Tension has been brewing between the council and the board over the level of funding to advance Maori interests. The board wants $295 million over 10 years but Mayor Len Brown initially offered $15 million. A board source said that had subsequently been increased to $23 million.
Board chairman David Taipari, however, said the audit was still in draft form, and that it was a separate issue from funding.
He said he was hopeful the funding divide could be resolved.
He would not be drawn, however, on whether court was an option if the issue was not solved.
Mayor Len Brown said he had not received the report but would comment once he had.
Mr Brown's statement said: "We are working through requests for funding for a range of projects. With this proposal we are looking at what activities are already being undertaken by council and what projects will deliver the most benefit to Maori."
WHAT THE REPORT FOUND
* The PWC audit assessed whether the council was compliant with Maori legislative rights set out in various Local Government Acts, the Public Works Act and the Resource Management Act.
* Six of 10 areas measured received a "high" rating - a serious weakness likely to compromise Maori legislative rights.
* Performance in the other four areas received a "significant" rating - where weaknesses were almost certain to compromise rights.
* The report said there were instances "where good practice is occurring, but this often relates to institutional knowledge rather than embedded processes working as intended."