Lorraine Coul' />

A Wellington region youth health service boss has resigned after spending more than $20,000 of taxpayers' money on shopping sprees.

Lorraine Coulston was stood down as manager of the Hutt Valley Youth Health Trust (Vibe) after financial irregularities came to light in May. She resigned in August, the Dominion Post reported.

Vibe received $1.4 million from the Hutt Valley District Health board and the Social Development Ministry last year but often ran short of cash and was repeatedly penalised by Inland Revenue for filing its returns late.

Senior staff were sometimes paid late. Twice in January last year Ms Coulston temporarily "loaned" $30,000 of her own money to cover the wages bill.

Ms Coulston admitted misappropriating $20,871 through a corporate credit card but auditors found thousands more unaccounted for.

A forensic audit report revealed more than $97,000 in questionable expenditure, mainly using two credit cards, hers and another card belonging to a "Ms B", who has also resigned.

Ms B told the auditors sometimes Ms Coulston would be very stressed at work they would then go shopping together.

The auditors identified transactions on Ms B's card "similar in nature" to those admitted as private by Ms Coulston.

Auditors also found more than $7000 was paid to their children to provide cleaning services to Vibe - on a wage of $70 an hour.

The auditors said poor controls and the culture provided ample opportunity for fraud to be committed and the opportunities were seized upon.

Neither woman could be reached for comment, but Ms Coulston's husband, Rob, told the newspaper she had been "punished enough".

Vibe chairman Denis Bourke, in a letter to the district health board, said that as Ms Coulston had repaid most of the money, police were unlikely to press charges.

Ms Coulston has repaid $15,000 so far.

The board was satisfied that only one person was at fault and the other card-holder had been "only doing what she was told".

Vibe has since introduced stricter financial controls.

Health board chief executive Chai Chuah said he was greatly concerned at the misuse of public funds, but Vibe's good work continued.

Detective Senior Sergeant Ross Levy of Lower Hutt police said no decision would be made on criminal charges till the investigation was complete.