Nigel Murray’s overseas destinations
The Waikato District Health Board chief executive quit after serious concerns were raised about his personal spending of public money. The question now is how did it go on for so long, writes Natalie Akoorie .
How Murray’s spending went unchecked
The first suggestion of a problem with Dr Nigel Murray’s expenses came in December 2015 when a staff member told a manager about a potential overspend on relocation costs. The new Waikato District Health Board chief executive had splashed out more than double the agreed $25,000 to move from Canada.
But it would be another 13 months before board chairman Bob Simcock was alerted to the concern — and six months after that when the DHB launched an investigation into Murray’s entire expenses.
Murray resigned on October 5 this year after the investigation found he had spent more than $52,000 to move to Hamilton, as well as other “unauthorised expenses”.
The total spend by Murray was $218,000 over his three years in the job. The DHB won't say exactly how much of that was unauthorised but so far he has paid back $30,000 and owes more, less than $50,000 according to the health board.
His resignation prompted the DHB to call off its investigation into what happened to the money. But a State Services Commission inquiry has now been launched after new Health Minister Dr David Clark asked the Government watchdog to flex its full powers to delve into the spending, and the management of those expenses.
Murray was appointed Waikato DHB chief executive in July 2014, despite warnings from former Labour MP Sue Moroney and Ian Powell, executive director of the senior doctors’ union, the Association of Salaried Medical Specialists.
They were wary of Murray after he led bitter wage negotiations with doctors in 2007 while he was chief executive at then Southland District Health Board.
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.”
Powell said it wasn't just Murray's leadership style he was worried about, but the fact he took a leave of absence while chief executive at Southland DHB and was later announced as the new chief executive at Fraser Health.
Murray, who had been consulting for Fraser Health before taking the CEO job, was cleared of breaching his contract with Southland but Powell says Simcock should have seen it as a red flag.
Simcock has said all references for Murray, including from Southland, now Southern DHB, were outstanding.
At a powhiri to welcome Murray to the job and back to the area — his American father was once a doctor there and Murray grew up at Walton, near Matamata — much fuss was made of the man charged with arguably one of the most important roles in the region: the healthcare of 400,000 people.
By that stage Murray was already living in DHB-funded accommodation. He and a guest — understood not to be Nicola Murray, his wife of 31 years — stayed at Quest Hamilton for six months, about five months longer than the time usually allocated for relocating staff.
Taxpayers footed the $13,466 bill, as well as $14,929 for his flights and $23,729 for household shipping.
A staff member involved in processing expenses flagged with a member of management in December 2015 that the total was $52,126, chief of staff Neville Hablous said in an Official Information Act response released to the Herald last week.
“When the matter was not rectified by the chief executive, the manager took a number of actions to try to ensure that it was.”
Hablous could not say what those actions were because the information now falls within the scope of the State Services Commission investigation.
As questions were being raised about Murray’s spending, there were also grumblings about his performance.
Many clinicians didn’t know Murray — he was never there, they felt.
And when he was there, it was suggested he was engrossed in pet projects such as the introduction of the controversial SmartHealth app and the $14.7 million refurbishment of an “ivory tower” where 800 mostly managerial staff were to migrate, away from the coalface.
the State Services Commission first wrote to Murray in August 2015 reminding him his expenses were due.
The next official warning came in August last year when the commission wrote to inform the DHB Murray’s expenses had not been disclosed, again.
It was the second year running Murray had failed to meet the legal requirement that all chief executives of public service departments and statutory Crown entities regularly disclose their expenses.
A year after the initial concern, on December 1, 2016, the Herald reported State Services Commissioner Peter Hughes was unimpressed that Murray had failed to disclose his expenses for the first two years in the role.
At the same time, newly elected board member Mary Anne Gill said it was the first issue she raised with Simcock.
“I was assured it was under control and trusted in the process going forward,” she said.
The expenses were finally filed in late January, but behind the scenes it was a scramble by staff to get the receipts in order.
Murray’s expenses showed he had spent $108,000 of taxpayers’ money over two years.
It was the highest of the chief executives from the larger DHBs.
Simcock told the Herald on February 8 this year he was comfortable with Murray’s spending because he was carrying out “legitimate DHB work”.
He pointed to the relocation costs as skewing the expenses total for that year.
In the OIA documents, however, Hablous said Simcock was made aware of the potential relocation overspend just days earlier on February 3.
“He met the chief executive that day for an explanation and received an undertaking that the overpayment would be repaid immediately.”
In explanation Simcock said he assumed when he spoke to the Herald five days later that Murray had paid the money back. He had not.
By May 18, three months after Murray told Simcock he would pay back the relocation overspend, he reimbursed $30,000.
Hablous resigned the same month after being alerted to concerns over Murray’s entire expenses.
About the same time he confided in two other members of Murray’s 17-strong executive team — corporate services executive director Maureen Chrystall and strategic projects executive director Ian Wolstencroft.
The trio escalated the concerns immediately to Simcock. That was June 7.
The DHB’s timeline of events after that show Simcock sprang into action, seeking legal advice, informing the office of then Minister of Health, Dr Jonathan Coleman, and outlining concerns with Murray himself on July 4.
It was another two weeks before the full board was alerted at a special meeting on July 19 and an independent inquiry was launched on July 21.
A day later the Weekend Herald revealed the investigation, and all hell broke loose.
THE DHB went into lockdown, refusing to answer many questions. Murray went on leave and speculation was rife.
Two-and-a-half months later the board accepted Murray’s resignation “on the basis he repay all outstanding amounts”, which amounted to less than $50,000.
The lawyer for Murray, Calum Cartwright, of Peter Cullen Law in Wellington, said in late October the DHB was in the process of finalising any amount outstanding.
“Dr Murray currently awaits a final reconciliation of the amounts involved, so he can make good if there are any further payments required.”
The reimbursement is still to come but that is understood to be because of a dispute over one expense claim.
Two weeks after Murray resigned, the Herald revealed the Auckland lawyer conducting the expenses investigation raised questions about claims linked to two Canadian women.
It prompted the Ministry of Health to ask for a briefing of the findings. Together with dozens of OIA requests and intense public scrutiny, the DHB was backed into a corner.
On November 3 this year, the DHB released hundreds of pages of Murray’s expenses for his three years.
It would not divulge details of the investigation findings, citing Murray’s privacy, but for the most part the truth was laid bare. And it was worse than expected.
Murray spent $218,000 of public money on international and domestic travel, accommodation, meals, taxi fares, parking and more. There were receipts for trips to New York, Los Angeles, San Francisco, Vancouver, Moncton, Montreal and Sydney
All the travel, the wining and dining, the accommodation, the overseas meetings — begged one very important question — when was Murray doing his job as CEO? The one he was being paid $560,000 a year to do.
UNDER MURRAY’S watch a baby died in preventable circumstances at Waikato Hospital, which was so understaffed it had only two junior doctors covering an entire medical unit of 290 beds across 12 wards at night.
The hospital lost training accreditation in its obstetrics and gynaecology department in late 2015.
It’s also on notice over accreditation in orthopaedics because of a serious imbalance in the types of surgeries junior doctors are learning.
Resident Doctors’ Association National Secretary Deborah Powell told the DHB in July that 419 doctors were stressed with overwork, couldn’t take leave and weren’t getting enough supervision.
In September the DHB was formally warned by the Medical Council of New Zealand over its intern training of house surgeons and registrars.
It is also spending $1.4m on making better use of theatres to stop $25m worth of outsourcing each year.
In late October Murray was under fire from the Senior Medical Staff Association for leading a culture of dysfunction.
Association chairwoman Dr Margot Rumball wrote a damning letter to Simcock slating Murray for embarking on expensive projects at the cost of core services and patient safety.
These included the $7m refurbishment of the KPMG building that ballooned to double the cost requiring ministry approval, the proposed Waikato Medical School and the SmartHealth app, believed to have cost upwards of $17m.
Simcock blamed Murray for part of the situation, saying the CEO was frequently asked to address a growing disjoint between doctors and management, but did not.
Staff morale is at an all-time low with two staffers saying they felt “broken and betrayed” by Murray’s abuse of power.
All this comes as the DHB grapples with a $32m deficit.
SOME STAFF credit Murray with being capable and a “big-picture thinker”. Others claim even when he was at the DHB he “doodled” in meetings, left early, or arrived looking dishevelled.
Murray, who has an MBE for work he did in Bosnia and Iraq as a doctor in the NZ Army, came to the Waikato with a history of high expenses, having spent $140,000 in an 18-month period at Fraser Health in British Columbia.
In the aftermath of Murray’s resignation, the calls came for Simcock to step down but he remains defiant, saying that would “not be best for the organisation right now”.
Murray has gone to ground. He does not return voice messages and his lawyer said it would be inappropriate for him to comment while the SSC investigates.
When the Weekend Herald went to his family home last week, a farm worker said he was overseas.
Hablous has withdrawn his resignation and Chrystall did not hand in one she had drafted in case Murray returned.
Gill says she is appalled it took more than a year for the first concern to be passed on to Simcock.
“From a governance point of view, we need to know why it took 14 months for someone to raise it with the board and we also need to trust in a process which ensures this sort of thing doesn’t happen again.”
An Audit NZ report into the management processes around Murray’s expenses including authorisation of them is still to come.
Since the scandal, the DHB now reports the expenses of its senior managers each month.
Simcock said the breach of trust was large and if someone acted outside policy without others knowing, it was difficult to intervene.
Interim CEO Derek Wright says his aim now is to lift morale and restore public confidence.
Asked if he was disappointed by Murray’s actions, he said: “It would be hard to say no.
“I’m disappointed at what’s he’s done to the DHB.”