Trust board cleared over fraud concern

An investigation into a Maori trust board that collapsed earlier this year, leaving at least 12 people out of work and its iwi facing a hefty debt, has found no evidence of fraud or criminal activity.

Te Aupouri Maori Trust Board closed its Kaitaia headquarters at short notice on August 25, and quit a raft of social services, after chairman Raymond Subritzky said it was facing "challenging financial circumstances."

Following appeals from Mr Subritzky and Te Aupouri's new runanga, Maori Development Minister Te Ururoa Flavell launched a ministerial investigation into the trust's affairs.

Figures cited for the size of the trust board's debt ranged from Mr Flavell's estimate at the time of "hundreds of thousands of dollars" to an insider's estimate of about $2 million.

The trust board's woes put a dampener on the Te Aupouri's Treaty settlement celebrations in September, when the iwi received $21 million in redress, as well as farm and conservation land. Settlement legislation also created a new entity, Te Runanga Nui o Te Aupouri, to replace the trust board and manage the settlement money; the new organisation also inherits the trust board's debts. The outcome of the investigation was released on Friday, Mr Flavell saying it had found no evidence of fraud or criminal activity.

While he was pleased that was the case, the report, by a partner at financial services company Ernst and Young, had confirmed that the trust board was insolvent.

When asked about the size of the debt or how it came about, Mr Flavell said he would not comment further until he had heard back from the iwi, which was still considering the report. In August Mr Flavell said he believed the board's financial troubles were the result of poor decisions rather than fraud, but he would leave that to the investigation to determine.

The runanga chairman was unavailable for comment.

The trust board's social services have since been taken over other providers. Its contracts with the Ministry of Social Development, worth about $1 million a year, included social workers in schools, home support, a home-based education programme and Kaitaia Safe, which trains workers for the security industry. The services benefited students at 36 schools, 60 families and 95 individual clients.

The trust board also ran the acclaimed Project Haere, which trained unemployed Far North youth to work in the Christchurch rebuild.