Part 5: Administration and monitoring of the Ngārimu VC and 28th (Māori) Battalion Memorial Scholarship Fund
Background
5.1
This scholarship was established by the Ngārimu VC and 28th (Māori)
Battalion Memorial Scholarship Fund Act 1945 (the Act). The Act establishes
a board to administer the Ngārimu VC and 28th (Māori) Battalion Memorial
Scholarship Fund (the Fund), and provides for the Māori Trustee to hold
money belonging to the Fund in a separate account. The Fund is a ‘public
entity’ under the Public Audit Act 2001 and is audited by the Auditor-General.
5.2
According to section 3 of the Act, scholarships are to be awarded to Māori
students:
- who are doing tertiary study;
- whose study promotes the study and encourages the maintenance of the Māori language, history, tradition and culture;
- based on academic merit; and
- for a term of 3 years, except in the cases of doctors’ and veterinarians’ studies where the term is 4 years.
Postgraduate scholarships are to be awarded to Māori graduate students with:
- a record of academic excellence; and
- a proven ability to complete postgraduate studies in New Zealand or overseas.
5.3
A capital fund of about $555,000 earns interest income. There is also an annual
grant from Vote: Education of $54,000. In addition, Vote: Education includes
$29,250 each year to be applied towards administration of the Fund.
5.4
The Ministry has entered into a contract (the scholarships contract) with the
Trust to provide administration services, including:
- provision of secretarial services to the Ngārimu Fund Board (the Board);
- administration of new and renewed scholarships; and
- organisation and administration of an annual essay competition.
5.5
The Act enables the Board to allocate the income of the Fund through:
scholarship, subsidy, special grant, or bursary for the education of any
Māori, or for the purpose of promoting the study and encouraging the
maintenance of the Māori language and of Māori history, tradition and
culture.
5.6
Only 15 new scholarships are awarded in any year. There are many
applications for a limited pool of scholarship funding. From time to time, the
Board has established criteria to be applied in determining eligibility.
5.7
Priority has been given to tertiary students in areas of study that promote and
encourage Māori language and history. The Trust has directed students with
high academic achievement in other areas of study to other scholarships
administered by the Trust. At the Annual General Meeting on 27 June 2002,
the Board decided to highlight the existing criteria, placing high priority on
whakapapa and tipuna (ancestry and genealogical links).
Process followed by the Māori Education Trust
5.8
Applications for undergraduate and postgraduate scholarships close in
February each year. The Trust is responsible for collecting applications and
reviewing them against the eligibility criteria contained in section 3 of the Act.
5.9
In recent years, the eligibility criteria have been programmed into the
scholarship database developed by the Trust. Once applications have been
screened for eligibility, a schedule of recommended scholarships is produced
from the database and submitted to the Board for review and approval.
5.10
The Board, or a standing committee of the Board, is required to approve
scholarships.
5.11
The Trust is required by the contract to report to the Ministry, as part of the
milestone reporting, against performance measures designed to assess the
quality of the Trust’s service in administering the Fund’s scholarship process.
Our findings and conclusions
5.12
Due to logistical difficulties, the Board had approved some scholarships after
students had received initial payments. This is an unsatisfactory situation. The
process supporting the award of these scholarships needs to ensure that the
Board approves all scholarship recipients before any payments are made.
Payment errors
5.13
The Auditor-General’s management report, prepared in connection with the
audit of the Fund’s financial statements for the year ended 31 December 2002,
identified that 3 ineligible students had received Ngārimu scholarships. The
first 2 ineligible students were each paid $5,000. The Trust has recognised the
administrative errors and reimbursed the Fund.
5.14
The third student, an existing scholarship holder, submitted a new application
that the Trust approved. He had already been awarded $5,000 for the 2003 year
when the Trust awarded him $5,000, again for the 2003 academic year, for the
new approved application. The Trust has agreed that the student may retain the
funds, and for no payment to be made to him in 2004 (the final year of his
eligibility).
Practices inconsistent with the Act
5.15
The Trust made payments directly to the students, and sought reimbursement
from the Fund account, before the Board formally approved the students as
scholarship recipients. While administratively efficient, this practice is not
consistent with the requirements of the Act.
5.16
When the Board did formally approve the students as scholarship recipients, it
did not pass a specific resolution to authorise the Trust’s reimbursement from
the Fund account.
5.17
To address this problem, the Trust is considering options for changing the
timing of the Board’s Annual General Meeting, and the possibility of closing
applications for these scholarships before February each year.