Council staff caught breaking sign-off rules

Staff at Nelson council made “numerous breaches” by signing off contracts and work orders without the proper authority.

The council boss has warned anyone caught breaking the rules could face disciplinary action.

An internal audit found Nelson City Council officers broke the rules multiple times in relation to their financial delegated authorities.

Financial delegated authorities set out which staff within the council are authorised to approve spending to what level.

Council chief executive Nigel Philpott says the senior leadership team were taking the issue “really seriously”.

“I take a dim view of any officer breaching their delegated authority; we’ve had a couple of incidences which were taken seriously,” he says.

“I think there had been a view that it was okay to breach a delegation.

“I’ve made it quite clear that that’s just not acceptable and that will be a disciplinary offence if people do that.”

The audit was conducted six months ago but was reported to the council’s Audit and Risk Committee on Wednesday last week.

Chris Logan, a council audit and risk analyst, says in his report that the breaches could have occurred because the authorisation levels were “inadequate”, though that was “not a justification” for the breaches.

Several recommendations have now been implemented, including communicating to officers how delegations work, increasing the financial delegation limits inline with inflation, and monitoring if the limits needed updating when roles changed.

“We’re in a much better place,” Chris says.

Nigel expects that these breaches won’t occur again in the future.

“Having said that, with a large organisation, there’ll be mistakes and people may do that, so I’m not going to say that there won’t be any, but my expectation is there won’t be any,” he says.

Following the increase to the levels of financial delegations, the senior leadership team was observing to see if the new levels were appropriate, Nigel adds.

The delegations will continue to be reviewed on an annual basis.

Independent committee member and former acting chief executive Lindsay McKenzie asked if there were any historic or future legal risks due to the council pulling out of a project or withholding payment if a contract was signed by someone with the wrong delegation.

Nikki Harrison, the council’s group manager corporate services, says the council would be obligated to fulfil the contract because ultimately the purchase order still lay with the officer with the correct delegation.

Catherine Taylor, the independent chair of the committee, says she felt assured the council was managing the problem, but urges officers to keep “an eye on” the issue.

The council is also going to implement software that will help standardise the delegations of Nelson council officers, which have been found to be “inconsistent” compared to officers in other councils around the country, to reduce risk.