Dr Nigel Murray's 'at risk' salary withheld by Waikato DHB when he quit

An "at risk" component of Dr Nigel Murray's salary was withheld last year after the former Waikato District Health Board boss resigned amid an expenses scandal.

Murray quit in October, the same month he would have received the portion of salary used as an incentive to meet key performance indicators [KPIs] in his $560,000 a year contract.

The former chief executive was paid $47,615 in October 2016 for the 2015/16 financial year and $46,277 in October 2015 for meeting his KPIs in the 2014/15 year, according to figures presented to the Health Select Committee.

However, the DHB did not pay Murray that performance-based portion of his salary for the 2016/17 financial year because it was investigating him for irregular expenses.

Murray spent $218,000 of taxpayer money in three years travelling for work and in his final year he was out of the office travelling for six months of the year.

He is now being investigated by the State Services Commission over the irregular spending after an Audit NZ report found he travelled overseas while on sick leave, booked travel without approval, failed to declare hospitality and tried to cover up the breaches.

The SSC investigation report is expected soon.

Waikato DHB corporate services executive director Maureen Chrystall told the Herald it was unclear if Murray met his KPIs in the final year but she understood no formal discussion was had about awarding the at-risk salary.

She believes the investigation and Murray's resignation ended his chances of securing the money, which was more than $10,000 higher than his predecessor.

According to the figures presented to the health select committee, Craig Climo earned back between $34,500 and $36,800 for his last three years as chief executive at the DHB.

Chrystall said the chances of the DHB being able to take back the first two at risk payments was slim.

"There's no legal basis for us reclaiming it. We would be on very weak ground to consider it."

Murray has paid back about $50,000 of the money he overspent. Another $20,000, which the DHB claims was used by Murray for personal benefit, is in dispute.

The DHB answered 168 questions from the health select committee, revealing previously hidden detail on a range of topics including SmartHealth, the DHB's controversial virtual health app powered by American company HealthTap.

At the 2015/16 health select committee, when Murray was still CEO, the DHB was asked how much SmartHealth cost, and put the figure at $2.9m.

But this year's response includes $10.5m - after an Audit NZ report found the DHB paid $US5m each year for two years to HealthTap to provide the platform - and gives a budget of more than $14m and overall total spent of $12.09m.

Previously the DHB kept secret the business case and procurement cost for HealthTap, the process for which is now being investigated by the Auditor-General.

The DHB also told the health select committee in the 2015/16 financial year that smart phones would be lent to the families of children suffering rheumatic fever in a bid to aid the DHB's rheumatic fever prevention campaign after five cases were reported that year.

However, in the 2016/17 financial year the number of cases jumped to 16.

Another line of questioning raised the $14.7m renovation of the former Farmers office block in Hamilton and an office in the adjoining KPMG tower building.

In August the Herald revealed the $7.7m refurbishment had ballooned to double the original estimate in one year for the project, that was to house 800 DHB staff including the executive leadership team, who had already moved to the tower.3

Waikato District Health Board interim chief executive Derek Wright moved his executive leadership team back to the Waikato Hospital campus. Photo / Alan Gibson

It meant the DHB needed Ministry of Health approval to continue.

The DHB told the health select committee the cost to relocate the 18-strong executive leadership team, including Murray, was $825,000 including fit-out and information systems costs.

The reason for relocation was to "develop an executive open plan workspace and public meeting spaces" but the move riled clinicians at the time who accused Murray of undertaking self-serving projects.

When interim chief executive Derek Wright took over in October he moved the team back to the Waikato Hospital campus and is in the process of trimming the number of executives in the team.

The resignation of another executive team member was announced at last week's board meeting, after strategy and funding executive director Julie Wilson stepped down.

Also revealed to the committee was the $6.12m it cost to lease the old Farmers building and tower office, as well as warehouse space, for one year.

A spokeswoman said the DHB was still leasing the tower office because it had other staff there and the lease on that space cost $234,742.

News of Murray's withheld salary comes as the board agreed to change its remuneration committee structure to one that solely focuses on the performance of its chief executive.

Waikato DHB spent $23.5 million on linen, $605,000 in one year on catering, and $115,000 on workplace counselling. Photo / Alan Gibson

At its monthly meeting last week the board agreed to change several committees including renaming the remuneration committee the chief executive performance review committee, after the mismanagement of Murray's expenses.

The Herald revealed in November that staff raised concerns about Murray's expenses in December 2015, but Simcock was only alerted to the overspent relocation costs in February last year and to issues with the overall expenses last June.

What Waikato DHB told the health select committee about 2016/17

• 740 staff terminations, a turnover rate of 12 per cent, compared to 507 in 2013/14;

• 1067 people resigned or left the DHB including five people who died, nine whose position was eliminated, 49 who were dissatisfied, 156 because of career progression and 179 who relocated;

• $1.33m paid out in severances and redundancies since 2012 including $115,000 to four people in 2015 following a restructure of population health services. In that payout was Kathleen Archibald who won an Employment Court case against the DHB which was forced to apologise over its treatment of the former nurse;

• $177,646 paid out in redundancies to five people compared to $110,909 to two people in 2013/14. The highest number of people made redundant in one year was 18 in 2012/13 with $441,754 paid out. The highest amount paid to one person was between $170,000 and $180,000 in 2015/16;

• Average use of operating theatre time was 74 per cent at Waikato Hospital and 60 per cent at Thames Hospital;

• 1198 patient complaints to either the DHB or Health and Disability Commissioner;

• 27.6m emails sent and received by the DHB;

• 262 Official Information Act requests received compared to 162 the year before;

• Five patient privacy breaches including a stolen car that had patient notes in it;

• 37 phones went missing and three were stolen. Also stolen was one laptop and three iPads, while one laptop went missing along with four iPads;

• $23.5m spent on linen and $605,515 was spent on reception and catering;

• Fees paid to consultants and contractors rose by $16.4m between 2015/16 and last year;

• 5607 leave requests were declined or cancelled with 46,925 sick days taken, an average of eight days per employee;

• $115,189 was spent on workplace counselling compared to $89,792 in 2013/14;

• $144,000 was spent by staff on international travel compared to $30,000 in 2013/14;

• Six Koru club memberships were paid for compared to nine in 2015/16;

• $9.15m spent on staff training, the highest in five years;

• $1.59m spent on seismic strengthening at Thames Hospital.

The rise and fall of Nigel Murray

July, 2014: Dr Nigel Murray starts at Waikato DHB.

December 2015: Staff member raises concerns with senior manager over Murray's relocation costs. Manager tries to get Murray to rectify situation.

December 2016: Herald reveals Murray has not disclosed expenses for two years.

January 2017: Murray finally discloses expenses which show $108,000 spent over two years including $36,000 relocation costs.

February 3, 2017: Senior manager alerts Simcock to potential relocation overspend. Actual amount spent was $52,000 versus $25,000 agreed. Simcock asks Murray to explain. Murray gives an undertaking costs will be immediately reimbursed.

May 2017: Murray pays back $30,000 after chief of staff Neville Hablous tenders resignation (later withdrawn).

June 7, 2017: Hablous and two other members of Murray's executive team alert Simcock to problems with the CEO's expenses. Simcock alerts Minister of Health, SSC, some board members and seeks legal advice.

July 4, 2017: Murray made aware of the accusations.

July 19, 2017: Full board alerted at special meeting. Agree to investigate.

July 21, 2017: Murray told of investigation. Goes on leave.

July 22, 2017: Herald breaks news of the looming investigation.

August 2017: Audit NZ begins review of management and authorisation of Murray's expenses.

October 5, 2017: Murray resigns and DHB's investigation ends. Draft report read to board. DHB refuses to release findings.

October 18, 2017: Herald reveals DHB investigation raised questions about expenses Murray claimed, associated with two Canadian women.

November 3, 2017: Murray's expenses for three years in the job released, showing he spent $218,000. Minister of Health David Clark asks State Services Commissioner to investigate.

November 24, 2017: Damning Audit NZ report into Murray's expenses.

November 28, 2017: Herald reveals Serious Fraud Office making preliminary inquiries into spending. Simcock resigns.

December 1, 2017: DHB releases Audit NZ criticism of procurement of contract with HealthTap. State Services Commissioner asks Auditor-General to conduct inquiry.

December 20, 2017: Auditor-General launches investigation into HealthTap purchase.