Auditor-General: Waikato University rejects public accountability over concerns over former National Minister’s $1m contract

The Auditor-General says the University of Waikato is abdicating its public responsibility during an investigation into how the university spent more than $1 million on a consultancy led by former National Party Cabinet minister Steven Joyce.

In a letter to the university’s chancellor released today, Auditor General John Ryan said the university “does not appear to realize that it is accountable to Parliament and the public as to whether it has followed the correct processes in issuing public money”.

“Relying on the view that the university is ‘completely satisfied’ with the work performed does not provide that certainty.”

Ryan also said the university did not consider it “necessary or appropriate” to comply with his request for an explanation of the work Joyce Advisory Services has performed since a contract was first entered into in 2019.

“While we later received confirmation that there was no further information to provide, I remain concerned about the initial response.

“A public organization that spends public money should be able and willing to explain to my office and to the public what that money was spent on.”

The university’s vice-chancellor, Neil Quigley, was not available for an interview, but the Herald expect a response to this. Tertiary Education Minister Penny Simmonds’ office will also respond.

Joyce declined to comment, saying it was a matter between the university and the Auditor General.

In relation to the ongoing contract with Joyce’s firm, Ryan believed that the University’s purchasing policy had not been properly followed and that there was insufficient evidence to support Quigley’s claim that Joyce’s firm was the only suitable option to fulfill the services – a reason used to justify not considering other companies.

In September, Quigley was criticized for endangering the university’s independence after documents revealed he had gone to great lengths to help National develop its policies by proposing a new medical school at the university, which he called a ‘gift’ for a future national government.

In June last year, the Tertiary Education Union was “shocked and dismayed” when the university paid Joyce’s company almost $1 million between December 2019 and December 2022, amid cuts to staff under financial pressure.

Media reports led to further questions from Ryan. The original contract was for three years with a total minimum agreed amount of $288,000. It was renewed in 2022 and by October last year the university had paid about $1.1 million while the work was underway.

Joyce’s firm was contracted to provide services including serving on the board of the Department of Management, giving public policy presentations and providing advice to senior university staff.

Ryan’s investigation revealed that the university had invoked a provision in its procurement policy that allowed it to retain Joyce’s services without considering other options.

He criticized the university’s inability to adequately explain why Joyce’s firm was chosen and why Quigley believed Joyce’s firm was the only viable option.

“That explanation, and the assurance it would provide the public that public money has been spent appropriately, is missing.”

The university’s policy included a requirement for the vice-chancellor to approve tenders if they were made without assessing all options, but Ryan said this had not happened in this case as Quigley told him there was “little point that he wrote to himself.”

“This misses the point that through comprehensive recording of procurement processes, the public can be confident that good decisions have been made to spend public money.

“This is even more important when the vice-chancellor uses a power to override the usual processes.”

Another argument used by the university was that it wanted to exclude Joyce from working with another tertiary education provider, but Ryan did not believe this.

“In our view, paying an amount necessary to secure exclusive services is not sufficient to provide assurance that the money spent on those services is appropriate and is therefore well spent.”

Ryan cited Quigley’s belief that the “results produced by the work” were more important than the “process by which the money is spent to achieve those results.”

Ryan agreed that delivering good results for the public was of value, but said it was equally important to balance that with how the results were achieved.

“If you do otherwise, you risk an approach where the end justifies the means.”

Adam Pearse is a political reporter in the NZ Herald Press Gallery team, based in Parliament. He has worked for NZME since 2018, covering sport and health for the Northern Advocate in Whangārei before moving to the NZ Herald in Auckland, where he reported on Covid-19 and crime.