The Department of Internal Affairs

Te Tari Taiwhenua | Department of Internal Affairs

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The Department of Internal Affairs recommends intervention in Westland District Council


4 April 2019

The Department of Internal Affairs (the Department) has raised concerns and engaged with the Westland District Council over a number of months and specifically regarding the findings of the Office of the Auditor General’s report (the report).

The report found “numerous examples of poor decision-making and poor procurement practice” by Westland District Council in relation to Franz Josef.

Due to the ongoing issues at Westland District Council, the Department has recommended that the Minister of Local Government exercise her powers of intervention under part 10 of the Local Government Act 2002 (the Act). Information on this process can be found at www.dia.govt.nz/Proactive-Releases#LG.

As a result, on 20 March 2019, the Minister of Local Government, Hon Nanaia Mahuta, sent a letter to Westland District Council’s Chief Executive, Simon Bastion, requesting further information about its procurement policies and processes.

A response to the Minister’s request for further information is due by 31 May 2019.

Following consideration of the information required from the Council and advice from the Department, Minister Mahuta will consider whether more formal steps need to be taken to ensure her confidence in the adequacy of the Westland District Council’s procurement policies and processes.

The Department will continue to engage with Westland District Council as necessary.


Frequently asked questions

1. Why are council procurement policies and processes important?

  • Procurement is a process whereby work and contracts are negotiated and awarded. It uses money from ratepayers to procure work and pay contractors. These processes should be followed to ensure that ratepayer money is being used responsibly.
  • The Office of the Auditor-General’s report found ‘numerous examples of poor decision-making and poor procurement practice’. The report found that processes undertaken were inappropriate for a community project of that size.
  • If the Westland District Council does not adopt better procurement processes, and continues to repeat improper procurement processes, then there is real potential for significant financial and/or community harm.


2. Is intervention necessary, if the problem is only a potential outcome?
  • Under the Local Government Act 2002, intervention may be considered if there is a problem or potential for a problem. In this case, the Minister of Local Government considers that there is a potential problem should the procurement practices displayed by the Council, through the Office of the Auditor-General’s report, not change.


3. Why did the Minister choose this power to intervene?
  • The Minister of Local Government considers this intervention proportionate to the potential problem that may occur. Should the information provided by the Council have appropriate procurement policies and procedures in place, she will not take any further action.


ENDS

Contact:
Media Desk
Te Tari Taiwhenua Department of Internal Affairs
Direct Dial: +64 27 535 8639
45 Pipitea Street | PO Box 805, Wellington 6140, New Zealand | www.dia.govt.nz