A Pacific leader at the centre of a critical Ministry of Health audit is standing for election at the local body elections.
Edwin Puni is standing for a seat on the Mangere-Otahuhu Local Board under the National Party-aligned Auckland Future ticket.
Puni headed the inaugural New Zealand Pacific Leaders forum chaired by Prime Minister John Key at the Beehive in April.
The Herald can reveal Puni was chairman of the Health Star Pacific Trust, which a Ministry of Health audit in 2012 found lent money to board members and to companies in which board members had an interest.
The trust received about $5.8 million from the ministry and Auckland and Counties-Manukau district health boards to promote breast screening, pregnancy support, immunisation and HPV awareness to Pacific communities.
The audit found Puni partly owned Event Polynesia Ltd which was paid $70,000 for website costs "disproportionate" to the limited use of the site.
Companies Office records show Event Polynesia currently has two directors - Edwin Puni and Rosa Puni - both registered at the same South Auckland address.
Event Polynesia was paid $22,500 for secure storage of seven trust vehicles over two years at Puni's property in South Auckland. An aerial photo in the audit showed "insufficient" storage for six vehicles and said it appeared likely vehicles were parked on the roadside.
Event Polynesia was paid $10,000 plus GST for associate sponsorship at two boxing events, which the audit said appeared to give "very limited, if any benefit" to the trust.
The audit also found Puni ran up a $10,786 bill on a trust mobile phone over five months and received an unsecured loan for $10,000 from the trust "to assist with cash flow" at 5.5 per cent interest when the ASB rate for unsecured personal loans was 17.95 per cent.
The trust lent $310,000 to the Samoa Health Mission Charitable Trust, with which Puni and three other board members were associated. Interest on the loan was written off and only $76,567 was repaid, the audit said.
The audit contains responses from the trust to the issues raised. The trust said the 5.5 per cent interest rate on the $10,000 loan was higher than the bank investment rate, the boxing sponsorship was to promote the trust and phone bills were justified.
When approached last week, Puni said he had not declared the audit findings on his Auckland Future application form. The form requires people to declare past or current aspects of their life that "might cause embarrassment to me or the party".
Puni said it was a standard audit and referred questions to the Ministry of Health.
The ministry's public health group manager, Grant Pollard, said following the audit a recovery plan was reached with the trust that included a new board independent of the management team, an ex-officio ministry representative on the board for 12 months, full repayment of staff loans and new financial systems.
The trust currently held two ministry contracts for services to Pacific communities in Auckland worth $365,265 and $184,000 a year. The trust had fulfilled its contractual obligations, Pollard said.
Rick Johnston, an accountant who was brought in to chair the trust after the audit, said Puni had retained his management position as the administration manager.
Former Labour MP Mark Gosche was appointed by the Ministry of Health following the review, Johnston said.
He said there had never been a question about the quality of services provided by the trust, which currently had contracts with the ministry and Auckland District Health Board.
A spokeswoman for the Counties-Manukau District Health Board said it had no contracts with the trust. The Auckland District Health Board did not respond to questions about contracts with the trust.
Auckland Future campaign manager Sue Wood said she knew about Puni's role at Health Star Pacific and believed he was an appropriate candidate.
She said there were start-up problems with the trust, such as a lack of separation between governance and management, but these had been addressed and it was being regularly audited by the ministry.
Wood said she respected Puni's role as chairman of the Pacific Leaders Forum.
"We have worked very closely with all our Pacific candidates and respect their contribution to their community and are very keen to see them succeed," she said.
The Herald has revealed that another Auckland Future candidate, Savea Peseta Al Harrington Lavea, who is standing for a seat on the Whau Local Board, had been convicted of stealing the identities of seven dead babies and using them to obtain false passports in the late 1990s.
Wood initially said the organisation was aware of the conviction and would continue to support him.
Within 12 hours Lavea issued a statement saying he was "standing down". His name remains on the ballot paper as an "independent" after Auckland Future withdrew its support.