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Processes to be strengthened

Processes to be strengthened

The Provincial Development Unit (PDU) administering the Provincial Growth Fund (PGF) is strengthening its systems and processes for assessing and approving requests for funding following an internal review, Provincial Development Unit head Nigel Bickle said today.

“The Provincial Development Unit accepts the findings of an internal review that due diligence on personnel associated with the Waste to Energy project should have been undertaken prior to approval of PGF funding for the project and a ministerial announcement,” Mr Bickle says.

The Waste to Energy project was approved for funding but that funding was put on hold as soon as issues arose. The internal review report released by the PDU today outlines the background to the issues and the process followed up until the Minister’s announcement.

“We also accept the recommendations made in the review. We fell below prudent standards of due diligence and we have apologised to the Minister for not getting this right,” Mr Bickle says.

“The public quite rightly expects government agencies to run a robust process before awarding contracts or approving funding. In this case we made a mistake by not completing appropriate checks on personnel associated with the Waste to Energy project.

“We agree there would have been enough time to complete these checks prior to any funding being approved and the subsequent ministerial announcement. The fact that these issues would most likely have been picked up in the contract negotiations process, post announcement and before any PGF funding was actually handed over, is no excuse.

“While this is not a defence, the team was in an establishment phase and we were quickly transitioning from an organisation set up to approve and manage around $11M/pa in development funding to one responsible for administering $1Bn/pa. All projects that have had funding announced to date will continue to undergo due diligence processes in accordance with the standards that have been put in place.”
The following changes to our processes and systems have been made:

• Due diligence on personnel is now carried out before applications are considered by Ministers and other decisions makers for funding and announcements.
• If due diligence cannot be completed within the available time, then the Minister’s Office will be informed of this risk, and where practicable, an announcement delayed until the process has been completed.
• The introduction of a robust application process that is proportional to the types of applications.
• Applicants will also need to declare that they have not been convicted or are under investigation for any offences bearing on the operation of the business.
• We are also asking the Office of the Auditor General to provide feedback and suggestions on any further improvements we could make.
The report is at http://www.mbie.govt.nz/info-services/sectors-industries/regions-cities/regional-economic-development/documents
[ends]

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