The Accident Compensation Corporation (ACC) has apologised after a whistleblower complaint led a top watchdog to find it had “unreasonably” excluded the costs of a senior executive’s farewell celebration from its response to Official Information Act (OIA) requests. 

The Wellington farewell cost around $17,287, including domestic travel and catering, but this wasn’t disclosed when journalists requested a list of events it had held costing above $10,000. Instead, ACC said it hadn’t identified any events in the scope of that request. 

But after a whistleblower alleged to the Ombudsman that senior ACC management “had manipulated data” to bring the event cost below the $10,000 threshold, an investigation was launched. 

ACC considered some of the costs associated should be excluded as staff members had other work reasons to be in Wellington, beyond the farewell. This brought the cost down to about $7500, meaning it was below the threshold requested. 

In a ruling issued today, the Chief Ombudsman found ACC “has acted unreasonably in its management of its response to the OIA requests” as it had “failed to demonstrate” that much of the farewell costs could be attributed to “other work” and that those expenses would have occurred regardless of the farewell happening. 

ACC on Monday directly apologised to the journalists who made the requests, acknowledging the Ombudsman’s view that its decision was “unreasonable and wrong”. 

“I apologise for ACC’s failure to disclose information that we should have,” a letter from chief executive Megan Main says. 

“We recognise that we should have handled the approach to your request differently and accept the decision we made to exclude those costs from the scope of the request and response was unreasonable.” 

It said it had taken “significant steps” to strengthen its record-keeping processes and improve transparency, as well as revising its travel policy so that travel “to be undertaken solely for the purpose of attending farewell events or other staff celebrations” is not allowed. 

ACC head Megan Main has apologised for the OIA responses. Photo / Mark Mitchell 

The requests were made in August 2023 off the back of revelations the Ministry of Pacific Peoples had spent nearly $40,000 on farewelling its former chief executive. Journalists wanted to know about other agencies’ expenditure on events costing above $10,000, including any hosted by ACC. 

According to a report from the Ombudsman, ACC initially identified the farewell event for outgoing deputy chief executive, chief Māori and equity officer Michelle Murray, cost “in the region of $18,000” and was therefore within the scope of the OIA requests. 

However, in the process of gathering information and drafting a response to the requests, staff considered whether to exclude employee costs – such as on travel and accommodation – if they had attended the event but had travelled to Wellington for what was described as “other work”. 

Internal correspondence within ACC said this “other work” included “transition planning, board and engagement planning and learning”. 

One staff member said they advised another it depended on whether the “core purpose” of their travel was to attend the event, “i.e. would they have been traveling to Wellington had the farewell event not occurred?” 

“If the answer is yes, their travel and accommodation is out of scope. If the answer is no, then the core purpose of that travel/accommodation is the farewell, and it should be included,” the employee’s advice is reported as. 

The Ombudsman, John Allen, said it initially appeared ACC would disclose the cost, estimated at around $18,000, with a caveat explaining that 11 staff travelled to Wellington “to attend the farewell but were also there on other business”. 

To evidence the “other work”, ACC provided the Ombudsman with meeting invitations showing some, but not all, of the 11 travelling staff members’ names. 

“ACC provided high-level descriptions on the purpose of the gathering and the meetings but confirmed that no formal documentation such as minutes, was available,” the report said. 

However, changes were then suggested for the OIA response. For example, the ACC media team is reported to have advised removing a section that broke down the direct costs associated with the event ($7584), and the costs of travel and accommodation for staff who attended but also did other work while in Wellington ($9703). 

ACC’s head of government engagement also asked staff for spreadsheets of costs. 

One staff member replied, asking if “flights and accommodation for those who ‘travelled to Wellington to attend [DCE] farewell but did work too’ are not in scope?” The head of government engagement responded that “people who did other stuff aren’t included”. 

They estimated that “takes 9k off”. 

The Ombudsman’s report states “some ACC colleagues appear to express concerns”, with one employee commenting in the work online chat, “‘other work’. This is wrong. Fundamentally wrong.” 

The head of government engagement is reported as acknowledging the comment and saying: “Everybody knows that ... Including [chief executive].” 

“[Name of Staff 1], can you please change the sign-out on the letter to my name and title. I’ll send you my signature. I’m not going to ask [colleague] to sign this one out and will do it instead. I am sorry both. I worked as hard as I can to get this to land somewhere that I was comfortable with.” 

The final OIA responses were then sent, advising the requestors that no events had been identified within scope, meaning above the $10,000 threshold. 

Chief Ombudsman John Allen has been investigating the OIA response. Photo / Mark Mitchell 

In September 2023, the Ombudsman’s office received a protected disclosure that alleged that senior ACC management “had manipulated data relating to a farewell event in 2023 for a DCE [deputy chief executive]”. 

“It was alleged that the actual cost of the event was approximately $18,000 and that ACC purposely manipulated that data to bring the event cost to under $10,000 and as such out of scope of the OIA requests,” the Ombudsman’s report says. 

The Ombudsman’s office contacted ACC for information and began an investigation in April last year, leading to today’s ruling. 

Considering the information, the Ombudsman said it was its determination “ACC has acted unreasonably in its management of its response to the OIA requests”. 

“It is my opinion that ACC has failed to demonstrate the case that approximately $9703 of the farewell costs can be attributed to ‘other work’ and that those expenses would have occurred regardless of the farewell.” 

The Ombudsman said ACC hadn’t provided information “which adequately details the specifics of what ‘other work’ entailed and that it would have occurred regardless of the farewell”. 

It was also “clear” some staff were “uncomfortable” with ACC’s position, Allen said. 

ACC’s “retrospective information analysis” to determine if staff would have been in Wellington regardless of the farewell also suggested “poor record keeping and “potentially a failure to actively monitor costs”. 

“This is concerning given it is a matter of public funding. ACC’s sensitive expenditure policy states that records should hold up to parliamentary and public scrutiny, and be consistent with standards of probity and financial prudence. This is not possible with poor record keeping.” 

The Ombudsman’s report contains ACC’s response, including its acknowledgement that it could have handled the OIA requests differently. 

Changes have been made at ACC to strengthen processes and introduce a new travel policy, effective from August this year, prohibiting travel solely for farewell events or other staff celebrations. Farewells are also only allowed in the case of retirement and costs exceeding $250 must get DCE approval. 

Other adjustments include ensuring travel activity is tracked and reviewed and creating a “dedicated Workplace Integrity function to support ethical decision making”. 

“Finally, ACC stated that it is committed to fostering a culture where staff feel safe and supported to raise concerns where they feel ACC is not acting in line with best practice or ACC values.” 

The Ombudsman said it was “encouraged” by ACC’s steps and, given the improvements it had made, it’s only recommendation was for ACC to apologise, which it had already agreed to do. 

“To ensure that other agencies are aware of this investigation and its conclusions. I consider it appropriate to publish my opinion on the Ombudsman’s website.” 

In ACC’s apology letter, Main confirmed the total costs of the farewell was $17,287.29, including nearly $17,000 in domestic travel, accommodation and meals for staff attending it and related meetings, and $294 for catering. 

These costs also include $603 for flights and accommodation for one family member of the outgoing DCE, “in accordance with tikanga requiring ACC to hand executive leaders back to their whānau”. 

“The event was attended by a number of ACC kaimahi, including 18 staff members who travelled to Wellington. While some of these staff also participated in strategic planning meetings, their presence at the farewell was considered culturally appropriate and encouraged.” 

Jamie Ensor is a senior political reporter in the NZ Herald press gallery team based at Parliament. He was previously a TV reporter and digital producer in the Newshub press gallery office. He was a finalist this year for Political Journalist of the Year at the Voyager Media Awards.