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Preschool fined over funding claims

NZ Newswire logoNZ Newswire 8/06/2017

An Auckland preschool that lied about the government subsidies it was receiving and then asked parents to make up the supposed "shortfall" has been hit with a $260,000 bill.

Kowhai Montessori Pre-School was on Thursday handed a fine of $254,000 and ordered to pay reparations of $11,000 at the Auckland District Court, having pleaded guilty to charges of misleading its students' parents.

The Commerce Commision says Kowhai told parents it was just receiving just $4.70 per child per hour under the government's "20 hours free" early childhood education scheme but was actually getting $10.32 an hour between October 2013 and 2014.

When the rates when up in September 2014, the school told parents the rate was going up to $5.70, when it was getting a total $11.43 an hour.

"Parents were asked to make up the supposed shortfall between the pre-school's hourly charge and the subsidy received," the commission said.

It estimated Kowhai received $221,632 in ECE funding which was not disclosed to parents, according to commissioner Anna Rawlings.

Sentencing judge June Jelas called the representations "grossly wrong" and said one obvious motivation was to maximise financial gain.

Former manager and director Rebecca Jayne Brindle had agreed to pay any part of the fine the school could not make up, the commission said.

Kowhai was sold in 2015 and now operates under a different name and management.

Ministry of Education deputy secretary of sector enablement and support Katrina Casey says it is believed to have been an isolated case.

"We will be reminding all early learning services that they need to provide accurate information to parents on how fees are calculated," she said.

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