Source: Radio New Zealand
Former Chatham Islands Council chief executive Paul Eagle. RNZ / Richard Tindiller
An auditor-general’s report into Chatham Islands Council spending has found former chief executive Paul Eagle should not have been in control of a project to upgrade his own accommodation, after costs ballooned by more than $250,000.
It also revealed Eagle edited or created quotes and contracts, and said the former Rongotai MP’s handling of documents was misleading and demonstrated exceptionally poor judgement.
The report – tabled in Parliament on Thursday – was instigated following concerns about spending that could be seen to give private benefit to staff.
Eagle took up the position as council chief executive in the Chatham Islands shortly after the retirement of the previous chief executive in August 2023. The job included the use of a home which – ahead of Eagle’s appointment – had a $200,000 project approved to address overdue maintenance.
The inquiry found Eagle made multiple additions to the project, including expensive kitchenware and electrical work, that suppliers considered to be excessive.
Supplied / Jenny Siaosi
It also uncovered an array of deficiencies in council policies relating to procurement, conflicts of interest, staff expenses and fiscal reporting as well as “misalignment” between existing policies and how they were put into practice by Eagle and council staff.
In a letter included in the report findings, Eagle – who resigned last month – apologised and said his actions did not meet the standards expected of himself and his role.
Inquiry raises ‘serious integrity questions’
The council – which served about 600 people living on Chatham and Pitt Islands – relied heavily on Crown funding for both its operational and capital spending.
Auditor-General Grant Taylor and Assistant Auditor-General Melanie Webb said a project to refurbish the home which housed the council’s chief executive was not well managed, and changes Eagle requested “increased the costs beyond what was necessary”.
Quotes and contracts for the work on the property were found to have been created or edited by Eagle, as well as procurement memorandums created by him in 2025 had been backdated to the previous year.
Eagle ran for mayor of Wellington in 2022. RNZ / Samuel Rillstone
“Individually, any of those examples would be concerning. Together they raise serious integrity questions for the council to contend with,” the report’s authors wrote.
“The information that the chief executive provided was misleading. Specifically, it created an incorrect picture about when certain events occurred (for example, when a contract was signed) or whether they had happened at all.
“We consider that the chief executive’s actions were unacceptable and demonstrated exceptionally poor practice and judgement.
“We have not reached a view on the legality of the chief executive’s actions. In this case, we consider it sufficient to draw the council, Parliament, and the public’s attention to the matter.”
The report said the significant cost of the project and the risk the upgrade to the house could be perceived as benefiting Eagle and his family should have instigated approval by the council or one-up approval by the mayor or deputy mayor, in line with the council’s sensitive expenditure policy.
“However, the chief executive effectively had sole control and oversight of the house upgrade project. He incurred that expenditure on the council’s behalf and approved most of the spending,” they wrote.
Eagle apologises: ‘I panicked’
In a letter accompanying the report, Eagle acknowledged its findings and apologised for the impact of his performance in the role.
“I started as chief executive of the council in late 2023, three months earlier than planned and, because of the illness of the outgoing chief executive, did not receive a formal, structured induction process covering the policies, processes, systems and documentation expected of the role. I wholeheartedly accept now that I should have sought clarity and support for this process.”
Eagle said that documentation and information provided to explain his actions to the inquiry also “fell short” of expected standards.
“In hindsight, I recognise I panicked when I realised documentation was incomplete and I tried to fix this. I deeply regret that those actions did not meet the standards I expect of myself and my role.”
Cost soared as Eagle took control
Ahead of Eagle’s appointment, a 2021 estimate of the cost of the building’s upgrades was $152,250 (plus GST) and the original budget was set at $200,000.
The final cost of the project was $460,001.65. Another $37,739.19 was also spent on rent to house Eagle and his family as the work went ahead.
In early November 2023 a revised quote from builders (dated 25 October) – which included some, but not all of Eagle’s suggestions for additional upgrades to home – allocated $10,000 for Fisher and Paykel kitchen appliances.
Eagle had contacted the building company on 26 October about installing Miele kitchen appliances at a cost of $18,102.45. The revised quote was approved by the mayor and deputy mayor after Eagle sent it on to them on 7 November. But the inquiry found Eagle had ordered the Miele appliances over a month earlier, on 30 September.
Basalt columns on the Chatham Islands Judi Lapsley Miller
“We saw little sign of any consideration of containing costs during the project. We also consider that the chief executive made spending choices that were not moderate and conservative,” the authors wrote.
“Purchasing expensive appliances for the kitchen and carrying out extensive electrical work that suppliers working on the project widely considered to be excessive were particularly questionable.”
Eagle’s wife caught up in potential conflict of interest
Eagle was found to have directly engaged with consultancy services without following council procurement processes and failed to store contract documentation in the council’s systems.
“There was a pattern of the chief executive failing to ensure that contracts were prepared and signed before work started. The contracts signed on the council’s behalf were generally retrospective, in whole or in part,” the authors wrote.
The council also failed to properly manage a conflict of interest which arose after a proposal to subcontract Eagle’s wife, Miriam Eagle, as on-island project lead on the council’s 30 year strategy. This occurred as a part of a $109,600 contract variation signed off by the mayor in July 2024.
“The only measure that the council took to manage the conflict was one-up approval of the contract by the mayor. The chief executive continued to manage the contract and the council did not hold the contract centrally in its system,” the authors wrote.
The report noted no conflict of interest policy was in place at that time, but a policy was put in place in December 2024.
Inconsistencies were also identified with information provided to the inquiry by Eagle concerning consultancy services.
Lack of detail and control of credit cards and expense claims
The inquiry also found deficiencies for the management of council credit card use and reimbursement claims.
It said staff did not provide enough detail to justify claims and separate systems for reviewing credit card spending and reimbursement claims hampered oversight of expenses.
The report identified insufficient detail on “unusually high” spending for Eagle and other council staff on food and other purchases.
Flights to and from the Islands which were allocated specifically to Eagle – as a part of his employment contract – were also used to transport his wife and child.
“Staff were generally aware that the chief executive had this contractual entitlement, but there were no procedures to govern how the contractual entitlement was used. In our view, this left staff in a difficult position because they had no guidance about what the council considered acceptable use of the entitlement.
“Using the contractual entitlement for family members’ travel does not appear to be consistent with the principles of the sensitive expenditure policy,” the authors wrote.
Recommendations
The report highlighted concerns over “the misalignment between the council’s policy and practice, the lack of effective controls over spending and/organisational integrity and ethical leadership”.
“The combination of these factors makes it difficult for Parliament and the public to have confidence in the council’s decision-making about how it spends public money,” the authors wrote.
The report said the council needed to examine staff training around spending, and more effectively track and monitor invoices.
“In response to our draft report, the council told us it had engaged with another local authority to obtain advice about improvements to the council’s internal controls,” the authors wrote.
“The council acknowledged that more transparent reporting to the elected membership is necessary and said it would establish a framework of transparent and regular updates to the elected membership.”
During the inquiry some staff spoke of a “toxic” working environment and said concerns raised about spending had been dismissed by senior leaders although this was refuted by the former mayor.
The council said it planned to “reflect on its organisational culture” and had established a chief executive review committee to monitor chief executive performance.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
