1 February 2018
Media: Rotorua Daily Post
Topic: Audit NZ Report to Council on the audit of Rotorua Lakes Council for the year ended 30 June 2017
Enquiry
1) Audit NZ said there were "There were significant delays in competing this year's audit. They occurred because of delays in producing information and a lack of QA review resulting in a significant number of misstatements. Going forward the Council needs to take project management approach to the production of the annual report. We are planning to meet with the finance team to determine how to make the audit process more efficient going forward." They have also said they would be talking to council regarding the "cost of overrun recoveries". I was wondering if you could please tell me why there were delays in producing information, and whether the cost of the overrun recoveries has been determined (if so, what is it?)
2) The report mentions a restructure of the council's finance team. Could you please tell me why this occurred, when it occurred, and what staffing changes were made?
3) The report details issues with staff spending, including mini-bar spending on P Cards, and hotel stays costing $300 and $450 per night. Is it possible to find out how much staff have spent on their P Cards on mini-bars, and how often staff have spent more than $300 per night on a hotel? Does the council have any comment about this type of spending?
4) "Rotorua Regional Airport Limited's Statement of Intent (SOI) did not meet all the requirements of the Local Government Act 2002. The key items not complied with were submitting the draft SOI to the Council by 1 March and the final SOI by 30 June. A complete list of the items not complied with has been reported to the Board of Rotorua Regional Airport Limited. We recommend the Council oversees Rotorua Regional Airport Limited's preparation of its Statement of Intent to ensure key requirements under the Local Government Act 2002 are met. " Does the council have any comment on this?
5) "There are situations where service request calls were completed before being logged in the system. This is occurring with calls received after hours and on weekends. The delay in recording the call has an impact on the calculation of the resolution time for performance measures that rely on the resolution time. The issue was limited to the Hansen reports extracted from the system for the first half of the year following a change in criteria used in the reports. " Is the council planning to make any changes to rectify the above?
6) "We identified an instance where a redundancy payment was calculated incorrectly and an employee was paid less than their contractual obligation. This error has now been corrected and the previous employee paid the difference. We recommend the Council reviews the process for calculating and reviewing redundancy payments, to ensure all employees are paid within their contractual obligations." Does the council have any comment on this?
7) There's a line in the report that I wanted to give you a chance to respond to if you wanted to.
When discussing the delays in information being provided to auditors, the reports cites "Staff performance and competency issues, including ability to plan the audit process" as being a contributing factor.
What measures has the council put in place to address the above?
Response
See below in response to your enquiry regarding Audit NZ's report to council on the audit of Rotorua Lakes Council for the year ended 30 June 2017 -
From Acting Chief Executive Jean-Paul Gaston:
"This report is an annual exchange between Audit NZ and Council which highlights areas for improvement for future financial and auditing processes.
We have taken on board all of Audit NZ's commentary and suggestions and as stated in the 'Management comment' sections in the report, have made changes and improvements as required.
It should be noted that Audit NZ signed off on Council's Annual Report for the 2016/17 year (ending 30 June 2017). Had any material issues been uncovered, it would not have done so.
The restructure of the finance department was part of last year's organisation-wide review aimed at aligning council's structure, roles and resources to deliver on the direction set by Council. Implementation of the review occurred during the annual reporting process in mid-2017 and placed added pressure on the finance team."
Changes made to the financial team are outlined in the Audit NZ report, which you have.
