8 Jun 2017

Auckland pre-school to pay $265k for overcharging parents

1:19 pm on 8 June 2017

An Auckland pre-school has been ordered to pay more than a quarter of a million dollars after misleading parents about the amount of funding it was receiving.

no caption

Photo: 123rf

Kowhai Montessori Pre-School will pay a total of $265,500 after pleading guilty to charges that it lied about the amount of funding it was receiving under the governments early childhood education scheme, asking parents to make up the shortfall.

The school has been fined $254,099.10, and will also pay $11,400.90 in reparation to four parents who complained to the Commerce Commission and acted as witnesses for the prosecution.

The Commerce Commission said between October 2013 and October 2014, the school asked parents to make up the supposed shortfall between the pre-school's hourly charge and the subsidy received.

Invoices sent to parents claimed the school was receiving a subsidy of $4.70 per child per hour, when the correct figure was $10.32.

In September 2014, Kowhai told parents that the subsidy was increasing to $5.70, when it was receiving $11.43 for eligible children.

The school was sentenced at the Auckland District Court today. Judge Jelas said the figures given to parents were "grossly wrong" and required parents to pay significant additional amounts.

She said "one obvious motivation was to maximise an unlawful financial gain" and Kowhai "undermined the purpose of the ECE programme by making its services appear more expensive than they ought to have been".

Former manager and director Rebecca Jayne Brindle will have to pay any part of the fine that Kowhai failed to pay.

Kowhai Montessori Pre-School was sold in 2015 and now operates under a new name and under new management.