Audit and Review, Deloitte

U N N E R V I N G ● N E W S

“If Deloitte was caught with one such brazenly egregious case, just what else is there that goes unreported, and undiscovered when it comes to corporate “books”, not only in Brazil but also in the US.”

### zerohedge.com Dec 5, 2016 9:43 PM
Auditor Deloitte Fined A Record $8 Million For Massive Fraud
By Tyler Durden
Remember when auditors were, by their very definition, supposed to be the embodiment of credibility, trustworthiness and moral fibre? The Brazilian arm of Big Four auditing giant, Deloitte, forgot these simple prerequisites and as a result the US auditing watchdog fined the firm a record $8 million for what amounts to massive fraud: falsifying audit reports, altering documents and providing false testimony during an investigation that unearthed what it described as its “most serious” finding of misconduct.
The US Public Company Accounting Oversight Board, or PCAOB, also penalised or barred 12 former partners, including a national practice director, and auditors of the Brazil-based Deloitte Touche Tohmatsu Auditores Independentes.
The Deloitte Brazil case is the first time the PCAOB has “charged a member of the Big Four auditing firms with fraud and for failing to co-operate with an investigation” according to the FT [Financial Times]. Worse, unlike banks which resolve similar cases without admitting or denying guilt, in settling, Deloitte Brazil admitted it had violated quality control standards and failed to co-operate with the auditing board’s inspection and subsequent investigation.
“This is the most serious misconduct we’ve uncovered. It’s cover-up after cover-up after cover-up,” Claudius Modesti, director of enforcement at the PCAOB, said. “As an investor you’re expecting that the audit was done properly and sufficiently and that wasn’t the case here.”
Not only was that not the case, but the details read like straight out of a fictional account of third-world crime.
Read more

Deloitte Touche Tohmatsu Ltd, commonly referred to as Deloitte, is a UK-incorporated multinational professional services firm with operational headquarters in New York City in the United States.
Deloitte is one of the “Big Four” accounting firms and the largest professional services network in the world by revenue and number of professionals. Deloitte provides audit, tax, consulting, enterprise risk and financial advisory services with more than 244,400 professionals globally. In FY 2016, the company earned a record $36.8 billion USD in revenues. As of 2016, Deloitte is the 6th-largest privately owned organisation in the United States.

The Big Four:
● PricewaterhouseCoopers (PwC), largest accounting firm in terms of revenue.
● Deloitte Touche Tohmatsu (Deloitte)
● Ernst & Young (E&Y)
● Klynveld Peat Marwick Goerdeler (KPMG)

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OTAGO RUGBY & RACING ASIDE

Remember the old chestnut…. The connection between TTCF (The Trusts Community Foundation Ltd; formerly, The Trusts Charitable Foundation Inc) —and Deloitte.

“TTCF engaged Deloitte when they desperately needed an ‘independent’ audit so as to put the Department of Internal Affairs (DIA) and Audit NZ off the scent. Unfortunately, even though Deloitte uncovered approximately $40k per month in mis-spent funds, TTCF ensured that was left out of the report because after all they were paying the Deloitte bill.”

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Related Post and Comments:
2.6.15 Queen’s Birthday honours to rogues #TTCF #ORFU #PokieRorts
11.3.15 DIA —poor job as gambling regulator
2.2.15 Operation Chestnut: DIA, SFO fluffing round the edges #TTCF #ORFU
11.1.15 Southern complainants: IPCA won’t ensure upfront investigation…
14.12.14 DIA regulates what? Not white collar crime, not with govt looking on!
5.8.14 Gambling Commission shuts down racing’s Bluegrass pokie trust
3.2.14 DIA signed up Intralot amid concerns about bribery and corruption
31.12.13 Martin Legge: Operation Chestnut [DIA’s PR exercise]
30.12.13 DIA insights: Pokie rorts, money-go-rounds, names
11.10.13 New Zealand: Pokie trusts same everywhere #pokierorts
10.10.13 Whistleblowers’ message heard ??! #OtagoRacingClub #pokierorts
1.8.13 Politicians keeping DIA/SFO quiet on ORFU and TTCF #pokierorts
31.3.13 DIA and Office of the Auditor General stuff up bigtime #pokierorts
21.2.13 DIA, SFO investigation #pokierorts
11.11.12 Department of Internal Affairs #pokierorts #coverup #TTCF
25.7.12 Martin Legge backgrounds TTCF (pokie trust) and Portage and Waitakere Licensing Trusts #DIA

█ For more, enter the terms *pokies*, *pokie rorts*, *ttcf*, *orfu* or *dia* in the search box at right.

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Posted by Elizabeth Kerr

This post is offered in the public interest.

*Image: Deloitte via Wikimedia Commons

University calling Property Services

The University of Otago has expensive real estate and facilities at Dunedin, substantial numbers of heritage and modern buildings, tracts of housing, halls of residence and colleges, a space programme and a campus master plan. The university always has some sort of building and construction work going on most of the time.

The Property Services Division, headed by Barry MacKay (pictured), states its raison d’être as:

“We create, develop and maintain the Otago campuses in a way that inspires and supports excellence in all that experience them. We’re proud to support the ongoing academic mission of New Zealand’s first university by providing the best facilities, services and physical environment in which staff, students and the general public can learn, teach, live and play. From overseeing the design and construction of award-winning buildings, fixing broken light bulbs, booking office space, cutting the grass and trimming hedges, we’re the highly-trained men and women who help keep the five University of Otago campuses humming.”
http://www.otago.ac.nz/propertyservices/index.html

Despite the amazing upbeat veneer of professionalism and competence….

Imagine the university’s shrill consternation over an ‘outstanding’ Code Compliance Certificate (CCC) —for work to Aquinas Hall in 2008.

Just this week the university started contacting members of the local building fraternity…. confusing particular builds and industry players, with SO MUCH BLAMING and, decidedly, no track of its own on which relevant project or missing CCC….

Turns out, the Stage 2 Aquinas job had been project managed by the university. Property Services should’ve called Property Services.

Too many light bulbs need to be changed. Not enough energy, Mr MacKay, put into your project management systems.

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█ A code compliance certificate is a formal statement issued under section 95 of the Act, that building work carried out under a building consent complies with that building consent.

Code compliance certificates – Ministry of Business …
http://www.building.govt.nz/bofficials-code-compliance-cert

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Related Posts and Comments:
28.3.15 University of Otago landscaping
24.7.13 University: Leith flood protection scheme and landscaping
● 31.5.13 University of Otago development plans [see latest comments]

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Posted by Elizabeth Kerr

Cr Vandervis on DCC project budgets

Received.
Sat, 16 May 2015 at 11:39 p.m.

via Malcolm Dixon’s Facebook page [link to Build Dunedin]
https://www.facebook.com /malcolm.dixon.528/posts/10152926652873106

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[screenshot]

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Related Posts and Comments:
7.5.15 DCC Draft LTP 2015/16-2024/25 —public submissions online
28.3.15 DCC Draft LTP 2015/16 to 2024/25 —CONSULTATION OPEN
25.3.15 DCC Long Term Plan: Green-dyed chickens home to roost
14.1.15 DCC Draft Long Term Plan: more inanity from Cull’s crew pending

█ For more about DCC and Cr Lee Vandervis, enter *vandervis* in the search box at right.

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Posted by Elizabeth Kerr

DCC Draft LTP 2015/16-2024/25 —public submissions online

PUBLIC FEEDBACK

You are able to search by submitter or subject/topic and view the details of the submission received by the Dunedin City Council to the DRAFT Long Term Plan 2015/16-2024/25.

The submissions are listed in alphabetical order of surname first.

█ Go to: http://www.dunedin.govt.nz/your-council/draft-long-term-plan-2015-2016/public-submissions

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Related Posts and Comments:
28.3.15 DCC Draft LTP 2015/16 to 2024/25 —CONSULTATION OPEN
25.3.15 DCC Long Term Plan: Green-dyed chickens home to roost
14.1.15 DCC Draft Long Term Plan: more inanity from Cull’s crew pending

DCC Draft Long Term Plan 2015/16 to 2024/25 —CONSULTATION OPEN

There is no SMALL CITY in this image.
Guess we haven’t started building yet. When we do it will take consolidated council debt to way over the existing +$600M which, of course, Mayor Liability Cull is already bleakly and ‘creatively’ responsible for.

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Dunedin City Council – Media Release
Long Term Plan Consultation Document Unveiled

This item was published on 27 Mar 2015

‘Building a Great Small City’, the consultation document for the DCC’s Long Term Plan (LTP) 2015/16 – 2024/25, has been released.

Mayor of Dunedin Dave Cull says the LTP is designed to enable the Council to examine the bigger picture and set a strategic direction for the city covering the whole range of DCC activities. Now priorities have been proposed, the Council wants to hear from residents.

The consultation document is now available at http://www.dunedin.govt.nz/ltp
Public consultation on the LTP opens on Saturday (today) and closes at 5pm on 28 April. People are encouraged to provide their feedback early and, if possible, use the online form.

A snapshot of what is proposed, presented in a map fold newsletter, will be delivered to every Dunedin household. Once consultation has started, there will be further information on the DCC website and copies of the LTP consultation document will be available at DCC facilities such as libraries and the Customer Services Agency in the Civic Centre. There will also be public workshops and LTP stands in public places and at events, with the opportunity for face-to-face discussion with Councillors. These will be held around the wider city during the consultation period.

For the first time, comments on the DCC Facebook page and tweets to @DnCityCouncil using #LTP will also be considered as feedback.

█ 28.3.15 ODT: Council accepts social media feedback

Mr Cull says, “The LTP allows us to look at the aspirations outlined in our strategy documents and how we should prioritise these over the next 10 years. This means the LTP needs to balance our financial goals, such as debt reduction, and our desire to develop Dunedin to make it a more attractive place to live and do business. Our Financial Strategy imposes a 3% rate increase limit unless there are exceptional circumstances. This is in line with the average 3% ‘cost of living’ increases faced by local government. Under current proposals, an overall 3.8% rate increase is proposed for 2015/16. The exceptional circumstances are that, in addition to our usual inflationary pressures, we have had to provide an extra $1.5 million for the Forsyth Barr Stadium and budget for losing $4.5 million of dividend from Dunedin City Holdings Limited, which owns companies on the DCC’s behalf. We have absorbed some of those costs, but cannot absorb them all. We also need to balance rate limits against a range of new proposals in the LTP which the Council believes are worth investing in. We need public input on these, plus feedback on several other projects that have been included as unfunded items, such as new aquatic facilities for Mosgiel and lighting for the University of Otago Oval.”

Amendments to the Local Government Act have changed the way LTPs are developed and consulted on with the community. Past long term plans have involved first producing a full draft plan which was then put out for public consultation and feedback. Under the new system the DCC is required to produce this consultation document which sets out the issues the city is facing and the options for managing them. Key issues include putting the Stadium on a more achievable financial footing, tackling the city’s ageing infrastructure and addressing low economic growth.

The consultation period will be followed by hearings and deliberations in May and a final LTP will be adopted by the Council in June.

A range of supporting documents and an online submission form will be available at http://www.dunedin.govt.nz/ltp from 7am on Saturday (today).

Contact Dave Cull Mayor of Dunedin on 477 4000. DCC Link

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Related Posts and Comments:
25.3.15 DCC Long Term Plan: Green-dyed chickens home to roost
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
12.3.15 Snaky Stedman —not answering … questions ratepayers must ask
4.3.15 DCC internal audits
20.2.15 Audit NZ making up for previous huge inadequacies over DCC books ?
21.1.15 Dunedin City Council to set rates WAY ABOVE….
14.1.15 DCC Draft Long Term Plan: more inanity from Cull’s crew pending
18.12.14 DCC: Deloitte report released on Citifleet #whitewash
21.11.14 Stadium Review: Mayor Cull exposed
19.11.14 Forsyth Barr Stadium Review
3.11.14 DCC: What happened to $20 million cash on hand? #LGOIMA
31.10.14 Whaleoil on “dodgy ratbag local body politicians” —just like ours at DCC
28.5.14 DCC: Audit and risk subcommittee
31.3.14 Audit services to (paying) local bodies #FAIL ● AuditNZ … LynProvost
26.2.14 DCC: New audit and risk subcommittee a little too late !!

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Posted by Elizabeth Kerr

*Image source: DCC

DCC Long Term Plan: Green-dyed chickens home to roost

Updated post Wed, 25 Mar 2015 at 12:49 p.m.

[todayifoundout.com]

With a self-imposed aim to keep rates rises to no more than 3%, the council still needed to find millions of dollars in savings each year for the next decade.

### ODT Online Wed, 25 Mar 2015
Council accused of being in denial over long-term plan
By Chris Morris
Councillors say the Dunedin City Council is in “denial” over the need to raise rates, or cut services, to plug a $68 million budget shortfall over the next decade. The claims came amid warnings from Crs Aaron Hawkins and Jinty MacTavish yesterday, as councillors met to sign off on a public consultation document summarising the council’s long-term plan.
Read more

—

Quelle surprise…. it’s not like these latest mumblings from Councillors on DCC budgets and projections is “News!” to the Dunedin ratepayers and residents who closely follow Council fortunes.

What IS news is the “greenie sustainables” of Greater Dunedin have finally woken up!

Is there a political split forming in Greater Dunedin? – when indeed, historically, we’ve been told by the ‘loose connection with incorporated society’ that its members have no shared policy, that their elected representatives are free to (think) and vote independently…. with some cohesion, nevertheless.

Well might Cr Lee Vandervis provide a standing ovation to Cr Aaron Hawkins’ voicing of major concerns. It was incumbent on Cr Jinty MacTavish, practically and politically… to agree with her Green Party confederate.
Interesting times. Wait for the YouTube video.

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Dunedin City Council Extraordinary Meeting 24 March 2015 at 12 noon
Council Chamber, Municipal Chambers

█ Agenda – Council – 24/03/2015 (PDF, 28.3 KB)
Extraordinary Meeting

Agenda Item 4
ADOPTION OF DRAFT LONG TERM PLAN 2015/16 – 2024/25 SUPPORTING DOCUMENTS AND CONSULTATION DOCUMENT
Report from the General Manager Services and Development (Simon Pickford). Refer to pages 4.1 – 4.8.
Supporting documents and consultation document circulated separately and are also available on the Dunedin City Council website.
Reports and recommendations contained in this agenda are not to be considered as Council policy until adopted.

█ Report – Council – 24/03/2015 (PDF, 176.8 KB)
Adoption of Draft Long Term Plan 2015/16 – 2024/25 Supporting Documents and Consultation Document

█ Report – Council – 24/03/2015 (PDF, 2.8 MB)
Adoption of Draft Long Term Plan 2015/16 – 2024/25 Supporting Documents and Consultation Document
Attachment 7 – Dunedin City Council Draft Long Term Plan Consultation document for adoption 24 March 2015

█ Report – Council – 24/03/2015 (PDF, 2.4 MB)
Adoption of Draft Long Term Plan 2015/16 – 2024/25 Supporting Documents and Consultation Document
Draft Infrastructure Strategy for adoption 24 March 2015 (replaces previously issued document)

—

Related Posts and Comments:
12.3.15 Snaky Stedman —not answering … questions ratepayers must ask
4.3.15 DCC internal audits
20.2.15 Audit NZ making up for previous huge inadequacies over DCC books ?
21.1.15 Dunedin City Council to set rates WAY ABOVE….
21.11.14 Stadium Review: Mayor Cull exposed
19.11.14 Forsyth Barr Stadium Review
31.10.14 Whaleoil on “dodgy ratbag local body politicians” —just like ours at DCC
28.5.14 DCC: Audit and risk subcommittee
31.3.14 Audit services to (paying) local bodies #FAIL ● AuditNZ … LynProvost
26.2.14 DCC: New audit and risk subcommittee a little too late !!

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Posted by Elizabeth Kerr

DCC internal audits

### ODT Online Wed, 4 Mar 2015
Council plans sweeping internal audit
By Chris Morris
An outside company will be paid to pry into every corner of the Dunedin City Council in the wake of the Citifleet fraud. The move came as members of the council’s audit and risk subcommittee yesterday endorsed two new policies designed to better protect the organisation from fraud.
Read more

### ODT Online Tue, 3 Mar 2015
Look at audit, disposal policies
By Chris Morris
The Dunedin City Council is continuing to close the gaps in its defences in the wake of the $1.5 million Citifleet fraud. Councillors at today’s audit and risk subcommittee meeting will consider a new internal audit policy, and an updated asset disposal and write-off policy, which aimed to better protect the organisation against fraud.
Read more

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The Council’s audit and risk subcommittee:
Susie Johnstone (Chairperson), Janet Copeland, Councillors Chris Staynes, Richard Thomson, Hilary Calvert and Mayor Dave Cull (Ex-Officio Member)

Agenda – Audit – 03/03/2015 (PDF, 105.3 KB)

Report – Audit – 03/03/2015 (PDF, 164.7 KB)
Audit and Risk Subcommittee Work Plan

Report – Audit – 03/03/2015 (PDF, 63.2 KB)
Governance/Financial Policies

Report – Audit – 03/03/2015 (PDF, 363.9 KB)
Updated Internal Audit Policy (Draft)

Report – Audit – 03/03/2015 (PDF, 216.7 KB)
Updated Asset Disposal and Write-off Policy and Procedures

Report – Audit – 03/03/2015 (PDF, 1.7 MB)
Significance and Engagement Policy

Report – Audit – 03/03/2015 (PDF, 38.1 KB)
Long Term Plan Update

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Posted by Elizabeth Kerr

*Images: glasbergen.com – bad news toon-1682; pinimg.com – keep calm

Auditor-general Lyn Provost #Resign

Link + message received from Anonymous
Wed, 26 Nov 2014 at 11:53 p.m.

Message: What unbelievable crap from Lyn Provost, given her office (OAG) has brushed aside so many public complaints and concerns about Council expenditure that may have prevented the situation she now chooses to alert us all to !!!!

________________________________

### stuff.co.nz Last updated 12:39 26/11/2014
Lax councils $7 billion behind in infrastructure
–Dominion Post
Ratepayers are facing a $7 billion bill to replace crumbling roads and water pipes caused, in part, by the “worry about it later” attitude of councils. A report released yesterday by Auditor-General Lyn Provost found councils nationwide have been failing to put enough money aside to maintain their collective $100b of infrastructure assets. The gap between funds needed and reality is tipped to reach $6b to $7b by 2020. Much of the country’s infrastructure was built in two waves, from 1910-30 and 1950-86, and many assets would reach the end of their lives at the same time, the report warned.

“They are storing up a problem for future generations, ” said Bruce Robertson, assistant auditor-general in charge of local government. Will councils step up and deal transparently and effectively with these issues?”

Keeping rates bills down to maintain political popularity was one reason assets were underfunded, and a “worry about it later” mentality also existed, the report stated.[…] Local Government NZ president Lawrence Yule said a $7b shortfall was significant, but it was too early for ratepayers to be pressing the panic button. It was not yet clear how accurate the auditor-general’s findings were, he said.
Read more

Note: These last years Lawrence Yule has been publicising how bloody good debt-funding council activities is. WTF

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████ Report 7 Nov 2014:
Auditor-General’s overview and conclusions
Water and roads: Funding and management challenges
New Zealand has a good reputation internationally for managing assets because of the work of groups such as New Zealand Asset Management Support (NAMS). However, many local authorities’ asset management practices fall short of asset management guidance, such as that developed by NAMS. This report suggests that local authorities need to better understand the local economy to plan for the longer term and that their management of infrastructure and capital needs to improve to meet the challenges ahead. Full Report

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Related Posts and Comments:
21.11.14 Stadium Review: Mayor Cull exposed
31.10.14 Whaleoil on “dodgy ratbag local body politicians” —just like ours at DCC
10.10.14 Cull consorts with losers at LGNZ
9.9.14 Mangawhai, Kaipara: Latest news + Winston Peter’s speech
26.8.14 DCC: Forensics for kids
6.8.14 DCC tightens policy + Auditor-General’s facetious comments
15.7.14 Stadium: Who is being protected?
26.6.14 LGNZ #blaggardliars
31.3.14 Audit services to … local bodies #FAIL ● AuditNZ ● OAG ● LynProvost
20.3.14 Delta: Report from Office of the Auditor-General
7.3.14 Jeff Dickie: Letter to the Auditor-General Lyn Provost
2.2.14 Stadium: ODT editorial (1.2.14) —Garbutt debunks myths
3.12.13 LGNZ: OAG report on Kaipara
28.5.13 Carisbrook: Auditor-General #fails Dunedin residents and ratepayers
21.4.13 Councils “in schtook” —finance & policy analyst Larry.N.Mitchell
31.3.13 DIA and Office of the Auditor General stuff up bigtime #pokierorts
6.3.13 Carisbrook: Cr Vandervis elaborates
15.2.13 Carisbrook: Call for OAG investigation into DCC / ORFU deals
22.11.12 Cull COVERS UP COUNCIL #massage

For more, enter the terms *dcc*, *dchl*, *dvml*, *citifleet*, *stadium*, *carisbrook*, *delta* in the search box at right.

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Posted by Elizabeth Kerr

DCC: Forensics for kids

Fairfax Media has obtained Audit NZ letters of management to the DCC from 2005 to 2012, released under the Local Government Official Information and Meetings Act. The letters show that in the years 2007-2010 auditors consistently urged the DCC to tighten up its risk-management policies and processes.

Audit NZ expressed concern over what it indicated could be inadequate controls over several internal processes, including verifying signatures of those authorised to sign invoices and purchase orders, independent review of creditor files, and controls of sensitive areas such as sale of council assets to staff. (Fairfax)

### stuff.co.nz Last updated 08:17 26/08/2014
Dunedin council officers ‘not kids’
By Wilma McCorkindale
The Dunedin City Council (DCC) appears to have ignored calls by Audit New Zealand to improve its risk and fraud processes, saying its officers were “supposedly people with integrity … not kids”.

The DCC revealed in June it was investigating a suspected major fraud within its Citifleet unit. The fraud was suspected to have been carried out over a decade. Citifleet team leader Brent Bachop died suddenly in May. His death has been referred to the coroner. Council chief executive Dr Sue Bidrose said the alleged fraud of $1.5 million included alleged illegal transactions resulting in the loss of profits from the sale of 123 council fleet vehicles. The findings have been passed to the Dunedin police for further investigation.

Fairfax Media has obtained Audit NZ letters of management to the DCC from 2005 to 2012, released under the Local Government Official Information and Meetings Act. The letters show that in the years 2007-2010 auditors consistently urged the DCC to tighten up its risk-management policies and processes. It appears Audit NZ was compelled to repeat similar advice over the period and noted the DCC met only minimum requirements.

Council managers’ response to the Audit NZ findings in 2010 was to say the council had considered creating an audit and risk committee but concluded its finance and strategy committee adequately performed the role. In December 2010 Audit NZ raised the issue of reviews of areas “susceptible to fraud”, but management commented that specific audits in the “most sensitive areas” had found “no transactions of concern or deficiencies in controls”.
Read more

Five council staff were involved in “employment processes”, with some facing the prospect of losing their jobs, the ODT understands.

[Irony] Local Government New Zealand president Lawrence Yule yesterday told the ODT the “mind-boggling” alleged fraud was the biggest involving a local authority he could recall.

### ODT Online Tue, 26 Aug 2014
Council overlooked audit advice
By Chris Morris
Dunedin Mayor Dave Cull concedes a chance to detect the alleged $1.5 million Citifleet fraud may have been missed, after the council twice overlooked advice from Audit New Zealand. The revelation came in Audit New Zealand’s annual reports to the council, obtained by the Otago Daily Times, which highlighted gaps in council processes dating back to 2003. […] The findings have triggered finger-pointing between past and present council staff, councillors and Audit NZ, but council chief executive Dr Sue Bidrose said responsibility for failing to detect the alleged fraud rested with the council.
Read more

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Related Posts and Comments:
23.8.14 DCC public finance forum 12.8.14 (ten slides)
6.8.14 DCC tightens policy + Auditor-General’s facetious comments
3.7.14 Stuff: Alleged vehicle fraud at DCC
1.7.14 DCC: Far-reaching fraud investigation Citifleet
3.6.14 DCC unit under investigation
2.5.14 DCC $tar-ship enterprise
28.4.14 DCC loses City Property manager in restructuring
7.2.12 DCC ‘money go round’ embedded

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Posted by Elizabeth Kerr

*Images (tweaked by whatifdunedin): tmba.tv – Tim McGarvey: 3D forensic animation (TMBA Inc. Animation Studio, New York City); scottthornbury.wordpress.com – F is for forensics (illustration by Quentin Blake, from Broughton, G. (1968) Success With English. Harmondsworth: Penguin)

DCC Draft Annual Plan 2014/15 Submission by Bev Butler

Received Friday, 9 May 2014 at 12:00 p.m.

Submission to DCC Annual Plan 2014/15 by Bev Butler

Thank you for the opportunity to speak to my submission.

I would like to express my support for the stadium review announced a few months ago.

Stadium Review

Due to concerns expressed by various members of the community, and my own growing concerns about the stadium issue, I decided to enquire into spending by DVML, through LGOIMA. It soon became clear that inappropriate spending had been occurring for some time within DVML eg hotel bills for up to $US350 per night etc. Purchase of boys t-shirts, gloves, hat, chewing gum and shaving gear. These are not business expenses. It is clear from some of the expenditure claimed that there is an ingrained sense of entitlement, which is unacceptable.

I understood that Council staff have been committed to curbing their budgets because of the debt problem and were unhappy to see the unbridled spending occurring within DVML. It wasn’t without its difficulties to obtain this information – DVML didn’t release it willingly. DVML treated the request as an imposition rather than an obligation. I was however – persuasive. Without the mechanism of LGOIMA requests some of this information may not have seen the light of day and hence steps made to address this wastage. It was reported in the ODT recently that DVML are now looking into charging for the future release of information. I believe this is a retrograde step: the purpose of acquiring official information is an important check on how public officers use public money or carry out their duties. Without it, unbridled corruption could occur.

Unfortunately for the Carisbrook Stadium Trust, they also operated inappropriately never dreaming that a group of citizens including myself would request information officially to expose their inappropriate spending. In fact, the former CEO, Jim Harland, informed me in 2008 that the CST was not subject to LGOIMA. What Mr Harland failed to tell me was that he had sought two legal opinions which both confirmed that CST was subject to LGOIMA through the DCC under section 2(6). To this day, Mr Malcolm Farry still shows considerable resistance to this and I have had to make several complaints to the Office of the Ombudsman. Mr Farry could have been prosecuted under the Ombudsman Act for his obstructiveness in releasing certain information should the Ombudsman have chosen to do so.

Why has this group of citizens continued to obtain information about the construction of the stadium? After all, it is now built and why don’t people just move on, as some say. I shall now explain why many people have not let go as would normally be expected.

Some may recall after the Christchurch earthquake there was a news item on TV1’s Close Up program. Shock and horror was expressed over invoices being sent to Christchurch residents for repair of their chimneys damaged in the quake. These invoices were for $2,000 and criticism was expressed at so little detail on these invoices. They just stated labour and materials $2,000. This was considered completely inappropriate invoicing and at the time there were questions of possible fraud.

Well, those quake invoices pale into petty significance compared with the CST invoicing. The CST presented millions of dollars worth of invoices to the DCC with merely two words on them: “Trust costs”. And, furthermore, this is after the Auditor General stated in his September 2007 report that no payments would be made to the CST without detailed invoices.

The former DCC Chief Financial Officer also sent me a letter in October 2007 stating that no CST invoices would be paid without third party invoices to support them. It was recently stated in an official information request that these third party invoices do not exist. In response, Mr Farry has now produced some paperwork, which the DCC is processing. This should have been done at the time and not retrospectively. When discussing this with a lawyer I said that the CST invoice process left the door wide open for fraud. The lawyer’s response was: “Not an open door, Bev, but a bloody great cavity!”

I emphasise that I am not saying that fraud occurred, what I am saying is the process was so flawed that no-one would know whether fraud had occurred or not. There is no statute of limitations on private or public fraud. According to the CST financial statements presented to the Charities Commission more than $71 million of public money went through this Trust. Every single dollar must be accounted for. Personally, I think it appalling that the process was so sloppy given that all the CST trustees are so-called top business people including two accountants. At best it shows the sheer arrogance of those trustees. I have also found other unexplained discrepancies in some of their financial reporting which I will deal with in another forum.

Another reason why a group of citizens are still investigating the stadium is because we believe criminal activity may have occurred.
So the issue is not whether you are pro or anti stadium but whether you are pro or anti corruption.

Outcomes from the stadium review

What I hope eventually comes out as a result of the stadium review includes:

1. A cost/benefit analysis of all the possible scenarios for the stadium including:
(a) Retaining the stadium under DVL ownership and DVML management
(b) Bringing the stadium “in house” under direct DCC ownership and management
(c) Privatising the stadium
(d) Mothballing the stadium until the private funding is raised as was promised by the CST prior to the stadium construction.

2. A cost/benefit analysis of the natural turf vs artificial turf .

3. An honest, full analysis of the entire stadium costs – by this I mean a report showing ALL annual costs of the stadium including DVML costs, DVL costs, DCHL costs (including from all the companies directly and indirectly). Ratepayers deserve an honest assessment – it won’t make ratepayers feel any better but at least we will know the full extent of the cost of the stadium. Many people think that the stadium costs Council just a million or two per year when in actual fact it is costing Council approximately $20 million per year overall, directly or indirectly. Ratepayers have a right to know. It is also very difficult to expect Council to make decisions when they are not presented with the full extent of stadium costs.

4. A formal request from the Council for the CST to front up with the three $1 million donations for construction which Mr Farry very excitedly announced in 2007. None of these donations have materialised nor has Sir Eion Edgar’s $1 million donation he announced in DScene in August 2009. A request for interest on late payment at market rates would also be appreciated.

5. A request for an increase in payment for naming rights from Forsyth Barr to keep it in line with what was initially promoted to Council by the CST’s agent The Marketing Bureau. Council was told naming rights were worth over $10 million but Forsyth Barr is only paying $5 million. Eion Edgar is trying to double count his $1 million ‘donation’ as being part of the $5 million naming rights. Naming rights are a corporate contract not a ‘donation’. As a trustee of a number of Charitable Trusts Sir Eion Edgar knows this. He can’t have it both ways.

6. A review of the Stadium Hire Agreement with the ORFU. David Davies, a former CEO of DVML, said ratepayers would be very angry if they knew what was in it – obviously this agreement is not advantageous to the ratepayer. So much so the ORFU are in a position where they only need to sell 200 tickets to break even.

7. No DVML staff should be working for the ORFU – ORFU is a private business and it is not up to the ratepayer to be subsidising the Union through providing staff support.

8. An assessment of the estimated substantial maintenance costs which are looming as reported in the DVML/DVL annual reports. Part of the projected $188 million (‘not one dollar more’) construction cost was a $6.4 million maintenance fund, which never eventuated, like the $45 million ($55 million including interest) in private funding for the construction lie.

Finally, the inappropriate spending, which occurred in the CST and continued through DVML when CST staff transferred to DVML, needs to be addressed. The community were provided with misleading information throughout the stadium construction but thankfully there is a democratic process in place which allows these matters to be exposed, to prevent this from happening in the future and bring those responsible to account.

[ends]

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Posted by Elizabeth Kerr

Audit services to (paying) local bodies #FAIL ● AuditNZ ● OAG ● LynProvost

Typically, local government pays Audit New Zealand to audit and review annual financial statements. It’s a tame, tick-box sort of exercise. Audit NZ does a remarkably poor job and is certainly not in it to protect the Community from institutional or corporate misuse of public funds, or indeed from what amounts to perversion or defeat of the course of justice.

Audit NZ is paid handsomely to not see failures of tansparency and non-accountability — such that the enlightened Mangawhai Ratepayers and Residents Association (MRRA) has had Audit NZ sacked from providing audit services to Kaipara District Council.

In an opinion piece last week at Otago Daily Times, City ratepayers let down again, Russell Garbutt cleverly and succinctly summarised the depth of the problem with the Office of the Auditor-General (OAG) investigation into Delta Utility Services Ltd. He also noted: “It may seem strange, but if a local government body goes feral, the body which investigates this and the one which provided audit services to that local body are both business units of the Auditor-General.”

Dunedin City Council (DCC) has ‘overseen’ the Auditor-General’s probe into property purchases at Luggate and Jacks Point by Delta Utility Services Ltd, which also involved the council’s holding company (DCHL). A more scandalous, politically slant and irresponsible report from a Government agency it would be difficult to imagine.

(Thank-you, Mayor Dave Cull and the individual Stuart McLaughlan.)

Criminally, the OAG’s Delta report is what passes for ‘honest and comprehensive’ investigation of fraud and corruption in New Zealand… such that the main Delta complainant, Cr Lee Vandervis of Dunedin City, who holds evidence obtained from over 350 emails, was NOT interviewed by the Auditor-General. Nor was his evidence examined.

The fact that for years Audit NZ has refrained from investigating or bringing attention to underhand dealings of the DCC and with respect to DCHL, Delta, Aurora, and Dunedin City Treasury Ltd (DCTL), to identify just some of the ‘group companies’ involved in financial mayhem with public funds, is fully SYMPTOMATIC.

And now we have DCC — and DCHL (again) — in relationship with Dunedin Venues Management Ltd, tied directly to Otago Rugby Football Union (ORFU) and The Highlanders through shared staff and facilities at the Stadium, and the facilities at Logan Park. Meaning that DCC continues to squander millions and millions of dollars of public funds each year, yet Audit NZ is nowhere to be seen under ‘the Roof’. Don’t mention the black hole, Carisbrook.

█ Inquiry into property investments by Delta Utility Services Limited at Luggate and Jacks Point. The Auditor-General’s Overview and Full Report are available at http://www.oag.govt.nz/reports/2014/delta

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WHERE TO FROM HERE ???
In yesterday’s Business section of the Sunday Star-Times came inklings of hope that the tide of fraud and corruption created by local bodies and ‘their mates’ is up for possible scrutiny through a change of legislation. Greater public and professional awareness of fraud by local councils and their companies (as well as private trusts and other means used to launder public monies) is coming to bear.

[Message to ALL: Those of us working quietly away to expose Dunedin City Council and Otago Rugby will never give up in a month of Sundays.]

SST Business 30.3.14 (page D5)

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NEWS: SFO has got into Mighty River Power and there are ‘reasons’ for non-disclosure of MRP fraud to the NZX…

A consultant says:

The following article goes on to cite other cases, one from last year mentions two men sentenced to prison and home detention following the payment of $849,000 in council funds for road and berm projects that were never completed.

█ Think DELTA, think AURORA, think DCC, think DCHL, think DCTL, think CWP, think CST (CSCT), think DVML…

█ Think of the individuals you know by name who fail to be prudent and conservative with Dunedin Ratepayer and Resident monies, whose actions (deliberate or otherwise) have been fraudulent and corrupt.

█ These entities and the individuals you know by name have been aided and abetted by Audit New Zealand, the Office of the Auditor-General, the Department of Internal Affairs, and indeed the Serious Fraud Office which doesn’t always show a clean pair of hands in assisting investigations by other Government agencies — if ‘supervised by’ mayors, local body politicians, local body employees, Members of Parliament, and Ministers of the Crown.

Welcome to the underbelly of New Zealand local government and the parties it pleases. STEAL from the poor to FATTEN the rich, by any means. Backed by Central Government.

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SST Business 30.3.14 (pages D1 and D8) [click to enlarge]

*Links to articles not yet available at Stuff.co.nz.

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Related Posts and Comments:
30.3.14 Paul Pope on local body annual plans
27.3.14 Jeff Dickie: Letter to the Auditor-General Lyn Provost
25.3.14 Delta blues . . . and Easy Rider
20.3.14 Delta: Report from Office of the Auditor-General
14.3.14 Delta: Mayor ignores Cr Vandervis’ official complaint
22.3.14 DVML, ‘Money for jam…..fig jam’
19.3.14 ORFU: Black-tie dinner, theft or fraud?
17.3.14 ORFU: Black-tie dinner on ratepayers

For more, enter the terms *carisbrook*, *cst*, *cull*, *cycle*, *dcc*, *delta*, *dia*, *draft annual plan*, *dvml*, *farry*, *orfu*, *nzru*, *pokie rort*, *pokies*, and *stadium* in the search box at right.

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Posted by Elizabeth Kerr

Councils “in schtook” —finance & policy analyst Larry Mitchell

Received Sun, 21 Apr 2013 14:45:37 +1200
Topic ring a bell? We are using DCC and Kaipara as the salutary case studies.

Larry N. Mitchell
Finance & Policy Analyst (Local Government)
PO Box 404 103, Puhoi 0951, Auckland, New Zealand
Phone: 09 422 0598 Mobile: 027 479 2328
Email: larry@kauriglen.co.nz

Read here or scroll to end of post to download this paper.

Councils “in stchook”
… their debt is way too high … it matters … so do proper disclosures

Dealing as I do, with matters of New Zealand Council finances, the one area that produces most comment, sometimes heated debate, is Council debt. Public discussion of Council debt is muddled, an often fractious difference of opinion generating more heat than light.

For example, the most recent (March 2013) Office of the Auditor General’s report of their findings from New Zealand Local Government audits concludes that Councils have their debt levels “within a reasonable range”. Recent New Zealand Local Government Association press releases concur.

Compare these reassuring findings to those of the 2013 NZ LG League Table where the lowest ranked 15% (10 in number) of New Zealand Councils are revealed as exhibiting unfavourable financial sustainability and community affordability issues. Both contradictory positions can’t be right. Unfortunately, the debate over Council debt is complicated by unsatisfactory public reporting-disclosures.

Discussions of Council debt are often compounded by current Council practices. These amount to opaque, imprecise Council debt accounting and “smoke and mirrors” disclosures. It is tempting to suggest that these are deliberate attempts to suppress discussion of Council debt on a “don’t scare the horses” basis.

This is particularly evident for use of the term by Councils of “Internal Borrowing”, a meaningless label, better described as “Robbing Peter”, covering as it does Council treasury management dealings involving a clear misuse (some might say misappropriation) of asset replacement funds.

Add to these sleights of hand a motivation for the more highly indebted Councils to keep their heads down when their debt totals soar, along with a tendency toward misinformation.

Department of Internal Affairs, the gambling authority

Comment received.

Russell Garbutt
2012/04/29 at 3:54 pm

Doesn’t it seem incredible that the DIA, when presented with an enquiry that on the surface appears to be more than dodgy, chooses to get a local investigator to phone one of the people involved, that investigator issues a warning to that person that things are being looked at for any future applications, chooses not to follow up with the appropriate people within the pokie fund – even when these people have what appears to be solid evidence that moves were made to obscure just who was really asking for grants. Did the DIA investigate with people like SPARC? Not to my knowledge. Seems to me that when anything is just a little bit too hard then the DIA run for the hills. Frankly, I can’t think of any work that the DIA have done in recent times that has really resulted in anything other than warning dodgy operations into becoming more covert.

*Sport New Zealand (Sport NZ) is the new name for the government organisation responsible for sport and recreation (formerly SPARC). -Eds

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See today’s story at Sunday Star Times by senior writer Steve Kilgallon
Pokie Funds: Case closed without call to whistleblower

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Posted by Elizabeth Kerr