Staff who withdrew $4000 in cash from a school's account and failed to explain what they spent it on will not be investigated, the Ministry of Education says.

A financial audit of Te Pumanawa o te Wairua, a struggling Northland charter school, found staff made the cash withdrawals from ATM machines and a BP station from January last year.

Education minister Hekia Parata last week decided to leave the school open until at least the end of the year, despite the Ministry of Education's reservations and its multiple contract breaches, as she believed it would be best for the 39 children currently attending.

During a special review auditors Deloitte found - as well as a litany of academic and governance failings - the school had poor financial controls, and it was unable to provide key financial information such as operational budgets, forecasts and management reports.


A list of current staff and their salaries was not available.

It said about $4000 of round-figure cash withdrawals from the school's debit card could not be supported by corresponding invoices.

Analysis raised concerns as to whether some expenses could not considered normal operational expenses, "specifically the ATM, round dollar EFTPOS withdrawals from Takeaways, BP, and purchases from Cafes, Domino's Pizza, KFC and Burger King".

"Based on our finding above we are unable to determine if all the operational funds received by the kura were used for the purposes for which they were granted," the audit said.

Asked if the ministry of education would investigate and get the money back, Katrina Casey, head of sector enablement and support, said no.

"The audit identified poor financial administration and record-keeping. It didn't say funds were improperly spent," she said.

"The school advises us it has since cancelled the debit card, reduced petty cash to $500 and implemented a regular petty cash reconciliation. The staff who were responsible for the debit card use are no longer at the school. We do not intend to take any action in this regard."

A spokeswoman for the school, Dee-Ann Brown, said the staff who made the transactions had left and a robust financial system had been implemented to prevent it from happening again.


The school is now working with professional accountants and has recruited several highly qualified staff, including a school commissioner, to work with it.

Questions in the house today from Labour's education spokesman Chris Hipkins revealed the school will get close to $1 million to spend for the rest of the year.

It was given an extra $129,000, to allow for implementation of its remedial plan and to fund external expertise, in the wake of Minister Parata's decision last week.

It will also get the help of former Education Secretary Karen Sewell at the taxpayer's expense - although the ministry is yet to disclose how much she will be paid.

Mr Hipkins asked if the minister could guarantee that every taxpayer dollar the school has received as well as the $1 million more that they are expected to receive for the remainder of this year will be spent appropriately and for the benefit of students' education.

Ms Parata said she was confident that all schools set out to do the best they could, and she expected that of this could, and would be monitoring it.

The minister had earlier advised the school to put off building a $25,000 on a fence, insisting instead that the additional operational budget should be spent on health and safety matters or a necessity for the educational delivery of the Kura.

The school planned to teach students about fencing while they were building the fence, as part of its farm-based curriculum.

Te Pumanawa o te Wairua

• The school opened at the beginning of 2014 as one of the government's flagship charter schools.
• It faced an immediate range of issues including drug use, poor achievement, a falling roll and poor governance.
• After a special audit in February, the ministry of education advised the school's contract could be terminated.
• Education minister Hekia Parata decided to keep it open until at least the end of the year after finding its students had limited other options should it close.
• Governance, achievement records and financials were found to be in poor shape.
• $4000 cash was withdrawn on the school Eftpos card and remains unaccounted for.
• There were also purchases from cafes, Domino's Pizza and KFC that remain unexplained.
• Staff who made the purchases have now left and the ministry says it will not investigate.