The investigation and subsequent reports were completed by Deloitte under a process that was subsequently found to be inadequate and as a consequence NZTA no longer stands by the findings of those reports — which have been removed from NZTA’s website. NZTA has also apologised to the manager who was the subject of the reports.
The former boss of a New Zealand Transport Agency's (NZTA) business arm has been heavily criticised in an independent report looking into his work.
Compiled by Deloitte, the report said an arm of NZTA and its manager had "an extensive disregard of proper processes for business, finance, governance, procurement and staffing".
It said that was "largely as a result of the leadership of [the former manager], and the relationship between [the former manager] and the former chief executive [Fergus Gammie]."
The former manager, who was being paid more than $150,000 a year, quit his job in March.
He had already been the subject of an internal investigation.
The business group was established in July 2017 and was tasked with the development of innovative technology.
In under two years the former manager oversaw an expansion from eight full-time employees to about 100 staff, 83 of whom were either fixed-term or contractors.
The Deloitte report offered 14 key findings, starting with concern over the bypassing of NZTA governance and controls, including the way staff were hired.
"Interviewees described various instances where standard corporate processes were "bypassed" to achieve desired results quickly and without challenge.
"Documents reviewed supported this with instances of recruitment of employees outside of recommended recruitment processes and the procurement of vendors without the consistent application of NZTA rules."
Deloitte said the hiring of contractors and fixed-term staff gave little certainty for long-term projects.
It also found the former manager drew on his technology contacts in California when hiring contractors, and he was not receptive to questioning of pay rates.
"The director pushed back when challenged on the high hourly rates paid to certain contractors in leadership positions, citing the risk to particular projects if the contract was not rolled over," the reporter said.
Deloitte found the group had lax financial governance.
It said the former manager side-stepped NZTA processes to obtain results and move ahead with initiatives.
The interim chief executive of the Transport Agency, Mark Ratcliffe, said the report showed failings within the former manager's team, which were unacceptable.
"The report makes it clear there was a lack of adequate oversight over this group and the processes weren't followed," Mr Ratcliffe said.
"The work is now being managed by a group where I have confidence in the leadership of that team to follow all appropriate processes, and this will not be happening again."
Mr Ratcliffe said he became concerned with the performance of the group when he started his job in mid-January.
"The first thing I saw was a business case that said that the project was likely to cost more money than had originally been budgeted for, and so I started to dig into it a bit."
Figures obtained by RNZ under the Official Information Act show the former manager racked up $38,772 worth of travel during his time in charge of the group.
That included a six-day trip to San Francisco in July last year, in which he spent nearly $1179.50 a night to stay at the Stanford Court Renaissance hotel.
The only room at the hotel in that price range is the Enterprise Parlor Suite.
Former NZTA boss Fergus Gammie signed off on the travel expenses, but Mr Ratcliffe said that spending was extreme and unacceptable.
Fergus Gammie Photo: RNZ / Jo Moir
"Silicon Valley is the home of most of the more innovative things that are going on in IT, and I think it's quite understandable that a senior executive would visit there," Mr Ratcliffe said.
"What I don't find acceptable is spending $1100 a night for a hotel room."
Mr Ratcliffe said NZTA would enact all of the recommendations of the Deloitte report.
The business group has been merged with other parts of NZTA.
