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Inquiry into the Christchurch Polytechnic Institute of Technology's Management of Conflicts of Interest Concerning Brylton Software Limited

21 June 2004

Terms of Reference

The Auditor-General has decided to conduct an audit and inquiry into Christchurch Polytechnic Institute of Technology’s (CPIT) management of any potential or actual conflicts of interest as they relate to CPIT’s joint venture arrangements with a private company, Brylton Software Limited. The audit and inquiry will be conducted under sections 16(1) and 18 of the Public Audit Act 2001.

The Auditor-General has made this decision after receiving and considering both a formal complaint, and a request by the CPIT to inquire into these matters.

In October 2003, the CPIT entered into a joint venture arrangement with Brylton Software Limited for the design and delivery of a cluster of free short courses on computing skills.

These courses - Computing Offered On Line, have become known collectively as the COOL IT courses. These courses were delivered by CPIT in the 2003 and 2004 academic years. CPIT ceased the promotion of the courses on 31 December 2003 and is completing the delivery of the courses in 2004. In that time, the courses drew $15.3 million of public funding.

Some concerns have been raised that CPIT representatives have had either potential or actual conflicts of interest by virtue of their relationships with CPIT and/or Brylton Software Limited. The audit and inquiry will:

  1. Examine the CPIT’s policies and procedures for identifying and managing conflicts of interest including but not limited to whether these were adequate to both identify and then manage situations involving CPIT representatives’ private business interests.
  2. Examine, in the context of the concerns raised about conflicts of interest emerging from the joint venture arrangement between CPIT and Brylton Software Limited:
    • whether there were any potential or actual conflicts of interest, leading up to and at the time of CPIT’s decision to enter into the COOL IT arrangement with Brylton Software Limited and, during the establishment phase and operation of the joint venture arrangement between Brylton Software Limited and CPIT;
    • whether the CPIT’s policies and procedures were adequately followed;
    • whether CPIT and any of its representatives acted properly; and
    • whether any CPIT representatives continue to have any actual or potential conflicts of interest in the context of the joint venture arrangements with Brylton Software Limited.
  3. Identify whether any improvements should be made to CPIT’s policies and procedures as they relate to conflicts of interest, with the objective of addressing any concerns identified as a consequence of the findings in 1 and 2 above.
  4. Examine any other issues that the Auditor-General considers relate to or arise out of the above matters.

The Auditor-General will report under sections 20 and 21 of the Public Audit Act on the above terms of reference and such other matters arising from the inquiry as he considers it desirable to report on.

The Auditor-General will report the findings of this inquiry to the House of Representatives.

Kevin Brady
Auditor-General
21 June 2004

For any enquiries, please contact:
Pania Gray, Sector Manager
tel: (04) 917-1596
email: Pania.Gray@oag.govt.nz

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