10 Mar 2020

Ministry's options limited in recovering Quit Group money

5:32 pm on 10 March 2020

Spend the money on smokefree services or give the money back and shut down.

A hand push the cigarette stub on white background, Symbolic stop / quit smoking concept, Free space for text

File photo Photo: 123RF

That's the blunt message from Prime Minister Jacinda Ardern to the board members of the Quit Group Trust, who have been paying themselves tens of thousands of dollars a year from a charity that ceased to exist five years ago.

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Jacinda Ardern. Photo: RNZ / Patrice Allen

"I see this as quite a simple matter that although this charity is no longer contracted to the Ministry of Health, they still have a social obligation.

"That money is meant to help people quit so either spend it on that or give it back,'' she said.

The Ministry of Health has no power to recoup the money given the charity is no longer operating, but Ardern said that was beside the point.

"For me that is neither here nor there. They have a social obligation that was to help people quit smoking - if they're not going to spend it on that - then give the money back and shut down,'' she said.

National's spokesperson for charities, Alfred Ngaro, said what the Quit Group Trust had been doing was unacceptable.

"What Quit Group was about was actually fulfilling a vision that was set out by (Dame) Tariana Turia and many others, that said by 2025 we should be smokefree.

"So Quit Group had a responsibility and a role in which they would play in engaging in a number of different programmes,'' he said.

"Now if they haven't fulfilled that, then that's wrong."

He said the ministry and its minister simply saying it was "trying'' to recoup the money was not good enough.

Ngaro said Ardern had taken a strong position and Salesa needed to follow through on it and recover the funds.

No power to get funds back

The Ministry of Health has no power to get back the more than $400,000 in funding that the Quit Group is holding onto despite not operating since 2015.

The Quit Group - the charity commissioned to run Quitline - created a trust under the same name, which has been hoarding more than $3 million in reserves.

It was never given a deadline to reinvest the money by the ministry, which audited it in 2017.

RNZ revealed yesterday the trust has been paying its four board members $18,000 each a year, despite the charity ceasing to exist.

Associate Health Minister Jenny Salesa said the ministry was putting pressure on the trust but because the ministry no longer had a contract with the charity, it was limited in what it can do.

"In a legal sense it's really hard to enforce this contractually,'' she said.

"The Ministry of Health is basically trying to get the trust to do the right thing.

"That funding actually was supposed to go to help people quit smoking - that's what the money should be invested in."

In the next few weeks, Salesa said she expected the more than $400,000 to be reinvested in smokefree services.

According to the Quit Group's latest financial statements the board still has assets totalling $2,726,737, down from $3,164,394 in 2016.

While no staff work for the trust, it continues to gain investment income and has paid out $702,296 since 2016.

The Quit Group's four board members are Chris Cunningham, Janet Pearson, Mary McCulloch and Annette Milligan.

Cunningham recently stood down as chair of the Hepatitis Foundation after RNZ revealed he had spent $128,000 on overseas travel on top of lavish dinners at expensive Auckland restaurants.

Salesa would not comment on whether Cunningham was fit for the job, because board appointments are not ministerial.

She said the board's members will come under scrutiny though.

"Absolutely it's unacceptable that this should happen. In terms of who should be on boards and who should be on NGO boards like this, this is no doubt something we would look at.''

Salesa is also seeking advice on whether the $2.7m the trust still has in reserves can be recouped but suggested RNZ direct its questions to the trust.

Cunningham has refused to answer RNZ's questions.

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