Unexplained Withdrawal by Former Student Association Prexy Under Fire
About $1 million had been drawn off from the bank accounts of a student association in Porirua, New Zealand when its then president relinquished the post, initial investigation by police authorities showed.
Members of the Whitireia Independent Students Association claimed that unexplained withdrawals from the union’s bank accounts took place for 18 months, which Deloitte will look into for possible traces of fraud.
Deloitte, whose audit on March triggered an investigation into the finances of Father Joseph LeCLair from Ottawa, Canada following issues raised over his gambling activities, vowed to release its final report soon.
Porirua police has set about an inquiry into allegations of fraud within the student association as the bank account of former president Loretta Ryder bloated in the wake of her resignation.
The almost $1 million withdrawal will be the focus of a forensic audit to be carried out by Deloitte accountants on top of the $200,000 unpaid tax.
Mahia Fuimaono, the current president of the student association, said the new set of officials won’t rush the investigation, confirming that the forensic audit is underway.
The student association is understood to be a charity, but it does not exempt the body to make pay-as-you-earn (PAYE) contributions and file tax returns to the Inland Revenue Department. The body can also be held accountable for GST on income.
In 2009, the student association failed to file tax and GST returns according to a previous audit conducted by Imran Kamal last year. Kamal warned that the failure may lead to heavy fines and court actions.
August this year, Kamal delivered his report showing that Ryder, who resigned two weeks earlier, was paid $45,000 in salary and $10,000 in bonuses for the fiscal year 2010 without proof of employment contract.
Kamal went on to reveal that an additional $8000 was paid to Ryder for “key performance indicators” included in the total amount of $11,972.
The 2010 audit revealed that only $6000 has been left in the bank account of the student association.
In addition to Ryder, former executive members of the student association were also shown to have received large sums of payments, $12,000 of which went to Ryder. In just one month, she spent about $3000, from which $700 was used for iPod and dock.
Other expenses included $18,200 for the accommodation of Ms Ryder, her family and vice-president Tai Te Karu; $17,000 for mobile broadband modems; and $700 a month for mobile phone bills of five executive members.
Huge amounts of money went unaccounted on top of the unexplained payments, the damning report claimed.
The unexplained withdrawals in June 2010 included $20,000 in cash and $10,000 in check, all taken from the savings account of the student association.