Hamilton City Council's processes - as characterised in an audit report - have been dubbed a "shambles" and "disgraceful" by the deputy mayor.
The council last week expressed disappointment at Audit New Zealand's opinion in the 2010/11 annual report, which criticised areas including its risk management and procurement processes - the subject of recommendations which had been repeatedly ignored.
The report highlighted concerns about the unusual length of the 20-year Montana Catering contract at the Claudelands Events Centre, which gave the council little scope to exit, and holes in the council's processes for capturing all commitments, management and financial.
Other red flags raised were payments being made which exceeded staff's delegated authority, an absence of rules on tipping and stopovers in the travel policy, an excessive level of texting on staff's mobile phones and failure to monitor the council's compliance with legislation.
A process under which one staff member was allowed to both purchase and receive goods and services also increased the risk of inappropriate goods being bought, the report found.
The critical report follows the scathing Audit New Zealand report released in September on the flawed processes in the city's involvement in the V8 Supercars race.
Deputy Mayor Gordon Chesterman said the report was a "shocker".
He was surprised an organisation with such a large turnover was not getting the basics right.
"I think this report is disgraceful. Not from the point of view of Audit New Zealand, but the point of view of the council.
"It is very simple governance and management that is wrong."
Mayor Julie Hardaker said her biggest concern was that critical issues repeatedly raised in Audit New Zealand reports were being ignored.
"What's disgraceful is what is written in this report and written in last year's, and the year before and the year before and the year before. I don't want to be here next year with that list."
The council challenged its chief executive, Barry Harris, to make sure that issues were addressed quickly.
Councillors tried to pass some of the blame for the V8 Supercars blowout to Audit New Zealand, asking why its staff did not raise concerns about the $14.32 million V8 reserve deficit or the unauthorised spending of $3.8 million by council management.
But Audit New Zealand general manager Karen MacKenzie said there was a gap between what the council and public thought the body's role was and what it provided.
RED FLAGS
Main issues raised in Audit NZ report:
* No conflict of interest policy relating specifically to procurement.
* Whether employee awards scheme is appropriate for a public entity, as council spends $86,478.
* No annual review of transactions, activities or locations that may be susceptible to fraud.
* Inadequacies in the council's processes for capturing all commitments for both management and financial reporting purposes.