Councillors will now prioritise which of KPMG’s 35 recommendations can be delivered quickly, while planning longer-term structural changes. Photo / Hamilton City Council
Councillors will now prioritise which of KPMG’s 35 recommendations can be delivered quickly, while planning longer-term structural changes. Photo / Hamilton City Council
Hamilton City councillors have pledged to overhaul procurement systems after an independent audit revealed $239.1 million in contracts were awarded without open tender between 2021 and 2023.
The KPMG review, commissioned in 2024, was formally discussed in council chambers yesterday, with elected members debating how to implement 35 recommended reformsover the next three years.
Deputy Mayor Geoff Taylor said he was “concerned”, “disappointed” and “disturbed” that the audit was not provided to all elected members under the previous council.
“It is a shame as I think if we were all involved we would have been pushed for more urgency with improving procurement systems,” Taylor said.
The report found that 75% of the council’s 1248 active contracts during the three-year period from 2021 to 2023 were awarded without an open competitive process.
However, chief financial officer Gary Connolly warned against interpreting the $239.1m figure as policy breaches.
He pointed to the Peacocke development as an example, where professional services were procured through a defined services panel that had already gone through a competitive tender process.
“Once they do the work they do not put it through the tender process again. These procurements have gone through the correct process.
“It would be dangerous to interpret that the $239m means that much has been done outside of policy.”
Connolly said KPMG’s main observation when the assessment was submitted related to the challenges of operating a mature procurement system within a decentralised model, “which meant we had tried to empower our organisation to deliver to its capital programme while still maintaining compliance policy”, he said.
“When I looked at the procurement assessment, I judged that the most important thing to be successful in implementing the changes that are required would be to engage across the organisation – bring the organisation together to decide what improvements [are] necessarily needed to be made. I think that was the right path.”
Connolly also clarified that when the report was first presented in 2024, the Strategic Risk and Assurance Committee was chaired by an independent chairperson, not an elected member.
Hamilton City Council chief executive Lance Vervoort. Photo / Supplied
Chief executive Lance Vervoort said KPMG’s recommendations amounted to major structural change.
“They were talking about changing the entire procurement system – and that will take a little bit of time,” he said.
Finance and Assurance Committee chairwoman Rachel Karalus said the council’s priority was strengthening governance rather than assigning blame.
“I want to ensure and assure elected members and the public that, of course, if anything comes up during this process that warrants a closer look or another formal process, then that opportunity exists, and good governance would demand that it should follow and will follow. But for now, the focus of this discussion is not on finding fault.”
Councillor Sue Moroney. Photo / Natalie Akoorie
Councillor Sue Moroney agreed, saying the focus should be on improvement rather than blame.
“What we do next is the most important thing. What was done in the past is something we can learn from,” she said.
Moroney said the debate was also about sending a clear message to suppliers and community service providers in what she described as the country’s “soon-to-be third-largest city”.
“The ratepayers of Hamilton Kirikiriroa are not a cash cow for your private profit and deserve the very best of services going forward,” she said.
Councillor Andrew Bydder said the new council intended to confront issues openly.
“Releasing these reports is not a witch hunt. It will take time to learn better systems,” he said.
Bydder and deputy chairman of procurement Graeme Mead have already met with staff as part of early reform discussions.
Connolly said improvements were already underway, including new measures to report and extract insights from procurement data, but he could not point to an analysis showing a “quantified” improvement.
He said the pace of reform had been influenced by the council focusing on other major priorities, including the IAWAI – Flowing Waters transfer – not because of a lack of resources within the procurement team.
Councillors will now prioritise which of KPMG’s 35 recommendations can be delivered quickly, while planning longer-term structural changes.
Tom Eley is a multimedia journalist at the Waikato Herald. Before he joined the Hamilton-based team, he worked for the Weekend Sun and Sunlive. He previously worked as a journalist at Black Press Media in Canada and won a fellowship with the Vancouver Sun.
