DHB boss already demoted
‘‘That was not the right thing to do. This meant Dr Murray did not have to answer for his conduct. And that was wrong.’’ State Services Commissioner Peter Hughes
Nigel Murray had already been ousted from a top health job in Canada because of concerns over his management and leadership skills when Waikato DHB was looking to hire him as its new chief executive.
But the DHB was unaware of Murray’s demotion from his role as president and chief executive of Fraser Health in May 2014 because it failed to talk to Murray’s former employer.
State Services Commissioner Peter Hughes said the DHB’s failure to speak to Fraser Health chair Wynne Powell, meant it missed crucial red flags about Murray.
‘‘I believe it was a small but very significant gap in the recruitment process,’’ he said.
The SSC released its investigation findings into Murray yesterday, finding more than half of Murray’s claims for travel and accommodation were unjustified.
The investigation concluded Murray spent $120,608 on unjustified travel and accommodation.
The SSC is also damning of Murray’s former employer – the Waikato DHB – saying the board’s governance of its chief executive was wanting.
The report has now been handed to the Serious Fraud Office which confirmed it is investigating Murray.
The SSC launched its investigation into Murray on November 3 following a directive from Health Minister David Clark.
The SSC’s probe focused on circumstances surrounding allegations of wrongful expenditure by Murray, as well as any similar conduct by other DHB staffers.
Clark said the report into Murray’s expenditure was concerning and raised serious concerns about the oversight of Murray.
‘‘Any poor spending of taxpayers’ money is something I would be concerned about. I think this particular investigation will ensure that DHB chairs and chief executives will be looking at their spending,’’ Clark said.
John Ombler QSO was tasked with heading the SSC investigation and found:
❚ Murray spent $218,209 of the Waikato DHB’s funding on travel, accommodation and related expenses during his tenure as chief executive from July 21, 2014 to October 5, 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 Murray was identified by the Waikato DHB as personal expenditure requiring reimbursement by Murray.
❚ $54,831.98 has been subsequently repaid and $19,434.06 remains in dispute.
❚ More than half of 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, Murray contravened both the agreement made in his letter of offer and the Waikato DHB policy on staff travel and accommodation.
Hughes said Ombler’s findings expose and catalogue sustained unauthorised and unjustified spending.
‘‘And I’m here today to say that that is not okay,’’ he said.
Murray resigned as Waikato DHB chief executive on October 5, part way through an independent DHB inquiry into his spending.
Hughes said former Waikato DHB chairman Bob Simcock’s oversight of Murray’s expenses ‘‘lacked the rigour and standard of care expected’’.
‘‘The investigation found the former chair was too trusting of Dr Murray. And Dr Murray let the chair down.
‘‘He [Simcock] did not provide expected levels of oversight and this is one of the reasons this happened in the first place.’’
Hughes said the Waikato DHB acted with good advice and urgency to address the growing concern with Murray’s conduct but it should not have allowed him to resign rather than face disciplinary action.
‘‘The board put pragmatism ahead of principle and the public interest,’’ he 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.’’
Hughes said the investigation into Murray was ongoing. ‘‘This is not over yet. ‘‘There is a Serious Fraud Office investigation under way and I’m handing all this material to them. They will determine whether or not there’s any criminality here and, if there is, we may well see prosecution.’’
During his three-year tenure, Murray chalked up $218,209 in expenses.
Murray spent $50,000 on relocation costs when moving from Canada to Hamilton in 2014 – $25,000 more than permitted.
His financial records were filed late for each year he was employed by the DHB. Investigators found some DHB staff felt intimidated by Murray.
During the 2016/17 financial year, Murray took five domestic flights without explanation. The flights cost taxpayers $5004.
All up, financial records show Murray took 16 overseas trips on the taxpayers’ purse.
Seven of those trips related to the DHB’s virtual health initiative, SmartHealth, or were described as IT-related trips.
The SSC was also asked to examine whether Murray and the Waikato DHB had maintained appropriate standards of integrity and conduct.
Hughes said taxpayers had been let down by Murray, but believed the health boss’s behaviour was ‘‘one out of the box’’.
‘‘This is hard-earned taxpayers’ money and I think Dr Murray’s behaviour here is an affront to the taxpayers of New Zealand. They have every right to feel aggrieved.’’
When initially confronted with allegations of unauthorised spending, Murray dismissed concerns, saying the funds related to a taxi fare and a meal.
He told Stuff he welcomed any inquiry into his spending and would fully co-operate with investigators.
Hughes said if the Waikato DHB had spoken to the chair of Fraser Health, it would have raised red flags.
‘‘Waikato DHB is one of the biggest district health boards in the country. It is a very large, complex organisation and you would not hire into the leadership of that organisation somebody who had question marks placed over their head in terms of his leadership and management skill set.’’
Meanwhile, Deputy AuditorGeneral Greg Schollum is to investigate the Waikato DHB’s showpiece virtual health project, SmartHealth.
Schollum’s probe is examining the health board’s procurement of IT services from HealthTap, the US- based company whose platform is used to deliver SmartHealth, as well as scrutinising the DHB’s management of the HealthTap contract.
One of the men heavily criticised over the former Waikato District Health Board chief executive’s excessive spending says Dr Nigel Murray led a ‘‘double life in the most extreme fashion’’.
Former DHB chairman Bob Simcock, who resigned over the debacle on November 28, said the State Services Commission (SSC) was using him as a ‘‘scapegoat’’ and had failed to ‘‘properly identify root causes and instead produced a report which is a scattergun of blame’’.
‘‘Unfortunately I am being held up as a scapegoat for some of what Dr Murray did, when it is now clear he led a double life in the most extreme fashion,’’ Simcock said.
Simcock said Murray’s ‘‘double-life’’ included ‘‘multiple relationships, in multiple countries with multiple mobile phones’’.
‘‘I am extremely disappointed to receive criticism from State Services Commission inquiry for accepting Dr Murray’s resignation and not dismissing him.
‘‘The inquiry says Dr Murray should have instead been held to account through dismissal and DHB disciplinary procedure.
‘‘I, and the DHB board, took legal advice from a law firm recommended by the Ministry of Health. This legal advice was to accept his resignation.
‘‘I am still hopeful Dr Murray will be held accountable for his actions as a result of other investigations.’’
The SSC inquiry also found that reference checks on the disgraced Waikato DHB boss failed to include his employer at the time.
If the check had been made it would have ‘‘raised a red flag’’, it said.
Acting DHB chair Sally Webb admitted the failing in a statement released shortly after the SSC revealed that a probe into Murray’s spending found $120k used on travel and accommodation was unjustified.
Webb took over the position of chair when Simcock resigned the post late last year, following the fallout of the Murray scandal.
She said the report identified that the DHB’s recruitment process was good but the reference checks were not thorough and didn’t include his current employer.
‘‘Had they done so, it would have raised a red flag with us.’’
In the wake of the report, all district health board chairs will now have to answer to the health minister for spending on their watch.
Health Minister David Clark gave a stark warning to health board chairs across the country.
‘‘There needs to be transparency around expenses, including written authorisation for significant travel costs and robust processes for manager’s expenses.’’
Clark said oversight will be bolstered by changes to the State Sector and Crown Entities Reform Bill.
‘‘To say this has been a disappointing episode for all involved is an understatement, but I have no doubt that lessons have been learned.
‘‘I now expect the Waikato DHB to concentrate on its real job – delivering quality health care for the people of Waikato. I have every confidence that the acting chair Sally Webb will ensure they do just that,’’ Clark said.
Webb said Murray routinely breached DHB policies and let the health board, the Waikato community and the former chair down.
‘‘We’ve taken steps to ensure that this sort of behaviour can never happen again at Waikato DHB. Audit NZ reviewed our processes for expenses, including those of the chief executive, in November last year and made a number of recommendations that we have already actioned.’’
Webb said the board made the decision to accept Murray’s immediate resignation and have him pay back all outstanding money that he owed, rather than sack him, to avoid being faced with further costs and potential lengthy litigation.
‘‘We weighed up many factors in coming to this decision but decided the ongoing costs to the organisation, not only financial but also in the amount of time we would spend on this, were outweighed by the need to move on and focus on delivering health services to our population.’’
Webb praised the staff who blew the whistle on Murray’s unauthorised spending. ‘‘I’m really pleased that the report acknowledged the courage of DHB staff, who made repeated efforts to bring the issue of over spending and spending outside policy to Dr Murray’s attention, before escalating their concerns to the chair,’’ she said.
‘‘There needs to be transparency around expenses . . . and robust processes for manager’s expenses.’’ Health Minister David Clark