SFO sounds warning over mis-use of billions in public funds

Julie Read, director of the Serious Fraud Office, at the SFO office in Auckland City. Photo/File.

Serious Fraud Office chief executive Julie Read has warned that billions of dollars of public money could be being misused, according to RNZ.

Read, in an interview with RNZ, said she expected up to 5 per cent of government funding to be obtained or used fraudulently.

In the 2017 financial year, that would have been worth nearly $5 billion, from the Crown's total expenditure of $99.8b.

"That's still a very substantial amount of money. Enough to pay for the SFO a couple of times over," Read told RNZ.

Revenue Minister Stuart Nash was not immediately available to the Herald on the SFO's claim.

Read said defrauding of public funds was the fault of applicants lying and some government agencies lack of oversight.

Citing the Auckland Transport case, where former employees were convicted for accepting more than $1 million worth of bribes in 2016, Read said some organisations overlooked checks and balances when receiving or allocating funds.

The SFO had also investigated cases of individuals defrauding councils, commissions and government-funded trusts.

The SFO was working to prevent fraud by strengthening funding systems at public sector agencies and organisations, she said.

"What we're aiming to do, is not to slow down the payment of money to those who need it, but to establish systems that can help prevent money being paid when it shouldn't," she said.

Read, in the Serious Fraud Office's annual latest report, said the country had made good progress combating bribery and corruption recently but could not afford to be complacent.

Large-scale offending can still take place if we do not remain vigilant. Increased spending on public infrastructure and government procurement as well as expanding social and business links to jurisdictions with high instances of corruption amplify the risks," Read said in the annual report.

The Auckland Transport case saw two men jailed in 2017 over roading contracts.

Stephen Borlase, former head of roading contracting business Projenz, was sentenced to five and a half years in prison while Murray Noone, a former senior manager at Auckland Transport, was given a term of five years.

The case related to a pattern of payments from Projenz to Noone, totalling more than $1m over seven years, which a judge found were related to the latter's role in awarding contracts worth tens of millions of dollars to Borlase's company.

The court heard evidence of a culture of largesse in the council's roading division, as Projenz laid on long lunches for staff - including an eight-hour affair at upmarket eatery Euro that cost $5500.
-- Staff Reporter