Associate Minister for Social Development Tariana Turia wants answers from her officials after she wasn't told about financial problems facing a Palmerston North-based Women's Refuge.

New Zealand First leader Winston Peters yesterday slammed the Government for failing to do background checks before funding Te Roopu Whakaruruhau o Nga Wahine Maori Women's Refuge.

An independent audit found the refuge made a loss of $109,000 for the June 30, 2011 financial year.

"Under a section labelled 'Fraud', the auditors said they had identified what they called 'unauthorised transactions' and recommended the introduction of controls for the 'prevention and detection of fraud'," Mr Peters said in a statement.


He said the auditors also found issues with the payment of bonuses and other personal costs such as fines, and the ineffective control over the employment of staff.

It is also alleged the refuge had run up a $75,000 debt with the tax department for the non-payment of GST and PAYE, and its payroll was greater than its annual income.

"The auditors said factors such as negative equity and working capital, and 'a payroll that is greater than annual income', raised 'concerns regarding the financial performance of the Roopu [refuge]'," Mr Peters said.

"It is blindingly obvious that background checks on the refuge were either not carried out or ignored before the Government approved funding to the refuge."

The refuge has received at least $80,000 in Government funding.

Associate Minister for Social Development Tariana Turia told Radio New Zealand's Morning Report programme she had no idea about the extent of the problems facing the service.

"It is the first time I have seen the audit report and I was completely unaware of the significance of the issues that have been highlighted in it."

She said Family and Community Services had not informed her of any issues in meetings she held with them.

Mrs Turia said she would ask agency head Murray Edridge to explain why she was not advised.

"I am disappointed because every minister generally has an arrangement with their agency that if there is a red alert they would contact me."