The government's auditor will increase its scrutiny of the $3 billion Provincial Growth Fund, citing risks of unappropriated spending occurring because its activities span several agencies and because it wants to examine the fund's systems of governance, management, monitoring and evaluation of outcomes.
A prize wrangled by New Zealand First for going into coalition government with the Labour Party in 2017, the PGF has become a lightning rod for controversy because of the conduct of its lead minister, Regional Economic Development Minister Shane Jones, and question-marks over how some funding has been allocated.
PGF funding has been announced for a large number of projects in the economically depressed Far North, where Jones hails from, prompting accusations by National Party MPs of pork-barreling.
Other deals, such as a loan for nearly $10 million to the Westland Milk dairy cooperative, have courted controversy because they appeared to be assisting commercial activities that a bank or shareholders might normally have expected to fund. The loan offer was subsequently withdrawn when a foreign buyer emerged for the commercially challenged West Coast firm.
More recently, Jones was criticised for attending a meeting at which funding of $4.6m was allocated to a Northland cultural centre that Jones had identified as representing a conflict of interest for him. He did not participate in the decision, but gave assurances to other ministers about the plan's bona fides.