Tag Archives: PPP arrangements

LGNZ: OAG report on Kaipara

Updated Post 7.12.13

Link received.
Saturday, December 07, 2013 4:29 PM

Anonymous says:
[An acquaintance] has been very involved with uncovering the Kaipara scandal. We’ve decided it is a genetic fiesty gene. You may be interested in putting up the following Youtube link… There are very similar parallels with the DCC!
See what you think.

Published on 22 Nov 2013. Ecocare Bear.

Mangawhai, Kaipara: When Government Goes Bad!!
Mangawhai Ratepayers and Residents Association (MRRA) goes to court in 2014. Please make donations now at http://www.MRRA.org.nz. We need your support to challenge Kaipara Council’s illegal contracts, illegal loans, 100% rates increases and abuse of law. If successful, our court ruling will help all Kiwis stop out-of-control spending by Councils around New Zealand

****

[via Far North email copy to Whatif? Dunedin]

OAG report on Kaipara
3 December 2013

Dear Mayors, Chairs and Chief Executives

This afternoon, The Office of the Auditor General released its report on the Kaipara District Council’s delivery of its wastewater project at Mangawhai and very shortly will be briefing media. The 400 plus page report (and summary report) is a sobering read. Media coverage is likely to be severe and we need to be ready for that. We would ask that you pass this communication on to all members of your council.

In summary, the Council’s management exhibited a lack of basic financial and project management expertise and little acknowledgement of relevant risks. Kaipara’s councillors also failed to assume governance responsibility for the project, assess its risks and ask the appropriate questions.

It would appear that the only positives [sic] outcomes are that Mangawhai now has a wastewater system that works and has capacity to cater for future growth. Although governance failures are not new in private, public or local government sectors, the report has highlighted significant management and governance failures and successive poor performance with Kaipara District Council’s delivery of its wastewater project.

This performance is not acceptable for local government, whether in the past, present or in the future. As all of us are acutely aware, it reflects very poorly on the sector. However, the issues have occurred – we now need to learn the lessons and take ownership of the broader governance concerns that the OAG has raised.

OAG’s report outlined areas for public sector entities to be aware of based on lessons learnt – these are outlined below. Without doubt there are many strongly governed councils in New Zealand but, as with any organisation, we can always improve. If a focus on governance ensures that a Kaipara is not repeated then the entire sector will gain from that, just as the reputation of the sector is tarnished when things go wrong on such a scale.

As we’ve discussed previously, LGNZ is introducing initiatives to lift the bar. The success of these initiatives will depend on member buy-in. In this regard, the Kaipara episode provides a powerful incentive for the membership to come together to support one another in ensuring that collectively we will strive to ensure that poor performance on this scale is never repeated.

Post-elections training for elected members is now complete. In early 2014, we will launch governance training in conjunction with the Institute of Directors to assess and improve current governance practices in councils. Councils will need to fund this training. In the light of Kaipara, I encourage you to think of such training as an investment in good outcomes and not as an unjustifiable cost.

LGNZ is also soon to introduce its centre for advice and best practice, and has articulated a strong future focus for the sector on financial effectiveness and value. Indeed, a soft launch is already underway with some councils already accessing LGNZ for advice on matters that will form a key focus of the Centre of Excellence.

Governance will be a core focus in the coming triennium. I recommend that you and your council review the report – the 40-page summary may assist here – and consider the relevance of the messages for your council. LGNZ will shortly issue a media release and I will front media as required – we need to acknowledge where there have been failings and show what we are doing to lift performance.

I will continue to write on this subject – including an article which may feature in national media in coming days and in IoD’s [Institute of Directors] Boardroom magazine later this month. It is important that our stakeholders and the public know we are strongly committed to good governance. The video clip on our recent major issues seminar held in Wellington on 21 November – “Why good governance matters in local government” – is available here on our website – this is useful viewing.

I have also provided my speech here. Michael Stiassny, Vice-President of IoD, has made several pertinent points for the sector to consider. We will continue the dialogue, and if you have any feedback for Malcolm [malcolm.alexander @ lgnz.co.nz] or myself [lawrence.yule @ hdc.govt.nz] on this subject, or any other, then please email us.

Kind regards

Lawrence Yule
President

Local Government New Zealand

OAG’s advice to public entities on lesson learnt:

Accountability
● Public entities should be meticulous about legality
● Good record-keeping is the foundation of effective accountability
● Workshops can supplement formal Council meetings, but not replace them
● Contractors need to be tied into public sector accountability mechanisms

Governance
● Understand the role and stick to it
● Common sense is a legitimate governance tool
● Understand what you need assurance on and where you will get it from
● Audit committees can provide useful support

Management
● There are limits to contracting out
● It is important to maintain appropriate financial management capacity and capability and to stick to your sphere of competence
● Project governance and management is important

PPP arrangements
● Do not underestimate what is involved in a PPP arrangement
● Accounting should not drive the decision to enter into a PPP
● Transfer of risk is not an end in itself
● PPPs are unlikely to succeed fully if the contract is not for “the complete package”

Feedback [info @ lgnz.co.nz]

——————————————————————-

[via scoop.co.nz]

Kaipara review shows a need to lift governance performance
Tuesday, 3 December 2013, 2:33 pm
Press Release: Local Government NZ
http://www.scoop.co.nz/stories/PO1312/S00024/kaipara-review-shows-a-need-to-lift-governance-performance.htm

Related Posts and Comments:
12.11.13 Northland council amalgamation
29.6.13 Audit NZ and OAG clean bill of health —Suspicious!
21.4.13 Councils “in stchook” —finance & policy analyst Larry.N.Mitchell
19.3.12 Local government reform
21.2.12 Kaipara this time

Posted by Elizabeth Kerr

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