Crown alleges funding scam at child centres

A Hamilton businesswoman is accused of "grossly inflating" figures on the number of children attending two childhood centres she owned - which earned her hundreds of thousands in government funding she was not entitled to.

Trixie Rosina Leigh is on trial in the Hamilton District Court on four charges of using a document for pecuniary advantage.

At the first day of proceedings yesterday the court heard Leigh, the owner of Trixie's Learning Centre and Trixie's Early Learning Centre - Babies, had allegedly submitted four forms to the Ministry of Education during the first half of 2012 in which she exaggerated the number of children attending the two centres and the hours they were there.

Crown prosecutor Philip Crayton said the allegedly falsified RS7 forms led to an overpayment of $247,000 from the ministry. There was also an $80,000 "bonus", also from the ministry, which was paid to Leigh because the attendance figures at the centres had been increasing.

"This amounted to $327,000 to which she and the business were not entitled . . . The fraud managed to increase funds paid to the accused by around 75 per cent."

Trixie's Learning Centre was licensed for a maximum 38 children, while Trixie's Early Learning Centre - Babies could have up to 20 youngsters on the roll.

Up until the start of 2012 the number of children attending the main childcare centre was in single figures - "massively under capacity", Crayton said.

But then, according to figures supplied to the ministry by Leigh, the attendance suddenly soared into the mid 20s.

The two centres maintained records based on parents and caregivers signing their children in and out, and a computerised role called First Base was maintained.

At the time when the alleged false figures began to be sent to the ministry, Leigh temporarily dispensed with the First Base system in favour of handwritten notes.

Crayton said staff at the two childcare centres had allegedly said Leigh had told them child numbers at the centres needed to be increased.

Leigh had also been borrowing money from New Zealand Childcare Finance, a private lending company specialising in the childcare sector.

She began with a $60,000 loan in December 2011.

"It was sought right at the start of the period for which the first fraudulent form was submitted."

Further loans were sought over the following month, including one on October 12, after a ministry audit of the businesses had taken place, requesting $327,000. During this time, both businesses had been on the market, with one being offered by Leigh to one of the facility's staff members for $300,000.

Crayton said Leigh's allegedly inflated figures had raised the sale price of the business to $427,000.

"It significantly improved the impression of the business as a viable concern."

Crayton said after notification a ministry audit was imminent, the attendance figures provided by Leigh dropped back down, "because the accused knew the game was up".

Defence lawyer Sasha Nepe opted not to give an opening address to the jury yesterday.

The trial is expected to continue until Thursday this week.

Waikato Times