Response on M.E.D. today

Press, 2 August 1985, Page 5

Response on M.E.D. today

The Auditor-General will report today to the Minister of Energy on the Christchurch M.E.D. accounts. However, this will be a general response on the regulations governing local authority accounts and their public accountability, rather than a specific look at allegedly “dishonest” transfers in the M.E.D. accounts. The Controller and Audi-tor-General, Mr Brian Tyler, said yesterday he would make a “response” rather than a “report” to the Minister, Mr Tizard. Mr Tizard had asked for comments on the regulations governing local authority accounting. Mr Tyler said Mr Tizard’s inquiry was triggered by publicity about the Christchurch City Council and its M.E.D. accounting procedures. That publicity followed from articles in “The Press” by Dr Donald Gilling, a senior lecturer in account-

ing at the University of Canterbury. Dr Gilling said the City Council charged power consumers more than it should have for electricity and broke Government guidelines on transfers of money from the M.E.D. to City accounts. He said that between 1976 and 1984 the M.E.D. transferred at least $l3 million in subsidies to the council’s general rate account. The transfer exceeded a Government guideline for transfers from electricity sales of no more than 1.5 per cent each year, Dr Gilling said. Dr Gilling’s articles prompted representatives of other Christchurch Councils notably the Waimairi District Chairman, Mrs Margaret Murray, to label the the transfers dishonest. Ratepayers in other districts who were supplied electricity by the M.E.D. were subsidising the Christchurch City Council, she

said. Mr Tyler said yesterday that Mrs Murray had sent him a copy of unaudited M.E.D. accounts with some queries about particular figures. Had Mrs Murray had a copy of the audited accounts, with accompanying notes, it would have been clear to her what had been done with various figures in the accounts, Mr Tyler said. He believed the audited accounts would have answered all her questions, and he had written to her telling her that. Mrs Murray said yesterday that she had received a letter from Mr Tyler in response to her questions. She intended to release the contents of the letter at a press conference today, she said. Mr Tyler said the Christchurch City Council was under no legal obligation to publish a separate set of accounts for the M.E.D.

which was merely one of its departments. The council was to be congratulated on the fact that it did make public a separate set of M.E.D. accounts as well as its full council accounts, he said. The sorts of questions now being asked of the council could not have been asked unless the accounts were made public, said Mr Tyler. However, after several years of having separate M.E.D. accounts audited the City Council passed a formal resolution last year to drop this. The City Treasurer, Mr Robert Lineham, confirmed yesterday that the council had decided no longer to publish a separate set of audited M.E.D. accounts. Instead it will include more details of the M.E.D. activities in its general corporate accounts which it must publish. Mr Lineham said that

under the present regulations the City Council was obliged to publish only the receipts and payments and the capital expenditure for the M.E.D. The council believed it could provide more meaningful information by including more M.E.D. details in the corporate accounts. The only department for which the council would provide a separate set of accounts was Christchurch Airport, Mr Lineham said. This the council was obliged to do because it had to supply a set of audited accounts to the Civil Aviation Division, its airport partner. Dr Gilling said yesterday that the regulations governing local authority accounts allowed too many things to be hidden from the public gaze. He believed the regulations should take more note of public accountability and of public accessibility to figures.