Horowhenua Conflict of Interest?

Concerns being raised

By Veronica Harrod

Conflict of interest concerns are revealed in an application by a group of Horowhenua businessmen to establish a charitable trust called Horowhenua New Zealand Trust.

This is because all of the self-appointed trustees are also board members of Horowhenua District Council’s in-house Economic Development Board.

There is no legislative requirement by the Economic Development Board (EDB) to declare conflicts of interest but the terms of reference state:

The Board will keep a register of interests to ensure that no conflicts of interest arise; furthermore, any commercially sensitive information discussed will be held in the strictest confidence and will not be divulged to any other party without the prior agreement of the Board.

Insufficient detail on the Council’s policy

Late last year the council voted in support of establishing the Horowhenua New Zealand Trust, but the council’s own conflict of interest policies have been criticised by Audit New Zealand for at least the past two years for not containing enough information regarding handling breaches of the policy and their mitigations.

The Audit NZ June 2017 report stated, We are pleased to see the policy has been reviewed in 2016/17. However, more detail still needs to be included for handling of issues, breaches and their mitigations.

This could be done by inserting a section which covers handling of all breaches under the policy. We noted that procedures are included for gift receipting, and political involvement and private comment but more guidance could be included for other areas such as secondary employment.

Almost one year later council has still not addressed the issues despite identifying, several interests held by councillors that were not declared and recorded in the interests register. We confirmed these interests had not transacted with the District Council but we urge the councillors to continue to declare and record an interest they may have and keep the interest register up to date.

Register of Interest requirements

In the May 23 council agenda Council’s governance and executive team leader Sue Hori Te Pa stated, Council is required to keep a ‘Register of Interest’ for which each Elected Member and Senior Leadership Team members complete a personal declaration form.

Information provided on this declaration form includes interests in a company, trust or partnership, properties owned within the district and any matters which the public might regard as likely to influence an elected member’s actions during the course of their duty. This information is updated annually.

A charitable trust is eligible for exemptions from income tax on all or some income, as well as being entitled to other tax benefits, but University of Canterbury charities researcher Dr Michael Gousmett said in an interview that although many charitable businesses had been hugely successful, charitable trusts clearly have a fiscal advantage over a commercial company.

 

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