Report spurs principal to quit

An embattled Hamilton principal being investigated for the alleged misuse of hundreds of thousands of taxpayer dollars has resigned after a damning accountants' report was made public.

Martin Elliott of Hamilton's Fraser High School has been on paid leave since May when he stepped aside to allow police investigations.

The justice of the peace and former mayoral contender has always vehemently denied accusations that school funds were used to do up his Hamilton home and a Bay of Plenty property in 2005 and 2006, blaming former staffers with "axes to grind".

In May, Mr Elliott told the Herald one complainant left the school under "very hostile" conditions and the other was fired for unknown reasons.

"This is just a personal vendetta against me by two guys who have both been interviewed by the investigative panel," he said.

But yesterday, Mr Elliott resigned as principal, after an investigation by accountancy firm Pricewaterhouse Coopers (PWC) featured in the Waikato Times at the weekend.

The report claimed Mr Elliott illegally accepted extra salary, falsified invoices after using school money on personal properties and allowed large payments for companies with school-employed stakeholders to do work around Fraser High.

The PWC report also suggested the school was $420,000 in debt to its creche, Little Feet, after Ministry of Education funding was redirected from there.

It said Mr Elliott appeared to have used taxpayer money to pay for staff lunches, buy groceries, give unauthorised staff salary advances, write off an ex-employee's private loan and waive fees for children of school trustees.

PWC also suggested payments for $2416 in "gifts" to Mr Elliott's wife Viv and $2400 to his son for work "may warrant further investigation".

Both Mr Elliott and his lawyer Mark Hammond could not be reached for comment last night.

But Mr Hammond told the Waikato Times his client had "made a full response [to the report] and a very strong denial of anything inappropriate".

PWC said Mr Elliott refused to be interviewed by its auditors.

While conducting inquiries, the firm used a private investigator's report from March, reviewed Mr Elliott's discretionary accounts to check personal spending, analysed payroll accounts, forensically imaged the principal's and other computers and interviewed staff, board members and contractors.

The 49-page report also questioned more than $70,000 spent on Mr Elliott's school credit cards.

The PWC report outlined a number of other perceived cases of suspicious behaviour and recommended police be formally notified of potential criminal breaches.