Allegations of "unauthorised" spending by health board boss Dr Nigel Murray have taken a dramatic turn with a new top-level investigation launched by the Ministry of Health.

The Ministry's announcement that it wants an explanation of Murray's expenses trumps Waikato District Health Board's own decision - revealed today - that it was shutting down an inquiry into the unexplained spending.

The decision to do so sparked concern with State Services Commissioner Peter Hughes, who told the Herald: "New Zealanders need to have confidence that public servants work to the highest standards of integrity in everything they do."

He said the State Services Commission had no jurisdiction over district health boards but the "allegations raise serious questions about the conduct and integrity of a former State Services employee".

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"It is unacceptable for any public servant to try to use their official position for personal gain."

Hughes said he had been personally advised by director-general of health Chai Chuah that the Ministry of Health was "looking into the allegations published in the New Zealand Herald against former Waikato DHB chief executive Dr Nigel Murray".

"I have asked the director-general to brief me on the findings."

It follows allegations in the Herald yesterday that a two-month investigation into Murray's spending was understood to have found he used public money for expenses associated with at least one woman who was not his wife.

Ministry of Health director of critical projects Michael Hundleby confirmed the Ministry had asked board chairman Bob Simcock to explain the article.

It has asked Simcock to "provide a briefing on recent allegations and his investigation into" Murray's expenditure.

"We have asked the chair to provide this information as soon as possible," Hundleby said.

"We will then review the information, and brief the State Services Commissioner."

State Services Commissioner Peter Hughes said the allegations raised serious questions about the conduct and integrity of a former State Services employee. Photo / Mark Mitchell.
State Services Commissioner Peter Hughes said the allegations raised serious questions about the conduct and integrity of a former State Services employee. Photo / Mark Mitchell.

A Waikato DHB spokeswoman confirmed the DHB was aware the Ministry was writing to request a briefing "which we will provide".

Simcock said the DHB had no interest in withholding any information from the public.

"But it does have to meet its legal obligations to balance public interest with the protection of the privacy of individuals.

"On that basis, it is unlikely there will be anything in a briefing to the Ministry of Health that we would not be happy for the public to know."

However the announcement came at the same time the DHB continued to refuse to release details of the investigation to the public.

The DHB said yesterday it would not release details of "unauthorised expenses involving potential financial breaches of Dr Murray's obligations" because he resigned on October 5.

"Because Dr Murray resigned, the investigation into his management of expenses was never completed," the DHB spokeswoman said.

"There were therefore no findings and the DHB is legally unable to speculate on what the findings might have been had the investigation been completed."

On further questioning, the DHB said an investigation could not be completed without active input from the person under investigation.

"As Dr Murray has resigned it is no longer possible to get the level of input to complete the investigation," the spokeswoman said.

"We are confident we can identify personal expenditure and will follow appropriate processes to recover costs.

"And we see no benefit in funding the completion when we have certainty that there will be no further incidences as Dr Murray is no longer in the employ of the DHB."

But former Labour MP Sue Moroney, who raised concerns with Simcock over Murray before he was hired, did not see it that way and added authorities had been slow to act.

"There have been questions unanswered about the board chair Bob Simcock's accountability for this issue."

Simcock has previously defended his actions saying he took immediate action as soon as concerns were raised by staff, alerting Health Minister Jonathan Coleman to the situation in June this year.

The investigation, conducted by an Auckland lawyer, was launched in late July.

The SSC first wrote to Simcock in August last year about the fact Murray's expenses for his first two years in the $560,000-a-year job had not been disclosed - an annual requirement.

It was January before they were disclosed, totalling $108,000.

An investigation by Audit New Zealand into the processes and management of Murray's expenses is expected by the end of this month.