Team New Zealand boss Grant Dalton says an investigation into the finances around the event have put a massive strain on the organisation as it looks to defend the America's Cup early next year.
Yesterday afternoon Team New Zealand, the Ministry of Business, Innovation and Employment (MBIE) and Auckland Council issued a joint statement saying a report by forensic accountants Beattie Varley found there was "no financial impropriety of any nature".
The statement also indicated that the report showed there was no loan between Team New Zealand and its event company America's Cup Event (ACE) nor was their fraud by either company.
The personal expenses of the team chief executive Dalton — or any other personnel — had not been paid from Crown money.
Newstalk ZB's Mike Hosking asked Dalton if the investigation was a "needless waste of time and energy".
Dalton said: "We're totally vindicated and yes, it's been a huge strain on people within the organisation to sort this out and put it behind us.
"I don't know what the motives were (for the original claims which led to the investigation). Over due course these things come to the surface.
"There are certainly questions that still need answering, how it was allowed to get to this point…we suspected something as far back as December last year was going on.
"At that point we didn't know what it was."
Mediation has been ordered over TNZ charging ACE a $3m boat design fee.
Dalton told Hosking that TNZ regard the new AC75 class as a design which has created "the most spectacular yacht in history" and thus part of the event, so the fee was justified.
"From our side it is a 20 minute conversation because we think it is so cut and dried…but those things have a habit of dragging out," he said.
A summary of Beattie Varley's report — all that has been released so far — said Team New Zealand's record-keeping "warrants criticism at a governance and management level".
It also revealed that Team New Zealand was in dispute with MBIE over the way the team charged ACE $3m to design the boats for next year's regatta. Beattie Varley said Team New Zealand's record keeping meant it could not verify how the team had calculated the fee which was being charged to taxpayers.
"The lack of an appropriate time-recording system within [Team New Zealand] prevented any objective verification of the amount that was ultimately recharged to ACE."
The Herald is prevented from revealing details from an earlier report by Beattie Varley after Team New Zealand was granted a High Court injunction blocking publication.
In July the Herald revealed that MBIE was sufficiently concerned about the financial affairs of the team that it had asked Beattie Varley, headed by former Serious Fraud Office officials, to investigate.
While Dalton initially said the team had discovered and expelled "spies" from within the team, it would later emerge that staff from event organising company Mayo & Calder had taken their concerns to MBIE and were acting as whistleblowers.
A letter from MBIE chief executive Carolyn Tremain raised questions both about the design fee, but also the loss of funds by the team into a Hungarian bank account due to fraud.
Beattie Varley's report says whether the $2.8m lost to Hungarian fraudsters was a breach of Team New Zealand's agreement with MBIE and Auckland Council "then it was not an intentional one".
It added that Team New Zealand did not expect the cost of the fraud to fall on taxpayers.
Previously MBIE has refused to say whether Team NZ's record keeping was allowing it to discharge its duties under the Public Finance Act.
Beattie Varley said this was a matter for MBIE to determine.
"We do not believe that ETNZ's failure to maintain a system allowing objective verification of time-recharged (and ACE's acceptance of that failure when it paid ETNZ) necessarily prevents the Crown from meeting its obligations under the Public Finance Act but we refer the matter back to MBIE for consideration."
Tremain refused to be interviewed last night. MBIE has not said when it will release the rest of the Beattie Varley report.
In a statement, Tremain said: "While it's excellent to confirm that there has been no financial impropriety and the escalation process has concluded, the Beattie Varley report had raised some concerns around record keeping relating to several historical matters."