Corrections rapped for double payment

The Auditor-General has criticised the Corrections Department for failing to stop a $14,758 duplicate payment made to Tainui as part of $1.5 million paid to the iwi for consultation work on the north Waikato prison.

National's MP for Port Waikato, Paul Hutchison, has released a letter from Auditor-General Kevin Brady responding to complaints he and Act leader Rodney Hide jointly made last year over the consultation.

The Government was embarrassed and the Corrections Department was in the gun at the time over revelations that the department forked out $1.5 million to Tainui over seven years for "iwi consultation" over the proposed Spring Hill prison.

Mr Brady said the department overpaid Tainui's Waikato Raupatu Lands Trust $14,758 but the department was not seeking repayment after being advised the cost of recovering it would exceed the likely amount recovered.

While he accepted the department acted appropriately in seeking legal advice on recovery options, it should have had systems in place to ensure duplicate payments could not occur in the first place.

Mr Hutchison said he did not know who in Tainui got the overpayment but it was typical of the Government's "slack attitude" that the department was not pursuing repayment.

Mr Brady's letter said he would not launch an inquiry into the consultation costs associated with the prison.

However, he said his staff were planning a "performance audit" considering the issues arising for Government agencies when consulting community groups on major projects. The Spring Hill consultation would be "specifically examined".

The Corrections chief financial officer, John Ryan, said in a statement the duplication of payments should not have happened.

The department had acted to avoid a repetition.

The department's legal advice had been that the cost of recovering the payment would likely have been higher than the amount overpaid.

Mr Hutchison was not happy that there would not be an inquiry. "This is a public scandal from the start to the end," he said. "The process has been absolutely shocking."

Mr Hide said he was also disappointed about the lack of an inquiry because the duplicate payment was just a small part of the problem.

"The $1.5 million had all the hallmarks of actually buying consent for the prison, rather than consultation."