the project had been conceived on the back of an envelope.
He put the blow-out down to arrogance in the project team and said Mr Reynolds, former Mercury Bay area manager Lesley McCormick and other council staff involved in the project were subject to a human resources review.
Mr Reynolds said he had retired from the project in December but had been retained on a different temporary contract.
Better documenting formal decisions in relation to capital projects, thereby reducing risk of "scope creep". Improving project monitoring at a project team level to incorporate commitment accounting and monitoring. Capital project reporting at the council level should be more detailed. Review segregation of duties over expenditure approval. Review controls surrounding Track 24 to ensure the information is accurate. Use of project management systems out of council standard system should be discontinued. Reviewing the accounting treatment of all costs before a business case should be assessed.
- © Fairfax NZ News
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