Part 1: Introduction

Inquiry into the West Coast Development Trust.

The West Coast Development Trust (the Trust) is a public entity under the Public Audit Act 2001.1 The Auditor-General is therefore its auditor, and is also able to carry out performance audits and inquiries into the activities of the Trust.

On 1 August 2007, the Auditor-General received a request for an inquiry into the Trust's operations, which was supported by a range of information about the Trust. On 25 September 2007, the Greymouth Star published an article stating that the information given to the Auditor-General had been leaked to the Greymouth Star. The newspaper article referred to material from Trust files, including an email and a letter from Mr Frank Dooley, the chairman of the Trust at the time.

Because of the public disclosure of the information and the associated public comment, Mr Dooley contacted the Trust's appointed auditor, and then us, asking that we inquire into the concerns that had been raised and were being reported in the media.

We assessed the material we had received, and the two requests, and decided that there were matters that warranted an inquiry. We released the terms of reference for the inquiry on 30 October 2007. The full terms of reference are attached as an appendix to this report.

We chose not to inquire into how confidential Trust information was provided to us, because it was disclosed to an appropriate authority. It is the general policy of the Auditor-General not to reveal the identity of people who contact us with concerns about public entities, because there is a public benefit in enabling people to raise concerns through this channel. Although information was also leaked to the media, we did not investigate those leaks because they appeared to be too closely linked to the disclosure to us. However, we do comment later in this report on the treatment of confidential Trust information (see paragraphs 2.36-2.39 and 3.22-3.32).

The inquiry process

In carrying out our inquiry, we visited the Trust and met with the six people who were trustees in late 2007 and with senior staff members of the Trust. We also met with the then chairperson, Mr Dooley, and two members of the advisory body.2 We extended an invitation to individuals who were trustees before the October 2007 elections, and spoke with those former trustees who expressed an interest in talking with us.

We reviewed relevant information and files from the Trust, including minutes of meetings and various files on applications for funding, as well as other information provided to us. We did not consider it necessary to meet with individuals or entities that had received financial assistance from the Trust.

We prepared a draft report and discussed it with the two most affected parties, Mr Dooley and the Trust's chief executive, Mr Mike Trousselot,3 to check whether our understanding of the facts was accurate and complete, and to meet natural justice requirements. After considering their comments, we gave them a second draft for further comment. We then gave a copy of parts of the draft report to the rest of the trustees and to the chair of the advisory body for comment. We discussed some sections again with Mr Dooley before we finalised and issued this report.

This process, and the length of time it has taken, has provoked some disquiet among interested parties. The process of preparing and consulting on draft documents is an important part of any inquiry, and confidentiality is essential. We have to check that our understanding of the facts is accurate and that our interpretation of events is reasonable. We also have to protect the rights of potentially affected parties to receive natural justice, which cannot be done if the process is not confidential. During the consultation process, additional information is often provided and initial views can change as the issues are explored in more depth. Therefore, the process can be an iterative one. The conclusions we reach at the end of our investigation and consultation are our own.

1: The West Coast Development Trust trades as Development West Coast.

2: The advisory body is a group of experts who advise the trustees on applications for funding.

3: In April 2008, Mr Trousselot resigned as chief executive to take up another position.

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