The Government's spending watchdog has sided with Regional Economic Development Minister Shane Jones and concluded the outspoken MP acted appropriately by declaring a recent conflict of interest.

But Auditor-General John Ryan said Jones did "confuse the situation" when it came to discussing a Provincial Growth Fund (PGF) decision regarding an organisation he used to be associated with.

Ryan's comments were in response to a complaint from Act Leader David Seymour to Auditor-General over Jones' involvement in the decision to award the Manea project $4.6 million through the Provincial Growth Fund (PGF).

Before he was a Minister, Jones was involved in plans to build Manea Footprints of Kupe, a culture heritage and education centre in Northland.

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Although Jones declared a conflict of interest, he did attend a meeting of Ministers where funding for the project was discussed in February this year.

Ryan said Jones was right to declare the conflict and there was nothing in the Cabinet manual – the list of rules Ministers need to follow – that said he should not have been in the meeting.

The Auditor-General also said Jones was right to transfer his decision-making responsibilities when it came to the project to one of his ministerial colleagues.

Act Leader David Seymour complained to the Auditor-General over Shane Jones' involvement in a Provencal Growth Fund (PGF) announcement. Photo / Paul Taylor
Act Leader David Seymour complained to the Auditor-General over Shane Jones' involvement in a Provencal Growth Fund (PGF) announcement. Photo / Paul Taylor

However, Ryan did say it would have been better if Jones did not express his opinion of the project in the meeting of the Ministers.

"Having declared an interest, it might have been better for Mr Jones not to confuse the situation by expressing a view on the Manea project when it came up for discussion [at the meeting]."

Ryan said if Jones was planning to express a view, it would have been more appropriate if better records were kept which explained his position, and confirmed that his ministerial colleagues had agreed or asked him to participate.

Despite Jones being cleared by the Auditor-General, Seymour said his comments were a "damning indictment" of Jones' role in the project.

"The idea that millions of dollars of taxpayer funding can be allocated, with Ministers who have a conflict of interest playing a decisive role, makes a mockery of the Prime Minister's claim to be running the most open and transparent Government in New Zealand's history.

The Auditor-General's report concluded that the exchange between Jones and Finance Minister Grant Robertson at the meeting "does not raise any significant concerns about the decision-making process".

But Seymour has questioned this conclusion.

"The Office of the Auditor-General gives no reason for this conclusion. We can only imagine that it is reluctant to point the finger directly at a Cabinet Minister.