New Zealand's most popular higher education institution is riddled with practices that are unacceptable in a public organisation, a report by the Auditor-General says.
Bad record-keeping, poor processes for spending, inadequate management of conflicts of interest and unacceptable use of credit cards and travel were uncovered at Te Wananga o Aotearoa.
But allegations in Parliament this year of tax-funded scams, nepotism and extravagance are not confirmed in the report.
Rongo Wetere, the chief executive, is on extended leave and resisting pressure from his council and the Government to resign. Dr Wetere admitted making mistakes but said the Crown now controlled the wananga and if records could not be found it was not his fault.
Te Wananga o Aotearoa was set up to counter Maori unemployment and educational failure. It offers courses in a "Maori-based environment", both in Maori language and culture and a range of vocational subjects. The wananga enrolled fewer than 1,000 students a year until 2000, when it began Mahi Ora, a free 12-month distance-learning course. The course involves personal development, technology and encouragement towards further education and employment. Variations were developed for non-Maori students and new immigrants, and the concept has been sold to Australia.
Mahi Ora, developed by Dr Wetere's daughter, Susan Cullen, propelled the institution's roll to 56,000 this year.
The Auditor-General says that the business case for the course was poorly documented and that Dr Wetere was too closely involved in purchasing the programme from his daughter.
An adult literacy programme called Greenlight will cost NZ$6 million (£2.4 million) in-stead of the expected NZ$2 million. Greenlight was developed by the wananga in collaboration with Cuba's Education Ministry, and the report says two NZ$7,000 donations to Cuban agencies to buy computer equipment were unacceptable practice.
Rapid growth contributed to many problems, the report says, but these were made worse by not heeding advice from government agencies. The wananga 's governing council also failed to ensure that governance and organisation met public sector expectations.
Kevin Brady, the Auditor-General, is careful to avoid any criticism of educational quality at the wananga . He says staff are passionate and committed.
His report describes Dr Wetere as an inspirational and visionary leader, but it adds that leadership without prudent management is fraught with risk. It says Dr Wetere failed to understand the need for robust policies and procedures, failed to lead by example and often did not comply with the few procedures that were in place.