Kidicorp funding probe

Kidicorp owner Wayne Wright says the company, which has 100 centres across the country, has nothing to hide. Photo / Doug Sherring

The nation's largest early childcare provider is being investigated for the way it claims more than $30 million of taxpayer money.

The Ministry of Education has been investigating privately owned Kidicorp after receiving information from the Serious Fraud Office. The ministry has yet to find evidence of "fraudulent claims" but plans to continue investigating.

Kidicorp receives more than $30m in taxpayer money to look after 9000 children in 100 centres across the country. Owner Wayne Wright said he had no knowledge of the investigation until approached by the Herald on Sunday. He denied any wrongdoing.

"Why doesn't someone talk to us? We're ready to talk to anybody when they want to talk to us. We've got nothing to hide."

The inquiry began in July after Serious Fraud Office staff visited the ministry's Wellington head office.

Education Minister Anne Tolley has been briefed on the inquiry, which has been run in secret with ongoing SFO contact. She would not accept questions, but said in a statement: "I am aware that the ministry is carrying out an investigation. It would be inappropriate for me to make any further comment."

The ministry also blocked attempts to interview its staff, including education secretary Karen Sewell. And it refused to answer questions, providing a written statement from its head auditing official, resourcing group manager John Clark.

It read: "The Serious Fraud Office informed the Ministry of Education about alleged financial irregularities involving Kidicorp on 27 July this year.

"The ministry treats all such claims seriously and once alerted immediately began an audit of some of Kidicorp's funding claims. That initial audit has so far not shown any evidence of fraudulent claims."

The investigation is believed to cover several areas, including the way Kidicorp has claimed funding for qualified staff.

Early childhood centres get more taxpayer funding depending on the percentage of qualified staff who work directly with children. Centres with 80-99 per cent registered teachers get more funding than those with 50-79 per cent.

One early childcare source said it was extremely frustrating for a centre to sit on 79 per cent when a few extra teacher hours could push it into a higher funding band.

Wright acknowledged that Kidicorp switched staff between centres to push some centres into higher-paying bands.

"I'm aware that sometimes when we get centres that are 77-79 per cent, we will switch teachers out of centres that are way above a threshhold... and reassign then to another centre for another day or three days a week to ensure that centre gets into the next funding band.

"There's nothing fraudulent about that. That's just manipulation of your resources."

He said Kidicorp also boosted qualified teacher percentages with professional service managers, who visited centres to mentor teachers.

Wright believed a disgruntled former staff member was behind the investigation. The employee was sacked and convicted of fraud last year, but repaid the stolen money.

Do you send your child to a Kidicorp centre, or work there? Email david.fisher@hos.co.nz