Two schools wrongly claim $170k under wage subsidy scheme

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2021-12-07 15:21:43

The Auditor-General says two schools were wrongly awarded money under the wage subsidy scheme totalling more than $170,000.

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Photo: RNZ / Richard Tindiller

Ponsonby Primary School in Auckland received almost $49,207 because it was unable to hold its Taste of Ponsonby fundraising event during last year’s level 4 lockdown. Lindisfarne College in Hastings received more than $123,000.

The primary school had to pay the money back but the college is still in discussions with the Ministry of Social Development about whether it will have to as well.

In another case highlighted by the auditor general’s office, the board of Papatoetoe North School gifted several hardware items costing $4310 to the principal of the school as a leaving gift and paid for a farewell event costing $8695.

The board gave farewell gifts of $1000 each to two staff members and spent $2200 on a function for a former teacher.

Papatoetoe North School principal Stan Tiatia, who took over in July 2020, said the function was held at an events centre for over 100 past and present staff members and close associates.

“The gift and event was held for the previous principal who had been at the school for 22 years and at the time the board felt it was an appropriate acknowledgement of the long service. The other staff members mentioned had served here for 29 and 33 years.”

The school’s sensitive spending policy was reviewed in September 2020 and amended in May 2021 to allow a board of trustees’ contribution of $30 per year of service, to a maximum of $300.

A statement from Lindisfarne College rector Stuart Hakeney said they relied on advice from the Ministry of Social Development that indicated the school was eligible to apply for the wage subsidy.

He said the school had not received any request for repayment but it would comply with any request if it was made.

He said at the time the ministry advised the school it could apply for the subsidy based on the fact its revenue had decreased by more than the required 30 percent when compared to the same period in 2019.

“The claim was for those staff who are employed by the Board of Proprietors over and above our Ministry of Education funding,” he said.

However, Hakeney said this year the Office of the Auditor General notified the school that it had not accepted this rationale.

He said the school was continuing to help the Ministry of Social Development’s review of the application and it would repay the subsidy if it the review determined the school did not meet the criteria.

The Auditor-General’s report on the results of 2020 school audits said state sector organisations are not generally permitted to apply for the wage subsidy and ‘sensitive expenditure’ should have a justifiable business purpose.

“Schools (as state sector organisations) were generally not permitted to claim the wage subsidy unless they had an exception from their monitoring agency (which is the Ministry for schools). The Ministry did not provide exceptions, instead it provided schools with additional funding and support throughout 2020 in response to Covid-19.”

Spending on farewell gifts and retirement functions should be moderate and conservative, and appropriate to the occasion, it said.

The report highlighted the funding shortfall schools faced because of lockdowns, less fundraising and their extra spending on laptops and modems.

That included transition funding for schools with international students and ‘urgent response funding’ to support students’ attendance and re-engagement.

“Schools received a total of $57.1 million of Covid-19 support payments in 2020,” it said. “This included $20m of international education support funding noted above. Schools also recorded revenue of $19m for devices for students in their financial statements. The devices are assets of the relevant school that the student attended.

“About 37,000 devices (laptops, iPads, and Chromebooks) were distributed during the year.

“The urgent response funding was allocated to schools using the Equity Index to ensure an equitable funding approach. It was also allocated to early learning services. About $26m was distributed to schools and kura between August and December 2020.

“Total locally raised funds for 2020 was $390m, compared to $520m in 2019. Schools also received about $117m of revenue from international students in 2020. This is a decrease of 26 percent on 2019 ($157m).”

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