Legal fees hike costs for Tainui
Tainui’s executive board has blown its budget, in one instance spending $161,000 more on legal costs than allowed for.
Accounts show the executive board – Te Arataura – is forecast to overspend by a quarter on its $998,000 budget for the 2011 financial year, with legal costs likely to be the biggest drain.
Te Arataura was allocated a $75,000 budget to cover legal costs in the 2011 financial year, but as of March 1 it had spent $191,000.
The legal bill for 2011 is tipped to be $196,000.
Communications manager Kirk MacGibbon said the tribe would not comment on leaked documents but it is likely any over-budget expenditure will be investigated during a review of Tainui’s governance. Work on the review, expected to be finished by next month, has been slow-moving.
Auditing firm KPMG has been contracted to conduct the review but confusion among tribal leaders over who has authority for financial decision-making has exacerbated the delays.
Last month, Te Kauhanganui chairwoman Tania Martin signed the terms of engagement issued by KPMG on behalf of the tribe’s review committee.
It stated the overall objective is to carry out an independent review to determine if tribal parliament Te Kauhanganui’s policies, procedures and governance frameworks have been adhered to.
It said the review would focus on activities relating to funds managed by the executive board for transactions from 2009 to this year. It is likely to take up to a month to complete the $70,000 review.
However, according to minutes from the last Te Kauhanganui meeting, board chairman Tukoroirangi Morgan said Mrs Martin did not have the power to sign off financial agreements.
“In this context KPMG has prepared another copy of the terms of engagement for sign-off by the executive chair and the chief executive. This will provide for the all-important assurance to KPMG that their costs for undertaking the review assignment, will be paid,” the minutes said.
The issue of control and management has been an ongoing battle between the tribe’s parliament and the executive board.
A stoush with Mrs Martin looks likely to continue as the board seeks a way to avoid covering her legal costs, even though the parliament has ordered it to do so.
Mrs Martin was fired as chairwoman of Te Kauhanganui by Maori King Tuheitia, after she wrote a report critical of the board.
But the king’s move was unconstitutional and Mrs Martin lodged an application for a High Court injunction to block the decision. She was ultimately restored as chairwoman in a vote by Te Kauhanganui, the only body with the right to replace her.
Te Kauhanganui is made up of three representatives of the 68 Tainui affiliated marae and is sole shareholder of the tribe’s assets.
Mrs Martin racked up a significant legal bill and at a meeting of Te Kauhanganui it was resolved the tribe would cover the costs.
However, the board has continually refused to honour the resolution, saying it alone has the power to make financial decisions.
The board sought advice from commercial lawyer Alan Galbraith, who said that even though Tainui was an incorporated society, company law principles could be applied by analogy, and that “power of management” was vested in the board.
The issue is likely to continue to play out through legal action.
– Waikato Times