Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search


Response to request to look at KiwiBuild

19 November 2019: In May 2019, Hon Judith Collins raised some concerns about KiwiBuild with our Office. We decided to look into those concerns as part of the 2018/19 annual audit of the Ministry of Housing and Urban Development. We have now completed that work and written back to Ms Collins with our findings.

Hon Judith Collins

Dear Ms Collins,

Thank you for raising your concerns about the KiwiBuild programme with me earlier this year. These included whether all of the KiwiBuild activity was covered by appropriations, how relationships with developers were managed, and concerns about specific projects linked to the “Buying off the Plans” component of KiwiBuild.

I asked my Appointed Auditor for the Ministry of Housing and Urban Development to consider those matters as part of the 2018/19 annual audit. They looked at how projects are identified, the evaluation, due diligence, and approval processes, and the processes for managing conflicts of interest.

Our annual audit work is now complete and the findings have been shared with the Ministry of Housing and Urban Development. We have also reported the findings of the annual audit to the Ministers for Housing and for Urban Development, and, as is normal practice, a copy of the letter to the Ministers has also been made available to the Social Services and Community Committee, ahead of its annual review of the Ministry on 20 November 2019.

Now that we have reported the audit findings to the Ministry and Ministers, I can share those findings with you. Our findings are based on the work conducted on several projects, including but not limited to those that you brought to our attention. I have set out below our findings on the matters you raised with me.

Our work on KiwiBuild processes

Our annual audit looked at the two main components of the KiwiBuild programme, the Land for Housing programme and Buying off the Plans. We reviewed a sample of contracts against the Ministry’s systems, processes, and controls for their origination, evaluation, and approval.

Land for Housing programme

The assessment of land for housing follows a well-defined process. There are two clear stages: assessment of the land for entry into the programme; and identification of an appropriate development partner. We reviewed two examples of land packages brought into the programme and the process for identifying land, assessing its suitability, and for identifying and contracting a development partner. From an audit point of view, we found the process to be robust.

Buying off the Plans

We reviewed the process for identifying opportunities to buy KiwiBuild properties “off the plans”. This process includes opportunities for outright purchase of properties as well as underwriting developments with conditions attached to their eventual sale to KiwiBuild purchasers at KiwiBuild price points.

We looked at eight projects, including planning, documentation, how the process was managed, how submissions were received and evaluated, the approach to due diligence reviews, and the process for approving a deal and reaching an agreement with developers. Generally, processes were clear, well planned, and structured. We note that input and assurance from an independent probity auditor is a strength of the current process.

We consider that the Ministry has adequate processes and controls in place to support the appropriate management and approval of these transactions. However, from a programme and system perspective, we have made some recommendations for improvement:

• Although the process for Buying off the Plans is now generally well established at a transaction level, as the programme matures we have recommended that the Ministry further formalise the documentation supporting its approach to the market. It would be helpful to bring together the policy positions currently set out in various documents. If applied to all KiwiBuild programme components, this framework would help ensure consistency (where appropriate) across the range of KiwiBuild projects and market interactions.

• We have also recommended that the Ministry include a more formal assessment of “additionality” in the evaluation process, as opposed to dealing with it separately in due diligence or negotiation. Additionality, or freeing up capital to start new developments earlier than would otherwise be the case, is one objective of the KiwiBuild programme.

Your concerns about specific projects

My auditors considered the specific projects you raised with me. In neither case did we find anything that would warrant further investigation.

Decision-making and coverage by appropriations

You also had concerns about the use of appropriations for KiwiBuild and whether projects are covered by Cabinet decisions. Your concerns included the underwriting of homes already under construction and outright purchase of properties already marketed by developers.

We considered these issues in the performance of our audit work and were satisfied that operations were in scope of both the appropriation and Cabinet approval.

Our future work on housing

My Office is still considering what further work we might carry out on housing and KiwiBuild in particular. Given the significant resources involved in the provision of public housing and other housing support, we continue to have an active interest in the sector. I have yet to make decisions about the focus and form of that further work. 

As well as the annual audit work we will continue to do on KiwiBuild, I will consider further whether there is value in conducting more in-depth work on aspects of the KiwiBuild programme or whether the resources of my Office could be better applied on other housing issues.

Please do not hesitate to contact the Sector Manager responsible for the Ministry of Housing and Urban Development (Tobias Nischalke, tobias.nischalke@oag.govt.nz) if you wish to discuss the findings in more detail. Because of the public interest in these matters, we will be publishing this letter on our website.

Yours sincerely

John Ryan
Controller and Auditor-General

© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On The Problems The Pandemic Is Causing For Big Oil

Chances are, climate change won’t kill you overnight, and that’s got to be significant. Yet while we were all in lockdown listening to the birdsong, it was hard to avoid the conclusion that if governments can up-end the economy for an unexpected reason – the coronavirus – surely, we can act just as decisively to counter the known threat that climate changes poses to planetary survival.
Currently, those twin threats from Covid-19 and climate change are converging: on the extent of oil production... More>>


E-Cigarettes: Vaping Legislation Passes

Landmark legislation passed today puts New Zealand on track to saving thousands of lives and having a smokefree generation sooner rather than later, Associate Health Minister, Jenny Salesa says. The Smokefree Environments and Regulated Products (Vaping) ... More>>


Housing: Government Delivers On Rental Reforms Promise

The Government has delivered on its promise to New Zealanders to modernise tenancy laws with the passing of the Residential Tenancies Amendment (RTA) Bill 2020 today, says Associate Minister of Housing (Public Housing), Kris Faafoi. “The Residential ... More>>


National: $4 Billion Investment To End Wellington’s Congestion Woes

A National Government will invest another $4 billion in transport infrastructure across Wellington, igniting the economy and delivering the congestion-busting solutions the region has long been crying out for, National Party Leader Judith Collins says. ... More>>


Gordon Campbell: On The Virtues (and Fluffed Opportunities) Of The Operation Burnham Report

One unspoken rule of thumb in any official public inquiry is : whatever you do, don’t conclude you were made to listen to “a litany of lies” even if the evidence of a deliberate cover-up is right there under your nose. In that respect, the report ... More>>


Office Of The Speaker: Parliament Is Revamping Its Rules

Today, the Standing Orders Committee’s report on the review of Standing Orders was presented to the House. The Speaker of the House, the Rt Hon Trevor Mallard, chairs the committee. He said today that the 2020 review will make our rules more ... More>>

Your Vote 2020: Bringing Election Coverage To Viewers Across TVNZ Channels And Platforms

As New Zealand gets ready to head to the ballot box this September, 1 NEWS is bringing voters comprehensive coverage and analysis of this year’s General Election. TVNZ’s coverage will draw on the depth of experience held across the 1 NEWS team, says Graeme ... More>>

Economy: 30% Believe Households Worse Off, 298,000 Expect To Lose Jobs

64% of New Zealanders feel the economic position of their households is the same or better than a year ago – and 30% think it is worse or much worse, while 298,000 think they will lose their jobs in the next 12 months. Households’ perceptions ... More>>

State Services Commission: Findings Of Investigation Into COVID-19 Active Cases Privacy Breach

Deputy State Services Commissioner Helene Quilter has today announced the findings of an investigation into a breach of privacy regarding sensitive personal information. The investigation looked into who or what caused the disclosure of the information, ... More>>

International Security: New Zealand Suspends Extradition Treaty With Hong Kong

The New Zealand Government has suspended its extradition treaty with Hong Kong and made a number of other changes in light of China’s decision to pass a national security law for Hong Kong, Foreign Affairs Minister Winston Peters says. More>>


Energy: 100% Renewable Electricity Grid Explored With Pumped Storage ‘battery’

The Government is taking a significant step toward its goal for 100% renewable electricity generation in a move that could be a game changer for consumers and the creation of a low-emissions economy, Energy & Resources Minister Megan Woods said. ... More>>






InfoPages News Channels