Part 8: Status of Maori Trust Board audits

Central government: Results of the 2006/07 audits.


We remain concerned about the continuing pattern of audit arrears in the Māori Trust Boards (MTBs) sector. We will continue to work directly with MTBs to bring these audits up to date as soon as possible.

We are pleased that policy proposals are being considered that will address many of the matters we have raised in previous reports to Parliament about the audit and accountability framework for MTBs.


We have previously reported to Parliament in 1993, 1995, 1998, and 2006 about the audit and accountability arrangements for those MTBs governed by the provisions of the Māori Trust Boards Act 1955 (the Act).1

While the legislative framework governing the MTBs sector remains unchanged since our 2006 report to Parliament, a review of the accountability provisions within the Act is in progress. We understand that this review may result in, among other changes, MTBs being no longer classified as public entities under the Public Audit Act 2001, but still being required to have their annual financial statements audited by an independent auditor.

We support these proposed changes. They are consistent with the conclusions that we made in our 2006 report to Parliament.

The proposed changes will require amendments to the Act. Until such changes are made by Parliament and take effect, MTBs remain public entities and the Auditor- General remains their auditor.2 Given the history of audit arrears in the MTBs sector, we considered it timely to report again publicly on the status of audits in the MTBs sector.

What is the Māori Trust Boards sector?

Broadly speaking, MTBs are organisations that exist to manage tribal assets for the general benefit of their beneficiaries. MTB beneficiaries can be loosely described as those persons who have genealogical links to the tribe(s) that the MTB represents.3 The Act empowers MTBs to provide money for the benefit or advancement of their beneficiaries and to apply money towards the promotion of health, social, and economic welfare, and education and vocational training.4

As we noted in our 2006 report to Parliament, many MTBs are reconsidering their legal form for the future. This has led to the gradual reduction in the number of MTBs - from 19 in 1993 to 15 in 2006.

Sixteen MTBs were governed by the provisions of the Act for all or part of the 2006/07 audit period.5 They were:

  • Aorangi;
  • Hauraki;
  • Maniapoto;
  • Ngāti Whātua o Orakei;
  • Taranaki;
  • Tauranga-Moana;
  • Te Arawa;
  • Te Aupōuri;
  • Te Rūnanga o Ngāti Porou;
  • Te Rūnanga o Ngāti Whātua;
  • Te Tai Tokerau;
  • Tūhoe-Waikaremoana;
  • Tūwharetoa;
  • Wairoa-Waikaremoana;
  • Whakatōhea; and
  • Whanganui River.

What is the current status of audits in the Māori Trust Boards sector?

MTBs are required to keep full and accurate accounts of all their receipts and payments, and to prepare annual statements setting out their financial position and financial operations every year.6 Most MTBs have 30 June balance dates, but the balance date for four MTBs is 31 March.

The financial statements of MTBs are audited by the Auditor-General and sent to the Minister of Māori Affairs who will forward them with their comments to the MTB.7 Audited financial statements are a critical input into future planning and for communicating performance to those to whom MTBs are accountable.

There is, however, no statutory deadline for the completion of audits. Instead, the Auditor-General has set a self-imposed time frame of five months after balance date before considering any MTB audits as being in arrears.

The MTBs sector continues to have a trend of audit arrears. There are a range of reasons for these arrears, some of which relate to auditor performance. Other reasons include delays by MTBs in producing quality financial statements for audit (for MTBs themselves and/or their subsidiary entities), and difficulty in resolving technical accounting and auditing issues.

We continue to be concerned about the status of audits in the MTBs sector. Figure 6 sets out the situation as at 31 March 2008.

Figure 6
Status of Maori Trust Board audits 2004-2007

Audit status 2004 2005 2006 2007
Number of MTBs in audit portfolio* 17 16 16 15
Number of audits completed 14 13 8 4
Number of audits in arrears (i.e. not completed within 5 months of balance date**) 3 3 8 11

* As at 30 June 2005, there were 16 MTBs governed by the Act, after the disestablishment of Te Rūnanga o Ngāti Awa in March 2005 as an MTB governed by the Act. As at September 2006, there were 15 MTBs, after the disestablishment of the Te Arawa Māori Trust Board.

** Four MTBs (Ngāti Whātua o Orakei, Tūhoe-Waikaremoana, Wairoa-Waikaremoana, and Whanganui River) have a balance date of 31 March. The rest have balances dates of 30 June.

We continue to work with MTBs directly, and with Te Puni Kōkiri where appropriate, to bring audits up to date. We recognise the undesirability of having so many MTBs with audit arrears, and some having multiple years in arrears. Finalising these audits will be critical to the effective transition of MTBs out of the public audit portfolio, in the event that this does occur.

1: First Report for 1993 (parliamentary paper B.29[93a]), First Report for 1995 (parliamentary paper B.29[95a], Second Report for 1998 (parliamentary paper B.29[98b], Central government: Results of the 2005/06 audits (parliamentary paper B.29[06a].

2: The proposal is for there to be a two-year transition period before MTBs are removed from the public audit portfolio. The Auditor-General will remain responsible for completing the audits up until the date that the new provisions take effect.

3: Part 1 of the Act defines who constitutes a beneficiary for each of the MTBs governed by the Act.

4:Section 24.

5: By 30 June 2007, there were 15 MTBs, after the disestablishment of Te Arawa as an MTB governed by the Act on 25 September 2006, as part of its Treaty settlement process with the Crown.

6: Sections 30 and 31.

7: Section 31.

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