A report by the Auditor-General has raised concerns about the Whangarei District Council's role in the city's new stadium project.
The $18 million Northland events centre in Whangarei opened last year at Okara Park.
The Auditor-General has been scrutinising the project after complaints of secret deals with the Northland Rugby Union.
The council initially said the new stadium would be owned by an independent trust, but later decided to retain council ownership.
It then allocated the Northland Rugby Union a $2 million interest in the stadium, to compensate for the facilities it lost at Okara Park.
But the Auditor-General says the council has not been able to show adequately how it reached that figure.
The council's chief executive was delegated to negotiate with the rugby union, because several councillors had links to rugby, and it wanted to avoid perceived conflicts of interest.
But the Auditor-General says this move backfired, because the talks were held behind closed doors, increasing public suspicions about a secret deal.
The report also says the council should have consulted Northland Regional Council before deciding to keep ownership of the stadium.
It says the regional council, as the major funder, is entitled to a monitoring role, to ensure its commitments to ratepayers are met, but is not now in a position to do that.
The Auditor-General's office says it will monitor the council's future dealings with the rugby union.
It says values of transparency are upheld when the community can scrutinise such matters, and the council should ensure any final decision on funding is clearly recorded and available to the public.
