Another charity scandal

Bryce Edwards writes:

In Dunedin, a charity called Te Kāika has been receiving tens of millions of dollars in government funding to provide health and social services to some of the city’s most vulnerable people. Over the past year, the Otago Daily Times has been methodically pulling back the curtain on what is going on inside this organisation. The picture is not pretty: nepotistic governance, unexplained payments to the leadership, staff fleeing in droves, government contracts unfulfilled, a youth facility shut down over abuse allegations, and a senior manager convicted of domestic violence. The Department of Internal Affairs is now investigating.

And yet, almost nobody else in New Zealand media or politics has said a word about it.

I had never heard of Te Kaika until Bryce wrote on them. I’m glad he did.

But the governance was flimsy. For nearly five years, the board consisted of just two people: chairwoman Donna Matahaere-Atariki and Matapura Ellison – a breach of the charity’s own constitution, which requires a minimum of three. The University of Otago, which had been involved early on, withdrew its shares in 2020, and all the outside voices on the board departed.

Then in June 2022, founding CEO Albie Laurence was abruptly replaced by Matt Matahaere (the chairwoman’s son). Her daughter, Winnie Matahaere, manages social services. When the board was eventually expanded to three members in 2023, the new addition was an accountant who had previously been suspended from practice for two years for breaching the chartered accountants’ ethical code.

Ask yourself the obvious governance question: how could the chief executive be independently held to account by the board, when the board chair is his mother?

They can’t. A good start would be the Government to set a rule that no social service provider will be funded that doesn’t have a minimum of five board members, none of whom are related to senior staff.

Over the weekend the ODT reported that Te Kāika’s main site appeared to have just one part-time GP serving thousands of enrolled patients. The Royal New Zealand College of General Practitioners recommends a ratio of about 1,000 patients per GP; Te Kāika’s Caversham hub reportedly has one doctor working four days a week for 5,000 to 6,000 patients.

Clinical consultations plummeted by nearly two-thirds in a single year (from 44,939 to 15,874), while patient registrations (and the government capitation payments that come with them) kept climbing. That matters because capitation funding follows enrolled patients, not the number of times they are actually seen.

The capitation rate per patient varies but on average is at least $300. So they would have got $1.8 million from the taxpayer, for one GP!

The tempting response to all this is to write Te Kāika off as an outlier: one rogue charity, exceptional in its dysfunction. 

It’s not. Bryce notes very similar issues with the Waipareira Trust and the Manukau Urban Māori Authority.

Health New Zealand, the Ministry of Social Development, and Oranga Tamariki were all channelling millions to Te Kāika. None of them had adequate oversight mechanisms in place.

This goes beyond Te Kāika. It reflects the way the system now works. This is close to what some scholars call the “shadow state”: charities and NGOs taking over public functions, but without the same transparency or discipline expected of government. The state has outsourced enormous amounts of social provision to NGOs, and has simultaneously failed to build the monitoring, auditing, and evaluation capacity necessary to ensure that outsourcing serves the public interest.

So, the state has become very efficient at shovelling money out the door. It has been far less effective at proving what that money achieves. And in a culture where questioning the kaupapa of Māori service providers has become politically sensitive, the space for honest scrutiny has narrowed further.

This is spot on. Now the answer isn’t for the state to provide all social services itself. If the state can’t even contract properly, what faith could we have in them being able to run them themselves.

This is not just an issue for NZ. Followers of US politics will know about Minnesota daycare centres and California hospices, which have become huge rorts.

Because governments are not spending their own money (they spend ours) they are less concerned with actual outcomes and value for money.

Here’s an idea. Why don’t we take 2% from the budget we have for contracting social services and use it to hire firms whose sole job is to scrutinise providers and contracts. They could scrutinise governance arrangements, finances, outcomes. They could do site visits to see if what they promise actually occurs.

The post Another charity scandal first appeared on Kiwiblog.