16 June 2003

The Auditor-General decided in January 2003 to conduct an audit and inquiry into matters regarding the integrity of the arrangements under which taxpayer funds have been paid (by any public entity) to the organisations with which Mrs Awatere Huata is associated and/or in which she has an interest. The terms of reference for our audit and inquiry are shown below.

We have identified the public entities that have had funding arrangements with Mrs Awatere Huata or associated entities, and tracked the public money paid to those entities in order to identify the manner in which it was spent.

We asked Mrs Awatere Huata for information about that funding. At a meeting with her in February, she agreed to co-operate fully with our requests for information.

Mrs Huata has provided some information, but she has now asked that we seek the rest of the information about entities in which she has no direct personal involvement from her husband, Wi Huata, and other family members.

We are disappointed to have received this response now, having pursued the matter for five months.

The Auditor-General has asked Mr Huata and other family members to provide the outstanding information.

We are compiling the information we have obtained from the public entities that have provided the funding in question. This information will form the basis of an interim report that we intend to publish as soon as possible.

The Auditor-General has been asked to investigate whether Donna Awatere Huata MP had some involvement in alleged inappropriate spending of public money paid to the Pipi Foundation for a children’s reading programme. The allegations include reference to public money paid to other organisations with which Mrs Awatere Huata is associated and/or in which she has an interest (financial or otherwise, and either directly or through near relatives).

The Auditor-General will co-operate with any investigation by other authorities of allegations concerning the Pipi Foundation or any other private sector organisation. However the Auditor-General is not the auditor of those organisations.

The allegations raise wider questions about the integrity of the arrangements under which taxpayer funds have been paid (by any public entities) to the organisations with which Mrs Awatere Huata is associated and/or in which she has an interest. The Auditor-General has therefore decided, in the public interest, to conduct an inquiry into matters concerning that funding. The inquiry will:

1. Identify all funding arrangements (whether involving contract or grant) between public entities and the organisations with which Mrs Awatere Huata is associated and/or in which she has an interest, and the purpose of the funding in each instance;

2. Examine the process by which the funding decision in each case was made, including whether a contestable process was or ought reasonably to have been used;

3. Review in each case the appropriateness of the arrangements for the funding entity to monitor the implementation and performance of the contract, or the use of the grant, as the case may be, and the effectiveness of that monitoring; and

4. Identify in each case whether the organisation concerned appears to have performed and/or complied with its contractual obligations and/or any grant conditions.

The inquiry will be conducted under sections 16 and 18 of the Public Audit Act 2001.

The Auditor-General will report to the House of Representatives, under sections 20 and 21 of the Public Audit Act, on the above terms of reference and such other matters arising from the inquiry as the Auditor-General considers it desirable to report on.

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