An independent review of Whanganui District Council’s failed $11 million investment in an international flight school has begun.
By Moana Ellis, Local Democracy Reporter
Deloitte has been appointed to carry out the review of the council’s decade-long investment in the failed New Zealand International Commercial Pilot Academy.
The review will cost $90,000 and is expected to be completed in December.
The flight school has been wound down after the council reported an $11m loss in March.
Deloitte will examine how the council’s financial exposure to the pilot academy developed over time, the key decisions and governance arrangements involved, and the information and advice available to decision makers.
The final report is expected to be presented to council in December.
Mayor Andrew Tripe said an independent review was necessary to establish a clear record of what occurred.
It would give the community confidence that the council has fully understood what happened, and would identify lessons that must be learned, he said.
“This review matters because the council over the years has made a significant investment in NZICPA, and the community is entitled to understand how those decisions were made and how the council’s financial exposure developed over time.”
Tripe said many current elected members, including himself, were not involved in the original concept or subsequent decisions relating to the NZ International Commercial Pilot Academy.
The review would include a chronology of key decisions, an assessment of how the council’s financial exposure changed over time, and findings on what worked well and what fell short.
The final report is expected to include recommendations for strengthening the council’s approach in the future.
Tripe said the council would continue to own significant commercial land and property.
“Decisions about how those assets are managed and funded will not go away. The lessons from NZICPA will help ensure future decisions are well-informed and made with a clear understanding of the risks.”
Deloitte is expected to engage with those involved in the academy’s governance, oversight and decision-making, but the council said the review was focused on learning and accountability rather than determining individual blame.
It is expected to make recommendations aimed at strengthening investment governance, oversight of council-controlled organisations, risk management and decision-making.
The council expects the final report to be made publicly available, subject to any information that is required by law to be withheld.
– Local Democracy Reporting is local body journalism co-funded by RNZ and NZ On Air
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