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Inquiry into payments to chief executives of dissolving local authorities in Auckland

4 October 2010

The Auditor-General has decided to inquire into payments to the departing chief executives of the eight local authorities that are dissolving on 31 October 2010 as part of the Auckland local government reforms.

Background

The Auditor-General routinely considers payments made to employees at the end of their employment and related disclosures as part of the audit of public entities. Local authorities are required to disclose any severance payments made to chief executives and employees in their annual reports. Our audit opinion must confirm that these disclosure requirements are met.

Public sector reforms such as the Auckland local government restructuring inevitably involve some employment-related costs. The Auditor-General intended to consider any payments to chief executives of dissolving local authorities as part of the final audit of those authorities, but has decided to do this sooner after receiving a request from the Minister of Local Government and because of parliamentary and public interest in the matter.

Terms of reference

The inquiry will consider:

  • the nature and extent of any payments or other benefits that the eight Auckland local authorities1 intend making to their chief executives at the end of their employment;
  • any other arrangements or agreements related to the end of their employment;
  • the terms and conditions of employment of each chief executive, and any variation to those contractual provisions;
  • the process and timing of relevant decisions by the eight local authorities; and
  • whether the agreement of the Auckland Transition Agency was obtained for any modification of terms and conditions of employment of chief executives in the period since the legislation dissolving the local authorities was enacted.2

The inquiry will also consider any other matters that the Auditor-General considers it desirable to report on.

The Auditor-General has the power to inquire into decision-making processes by public entities, including local authorities, and to report her findings as she sees fit. The Auditor-General does not have the authority to consider the merits of decisions, or to overturn decisions made by public entities.

We will carry out this inquiry under sections 16(1) and 18(1) of the Public Audit Act 2001. The Auditor-General will decide on the appropriate manner in which to report her findings once the inquiry has been completed.

Contact for enquiries

Bruce Robertson, Assistant Auditor-General – Local Government

Telephone 04 917 1500


1: The eight local authorities are the Auckland City Council, Waitakere City Council, Manukau City Council, North Shore City Council, Rodney District Council, Papakura District Council, Franklin District Council, and Auckland Regional Council.

2: Section 31(4)(g) of the Local Government (Tamaki Makaurau Reorganisation) Act 2009.

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