New Zealand's Ministry of Foreign Affairs says Niue is no longer using misusing donor funds to improve government cashflows.
A financial report to the Niue government indicated that up to 650,000 US dollars was used incorrectly.
The head of Foreign Affairs' special relationship unit, David Payton, says in recent years there has been a great deal more clarity and accountability:
But a former member of Niue's Assembly, Hima Takelesi, says Cabinet members need to be more answerable for their spending, especially in areas such as travel:
"Cabinet is not responsible to parliament. Now that makes it very difficult for parliament to do the work it is supposed to do. When there is no accountability, you can have an open government as much as you like, you can be very open about the decision that you make, but if no one is called to account for it the whole system of discipline, if you like, breaks down."
A former member of Niue's Assembly, Hima Takelesi