He indecently exposed himself and performed an indecent act. Some of the children asked him why he was acting the way he was and Pauley told the children that most people did what he was doing.
Pauley continued to talk to the children because he was "lonely and was enjoying their company'', the summary stated.
He told police he had become stressed with ongoing issues in his life relating to debt and other problems. He said he accepted he needed medical help and that previous prison sentences had never helped him address his behaviour.
The court had heard that Pauley had 34 previous convictions for doing an indecent act in a public place.
All of his offending was done during daylight hours.
The court also heard Pauley was previously handed a jail term for this offending and was released from prison in December.
Rotorua grandmother Daisy Rifle told The Daily Post earlier in the week she was shocked when Pauley indecently
exposed himself to several children, including her granddaughter.
"My granddaughter was there when it happened, she saw one of her koro nearby so ran over to him to tell him
what was going on,'' she said.
"Luckily he was nearby and she knew he could help her. So her koro went over and held the man down until police arrived.''
Ms Rifle said several Fordlands residents had heard about the weekend's incident and were concerned.
"The whole community is concerned that this happened. Luckily the children don't appear to be too badly affected by what has happened.''
The fraud charge related to Pauley altering his vehicle road user label and warrant of fitness. He told police he made the alterations as he could not afford to pay to keep his vehicle current.
Judge Graham Hubble remanded Pauley in custody for sentencing on May 14.
