Auditor-General looks at government procurement processes after Fuji Xerox scandal

The Auditor-General is considering bringing forward a review of government procurement after financial irregularities at Fuji Xerox, which has an all-of-government contract.

However, he will wait for a Ministry of Business, Innovation and Employment investigation into the contracts before deciding whether he needs to act on the issue.

Japanese parent Fujifilm Holdings last month released a report by an independent investigation committee which revealed "inappropriate accounting" in operations in New Zealand and Australia amounting to roughly $355 million between 2011 and 2016. Fuji Xerox's chairman Tadahito Yamamoto, deputy president Haruhiko Yoshida and two Fuji Xerox directors, Katsuhiko Yanagawa and Jun Takagi, have all resigned.

The New Zealand business has said it takes the findings "very seriously and is committed to resolving past issues and ensuring that there is no recurrence."

The Auditor-General's statement today came in response to an enquiry from New Zealand First leader Winston Peters, who was concerned that the Crown has all-of-government contracts with Fuji Xerox, managed by the Ministry of Business, Innovation and Employment (MBIE).

In a letter to Peters released letter, Greg Schollum, deputy controller and auditor-general, said Fuji Xerox is outside the office's mandate as it is not a public entity, but it "can and does look at the relationships between private entities and the Crown", including whether contracts are being delivered on.

All-of-government panels reviewing public entity procurement, which had been scheduled for 2018/2019, could now be carried out in 2017/18, Schollum said. MBIE has also been asked to review the contracts with Fuji Xerox, and the auditor-general has met with officials from the ministry about the issue.

"We are liaising with officials about that work and have told them that we intend to actively monitor MBIE's consideration of the arrangements," Schollum said. "We will consider what action we intend to take once we have considered the results of the work that MBIE is doing."

(BusinessDesk)