Part 6: Our conclusions

Inquiry into the West Coast Development Trust.

The Trust has a significant responsibility to the community of the West Coast region. As the Government's policies to end logging would have a significant effect on the region, the Trust was established to help the region's economy adjust. It was entrusted with $92 million to help create sustainable economic growth and new jobs in the region through careful and strategic investments. Creating the organisation as a trust placed particular responsibilities on the trustees to act solely in the best interests of the people of the region.

We carried out our performance audit of the Trust in 2006 because we considered it important to provide some assurance over the way in which such an important local fund was being managed. As already noted, our audit showed an organisation that was developing well. There were some emerging issues that required attention, but the overall report was positive.

We are disappointed that, only two years later, we have needed to inquire into the Trust.

We have investigated the various incidents that were raised with us. We have detailed the particular incidents and our conclusions on them in this report because we consider it important to explain to the public what the facts are, and to “set the record straight” on issues that have been covered in the media, rather than because we consider that the incidents are particularly significant. We have identified minor administrative errors that could have been handled better, some processes that could be improved, and occasional instances of poor judgement on the part of Mr Dooley. We have seen nothing to suggest bad faith on the part of Mr Trousselot or Mr Dooley. Those few errors and instances of poor judgement have to be set against the record of effective and appropriate administration during the Trust's first seven years of operation. They must also be set against the increasingly difficult operating environment of the past 18 months, which has meant that the ordinary systems supporting the Trust's decision-making have at times failed or been effectively unavailable.

The relationships between trustees, and the inability to resolve basic questions of governance and management so that the Trust could start to operate effectively again, have been of much more concern to us. The Trust is dysfunctional. The behaviour that we have seen there during the past 18 months is not appropriate for a public entity, or for trustees.

The trustees have been unable to work effectively together since late 2006. Personal opinions and local politics appear to have prevailed over the basic fiduciary duties of the trustees to work together in the best interests of the Trust's beneficiaries. The inability to agree on the core role of the Trust, how it should operate, how information should be treated, and the many other issues covered in this report have all contributed to an atmosphere of suspicion and distrust. That atmosphere has manifested itself in hostility and accusations.

We make only one formal recommendation. It is that the group of trustees urgently find a way to work together so they can take effective collective responsibility for the governance of the Trust.

All trustees need to focus on the legal and ethical responsibilities they owe, individually and collectively, to the Trust and to the community of the West Coast region. If trustees cannot make that change, and remain unable to fulfil their responsibilities, then they should consider stepping down.

Until we see evidence that the group of trustees is able to take effective collective responsibility for the governance of the Trust, we are unable to provide assurance that the Trust is able to deliver fully on its purpose of generating sustainable employment opportunities and economic benefits for the people of the West Coast region.

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