Grant for bankrupt and 'lost' paper trail a sorry tale

Ruth Dyson needs to explain why her ministry gave close to $50,000 to an undischarged bankrupt who was later jailed for fraud relating to false grant applications, and why MSD has lost significant files relating to the case, says National's Welfare spokeswoman, Judith Collins.

Ms Collins is referring to the case of Graham Carden, who was given $36,000 to train 12 beneficiaries in karaoke, and $12,714 in wage subsidies in respect of two beneficiaries.

"Carden had already been declared bankrupt two years before, and had subsequently pleaded guilty to two charges of trading while insolvent. He went on to be jailed for fraud relating to false grant applications.

"Surely, if MSD was doing its job properly, alarm bells would have rung and Carden would not have benefited from taxpayer money for what turned out to be a dodgy course.

"Minister Dyson needs to explain why her staff are not required to check bankruptcy notices before they award wage or training subsidies. When I asked her in Parliament today why Work and Income would award wage subsidies to an undischarged bankrupt she didn't even try to offer an explanation.

"This raises serious questions about MSD's system for awarding contracts. The Government has spent more than $300 million on Job Plus subsidies since 1999. The taxpayer has a right to expect these schemes are properly monitored.

"Equally concerning is the disappearance of the paper trail in relation to this contract. The CEO of MSD, Peter Hughes, has informed me that every single client record in relation to this contract can now not be found.

"This sorry tale about inappropriate use of taxpayer money and slack record-keeping should never have been allowed to occur. Ruth Dyson needs to get her house in order."