Decision from the Auditor-General's office about Manukau Mayor's purchasing card expenditure

23 June 2010

Mr Len Brown
Mayor of Manukau
Manukau City Council
Private Bag 76-917
Manukau City 2241

via email: [email protected]

Dear Mr Brown

Mayoral purchasing card usage – request for review

Thank you for your letter of 22 June which was e-mailed to me this morning.

We have been aware from media reports that you intended to ask the Auditor-General to look at your use of a Council purchasing card for sensitive expenditure. We have given considerable thought to the appropriate response to that request, should it eventuate. My decision is to decline your request.

Since your statement last week, the Council’s Audit Committee has asked our appointed auditor to carry out additional work on the Council’s systems and processes for sensitive expenditure during the course of ongoing normal audit work. The additional sampling, testing, and reporting by our appointed auditor will not be confined to transactions on credit or purchasing cards, or to the spending of any particular individual. I note too that the auditor has already commented on shortcomings of these systems and processes.

We understand that the Committee has also asked the Council’s chief financial officer to review certain aspects of the Council’s expenditure policies and processes to ensure that they are operating appropriately and will continue to do so.

In addition, the details of the purchasing card transactions are in the public arena and you have publicly acknowledged shortcomings in your personal use and administration of the purchasing card.

In reaching my decision, I have considered the effect of the additional annual audit work, alongside the previous work that has been carried out by our appointed auditor and the Council’s internal audit staff, the review of expenditure policies and processes, and the public disclosure of Council spending that has already taken place. It is also relevant that the Council will shortly cease to exist as a separate organisation.

I consider that, in all these circumstances, the Council’s response is appropriate and there is no need for further involvement of the Auditor-General.

Yours sincerely

Phillippa Smith
Deputy Controller and Auditor-General