Minister defends ACC blunder

$12m wrongly paid out 'not a hanging offence'

Last updated 05:00 13/06/2009

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Just three months after ACC Minister Nick Smith sacked the corporation's board members for cost blowouts, he is defending it over its latest blunder, saying $12 million in wrongful payouts is "no hanging offence".

New ACC board chairman John Judge is also playing down the matter, saying "mistakes will happen" and he is not asking for resignations.

Their comments followed ACC's admission this week that it had mistakenly made $12m in payments to 170 people, some of them sexual abuse victims, who were not entitled to the money.

The bungle happened when ACC failed to put into effect a 2006 court ruling that people had to be employed at the time of their injury to qualify for income compensation. The money will not be recouped.

Dr Smith said he had not asked for ACC chief executive Jan White to resign. Nor was it appropriate for him to do so as she was answerable to the board.

"This is a one-off. I have confidence in the board and that they are aware of some of the corporation's weaknesses and failings and are taking proper steps to put the organisation in better shape.

"I'm satisfied with the way the corporation has managed the issue after getting into a pickle."

Rather than sweeping it under the carpet, they had chosen to be up front, he said.

Ms White had apologised, and while Dr Smith expected it would be considered in her performance appraisal, it was not a hanging offence.

Dr Smith said he had made very clear his expectations of the corporation's performance. "I have confidence in Jan White but the legal responsibility for the chief executive rests with the board."

Mr Judge did not think any staff would be disciplined.

"I will be having a good look at processes to see what went wrong ... and to make sure it doesn't happen again.

"But it is a very large organisation and the reality is things happen from time to time."

Asked if it might affect performance bonuses, he said he was unsure if staff who were responsible for the error were still working for ACC.

There was no talk of resignations being asked for or tendered.

Two weeks ago Dr Smith announced that 70 jobs would be axed from ACC as part of a restructuring that is unrelated to this latest problem.

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- The Dominion Post

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