Mayor 'bites lip', agrees to sign-off on annual report
“[It's not been] a good experience for the past 12 months. [Audit NZ] have agreed to do better next year. I’ve bitten my lip and taken away the threat."
Mayor Nobby Clark has “bitten his lip” and in fact signed off on a key part of the Invercargill City Council’s annual report.
On Tuesday morning Clark threatened to not sign the documents as tensions between the council and Audit New Zealand bubble away.
Later in the day, the council did eventually adopt its annual report for the year ending June 30, 2022.
At a risk and assurance meeting earlier in the morning Clark indicated he was considering not signing the “Compliance Statement” because of the performance of Audit New Zealand through the audit process.
“I’ll be upfront about that. Subject to the meeting you hold after this meeting with the Audit New Zealand people - and prior to the full council meeting - I will not discharge those issues until the issue of Audit New Zealand’s performance is resolved.
“I just want to be upfront about that, some of my colleagues already know I’m going to take that position.
“It seems to me it’s the only tool that’s available to me at the moment.”
The council’s frustration with Audit New Zealand stems from a letter Audit New Zealand director Derek Ollsson wrote to the council in December.
It stated it had delayed its audit report with much of the reasoning lumped on the council.
It included suggesting “a high volume of errors in the consolidation process”, “a high volume of misstatements” and “a lot of time taken to receive satisfactory property, plant and equipment reconciliations”.
However, the council was upset by the comments.
Now chief executive Michael Day stated at the time the extent and severity of the issues Ollsson outlined in the latter had not previously been raised.
At a November 24 meeting Day said he asked Audit New Zealand if there was anything outstanding that would prevent the signing of the audit report on December 20.
Day said the reply was “nothing”.
At the time Clark also publicly voiced his frustrations labelling it “butt-covering” from Audit New Zealand.
He advised independent risk and assurance committee chair Bruce Robertson at 2pm on Monday of his intentions not to sign the required documentation.
Robertson urged Clark not to take that strategy and had support from fellow independent risk and assurance committee member Ross Jackson.
“I would certainly appreciate the chance to speak with you after the meeting….We believe that there is importance in seeing through this immediate accountability,” Robertson said.
Although Robertson said “deep and meaningful discussions” were needed with Audit New Zealand about its performance.
At an extraordinary meeting later in the day Clark said he had decided to sign the documents after a “tense meeting” with Audit New Zealand representatives.
Audit New Zealand director Dereck Ollsson and executive director Stephen Walker were both in Invercargill on Tuesday.
“Since the meeting, there has been some backwards and forwards with Audit New Zealand to try and defuse the situation because my initial position was, I would not sign the annual audit report that would go away.
“That would trigger a tsunami of issues, including a report from the Auditor General to Parliament, so we worked our way through that.”
“[It has not been] a good experience for the past 12 months…. They have agreed to do better next year, and the players involved have given me some assurance.
“I’ve bitten my lip and taken the threat away.”
That pleased Robertson, the council’s risk and assurance chair.
“Yes, we want change and I think your tactics have helped to get that. Thank you, Nobby.”
The key question though, how did the Invercargill City Council’s finances shape up for the year ending June 30, 2023?
The council had an operating surplus of $6.6 million, an increase on $2.2m the previous year.
Council’s total assets are $1.3 billion, with most of that tied up in infrastructure assets. Its borrowing has increased to $102.1m, which is $3802 property. That’s up from $3511 per property the previous year.
As a result of a revaluation of council assets, there was an increase of $215m in value of those assets.