Police to look into trust's spending

20:19, May 27 2014

Police have become involved in allegations of misspending at a taxpayer-funded Maori disability services provider.

Te Roopu Taurima O Manukau Trust is under close scrutiny by the Ministry of Health after concerns raised by former staff about the organisation's management.

This week NZ First leader Winston Peters brought to light documents that suggest dozens of irregular payments were made to contractors.

It has been widely reported the trust is $1 million in the red, and a former worker who first raised concerns about the finances is involved in an employment dispute with the organisation.

Police spokeswoman Katherine Manaton confirmed police had become involved. "Counties Manukau police have been contacted by recent employees of the trust and are working with them regarding their concerns."

No formal complaints had been laid.


Alleged irregularities raised by Peters included payments of more than $360,000 to what appeared to be a bakery to carry out building and property maintenance work.

Internal accounts show Hungarian Twister Ltd was contracted by the trust and paid $360,662.90 over two years for property maintenance. Director Peter Horvath confirmed he did jobs, which included the demolition of a house.

Peters also alleged that trust chairman John Marsden appointed himself the change director while he was a fulltime employee at another organisation.

Invoices show the trust paid him $29,813.81 before tax, for his services in April 2012. Marsden refused to comment when approached.

Internal emails from staff to trust management expressed concern over the trust's finances.

Prime Minister John Key has advised that if the allegations are proven true, "action will be taken".

"I don't have great information on that particular case, but we take the spending of taxpayer money very seriously. We expect to get value for money for the taxpayer.

"I expect someone will be checking that we are in fact getting value for money. If we're not, then action will be taken."

The trust is the only intellectual disability residential kaupapa Maori provider, serving nearly 300 clients. It employs 500 staff in 54 separate residences in Auckland, Northland, Waikato and Canterbury.

Many of the clients have serious mental illness and some are in secure care under court order, according to the Health Ministry.

The trust listed its income for 2013 at $30.6m. Most of that funding is from the government.

National Health Board director Jill Lane said the ministry had arranged to meet the trust tomorrow to "escalate concerns" over its governance.

A review by the ministry's audit and compliance unit had not raised any specific concerns about the trust's financial practices, "but the auditors identified there was a lack of expertise at board level". While the organisation was financially viable in the short term, the auditors questioned its long-term viability.

Peters called for an urgent inquiry into the trust's spending.

The trust said it was investigating the claims, but that the incidents were "historical".

"Over the past several months the trust has been conducting an employment investigation into suspected breaches of employment conditions, which includes the misappropriation of funds and misuse of confidential information."

It was believed the suspected breaches were related, but chief executive Malcolm Robson would not comment.

The Dominion Post