Kohanga Reo probe avoids key claims

TRACY WATKINS AND MICHAEL FOX
Last updated 21:50 18/03/2014

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The Government is dodging questions about allegations of misspending by a company linked to Kohanga Reo after a press conference tonight where it claimed the firm had been cleared – before admitting none of the claims sparking its inquiry were investigated.

After holding on to an audit report for a week, Education Minister Hekia Parata tonight called an urgent press conference for 8pm with just over an hour’s notice to announce the Kohanga Reo National Trust had been cleared of any wrongdoing -  though the report by Ernst & Young raised questions about the processes surrounding a $50,000 koha payment to an unnamed recipient, and credit card controls.

But under questioning  Parata and Maori Affairs Minister Pita Sharples confirmed none of the original allegations surrounding spending by the trust's  commercial arm Te Pataka Ohanga were investigated.

Parata said it was a private organisation so outside the Government’s scope – though it was later confirmed TPO ultimately receives its funding via the Ministry of Education.

Labour MP Shane Jones slammed the report for failing to address the allegations.‘‘This head office has a culture covered in murk, this head office has been given a free pass by Dr Pita Sharples.''

The public supported kohanga reo ‘‘but the public is not up for feeding the appetites of their clandestine subsidiaries,'' he said.

The urgent audit into the spending of taxpayer money aimed at helping children learn te reo was launched in October after claims of inappropriate credit card spending by managers of TPO.

The allegations were aired on Maori TV’s Native Affairs programme which alleged that public funds were misused by Lynda Tawhiwhirangi, the general manager of TPO.

Spending allegedly included the purchase of a wedding dress for  Tawhiwhirangi’s daughter, the purchase of a Trelise Cooper dress, a 21st birthday present for a woman who was in a relationship with one of her sons and had carried out work experience at the trust, and a $1000 cash withdrawal from a BP station as koha for a tangi which she did not attend.

TPO revealed when the investigation was launched that a staff member was stood down and that its credit cards had been cancelled.

But the Ernst & Young review which looked into whether there were proper financial controls around the $92 million per year in public funding that kohanga received found there was no misuse of public money, Parata said tonight.

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"It found the trust’s financial controls are effective for an operation of its size and complexity, but some improvements are needed around credit card returns and koha payments.

‘‘The trust is working through the review’s recommendations around accounts processing, documentation and the recording of koha. In the meantime, it has cancelled all credit cards.’’

Parata stressed that TPO was a subsidiary company owned by the trust and did not have any financial or contractual relationship with the ministry.

No improprieties around kohanga funding had been found, she said.

However, the trust should ‘‘take this opportunity to assess whether their current arrangements meet the challenges of being a modern organisation, responsive to the needs of whanau,’’ she said.

The review identified a number of issues with credit card spending. It pointed to a koha payment of $50,000 made in December 2012 to another party for services relating to the extended Treaty of Waitangi claims process.

It said this had the support of all board members but was not included in the trust’s 2012 annual report.

It found about $5000 in koha payments from credit cards in 2012, largely comprised of payments of between $100 and $200, representing around 5 per cent of all koha payments that year.

‘‘We were unable to see evidence that the chief executive had pre-approved these koha payments as required by trust policy.’’ 

Some payments were also made with petty cash, which was inconsistent with trust policy. Trust members were also sloppy with reconciliations, saying that in 2012, many returns did not include relevant supporting documentation and were not prepared in a timely manner.

There was also no evidence the board was reviewing credit card returns, though requiring board approval was a higher threshold than most equivalent organisations.

The trust has since cancelled all six credit cards it was previously using.

‘‘In our view the trust’s policy was set up to provide adequate control over use of the cards, but the controls have not been operating in line with policy.’’

 It recommended the trust consider whether board approval of all credit card statements and documentation was necessary.


- Fairfax Media

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