Provincial Growth Fund and managers to be viewed more closely

Regional Economic Development Minister Shane Jones came under fire last month for his role in a decision to fund a group from the regional growth fund. - Photo: RNZ / Richard Tindiller

The Auditor-General is going to pay closer attention to the payments made to businesses from the Provincial Growth Fund.

Auditor-General John Ryan said Ministry of Business, Innovation and Employment (MBIE) officials had been told to improve the management of the fund after an initial review found the risk of some payments going astray.

"We carried out some preliminary work to review how [MBIE] was administering the fund," he said, adding that the review resulted in recommendations to improve the management of payments from the fund.

"The fund also requires appropriations to be managed by multiple government departments and organisations, which increases the risk of unappropriated expenditure."

The fund allowed for $3 billion to be disbursed over three years, with the aim of lifting productivity in the regions.

Mr Ryan said his priority was to keep a closer eye on the fund and its managers, over the next year, which included MBIE, the Ministry for Primary Industries and the Ministry of Transport.

He intended to carry out three separate audits of those government agencies, focusing on the terms of the contracts with businesses.

Mr Ryan also ordered a review of the Provincial Development Unit (PDU) within MBIE, which was responsible for administering the fund.

"This work will have a wider scope than that being carried out through the annual audits of each department, and reflects the fund's importance as a cross-agency programme of work, and the PDU's role in it," he said.

That review would be finished in October.

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