Auditor-General to scrutinise refusal to show V8 documents

The recent V8 series in Hamilton has cost ratepayers $40 million. Photo / Christine Cornege

The Auditor-General is investigating Auckland councillor Cathy Casey's complaint that a secret report on the V8 supercars was hidden from the council by its standalone events body.

Councillors approved $10.6 million on Thursday to ensure the return of the supercars to Pukekohe after Auckland Tourism, Events and Economic Development (Ateed) refused to show them a report on the financial position of parties involved in the event.

Councillors and the public have also been unable to see a "detailed risk review" referred to by Ateed because Auckland Council chief executive Doug McKay said it did not exist as a single document, but as a "multi-faceted" review of the risks.

"I am dumbfounded that a council-controlled organisation can refuse to disclose to councillors a ratepayer-funded due diligence report ahead of a major decision involving $10.6 million of ratepayers' money," Dr Casey said in a letter to Auditor-General Lyn Provost.

"This rushed decision ... was made in the absence of crucial risk and due diligence information."

Dr Casey has asked the Auditor-General to advise whether the council should have had access to the information and whether withholding it compromised Thursday's decision.

She has also asked for the Auditor-General's opinion about councillors' access to information held by the council's seven council-controlled organisations.

The decision by the Office of the Auditor-General to take on Dr Casey's complaint follows a scathing report by its business arm, Audit New Zealand, into Hamilton's hosting of the event, which cost ratepayers $40 million.

The New South Wales Auditor-General has produced a critical review of state Government investment in V8 supercar racing at Sydney Olympic Park in 2008, and in 2002 the Capital Territory Auditor-General produced a biting report on the V8 series in Canberra.

A spokesman for the Auditor-General said the relationship between the council and its CCOs was an interesting case study and the office was focusing on how the new structure was bedding in.

Last night, Mr McKay confirmed Dr Casey's claim that neither he nor council chief finance officer Andrew McKenzie had seen the due diligence report before Thursday.

Mr McKay said there was no need to see the report because Ateed had authority to approve the $10.6 million and referred it to council out of courtesy and because of public interest.

"The fact Pukekohe is a dedicated racetrack and not a street race, this is a quite different scenario to Hamilton," Mr McKay said.

History repeats
Hamilton: Significant use of confidentiality left public with poor knowledge*
Auckland: Public excluded from confidential briefings
Hamilton: Management did not trust councillors with confidential information*
Auckland: Auckland Tourism, Events and Economic Development withholds due diligence report from councillors
Hamilton: Chief executive Michael Redman holds back information on the grounds councillors did not request it*
Auckland: Ateed says no councillors requested due diligence report so it was not provided
*Audit New Zealand findings