The recruitment company that helped hire the disgraced Waikato District Health Board chief executive was paid $106,000 for its work.

Sheffield interviewed, tested and checked references of chief executive candidates for the health board.

Dr Nigel Murray was hired despite a history of high spending. He proceeded to rack up $218,000 in expenses while he worked for Waikato DHB. He resigned last October, just over three years after starting.

Sheffield was paid a total of $106,556.58 by the DHB to find the right candidate to fill the chief executive role, Radio New Zealand's Checkpoint reported.

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The payment to the recruitment company was done in three instalments of $23,334, $40,598.02 and $42,624.56.

WDHB spent $106,000 hiring Dr Nigel Murray, who then racked up over $200,000 in unjustified expenses. Photo / Christine Cornege
WDHB spent $106,000 hiring Dr Nigel Murray, who then racked up over $200,000 in unjustified expenses. Photo / Christine Cornege

The Audit NZ investigation found Murray - who was paid $560,000 a year - took two international work trips while on sick leave, used public money for personal jaunts, did not declare hospitality, booked travel without approval and tried to cover up the breaches.

He spent more than half his final year out of the office on overseas and domestic trips.

Murray's predecessor, Craig Climo, spent only $18,000 in his last two years as chief executive and only took one overseas trip in 17 years in the role - to Australia for a three-day conference.

Sheffield executive director Ian Taylor told the Herald the $106,000 fee was about one-third expenses and two-thirds "professional fee".

He said the expenses were used to cover an international candidate search that included marketing, advertising, communications and travel. He also said the fee was calculated as a percentage of the role's remuneration package but he was not able to recall the percentage.

Taylor declined to discuss the details of reference checking for privacy reasons.

He said Sheffield usually presented a shortlist of three or four candidates to the board for selection.

"The process is confidential to the candidates and confidential to the client."

Taylor said Sheffield would welcome a review by State Services into the entire process and would contribute if asked to participate.

Dame Annette King was Health Minister while Murray was chief executive of Southland DHB and was concerned when she heard Waikato was considering his appointment.

"He left that DHB under a cloud ... when I heard he was going to be likely in Waikato, I did warn them to look closely at his record," King told Checkpoint.

Murray spent $128,000 on expenses in just 18 months at Southland DHB, Checkpoint reported. Half of that was on domestic travel.

The Audit NZ investigation highlighted several poor processes around the management of Murray's expenses which allowed him to book his own travel, ignore the need to supply proof of the business events he was attending and take unauthorised international trips.

The Audit NZ report, revealed by the Herald, showed Murray wasted money on last-minute cancellations or amended bookings, and some complex travel requests that resulted in significant costs provided no evidence to support the business need. It's also unclear if some of the amendments were approved.

Auditors said some international trips appeared to be driven by a particular scheduled meeting and that the DHB should have considered video conferences instead.

Murray, whose travel was booked using a $330,000 credit limit, even took out travel insurance on some trips but auditors said this was unnecessary because of a DHB-wide policy preventing the need for individual insurance.