Cycle trust told to get legal advice over director's actions

The start line at the Contact Lake Taupo Cycle Challenge is an amazing sight. Photo / APN

The Lake Taupo Cycle Challenge Trust has been advised to take legal advice about whether to lay a formal complaint with police against the event's former director.

An auditor has made the recommendation after finding Rob McKnight took two overseas holidays meant as spot prizes - one for himself and another for a contractor as a "reward''.

The independent audit was carried out by fraud examiner Brian Fox for the Lake Taupo Cycle Challenge Trust Board after questions were raised last year about Mr McKnight's actions.

In a statement last year, Mr McKnight apologised for making wrong assumptions when claiming a trip to Australia for himself.

"I made a mistake ... I used something that was not intended for me but intended for the Cycle Challenge. This was a huge error of judgment on my behalf.''

He stated he had repaid the event and had not intended to make any personal gain.

Yesterday, he said he had not seen or read the audit report and would not yet be making any comment.

His contracts with the trust for his two roles - as event director and sponsorship director - were terminated last year.

In the audit report, Mr Fox said the event trustees needed to consider that Mr McKnight was responsible for taking the trips, even though he used only one himself.

"In such cases it is not uncommon for an individual to look to legitimise their own actions by involving others and sometimes without their knowledge, in full or in part,'' Mr Fox said.

Other potential issues raised included Mr McKnight allegedly using restaurant vouchers for himself which were meant to be used during the event and its promotion.

Concerns were raised about the structure of the cycle challenge, including that Mr McKnight had held two roles, one effectively creating revenue for the trust and the other with overall operational control for day-to-day expenditure which was often approved retrospectively. The report was critical of the fact Mr McKnight was allowed to continue as sponsorship director after irregularities surfaced and he was stood down as event director.

"[This] shows either a complete lack of understanding or desire to act in the overall interest of the trust.''

The report made 36 recommendations for improving the management and operation of the cycle challenge.

Event trust chairman Doug Simmons said many of the recommendations were being carried out and others were being considered. The report was not expected to impact on this year's event.

The trust would appoint a sub-committee to look at the recommendation to consider seeking legal advice on possible police action against Mr McKnight.

The decision to allow Mr McKnight to continue as sponsorship director after he was stood down as event director might, in retrospect, not have been the right one, Mr Simmons said. However, the sponsorship role was commission-only and didn't cost the trust any extra.

The report showed the alleged activities which led to the cancellation of Mr McKnight's contracts were isolated, Mr Simmons said.

The trust would review management and governance structures but retain the status quo for the 2012 event to ensure continuity.