Government watchdog set to monitor troubled Westland District Council

Tuesday, 30 July 2019

Local Government Minister Nanaia Mahuta has advised the Westland District Council she intends to appoint a watchdog because of governance concerns. (Video first published in July 2019)

A Government appointed watchdog could soon monitor the troubled Westland District Council.

Stuff understands Local Government Minister Nanaia Mahuta recently wrote to the council's chief executive, Simon Bastion, outlining her intention to put in place a Crown observer.

The letter follows an Auditor-General inquiry that raised serious concerns about a decision by Westland mayor Bruce Smith and councillor Durham Havill to build a $1.3 million stopbank at Franz Josef without the backing of the full council, and without consulting experts or conducting a proper procurement process.

A letter outlining an intention to put in place a Crown observer at the Westland District Council will be discussed in secret at an extraordinary meeting in Hokitika on Thursday. (File photo)

The letter will be discussed in secret at an extraordinary council meeting on Thursday.

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Local Government Minister Nanaia Mahuta previously said the findings of a recent Auditor-General inquiry into procurement of work by the Westland District Council at Franz Josef were 'concerning'.

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Westland mayor Bruce Smith confirmed the chief executive had received a letter from Mahuta.

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Smith confirmed the chief executive had received a letter from Mahuta about the council's procurement of work at Franz Josef. He refused to discuss its contents.

Westland District Council chief executive Simon Bastion refused to discuss the contents of the letter until he'd met with councillors.

'The chief executive is taking advice on it, which is both legal and local government advice, and we'll present it to a meeting on Thursday.'

The meeting was publicly excluded because the matter was 'confidential', Smith said.

'I'm looking forward to Thursday, it should be quite good fun.'

Bastion refused to comment about the letter's contents or why the public would be excluded from the meeting, saying Stuff was 'harassing and fishing'.

'I'm not going to talk to the media until I've discussed it [the letter] with council.'

Mahuta declined to comment.

'I am communicating in confidence with the council and it would be inappropriate to discuss this further while the process is ongoing,' she said in a statement.

Stuff understands Mahuta hopes to have the Crown observer in place within two months.

The council has several weeks to respond to her letter.

A Crown observer, if appointed, will help the council address identified issues, monitor progress and report back to the minister on whether any further action is required.

The Westland District Council, according to a March briefing to Mahuta, has a history of issues relating to dysfunctional governance and management, inadequate procurement and process, and non compliance with statutory obligations.

The briefing highlights several projects:

- In August 2016, there was an independent audit of the West Coast Wilderness Trail, which went $1.5 million over budget. The audit focused on the project and financial management weaknesses. It found a dedicated project manager was not used, the elected councillors had not acted as a governing body over the project, and the project was under-resourced from inception.

- In November 2016, the Serious Fraud Office launched an ongoing investigation into 'procurement irregularities over the allocation of contracts for the council water supply'.

- In 2017, the Auditor-General launched an inquiry into the building of the 700-metre Waiho River stopbank designed to protect Franz Josef's water supply from flooding. The inquiry followed concerns about the council's procurement of the work and whether it had managed any potential conflicts of interest. Its findings were made public in March and pointed to 'numerous examples of poor decision-making and poor procurement practice'.

Mahuta wrote to Bastion on March 20 saying the findings of the Auditor-General's inquiry were 'concerning to me'.

'I am concerned that these issues may happen again, at the expense of community. All local bodies should follow due process, particularly when ratepayer money is being spent on major community projects.'

Mahuta gave the Westland District Council until the end of May to provide her with information that gave her an assurance that 'these issues will not reoccur'.

In April, Stuff reported the council had ordered an independent review of its procurement policy.

Since then, the Auditor-General has released details of a separate inquiry that found Smith and deputy mayor Latham Martin did not follow the legal process when appointing directors to council-controlled organisations.