Home' Advocate Communications : Advocate South 25 August 2016 Contents 25 August, 2016
a one-horse race
the independent investigation
by Deloitte, released last week,
found no reasoning for the $8
million figure approved by the
council in May 2013.
"there was no explanation
as to why the budget should
be $8 million in 2013 when the
engineering firm had estimated the
cost as being $11 million in 2009,"
the report said.
Furthermore, the council did
not seek the input of that same
engineering firm when constructing
the approved $8 million budget,
but rather it "was prepared at
Council’s instruction largely based
on figures provided by a contractor
to the council, using unit prices and
measurements that were provided
in the Initial Engineer’s Report
prepared in 2009, and estimates
based on actual costs from an
existing cycle trail the contractor
was involved with".
the Deloitte review was
commissioned by the council
earlier this year after it identified
the projected cost of the trail had
increased to more than $14 million.
According to the report, the council
estimates its contribution to the
project to date is $9 million.
the Deloitte report says it was
unclear why, but council staff
involved in preparing the 2013
budget believed the council would
not approve a budget over $8
million, thus reducing the budget to
fit this number.
Other warning signs that the
actual expenditure would go
beyond the budgeted $8 million,
such as Fish & game's discomfort
with cycle numbers increasing
along the Oreti River, were also
known during the early stages of
the project and such indicators
should have put the council "on
notice", according to the review.
the council also "did not
expressly disclose to the public that
council funding would be required"
in the event that the trail's cost
exceeded the budgeted $8 million,
or if the council could not raise the
$4 million that was expected to
come from other sources, such as
the Community trust of southland
or the Lotteries Commission.
Other major criticisms from
the review included inadequate
monitoring of the project's
financial status, poor governance
and oversight, lack of appropriate
skills to manage the project, and
"substandard" project management
sDC mayor gary tong and chief
executive steve Ruru said they
accepted the report's findings.
Mr Ruru said it was easy in
hindsight to see deficiencies.
“Council seems to have become
so engrossed in trying to make
the cycle trail happen that it has
forgotten to follow some basic
project management disciplines,”
"More questions should have
He said staff had been asked to
develop an action plan to ensure
the lessons learnt from this review
were implemented. Changes
already underway included putting
into place a new risk management
policy and register, an internal audit
programme, and audit training
for councillors, Mr Ruru said. the
council would receive a report in
september outlining improvements,
not only to the trail project, but
overall management processes.
Mr Ruru said other actions had
been already been implemented
before the report came out, such
as creating a new project sub-
committee in 2015, and establishing
a twice yearly re-forecast for the
entire council budget.
Mr Ruru said a financial forecast
of the project would be confirmed
and finalised once the Environment
Court's decision was released.
$8m of wishful
The Around the Mountains Cycle Trail.
PHOTO: Venture Southland
The very first estimate for the proposed Around
the Mountains Cycle Trail put the likely cost at $11
million, yet four years later the Southland District
Council approved a budget of just $8 million.
That’s just one of several damning revelations in
an independent report into the management of the
yet-to-be finished trail, the costs for which have
already topped $14 million.
By Claire Kaplan
Te Anau’s inaugural Walk the Talk fashion fundraiser has
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challenger Steve Fagerlund
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