Court documents show Paterson, who controlled millions of dollars in an annual budget, approved invoices for security work to a company called B & V Enterprises Ltd.
The money was being paid to Vasu Munsamy, who worked at the ADHB in a contract role as a guard for First Security.
The offending took place between October 1, 2009 and June 1, 2012, the court heard.
Paterson was caught when the ADHB was conducting an internal audit and found irregularities which showed the ADHB was being invoiced by B & V Enterprises.
He was found not guilty of the offending relating to that company, but Munsamy was found guilty.
During the investigation it was also uncovered that during Paterson's employment at ADHB he became good friends with Munsamy.
While in his senior position he was able to approve expenditure to a certain level without having to go further up the command chain, the court heard.
It was with this power that Paterson cleared unauthorised overtime invoices from Munsamy.
Munsamy was not entitled to receive overtime because he was paid a salary, while another security guard was also paid overtime as Paterson regularly signed off the time sheets.
Invoices by First Security for numerous overtime hours showed $52,734 in extra money for Munsamy.
The theft charge related to Paterson selling old hospital beds for $760, while he also stole $1857 of ADHB funds to pay for his daughter's 18th birthday party.
He employed security guards and a linen provider to work at the party.
When questioned, Paterson said he was responsible for the birthday money and it should be repaid to the ADHB. However, the court heard it was yet to be repaid.
On July 1, 2012 Paterson was suspended before losing his job on March 8, 2013 when police began investigating.
After leaving the ADHB, Paterson worked briefly for Auckland Transport before his arrest saw him lose that job.
Judge Sharp said Paterson's offending was significant because he was abusing ADHB funds which "ultimately should have been used to provide health care services to the public".
She agreed with Paterson's lawyer Annabel Maxwell-Scott that he did not ever intend to benefit from his fraud, but was helping others profit.
However, Judge Sharp described Paterson as "quite cocksure and arrogant".
"He had become reckless as to his need to be diligent and extremely cautious when expending public money," she said.
"Like many fraudsters he had become overconfident about his position and his ability and entitlement to use this position."
The judge said it was important to send a message that the misappropriation of public money will not be tolerated.
She sentenced him to four months' community detention and 200 hours' community work.
Paterson was also ordered to pay back the birthday money, but further reparation was not ordered because Paterson couldn't afford it.
Maxwell-Scott said her client had been out of work and had very little realistic chance of ever getting another job.
She said the offending was "rather unusual" and that Paterson was effectively giving his colleague a "leg-up" and not profiting from his offending.
She described it as a "dramatic fall from grace", with media coverage of his offending squashing any chances of him gaining "a decent job in the future".
Munsamy, the sole director and shareholder of B & V Enterprises, will be sentenced at a later date.
