KEY POINTS:
Tougher controls on staff across all departments in the Auckland Regional Council are promised following the David Beckham fiasco in which council-owned Mt Smart Stadium lost $1.7 million.
"I'm tightening up everything across the whole council's operations," ARC chief executive Peter Winder said last night.
In parallel with an inquiry into the event by the Office of the Auditor-General, Mr Winder was making his own review of the way the LA Galaxy football match in December was planned and managed.
As a result he was making considerable changes to the control environment, including officers acting under delegated authority, across the whole council's operations. Since the LA Galaxy event, the chief executive has terminated all capital spending at the stadium and all spending is tightly controlled.
The unit departed from its normal role as venue operator to act also as promoter, underwriter and operator of the match day and associated events.
An alarmed ARC chairman Mike Lee called in the Auditor-General to investigate what caused such a serious failure.
Last night, Mr Lee said the chief executive reported some apparently very serious management failings.
"These failings are currently being dealt with by the CEO," said Mr Lee. "For employment law reasons I can make no further comment."
However, Mr Lee said the future of the stadium as a business unit is being reviewed as part of the investigation.
That could result in it becoming part of the regional parks financial arrangements.
Currently, ARC provides the stadium's working capital and Mt Smart pays interest to the council on the debt that it holds.
Both Mr Lee and Mr Winder say the loss on the event will not affect rates and the council is budgeting for a lower rates rise than last year's.
The stadium has a $24.2 million debt, including the event loss. Most of it was incurred by capital works, such as the East Stand.
Mr Lee said the stadium debt was designed to be gradually paid off from receipts of Warriors' rugby league games and other events such as the successful U2 concert.
For the LA Galaxy event, travel and accommodation for the teams and event promotion came to nearly $3 million.
The Herald understands the loss figure includes a $50,000 fee - not yet invoiced - for Dutch international Edgar Davids. He played with his trademark goggles and dreadlocked hair in the opposing Oceania All Stars team.
Mr Winder said confidential agreements prevented him from commenting on footballers' fees. No specific amount had been spent on bringing Beckham to Auckland.
The impact of the Beckham fiasco is revealed in the half-year to January 31 stadium earnings before taxation and interest, which show a negative $1.456 million. In the previous seven years, stadium earnings ranged from $874,000 to $1.59 million.
