$500k blowout due to 'oversight' | Hawkes Bay News | Local News in Hawkes Bay

Management oversight and lack of detailed financial reporting led to Venture Hawke's Bay's (VHB) unexpected deficit, Regional Council CEO Andrew Newman said.

The regional tourism organisation reported a $495,000 deficit to Hawke's Bay Regional councillors last month.

VHB reserves could cover $250,000 of the deficit and the council was asked to use $250,000 from cash reserves to cover the rest of the deficit. Councillors asked for details about the organisation's budget and spending before making any decision. Hawke's Bay regional councillors will decide today how to cover the extra deficit.

Reports at today's Strategic Planning and Finance Committee meeting showed that Venture Hawke's Bay over-estimated revenues by more than $300,000.

The organisation spent more than $100,000 over budget on projects including attracting cruise ships to the region, producing a visitor guide and attending trade shows.

Venture Hawke's Bay is going through a period of change and restructuring after a difficult year that ended with general manager Janet Takarangi stepping down and the regional council deciding to move the organisation into the council's Dalton St offices.

Mr Newman said if the council had been aware of the situation earlier it was likely that they could have dealt with it by reducing the organisation's cost structure.

"Once we were aware of the problem, that's what we have done, and we have done it quite quickly," he said.

The council and Venture Hawke's Bay intended to be pro-active to figure out the best scenario for the future, he said.

"It is still a work in progress, but this is where the conversation needs to be going," Mr Newman said. "What is the road forward?"