The debt left behind by a Far North Maori trust could be as high as $3 million - including more than $500,000 in unpaid taxes - and will affect the iwi for years to come, its new governing body says.

Kaitaia-based Te Aupouri Maori Trust Board closed in August with the loss of about a dozen jobs and a raft of social services because of "challenging financial circumstances".

The trust board was formally wound up on December 17 as part of Treaty settlement legislation, but the tribe's newly created governing body - Te Runanga Nui o Te Aupouri - has inherited its debts of $1.5 million to $3 million. That will make a significant dent in Te Aupouri's $21 million settlement and affect what the runanga can do for its members.

The findings of an inquiry ordered by Maori Development Minister Te Ururoa Flavell were shared with iwi members at a hui in Te Kao earlier this month, revealing "worrying governance and managerial practices and poor decision-making by the trust", runanga chairman Rick Witana said.


"Te Aupouri has been waiting for settlement legislation to be enacted for almost four years since a settlement agreement was signed with government, and quite rightly our people are generally pretty annoyed about what has happened."

Mr Witana said the trust board had kept expanding and operating in an unsustainable way, even though it was not meeting its statutory reporting requirements to the minister or reporting to the iwi.

The losses would have an immediate impact on what the runanga could do for Te Aupouri over the next five years.

The minister's report was only a starting point with much still to be done. The runanga will meet Mr Flavell in the New Year to discuss how the settlement was affected by the findings and work with him to resolve any outstanding issues.

Te Aupouri was down but by no means out, Mr Witana said. The iwi would learn from the experience and enter the next phase in its development with renewed determination to improve the lives of its people.

Ebony Duff, a Te Aupouri member, said in a letter to the editor that the report made for "painful reading".

When the runanga was set up in 2011 it was expected the trust board would scale back its operations, apart from its social services arm, until the passing of settlement legislation allowed the runanga to take over.

However, the report showed the opposite had happened, with the trust board dramatically expanding in size and scope in 2012-15, setting up five subsidiary companies and owing IRD $540,000. The report put the losses down to poor financial management, inadequate governance and management's failure to raise key financial issues with the board, she said.

Ms Duff urged the government to act quickly to close the doors of the country's remaining trust boards so the same thing could not happen to other iwi waiting for their settlements to get through Parliament.

-An initial statement by Mr Flavell stated that the investigation had found "no evidence of fraud or mismanagement". That was replaced by a new statement on December 18 stating that it had found "no evidence of fraud or criminal activity".