Christchurch Foundation criticises review of its finances at council meeting

Photo: RNZ / Nate McKinnon
Photo: RNZ / Nate McKinnon
A review that has found a charitable trust guilty of high costs and a lack of transparency has been labelled strange and ridiculous.

The comments were made by the chairman of the Christchurch Foundation when he fronted up, along with his chief executive, to a grilling from Christchurch city councillors on Thursday.

Christchurch Foundation was set up in 2017 to attract donations for worthy causes in the city.

To start, the council promised $600,000 a year to cover operating costs, like wages for its three staff and chief executive.

Wanting to check it was getting good value for money, the council ordered a review by Deloitte.

It found the foundation's costs were twice that of similar trusts.

At a council meeting, the foundation's chair and rich lister Humphry Rolleston described the council's brief to Deloitte as strange.

"I personally answered every query that was raised under your brief, not mine, and we gave them full access to auditors and our accountants, full access. The only access we will not give them is confidential information that pertains to our commercial clients. It's none of Deloitte's business. There's no conclusion they could draw from it."

He told councillors Deloitte lacked the expertise to review the foundation, and he struggled to see why one was needed given the small amount of money the trust spent each year.

"I'd be really interested to know what this review has cost you. The interesting thing about this is it's really an audit over $150,000. That's the difference between salaries and wages and what we're spending. It's just ridiculous."

The foundation's chief executive, Amy Carter, told councillors Deloitte was wrong to strip out the $11.4 million it helped fundraise following the mosque attacks.

Carter said the work she and former city councillor, Raf Manji, did in distributing this money was substantial and impacted on their ability to fundraise for other causes.

"That swallowed us whole for a year and a half. When you talk to Raf and I, we will both tell you that it's the hardest thing we've ever done professionally. It was thousands of hours. And the other unintended consequence of this process is I've received phone calls over the last few days from members of that community that now think you don't care because you removed it out of that calculation. And that is devastating."

Council manager Linda Gibb was asked by councillors to explain how the $600,000-a-year figure was reached, given the foundation failed to provide Deloitte or the council with a budget.

"We haven't had that information because, I believe, we haven't had a robust enough conversation between the two parties as to why that information is needed."

The trust was quizzed about its reliance on the council grant to fund its operating costs.

Carter was confident it would be self-funding within the next two years - but right now it was still reliant on ratepayer support.

"If we had a significant cut in funding from the council for the new financial year, we'd have to very quickly move to find a fill or adjust our model."

The council agreed to put on hold a decision about future funding of the foundation until it could provide a draft budget for the next year and its four-year plan on how it aims to stand on its own two feet.

 

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