Council claimed expenses it wasn’t entitled to, but refuses to say how much

Thursday, 12 September 2024

The Buller District Council’s project management office based in Westport was subject of a forensic audit by KPMG. (file photo)

The Buller District Council is refusing to say how much money it has claimed from government agencies that it was not entitled to.

The costs were claimed by the council’s project management office (PMO) from NZ Transport Agency Waka Kotahi (NZTA) and the National Emergency Management Agency (NEMA).

The council announced in October it had commissioned KPMG to conduct an independent forensic audit into the PMO after whistleblower allegations about fraud, irregular use of public funds, mismanagement, and conflicts of interest relating to roading projects and unplanned expenditure of $3m on water projects.

The Buller District Council’s office in Westport (file photo)

While the audit did not find evidence of fraud, it did find the council was claiming costs from external funders it was not entitled to.

“Evidence was found supporting the allegations that Buller District Council submitted claims for costs associated with management of the PMO that in KPMG’s view, fell outside the parameters set by external funding agencies,” the council said in a statement.

The PMO was set up in January 2021 to manage shovel ready and provincial growth fund projects including roading and Three Waters infrastructure. Its budget tripled to $20m a year after severe flooding in the district in July 2021 and February 2022.

The audit also found management and councillors did not oversee the spending of millions of dollars as closely as they should have.

The Press filed an official information request asking for more information on the claims, how much they were for and whether ratepayers would be liable for the costs.

Buller District Council chief executive Simon Pickford has created an action plan after an independent audit found “shortcomings” in how the council oversaw millions of dollars in spending.

Chief executive Simon Pickford refused most of the request citing reasons such as to “protect the privacy of natural persons” and disclosure of a trade secret as well as to allow council to carry on negotiations without prejudice.

He refused to release what evidence was found and how much money was involved.

He said the claims were for project management costs sent to NEMA and NZTA but would not say whether they would be repaid or who would foot the bill.

He said the agencies paid some of the claims.

“We are working through a process with our funding partners relating to claims,” he said.

An NZTA spokesperson said it was aware of the issues identified in the KPMG report.

Buller mayor Jamie Cleine says councillors received the report before it was made public.

“We have been working with the Buller District Council and continue to do so, including commencing our own review to establish the extent of the issues and the potential impact on National Land Transport Programme (NLTP) funding provided to council,” he said.

“We are in consultation with the relevant government agencies involved, and we are not able to provide further comment at this time.”

Pickford declined a request for an interview but previously said since receiving the report, the council had been working on improvements including creating a Protected Disclosure Policy and a new Capital Works team to replace the PMO.

Buller mayor Jamie Cleine previously confirmed the original reviews happened after NEMA refused to pay a $90,000 bill for consultants used by the PMO.

NEMA said it would process The Press’ query under the Official Information Act.