Rotorua's deputy mayor says another councillor erroneously alleged "skullduggery" in the accounting practices of Te Tatau o Te Arawa, but the councillor says it was a "perfectly reasonable and professional" question.
The exchange occurred at a full Rotorua Lakes Council meeting on Thursday morning, between deputy mayor Dave Donaldson and councillor Reynold Macpherson, as Te Tatau o Te Arawa presented its 2020 annual report, which shows the $500,000 charity in the black with $459 to spare.
Te Tatau o Te Arawa is a representative organisation which works in partnership with the district council. At the meeting, the group was represented by chairman Te Taru White and manuhautu (executive officer) Jude Pani, with GHA accountant Glenn Hawkins.
The issue of auditing was raised by mayor Steve Chadwick, who asked Hawkins if he acted as auditor to Te Tatau.
Hawkins clarified Te Tatau's accounts were not audited because it was not a requirement in the trust deed.
He said it was an option in the future for trustees to consider but it so far wasn't seen as necessary and was a "relatively expensive" process.
However he assured the council there was a segregation of duties and GHA was "very comfortable" that the accounts reflected current reporting standard requirements.
Hawkins said Te Tatau was also compliant with reporting standards as a charitable organisation.
Macpherson said the financial report was comprehensive and "very professional".
"At the same time, audit is going to be essential to maintaining public support and the diversification process and the development of service programmes," he said.
"Could it be time to review and achieve greater degrees of separation between Te Tatau and GHA in the processes used to discharge accountabilities through the charitable trust process?"
That was interrupted by a point of order by Donaldson, who said, in his opinion: "There's an insinuation in there that there's some skullduggery between the two entities."
Macpherson said that, in his view, was "absolute nonsense".
He said, in his view: "It's a perfectly reasonable and professional question for a professional person to answer and there's nothing pejorative about it at all, and to suppose so is most unpleasant. Unnecessary."
Chadwick said she didn't know what Macpherson was "trying to achieve" by his question.
"Is there a problem that you are trying to solve by that question? Are you implying that there's a problem currently with the financial accountability of this organisation?"
Macpherson asked if it could be helpful to further develop audit policies and practices by "achieving greater degrees of separation and also using the charitable trust accountability process?
"I prefaced that question by pointing to the importance of maintaining public support and the diversification process and the development of service programmes, and indicated that it might be time to consider further developing audit policies and practices. That's all," Macpherson said.
White said Te Tatau was "happy to respond", delegating the answer to Hawkins, who said if there was further separation the accountancy "wouldn't be able to do our job".
"We have a job to do which is preparing financial statements and it's quite a different process to the audit process that you're suggesting may also be undertaken. There's sufficient separation now … we do discount our rate but apart from that, we continue to do that [job] with the same diligence we do for all other clients we look after.
"To be fair our clients - we have a number of significant Māori land trusts, incorporations and Treaty settlement entities, they're worth over a billion dollars - so … we know what we're doing.
"[Te Tatau] are very hard task-masters in terms of our reporting, to ensure we are reporting accurately and fairly."
Hawkins said he believed the question was incorrect because there was not a need for a separation of duties.
"I think what you're focusing on is the audit process which the trustees will take back and consider in due course."
Other councillors, such as Trevor Maxwell and Raj Kumar, made generally positive comments about Te Tatau's contribution and partnership to the council, before Donaldson raised the auditing issue again.
"I don't want to leave this issue of audit and public transparency, accountability, hovering," he said.
He asked council officers to contribute their advice.
Donaldson said, in his view: "Because while my colleague councillor Macpherson feels offended by the suggestion, I can assure him the offence is felt over here as well as the professional independence of GHA is brought into question."
Council chief financial officer Thomas Colle said Te Tatau's financial accountability "would have to come through Te Tatau demonstrating the outcomes they've achieved, which they have".
"GHA is a professional accounting organisation. They have public practising certificates, they are bound by the same standards we are also bound by and there is nothing to suggest that they are not a professional organisation.
"They are seen as a leading accounting organisation of Rotorua."
Chadwick said, in her opinion: "Certainly some of us took offence at those remarks."
Councillor Merepeka Raukawa-Tait expressed some concern that the council gained a lot more from Te Tatau for the amount of money the council contributed to the organisation, and asked if that contribution had been raised since the organisation's naissance in 2015.
Council governance manager Oonagh Hopkins reminded councillors they had raised its annual contribution to Te Tatau o te Arawa from $250,000 to $372,500 in February 2020.
CLIMATE CHANGE ACTION PLAN APPROVED
At the meeting, the council also approved the Rotorua Climate Action Plan for adoption.
Thirty-six people made submissions on that document, with almost 65 per cent disagreeing with the council's proposed emissions reductions targets.
On Wednesday, a council spokeswoman confirmed there were 36 formal submitters on the plan but said community and stakeholder engagement on it took place over two years, with a "wide range of stakeholders" participating in workshops and discussions in 2019.
The plan had developed from there and was considered to be a "living document that provides a starting point for constructive dialogue" about resilience and opportunities associated with climate change.
Councillor Peter Bentley voted against adopting the plan, with all others in favour.
In the meeting, Chadwick also hinted at a visit from Climate Change Minister James Shaw to the council on Friday, where the plan would be discussed.
The mayor also said the New Zealand Community Trust had contributed $500,000 towards the upgrade of the Rotorua Aquatic Centre.
The council also agreed to send a review of speed limits out for public consultation.