The man responsible for overseeing the expenses of Dr Nigel Murray was told if any deliberate wrongdoing was found he should terminate Murray's employment
as the Waikato District Health Board chief executive.
Former board chair Bob Simcock assured Assistant State Services Commissioner Geoff Short there was nothing in a draft report of the DHB's initial inquiry that suggested any criminal offending by Murray or warranted further investigation by other authorities.
The expenses scandal was referred to the Serious Fraud Office this week after an investigation by the State Services Commission found more than half of Murray's travel and accommodation expenses were unauthorised or unjustified.
Simcock told Short in a phone call on September 29 last year, six days before Murray resigned, the matter centred around Murray's relocation overspend of $27,000, according to documents released in the State Services Commission inquiry on Thursday.
Simcock indicated the DHB expected Murray's lawyers would fight the release of a draft report outlining the findings of the DHB inquiry, Short wrote in notes he took of the phone call.
Simcock and the board's remuneration committee - the group directly responsible for the CEO - heard the damning draft report that day, later revealed by the Herald to show expenses associated with two Canadian women, neither of whom were Murray's wife.
Short advised Simcock such reports always became public, but said because he didn't know what the findings were he could not advise the DHB other than to say, "if there had been deliberate wrongdoing then the result should be termination".
"I also asked Mr Simcock if there had been any criminal offending or anything that might be perceived by the public to warrant further examination by the police or other authorities. He advised that there was nothing of that nature.
"I reiterated to Mr Simcock that if there was wrongdoing or poor behaviour by the CE then our preference would be for the termination option. He closed out the call following that."
Before the DHB launched its investigation in mid-July, Simcock told Short on June 8 a rental car Murray hired, in Moncton, Canada, was charged to the DHB for a month despite the chief executive returning to New Zealand two days after hiring it.
In another meeting on August 25, Simcock advised Murray stayed in Auckland ahead of moving to the Waikato to take up the $560,000 a year role, and had "expended more than he was entitled to".
"I asked Mr Simcock if there was anything particularly concerning in the expenses, particularly in light of media speculation and some suggestions Dr Murray's behaviours had mixed private and public interests," Short wrote.
"Mr Simcock talked specifically about the trip to North America, where Dr Murray had not attended the health conference he had initially been interested in.
"Mr Simcock was comfortable that all of that was accounted for. I asked Mr Simcock if there was anything emerging that he thought needed further investigation by appropriate authorities. He didn't think there was anything of this sort."
Simcock said on Thursday Murray led a double life which enabled him to hide his actions.
In announcing the findings this week State Services Commissioner Peter Hughes criticised the DHB for accepting Murray's resignation, which effectively shut the door on disciplinary action and put an end to the DHB investigation.
"That was not the right thing to do. This meant Dr Murray did not have to answer for his conduct. And that was wrong," Hughes said.
"Public accountability and transparency is essential to maintaining public trust and confidence."
DHB acting chairwoman Sally Webb said the board agreed to Murray's resignation because "we thought that was best for the organisation and it was the legal advice we got".
Webb said the board did not remember Simcock making known the SSC's preference to terminate Murray.
"We have no recollection of that being passed on to us. I don't know if it would have changed the decision but we would certainly have stopped and discussed the impact.
"If we had thought the Commissioner said we should dismiss him, not allow him to resign, that would have been part of the discussion and the thinking.
"From my memory and the memory of a couple of other members I've checked with, it was not."
Simcock did not respond to questions yesterday.
He previously told the Herald the decision to accept Murray's resignation was taken under advice from a senior New Zealand employment lawyer.