The regional council has not sought legal advice over the $43.1 million Ruataniwha scheme buy-in, despite strong recommendations from Audit New Zealand to do so.
The advice was sought by council staff from the government office following the February 24, 2016, council meeting which saw heated debate on whether or not the buy-in was significant under the authority's Significance and Engagement Policy.
In its letter to Audit NZ, cited in today's meeting agenda, the council's view is that such a buy-in would "not trigger an amendment to the [long term plan]".
However, in his response Stephen Lucy from the audit office advised council to seek legal advice as to whether or not a change to the long term plan was required.
He said whether a long-term plan required amendment was a legal test and as auditors they were unable to give such legal advice.
However, he said in carrying out its role Audit NZ are required to assess aspects of council's legal compliance, including considering whether decisions taken by Council required it to amend its long term plan.
"Given the significant amount of money involved, and the contentious nature of the project, we would expect the Council to be seeking legal advice on these issues, if it hasn't already done so," Mr Lucy said.
When asked if such legal advice had been sought by council regional council chief executive Liz Lambert said "no we didn't".
"We could have sought legal advice but it may have delayed tomorrow's decision," she said.
She said Audit NZ was quite clear in its response about consultation.
"Any amendments such as this to the Long Term Plan need to be audited before adoption on March 30," Ms Lambert said.
Councillor Peter Beaven who initially raised this issue said he was "really worried that the council had got this wrong".
Mr Beaven will be absent from today's meeting.
"I don't even understand the legal ins-and-outs of what we are doing here," he said.
"I am quite concerned about council's legal position in relation to all of this.
"There is still a resolution that has been passed and encompassing obligation that sits on the table currently to buy $43.1 million worth of water."
He said he was worried that if council goes through a public consultation with the 'in principle' decision to purchase the water still in place, what happens if public give a clear message that they do not want the council to purchase the water.
"I just don't understand why we wouldn't recind that motion that was passed at the last meeting and pass another motion which makes the purchasing of that water subject to public consultation," he said.
"We haven't done that, we have just said we have left the motion just sitting there passed and we are saying we will go and have a public consultation."
At today's meeting councillors will decide whether or not to go to the public under a "special consultative process".