Lakes Leisure has given work worth $129,474 to a private firm co-owned by one of the Queenstown council company’s directors.
Recruitment firm Queenstown Job Agency, 50 per cent owned by Lakes Leisure director Wayne Evans, was handed the work on a plate – without tenders, contracts, quotes or contestability.
Lakes Leisure is wholly-owned by Queenstown’s council and runs the Events Centre, Alpine Aqualand, community halls and sportsgrounds.
Mountain Scene spotted the related party transactions buried inside Lakes Leisure’s recent annual report.
The $129,474 paid to the Job Agency in the financial year 2012 follows $112,000 worth of work for the Job Agency in the previous year, meaning Evans’ firm has received $241,000 of business from Lakes Leisure over two years.
Evans applied for a Lakes Leisure directorship in late 2011, beginning his four-year board stint in January, 2012.
Approached about Evans’ Job Agency links, Lakes Leisure chairman Peter Faul agrees while 2012’s $130,000 is a lot, Evans’ conflict of interest was “declared from the outset”.
Faul reveals Lakes Leisure engages only one rival recruitment firm, Addstaff, which received just $504 and $7891 respectively in 2011 and 2012 – crumbs compared with the Job Agency’s big bread.
Faul also reveals Lakes Leisure’s annual report, a statutory audited document, incorrectly recorded $10,029 going to the Job Centre in 2011 when it was actually $112,000.
The $10,029 was for yet another related party transaction with a company owned by Wanaka councillor Lyal Cocks, Faul discloses.
Evans’ firm provides temporary staff for Lakes Leisure events, Faul says, and there are no contracts nor tenders:
“It’s done pretty much on a casual basis because we don’t have a set amount of work.”
Job Centre bills by the hour at the end of each assignment rather than quoting in advance, Faul believes.
Evans, an Invercargill businessman, stresses his Job Agency was already working for Lakes Leisure prior to his directorship and he disclosed his conflict of interest when applying to council.
Evans says he deliberately “distanced” himself from his firm after being appointed a director and doesn’t know what it does for Lakes Leisure nor whether Lakes Leisure tenders the work or if there’s a contract.
“I don’t have any participation in the Job Agency beyond my directorship and shareholding,” Evans says, referring questions to co-owner Chris Major.
Evans vehemently denies seeking the directorship to feather his private company’s nest.
Mountain Scene: What’s your reaction to the suggestion you perhaps applied to join Lakes Leisure’s board to foster its trading relationship with Queenstown Job Agency?
Evans: “I find that suggestion preposterous – it’s far from true.”
While Evans and his Job Agency appear to have declared the conflict correctly, the revelations call into question Lakes Leisure’s governance.
Faul concedes Lakes Leisure didn’t introduce a new policy for Job Agency transactions when Evans joined the board.
Faul also rejects any suggestion Lakes Leisure employees might suck up to board members by giving business to their private companies.
However, with Job Centre transactions now at “a significant level”, Lakes Leisure may also need a governance policy reflecting “the quantum of that relationship”, he says.
Despite earlier saying a new policy may be needed because of “significant” business with Evans’ Job Centre, Faul now says “the issue of improving the arrangement was already being addressed”.
New Lakes Leisure boss Ruth Stokes is “reviewing” procurement and while the Job Centre arrangement was “casual and flexible”, there’s now “an opportunity to canvass the business to other providers”, Faul says.