EDITORIAL: Questions arise from VHB woes

The explanations given to the public around the budget blow-out by regional tourism and development organisation Venture Hawke's Bay beg at least two big questions.
Before asking those questions, it should be noted that Hawke's Bay Regional Council has been frank in opening the books and explaining how Venture racked up an almost $500,000 deficit in the year ended June 2010.
And that Venture was expected to make a loss through its efforts to promote the region in 2009/10. The loss, however, should have been around $117,000, not $495,794. The extent of the deficit means that not only is all of Venture's $250,000 in reserves now swallowed up, but its parent, the regional council, has had to grapple with how to fund the remaining $250,000.
The former general manager of Venture has lost her job, the organisation has been down-sized and the regional council chief executive appears to be doing most of the official speaking as the mess is sorted out.
And there has been some plain speaking. The deficit, we have been bluntly informed, is due to a lack of rigour from Venture management, in particular a lack of disclosure of the worsening financial situation of the child, Venture, to the parent, regional council. If better financial disclosure had been made at or before the April regional council meeting, the worsening financial position might have been headed off, we are told.
So, to those questions:
1) How was it that Venture, a business unit of the regional council, was able to get away with not providing detailed financial reporting to its advisory board?
2) Does the Venture experience give the regional council pause for thought on its plans for an arms length holding company for regional assets?
Regional councillors with an eye to re-election may wish to answer these questions as they move into campaigning mode from tomorrow.
Meanwhile, parties interested in the success of Venture, including tourism operators and the Chamber of Commerce, are politely welcoming the new messages of willingness to engage and to find a new road forward.
Behind the scenes, however, you can bet they are not happy with the wash-up from the 2009/10 financial year and they will be discussing alternate models for running our regional development organisation.
These business interests may have to put their money where their mouth is and may, indeed, be happy to do so.
For there is a case to be made for the board of Venture to comprise more local business people, one or two local bureaucrats and no politicians.