Auditor-General's overview

Local Authorities (Members’ Interests) Act 1968: A guide for members of local authorities on managing financial conflicts of interest.

E ngā mana, e ngā reo, e ngā karangarangatanga maha o te motu, tēnā koutou.

The Local Authorities (Members' Interests) Act 1968 (the Act) helps protect the integrity of local government by ensuring that local authority members cannot take advantage of their official position for personal financial gain.

Although the principle underlying the Act is relatively simple, the detail of the rules and the various exemptions are complex. The Act is somewhat out of date and difficult to understand, and the rules are not always easy to apply in a modern local government context. However, local authorities and their members need to understand the Act, because breaching its rules can lead to a criminal conviction or disqualification from office.

That is why we have written this plain English guide. We want members who are covered by the Act, and those advising them, to be aware of the Act's rules and the steps they need to take to ensure that they do not inadvertently breach them. This guide also explains our statutory functions under the Act – specifically, how we consider requests for approvals, exemptions, and declarations – and the information that we need to respond to requests promptly.

The previous edition of this guide covered non-financial interests and predetermination. When it comes to conflicts of interest, our statutory role is only under the Act, and the Act covers only the financial interests of members. Because of this, our guidance about non-financial interests and predetermination is now in our separate good practice guide Managing conflicts of interest: A guide for the public sector. That guide is intended for all public sector organisations, including local authorities, and covers other types of interests that might affect a member's ability to participate in their local authority's decision-making. I strongly recommend that you read both guides.

Nāku noa, nā,

Signature - JR

John Ryan
Controller and Auditor-General

24 June 2020