The 2024 audit revealed \u201csignificant areas of concern\u201d in the council\u2019s procurement approach and said there was \u201cimprovement potential in all dimensions\u201d.<\/p>\n
Why the audit took place<\/p>\n
KPMG, one of the world\u2019s largest audit and advisory firms, was engaged by council staff in 2024 to conduct an independent maturity assessment of its procurement function and identify risks, governance gaps and areas for improvement.<\/p>\n
The audit identified gaps in strategy, governance and oversight.<\/p>\n
It found that 75% of the 1248 active contracts during the three-year period were awarded without an open competitive process.<\/p>\n
Non-contested contracts are agreements issued without multiple suppliers bidding for the work.<\/p>\n
The KPMG report also said that in the 2024\u20132034 Long Term Plan, expenditure was projected to grow 73% from 2021 to 2031, increasing daily spend from $1.7m to $2.9m.<\/p>\n
Key findings noted by KPMG included that procurement \u201cpolicies and guidelines are outlined but not complied with due to disagreements, perceived complexity and a lack of training\u201d.<\/p>\n
\u201cThe ability to centrally follow up on procurement activities is missing. Insights and reports are not flowing through to the executive leadership team.<\/p>\n
Hamilton City Council was audited by KPMG in 2024. Photo \/ Hamilton City Council <\/p>\n
\u201cCompliance is not enforced and repeated non-compliance occurs without consequences.\u201d<\/p>\n
Further, it says \u201cInsufficient communication between all HCC branches leads to … poor decision-making… and risks.<\/p>\n
\u201cHigh workloads, frequent friction, and confrontational behaviours drive staff turnover in HCC\u2019s procurement areas.\u201d<\/p>\n
The audit was first briefly discussed at a Strategic Risk and Assurance Committee meeting on September 3, 2024.<\/p>\n
At that meeting, council management proposed a procurement task force and a programme of improvements.<\/p>\n
Details of this were meant to be discussed at the committee\u2019s next meeting, but the next meeting\u2019s agenda does not include the report.<\/p>\n
A year after the review took place, in September 2025, at a meeting of the Strategic Risk and Assurance Committee, KPMG outlined 35 specific initiatives to be delivered over the next three years to support better decision-making.<\/p>\n
What\u2019s ahead<\/p>\n
Current councillors are now working through those 35 recommendations alongside council staff.<\/p>\n
\u201cThe procurement subcommittee will work with the team to see which of those initiatives should be prioritised \u2013 what can we deliver quickly and for the biggest impact,\u201d Karalus said.<\/p>\n
Hamilton City councillor Rachel Karalus.<\/p>\n
She said the council wanted to empower staff to implement improvements as soon as possible while ensuring elected members had appropriate oversight.<\/p>\n
\u201cWe have a council that has a desire to empower the staff to now deliver this programme of work as quickly as possible, and to deliver the outcome at the earliest opportunity for the benefit of the community that we all serve.\u201d<\/p>\n
Karalus said procurement concerns were a recurring theme raised by residents during the local body election campaign.<\/p>\n
\u201cWe went into the election, procurement concerns were one of the things that people spoke very vocally about,\u201d she said.<\/p>\n
She said procurement was one of the most important tools available to local government because it determined how public money was spent and whether projects delivered value for ratepayers.<\/p>\n
\u201cIt enables us to have confidence that we are procuring services in a way that delivers value for money and ensures good community outcomes,\u201d she said.<\/p>\n
Who\u2019s to blame?<\/p>\n
Karalus said more information was needed before determining who was responsible, but she wanted to focus on improving future systems rather than blame.<\/p>\n
\u201cThat\u2019s not to avoid answering the question, simply that there hasn\u2019t been the time for the inquiry to be made in order to make a firm comment,\u201d she said.<\/p>\n
Karalus said council staff had brought the audit findings to the attention of elected members and had worked openly with councillors on improving transparency and accountability.<\/p>\n
\u201cStaff have not been resistant to elected members around transparency and accountability,\u201d she said.<\/p>\n
The report and the proposed programme of work are expected to be formally discussed in Hamilton City Council chambers tomorrow.<\/p>\n
Tom Eley is a multimedia journalist at the Waikato Herald. Before he joined the Hamilton-based team, he worked for the Weekend Sun and Sunlive. He previously worked as a journalist at Black Press Media in Canada and won a fellowship with the Vancouver Sun.<\/p>\n","protected":false},"excerpt":{"rendered":"The 2024 audit revealed \u201csignificant areas of concern\u201d in the council\u2019s procurement approach and said there was \u201cimprovement…\n","protected":false},"author":2,"featured_media":301382,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[22509,41666,2199,2516,5205,7558,1874,6288,8788,78,21556,1452,111,43,139,69,5204,49182,9364,1560,5257,8262,102],"class_list":["post-301381","post","type-post","status-publish","format-standard","has-post-thumbnail","category-new-zealand","tag-areas","tag-audit","tag-city","tag-concern","tag-council","tag-councils","tag-found","tag-hamilton","tag-highlights","tag-in","tag-independent","tag-issues","tag-new-zealand","tag-news","tag-newzealand","tag-nz","tag-process","tag-processes","tag-procurement","tag-report","tag-significant","tag-spending","tag-with"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/301381","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=301381"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/301381\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/301382"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=301381"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=301381"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=301381"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}