Editorial: Fraud office probe crucial in kohanga reo case

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According to Hekia Parata, Te Pataka Ohanga is a subsidiary owned entirely by the trust; the Govt is not responsible for monitoring its expenditure. Photo / TVNZ
According to Hekia Parata, Te Pataka Ohanga is a subsidiary owned entirely by the trust; the Govt is not responsible for monitoring its expenditure. Photo / TVNZ

To obtain the right answers, it is necessary to ask the right questions. Asking the wrong questions invites only obfuscation or a muddying of the waters. So it is with the independent review of the Te Kohanga Reo National Trust. EY (Ernst & Young) was asked by the Ministry of Education "to assess the effectiveness of the financial internal controls over public funding received by the trust". But that was not the central issue raised last October by Maori Television's Native Affairs programme, which alleged two leaders of the trust's commercial arm, Te Pataka Ohanga, had used business credit cards to buy dresses, accommodation and gifts worth thousands of dollars. Predictably enough, the review was silent on this.

That situation appeared to suit some of those involved. From the outset, the trust had sought to block the results of Native Affairs' seven-week investigation. It went to the High Court to try to block the programme's broadcasting before backing down. Yesterday, a spokesman, Derek Fox, insisted lamely that the relationship between the trust and Te Pataka Ohanga was the same as any other employer-employee relationship, and that the subsidiary was free to spend its money in whatever way it deemed appropriate.

The Government's initial attitude also amounted to an attempt to brush the matter under the carpet. The Education Minister, Hekia Parata, sat on the review for a week before hastily convening a press conference at 8pm on Tuesday. She was, she said, "pleased to be here to assure New Zealand taxpayers that their monies had been expended appropriately". That may have been largely so in the narrow confines traversed by the EY review. It found the trust's controls were "effective for an operation of its size and complexity, but some improvements are needed around credit card returns and koha payments". But Ms Parata, too, used the lamest of defences when the focus turned to spending at Te Pataka Ohanga.

According to her, it was a subsidiary owned entirely by the trust, and the Government was not responsible for monitoring its expenditure. Yet the ultimate source of Te Pataka Ohanga's funding is the Ministry of Education. Public money is transferred from the trust to it, and the Government has every reason to ensure it is spent appropriately. And that, as Labour's Nanaia Mahuta said, there is a high level of transparency and accountability.

Ms Parata's inane placement of Te Pataka Ohanga beyond Government purview merely compounded the woeful waste of public money that resulted from the ministry's ill-judged terms of reference. Fortunately, better sense prevailed late yesterday, and the Serious Fraud Office is to investigate the allegations of misspending. The minister attributed this change of tack to claims that she had continued to receive, and the need to restore public confidence. Even then, however, she did not back away from her contention that Te Pataka Ohanga was a private organisation and outside the Government's scope. It had, said Ms Parata, no more power over Te Pataka Ohanga than over a stationery shop or an insurance provider.

By any yardstick, the involvement of public money makes that nonsensical. Clearly, there was a grievous abuse of normal governance process when the kohanga reo structure was set up. That includes Te Pataka Ohanga somehow enjoying a charity status.

The Serious Fraud Office's findings should indicate how much this structure laid a foundation for what happened there. Either way, more needs to be done. Restoring public confidence in the kohanga reo movement now rests also on improvements in its governance.

- NZ Herald

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