Financial issues cause problems for two social service providers

updated By Maiki Sherman

Social Development Minister Anne Tolley was under pressure to answer questions today regarding two providers whose financial problems have seen them hit rock bottom.

Yesterday, Te Kāea revealed that Raukura Waikato Social Service provider's approval had been suspended by the Ministry of Social Development.

Meanwhile, Relationships Aotearoa today announced it is being forced into closure.

Contracts worth just over $2 million were given to Raukura Waikato by various government departments last year including just over $1 million from the Ministry of Social Development.

However, its financial situation is so bad they've had their approval as a provider suspended. 

Anne Tolley says, “I know they've been suspended because of a number of issues, so they're working through how they might address those issues.  But in the meantime, of course, care and protection is absolutely critical and so they are no longer qualified.”  

Last year, their budget was in deficit by about half a million dollars.  Tomorrow, the board will meet to discuss a way forward.

The MP for Hauraki-Waikato says it's a disappointing situation for her electorate.

“One of the government departments will review the management of the service, which could help address any management issues at the service,” says Nanaia Mahuta.

In terms of Relationships Aotearoa, it's game over.  They're in deficit of $1.5 million and the government says the situation's dragged on long enough. 

However, New Zealand First says a cut by the government to its budget in 2012 by $4 million is to blame.

Relationships Aotearoa says it will close its doors next week.

Although Raukura Waikato's suspension is only for two months, they are definitely vulnerable at the moment.