Annual report keeps ratepayers in dark – expert.
A leading New Zealand accounting expert is criticising Queenstown Lakes District Council over an important public document.
Former Canterbury University accounting professor Alan Robb was commissioned by Mountain Scene to rule on a complaint by QLDC over the story Quangos Are Costing Us (MS Jan 29).
Robb finds no substance in QLDC’s complaint but – off his own bat – takes the council to task over its latest annual report.
“I believe the QLDC financial reports fell short of the standard of information which ratepayers are entitled to expect,” Robb concludes.
For starters, QLDC hasn’t tried to quantify the impact of changes in council-controlled quangos during the financial year.
“That is an omission which has impacted on the potential usefulness of the reports.”
Robb also found another “material omission” – in QLDC’s summary report which precedes the complex financial tables.
In the “statement of recognised income and expenditure”, nearly $37 million of income is recorded directly in equity – but this isn’t mentioned at all in the summary.
“Few readers of the summary statement would know that a whole section of the financial reports has been dropped out.”
Equally worrying, says Robb, is the lack of information – anywhere – over how this $37m arose. “What was it?
Is it likely to recur next year?”
Failing to explain this is “a major defect in the quality of information presented”.
In its article two weeks ago, Mountain Scene said QLDC’s bottom line shows the council “coined it” last financial year – and Robb agrees.
Excluding quangos, QLDC made a surplus of $23.6m on total income of $93.7m – that is, 25.1 per cent.
Robb says the same percentages for Dunedin and Invercargill city councils are 2.1 and 3.96 per cent respectively.
“A similar pattern occurred in 2007,” he adds, “with QLDC recording a surplus between two-and-a-half and four times greater than the other councils.
“I believe [Mountain Scene’s] comment of overcharging is justified.”
After the paper last week corrected an error in the original article, Robb was asked to run his calculator over the rest of the story and point out any mistakes he found – there were none.
QLDC’s complaint accuses the paper of “seriously misrepresenting the council, its organisations and the cost to the community”.
Robb is nationally known for his occasional exposés of the financial accounts of major companies and state-owned enterprises, Transpower and Fonterra among them.