Mayor orders independent review

Mayor Steve Chadwick said the brief would be to investigate the adequacy of past financial disclosures

Mayor Steve Chadwick has ordered an independent review of Rotorua District Council's financial disclosures to councillors.

Yesterday's move came after the Rotorua Daily Post reported several councillors claimed to be unaware of the extent of the council's debt crisis.

Former chief executive Peter Guerin has disputed that, saying he did not believe councillors were completely unaware and it was a "mystery" to him that they didn't know.

Mounting debt levels at the council have led to severe cuts to capital-works spending and residents being told to expect a 3 per cent annual rates increase until at least 2030.

The independent review is to be undertaken by an external professional accounting firm and will cover the last two years.

Mrs Chadwick said the brief would be to investigate the adequacy of past financial disclosures made to elected members and to the public during planning processes.

"It will also seek comment on the framework proposed by management to control the council's finances and reporting procedures.

"In recent days and weeks, public concerns have arisen over whether councillors in the past have had access to all the financial information they needed for making sound strategic financial decisions and whether residents had access to enough information during annual-planning processes.

"While limited disclosure of financial information has not been my experience since I've been mayor, I want to find out once and for all whether appropriate financial information has been disclosed in recent years, so we can put this question to rest and move on."

Council chief executive Geoff Williams said he was talking with financial accounting firms around development of a scope for the review, an approximate timeframe and an estimate of costs, before proceeding. "We intend getting this project under way very soon so we can get a report back to the mayor and councillors well before the end of this financial year. I would expect the outcomes of the report to also be made public."

Long-time councillors Glenys Searancke and Charles Sturt said they were unaware the financial situation was so dire.

Councillor Janet Wepa, who presided over last year's annual-plan process, said she had a "clear understanding" of the debt, but was not aware operational costs were being paid for by debt.

The Rotorua Daily Post has received letters to the editor as well as comments on our website and Facebook page criticising the councillors.

One letter writer said: "[For] Two older councillors to have no knowledge of the serious financial problems is totally unacceptable. Forward planning within a budget is paramount."