Ministry insists terms of reference framed to include money paid to subsidiary TPO.

Two key players in the $90,000 Ernst & Young review of Te Kohanga Reo National Trust have contradictory views about what the terms of reference allowed the review to do.

The Ministry of Education says the terms of reference were worded with the explicit purpose of looking at the trust's subsidiary company, Te Pataka Ohanga (TPO) and the money it got from the ministry-funded trust.

But the Ernst & Young partner who conducted the review, Grant Taylor, told the Herald he would have looked at TPO if the terms of reference had made that clear.

The review effectively cleared the trust of major wrongdoing but did not look at TPO.


The terms of reference were agreed in October last year between Education Minister Hekia Parata, Maori Affairs Minister Pita Sharples and Te Kohanga Reo National Trust after claims of misspending were aired on Maori Television's Native Affairs.

Video: Parata hiding info - Cunliffe

Labour leader David Cunliffe feels Education Minister Hekia Parata is hiding information from the public, that the Te Kohanga Reo National Trust should have public accountability.

Labour Party leader David Cunliffe has accused Ms Parata of deliberately setting the terms of reference to prevent the review looking into dubious expenditure of TPO, which sparked the review in the first place.

But Ministry of Education deputy secretary Andrew Hampton said the terms of reference, which he advised on, had been deliberately worded to include money that TPO had received from the national trust.

"The terms of reference were constructed in a way which explicitly included TPO to the extent to which it received Crown funding," he said yesterday. "That was agreed by the trust and ministers ... and there's an explicit provision No 6."

Provision No 6 states that an objective of the review is to "establish what, if any, public funding provided to Kohanga Reo National Trust may have been provided to Te Pataka Ohanga".

Asked if he believed the review was to cover monies paid from the ministry to the trust then to TPO, he said, "that was the purpose of the provision ... It was a classic 'follow-the-money'."

The first that the ministry knew that Ernst & Young had not looked at TPO was on January 28, when it received the draft report.


Mr Hampton said another fact to bear in mind was a parallel investigation being undertaken into TPO by the Department of Internal Affairs.

"They have the ability to access bank account records and the like and we know they are taking several months to complete their report so we are confident they are doing a thorough job," Mr Hampton said.

"Until you have the EY report lined up with the Charity Services report lined up with the SFO [Serious Fraud Office] report, you won't actually have a full picture ... " The ministry advised Ms Parata that the reason Ernst & Young did not look at TPO was because as an independent but 100 per cent subsidiary of the trust, and not funded by the ministry, it was not subject to the review.

Mr Taylor yesterday declined to say if or why he thought TPO money was private money and not public money but he said there was no clear definition of where the line was.

How events unfolded
Oct 14: Native Affairs exposes dubious spending by Te Pataka Ohanga (TPO), a subsidiary of Te Kohanga Reo National Trust.

Oct 16: Ernst & Young (EY) hired for independent review by Education Minister Hekia Parata in consultation with trust.

Dec 13: EY gives draft report to trust.

Jan 28: EY gives draft report to Ministry of Education.

Feb 18: EY, ministry and trust meet to discuss report.

Mar 12: Report given to Parata.

Mar 17: Parata's office receives letter from TKRNT trustee with more allegations about TPO.

Mar 18: Parata meets Te Kohanga board and releases report. She says trust cleared but reveals ongoing investigation into TPO by Internal Affairs.

Mar 19: Parata refers new TPO allegations to Serious Fraud Office.
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