The Auditor General has agreed to pay Kaipara District Council just over $5.3 million as a consequence of audit issues associated with the Mangawhai community wastewater scheme.
The two parties settled the dispute through mediation, conducted by retired High Court Judge Rodney Hansen QC, and the decision was announced a short time ago.
Neither party has admitted liability.
Council brought the claim against the Auditor-General in connection with audit issues identified in the Auditor-General’s report Inquiry into the wastewater scheme, tabled in Parliament, in December 2013.
As that Inquiry established, the Council failed to adequately perform its responsibilities to the community in connection with the wastewater scheme. The Council’s claim alleged that the Auditor-General failed to identify these failings in a timely manner and take appropriate steps to bring them to the attention of the Council.
The Council alleged that some of the poor decisions made by the Council in this period could have been averted if the Auditor-General's office had performed its responsibilities appropriately.
In the Inquiry report, the Auditor-General offered an unreserved apology to the Kaipara District community for the failings in some audit work carried out by her office.
However, the Auditor-General disputed the Council’s claim for damages arising out of those failings.
In particular, the Auditor-General considered that it was the Council that had the responsibility to comply with its statutory obligations, and its failure to do so was not attributable to the Auditor-General’s office.
The sum of $5,375,000 (including GST, if any) will be paid to Council on behalf of the Auditor-General, and the parties will bear their own costs in the litigation to date.
The mediator has confirmed to the parties that, in his opinion, the settlement is a reasonable one for the parties to enter into.