Public service commissioner outlines scope of IT upgrade inquiry

The public service commissioner has laid out the terms of reference for an inquiry into the conduct of Ministry of Business, Innovation and Employment (MBIE) staff linked to a failed $35 million IT project.

Commissioner Sir Brian Roche has appointed Michael Heron KC to head the inquiry, which will look into what advice MBIE gave the minister, what staff knew about the project, and claims around 'creative accounting' relating to the Biometric Capability Update (BCU) project.

In a statement, Sir Brian said the inquiry is important and "goes to the trust and confidence of ministers who must be able to rely on advice they receive from officials".

"The conduct and integrity of public servants is fundamental to the trust and confidence New Zealanders have in the public service."

The inquiry comes after Immigration Minister Erica Stanford mounted a scathing takedown of her ministry and said officials "deliberately withheld" information from her and the previous Labour government about a failed tech upgrade while scrutiny around it grew. This follows earlier revelations about the project.

It also comes as RNZ revealed the head of Immigration New Zealand did not tell Parliament three months ago at a select committee hearing that the project had been scrapped.

Sir Brian said he was pleased to appoint Heron to conduct the inquiry, calling him a "respected barrister and former solicitor-general"'.

'He has extensive legal experience and has been involved in a number of independent investigations for government agencies,' Sir Brian said.

Heron, alongside barrister Jane Barrow, will investigate and report back to the public service commissioner on:

what advice MBIE gave ministers - how it was prepared, approved, what it said, when it was given, and whether it was consistent

what MBIE knew, or should have known, about the project at the time, and whether this matched the advice given to ministers and agencies

whether MBIE's actions met the Public Service Code of Conduct, public service principles, and Cabinet Manual guidance, including the 'no surprises' principle

claims of 'creative accounting', and whether MBIE's investment decisions followed Cabinet rules and guidance

what may have led to any deficiencies in MBIE's advice - including organisational, governance, cultural or system issues, or external pressures

concerns raised about the project, how MBIE handled them, and whether the response was appropriate

how MBIE handled its independent review - including the advice given to ministers and when the final report was shared

any other matters needed to meet the purpose of the inquiry.

The Public Service Act gives the commissioner powers to support the investigation, including getting information from the agency being investigated. Under the Inquiries Act, the commissioner can also summon witnesses, former employees and people outside the public service.

The inquiry is likely to take several months to complete due to the "serious nature of these allegations, the complexity of the inquiry and the need to meet procedural fairness requirements".