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Finance Minister Bill English has conceded money given to at-risk families under the Whanau Ora scheme could be better monitored and evaluated, after it was revealed a Dunedin gang member used $20,000 from the fund to buy cannabis.
Korrey Teeati Cook, 36, admitted indictable changes of dishonestly converting $20,000 of trust money, conspiring with others to sell cannabis and two charges of possessing cannabis for supply.
He was sentenced to three years and three months on the cannabis charges, and an additional nine months for the criminal breach of trust.
Mr English said despite a need for more monitoring, the evaluation being applied to Whanau Ora is of a much higher level than most other social spending.
"It's been set up with a lot of structure and checking around it - all of which are good things; but we need to apply that same standard to all the other programmes.
"If performance measures haven't been met then there will be an expectation they need to adjust their practise and their method in order to get on and meet them."
Mr English said the Whanau Integration, Innovation and Engagement fund (WIIE fund) was being held accountable in line with the Government's better public service targets.
He said Whanau Ora was under pressure to perform because there was a lot of public interest in the scheme.
An evaluation by Te Puni Kokiri (TPK) of the WIIE fund was presented to Maori Affairs Minister Pita Sharples on September 14.
TPK interviewed families who had received grants and found there was good evidence the WIIE fund was helping families, but found there were performance, monitoring and reporting gaps.
It also found the funds were being unevenly allocated across New Zealand - a high-needs area like Northland was only receiving seven per cent of the funding.
Families can apply for up to $20,000 from the WIIE fund to achieve goals such as breaking a cycle of violence, leading a healthier lifestyle, or giving up gambling.
The fund distributed $4.9 million in 2010/11, $7.7m in 2011/12 and was expected to be allocated $6.4m for 2012/13 and $8.4m in later years.
The funds came under question earlier this year when it was found Mongrel Mob members had misused Whanau Ora money.
The TPK evaluation found the fund is "still evolving" and needed better administrative tools.
Green Party co-leader Metiria Turei said a much more rigorous system of monitoring and evaluation needed to be introduced into the scheme.
"If they don't, there can be no justification for continuing this funding."
She said misappropriation of public money happened across the board and was not, on its own, a reason to undermine the Whanau Ora scheme.
"What is shows is TPK needs to tighten up on its processes. It needs to provide support across all the community organisations that are involved.
"The way Whanau Ora is set up is there is a lot of local decision-making, but there's not a lot of support at a national level for the data collection and the management of that money," said Ms Turei.