Foreword

Managing conflicts of interest in the public sector involves more than consideration of the law. The ethics of the situation must also be considered.

The findings of my inquiry into how Cambridge High School managed conflicts of interest in relation to Cambridge International College (NZ) Limited highlight the need for schools to carefully consider the ethical dimensions of conflicts of interest.

Two particular aspects of this inquiry stand out:

• The lack of understanding by the School’s Board of Trustees and the Principal of the nature and proper management of conflicts of interest in the public sector.
• The unwillingness of the Principal of Cambridge High School at the time to provide an account to her employer and to us of her private interests where these were relevant to her employer. The Principal was at the centre of a set of relationships that resulted, or had the potential to result, in personal gain. Her inadequate disclosures of her interests meant that the gain or potential gain was not clear. All public officials must be accountable for their actions and private interests that may affect their public duties.

There are about 2500 state schools. Although it is unlikely they will ever have to manage a conflict of interest of the complexity found in this inquiry, all school Boards of Trustees must be prepared to understand the nature of conflicts of interest, and be able to act as and when appropriate.

Those school Boards of Trustees that do need to manage a conflict of interest must do so properly, to uphold the high standards and reputation of the public sector.

While each state school Board of Trustees is a Crown entity in its own right, and has legal obligations, the Ministry of Education also performs an important role in relation to schools. The Ministry’s Statement of Intent says it seeks to support good governance and management, develop clear expectations of quality, and provide core infrastructure in the schools sector.

I therefore urge the Ministry to take steps to ensure that schools are fully aware of both the nature of conflicts of interest in the public sector and how they should manage them.

K B Brady
Controller and Auditor-General

13 October 2005