Is Team New Zealand sailing away with our money? | Stuff.co.nz

SIMON PLUMB AND TONY WALL

Sailing away: Some believe there has not been enough scrutiny over the money given to Team New Zealand.

Team boss: Grant Dalton was apologetic over reports.

Team New Zealand?failed to provide information required as part of its $36 million deal with the Government for more than a year, a Sunday Star-Times investigation has found.

And it took the Ministry of Economic Development that long to do anything about the apparent breach of the funding deal - finally sending an email to the yachting team saying "we haven't received any quarterly reports from you in quite a while".

Team boss Grant Dalton apologised in an email, but complained that earlier reports "just seemed to disappear into a black hole".

The emails form part of hundreds of pages of documents released under the Official Information Act. We asked for financial information provided by Team NZ to the Government after sources close to the team told us they had concerns over a lack of accountability over how the money was being spent.

"So many people are asking these questions. There's no accountability, no transparency around the public money," an America's Cup veteran said. "Questions need to be asked of the Government - you provided the money, what accountability is there?"

The Ministry of Economic Development released cabinet briefing papers and the agreements signed between the Government and Team NZ, but very little financial information.

The team's agreement with the Government has a clause stating it must be prepared to be audited, but no audit has been carried out. At least $14m of the $36m has been released.

The America's Cup will be held in San Francisco in September and it is likely to be New Zealand's last chance to win back the cup. Dalton said in a television interview in February that the event had become "ridiculously out of control, expensive" and that "billionaires' egos" were being allowed to set the criteria.

Green Party co-leader Russel Norman said the Government's oversight of the money was "disgraceful" and "extraordinary" and it had failed to implement basic accountability measures for the use of $36m of taxpayer money.

He was scathing of the year-long gap in providing information.

"On the face of it, it's a clear breach of the agreement. I think we can say Government was asleep at the tiller."

The Government's "strategic partnership agreement" with Team NZ says it must provide the ministry with an accurate and complete report on all the areas set out in an eight-page reporting template, including a summary of all its activities that utilised Government money and a report on expenditure against budget, within 30 days of the end of every quarter.

On October 14, 2011, an MED staff member, whose name was withheld, contacted Dalton, informing him that the required paperwork had not been completed for 13 months, meaning at least three missed reports.

The documentation was needed to authorise the release of Crown payments - though Team NZ received the payments anyway.

The official wrote: "We've noticed . . . that we haven't had any quarterly reports from you in quite a while. While we have the financial information we need to make the payments, we also require those reports under the most recent amendment to the Strategic Partnership Agreement.

"To bring the reporting up to date, could you please supply us with a report covering the period since 30 September 2010, when the last report was submitted? This is due according to the normal reporting schedule of 31 October."

The official noted that when reports had been submitted previously there was not a great deal of relevant information that Team NZ could provide, but that was no longer the case as a formal commitment had been made by the Government and Team NZ had formally entered the 2013 America's Cup.

"With that in mind, we will be expecting a greater level of detail beyond what has been provided in the past. While we do not necessarily require a great volume of reporting, we do require more substantial information regarding the operation of TNZ as it relates to the funding Government has provided in support of the America's Cup entry."

The official signed off by saying the Government would pay the latest instalment if Dalton agreed to provide the information by the end of the month.

Dalton wrote back: "Sorry about no reports, they just seemed to disappear into a black hole and we have never heard a word since the first one we did for Roger all that long time ago. Anyway, we will fill one out and send it on beginning of next week."

In response to Star-Times questions about the lack of information provided, the ministry said on Friday it now had up to date reports covering the period from January 2010, when the agreement with Team NZ was updated, and any delays in reporting were an "administrative oversight".

The ministry had stayed in regular telephone contact with Team NZ during the period in question and no issues were raised that required action. Two payments were made during that time.

The ministry said quarterly reporting expectations were separate from instalment payment requirements. Team NZ met its contractual requirements prior to payment, which included showing evidence of raising $2 of sponsorship for every $1 of government funding.

Dalton said yesterday the basis of the drawdown of funds was showing proof of sponsorship money. "Team NZ is not aware of any issues outstanding through the time you describe."

SHIFTING THE GOAL POSTS

Four days?after being given the hurry-up by the ministry, a Team NZ representative emailed the ministry saying they were working on a report and suggesting a "few small changes to improve on it".

The team member complained that the questions in the eight-page report template were generic, and suggested a different format for the quarterly reports, focusing on sponsorship money raised by the team against budget, operational status, America's Cup event progress, leverage activity for New Zealand Trade and Enterprise and a sponsors' marketing update.

The ministry official replied: "Fantastic thank you [name withheld]. That sounds like a great approach, why don't you forward it in this format and we'll let you know if there are any gaps?"

Norman said he was concerned that the ministry appeared to have allowed Team NZ to change the parameters of its reporting.

"It's extraordinary that a beneficiary or recipient of aid could just turn around and change the terms of reporting on the spending of taxpayer money. It's disgraceful that the ministry let it happen."

The ministry said on Friday it was "not unusual" to vary a reporting format as a project progressed. The new format provided the ministry with "relevant, useful information to allow accurate monitoring of the agreement".

Dalton said the reporting format was altered to provide "fuller and more relevant reports" and claimed the information was more extensive than originally requested in 2008.

Dalton said the financial information provided to the ministry was in the form of a bank certificate showing deposits by sponsors.

More detailed financial information was not provided because it could give competitors an advantage. "None of Team NZ's competitors disclose their accounts or provide information about their levels of expenditure."

Norman pointed out that none of the other teams were publicly funded.

Team New Zealand?complained about the timing of payments, other emails show.

A team member wrote on April 28, 2011: "As far as future payments go, following on from discussion with Grant over cashflow, it is imperative that receipts of funds are closer to the beginning of the respective quarters rather than the end."

Dalton wrote on February 15 last year: "Just seeing if you can chase along our due payment. The invoice went in with our last report that was Jan 17."

A ministry official wrote back: "Happy to sort this out asap and appreciate the situation, but technically we need a written response to the report feedback before the funds can be paid.

"Sorry I thought that this was understood when we spoke last week?

"No dramas, I've asked for an exception this time and think we'll be OK as a one-off, so this means I'll request payment today and it should be in your account by tomorrow night.

"Regarding the outstanding action points, there are only a couple, but a few of them have been on the last two report feedbacks, so I would appreciate if you could ensure that we have a response before the end of the month." The official signed off with a chummy comment about his trip to Europe: "You were right it was FREEZING in Switzerland last week!"

The ministry said it was satisfied that financial statements provided by Team NZ showed all sponsorship payments received, who made the payments and when, as required by the agreement.

The ministry took financial accountability, transparency and oversight seriously and continually reviewed its processes. Team NZ was up to date with its reporting and had met all other contractual requirements, "so there has been no need to audit them".

AGREEMENT BREACH

Norman remains unconvinced and believes the terms of the agreement were breached.

"Clearly it's both sides. The Government, at the end of the day, is in the position of allocating money and could have insisted on proper accountability mechanisms, but, because they're asleep at the tiller, they didn't."

Economic Development Minister Steven Joyce said officials had told him that under the agreement, funding instalments were solely

dependent on the level of sponsorship raised, not the performance reporting.

This appears to be at odds with the papers released to the Star-Times, and Joyce said he would be asking officials for a full report on accountability to date and taking further action if required.

He revealed that the Government had looked at whether it could get out of its contract with Team NZ, which had been signed by the Labour Government at a time when "money was thought to grow on trees".

Labour's former minister for the America's Cup, Trevor Mallard, who first signed the strategic partnership agreement, remains convinced it was a good deal.

"It's my understanding now that all the income targets have been met and as a result of that the grant would have been more than paid back in PAYE and GST.

"I think a lot of people think ?shit, 30 million bucks that's an enormous amount of money and it's all going one way', whereas the whole basis of the agreement . . . and the reason for phasing the payments to them was they had to meet other income targets and be based in New Zealand and a whole pile of other things which were designed to result in the taxpayer being net better off."

Mallard said the reason the team did not have to provide detailed information on spending was that it could be discoverable under the Official Information Act.

"If the documentation becomes available under the OIA, then it's available to [rival] Russell Coutts. Certainly if I was Grant Dalton I wouldn't want Russell Coutts having expenditure details."

But the Government can withhold information for reasons of commercial sensitivity, and in fact large tracts of the documents released to the Star-Times were removed after consultation with Dalton.

- ? Fairfax NZ News

Comments

Source: http://www.stuff.co.nz/national/8465020/Sailing-away-with-our-money

bubba watson recent earthquakes fbi most wanted list stuttering james van der beek dyngus day indonesia quake