The West Coast Regional Council made errors in applying the valuations across different rating districts in 2023. Photo: Local Democracy Reporting
Mistakes in setting rates and a best-guess system for valuing assets have earned the West Coast Regional Council a do-better warning from its auditor.
The council's Risk and Assurance committee held a marathon three-hour meeting on Tuesday with newly-appointed independent chair Graeme McGlinn at the helm.
The experienced accountant who performs the same service for several other councils, spent Monday with council staff to discuss West Coast Regional Council's [WCRC] systems and finances.
At the top of Tuesday's agenda was the 2023-24 audit report.
Ernst and Young auditor Stuart Mutch flagged 16 areas where the council needed to improve, two of them coded red - or high risk.
The first was the 2023 rates mix-up, when the council made errors in applying the valuations across different rating districts, then had to credit ratepayers and re-invoice them.
And mistakes in calculating rates for the One District Plan had generated significantly more rates revenue than the council had intended, the auditor found.
It had aimed to collect $1 million - but ended up collecting an extra $244,000.
The second high risk item for the auditor was uncertainty over the value of the council's main asset - its network of 66 kilometres of flood walls and stopbanks.
"Flood control infrastructure assets represent council's key asset. The integrity of the valuation underlies the overall financial statements of council."
The stopbanks throughout the region were often in remote places, and the council took care to document volumes and locations for work done, the auditor said.
"However, there has not been a full review undertaken of the length, breadth, height, and condition of flood control infrastructure for some time, if at all."
Work is underway on surveying every stopbank and floodwall on the West Coast. Punakaiki is among the areas threatened by erosion. Photo: RNZ / Tracy Neal
The GIS information (a system with geographical data) the council did hold did not provide a high standard basis for valuation purposes, the report said.
The council accepted all of the auditor's recommendations and work had already begun to resolve the concerns, planning manager Stuart Genery reported.
"Significant effort has subsequently focused on improving our rate setting processes. This was largely successful for the 2024 - 2025 financial year."
Work was also underway on developing a comprehensive asset management system - a systematic survey using Lidar technology of every stopbank and floodwall in the region, to determine its condition and value.
"The previous valuations were done by a desktop survey about six months ago," WCRC chair Peter Haddock told LDR after the meeting.
"It's going to be a massive job to survey them in this detail - it will take some time. But it's important to have an accurate picture - the government requires it, and it affects our insurance cover."
Councillor Andy Campbell told Tuesday's meeting that based on the latest (desktop) study, the valuation of stopbank assets in his Wanganui catchment valuation had risen 30 percent, a figure he questioned.
Haddock said basing valuations on total replacement costs was not realistic, and new valuations should take that into account.
"If the stopbank is wiped out in a flood, you don't lose the armour rock - the (biggest boulders) don't go far - they can be recovered. And if it's an area like Punakaiki seawall, damaged in a sea surge, a lot of those rocks wouldn't go far either and could be re-used."
Given the time it will take to resurvey every stopbank in the region, the council might face another qualified audit in the current reporting year, staff noted.
Haddock said given the lack of staff at the WCRC when he became chair in 2023, the council had made great progress, with a full finance team now in place.
"I'm pretty pleased with what they've done already to put new systems and controls in place; when I arrived there was just one guy in finance and he resigned and we had to get Price Waterhouse to fill in. We've come a long way."
LDR is local body journalism co-funded by RNZ and NZ On Air.
