Maori group's funding axed after it misspent $102,000

A group providing cheap healthcare for Rotorua Maori has had its contract axed after misspending more than $100,000 of Government funds.

The Lakes District Health Board has ended its contract with primary health organisation (PHO) Te Kupenga A Kahu after it failed to repay $102,000 owed to the board by January 20.

The debt related to money earmarked for health services which was spent by the group on operational costs.

The health board hopes to recover the money, but the group's chairman, Pihopa (Bishop) Kingi, said it was unlikely the debt would be repaid.

He was reluctant to blame the PHO's demise on any individual or organisation. But yesterday he said small PHOs, such as Te Kupenga A Kahu, faced a greater battle than larger PHOs, which were given more money to cover operational expenses.

He has asked for a meeting with Health Minister Annette King to address the issue.

Signs of the PHO's financial woes were revealed by the Daily Post last month after a consultant's report highlighted major concerns about the group's leadership and financial viability.

Findings from the report coincided with the departure of one of the group's key providers, Korowai Aroha, which provides GP and nursing services.

The loss of Korowai Aroha's patients heightened the board's concerns about Te Kupenga A Kahu's ability to continue operating. With 5500 fewer patients enrolled, it would be given less money than previously.

Korowai Aroha and two other Maori health providers - Tipu Ora and Te Runanga O Ngati Pikiao - formed the PHO in April 2003. Cracks in the Maori PHO began to show six months after it started operating when Korowai Aroha general manager Ngaire Whata expressed concern about the funding formula.

The PHO was given about $38,000 in establishment funding to pay for start-up costs, including administration, meeting fees and feasibility studies. By October 2003, all was spent. There was not enough funding for a separate PHO office so Korowai Aroha provided a space in its building.

At the time, Mrs Whata said she was unhappy about having to "carry" the PHO's smaller health providers. Last month, she said the funding formula failed the country's smaller PHOs, including Te Kupenga, and the only way they could survive was if they shared operational costs.

Mr Kingi said Te Kupenga accepted it had made an error in misspending funding earmarked for health services.

The PHO was given options for repayment, which included regular instalments and asking iwi for a loan. Mr Kingi said while iwi supported Maori health providers, organisations such as the Te Arawa Maori Trust Board were unable to help.

Cut-price health

* Like the district's other PHOs, Te Kupenga A Kahu was set up using Government money with the aim of slashing the cost of visits to the doctor.

* Government funds are administered by the health board, which gives each PHO money for health services and operational costs, based on patient numbers.

- NZPA