In a letter sent by the Department of Internal Affairs to the Ministry of Education on the sixth of this month, details were given as to why it laid a formal warning against Te Pātaka Ōhanga.
The purchase of personal vehicles and funding personal travel were just some of the findings by Internal Affairs into Te Pātaka Ōhanga's Whānau Assistance Loans.
The department says a number of loans were granted outside its charitable purposes scope, made to staff and their families including company directors.
Minister of Education Hekia Parata says, "It's not good and that's been relayed in reports by both departments to the Trust Board. The board is aware that it's not good."
Internal Affairs concluded there was gross mismanagement and serious wrongdoing under the act. Add that to the Serious Fraud Office finding which states failures in corporate governance.
When asked should the board members resign immediately, Minister Parata said it was for the kōhanga whānau to decide. She went on to say, "We (MoE) are currently renegotiating the master contract, and if I'm not satisfied that there is an appropriate way forward, I will make further comment at that stage."
The master contract being referred to, which the Ministry of Education is not renewing at this stage, relates to the National Trust's $2.5mil operational costs.
However, one of those on the working group, who is also a staff member of the National Trust, has already commented that the elders on the Trust Board need to keep their roles.
The chairman of the working group, Sir Toby Curtis, says he'll be seeking an explanation from his fellow committee member on that statement.
He says, "It's not appropriate for us to be giving our views on the matter, that's something for them (whānau) to do."
Te Pātaka Ōhanga has been given until the 21st of next month to implement remedial actions, including adopting new loan criteria, which ensures that loans can only be directed towards charitable purposes.
Failure to comply could result in the loss of its charitable status.