New Zealand school finance administrator stole $375,000 over seven years by creating, approving and paying 77 fake invoices from a building project’s funds

A school finance administrator in New Zealand stole $375,000 from the school over seven years by creating and paying false invoices from a building project’s funds. The employee used money allocated for the project to make payments to himself, disguising the documents as invoices from companies that had previously worked for the school. The fraud came to light while the employee was on leave, after an external contractor noticed that project invoices and payments did not match. According to the Serious Fraud Office (SFO), the employee had worked at the school for 20 years before it was uncovered. The employee created, approved, and paid 77 false invoices. None of the services listed had been provided to the school.How the employee used 77 fake invoices to steal school fundsThe employee worked as an internal finance administrator and was responsible for the school’s day-to-day finances. Over seven years, he used funds set aside for a large building project to pay himself through 77 false invoices. The documents were fabricated to make them appear as though they had been issued by companies that had previously carried out work for the school.The employee created, approved and paid the invoices. None of the services recorded in them had been provided to the school. The employee rationalised the conduct by saying he had been underpaid for services provided during his 20 years of employment at the school.An external contractor raised concerns while the employee was on leaveThe fraud was detected while the finance administrator was on leave. An external contractor became suspicious after noticing that invoices and payments connected with the building project did not match. The contractor raised the concerns with the school’s Principal. The school then carried out an internal investigation and uncovered the fraud. It followed due process by reporting the matter to the Ministry of Education, which referred the case to the Serious Fraud Office. The employee was subsequently sent to prison for two years and three months.Seven-year theft left school struggling to fund student resourcesThe SFO recorded a detected financial loss of $375,000 over the seven years. More than 100 hours of employee and volunteer time were also spent on the investigation, involving school staff and members of the Board of Trustees.The school reported that 3,000 students had passed through during the period in which the fraud took place. It said those students were deprived of access to additional resources, including teacher aides, new textbooks, school tablets, sports uniforms and programmes supporting students at risk.The Office of the Auditor General reported that the school was among the top 25 financially struggling schools nationwide and faced serious financial difficulties expected to continue for many years.New framework aims to prevent further misuse of school fundsAfter the fraud was uncovered, the school strengthened its internal processes and controls. It engaged a specialist adviser to develop a new control framework for its financial processes. The case highlighted the importance of separating duties so that one person was not responsible for several parts of a transaction.The case study also identified several warning signs in the employee’s working practices. These included rarely taking leave, not sharing responsibilities, and refusing to delegate tasks to colleagues.You use AI every day. Now get your AI Quotient. Take the AIQ test.