Disability trust under scrutiny

20:10, May 26 2014

A Maori disability services provider at the centre of allegations of misspending hundreds of thousands of dollars of taxpayer funds is under close scrutiny by the Ministry of Health.

Te Roopu Taurima O Manukau Trust is the country's only intellectual disability residential Kaupapa Maori provider. It serves nearly 300 clients.

The trust employs 500 staff across 54 separate residences in Auckland, Northland, Waikato and Canterbury regions.

Clients may have serious mental illness, and display extremely challenging behaviour, and some may be in secure-care facilities under court orders, according to the ministry.

Most of the trust's funding comes from the Government. It listed its income for 2013 at $30.6 million in last year's annual report.

Internal records and invoices provided to Fairfax Media, by NZ First leader Winston Peters who made the allegations, suggest that dozens of irregular payments were made to contractors.


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

Ministry of Health National Health Board director Jill Lane confirmed the trust was being monitored.

"Earlier this month, the ministry had arranged to meet with Te Roopu's board on Thursday 29 May to escalate concerns and increase ministry oversight to improve the organisation's governance and senior management," Lane said.

"The Ministry of Health has been closely monitoring Te Roopu Taurima O Manukau following concerns raised last year."

A review by the ministry's audit and compliance unit didn't raise any specific concerns about their financial practices, "but the auditors identified there was a lack of expertise at board level", she said.

Peters yesterday raised his own concerns, among which were 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.

Peters alleged that among those payments was $2231 to rewire a clothesline.

Peter Horvath was listed as the contact on the bakery's website. He rejected the claims about the clothesline, calling them "false".

But he confirmed he carried out contracting work for the trust, which included the demolition of a house.

"I completed the work that I was asked to do promptly on high quality," Horvath said.

"In some of the major project[s] (example demolishing a house) I involved subcontractors.

"This is all the information that I can give you. I would appreciate if you could contact Te Roopu Taurima O Manukau trust for further information," he said in an email.

Trust chairman John Marsden had appointed himself the change director while he was a fulltime employee at another organisation, Peters said.

Invoices show the trust paid him $29,813.81 before tax, for his services in April 2012.

Marsden refused to comment when approached by Fairfax Media.

Employed as a senior asset officer in October 2012, on a one-year contract, was Tori Puata.

Ministry of Justice and police records show Puata has a criminal record, which he declared to the trust at the time he applied for the role.

He was identified as the "first choice" for the position, according to interview documents.

Puata – a former Customs officer – was jailed for nine years on corruption charges in 2004, after he was found guilty of importing methamphetamine. He was released early on parole.

Peters said it "stretches the credibility of the trust" that a former Customs official, jailed for smuggling methamphetamine was the trust's first choice as a senior assets officer.

Peters also alleged improper purchase and maintenance of vehicles by the trust.

"The costs of servicing vehicles were several times those charged by nationwide car companies and their servicing outlets," Peters said.

"The trust also changed its vehicle purchasing arrangements and 14 vehicles were obtained without going through a proper tender process and using an unusual payment method," Peters said.

He is calling for an urgent inquiry into the trust's spending, saying the findings were disturbing.

"This situation is totally unacceptable to the taxpayers of New Zealand. Public money must be accounted for and the organisations funded must have rigorous accountability," he said.

That it was another Maori social service organisation with financial irregularities involving taxpayers' money was "doubly disturbing".

"Individuals who have sullied the name of this trust have not only betrayed taxpayers and the intellectually handicapped they are supposed to help, they also cast a shadow over other Maori groups who do their work to a high standard and account for every cent they spend."

In a statement 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."

The trust said it believed the suspected breaches were related, but would not comment on specific allegations or the individuals involved while the investigation was active.

Chief executive Malcolm Robson said he came on board in July 2013 as part of a major restructure, "and there were a number of legacy issues that were still being resolved".

"There is a proper employment process to follow and we will not be conducting this process publicly," he said.

"At the investigation's conclusion, if we have to refer any information to other authorities for further action, we will do so."