Education Minister Hekia Parata says she has asked the Serious Fraud Office to investigate Te Pataka Ohanga in relation to allegations about its spending.
The organisation was a subsidiary of the Kohanga Reo National Trust, which was cleared of misusing public funds last night following an Ernst and Young investigation.
The investigation did not look at any expenditure by Te Pataka Ohanga because it was deemed a private organisation.
This afternoon, Ms Parata said that she had continued to receive allegations about the subsidiary and she had referred them to the Serious Fraud Office.
She said that public confidence needed to be restored and allegations of credit card misuse needed to be put to rest.
"I have no legal authority in terms of TPO but nevertheless, such is our concern around maintaining public interest and reliance on the trust, we would prefer that the [SFO] investigated these issues.''
She added: "It seems at this point to us that having assured ourselves of the public funding of the Kohanga Reo services, with which we are satisfied, these other matters need now to be answered by the trust.''
Asked whether the original review should have looked at allegations of credit card misuse more seriously, she said that a minister had no more power over Te Pataka Ohanga than she did over a stationery shop or an insurance provider.
Ms Parata would not confirm who had made allegations against the organisation's members or how many people would be investigated.
"The point is that there are allegations that are yet to be answered by the trust, they need to be so that public confidence can be restored.''
The SFO was responsible for highly complex fraud cases, fraud involving large amounts of money, or cases involving people in important positions of trust.
Ms Parata said the SFO was not getting involved on the grounds that it was a politically sensitive issue.
Ms Parata and Maori Affairs Minister Pita Sharples wrote to the trust today to express their concerns.
In the letter - which can be read here - they told the trust that it had reassured them last night that "matters were in hand" and that the trust would publicly address the concerns today.
"It is not clear to us that this is occurring and we urge you to take immediate steps to restore public confidence in the governance and management by the Trust of your subsidiary, Te Pataka Ohanga."
The ministers told the trust they had received a letter from one of its trustees raising further concerns about TPO and its relationship with the trust board.
"We are taking these concerns very seriously and accordingly are advising you we are referring these to the Serious Fraud Office."
They said that their central concern was that the Te Kohanga Reo National Trust was using robust and efficient purchasing decisions and was passing the benefits on to kohanga reo.
Speaking to Radio New Zealand this morning, trust spokesman Derek Fox said Te Pataka Ohanga was free to spend its money in whatever way it deemed appropriate.
"The company deserves to be paid for its services
"These services are paid for retrospectively," Mr Fox said.
He said the relationship between the trust and Te Pataka Ohanga was the same as any other employer-employee relationship.
"What you do with your money, that you earned by delivering your service, it's got nothing to do with your employers," he told Radio New Zealand's Kathryn Ryan.
"There is salacious interest obviously in the media with this. The report said nothing went wrong, but that's not good enough for the media."
Mr Fox said an investigation had been launched by Te Pataka Ohanga over the allegations.
"There are ongoing investigations in a private organisation and those investigations and actions are taking place, and that's the private business of that private company,
"The trust is satisfied with what is going on."
Ms Parata said this morning any questions about Te Pataka Ohanga had to be directed to the trust.
The report did show improvements were needed around credit card returns and koha payments, she said yesterday.
It pointed to a $50,000 koha by the trust for a contribution during an extended Waitangi claim process. It was approved by the board but not in the annual report.
All staff credit cards were cancelled in October last year, after the Native Affairs investigation and Lynda Tawhiwhirangi, the general manager of Te Pataka Ohanga was suspended.
Dr Sharples and Ms Parata met the trust board last night to discuss the report.
Hekia Parata. Photo / Mark Mitchell
Ms Parata said afterwards that the report "shows that the trust was legitimately buying services from Kohanga Reo from Te Pataka Ohanga and there was no misuse of public monies in this regards.
"It found that the trust's financial controls are effective for an operation of its size and complexity but some improvement are needed around credit card returns and koha payments.
"No improprieties in respect of kohanga funding have been found," she said.
Te Pataka Ohanga is being investigated by the Charities Commission, trustee Angus Hartley confirmed to reporters at Parliament yesterday.
