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Formal complaint to the Office of the Controller and Auditor General


15 April 1998


Controller and Auditor General
Office of the Controller and Auditor General
Level 7
Hitachi Data Systems House
Thorndon
WELLINGTON


Dear Mr MacDonald,

The Centre is writing to you in order to bring to your attention concerns of the Centre in respect of the declarations which may have been made by the Dunedin City Council in order to obtain part taxpayer funded Taskforce Green staff.

While it is not considered probable that there has been any illegality in these matters, the Centre is concerned that the possibility exists and would be very grateful if you could in fact confirm that these dealings are wholly within the law. The Centre understands that matters of non-legal probity may also fall within your jurisdiction.

In the last few weeks the Centre has become aware that, in order to qualify for government subsidised Taskforce Green personnel, employers - at least currently in Dunedin and in the case of the DCC - are required to make a declaration covering a range of conditions including condition three which says:

"That the employer declares that the project would not have been undertaken but for Taskforce Green."

The Centre has specific concerns with two projects undertaken by the Dunedin City Council.

The first project, carried out in 1994, involved three persons being employed to carry out inspections of all existing buildings in the area for which the Council was responsible, for the purpose of obtaining information that the DCC claimed was necessary in order to issue a Compliance Schedule for that building.

As you will see from the enclosed photocopy of a letter of authority, the then Development Services Manager Mr Ken Hadley stated in that letter that the information was required to be collected for:

" . . . the issue of a Compliance Schedule under Section 44 of the Building Act 1991."

As you will also see from the enclosed copy of the memorandum dated 8 February 1994, Mr Hadley was, apparently knowingly:

" . . . trying to obtain some temporary staff to assist with the project, either through Taskforce Green or from within existing Council resources . . . "

It would appear from the letter of authority that Mr Hadley was aware of the statutory nature of the work and from his memorandum, it would appear that he was knowingly trying to obtain Taskforce Green staff to assist in it.

It was also acknowledged by Mr Hadley in his memorandum, that the Dunedin City Council could not recover the costs associated with issuing Compliance Schedules to existing buildings. Is this a possible reason for using Taskforce Green staff to inspect these buildings?

After all, if taxpayer funding can be used to reduce the cost to the ratepayer, this may have been an incentive.

The matter that is of concern to the Centre here, is that if Mr Hadley knew that the work was required by law, how could he then sign a declaration that it would not be done but for Taskforce Green? It would appear that either the declaration was untrue, or that he intended to ignore the Council's statutory obligations.

It may well have been the case of course, that at that time no declaration was signed, or that no declaration was necessary. The Centre does not have a copy of any declaration signed by Mr Hadley.

If you would care to refer to the enclosed copies of the Building Act, it can be seen that Section 44 (1) states that a Compliance Schedule shall be required for any new building subject to that building meeting various conditions, and that para (2) states that that Schedule shall be issued by the relevant territorial authority. Reference to Section 44 (6) shows that the requirements for new buildings also apply to existing buildings, and that, if no person as defined in sub-paras (a) and (b), notifies the territorial authority of the requirement for a Compliance Schedule, then para (c) requires such a Schedule to be issued within two years of that Part of the Act coming into force.

Section 44 (6) (c) of the Building Act 1991, amended 1993, therefore appears to require territorial authorities to issue Compliance Schedules for all existing buildings within two years of the Act becoming law. It is suggested that that is the statutory requirement that Taskforce Green staff were employed to carry out. The three staff members not only carried out the inspections, but also issued the completed Schedules.

This analysis may be incorrect, or there may be other matters of which the Centre is unaware, which offer a simple explanation for the use of Taskforce Green staff under these circumstances and which makes their use quite proper.

The second example concerns a declaration made by Ms Elisha J McElroy, the current Development Services Manager of the Dunedin City Council.

As you will see from the enclosed copy of a letter from the Centre to the Mayor of Dunedin of 14 April 1998, the Centre has a number of concerns with regard to the work that was and is being done on the records system of Environmental Health.

There are however, a number of additional points the Centre would like to bring to your attention if it may. You will notice from the enclosed copy of the Taskforce Green Subsidy Application Form, that on page 2, the Dunedin City Council states as a matter of fact, that in response to the question of how the project will:

". . . benefit the environment and or the community?; "

the work to be done is not applicable to either area.

Is it responsible behaviour for a local authority to seek a government subsidy when it acknowledges that the work to be done will not meet the criteria?

Is it responsible behaviour for the New Zealand Employment Service to grant that subsidy knowing that the employer admits that the work to be done does not meet the criteria?

The Centre notes that the work done and to be done, in Environmental Health, relates to the

". . . monitoring of premises licensed under the Health Act 1956."

Does this statement possibly mean that there is a statutory requirement for the Dunedin City Council to maintain accurate records in this area?

Finally, the Centre notes the existence of condition two which says:

"That the employer agrees that the project will not displace or have the potential to displace other workers. "

This condition appears to have been written by a person with a global cognitive structure because it is too wide for the Centre to comprehend. It would appear that this could mean either that a person or persons could lose their jobs either immediately or in the future as a result of this work being done, or that it stops people being employed either immediately or in the future to do this work.

If it does in fact mean the latter, then this is a further cause for concern to the Centre in terms of possible incorrect declarations.

In more general terms the Centre is concerned that the whole system of wording of the Taskforce Green declarations, means that it is very easy for an employer to make truthful declarations, yet permanently replace a proportion of their staff with government subsidised employees who have no status, rights or entitlement to protection of a union.

Please find enclosed copies of the relevant documentation.


Yours faithfully,





J M STEVENSON (Mr)

DIRECTOR


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