Council missing vital footpath contract details

Auckland City chief executive David Rankin says the council has no specific measurement records to conclude no overpayment was made on two footpath contracts.

But he is satisfied the council reached the correct conclusion based on documents that were available - including some limited measurement records - and audits into the alleged overpayments to John Fillmore Contractors.

Mr Rankin has released a timeline of events and a new audit completed on Monday that was "satisfied that no allegations of misconduct or overpayment can be substantiated".

The audit followed an ultimatum last week from Mayor John Banks to Mr Rankin to get to the bottom of new revelations published by the Herald or he would call in the Auditor-General.

Mr Rankin responded by saying the issue had become one of public confidence, and he asked the Auditor-General to independently review the matter.

At the heart of the issue is whether John Fillmore Contractors was overpaid for footpath renewal work.

The council concluded in January 2007 that there had been no overpayment.

The latest audit - like a previous internal audit in May 2007 - was hampered by the lack of documentation on the contract files.

Mr Rankin said there were no specific remeasurement figures on the council files to support the conclusion reached in January 2007.

At the time, big changes were occurring in the transport division and record-keeping was not up to scratch.

Soon after January 2007, audit staff became aware of the overpayment issue and talk of a "cover-up" and investigated. They spoke to a former council officer who had made the allegations and other people involved. Scoping of the footpath work, billing statements and random monthly independent audits all pointed to nothing being wrong.

The only measurement documents available for the review were as emails about three streets remeasured by council staff and an independent auditor in June and July 2006.

The council subsequently obtained two letters on June 29, 2007, written by a council officer to John Fillmore Contractors in March 2006. The first, dated March 17, outlined an overpayment of $723,150 between June 2005 and January 2006.

The second, dated March 31, said a council officer and a Fillmore staff member had remeasured several streets. As a result of the new measurements, the overpayment figure was adjusted to $662,284.

The March 31 letter concluded by saying a letter "on how to proceed from this point" would follow. The council has no record of what happened next.

The council's auditors reviewed the March letters and decided they did not alter the findings of the May review.

Mr Banks said he was glad the matter was now before the Auditor-General "because it is important that a public institution like the Auckland City Council is squeaky clean in all of its dealings".

STEP BY STEP

July 2005: Possible overclaim issues raised by council.
Aug 2005-January 2006: Some email correspondence, missing contract meeting minutes.
Feb 23, 2006: Potential measurement discrepancies raised during monthly contract meeting between council and John Fillmore Contractors.
March 17, 2006: Letter to JFC regarding alleged overpayments totalling $723,150 between July 2005 and January 2006.
March 24, 2006: Contract meeting minutes say project manager Winston Hiliau and JFC's Bernie Sheary to meet on site and go through measurements.
March 31, 2006: Letter to JFC outlines remeasurements and spreadsheets. Overpayment figure adjusted to $662,284.
April-May 2006: Correspondence between council and JFC over disputed measurements.
June 19, 2006: Email from independent company, TP Civil, showing remeasurements for two streets and original JFC claim was within accepted tolerance levels.
July 2006-Jan 2007: No contract meeting minutes, no correspondence on file.
Jan 17, 2007: Council writes to JFC concluding there had been no overpayments and the matter is closed.