Is Kohanga Reo row a media beat-up?

20:14, Mar 20 2014
Derek Fox
DEREK FOX: Kohanga Reo National Trust board spokesman.

I can't help but think a fair bit of the Kohanga Reo National Trust controversy has been seriously assisted by a biased media beat-up and an equally biased opposition party beat-up.

Before everyone thinks I am also biased, read through what I have to say.

The issues were first raised by Maori Television's Native Affairs, and the matters identified certainly seemed serious enough to warrant investigation.

Many Maori still believe that this was a betrayal of one Maori language organisation by another, while others believe in the independence of the Fourth Estate regardless of ethnicity or kaupapa. No matter where you lie on this matter it was raised in a typical current affairs, investigative style and both light and heat were legitimately brought to bear upon the trust and its activities.

Such controversies are fodder for opposition politicians, and they circled pretty quickly to point fingers at the Government.

Minister Hekia Parata has now released the independent Ernst and Young report, and has quite accurately represented the findings that Ernst and Young arrived at.


Since then there have been further allegations made that clearly concerned the minister to the point that she has referred the matter to the Serious Fraud Office. Accusations have also been made about ministerial incompetence, but I do not buy them.

Firstly, Ernst and Young were asked to assess the internal financial control environment regarding the receipt and use of public funds. They were to determine the extent to which the key financial controls are operating as intended, to make recommendations on any improvements that may be require,d and report back on the implementation of any actions the board is taking to address the findings of the review.

They were also asked to establish if any public funding was provided to Te Pataka Ohanga.

Despite the media implying that they were duped by late notice of the report, and were not prepared for the conference, it needs to be stated that the report is only 20 pages long. It is easily digested in half an hour.

I have read the report and, having served on a number of audit committees, can confidently state that its tone is far from alarming.

The authors state clearly that they have not identified any gaps in the controls governing the administration of funds on behalf of kohanga reo.

Ernst and Young are one of the most reputable and respected consultant accounting firms on the planet and they simply cannot afford to be pandering to government agendas.

I have no doubt that report will have absolute integrity.

Despite all manner of accusations about Te Pataka Ohanga, Ernst and Young were also clear. Te Pataka Ohanga is, in effect, a central procurement entity that purchases, for all kohanga reo, insurance, internet services, fuel cards and information technology equipment.

These purchasing arrangements are reviewed against market prices and Ernst and Young were satisfied that, even with a margin applied, the charges are reasonable.

Whether the minister can follow those funds into Te Pataka Ohanga, and keep reviewing that entity, is up for dispute - but clearly her advice was that she couldn't. That said, some matters mentioned in the report are of a concern.

It was noted that one koha payment of $50,000 was made to a related party, and was not disclosed as a related-party transaction. The report makes it clear that the board has the authority to make this payment, even though the related party was one of the trustees.

Just because they have the authority to do it does not make it wise. This, and the opaque manner in which the credit card purchasing issue was handled, has provided the opportunity for significant criticism.

The trustees are not young and the levels of accountability and public scrutiny regarding the governance of publicly funded entities have grown significantly in the past few years.

As a trustee or director, one is obliged to stay up to speed with changes in the sector and things are unlikely to ever relax again. The expectations have moved on, and maybe the trust needs to as well. Throwing Derek Fox out front may have given the trust some comfort, but it has not comforted the public or, I suspect, the minister.

So although I am not convinced there has been a major infringement identified thus far, perhaps the new information will prove more serious. I am also not convinced the minister has been driven to cover anything up.

The trustees, though, need to reflect upon whether they remain the best people for the job.

There is a Maori proverb that states that although there are a myriad of stars in the sky one cloud can make them all disappear.

Most would agree that the Kohanga Reo movement has displayed many shining stars over the years but today they are dimming.

The Press