The Families Commission was looking for a new senior manager - instead it got a $400,000 Australian consultant.
An audit obtained under the Official Information Act has found the Crown entity failed to follow its own rules, paying $411,000 for a consultant to fill a permanent manager's seat without checking if she was "value for money".
In early 2011, Angela Tidmarsh was seconded from the Australian Institute of Family Studies at a cost of $52,235. When the commission failed to find a suitable permanent candidate for its senior manager "of knowledge management and relationships" in May 2011, it gave the job to Ms Tidmarsh, the audit said.
In that role, she clocked up an hourly rate of up to $120. The commission had previously spent $39,422 on her travel and accommodation cost. In total, her services cost $411,732.
Audit New Zealand said any contract over $100,000 should have been put out to tender unless the commission's board made an exception - which it hadn't. The mistake was even repeated, when her contract was rolled over after a year when it should have been publicly advertised.
Ms Tidmarsh had not applied for the role or been identified as a potential candidate but was still contracted with no recorded evidence on whether she was worth $411,000, the report said.
The transaction was uncovered in March, a few months after the commission's chief commissioner, Carl Davidson, and chief executive Paul Curry had both left.
On March 13, interim chief commissioner Belinda Milnes wrote to Social Development Minister Paula Bennett, raising concerns about the previous management's "financial practices".
This week Mr Curry defended the decision to hire Ms Tidmarsh and said he was offended by aspersions cast about his financial management. "You look at my history, I am the tightest-arse chief executive you have ever come across," he said.
He disagreed with parts of Audit NZ's report, which had not included contacting him. Ms Tidmarsh had applied for the job like anyone else and was hired during a tumultuous time at the commission because she was the best candidate.
He had never acted outside his authority, he said. "It's pretty easy to ping someone in retrospect."
Mr Davidson also supported the contract and said while the proper processes may not have been followed, the outcome would have been the same.
"We were in a period of significant change and we really needed those skills," he said.
The commission's corporate support and reporting manager, Lynda James, said all of Audit NZ's recommended changes had been accepted.
While many key people have been replaced since Ms Tidmarsh was hired nobody had left as a result of Audit NZ's findings.
"We've drawn a line under the past."
Ms Bennett said she had absolute confidence in management at the commission.
Ms Tidmarsh left the commission last October and now works in Australia. She could not be reached for comment.
Audit NZ also investigated other concerns raised by new management about staff spending but uncovered no significant problems.
The commission receives about $8 million in public funding and is in the midst of transforming into a social policy unit for monitoring government policy.
Last year its funding was reduced by $1m and the number of commissioners has also been cut.
The commission was established in 2002, a concession wrangled by Peter Dunne's UnitedFuture in return for supporting Labour's minority government.
- © Fairfax NZ News
A "fat tax" on sugary drinks is:Related story: PM rejects 'fat tax'