Part 7: Handling of visa and permit applications from relatives of Mary Anne Thompson

7.1
As discussed in Part 3, Immigration New Zealand staff generally act with integrity and probity when making visa and permit decisions. However, sometimes there are – perhaps inevitably in a large organisation – exceptions to this. When the exception involves a senior manager, the consequences for the organisation are more serious.

7.2
One of the significant public concerns that led to our inquiry related to allegations of improper handling of visa and residence applications for relatives of Ms Thompson while she was Deputy Secretary (Workforce) in charge of Immigration New Zealand.

7.3
In this Part, we discuss:

• the visa and residence applications and related investigations;
• the results of the SSC’s investigation;
• our observations;
• what the SSC knew about these matters before it investigated; and
• what the responsible Ministers knew about these matters.

7.4
During our inquiry, it was clear that stories had circulated within Immigration New Zealand about the involvement of a senior manager in decisions affecting their family members. Some of these visa and permit decisions became well known in parts of Immigration New Zealand, including in offshore branches.

7.5
Gossip and rumour about the integrity of a senior manager can be damaging to the culture and morale of an organisation. Although a few staff members raised this issue as a matter of concern, the fact that other people appeared to know something of the incidents but took no action also shows a disappointingly low level of knowledge of, or confidence in, Immigration New Zealand’s processes for raising concerns.

The visa and permit applications and related investigations

Relatives of Ms Thompson received visa waivers and residence permits that were not consistent with policy requirements, leading to some concerns about Ms Thompson’s involvement.

7.6
The visa waivers and residence permit applications that caused concern involved members of Ms Thompson’s Kiribati family. We describe briefly what took place because it is important to the rest of this Part of our report. The circumstances are discussed in detail in the SSC’s investigation report.

Visa waivers

7.7
In 2004 and 2005, some of Ms Thompson’s relatives travelled to New Zealand. Ms Thompson helped them with their applications. In some instances, this assistance involved email discussions with relevant Immigration New Zealand staff, which resulted in the applicants being granted waivers from the usual requirements that they obtain visas for their travel. The decisions to grant the visa waivers were made by other staff, and did not comply with Immigration New Zealand’s policy.

7.8
Dr Buwalda, the chief executive at that time, became aware of some of these visa waivers in 2005, and spoke with Ms Thompson about her involvement. We discuss this in more detail later in this Part.

Residence permits

7.9
Three residence permits were granted to relatives of Ms Thompson in March 2006 under the residual places policy for the Pacific Access Category quota scheme.

Internal audit report

7.10
Internal audit staff identified concerns with some visa and permit applications for relatives of Ms Thompson. It was brought to the attention of the audit staff by a manager in the Pacific Division during a branch review early in 2007.

7.11
The concerns were brought to Dr Buwalda’s attention, and he asked for further investigation into these applications. The resulting internal audit report (described as a “preliminary background investigation”, dated March 2007) identified a number of issues and inconsistencies with these applications, including instances where requirements were waived or policies breached. The report recommended that an urgent meeting of the Department’s audit committee be called to help the chief executive in handling this matter, and that the chief executive commission a further independent investigation into it.

Involving the audit committee

7.12
The role of an audit committee is to provide the chief executive with independent advice on strategic, performance, assurance, and compliance matters.¹ At that time in 2007, the Department’s audit committee comprised two independent members (one of whom chaired the committee), the chief executive, and two Deputy Secretaries. Dr Buwalda told us that he did not formally refer the matter to the audit committee because the report involved a senior manager, and two members of the committee were her peers. Instead, he discussed the issues separately with the two independent members and sought their advice on the approach he should take for an independent investigation.

7.13
This meant that there was no formal consideration by the audit committee of the internal audit report into the visa and permit applications, and the committee was not aware of all of the issues highlighted by the report.

7.14
In our view, to achieve the benefits associated with audit committee independence, most of the audit committee members for entities should be external appointments. We are pleased that the Department’s audit committee now comprises two independent members (one of whom is the chairperson) and the Deputy Secretary (Legal). The audit committee should consider the process it will use for appropriately handling sensitive issues.

Recommendation 19
We recommend that the Department of Labour consider how sensitive issues can be appropriately handled by the audit committee.

Mr Oughton’s investigation

7.15
Dr Buwalda initiated an external investigation into the lawfulness and policy compliance of the residence decisions for Ms Thompson’s relatives, who was responsible for making them, and whether there were any irregularities in the decision-making process. This investigation was carried out in 2007 by Mr Oughton. Mr Oughton did not comment on the lawfulness of the decisions, but concluded that the applications did not qualify under the Department’s current policies. It became an employment matter once Mr Oughton had looked into it further, and one staff member in the Pacific Division was found to have acted inappropriately in issuing the permits.

7.16
Ms Thompson signed the application forms for the permits to acknowledge her assistance in completing the forms, which is necessary and required by the form when someone assists an applicant in this way. She was not involved in the decision-making process.

The State Services Commission’s investigation

The SSC found that Ms Thompson failed to appropriately manage the conflict of interest involving her relatives, and the Department was deficient in handling the visa and permit decisions and in responding to concerns raised internally.

7.17
The SSC investigated these visa and permit decisions because of public concern about the effectiveness of the Department’s response. The SSC reported its findings in October 2008.² The SSC’s report comprehensively describes the visa and permit decisions, the actions of Ms Thompson and other relevant staff, and the Department’s handling of the concerns.

7.18
We agree with the SSC’s findings and conclusions. We reviewed a considerable amount of documentary evidence from the Department and the SSC, and we interviewed some of the same individuals as the SSC as part of our inquiry.

7.19
Although it is unnecessary for us to provide further detail about the circumstances of the investigated allegations, it is useful to summarise the SSC’s comments about the way these applications were processed and the Department’s handling of those concerns. These particular issues illustrate broader problems we also found throughout our inquiry.

The SSC's findings

7.20
The SSC found that Ms Thompson failed to appropriately manage the conflicts of interest relating to the applications involving her family. She did not advise the chief executive (as her manager) of any of the details of her involvement with her family’s immigration applications.

7.21
The SSC found that the Department was deficient in the handling of these visa and permit decisions and in its response to concerns being raised.

7.22
The SSC found that the visa waivers and residence permits were granted in circumstances where they normally would not have been, but were lawful. There were two main problems with these decisions:

• Although Immigration Officers have discretion to grant visa waivers, they are normally only granted in special circumstances. There were no special circumstances in these cases, and the visa waivers were given simply for the convenience of Ms Thompson and her family.
• A late application for residence was accepted and inappropriately processed ahead of other applications that had been received within time. This was contrary to policy, and the manager who made the decision rejected advice from staff about it. The SSC found that the manager was influenced by Ms Thompson’s name on the application form when making that decision. The manager may also have been influenced by the Group Manager, Service International. Other senior staff also took an active interest in the processing of the application after Ms Thompson expressed a general concern about documents going missing and used these applications as an example. This caused significant anxiety for some frontline staff.

7.23
The SSC found that the Department failed to effectively investigate the concerns raised about these visa and permit decisions. Concerns about some of the visa waivers were raised in 2005 with Dr Buwalda. He spoke to Ms Thompson informally, but Ms Thompson did not appreciate that the matter was serious. Dr Buwalda was not aware of the full extent of the waivers at the time, and he had received inadequate assurance about the appropriateness of the visa waivers from the Group Manager, Service International. The SSC found that the actions taken by Dr Buwalda were not effective in terms of clearly establishing what happened and in dealing with the conflict of interest.

7.24
The SSC accepted the reasoning for having Mr Oughton conduct a focused investigation, but said that there needed to be a plan for investigating the other issues identified in the internal audit report, which was not done.

7.25
When Mr Oughton’s report was completed in July 2007, the new acting chief executive, Mr Fortune, was unaware of all the other matters that needed to be addressed. He responded to what he believed to be a single incident. One staff member was disciplined, and Ms Thompson was asked to progress some actions arising out of the investigation. This included developing more formal protocols to cover applications from people who have relatives or extended family members employed in the Department, to ensure the integrity of the Department’s systems.

7.26
The SSC’s investigation concluded that, overall, the Department did not deal with the issue in a timely or effective fashion until the end of 2007. Ineffective investigations meant Ms Thompson’s actions were dealt with too informally and leniently in relation to her conduct. The SSC’s report said:

Staff who raised serious concerns did not see any significant response by the Department. The damaging lesson that staff could take away from this is that there is little or no point in raising concerns with management, as little will be done. I consider it is clear that doubt and loss of trust arising in the minds of the various [Immigration New Zealand] officers concerned was having significantly corrosive effects.

7.27
Dr Buwalda acknowledged after the SSC investigation was released that, in hindsight, he should have more thoroughly investigated Ms Thompson’s involvement in immigration matters about her family, and dealt with the matter more formally. Ms Thompson has also acknowledged an error of judgement in that she could have better handled the matter.

7.28
The State Services Commissioner (the Commissioner) notes in his report that the current chief executive, Mr Blake, began to take comprehensive action on several issues, including those identified in the SSC investigation, after joining the Department in October 2007. The Commissioner stated that Mr Blake’s leadership gave him confidence that the issues identified would be successfully managed.

Our observations

The visa and permit decisions relating to Ms Thompson’s relatives highlight wider issues we have discovered in this inquiry.

7.29
We discuss here some further observations about these incidents, drawing on our broader review of how visa and permit decisions are made.

Identifying and managing conflicts of interest

7.30
In our guidance publication about conflicts of interest,³ we comment that conflicts of interest are often natural and unavoidable. The existence of a conflict of interest does not necessarily mean that someone has done something wrong, and it need not cause problems. However, it needs to be identified and carefully managed to preserve the integrity and fairness of the decision-making process.

7.31
The matters discussed in this Part illustrate the importance of dealing with conflict of interest issues in an effective and transparent way. In this case, the fact that Ms Thompson had relatives who wanted to come to New Zealand need not have caused a problem. Her relatives should not have been given preferential treatment, but equally they should not have been improperly disadvantaged because of her position. Similarly, the fact that she personally helped them with their application forms and paid their fees was not in itself wrong, and doing so was not prohibited by departmental policy.

7.32
In our view, some of Ms Thompson’s actions to help her relatives would have been quite legitimate if her conflict of interest had been properly disclosed and managed. She needed to tell her manager (the chief executive) precisely what she was planning to do, so that proper steps could be taken to ensure that the matter was handled fairly and that Ms Thompson, relevant staff, and the Department, were all protected. The risks here were particularly acute because of Ms Thompson’s very senior position, which meant that frontline staff might feel pressured to act in her favour. Suitable steps to manage her situation might be different from those taken if a junior Immigration Officer was in a similar situation. But, in our view, the risks could still have been managed.

7.33
For example, appropriate steps in the case of the residence application might have included instructing Ms Thompson (and, if necessary, those staff close to her) not to communicate with staff processing the application. They might have included ensuring that the application was assigned to a suitably senior and experienced immigration officer, with instructions to process it in the same way as any other application and strictly in keeping with relevant policies. They might also have included requiring an extra level of review by a senior or independent person who did not work in Ms Thompson’s part of the Department, or by having the application checked by the chief executive.

7.34
In January 2005, Ms Thompson distributed a memo to immigration staff headed “Staff Disciplinary Issues”, as a result of two instances of serious misconduct by staff that breached the Department’s code of conduct. The memo discussed the question of whether staff can act as sponsors for applications from family members, stating that this was permissible, provided the person’s manager had been previously informed so that the application could be processed by another office. Ms Thompson breached these instructions later in 2005.

The cumulative effect of Ms Thompson's actions

7.35
The cumulative nature of Ms Thompson’s involvement in several immigration applications compounded the problems, because the result was a series of poorly handled decisions. Matters have also been made worse because the issues were not comprehensively addressed by the Department when her involvement first became clear in 2005.

7.36
Incidents were considered in isolation when there was a cumulative picture that needed to be considered. Regrettably, that did not happen until the SSC’s investigation. Dr Buwalda told us that Mr Oughton’s investigation was an essential step in this process, and the outcome would then assist him to determine what further action might have been needed. Dr Buwalda resigned before the investigation was complete.

7.37
The current chief executive, Mr Blake, became aware when he joined the Department that there had been some previous issues concerning applications for Ms Thompson’s relatives. The Department received an official information request about these matters in December 2007, which prompted Mr Blake to read Mr Oughton’s report. Mr Blake began to follow up with Ms Thompson on the outstanding issues.

7.38
We do not have any criticisms to make of Mr Blake about this matter. By the time he had arrived at the Department and become familiar with the issues, his options were limited. He was concerned about what he discovered and he actively considered whether he could reopen the matter, including seeking Crown Law advice. But he could not discipline Ms Thompson a second time for matters that had already been dealt with (such as the visa waivers that Dr Buwalda had spoken to her about), nor could he discipline her about a matter where the relevant inquiry had essentially cleared her.

7.39
What Mr Blake did do was seek certain assurances from Ms Thompson about her involvement, and follow up certain process improvements that she had been required to action following Mr Oughton’s report. It is clear to us that he did so diligently. He took a close interest in the Department’s handling of a series of detailed official information requests that had begun to arrive about the issues. He also began to examine the operations of the Pacific Division.⁴

Relevance to other matters we have investigated

7.40
The visa and permit decisions for Ms Thompson’s relatives illustrate some of the wider problems we have seen in our inquiry, and which we discuss elsewhere in this report:

• They involved situations where some managers misunderstood the extent of their own authority to make visa and permit decisions, or made decisions that did not comply with policy. There was confusion about policy requirements in some cases.
• They show that some managerial staff were not sufficiently alert to integrity risks that arise out of conflicts of interest, where well-meaning or facilitative actions can very easily lead to perceptions of preferential treatment or improper influence, and where more junior staff can feel obliged to deal with applications in a particular way against their better judgement.
• They show that some managerial staff did not have sufficient concern for following proper processes, and were not mindful of the need to take greater care in cases where any integrity risks may exist.
• It was clear that staff are sometimes unsure about how best to deal with their concerns, and their confidence in the Department can be seriously damaged when they feel managers are not interested in following proper process or that managers could be breaching the rules for their own benefit.

What the State Services Commission knew

The SSC’s knowledge of integrity issues within Immigration New Zealand was limited. The SSC needs to look at what steps can be taken so that significant or sensitive issues are fully covered in briefings to incoming chief executives.

7.41
In this section we discuss the ongoing monitoring role of the SSC with the Department, separate from the investigation discussed in the preceding paragraphs, and what the SSC knew about the integrity issues within Immigration New Zealand.

The State Services Commission’s role

7.42
The SSC is one of three central agencies responsible for providing leadership, co-ordination, and monitoring throughout the public sector.⁵ It is the Government’s lead advisor on public management systems, and works with government agencies to support the delivery of quality services to New Zealanders, and to ensure that the government operates effectively and efficiently.

7.43
The SSC’s role is to support the Commissioner in discharging the Commissioner’s statutory functions and responsibilities. These include:

• appointing and employing public service chief executives and reviewing their performance; and
• investigating and reporting on departmental performance matters.

7.44
The Commissioner has other responsibilities that relate to the operation of the public service as a whole, the state services, or wider state sector. These include setting minimum standards of integrity and conduct.

7.45
We spoke with various individuals within the SSC who were responsible for the SSC’s relationship with the Department during the period 2004 to 2007, and who liaised regularly with the chief executive and senior managers within the Department.

Knowledge of any integrity issues

7.46
The SSC appreciated that Immigration New Zealand was an area within the Department where integrity concerns were more likely to arise, because of the nature of the decisions it makes and because it has a large number of offshore staff operating in different cultural environments. However, no widespread integrity issues had come to the attention of the SSC through its regular meetings with senior management of the Department. This is consistent with our finding in Part 3.

7.47
Earlier in this Part, we discussed Mr Oughton’s investigation into visa and permit decisions for relatives of Ms Thompson. Some details of the matter were provided to the SSC by the Department at this time.

7.48
Dr Buwalda, the then chief executive, informed the SSC in April 2007 that an issue had arisen about potentially illegal visa and permit decisions involving relatives of Ms Thompson and that he was setting up an investigation. The SSC understood that the review was not focused directly on Ms Thompson’s actions and whether she had a conflict of interest, but on the legality of the visa and permit decisions and their compliance with policy. The investigation was not complete at the time of Dr Buwalda’s resignation in May 2007.

7.49
The SSC was not provided with a copy of Mr Oughton’s report when it was finalised, but staff were briefed on its findings. The former Commissioner’s impression was that it was not a major issue, and that it did not raise integrity concerns about Ms Thompson.

7.50
The SSC was not aware of the visa waiver issues until late 2007 or early 2008 when they became the subject of official information requests to the Department. The SSC was not aware that the residence applications were part of a pattern of behaviour.

7.51
In our view, the SSC appropriately managed its interaction with the Department about Mr Oughton’s investigation, based on the information the SSC had received. It will always be a matter of judgement for departments and their chief executives to decide which issues are significant enough to discuss with the SSC.

7.52
To the extent that the issues considered by Mr Oughton’s investigation were employment matters, they remained the responsibility of the Department’s chief executive. However, the SSC has a role in providing appropriate leadership and guidance to the chief executive if it is required.

7.53
It is important that issues the SSC is aware of, and that are relevant to its role, are followed up and resolved. In our view, this happened when the SSC followed up on Mr Oughton’s report.

7.54
Although the SSC appreciated that making visa and permit decisions could heighten the risk of integrity issues, it was not clear that the SSC routinely asked questions of the Department about how it was handling integrity and conduct matters. The SSC may wish to consider its approach to such matters. For example, the Department’s internal auditors produce regular statistics on incidents of misconduct within the Department. These do not appear to have been provided to, or requested by, the SSC.

Induction of chief executives

7.55
Before Mr Oughton’s report was finalised, the chief executive resigned and a new acting chief executive was appointed by the Commissioner. We considered how handovers are generally handled for a new chief executive, because the change in chief executive at the Department meant a lack of continuity in dealing with a sensitive issue. This had a significant effect on how the issues were dealt with by the Department.

Handovers within the Department of Labour

7.56
When Dr Buwalda left the Department in May 2007, he had briefed the SSC about Mr Oughton’s investigation. Part of Dr Buwalda’s intention in doing so was that there would be continuity of information which could be used for the SSC’s induction of the incoming chief executive, but he was not explicit about this with the SSC. Dr Buwalda mentioned Mr Oughton’s investigation to the incoming acting chief executive, Mr Fortune, and said that the Deputy Secretary (Legal) was holding the file for him. Dr Buwalda did not brief Mr Fortune on the wider context of the visa waivers and the internal audit report. Nor was the SSC aware of this wider context.

7.57
More detailed briefings were usually provided to an incoming chief executive of the Department by each member of the senior management team (the Deputy Secretaries), about their areas of the organisation. However, because the issues about Ms Thompson concerned a member of the senior management team, they were being handled primarily by Dr Buwalda with assistance on some aspects from the Deputy Secretary (Legal). As the report involved a member of the senior management team, it was more difficult for the chief executive to fully brief another senior manager.

7.58
The Deputy Secretary (Legal) had some involvement with Mr Oughton’s investigation, and he briefed Mr Fortune about the status of it. Another Deputy Secretary was also aware of the investigation, and raised it with Mr Fortune and Mr Blake.

7.59
Mr Fortune was not aware of the wider context of Mr Oughton’s investigation. He told us that he did not come across any record or comment about the earlier visa waiver issues on Ms Thompson’s personnel file, nor did he see the internal audit report.

7.60
When the current chief executive, Mr Blake, took over in October 2007, he was told by Mr Fortune about the general issues coming out of Mr Oughton’s report. He did not become aware of all of the earlier visa waiver issues until he was briefed in early 2008 about responses to official information requests.

SSC’s role in chief executive inductions

7.61
As the employer of department chief executives, the Commissioner is responsible for some of the induction process for new chief executives within the public service. This includes briefing the chief executive on the SSC’s view of the department, introducing them to relevant people outside the department, and ensuring that they understand the sector in which they will be operating. The extent of the SSC’s involvement in an induction is tailored to the organisation and the individual being appointed, and may also depend in part on the individuals within the SSC.

7.62
The SSC’s induction discussions with Mr Fortune included reference to Mr Oughton’s investigation. It was identified as an issue that needed to be finalised and resolved by Mr Fortune before the new chief executive was appointed. The SSC told us that it commented to Mr Blake about following up on the outstanding action points that Mr Fortune had raised with Ms Thompson about Mr Oughton’s report. Mr Blake does not recall this comment.

7.63
However, the main focus of the SSC’s inductions for both Mr Fortune and Mr Blake was the wider organisational issues faced by the Department. We refer to some of these in Part 2.

7.64
Dr Buwalda told us that he did not recall receiving any explicit advice or suggestions from the SSC about its expectations for briefing his successor.

7.65
We expect the SSC to take a lead role in arranging an induction appropriate to the individual and the organisation. However, we acknowledge that the SSC can only help ensure continuity of significant or sensitive issues if it is aware of them. This will always be difficult with a sensitive matter, especially one involving a second-tier manager. It will also depend on the judgement of all those involved about whether it is necessary for the SSC or the new chief executive to be briefed about a particular issue.

Recommendation 20
We recommend that the State Services Commission take a more systematic approach to establishing how well departments are handling integrity and conduct matters. It should also consider what steps it could take to increase the likelihood that all significant and sensitive issues are covered in briefings to an incoming chief executive.

Handovers between SSC staff

7.66
We also considered how the SSC manages handovers of responsibilities between its staff. Between 2004 and 2007, there were several changes in staff responsible for the relationship between the SSC and the Department.

7.67
Generally, internal staff handovers involve a written briefing paper and a discussion, but this varies depending on the approach taken by the individuals involved. Sensitive matters being handled by the Commissioner are normally the subject of discussions between outgoing and incoming Commissioners. These issues would often not be documented.

7.68
We reviewed the content of the SSC’s written and electronic files about the Department from 2003 to 2008. We had commented in a performance audit of the SSC in 2004 that, outside the chief executive performance review process, the SSC had few records describing the nature and extent of staff interactions with departments. We were concerned about this lack of documentation, and we suggested that the SSC should ensure that staff maintain records of all significant exchanges they have with departments.⁶

7.69
Despite our report, the SSC had few records of staff interactions with the Department. Different staff in the SSC had different practices for the sort of records they kept. We note that the SSC finalised, in September 2008, a policy on documentation requirements for meetings with chief executives and agencies. It requires staff to document material points from discussions with chief executives and agency staff, acknowledging that judgement is needed to decide whether an issue might become material and should be recorded. Compliance with this policy should improve record-keeping and enhance the handover of issues within SSC. We expect the SSC to monitor staff compliance with this policy.

What Ministers knew

Before 2008, Ministers were not informed of any particular integrity issues within the Department. They did not take inappropriate action and did not fail to act when they should have.

7.70
When some of these matters emerged in the public domain in 2008, questions were raised about whether Ministers had been aware of the issues and, if they were aware, what they did or should have done. We spoke to the individuals who held the posts of Minister of Immigration and Associate Minister of Immigration between 2002 and 2008.

The relationship between Ministers and their departments

7.71
The relationship between a department, and in particular its chief executive, and the responsible Minister can be complex and requires careful balancing.

7.72
The chief executive of a department is responsible to the appropriate Minister for several areas, including providing advice and the general conduct of the department.⁷ However, when making decisions about individual employees, the chief executive is not responsible to the appropriate Minister but must act independently.⁸ The Cabinet Manual notes that the duty of independence and the obligation to act as a good employer will usually mean it is inappropriate for a chief executive to involve the Minister in any staffing matter.⁹

7.73
However, these requirements may, in some instances, need to be balanced against the “no surprises” principle. This requires that chief executives should promptly inform Ministers of matters of significance within their portfolios, especially where those matters may be controversial or become the subject of public debate.¹⁰

7.74
The “no surprises” principle means that judgements must continually be made by chief executives and their officials about what Ministers ought to be told. Some matters, although significant, may properly be kept from a Minister. Employment issues will often fall into this category, except when the matter is likely to become the subject of public debate.

7.75
This tension was discussed by the former State Services Commissioner, Dr Prebble, in his inquiry report into the employment of Madeleine Setchell.¹¹ He said:

A Minister’s request that they have no surprises does not override the Chief Executive’s good employer responsibility to handle employment matters with discretion.

Requests by Ministers that they be kept informed on a “no surprises” basis cannot and do not mean that Chief Executives must inform Ministers of everything they do. Much of what Chief Executives do is not the business of Ministers and both efficiency and propriety dictate that such matters should not be brought to Ministers. Chief Executives should keep Ministers informed of anything with significance within their portfolio responsibilities, but there should be good and particular reason why the Chief Executive would bring matters that are the Chief Executive’s statutory responsibility to the attention of Ministers.

Knowledge of investigations

7.76
Successive Ministers of Immigration were aware from briefings by the Department’s chief executive at various points from April 2007 onwards that an issue had arisen about visa and permit applications from Ms Thompson’s Kiribati relatives. Briefings were provided to Ministers in general terms about the commissioning of Mr Oughton’s investigation, and again at its conclusion. The briefings were for their information only and based on the “no surprises” principle. Ministers did not know about the issues in any depth, and they were not given the investigation reports.

7.77
Some Ministers expressed disappointment at the way the Department dealt with the matters at the relevant times, and they felt that the issues may not have been adequately addressed when they arose. However, they understood that Mr Fortune and Mr Blake had limited knowledge at relevant times and had not identified the full extent of the issues. Another chief executive might have chosen to share Mr Oughton’s report with their Minister but, in our view, it was a judgement decision about an operational matter that could have been made either way.

7.78
In this particular case, the operational matters discussed in Mr Oughton’s report were complicated by the employment dimension to the findings.

7.79
Ministers would not normally be informed about an employment issue unless there was a decision or action taken by the chief executive that was likely to attract public comment or be relevant to Ministers. It might be appropriate to inform the Minister if the matter was likely to affect day-to-day operations between the department and the Minister. This could involve providing a “for your information” briefing to the Minister.

7.80
The Ministers were extremely careful to distance themselves from the matter, and they did not ask for copies of the investigation reports. They took careful note of the limits on their role under the State Sector Act, given the contemporary Setchell and Curran¹² matters. They were careful to avoid any perception of improper interference on their part.

7.81
Based on the information provided to them, Ministers did not take inappropriate action and they did not fail to take action when they should have. Ministers were generally aware of the boundaries of their roles, especially with employment matters.

1: Audit committees have a valuable contribution to make in improving the governance, and so the performance and accountability, of public entities. We discuss the role of audit committees in our 2008 publication, Audit committees in the public sector.

2: State Services Commission (2008), Investigation of the Handling by the Department of Labour of Immigration Matters Involving Family Members of the Head of the New Zealand Immigration Service, State Services Commission, Wellington, and the Comments of the State Services Commissioner in respect of report on NZ Immigration Service matters, 3 October 2008 (see www.ssc.govt.nz).

3: Office of the Auditor-General (2007), Managing conflicts of interest: Guidance for public entities, Wellington.

4: This review is discussed in Part 6.

5: The other central agencies are the Treasury and the Department of the Prime Minister and Cabinet.

6: The State Services Commission: Capability to recognise and address issues for Māori, Wellington. An absence of formal records and poor information flows within the SSC was also commented on in the Hunn report – Investigation into the public service recruitment and employment of Ms Madeleine Setchell, to the State Services Commissioner from D K Hunn, Crown Law Office, dated 12 November 2007, at paragraph 23.1(d)(iv)(d).

7: Section 32, State Sector Act 1988.

8: Section 33, State Sector Act 1988.

9: Department of the Prime Minister and Cabinet (2008), The Cabinet Manual, Wellington, paragraph 3.26.

10: Department of the Prime Minister and Cabinet (2008), The Cabinet Manual, Wellington, paragraph 3.16.

11: State Services Commission (November 2007), Report on the Public Service recruitment and employment of Ms Madeleine Setchell, Wellington.

12: See Investigation into the Engagement of Clare Curran by the Ministry for the Environment – Report to the State Services Commissioner, 19 December 2007, and the Commissioner’s conclusions in respect of the Clare Curran investigation, 20 December 2007 (www.ssc.govt.nz).

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