8.2 Accountability and oversight of council-controlled organisations (CCOs)

Auckland Council is accountable for the actions and spending of its CCOs. To ensure alignment with council objectives, the following tools and processes are used: 

Board appointments

• The council appoints all directors of substantive CCOs and most smaller CCOs. 
• Appointments follow the council’s Appointment and remuneration policy for board members of council organisations. 
• Under the Companies Act 1993, directors of CCOs that are companies (all except AT) must act in the CCO’s best interest, though constitutions allow action in the council’s interest. 
• Up to two councillors may be appointed to Auckland Transport's board. 

Statements of Intent (SOIs)

• Each CCO prepares an annual SOI covering three years [1]. 
• SOIs outline strategic priorities and performance measures. 
• Council gives direction on the SOI through letters of expectation.  Each year, the council writes to the substantive CCOs, setting out expectations to guide the development of the SOI. Workshops are held to support the development of these letters, involving CCO chairs, chief executives and the Governing Body. 
• Substantive CCOs must report on their performance to the council at the end of the first and third quarters and explain if SOI performance measures have not been met [2].  
• The council has performance meetings with CCO boards for the half-year reports and for the fourth quarter results. 

Substantive CCOs must also align with the council’s long-term plan and other plans or strategies [3]. 

CCO Accountability Policy

The CCO Accountability Policy outlines the council’s expectations for substantive CCOs and is set out in the council’s long-term plan. The policy includes [4]: 

• asset and activity planning requirements 
• performance frameworks 
• financial reporting aligned with council standards 
• obligations to prepare a Māori Responsiveness Plan and work with the council to report against it. 

Strategic asset management

The Accountability Policy identifies strategic assets owned or managed by each substantive CCO and sets out management requirements for them.  

• Major transactions related to strategic assets, including transfer or ownership or control, must be approved by the council or included in the long-term plan [5]. 
• Some transactions may trigger public consultation requirements [6]. 

Statement of Expectations (SOE) 

Under section 64B of the Local Government Act 2002 the council can issue an SOE to guide how CCOs operate and manage their relationships with the council and stakeholders. The SOE complements the Accountability Policy and both have statutory status. The SOE includes principles like: 

• reflecting the council's shared governance structure 
• focusing on outcomes for Aucklanders 
• operating collaboratively as a group 
• following a no-surprises approach 
• using common branding  
• being transparent with the public 

Additional mechanisms

The council has some additional mechanisms to achieve alignment and accountability, including: 

• Local Board Engagement Plans: CCOs must build strong relationships with local boards and develop formal engagement plans. These plans are a requirement of the CCO Accountability Policy. 
• Liaison councillors: These roles were introduced in the 2019–2022 term to strengthen relationships between the council and CCO boards and improve the flow of information. 

Footnotes

[1] Local Government Act 2002, section 64 

[2] Local Government Act 2002, sections 66 and 67 

[3] Local Government (Auckland Council) Act 2009, section 92 

[4] Local Government (Auckland Council) Act 2009, section 90(1) 

[5] Long-term Plan, Volume 2, Part 4.4. 

[6] See the council’s Significance and Engagement Policy.