Government blamed for wananga's money crisis

Rongo Wetere

The Government has been accused of pushing the country's flagship Maori education centre to the point of collapse.

The near-insolvent Te Wananga O Aotearoa was yesterday bailed out with a $20 million short-term loan.

The Government also started the process of appointing a commissioner to replace the council and take over running the wananga.

"There has never been a commissioner appointed for a tertiary education institution in the past," Education Minister Trevor Mallard said, "and therefore this is an indication of a very, very serious financial and, I might say, governance and managerial situation."

The wananga's dire financial position is being attributed to a 25 per cent drop in student enrolments and severe cashflow problems that have left it at risk of being unable to pay staff and creditors.

A wananga council member, who did not want to be named, said the Government had also caused the financial situation.

The source said a proposal to sell wananga assets - to stem a cash shortfall created, in part, by the Bank of New Zealand's decision to withdraw overdraft facilities - was thwarted by crown manager Brian Roche, who has control of the wananga's finances.

The source said Mr Roche declined the proposal to sell wananga property and to call in debt of around $6 million owed by the Aotearoa Institute, which is linked to the wananga.

 

The Herald understands there is concern within the wananga that the Government had not paid out a $15 million suspensory loan, agreed to as part of the wananga's 2001 Treaty of Waitangi settlement.

A spokeswoman for Mr Mallard said the suspensory loan had not been paid out because the wananga had not met the conditions, which include the quality of education, student numbers and the proportion of Maori students.

The spokeswoman also said Mr Roche had not ruled out asset sales, but was insisting that proper processes were followed.

Earlier yesterday, Mr Mallard said the wananga had a cashflow problem, but was asset-rich.

He said he did not want to provoke sudden fire sales of wananga buildings, and changes needed to be carefully managed. The situation at the wananga had been far more serious than originally thought when Mr Roche was appointed crown manager at the beginning of March.

Mr Mallard wrote to the wananga yesterday saying he had begun the statutory process to dissolve its council and appoint a commissioner.

The wananga has five days to respond, followed by 21 days of formal consultation. It is understood the role of its chief executive, Rongo Wetere, will be under intense scrutiny if a commissioner is appointed.

Wananga management said its projected cash flow would see it in surplus by the end of the year.

Mr Mallard said he had not taken the step to appoint a commissioner lightly, but "to not do anything would be irresponsible".

 

A senior wananga member said there was a belief among a number of board members and senior staff that the Government and the minister were determined to oust Dr Wetere and to cut back the wananga's scale.

"They do not like the fact we are the largest in the country. They think the wananga should be a small niche Maori tertiary provider."

One source said the Government was working to "wind down" the wananga and turn it into more of an "iwi community college".

The Herald understands Wira Gardiner, who was appointed to the council by Mr Mallard in March, called for Dr Wetere to resign as chief executive after last month's board meeting.

Mr Gardiner refused to discuss the matter. It is understood he is a leading candidate for the position of commissioner.

Staff at the wananga's Apakura campus in Te Awamutu yesterday said they believed the furore was politically based.

Te Wananga

22,000 full-time students.
13 North Island campuses.
$239 million in public funding last year.
In February, Act MP Ken Shirley alleged rorts, conflicts of interest and nepotism at the institute. The Auditor-General is investigating.
In March, crown manager Brian Roche took financial control.

- additional reporting: Nicola Boyes