Housing NZ cleared of cooking books, criticised for gagging clause

A gagging clause in a Housing New Zealand settlement with a former contractor was "inappropriate", but the agency did not cook its books, the Auditor-General has found.

It was claimed this year that the state housing agency tried to silence the former contractor's claims that it presented misleading accounts to mask budget blowouts in some areas.

The Auditor-General's report, released today, said it found no cause for "significant concern" about the agency's accounting practices.

But the gagging clause, which forbade the contractor from raising his concerns with ministers, MPs, or journalists, was too broad and contravened existing legislation protecting whistleblowers.

However, it said the intention of the clause was not to "silence" the contractor and its inclusion was initiated by the contractor.

The report said chief executive Helen Fulcher approved the financial parameters of the $3000 settlement -- effectively a fortnight's notice for the contractor -- but was unaware of the controversial non-disclosure cause.

The report cited concerns about management reporting practices in the agency's national property improvement team.

HNZ said it was addressing those concerns through the appointment of an additional accountant.

- NZPA