An enquiry from the Auditor-General has criticized the University of Auckland’s decision to purchase a $5 million Parnell mansion as unjustified, saying the university lacked transparency and has been unable to show the expenditure was moderate.
The university bought the four-bedroom house in November for $5,062,500 last year, claiming then it was to replace another similar property in Remuera, and it would be used for university-related events and hosting.
The university told the Auditor-General that being able to offer housing was an important factor to recruit the right candidate for the Vice-Chancellor position, saying the competitive Auckland property market meant it would be “unreasonable to expect someone coming from overseas for a five-year term to purchase a house”.
It also said it would be inappropriate for the Vice-Chancellor to rent accommodation on the open market because she “might face disruption if the landlord decided to sell the house”, meanwhile the house’s hosting purpose was important for the Vice-Chancellor to “build connections with key influencers” and secure donations.
The Auditor-General’s report said from June 2019, correspondence between then-incoming Vice-Chancellor Dawn Freshwater and the university asked her to provide information about her preferences.
A property brief next month specified that the house had to be “within walking distance of the University and have easy access to the bays, cafes, and restaurants”.
The Vice-Chancellor’s rent was fixed at 52% of the market value, and the university was also responsible for furnishing the house’s communal and outdoor areas, as well as the home office and spare bedroom. It also expected the mansion would be used to host 14 dinners or events over the next 2 years.
The Auditor General’s report states that university could have been more transparent about any arrangements made about the house, and further said the university has not been able to demonstrate it has met key principles of managing sensitive expenditure well.
Controller and Auditor-General John Ryan said the university has not been able to show “a justifiable business purpose” for the mansion.
“It is hard to accept that purchasing a house to provide accommodation for the incoming Vice-Chancellor, and to host an anticipated 14 events in two years, justifies the $5 million expenditure.”
“Nor does that level of hosting, in my view, justify an almost 50% reduction in the property’s rent.”
A university spokesperson said they accept the report’s findings and acknowledges there were shortcomings in the handling of the process.
“We have commissioned independent advisors to undertake detailed reviews of the University’s policies and processes relating to sensitive expenditure. Once completed, any changes the University makes in response to those reviews to its policies and processes will be made publicly available.”
Freshwater announced to staff in October that she had asked the University to consider selling the property, due to the financial impact of COVID-19.