Health Minister David Clark has directed the State Services Commissioner to launch an investigation into the circumstances surrounding allegations of wrongful spending by former Waikato District Health Board chief executive Dr Nigel Murray.
The news follows a special investigation by the Herald into Murray's expenses stretching back to December last year when the newspaper revealed Murray had not disclosed expenses for his work at the DHB for two years.
The announcement comes as the DHB released hundreds of pages of receipts which show Murray spent $218,000 in his three years in the role, including living for six months on the taxpayer dime when he first relocated from Canada.
Murray resigned on October 5 after a two-month investigation by the DHB into his expenses, which the Herald understands found Murray made claims for costs associated with two Canadian women.
The DHB has not released the full findings of that investigation citing privacy issues.
Murray spent double the $25,000 agreed relocation costs when he moved from British Columbia to Hamilton in mid-2014, which included six months of accommodation for two people.
The DHB also found other "unauthorised spending" but until today has not divulged what those breaches were.
Today the new Health Minister said he had written to State Services Commissioner Peter Hughes to launch an investigation "because such issues or allegations, especially relating to senior leaders in the public sector, risk damaging confidence in the public sector".
"It is critical that transparency in and accountability for these processes and outcomes is maintained."
Clark has directed the SSC to exercise its functions and powers under the State Sector Act 1988 to investigate:
• The circumstances of any alleged unauthorised or unjustified expenditure by Murray of DHB funds;
• Any related or similar conduct by Murray or any related person identified during the course of its inquiry;
• Any processes undertaken or decisions made by the DHB relating to any matters identified under the first two requests.
"I expect that this investigation may involve considering whether appropriate standards of integrity and conduct have been maintained by Dr Murray and the DHB."
The Minister will be briefed on the findings and any recommendations of the investigation.
Waikato DHB spokeswoman Lydia Aydon said the DHB welcomed the investigation and would "absolutely comply" with whatever the State Services Commission asks for.
Board chairman Bob Simcock told Newstalk ZB the money Murray owes, including the $30,000 he has already paid back, were not authorised expenses.
"And were somehow or other charged directly to the DHB without my awareness and the awareness of senior management so that's how it's happened."
He said if someone acted outside policy without others knowing it was difficult to intervene.
"I think the breach of trust is large and we're having to deal with the impact of that in our organisation."
He remained adamant that the DHB could not release the full findings of its investigation to the public unless the Ombudsman directed it.
Simcock also said he had not been asked to resign by Clark and had "no expectation" around that.
State Services Commissioner Peter Hughes said the SSC would investigate as directed.
He said the investigation would be carried out using the Commissioner's powers as set out in the Act.
Hughes confirmed it would look at whether or not the appropriate standards of integrity and conduct have been maintained, along with the appropriateness of the processes or decisions undertaken by the DHB.
The Commissioner would appoint a qualified investigator to carry out the investigation. The name of the investigator, along with the terms of reference would be released as soon as practicable, Hughes said.
"The allegations of wrongful expenditure which have been made here raise serious questions about the conduct and integrity of a former State Services employee," he said.
"I expect senior leaders of government agencies to demonstrate the highest standards of integrity and conduct at all times, especially in relation to the use of taxpayers' money. And I expect boards to provide proper oversight and accountability for that."