The chairman in charge of authorising Dr Nigel Murray's expenses has admitted Waikato District Health Board failed to undertake proper checks on his spending.
On the day a board member released a damning Audit NZ review of the management of expenses claimed by Murray - who spent $218,000 of taxpayers money in three years - board chairman Bob Simcock said the situation was "at heart quite simple".
"Unknown to the board or me, Nigel Murray charged expenses to the DHB which were neither authorised nor justified," he said.
"Unfortunately, the organisation paid those expenses without checking if they had been authorised.
"I have been assured by the interim chief executive [Derek Wright] that steps have been taken to ensure that cannot happen again."
It's the first time Simcock has admitted a process error over the debacle which resulted in Murray's resignation in early October and three investigations including one by the State Services Commission which is ongoing.
However board member Dave Macpherson, who released the report yesterday ahead of the DHB and without its consent, said Simcock continued to deflect responsibility for the spending.
"Bob needs to accept that he's accountable for this situation. He should leave and allow the DHB to get on with the business of running a health system."
Simcock has said he will not resign unless asked to by Health Minister Dr David Clark.
Clark said the investigation he directed the State Services Commissioner to launch into allegations of Murray's wrongful expenditure would include Simcock's oversight of the matter.
He said he was unable to comment further until he had been briefed by the commissioner at the end of his investigation.
Macpherson said the draft report showed damning insight into Murray's behaviour which he believed warranted a higher level investigation.
"I think the Serious Fraud Office should have a look at it. I don't believe that the expenses were mistakes.
"I believe they were deliberate and they were of such a scale, and one of the tests of the Serious Fraud Office is whether it's of significant public interest and I think this is."
Murray's predecessor Craig Climo, who only took one overseas trip in 17 years as a DHB chief executive - to Australia for a three-day conference - said the fact Murray circumvented Waikato DHB's travel policy was particularly concerning.
"The circumvention of controls shows quite some intent and awareness. And it suggests to me there was an awareness that it was wrong."
Climo, whose expenses for his final two years in the chief executive role were less than $18,000, said the report pointed to Murray's abuse of his position as methodical.
"This circumvention and over such a long period of time seems to me it was pretty systematic."
The release of the report follows months of Weekend Herald revelations about Murray's activity during his $560,000-a-year job, including that he spent more than half his final year out of the office on overseas and domestic trips.
Climo said he could not understand how Simcock was unaware of Murray's absenteeism.
"I don't know how the chief executive could be away that long and the chairman not be aware of that just through the ordinary course of communication between chair and chief executive."
The Audit NZ investigation found Murray 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.
It highlighted a number of 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.
Waikato DHB interim chief executive Derek Wright did not want to comment on the audit until the final report was released.
State Services Commissioner Peter Hughes could not comment specifically on the report yesterday because of the SSC's own investigation.
Hughes said that investigation, into allegations of wrongful expenditure of public money by Murray, is underway and being led by former CERA chief executive John Ombler.
Hughes said Ombler's investigation report would be released publicly and was expected early in the new year.