New Zealand's auditor-general resigns over handling of fraud

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WELLINGTON, New Zealand (AP) — New Zealand's auditor-general resigned Thursday amid questions over how he handled a fraud case while he was head of the nation's transport agency.

Martin Matthews said the issues and speculation over the case had made it untenable for him to continue leading the Auditor-General's office, which is responsible for overseeing good governance in about 4,000 public agencies.

His resignation came ahead of the results of a Parliamentary report into whether Matthews was suitable for the job, considering he was chief executive at the Ministry of Transport when manager Joanne Harrison defrauded the agency and retaliated against whistleblowers.

Harrison was jailed in February for stealing about 725,000 New Zealand dollars ($563,000) of taxpayer money. She used the money to pay off her home mortgage and for other expenses.

Matthews said that until April 2016, he'd considered Harrison a high-performing part of the leadership team.

"I believe I acted swiftly and thoroughly to detect the fraud and bring her to justice when I became aware of her potential wrongdoing," he said in a statement. "I wish that I had detected her criminal activity much earlier."

But an earlier investigation by the State Services Commission found that four staff whistleblowers had raised concerns about Harrison, who had then treated them poorly. Three of those whistleblowers have since reached a financial settlement with the government for their mistreatment.

Matthews began working as auditor-general in February but faced mounting concerns about how he'd handled the case and agreed to temporarily step aside while officials on a Parliamentary panel reviewed his suitability for the job.

He resigned just hours before the panel's report was due to be released. The panel then said his resignation had brought the matter to an end, and elected not to publicly release their report.

That decision was criticized by some politicians and unions, who said the details should be released for transparency and so that lessons could be learned for the future.

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