Ms Lawson left the council in June after deciding not the seek reappointment and Mayor Vanessa van Uden said the communication failure was not the fault of any current council staff member, but such an incident would not be tolerated.
Ms van Uden told the Otago Daily Times the infrastructure services committee had also been unaware of an incentive payment in the Veolia Water contract when it was renewed last July.
She said she was not arguing about whether incentive payments were good, bad or indifferent, and acknowledged the payments were a method of working with contractors, but the point was she should have been made aware of it.
"There's no-one to hold accountable for that now. I was just making a point that I wouldn't tolerate that again ... because it's not a tiny amount of money.
"To be fair, they have to perform [to get the payment], it was a comment about the fact that we need to know these things, as opposed to a categorical opposition to them."
Although the infrastructure services committee was unaware, she said "council staff" would have known, specifically Debra Lawson.
"It was signed off at a time when Debra was CEO ... so she would have signed it off.
"I have to assume she did know [about the payment], given the fact that she signed it off."
The council's general manager of infrastructure services, Erik Barnes, who began work for the council this year, said total savings achieved by Veolia Water for the past financial year were $368,000.
Mr Barnes said Veolia Water had held a contract with QLDC since 2008, but a new contract and terms were struck in 2011.
The initial contract last year was for a year, with rights of renewal of two years. In August, the council renewed the contract and the company is again eligible for incentive payments.
The contractor operated within key performance parameters and Mr Barnes said, "Yes, QLDC are giving something up by the incentive structure, but in doing so we get more back".
When asked if other companies working for the council received incentive payments, Ms van Uden replied, "Not as far as I'm aware."
