Mistakes in setting rates and a best-guess system for valuing assets have earned the West Coast Regional Council a do-better warning from its auditor.
The council’s risk and assurance committee held a marathon three-hour meeting last week with newly-appointed independent chair Graeme McGlinn at the helm.
The experienced accountant who performs the same service for several other councils, met council staff to discuss systems and finances.
Ernst and Young auditor Stuart Mutch flagged 16 areas where the council needed to improve, two of them coded red — or high risk.
The first was the 2023 rates mix-up, when the council made errors in applying the valuations across different rating districts, then had to credit ratepayers and re-invoice them.
And mistakes in calculating rates for the One District Plan had generated significantly more rates revenue than the council had intended, the auditor found.
It had aimed to collect $1 million but ended up collecting an extra $244,000.
The second high risk item for the auditor was uncertainty over the value of the council’s main asset — its network of 66km of flood walls and stopbanks.
"Flood control infrastructure assets represent council’s key asset.
"The integrity of the valuation underlies the overall financial statements of council."
The stopbanks throughout the region were often in remote places, and the council took care to document volumes and locations for work done, the auditor said.
"However, there has not been a full review undertaken of the length, breadth, height, and condition of flood control infrastructure for some time, if at all."
The council accepted all of the auditor’s recommendations and work had already begun to resolve the concerns, planning manager Stuart Genery reported.
"Significant effort has subsequently focused on improving our rate setting processes.
"This was largely successful for the 2024-2025 financial year."
Work was also under way on developing a comprehensive asset management system.
"The previous valuations were done by a desktop survey about six months ago," council chair Peter Haddock told LDR after the meeting.
"It’s going to be a massive job to survey them in this detail — it will take some time.
"But it’s important to have an accurate picture — the government requires it, and it affects our insurance cover."
Cr Haddock said basing valuations on total replacement costs was not realistic, and new valuations should take that into account.
Given the time it will take to resurvey every stopbank in the region, the council might face another audit in the current reporting year, staff noted.
Mr Haddock said given the lack of staff when he became chairman in 2023, the council had made great progress, with a full finance team now in place.
• LDR is local body journalism co-funded by RNZ and NZ On Air.
By Lois Williams
