New clamps at council company

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Poor purchasing practices at Queenstown council company Lakes Leisure have been plugged, chairman Peter Faul pledges. 

New Lakes Leisure chief executive Ruth Stokes has created a new procurement policy based on the Office of the Auditor-General’s best-practice guide, Faul says. 

The new policy was adopted at the January board meeting. 

Lakes Leisure copped criticism from councillors two months ago, after Mountain Scene revelations it gave $129,474 of work to a private firm co-owned by one of the council company’s directors. 

Recruitment firm Queens­town Job Agency, 50 per cent owned by Lake Leisure director Wayne Evans, was handed the work on a plate – without tenders, contracts, quotes or contestability. 

A rival recruitment firm – Addstaff – received $7891 worth of work the same year. 

Mountain Scene spotted the Job Agency related-party transactions buried inside Lakes Leisure’s recent annual report covering its June 2012 financial year. 

Evans began his board stint in January 2012 after declaring his conflict of interest when applying. He vehemently denies seeking the directorship to feather his private company’s nest. 

After Mountain Scene’s first enquiries, Faul reveals he and Stokes examined all Job Agency transactions to ensure their accuracy: “We looked at every invoice value to make sure there was no rort anywhere – and there wasn’t.” 

A procurement review found no specific problems over related-party aspects, Faul says – what required beefing up was contestability. 

Depending on the purchase, there are now various dollar thresholds which trigger competitive bidding via quotes, tenders or contract prices. 

“There’ll be at least three [competitive bids]”, Faul says – and “some things we might advertise by open invitation” to all and sundry. 

MS: What dollar threshold would trigger a competitive pitch for casual staff recruitment such as the Job Agency provided? 

For a one-off purchase – $5000, Faul says. 

“And once the [cumulative] sum total for casual purchases throughout the year reaches $25,000, then it has to go in to a competitive bidding process,” he says. 

Where Lakes Leisure was caught on the hop was Job Agency work cumulatively creeping up to $129,000, Faul says. 

“Because the individual transactions were quite small, the board wasn’t appraised of the cumulative effect,” he says. 

“If we were remiss in any way, [it was because] we didn’t recognise the [spiralling] value of it.”
Faul continues to maintain that Lakes Leisure was already working on a new procurement policy before Mountain Scene’s coverage. 

“It’s a happy coincidence you’ve picked it up [and] we’ve picked it up,” he tells the paper.