Huata said operation paid from salary, jury told

Former MP Donna Awatere Huata told an accountant that funds for a stomach-stapling operation came from money she salted away from her parliamentary salary, a jury in the Auckland District Court heard yesterday.

Mark Stevens said he was asked by Awatere Huata to do a report because the Act party wanted to know whether there was any substance to claims in the Dominion Post that money from the Government-funded educational trust was being misused. There were other allegations, including a claim that Pipi Foundation money was used to fund a trip to a fashion show in Australia.

Mr Stevens produced a report exonerating Awatere Huata, stating that she received no funds directly or indirectly and that all foundation funds were expended in accordance with the trust deed.

The Serious Fraud Office alleges that a $30,946 cheque was used to finance the operation and for her personal expenditure.

Awatere Huata and her husband Wi Huata face seven charges, covering $82,000 of Pipi funds.

They jointly face four charges of fraud and one of attempting to pervert the course of justice and two fraud charges are laid against Awatere Huata alone.

Mr Stevens said that Awatere Huata told him she saved up money from her parliamentary salary for the weight-loss operation.

She had not wanted her husband to know.

Mr Stevens said she told him that the cheque for $30,946 was cashed and used to pay a number of other people in relation to foundation business.

Mr Stevens said that there were no accounts, a shortage of source documents and missing minutes.

"Basically you could not make much sense of what was there."

He advised that a proper cash book, source records and a full set of accounts were needed and the trustees needed to reconstruct minutes.

Mr Stevens said that Awatere Huata had a reasonable amount of income and it appeared she had given him a valid explanation for how the operation was financed.

"On the basis of what I saw, I was of the opinion that there was insufficient evidence to make a decision other than to give Mrs Awatere Huata the benefit of the doubt ... "

Mr Stevens agreed with Awatere Huata's lawyer, Guyon Foley, that like many Maori trusts the foundation was run "quite informally", something he said was a serious problem.

SFO forensic accountant Joanne Pettifer told the jury that many of the financial documents she would have expected from an organisation such as the foundation were absent.

She said that in the three years to August 2002, the foundation received deposits of $840,000, mostly from the Ministry of Education.

Cash cheques totalled more than $169,000 and payments to Huata entities more than $177,000, while schools received $228,379.

Ms Pettifer said her observation of the use of the $30,946 cheque differed from Mr Stevens' report.Earlier, a forensic computer analyst, Chris Budge, said that invoices had been created after the dates recorded on the documents.