Police inquiry into missing student funds

BY ANDREA VANCE

A police investigation has begun after more than $750,000 was drained from Whitireia Polytechnic students' association funds over a year.

An audit report shows huge cash payments were made to former association executive members, including almost $12,000 to former president Loretta Ryder. Ms Ryder – the sister of former Black Power spokesman Eugene Ryder – also claimed expenses of $3000 in one month. Almost $700 was spent on an iPod and dock.

The funds also paid for $18,200 of accommodation for Ms Ryder, her family and vice-president Tai Te Karu. It is understood they are cousins and live together.

A large amount of money is also unaccounted for.

About $17,000 was spent through excessive use of mobile broadband modems to surf the internet, the report said. Mobile phone bills of five members of the executive averaged $700 a month.

Ms Ryder, of Kenepuru, was stood down two weeks ago. Mr Te Karu left in April.

An extraordinary executive meeting was called at the polytechnic yesterday so the auditor could detail his findings.

Angry students – who learned their funds had dwindled to just $6000 – demanded the executive step down during the tense meeting. After heated discussions, one committee member broke down in tears as she told students to "have faith" in the new executive, which, except for one member, was elected after the misappropriation took place.

Fulltime students must have $135 deducted automatically from their student loans to pay subs for the Whitireia Independent Students Association. There are about 6000 students at the polytech, half of whom are fulltime.

Acting president Tim Manu, also a Porirua city councillor, said the members would stay on to "clean up the mess". Mr Manu called in police earlier this year.

Imran Kamal, of Accountants First, told the meeting: "This is one of the most difficult audits I have been involved with ... I don't think the association is solvent.

"The other issues are a number of assets have gone missing. It's a big mess."

He warned that tax and GST returns had not been filed. A $25,000 phone bill is also outstanding. He said Mr Te Karu had confessed to misappropriating money.

He pointed to cash payments made to Ms Ryder, which total $11,972. Almost $8000 of this was for "key performance indicators". She was also paid a $45,000 salary and a $10,000 bonus for the year. But he noted an employment contract was not provided, although Ms Ryder said she had one.

Students told the meeting they had been assured none of the executive was paid a salary.

The report said money had been paid out in "student hardship grants". Mr Kamal notes: "These payments are an abuse of management responsibilities ... I have not been able to voucher these payments to check validity and recipients."

In June last year, $20,000 was taken out of the association's savings account in cash and a further $10,000 by cheque. The auditor could find no explanation for the withdrawal.

Mr Manu said he was "in shock" after reading the report. "I never anticipated it was this bad." The association was now working to put better checks in place.

Whitireia Community Polytechnic deputy chief executive Lawrence Arps attended the meeting and said he would take the report to chief executive Don Campbell. The polytechnic required an annual audit before giving funds to the association. Mr Campbell could not be contacted yesterday.

Leutele Grey, an information technology student, said she was devastated by the report. Ibrahim Raouf-Morton, 42, a class rep for IT students, welcomed the police investigation.

Detective Terry Laws said a complaint had been received from the students' association executive committee. Police were beginning an investigation.

A spokeswoman for Tertiary Education Minister Steven Joyce said it was inappropriate for him to comment at length while a police inquiry was under way.

"There are already laws in place to protect students' contributions to students' associations ... the police investigation will no doubt be seeking to determine whether or not these laws have been broken."

Ms Ryder and Mr Te Karu could not be contacted yesterday.

WHERE THE MONEY WENT

Loretta Ryder's salary: $45,000 plus $10,000 bonus

A cash payment made to Ms Ryder in January 2010 of $11,972

Spending on T-sticks between June and December 2009: $17,868.24 (one member spent $5521)

Expenses: $12,385.94. Includes: $2764 paid to Ms Ryder in June 2009. The auditor notes there are no receipts or invoices. $2700 to Tai Te Karu for June 2009 ($860 was for lunch/dinner and $1840 with no breakdown)

$18,2000 to Kenepuru International for accommodation for Ms Ryder and her family and Mr Te Karu. The auditor notes the tax invoice is "not a valid tax invoice"

$667.95 for an iPod and dock

$4000 cash payment to Dick Smith in June 2009

$3431 cash payment to City Central in July 2009

- © Fairfax NZ News