Leap of faith to believe Parata

16:00, Mar 21 2014

Like the water to wine miracle, it requires a huge leap of faith to believe Hekia Parata’s line that the simple device of  passing money through a subsidiary has the  transformative power of turning public funds into private funds that are above government scrutiny.

Hekia Parata and Kohanga Reo National Trust spokesman Derek Fox may be at war with each other over other things but the apparently immutable fact on which they both agree is the Government’s powerlessness to scrutinise money paid to the trust once any of it turns up in its wholly-owned offshoot Te Pataka Ohanga.

Fox might be excused his view as spokesman for the under-siege trust as it tries to explain how such public money – in this case Ministry of Education funds – can allegedly be used by TPO staff on wedding dresses or a $1000 koha payment for an event that was never attended.

But for Parata to hold such a view should disturb her colleagues as much as it disturbs the public, given her seniority in a government for which devolving hundreds of millions, ultimately perhaps even billions, of dollars to third-party providers is central to its ideology. 

The debacle surrounding Parata’s oversight of an inquiry into spending by TPO could – and should – ring bells about the Government’s oversight of spending in a raft of areas, including Whanau Ora, Parata’s flagship charter school roll-out, and the massive divestment of social housing to third party providers to name a few.

NZ First leader Winston Peters has previously excoriated Whanau Ora’s ‘‘whanau plan’’ grants of up to $20,000 after discovering one went to a rugby club and another to a family reunion.


In the case of charter schools, meanwhile, we know they will be exempt from the Official Information Act, meaning any ability for the public to scrutinise the tens of millions of dollars they  receive in public education funding will be limited.

The rules around third party housing providers, due to play a central role in the multi-billion dollar provision of state housing, will presumably be just as – or even more – opaque given the complexities involved.

Under those circumstances, and given the much greater potential for private individuals to clip the ticket on the way, the public is entitled to expect greater transparency, not less.

Parata’s enthusiasm to wash her hands of the allegations swirling around TPO strips away any confidence that will be the case. She still has questions to answer after giving ‘‘the taxpayers of New Zealand’’ her assurance on Tuesday that ‘‘any concerns about public money have been well and truly answered’’.  

That assurance has been shown up as either naive or dishonest, given her subsequent explanations that it related only to spending by the kohanga reo trust, and not TPO, which is what the allegations about Trelise Cooper frocks and cash withdrawals related to,

The explanation was that TPO does not receive any public funding directly from the trust, which, as extrapolated by Parata, meant it received ‘‘no public monies’’,  a point she has made to exhaustion.

Only someone steeped in the bureaucracy, such as Parata after a 30-year career climbing the civil service ladder, would believe that.

The Ernst & Young report also spells out the way in which TPO receives its funding and it is clear that its money is ultimately derived from the Ministry of Education.

That raises questions about why such a roundabout way of dispersing  the funding was devised by the trust in the first place but Ms Parata showed no inclination to pursue that question further on Tuesday night.

It was likely only the intervention of the ninth floor or Finance Minister Bill English that forced Parata to refer the matter to the Serious Fraud Office and prove that the Government was taking the matter seriously.

In doing so they saved Parata from herself. Given the rumblings of unease from unnamed trust members and the likes of Sir Toby Curtis and Pem Bird about financial management at the trust more generally it was only a matter of time before Parata’s assurances exploded  in her face.

But the damage may have already been done. Taxpayer memories are not so short they won’t remember the abysmal record of government agencies at monitoring programmes set up to distribute public money – think Closing the Gaps, the Community Employment scheme, Capacity Building Grants, or the Social Entrepreneur Scheme to name a few.

National first came to power partly off the back of its ‘‘stop the waste’’ campaign against such spending. Engraved into the public consciousness is wasteful spending on things like hip hop grants, twilight golf or the Pipi Foundation.

The lessons from the Pipi Foundation are instructive. Set up to help under privileged children, its founder, former ACT MP Donna Awatere-Huata, was jailed for taking money from the government-funded trust and spending it on school fees and a stomach stapling operation.

But the spending only came to light after an investigation by Fairfax journalist Phil Kitchin, underscoring the near total lack of checks and balances in a system which seemed intent on shovelling out money tagged as meeting the political whim of the day.

A subsequent inquiry by the famously fearless auditor general at the time, Kevin Brady, should be required reading for Parata.

This line from his report in particular should resonate.

‘‘Irrespective of whether the allegations of fraud involving Pipi funds were true, the suggestion that funds of public origin may have been available to be misspent at all brought into consideration the possibility either that the contracted services had not been fully delivered or that more public funds than necessary had been provided for the purpose. This raised a question about the integrity of the systems used by the individual funding agencies – both in the making of contracts with private organisations and in monitoring and overseeing their service delivery. ‘‘

These are the questions Parata should have been asking her officials.

Her spectacular lack of any sort of political radar is demonstrated by the fact that she failed  at that test.

Fairfax Media