Part 7: Use of Crown funding and third party revenue

Inquiry into certain allegations about Housing New Zealand Corporation.

We mentioned in our terms of reference for the inquiry that we intended to report on the extent to which there was clarity and transparency around the Corporation's use of Crown funding and third party revenue.

The Corporation's revenue comes from 2 main sources:

  • public money appropriated by Parliament, and paid to the Corporation through the Department of Building and Housing, for:
    • housing policy advice, research, and evaluation;
    • education, support, capacity building, and other services which the Corporation obtains from other agencies, to support better housing for target groups;
    • housing related services provided by the Corporation, including home ownership initiatives, community renewal, and healthy housing;
    • subsidies for the Corporation's tenants to compensate for the difference between assessed income-related rents and market rents;
    • payments to the Corporation (and other providers) to compensate for the difference between the cost of funds and the rate at which funds are lent, and provide write-offs for loans; and
    • capital injections to give effect to government policy decisions around stock acquisition, modernisation, and other housing interventions; and
  • third party revenue received directly by the Corporation from, for example, tenants and mortgagees.

It is important for a Crown entity in the Corporation's position to have a clear understanding of the different sources of revenue, and for that understanding to be reflected in its financial management and accountability reporting.

None of the issues we investigated related specifically to the distinction in revenue sources, although staff who we would expect to be aware of the distinction, such as those in the Finance area, were aware of it.

We did not find any evidence to suggest any problems in this respect, and do not discuss the matter elsewhere in our report.

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