An independent audit of vital processes around daily Central Otago District Council (CODC) expenditure has revealed problems.  

CODC conducts internal audits to ensure compliance and avoid risk. 

For the 2021-22 year, an audit of the procurement processes and policy was one of three audits CODC contracted New Zealand Company Deloitte to undertake. 

Procurement covers every activity involved in obtaining the goods and services CODC needs to support its daily operations.

Seven complex contracts the council undertook were put under the auditor's microscope. 

The contracts ranged in value from $0.13m to $4m.

The audits of these contracts rated CODC as having informal/inadequate controls or, in layperson's terms, two out of a possible five stars. 

This rating means a controlled environment exists within CODC, but it’s informal or has important gaps, with certain aspects below good practice or doesn’t compare favourably to other models.

There were two key findings in the Deloittes report: Inconsistencies in the implementation of policy and execution of procurement activities; and a lack of monitoring, reporting and record-keeping on procurement activities.

Deloitte concluded of the overall procurement policy: “The policy appears to us as a relatively extensive document, and management should consider its practicability.” 

“The policy should be fit for purpose and provide sufficient and clear guidelines for staff to refer to when making any procurement decisions.” 

CODC business support manager Saskia Righarts said the purpose of an audit “is always to help us identify where we are working well and, importantly, where we can do better”. 

“We accept both the findings in the report.” 

Mayor Tim Cadogan likened the audit process to, “going to a doctor for a checkout, sometimes you might not like the news that you get, but when you take action with that news, the outcome’s always going to be much better.”

“The report showed that the procurement policy is just way too complicated and, like many a complicated thing, got left to one side too often because it was just too hard to use, and we'll be making changes that need to be made to make it more functional,” he said.