National want wider probe of Housing NZ

National is seeking a wider probe into Housing New Zealand Corporation (HNZC).

National Party housing spokesman Phil Heatley said Auditor-General Kevin Brady should extend his inquiry into financial mismanagement allegations at the corporation to include costs of upgrading state houses.

Mr Brady is also investigating a confidentiality agreement HNZC had with the contractor who made the allegations about a $2.1 million "suspense account" used to make it appear a project was completed on time and on budget.

The contractor was told in December last year that $3000 owed to him would not be paid unless he agreed not to take his complaints about accounting irregularities to the media, ministers or MPs.

A senior manager, Gerard Coles, who signed off the settlement letter, stood down but board chairman Pat Snedden expressed confidence in chief executive Helen Fulcher and she remains in the job.

Today Mr Heatley said Mr Brady should also look at why upgrades of state houses were costing $105,000 per room.

"Given allegations that the accounts are being doctored to hide budget blowouts, I want to know whether the modernisation costs are being inflated to disguise financial mismanagement elsewhere at Housing New Zealand," he said.

The 2005 building costs survey says it should have cost around $1500 per sq m including all structural, electrical and plumbing costs.

Mr Heatley would try to get the HNZC scandal examined at a select committee.

At the weekend Mr Heatley repeated calls for Ms Fulcher to stand down after the Herald on Sunday reported that she was sent copies of emails alleging financial mismanagement as early as last September and that she was kept in the loop on the gagging letter.

The inquiry terms of reference said Mr Brady would "in particular" find out whether Ms Fulcher authorised the confidentiality agreement, or knew about it in advance.

Neither HNZC nor Housing Minister Chris Carter would comment until the inquiry was completed -- expected to be in mid-May.

- NZPA