Peter Nicholl
Peter Nicholl
The News published a story on March 16 headed ‘Audit rebuke for council’. Audit NZ had reviewed the spending controls of the Waipā District Council and found some areas that concerned them. The Cambridge News story obviously was of interest to readers as it was the second most viewed item on the paper’s website in the week after its publication.
Problems can occur in organisations where risk and spending controls are either absent or exist but are ignored or not taken seriously. It is not that long ago that serious breaches occurred in the Waikato District Health Board. More recently, a senior council executive of the Westland District Council was found guilty of taking bribes in relation to procurement contracts.
The first thing that can be said about the Audit Department’s rebukes of the Waipā District Council is that most of the breaches they found were not that serious. For example, one case was that expenses that were justified were signed off by the wrong person.
But another breach was that the information on the register of councillors’ interests had some gaps. That surprised and disappointed me. It is less than a year ago that the Cambridge News uncovered that one councillor was a shareholder in a Maungatautari quarry that had been operating for five years but had never applied for a resource consent. They only applied for consent after the Cambridge News story.
Given this major breach occurred less than a year ago, I would have thought that every Waipā councillor would have been careful to ensure they made full disclosures on the interests register this year – but it seems some were not.
It is good that the Audit Department has drawn attention to the issue, that Cambridge News has published the story and that readers have taken it seriously.
From my experience, the risk of minor breaches being ignored or minimised is that a culture can develop in the organisation that some rules don’t matter.
When that happens, the list of rules that the staff believe don’t matter can spread slowly but steadily. Staff and councillors need to believe that all rules matter and to act on that belief. If there is a rule that the staff think is inappropriate or difficult to implement, they don’t have the right to ignore it. The appropriate response is to go to the person or body that set the rule and give them the reasons why the rule should be changed or dropped.
Early in my tenure of the position of governor of the Central Bank of Bosnia and Herzegovina, the Head of the Bank’s Foreign Reserves Department breached one of the investment guidelines set by the board.
It was not a serious breach but the response of the person was completely the wrong one. He said the breach didn’t matter as the institution he had invested more of our reserves in than the limit permitted was a strong one. In order to convince not just him but all of the bank staff that all rules set by the board did matter, I demoted him and shifted him to another department. We had no more breaches of these investment guidelines in the seven and a half years that I was governor.
Read more: Audit rebuke for council.
