14 Jul 2016

Govt calls lawyers over 'quit' charity

7:19 pm on 14 July 2016

The government has called in lawyers for advice over a charity that is holding on to millions of dollars in public funds several months after it stopped operating.

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Photo: 123RF

The Quit Group has received up to $9.5 million a year since 1999 to help people quit smoking through its helpline, Quitline.

But last year it lost its funding after a government agency took over Quitline.

Funding ran out at the end of October but the trust still has $3 million in reserves.

Massey University public health researcher associate professor Marewa Glover said that should be handed straight back to the Ministry of Health.

"How can this be? Why wasn't the money spent on what it was supposed to be spent for, delivering cessation services to people. I'm just flabbergasted.

"It was meant for smoking cessation services, it wasn't spent on that, give it back."

Marewa Glover

Marewa Glover Photo: Supplied

She said $3m would go a long way to helping smokers quit.

"That is a lot of jobs over a number years, $3m. You're looking at at least $1m for a mass media campaign. It just could have gone so far."

Accounting and audit firm Grant Thornton said in the trust's 2015 financial statement that it would continue in a "dormant state" while the trustees decided what to do with the $3m.

A still from a 2016 Quitline TV ad campaign.

A still from a 2016 Quitline television ad campaign. The helpline was last year taken over by a government agency. Photo: supplied

The ongoing costs of maintaining the Quit Group could be covered by the reserves for at least a year after the date the trustees approved the financial statements, it said.

Charities analyst Michael Gousmett said that meant the trustees, who received $100,000 in each of the last two years, could continue paying themselves while the trust did nothing.

"The trust has done its work, that should be returned to the government. I don't think the trustees should carry on trying to decide - while at the same time, having provided themselves a provision for being paid remuneration for that activity - [whether] to use those funds when in fact the work's done.

"All they're doing is duplicating what the government's already doing through another programme."

The trustees should not be able to continue to be paid when funds were desperately needed elsewhere in health, Dr Gousmett said.

The ministry should be able to claw the money back, he said.

"That would then mean that the trust has no money. That can carry on in the meantime, doing nothing, having no funds but we need this money back in the public health system not sitting in their bank account to pay people remuneration."

Minister seeks legal advice, charity responds

The Ministry of Health said it had sought legal advice about the Quit Group and was assessing its options.

Grant Pollard, a purchasing manager at the ministry, said this in a statement:

"[The ministry] works with all of its providers to ensure that all funding supports service provision. However, some providers do maintain a reserve fund to manage any unplanned operational costs that are relevant to the funded service.

"Where is it clear that there is a material surplus, the ministry will work with a provider to reinvest that surplus into service delivery. In some circumstances it may have the ability to seek the return of any funding that is unspent."

Quit Group chairman Chris Cunningham is also the chair of the Hepatitis Foundation, which is being investigated by Charities Services for potential serious wrongdoing.

In an email, Prof Cunningham said the trust continued to operate and was completing its reporting for the 2015/16 financial year.

"The trustees have made no decisions on the future of the trust or on the distribution of reserves. We are currently exploring initiatives that are consistent with the objects of the trust and which will contribute towards the government goal of a SmokeFree Aotearoa 2025."

None of the other trustees responded to calls and emails from RNZ to explain why the Quit Group was still holding $3m.