The Kohanga Reo National Trust has been cleared of mis-using public monies, Education Minister Hekia Parata said tonight.
However she said improvements were needed around credit card returns and koha payments.
She released a report by Ernst and Young that she and Maori Affairs Minister Pita Sharples commissioned following allegations of mis-use on Maori Television's Native Affairs show.
All staff credit cards were cancelled at the time, in October last year, and Lynda Tawhiwhirangi, the general manager of the trust's subsidiary company Te Pataka Ohanga was suspended.
Dr Sharples and Ms Parata met the trust board tonight to discuss the report.
Ms Parata said afterwards that the report "shows that the trust was legitimately buying services from Kohanga Reo from Te Pataka Ohanga and there was no misuse of public monies in this regards.
"It found that 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."
"No improprieties in respect of kohanga funding have been found," she said.
She said the trust was working through the review's recommendations around accounts processing, documentation and the recording of koha."
In the meantime it had cancelled all credit cards.
The trust receives $92 million in public funding each year and it oversees 465 kohanga reo - Maori language pre-schools.
Ms Parata and Dr Sharples said it was important to remember that the subsidiary was owned entirely by the trust.
There was no contractual or financial relationship between the Ministry of Education and the trust.
An arrangement existed between the Crown and the Trust to fund individual kohanga reo, and was different from all other early learning providers, Ms Parata said.
She said kohanga reo had been a cornerstone in the revitalisation of the Maori language and had "inspired generations of whanau to be a part of our cultural resurgence."
"It is important that the trust take this opportunity to assess whether their current arrangements meet the challenges of being a modern organisation, responsive to the needs of whanau."