22 March, 2018

Waikato DHB investigation findings

A State Services Commission investigation into the expenditure of former Waikato District Health Board chief executive Dr Nigel Murray found that more than half of his claims for travel and accommodation were unjustified.

State Services Commissioner Peter Hughes said the inquiry, led by John Ombler QSO, had found Dr Murray’s conduct fell short of what is required of a State sector leader.

On 3 November last year, the Minister of Health requested that the Commissioner investigate the circumstances surrounding Dr Murray’s expenditure. This followed the Waikato District Health Board’s own internal investigation into his expenses, which was not completed. Dr Murray resigned on 5 October last year, before the internal investigation could be finalised.

The investigation found that:

• Dr Murray spent $218,209 of the Waikato DHB’s funding on travel, accommodation and related expenses during his tenure as chief executive from 21 July 2014 to 5 October 2017
• There were 129 items of expenditure on travel and accommodation during the former chief executive’s tenure
• 59 of the items of expenditure, valued at $101,161, did not meet the Waikato DHB’s standards for appropriate authorisation as set out in its policies and procedures
• 45 of the items of expenditure, valued at $120,608 were unjustified when measured against the Auditor-General’s guidelines for such expenditure
• $74,265.04 of the expenditure by Dr Murray was identified by the Waikato DHB as personal expenditure requiring reimbursement by Dr Murray
• $54,831.98 has been subsequently repaid and $19,434.06 remains in dispute
• More than half of Dr Murray’s travel and accommodation (by cost) was unjustified, and about half was unauthorised or had authorisation deficiencies.
• On the issue of his relocation expenses, Dr Murray contravened both the agreement made in his letter of offer and the Waikato DHB policy on staff travel and accommodation

“The inquiry found Dr Murray’s conduct fell well short of what is required of a State sector leader,” said Mr Hughes. “I have accepted all of Mr Ombler’s findings.

“It found Dr Murray made significant claims for reimbursement of travel and accommodation expenditure that were outside the DHB’s policies and spent public money on travel and accommodation without authorisation, which led to serious and sustained breaches of the State Sector Code of Conduct.

“The investigation report shows Dr Murray spent public monies on private travel and made claims for the reimbursement of expenses he was not entitled to claim for. As the Chief Executive he should have known better. He was supposed to be setting an example for his organisation.

“While Dr Murray’s conduct did not meet the standards expected in the State sector it is not the role of this inquiry to determine whether there was any criminal wrong-doing. That is why I have referred the investigation report to the Serious Fraud Office.”

The investigation also found governance was wanting at the Waikato DHB. The Board did not carry out the normal checks and balances expected at a big public sector organisation, which allowed Dr Murray’s unauthorised and unjustified expenditure to continue for too long without being addressed.

The former Chair’s oversight of Dr Murray’s expenses lacked the rigour and standard of care expected. The former Chair retrospectively approved 20 of Dr Murray’s travel applications, and, at least 42 of the total travel applications approved by the Chair had no or inadequate evidence of business purpose.

“The investigation found the former Chair was too trusting of Dr Murray. And Dr Murray let the Chair down,” said Mr Hughes.

Mr Hughes says while the Board acted with good advice and urgency to address the growing concern about Dr Murray’s conduct, the inquiry found the Board should not have allowed him to resign rather than face disciplinary action.

“The Board put pragmatism ahead of principle and the public interest,” Mr Hughes said.

“That was not the right thing to do. This meant Dr Murray did not have to answer for his conduct. And that was wrong.

“Serious allegations ought to be fully determined wherever possible, so that either a person’s name is cleared or they are held publicly to account for their actions. Public accountability and transparency is essential to maintaining public trust and confidence.

“If Dr Murray was employed by me I would have terminated his employment based on what I have seen.”

On the issue of Dr Murray’s initial recruitment, the inquiry found the Board had failed to undertake a check with a previous employer. It should have done so. If they had checked with his current employer in Canada it would have raised a red flag. That did not mean Dr Murray would not have been employed but the Board should have the fullest information in making an appointment.

“It is good that our public health system model brings commercial disciplines and expertise but DHBs are public organisations run by public servants using taxpayers’ money to deliver public services to New Zealanders,” Mr Hughes said.

“Effective public organisations like DHBs need to have the trust and confidence of New Zealanders, and that means working to the highest standards.”

Related Resources:
Waikato DHB Inquiry Report
Background information:

As set out at paragraph 58 of the report, Dr Murray’s legal representative requested that a letter setting out Dr Murray’s position be included with the report. The material contained in that letter has been appropriately addressed by Mr Ombler during the process.

In accordance with SSC’s commitments to open and transparent government and in compliance with the Privacy Act 1993, the statement received has been included alongside the report and supporting material and can be read with it. In order to provide the full context, a letter to Dr Murray’s legal representative in response has also been included.

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