Cr Jim O’Malley said at a Dunedin City Council meeting, staff were "caught" and money was then reallocated in a manner councillors had wanted in the first place — more obviously into Three Waters activity.
Cr O’Malley agreed to modify his language to staff having to "correct" what they had done, rather than being caught, after a point of order from Cr Carmen Houlahan.
The issue goes back to the way the council applied for Three Waters "Better Off" funding in 2022.
It secured $11.54million, but the Otago Daily Times reported last year councillors seemed not to be in the loop about the nature of the application and the details did not emerge until later.
Cr Sophie Barker said at the time she felt there had been a "step missing" from the council’s process — this being consultation with councillors about the theme of the application before it was sent to the Department of Internal Affairs.
In the end, government money tagged to a Treaty of Waitangi partnerships package was reduced from a planned $1.89m to $408,049 and a climate action category had its allocation cut by more than $1.2m, among other changes.
As the ODT reported last year, the government fund was established to enable councils to "focus on the wellbeing and aspirations of their communities" and the city council said its initial application was in line with Internal Affairs requirements under the previous government.
A report for the council’s finance and council-controlled organisations committee meeting on Tuesday highlighted the focus of Better Off funding shifted after a change of government.
However, Cr O’Malley was keen to correct perceptions relating to that.
Councillors had been clear in their initial resolution that they expected the money to be assigned to Three Waters activity, he said.
Staff then did something different and this was noticed by members of the public and followed up by councillors, who had needed to do some digging, he said.
As it happened, what councillors had sought was in line with the new government’s expectations, Cr O’Malley said.
He claimed staff had "misdirected" funds and the situation then had to be sorted out.
Cr Houlahan referred to clauses in meeting rules about both disrespect and misrepresentation and said Cr O’Malley had made the situation sound sinister.
Finance and council-controlled organisations committee chairman Cr Lee Vandervis asked if Cr O’Malley was happy to substitute correct for caught, and he was.
