AUT tightens security

By Edward Gay, Jared Savage

Jonathan Kirkpatrick says he will plead guilty at his next court hearing. Photo / Steven McNicholl
Jonathan Kirkpatrick says he will plead guilty at his next court hearing. Photo / Steven McNicholl

AUT has rushed through tighter rules around paying consultants after a senior executive was arrested over an alleged $666,000 fraud spanning nine years.

But the new protocols have been described as a "bare minimum" by a leading fraud expert who was surprised the security checks were not already in place.

Jonathan Richard Kirkpatrick, 53, appeared in Auckland District Court yesterday to face seven criminal charges.

The former chief executive of the AUT Business Innovation Centre is alleged to have stolen $665,985.25 by sending 82 invoices to the university from companies in which he was a director and shareholder.

Court documents show the alleged fraud started in 2002 - the year Kirkpatrick started at AUT. The charge sheets also allege the Anglican minister entered false information into the AUT accounting system.

In court yesterday, his lawyer Russell Fairbrother said he anticipated Kirkpatrick would enter pleas to the charges at his next appearance on August 18.

Kirkpatrick was released on bail but had to surrender his passport and was barred from entering AUT property.

Outside court, Kirkpatrick said he hoped the case would not drag on.

"What can I say? I'm intrigued as much as I'm scared of the whole thing."

He said he intended to plead guilty at his next appearance.

Kirkpatrick's arrest came a week after the Herald revealed police were investigating him and he resigned after "accounting discrepancies" were discovered.

AUT moved quickly to file legal action against Kirkpatrick in the High Court at Auckland to freeze his assets.

An AUT spokeswoman declined to comment yesterday as the case was before the courts.

But the Herald has obtained an email from AUT general manager finance Judith McKay to staff which says the "vice-chancellor has requested that we strengthen our controls around employment and remuneration of consultants in the university".

Dated August 1, the email says all invoices must be coded to a specific account and be countersigned by a senior manager in that department. Any invoices that were not countersigned would not be paid. The email says invoices should clearly identify the service delivered and mention any contract or agreement made.

A list of all consultant payments will be provided monthly to senior management.

Gib Beattie, a former assistant director of the Serious Fraud Office who now has a private forensic investigation firm, said the new AUT protocols should be "stock in trade" to prevent fraud and an "absolute no-brainer".

"Quite frankly, these are the sort of rules that you should see in a large organisation anyway. It is so easy for people employed by an organisation to covertly set themselves up as consultants and contract to the organisation using companies as a shield.

AUT vice-chancellor Derek McCormack sent an email to reassure the university's 26,000 students on Saturday. "The discrepancies relate to money in the research and development field, and is not derived from student fees.

"Nevertheless, AUT is largely a student and taxpayer-funded organisation and remains accountable to the highest accounting standards."

THE CHARGES

* With intent to obtain a pecuniary advantage used 32 invoices totalling: $288,542.50

* With intent to obtain a pecuniary advantage used 36 invoices totalling: $256,196

* With intent to defraud used nine invoices totalling: $74,840.50

* With intent to obtain a pecuniary advantage used four invoices totalling: $38,250

* With intent to defraud used an $8156.25 invoice

* With intent to obtain a pecuniary advantage, made false entries in the AUT accounting system

* While a servant of AUT, made false accounting records for his own benefit

TOTAL: $665,985.25

- NZ Herald

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on production bpcf04 at 26 Oct 2014 09:51:21 Processing Time: 424ms