During his former role as chief executive of South Somerset District Council in England, Waitaki District Council chief executive Alex Parmley authorized a ‘substantial’ settlement payment to a senior council staff member over the course of the financial year 2020-21.
In an audit report released in August, auditor Grant Thornton found that proper processes had not been followed – the head of council and other elected members had not been consulted.
It also found that financial regulations and standing orders had not been followed and there was no evidence that value for money had been considered.
The payment represented a serious flaw in the governance arrangements, the auditors said.
“There has been no review of the decision by statutory officers or members. There is no evidence to support the decision taken, and no legal opinion has been sought on the legality of the decision. OK.”
The payment resulted in a statutory recommendation.
Listeners said the action was “almost as high as listeners can go”.
English media reported the payout was £109,000 (NZ$209,506).
Mr Parmley, who started his role on Waitaki council in July last year, said he did not recognize the amount and did not believe it was accurate.
He acknowledged the auditor’s findings, but said he believed the proper processes were followed at the time.
“The issues raised in the report result from the full documentation of these processes not being completed, which I also acknowledge.”
The audit report did not take into account the effects of Covid-19, he said.
“The council, like many, was under severe pressure, including a third of staff deployed to the immunization program and many other staff being redeployed to support business grants, hardship payments and other new services.”
Waitaki’s advisers had seen the report before he was aware of it.
“I have discussed the matter with elected members, who are satisfied that due process was followed, even if not fully documented.
“I have a track record of hard work, innovation and upholding high standards for the communities I have worked for.
“I intend to do the same for Waitaki.”
The statutory requirement meant that the board had to discuss and publicly respond to the audit report.
South Somerset District Council chief executive Jane Portman said in a statement that the matter was taken very seriously and investigated as far as possible to ensure a such an incident does not happen again.
At a special audit committee meeting on September 2, she said the payment was made when “the then chief executive instructed payroll to pay the amount.”
She learned of the payment shortly after taking office in August last year, as it was an overrun of the chief executive’s budget.
The payment was not unjustified, rather it was a procedural failure, she said.
Waitaki Mayor Gary Kircher said council had full confidence in Mr Parmley.
The board had considered the matter and remained “fully confident that our appointment of Mr Parmley is a very good decision and that he will continue to serve us and Waitaki very well”.