The chairman of Waikato District Health Board, who employed Dr Nigel Murray as chief executive, has been called on to stand down.
Murray resigned yesterday as the board heard details of a two-month investigation into his work expenses which found he spent more than the agreed $25,000 allocated for relocation costs, as well as other "unauthorised expenses involving potential breaches of the chief executive's obligations".
It is not yet clear what those potential breaches were or if the investigation is ongoing.
Board chairman Bob Simcock hired Murray for the $560,000 a year job in July 2014 despite concerns raised by doctors and politicians.
Then Labour MP in Hamilton, Sue Moroney, said she personally raised concerns with Simcock in a private meeting before Murray was hired.
"He gave me an undertaking he would 'keep a close eye' on Murray and he clearly did not. He said he was satisfied that Nigel Murray was the best person for the job."
Moroney and Association of Salaried Medical Specialists executive director Ian Powell both told Simcock at the time they were worried about Murray because of bitter salary negotiations with doctors in 2007 of which Murray took the lead for district health boards.
Simcock previously told the Herald the concerns raised with him were not relevant to Murray's appointment as chief executive and that he extensively and personally checked Murray's references in Canada where he was the head of Fraser Health before returning to New Zealand.
Yesterday, in answer to the criticism and call to stand down, Simcock said in a statement that he took immediate action as soon as the issues over Murray's expenses were raised with him.
"The board have followed the correct process and procedures to independently investigate this matter," Simcock said.
"The board is satisfied that they have acted responsibly and quickly to resolve this."
A DHB spokeswoman said the board would not make a complaint to police over Murray's expenses because legal advice was that it was not a criminal matter.
She confirmed Murray would not receive any pay-out, but the Herald understands his leave since July 22 was paid.
Meanwhile State Services Commissioner Peter Hughes said he had not seen the report but expected senior leaders of Government agencies to "demonstrate the highest standards of integrity and conduct at all times, especially in relation to taxpayers' money".
Ministry of Health director general of health Chai Chuah said the investigation was an employment matter for the DHB.
He added: "People working in publicly funded health agencies are expected to always act with the utmost integrity".
Murray's resignation is effective immediately and the DHB is now looking to replace him as soon as possible.
Some of his more controversial projects include an unfinished $14.7 million refurbishment of an office building to house 800 DHB staff, the DHB's partnership with the University of Waikato to build a medical school in Hamilton, and a two-year trial of a virtual health model known as SmartHealth.
SmartHealth, thought to cost $17 million, has not yet attracted the targeted number of users and has come under intense scrutiny from GPs who previously said they already had a better, more functional model.
Nigel Murray at a glance
• July 2014: Nigel Murray hired by Waikato DHB chairman Bob Simcock as chief executive despite Simcock being warned by several parties against the appointment.
• August 2014: A Canadian Government review of Fraser Health shows the authority to be one of the worst performing in the country.
• March 2015: Was a no-show at a conference and delegate site visit in the US he was invited to. Said he was conducting other business.
• December 2016: Under fire from the State Services Commission for not disclosing annual expenses for two financial years.
• January 2017: Expenses show he spent $108,000 of taxpayer money travelling internationally and domestically for work.
• June 2017: Minister of Health Jonathan Coleman informed of concerns raised about Murray's expenses. Waikato DHB board members left in dark for five weeks.
• July 2017: Murray goes on annual leave for two weeks while Waikato DHB launches investigation.
• August 2017: Midlands Health Network, representing 400 GPs, writes to Ministry of Health director-general Chai Chuah complaining that Murray is difficult to work with.
• August 2017: Murray extends his leave as investigation not completed within initial three-week timeframe.
• September 2017: Investigation completed and reported to remuneration committee of the board.
• October 2017: Murray resigns from CEO position.