Wananga report: Common theme in inquiry conclusion

The Auditor-General officially released the report into Te Wananga o Aotearoa yesterday - a day after chief executive Dr Rongo Wetere issued the document.

The report found three problem areas which were a common theme throughout the investigation: poor decision-making practices for significant expenditure, inadequate identification and management of conflicts of interest and unacceptable practices in senior management expenses concerning international travel and credit card expenses.

WHAT THE REPORT FOUND

Te Wananga o Aotearoa (TWOA) received $156 million in Government funding last year.

Rongo Wetere failed to understand the need for robust policies and procedures in some areas of management.

He also failed to lead by example, and often did not comply with the few procedures that were in place.

Dr Wetere did not have adequate advice from those around him.

* On the relationship between the wananga and the parent body, the Aotearoa Institute:

"We are concerned about the close relationship between TWOA and the AI trust. Many business transactions between them show poor decision-making practices and pervasive conflicts of interest."

* Conflicts of interest:

Contracting and employment of senior personnel's relatives (or their companies) was common.

Most conflicts of interest involved Dr Wetere or whanau members. Seventeen relatives of Dr Wetere were employed or contracted by the wananga.

There was frequent and extensive conflicts of interest within both educational courses and contracts for goods and services.

* Payments to family-owned companies:

2003-04: $38.7m paid to Ora Ltd, owned by Susan Cullen (Dr Wetere's daughter) for an immigration course.

2003-05: $1.8m paid to Aranui Ltd, owned by Ara Wetere (Dr Wetere's brother) for work including landscaping and grounds maintenance.

2004: $81,000 paid to Wairau Property Developments Ltd (owned by Susan Cullen) for property leases.

2004: $15,000 paid to Global Origins Ltd (part-owned by Susan Cullen) for printing; $4000 paid to Masterfibre South Pacific Ltd (part-owned by Dr Wetere's son, William) for rubber matting; $2500 paid to Te Whatu Family Trust (beneficiary, William Wetere) for property leases.

2000-2001: Mahi Ora Joint Venture, amount paid unknown (company owned by Susan Cullen).

2001: $7m paid to Mahi Ora Ltd, owned by Susan Cullen, for purchase of Mahi Ora programme.

2000-2005: $3.8m for air conditioning systems and maintenance to Power Chill NZ Ltd. Part-owned by William and Kingi Wetere

2003-04: Lifeworks: $2.1m paid for programme development to Awarua Ltd owned by Susan Cullen.

* Aranui Ltd:
Owned and operated by Dr Wetere's brother, Ara Wetere. $1.8 million paid for landscaping, maintenance, tar-sealing, drainage and fencing, between 2003-2005.

While a small permanent staff and subcontractors were used, Ara Wetere said he did most of the work.

No written contracts or quotes from Aranui were found. Instruction of work to be done was often given verbally, usually by senior managers and Dr Wetere.

Report found the relationship inappropriate, and an unacceptable practice for a public entity. "The overall situation shows poor judgment by Rongo Wetere and the senior managers involved at TWOA."

* Enercom International Inc and Pace Energy Solutions:

Involving the use of two American energy conservation consultants, Dr Jack Scherschell and Paul Saxton.

Dr Scherschell is a friend and former work colleague of Dr Wetere's partner, Marcia Krawll.

Dr Wetere said he was concerned with wananga electricity costs. The men were flown to New Zealand for consultations in 2003.

Following a long delay, a report was received and approved by Dr Wetere, with recommendations implemented at Porirua campus in June last year.

The audit report was critical that no business case, post- project report or analysis of other options were found relating to the contract.

There was no monitoring of work, and no idea about benefits resulting from the project.

"In our view the work was based wholly on the relationship between Ms Krawll and one of the consultants."

* Greenlight programme:

An adult literacy course developed by the wananga with the Cuban Ministry of Education.

Contrary to some public allegations, this course has not been purchased by the wananga.

The programme is co-ordinated by Marcia Krawll.

Originally estimated to cost between $1.5m and $2.5m. Costs currently at $5m, expected to increase to $6m to $7m.

Concerns about lack of formal planning and costing. No detailed project plan. Ms Krawll did not know what the budget was or who controlled it.

Until recently she reported on progress and expenditure only to Dr Wetere.

Auditor told income from the programme covered set-up costs.

* International travel:

Poorly documented, poorly accounted for. Unable to confirm travel identified as complete, as no registers kept.

International travel required Dr Wetere's approval, but did not appear to require trip budgets or details of why trip required.

Cases found where international travel was approved for non-business purposes.

Council did not authorise the trips.

* Dr Wetere's travel:

Between 2002 to 2004 he took 16 trips, to Australia, Canada, Cuba, Malaysia and the United States. Ms Krawll joined him on 13 of the 16 trips at wananga's expense. Six were first class travel. Dr Wetere said he was not told he could not fly first class.

Credit card receipts often existed but often could not be verified by purchase receipts.

Dr Wetere did not supply expense reconciliation summaries until 2003, or credit card transaction summaries until August 2004.

While he was in Cuba most business expenses were paid with $42,000 in cash, withdrawn through Dr Wetere's credit card. Little documentation could be found to show how the money was spent. Dr Wetere said cash was necessary as credit cards were not always accepted in Cuba.

The report found all of Dr Wetere's travel was on legitimate business grounds.

Ms Krawll went on many of these trips as she was international events co-ordinator and Greenlight programme co-ordinator.

The report also identifies instances were Dr Wetere's personal credit card was used for business purposes, and compensation has not been sort.

The report recommendations include seeking reimbursement from staff for non-business travel, and to seek reimbursement for the first class component of Dr Wetere's and Ms Krawll's travel.

THE WANANGA AND ITS STUDENTS

* In 2005 it delivered 101 programmes to 56,000 full-time and part-time students.

* The programmes covered areas such as Maori language, business and computer studies, traditional Maori arts including carving and weaving, employment and life skills, social sciences, and programmes for recent immigrants.

* Programmes are delivered in classrooms, marae, and at home. The wananga has 11 main campuses.

* Student Profile The typical wananga student is a 34-year-old Maori woman with no secondary school qualifications, who was previously unemployed.

* This year 25,457 Maori were enrolled at Te Wananga o Aotearoa - 45 per cent of the roll.

* Sixty-seven per cent of students are female, 33 per cent male.

* In 2004, 74 per cent of students successfully completed their courses.

* Of the 2004 wananga graduates, 78 per cent have been in full-time or part-time work and 94 per cent of students expressed satisfaction with the programmes.

- additional reporting NZPA