Steep rise in regional governance costs queried

steep-rise-in-regional-governance-costs-queried

Governance costs for the West Coast Regional Council have nearly doubled in the past three months, prompting a “please explain” from the council’s finance monitors.

Google Maps image of the West Coast Regional Council.

Photo: Google Maps

Financial reports presented to the Risk and Assurance Committee meeting show the council spent $329,248 on governance costs, against a budgeted spend of $168,647.

Staff at the meeting were unable to explain the variance, according to the committee chairwoman Debra Magner.

“I understand some of it relates to extra audit costs (for the council’s annual and long-term plans) but I would have expected that information to be to hand.

“We will need a lot more information on budget variations in future and in a timely fashion.”

Magner said she had been assured staff were working to improve the financial reporting system.

The council’s long-serving corporate services manager Robert Mallinson retired in August and has not yet been replaced. Contractors have been filling in for the finance role.

Council activities with the potential to increase governance costs in recent months include audit and accounting fees, legal advice and negotiations over the resignation of chief executive Vin Smith, after a falling out with the chairman Allan Birchfield.

The council has refused to say whether Smith received a severance package after his seven-month stint at the council, but the amount would be expected to show up in one form or another in the council’s overdue annual report.

The report appeared in its unaudited form in the agenda for the public-excluded section of the Risk and Assurance meeting yesterday.

Magner said the council would release the report once it was audited, but that would not be until February because of delays and staff shortages at Audit NZ.

Acting finance officer Neil Selman, who works from Invercargill as a contractor, was initially unable to explain the governance overspend when the Greymouth Star contacted him, but offered to investigate.

He said today much of the variance was caused by delays in getting the long-term plan out this year.

Political upheavals at the council over the need to increase rates; the loss of the chief executive and the late adoption of the LTP had meant that costs budgeted for in the previous financial year had been carried over into the new one.

The costs included staff time, auditing and printing fees.

The council systems had since improved, Selman said.

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Local Democracy Reporting is a public interest news service supported by RNZ, the News Publishers’ Association and NZ On Air.

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