Maori trust board cleared of fraud

Te Ururoa Flavell

An investigation in a Maori trust board which collapsed earlier this year, leaving at least 12 people out of work and its iwi facing a hefty debt, has found no evidence of fraud or criminal activity.

Te Aupouri Maori Trust Board closed its Kaitaia headquarters at short notice on August 25 and quit a raft of social services after chairman Raymond Subritzky said it was facing "challenging financial circumstances".

Following appeals from Mr Subritzky and Te Aupouri's new runanga (tribal council), Maori Development Minister Te Ururoa Flavell launched a ministerial investigation into the trust's affairs.

Figures cited for the size of the trust board's debt ranged from Mr Flavell's estimate at the time of "hundreds of thousands of dollars" to an insider's estimate of about $2 million.

The trust board's woes put a dampener on the Te Aupouri's Treaty settlement celebrations in September, when the iwi received $21 million in redress as well as farm and conservation land.

Settlement legislation also created a new entity, Te Runanga Nui o Te Aupouri, to replace the trust board and manage the settlement money - but the catch is, the new organisation inherits the trust board's debts.

As a result some of the money that could have been spent on improving the lives of iwi members may instead have to be paid to creditors.

The outcome of the investigation was released on Friday with Mr Flavell saying it had found no evidence of fraud or criminal activity.

While he was pleased that was the case, the report - by a partner at financial services company Ernst and Young - had confirmed the trust board was insolvent.

When asked about the size of the debt or how it came about, Mr Flavell said he would not comment further until he had heard back from iwi who were still considering the report.

When the news first broke Mr Flavell told the Advocate he believed the board's financial troubles were the result of poor decisions rather than fraud, but he would leave that to the investigation to determine.

The runanga chairman was unavailable for comment on Friday.

The trust board's social services have since been taken over other providers.

Its contracts with the Ministry of Social Development totalled about $1 million a year and included social workers in schools, home support, a home-based education programme and Kaitaia Safe, which trains workers for the security industry. The services benefited students at 36 schools as well as 60 families and 95 individual clients.

The trust board also ran the acclaimed Project Haere, which trained unemployed Far North youth to work in the Christchurch rebuild.