Results go missing in web of cliches

The sloppiness of a $3 million contract to help Maori businesses earn export dollars is revealed in documents showing consultants received hundreds of thousands of dollars of taxpayer money - for targets they couldn't prove they had met. Phil Kitchin reports.

The debacle over the suspended Tekau Plus project has drawn an admission from Te Puni Kokiri chief executive Leith Comer that the government agency has a "big lesson" to learn.

The project has been frozen and Mr Comer now concedes the contract was extraordinarily loose and wishy washy.

Project bosses repeatedly relied on management cliches about "outputs", "establishing soft network clusters" and "bigger picture value propositions" when they were pressed for proof that goals were being achieved.

At one stage those running the Tekau project refused to provide details, claiming commercial sensitivity – even though they were spending taxpayer money and the government department that gave it to them wanted to know how it was being used.

When Mr Comer demanded proof that project targets were being met, he was sent irrelevant documents or explanations.

A report by PricewaterhouseCoopers, obtained by The Dominion Post, shows that in one three-month period taxpayers forked out $60,000 for project consultants to analyse seven media stories, eight economic updates, a business awards list, a 13-page essay and reports on an education programme.

In another three-month period consultants received $33,000 for analysis and research including "developing a strategy for a clear strategy forward" and "ensuring offshore studies add value".

That bill was also for analysing "establishing soft network clusters" and "bigger picture value proposition", media articles, economic forecasts and working through issues with stakeholders.

TEKAU Plus was set up as an export support programme to "assist indigenous businesses to go to the market with value-added products, systems and services".

Its "game plan" was to assist 10 high value Maori businesses and brands working in niche markets to develop export earnings of $10m within a decade (tekau is the Maori word for 10).

Tekau Plus is a partnership between the Government-appointed Maori Trustee, Maori business network the Federation of Maori Authorities (Foma) and the Poutama Trust, which provides business services for Maori.

Tekau is chaired by John Paki, who is the Maori Trustee, a position appointed by the Maori Affairs minister but is independent of government.

The project was run by Foma's investment arm and consultancy business, Fomana Capital.

Paul Morgan, a Fomana director, manager and 15 per cent shareholder, was also on the Tekau board. Mr Morgan was voted top of The Listener's power list for Maoridom last year and received the Queen's Service Order for services to Maori business in the New Year honours.

Wayne Mulligan, Fomana's chief executive and a 15 per cent shareholder, managed the Tekau project.

Now Foma chairwoman Traci Houpapa says an independent inquiry into how taxpayers' money was spent and what was achieved is needed.

Most of the money appears to have gone to Mr Morgan and Mr Mulligan, for bonuses and management and consultancy fees, she says.

Foma is conducting its own review including looking into Ms Houpapa's "assessment" that Koha, a glossy magazine owned by Fomana Capital, received Tekau funding – which she said would raise conflict of interest issues.

The Tekau project was a good idea but clearly needed to improve in hitting its contracted targets, she said.

"You and I are asking the same questions for different reasons."

Mr Comer agrees the Tekau contract was wishy washy. Te Puni Kokiri and Foma are reviewing the future of the project.

Fomana received nearly $1.2 million from the project before it was suspended in November.

Te Puni Kokiri then asked PricewaterhouseCoopers for a report into the Tekau Plus project.

Mr Comer referred to the findings as an "audit" but the document, obtained by The Dominion Post, says it is an "interim report ... subject to limitations".

In a report dated January 18 this year, PricewaterhouseCoopers notes that the analysis "does not include any assessment of the quality of the output or the extent to which the tasks completed contribute to achieving the overall objectives of the project".

Mr Comer said the findings did not find any mis-use of taxpayer money, but highlighted the looseness of the contract.

PWC was satisfied money went into the right bank accounts and that payments were approved by the Tekau board. But, despite concerns about the project's value for money, Te Puni Kokiri did not ask the PWC to assess whether contracted targets the project was supposed to achieve were actually achieved.

THE leadup to the Tekau project being suspended began in October last year – two years after it began and after two-thirds of the $3 million in funds had been spent.

Mr Comer asked Tekau to provide him with records to confirm various goals had been met in relation to nearly $500,000 that had been paid in the six months to June 2009.

He said the public sector needed a "strong value-for-money focus".

Unhappy with the paperwork supplied, Mr Comer sent a terse letter in December to Tekau chairman John Paki – rejecting his claim that some material couldn't be supplied because it was commercially sensitive.

Mr Paki was also reminded that Mr Comer had already asked for evidence that research projects and niche studies Tekau received $75,000 for had been completed.

But instead of getting the proof he asked for, Mr Comer said he had "once again" been sent an irrelevant "PowerPoint presentation" recording Tekau's "overall strategy".

"The time for strategy has passed," Mr Comer told the Tekau board.

And instead of receiving evidence showing Tekau had achieved specific targets, he was sent an e-mail from Mr Mulligan about "a potential workshop at a conference ... nothing to do with information on the output requested".

When he asked for evidence to show Tekau had achieved a six-monthly target described as "Strategy reviewed, think piece developed to enhance strategy", Tekau admitted it did not have a single document recording a "think piece or strategic review".

"But that is what the output for this six-monthly period required and that is what $25,000 was paid for," Mr Comer told Mr Paki.

He noted that Te Puni Kokiri had paid $50,000 for Tekau to produce a brochure, a "Q & A" and a media release.

"TPK has received no information from Tekau to establish compliance with that output," Mr Comer said.

In an interview with The Dominion Post, Tekau Plus chairman John Paki declined to say whether the project's suspension was merited. That was Te Puni Kokiri's choice, but he stressed that the PricewaterhouseCoopers report had found everything was financially "fine" with the project apart from it needing "some tweaking".

Mr Paki says he "certainly" did not accept Mr Comer's criticisms that Tekau continued to provide the ministry with irrelevant justifications for the how the contract was going.

The outcome of the PWC report justified those outputs, Mr Paki says.

When it was put to him that the PWC report clearly stated that its analysis did not "include any assessment of the quality of the output", Mr Paki said he received a letter from Mr Comer on March 11 supporting the project.

Mr Paki said he would "have to check" how much money from Tekau was spent on establishing the glossy Koha magazine, which is owned by Fomana and has been used to promote Tekau Plus and Fomana interests.

He acknowledged there were some minor conflicts of interest to address – and was confident that the suspension of the Tekau project would soon be lifted.

Tekau's manager, Wayne Mulligan, said he was comfortable with the PWC report's findings – and was proud of what Fomana achieved for Tekau.

Asked if he accepted the reasons for the suspension of the project, Mr Mulligan said that was an issue for the Tekau board and Te Puni Kokiri.

Mr Mulligan said he was confident those running the project had always declared any conflicts of interest they may have had.

- © Fairfax NZ News