Outstanding matters related to Kaipara District Council audits

13 August 2012

File Ref: EN/LCA/03-3318

Kaipara District Council
Private Bag 1001
Dargaville 0310

Dear Mayor and Councillors

I am writing to highlight matters that you, as the elected members of Kaipara District Council, are responsible for resolving. I acknowledge the intense scrutiny and considerable pressure that your Council has been under in recent times, and the high degree of uncertainty around the district’s complex financial situation. Under the circumstances, I encourage you to take action as soon as possible to address the matters highlighted so you can give your community a level of clarity and certainty.

Through the audit work, the audit team has identified a number of significant issues and concerns that are set out in detail in the attached:

• letter and draft audit report on the Council’s annual report for the year ended 30 June 2011; and
• letter about progress on the audit of the Council’s 2012-22 Long-Term Plan (LTP).

The main concerns at a high level are for the Council to establish whether it:

• is financially viable;
• has an appropriate and prudent financial strategy;
• is basing its long-term planning decisions on the right information; and
• has the capability to deal with the complex and compounding nature of the issues at hand.

These are matters that should be considered directly by you as the elected members, and that you need to decide on, with advice from Council staff.

I acknowledge the combined efforts of your own staff and the Auditor-General’s Appointed Auditor Karen MacKenzie and her audit team, who have all been doing their best to deal with outstanding issues under difficult circumstances. We remain concerned that the Council relies on too few appropriately skilled staff to be in a position to resolve these issues in time to adopt the 2011 annual report and the 2012-22 LTP on 29 August 2012 as planned.

Karen MacKenzie will now complete the outstanding audit work so that, when the Council has attended to the matters raised and is ready to adopt the annual report and approve the LTP, she is in a position to issue the relevant audit reports. The audit reports will reflect how the Council decides to resolve the fundamental issues posed in the attached documents.

I appreciate that this is a difficult time for you all and know that you have the community’s best interests at heart. We have tried to be as clear as we can about the issues and the implications of your decisions. If you need further clarification, please contact Karen MacKenzie in the first instance.

In closing, I expect the Council to make this letter and the attached documents public as soon as possible.
Thank you.

Yours sincerely

Bruce Robertson
Assistant Auditor-General, Local Government