NHS chief executive 'fraudulently paid husband more than £20,000'
A "dishonest" NHS chief executive fraudulently paid her husband more than £20,000 from her budget, a jury has heard.
Paula Vasco-Knight, 53, is accused of two charges of fraud between 2012 and 2013, when she was in charge of South Devon NHS Foundation Trust.
Vasco-Knight, of Runcorn, Cheshire, was the national lead for equalities for NHS England, with a budget of £200,000.
Exeter Crown Court heard she commissioned her husband, Stephen Vasco-Knight, 46, to produce a £9,000 newsletter as part of her equalities work.
She allegedly used NHS funds to buy a MacBook Pro computer with graphic design software which, the jury heard, she later admitted she never used.
She is also said to have paid her husband £11,072 of taxpayers' money to design a 200-page document entitled Transform.
The court heard the document was never submitted to the NHS, with the couple showing investigators a "complete sham" as evidence of it in 2014.
Prosecuting, Gareth Evans said Vasco-Knight was legally bound to declare her interest in her husband's company but did not do so.
She should have done this as part of the NHS's Standing Financial Instructions (SFIs), which prevent public money being used corruptly.
Stephen Vasco-Knight denies one charge of fraud, while Habib Naqvi, a senior manager in the NHS, denies two charges of encouraging or assisting Paula Vasco-Knight.
Mr Evans said: "Paula Vasco-Knight breaches SFIs massively, causes her husband to be paid in excess of £20,000 with no declaration of interest made.
"She must have known that she of all people, as the CEO, should obey Standing Financial Instructions.
"She attempts to distance herself from the involvement by blaming Mr Naqvi for commissioning that newsletter, but clearly on the emails, she told him who was to produce the newsletter.
"The Transform document is a complete sham. No document, proper document, was ever produced yet the two of them were awarded £11,072 for something that had never been done.
"That is fraud and it is dishonest in the extreme.
"It is, on the part of Paula Vasco-Knight, an immense breach of trust and an abuse of her position as CEO of the trust."
The jury heard Mrs Vasco-Knight was the CEO of the trust, based in Torbay, Devon, until her resignation in May 2014.
She had been employed by the NHS for 30 years, during which time she had worked as a nurse.
Her husband is a graphic designer and owns his own business called Thinking Caps, which is not a limited company.
"When he was interviewed under caution in 2015 he said it was a one-man show run from his garden shed," Mr Evans said.
Mr Naqvi is a senior manager for equalities, employed by NHS England.
The court heard Mrs Vasco-Knight was national lead for equalities for NHS England, a one-day per week role.
In 2012, she requested a MacBook Pro with QuarkXPress graphic design software on it to produce newsletters, it is alleged.
"The NHS spends our money - taxpayers' money," Mr Evans said.
"Because the NHS uses public money, there are rules that apply to ensure that there is no corruption, to ensure that there is transparency, to show where and how and to whom money has been spent."
He said the rules particularly apply to CEOs as they have budgetary responsibility for organising and granting contracts.
Anyone involved in granting or authorising payments or commissioning outside companies has to declare any interest in such companies, the court heard.
This has to be done as a formal declaration of interest, Mr Evans said.
"Paula Vasco-Knight, with the assistance of Habib Naqvi, avoided a declaration of interest when her husband was contracted to carry out the production of newsletters for the equalities team," he said.
Mr Evans said failure to declare Mrs Vasco-Knight's interest in her husband's company, which was paid £9,000 for the work, was a criminal offence.
The newsletter was commissioned in April 2013 and produced by Thinking Caps that July, the court heard.
In an email to Naqvi, Mrs Vasco-Knight simply described the contractor as 'Steve' and did not mention that he was her husband, the court heard.
In another email, Mrs Vasco-Knight told another colleague that "my Steve" could do the newsletter but she would "need to be careful", the court heard.
Mr Vasco-Knight was secretly copied in to emails between NHS staff discussing the newsletter before his company was officially contracted, it is alleged.
Mrs Vasco-Knight also sent her husband a newsletter previously produced for the NHS by a rival company, the court heard.
The court heard that in a later email to Naqvi, who was then aware of the relationship, Mrs Vasco-Knight wrote: "Thinking Caps is the name Steve produces his graphic design work, hence working via you not me."
Naqvi later told investigators that Mrs Vasco-Knight assured him she had formally declared her interest in Thinking Caps to the NHS, the court heard.
The court heard that Mrs Vasco-Knight was awarded a £10,000 bursary for leadership development in December 2012.
In November 2013, her husband submitted a second invoice to the NHS for £11,072 - from the bursary funds.
The invoice was initially sent to Mrs Vasco-Knight who then forwarded it to Mr Naqvi, the jury heard.
Mr Naqvi was in the process of submitting three other invoices for work from separate companies at that time.
"He was told by Paula Vasco-Knight to hold back on submitting those three invoices because there was another invoice on its way," Mr Evans said.
"That invoice was the £11,072 from Thinking Caps. The only reason for that was to try to hide that invoice, to camouflage it."
Weeks later, Mrs Vasco-Knight began chasing payment for the invoice and was informed that it had not been authorised.
She allegedly asked another manager to approve it but he did not do so.
Records show that Mrs Vasco-Knight's authorising number was used to approve the payment, Mr Evans said.
"She had approved her husband's invoice with no declaration of interest," he told the jury.
After the payment was approved, Mrs Vasco-Knight asked the NHS finance department if it could be paid as a cheque.
Mr Vasco-Knight later provided his banking details.
"It was those banking details that, in 2014, led to a link being made between Thinking Caps and Paula Vasco-Knight," Mr Evans said.
"That led to a chain of event culminating in these proceedings."
The money was paid for the document, named Transform, but this was never produced to the NHS, the court heard.
However, in interviews in 2015, the couple handed investigators a copy of a 200-page document charged at £50 per page.
"The document has a lot of blank pages save for four words - 'think it, write it'," Mr Evans said.
"This document was to improve the leadership qualities of CEOs."
Investigators searched online for passages of text that appeared in Transform, which was invoiced for in November 2013.
Pages were "virtually verbatim" from a document published in 2014.
Others were from a document produced by the The King's Trust which was not published until November 2014.
"There are also passages within Transform that refer back to a merger between two organisations that took place in 2014," Mr Evans said.
In police interviews, Mrs Vasco-Knight said she had no involvement with the newsletter and this was done by Mr Naqvi.
She said Transform was completed by her husband under her instruction and she did not follow SFIs as it was paid for with her bursary money.
Mr Evans told the jury: "She said her actions at times were probably not best practice but she did what she did because she wanted to ensure value for money."
Mr Vasco-Knight insisted he had completed Transform in November 2013.
"He said he told his wife to make sure she had declared her interest in the company," Mr Evans said.
Mr Naqvi denied that he had asked Thinking Caps to carry out the work and had been informed that the company had been selected by Mrs Vasco-Knight.
He said he had no knowledge of the production of the Transform document.
The trial, expected to last for two weeks, continues.