ARC exec has to pay back $41k

The 35-year-old woman. Photo / Supplied

A senior Auckland Regional Council executive who used ratepayer cash to take his lover to Las Vegas has been ordered to pay more than $41,000 in repayments and penalties.

The Employment Relations Authority found Katuni Tilialo hired his lover as a contractor, paid her for work she didn't do, then spent the money on an overseas holiday.

The 35-year-old woman involved has been employed at Manukau City Council since the incident, but she is now also under investigation.

The ERA's determination said Tilialo had authority to approve spending of up to $50,000 as programme manager for the ARC's regulatory services department.

In 2007 he hired the woman for contract work without disclosing that he was having an extramarital affair with her.

He then authorised payment of $9000 for two invoices for work on a report, later found to be largely lifted from overseas websites. The money was paid to a charitable trust, then transferred to the woman's credit card and used to pay for travel expenses to Los Angeles, New York and Las Vegas.

An investigation was sparked when the woman boasted to colleagues that her holiday in New York with her boyfriend was paid for by the ARC.

Tilialo resigned in March last year, but was dismissed for serious misconduct in April, after the false invoices came to light.

The ERA accepted the council's claim that Tilialo had abused his delegated authority, breached his duty to serve his employer in good faith and fidelity, and his obligation of trust and confidence.

He was ordered to repay $9000 for the false invoices, as well as $32,800 in costs, fees and penalties.

ARC chief executive Peter Winder said the result was pleasing, particularly as police had opted not to prosecute Tilialo.

"We have zero tolerance for fraud so we pursued every avenue that was available to us.

"We felt we had a profound duty to ratepayers to recover the money."

Winder said a claim against the woman involved was withdrawn, because some money was repaid and a confidential settlement reached.

A thorough review of all Tilialo's authorised payments raised no other concerns, he said.

A Manukau City Council spokeswoman confirmed the woman was still an employee.

She said the council was alerted by the ARC in 2007, but an investigation was put on hold pending the ERA decision.

"We are now conducting our own internal inquiry and deciding what course of action to take."

Tilialo could not be reached for comment, and his lawyer, Gretchen Stone, said she had no instructions to comment on his behalf.

- HERALD ON SUNDAY