The job of Chief Families Commissioner Rajen Prasad is on the line after he approved a confidential payout to the commission's chief executive without the Government's knowledge.
Social Development Minister Steve Maharey said yesterday that Dr Prasad's actions in approving the payment were not consistent with Government guidelines and a
"process" was in place to "work through the consequences of his decision".
Former chief executive Claire Austin left last month after only five months in the job.
Dr Prasad said then the board's expectations and hers around "governance and operational models" had not lined up.
A confidential settlement was reached and Dr Prasad would not reveal its details, saying they would be made public in the commission's annual report. At the time Mr Maharey's spokesman told the Herald the commission was well aware of the Government's expectations around settlements for departing chief executives and "we are confident the settlement was in line with that".
But yesterday, Mr Maharey conceded this was not the case and an inquiry was under way.
He was under fire in Parliament about alleged double-standards over "golden handshakes" in the public sector.
Mr Maharey avoided answering National MP Judith Collins, when she asked if Dr Prasad would lose his job over the pay-out. His office later refused to confirm that Dr Prasad's job was safe, repeating only that a process was in place. Dr Prasad would not comment yesterday.
It is understood the Government was informed of problems in the relationship between Ms Austin and her board in mid-February and that the Ministry of Social Development had provided the commission with advice on what processes to follow.
Mediation attempts were unsuccessful and in late February the Government was advised the situation couldn't be resolved. But it was not informed the commission's board had reached a confidential settlement beforehand.
Mr Maharey's spokesman said yesterday that he had been misinformed when he initially said the settlement was in line with Government expectations.
United Future leader Peter Dunne, whose party convinced the Government to establish the commission, appeared to suggest a compromise position might provide an alternative to him losing his job. The fact the payout was contrary to Government policy had to be dealt with.
However, he did not believe there was any "improper intent" in the commission's actions and said the "question is to what extent it is in conflict with policy?"
He urged a "cautious and calm approach".
But the Government's initial refusal to condemn the payout, said to be small, saw it yesterday subjected to embarrassing taunts.
Act MP Heather Roy asked Mr Maharey if the Government continued to stand by Helen Clark's comments on golden handshakes while in Opposition when she said: "I've had a gutsful. I don't intend, if I'm Prime Minister, to have to sit there and suffer one humiliation after another because of a culture of extravagance which has been allowed to grow in the public sector. Whatever's in there and is hidden we want out."
Mr Maharey said the Government stood by the comments, which he had discussed with Dr Prasad who "understands exactly" the Government's position.
Who is Rajen Prasad
* Dr Prasad was appointed with five other commissioners to the board of the new Families Commission in July.
* He then refused to reveal what he would be paid for his fulltime role, saying the figure would be in his first annual report.
* About $28 million was provided for the commission's first four years.
* He was Race Relations Conciliator from 1996 to 2001 and led Massey University at Albany in its establishment phase. He's a member of the Residence Appeal Authority.
Correction: An earlier version of this story incorrectly stated that Mr Maharey's spokesman said the minister had been misinformed when he initially said the settlement was in line with Government expectations.
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