Schools paid too much in perks: report

A report into schools' spending found 11% made extra unapproved extra staff allowance payments. Photo / Greg Bowker

Schools are to face greater scrutiny over staff perks and allowances after reports showed 11 per cent of secondary schools made unapproved extra payments.

A 2004 investigation by the Office of the Auditor General highlighted concerns over the payments.

Further checks were made in 2007 and again this year.

The Ministry of Education has since introduced a twice yearly check on all payments made outside the central payroll system.

Huntly school Te Wharekura o Rakaumangamanga was singled out in the first audit after nearly $400,000 in undeclared benefits were made to its principal - including a $270,000 interest-free loan to buy a house.

When the ministry concluded that the loan was illegal, the board bought the house for $238,000 and wrote off the remaining $32,000.

The principal later bought the house at a discounted rate.

"The total unlawful remuneration received by the principal amounted to $269,000. The total cost to the board, including tax and possibly penalties and interest on unpaid tax, could be nearly $400,000," the report said.

There was no chance of the money being recovered.

"We consider that this case adds further weight to the need for the ministry to strengthen the arrangements for reducing the incidence to unlawful payments."

The new checks on outside payments will form the basis of a report addressing unlawful expenditure.

- NZPA