Nursing Council audit finds procurement and payment control failures, Auditor-General notified

Further investigative work began this month by the council’s external auditor, Baker Tilly.

Part of this work will focus on a large contract for what is known as the Objective Structured Clinical Examination (OSCE) centre, a Christchurch facility where internationally qualified nurses are tested for New Zealand registration. The contract is held by Nurse Maude.

Wide-ranging irregularities around the award of the contract to operate the centre and a separate establishment cost, understood to be over $1 million, were identified by PwC.

The release of the council’s annual report, which was due in September, has been delayed and is now expected in early 2027.

Rob McHawk, on secondment from the MoH, joined the council in August to fill in as interim registrar following the resignation of chief executive Catherine Byrne, who also served as registrar.

Chairwoman Sharon Brownie emphasised that there “is no current evidence of improper payments”.

The Nursing Council is a statutory body that registers all practising nurses in New Zealand and acts as regulator for the sector.

It is largely funded by its members and doesn’t receive public funds to operate; total revenue in 2025 was just shy of $20m.

The council has about 70 fulltime staff and appears to have hundreds of contractors, many doing small amounts of work.

The PwC work, completed in August, identified conflicts of interest in procurement, allegedly with no documentation indicating how they were addressed or managed; payment management systems that allowed users to sign off payments above their authorised limits; no monitoring of supplier performance and compliance against procurement policy; and disaggregated record-keeping, with records sometimes lacking entirely.

The council’s controls were described as “generally undocumented” and “informal” – the lowest ranking on PwC’s scale of maturity for such systems.

Transactional data from the council’s invoice system showed 590 invoices (22%) for the year had the “approver” field left blank and 1200 invoices were processed outside usual working hours, the report said.

It also described potential duplicate invoices amounting to a combined gross value of $1.29m; more than 500 payment transactions made to bank accounts not included in the council’s master data system; 156 payments made to inactive or deleted vendors; and 156 payments to vendors with a “no payment” flag in the system.

The report noted that at least one contractor had access to the council’s invoice approval system, giving rise to the possibility of approving their own invoices, though no evidence of the latter was noted.

PwC’s work has landed in the public domain following considerable upheaval at the council.

The audit covered the council’s last full financial year, from April 2025 to March 2026; a period that relates to the tenure of the previous board chairwoman, Ngaira Harker.

The Heraldwas unable to reach Harker, who left the board in May or June.

The head of the council’s Financial, Audit and Risk Committee for the period was Iosefa Paituli; he is an elected member and a minister at Mt Roskill’s Congregational Christian Church.

He remains on the council but Francis Hughes, a registered nurse, took over as chairwoman of the Financial, Audit and Risk Committee in July.

The council’s chief executive, Catherine Byrne, resigned in August.

New chairwoman Sharon Brownie did not disclose whether Byrne received an exit payment.

The council restricted Byrne’s financial delegations before her departure, which followed that of the chief education adviser and two deputy registrars.

At least two council members were concerned that Byrne’s workload became unduly heavy because of the audit; these were covered in emails released by the MoH.

The council is currently advertising to fill the role of permanent chief executive and for a separate registrar role.

The audit was called under the leadership of Brownie, who was elected chair in May by a council vote.

The PwC report was part of a much larger release of documents under the Official Information Act by the MoH.

These suggest that Brownie, appointed to the council by Health Minister Simeon Brown in September last year, became concerned about council processes and costs soon after taking up the governance role.

She is part of a new cohort of eight minister-appointed members to the council of 12 (the balance are largely elected by nurse members).

The change of guard has attracted intense criticism from some corners of the nursing sector, including its union, the New Zealand Nurses Organisation.

Its online journal called Brown’s appointments “whitewashing”, since departing members – some declined to stand again and some were not reappointed by the minister – were a largely Māori cohort.

The email communications released by MoH also show that Brownie has made efforts to more clearly define the role of the council’s Māori advisory committee, made up of non-council members.

The emails suggest the advisory group has an expectation of co-governance or at least greater partnership; however, the sharing of governance responsibility does not appear to be provided for in the council’s establishment legislation, the Health Practitioners Competence Assurance Act 2003.

Responding to the Herald’squestions, Brownie said incoming council members noticed concerning issues starting last November. These included a major operating deficit, “peculiarities” in procurement and expenditure, and major projects being behind schedule and over budget.

A huge jump in travel expenses, from a little over $100,000 in 2025 to $676,000 in the last fiscal year, is also a concern and was noted in the PwC report.

The cost covered airfares and taxis but not accommodation and per diems, and Brownie said the council still had little understanding of the purpose of the spending.

The council has begun in-depth audits related to conflict of interest management, financial management and procurement, and further examination of the OSCE Centre procurement and a formal evaluation of its operations.

It has temporarily paused its recertification audit requirements for nurses because of weaknesses across the council’s systems, including where it relies on contractors, Brownie said.

PwC’s work describes failures in contracting for an operator for the OSCE in 2023, including that there was no pricing on a standardised basis required in its request for information process.

The council scored the eight respondents, but scoring was inconsistent: “five of the eight respondents had calculation differences, multiple scores or both”.

The respondent with one of the highest scores did not move on to the request for proposal stage, and no shortlist recommendation was identified.

The PwC report also noted a potential or perceived conflict of interest related to the OSCE delivery arrangement and no evidence the relationship was declared or managed.

In nursing and health, many individuals hold multiple positions across organisations; the council had no system for managing this.

The report also noted unresolved questions about the OSCE centre cost, including a potential council underwrite provision.

The Heraldunderstands the council is concerned that it is exposed to the centre’s establishment cost of over $1m.

An education review commissioned by the council, written by contractors Debra Thoms and Candy Cookson-Cox, has also raised questions.

The project paper was titled “An Independent Review of Nursing Education in Aotearoa New Zealand”.

A subsequent quality audit of the work by Phronesis Public Policy, also council-commissioned, noted that Cookson-Cox was an active member of the Nursing Council while undertaking the review and Thoms had recently been interim chief executive at the Council of Deans of Nursing and Midwifery (CDNM), a peak body for university deans.

Neither conflict was disclosed in light of the claim of independence.

Thoms’ previous work was especially notable because the review controversially recommended that the Nursing Council establish “a clear, time-bound plan for transitioning all programmes leading to Registered Nurse registration into the university sector commencing from the beginning of the academic year 2030”.

The qualification is currently offered across universities and polytechnics.

The quality audit found the sole basis for making this recommendation was a position paper by the CDNM.

The idea of university-only nurse training has been strongly opposed by the Tertiary Education Commission.

Brownie confirmed that the recommendation will not be approved by council and that she did not participate in that decision as she is a member of the governing council at MIT and Unitec.

The procurement details for the education review were also unusual, according to PwC. The tender was not openly advertised despite being over the standard threshold (in the public sector) of $100,000. No rationale for exemption was documented.

The proposed reviewers were approached before the procurement plan was finished and the reviewers received offer letters several weeks before the project budget of $120,000 was approved.

PwC described gaps in “procurement planning, approval, sourcing, evaluation and record-retention requirements”.

Both the OSCE and the education review procurement predate the period otherwise covered in the audit.

A notice released with PwC’s work by the Ministry of Health warned that the consultancy was unaware that its report would be released to the public and that it was not structured or intended for wider public distribution. This is surprising, given that the council is covered by the Official Information Act.

In its notice, PwC warned that the engagement comprised an initial internal audit of selected procurement processes and controls determined by the board of the Nursing Council; its scope was limited, and findings were compiled on the basis that the information provided to it was accurate and complete. It said this is a usual approach for an internal audit.

Efforts to seek comments from Nurse Maude for this story went unanswered on Friday.