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Housing New Zealand is restructuring its investigations unit after the unit failed to take action for nine months against a top boxer who allegedly sublet his Mangere state house at a profit.
The corporation has recruited Wellington accountant Lisa Topping to oversee the Manukau-based unit and other audit
activities, and is expected to boost the unit's staff from the present seven.
A review, initiated after former boxer Sean Sullivan was alleged to be subletting his Mangere state house while owning a holiday home in Russell, has found that the unit was struggling to cope with a seven-fold leap in fraud investigations from 101 in 2002 to 723 in the latest financial year.
Alleged subletting cases, which have averaged 76 a year in recent years, jumped to 65 in the month of July this year alone - the month after the Sullivan case became known.
Documents obtained by National MP Phil Heatley under the Official Information Act showed that Sullivan paid rent of $133 a week to Housing NZ and sub-let the Mangere house to a couple at $210 a week.
The case came to light when the couple applied for a state house themselves - and were told that they were living in one.
Housing Minister Chris Carter said a Housing NZ report found that the investigations unit struggled with "blockages", both at initial referral, when too many cases piled up on its waiting list, and at the end of the process, where cases such as Sullivan's waited for months before being handed over to prosecutors.
There were 1164 cases on the unit's books on September 1, many still waiting for an initial assessment.
Housing NZ said yesterday that 795 of these had now been wiped from the books by referral back to other parts of the corporation or being "safely closed".
It said 87 per cent of cases referred to the unit last year did not lead to findings that tenants owed money to the corporation, had committed fraud or should be prosecuted. Most cases related to claims that tenants falsified their income or did not declare that they had partners.
Unlike Inland Revenue and Work and Income, Housing NZ does not have access to tenants' bank accounts and cannot legally swap information with other Government departments.
Corporation deputy chairwoman Lope Ginnen said the investigation unit was contracted out to a private company from 2001 to 2003, but neither that company nor the present in-house unit used private investigators.
"We are not spying on our tenants," she said.
HOUSING NZ FRAUD INVESTIGATIONS
2001-02 - 101
2006-07 - 723