Grant criteria reasonable but incorrect; grant refunded

Jim Anderton is relaxed about an Auditor-General’s office report on a grant of $75,000 to the Warehouse of which $21,000 was been paid out and is being returned.

“The grant to the Warehouse suppliers was a reasonable decision made by Industry New Zealand which subsequently proved to be a grant that the Auditor-General’s office said was outside of the Cabinet Guidelines. Industry NZ interpreted the size criteria of eligible companies as only needing to apply to one company in a group application, and that it would use its commercial expertise to assess the merit of proposals.

“New Zealand Trade and Enterprise which was formed from the merger of Industry NZ and Trade NZ has improved its processes to address all the issues of concern raised by the Auditor-General’s office.

“The Auditor General’s office stated in its report that it “is satisfied that NZTE has responded appropriately and in a proactive manner to the issues raised by its review.”

A list of 15 companies was originally proposed when Industry New Zealand approved a grant to suppliers of The Warehouse to become more efficient and therefore better suppliers, through Enviro-mark certification (administered by Landcare New Zealand).

Industry New Zealand widened the group of companies to be considered to ensure that the most appropriate companies were funded following the initial grant approval. Three agencies were involved in the selection process, Landcare, The Warehouse Limited and Industry New Zealand. The final group of ten companies was confirmed on 3 April 2003.

Before the group of ten companies was confirmed Industry NZ assessed whether they met the Business Growth Fund criteria. As a group, the companies met the eligibility criteria as Industry NZ had interpreted them.

A subsequent Auditor-General’s office opinion is that Industry NZ’s original interpretation was inconsistent with the criteria agreed by Cabinet.

“There have been approximately 1300 businesses and development grants paid up until the end of June 2003 and a few administrative failures is no reason to stop working to assist businesses to develop and create more sustainable jobs for New Zealanders,” said Jim Anderton.

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