The Minister for FENZ says the organisation was "breaching their own law in regards to levy collections" and thought she didn't need to know about it.
By Lillian Hanly of RNZ
Brooke van Velden said she was also in the dark about Fire and Emergency spending nearly half a million dollars looking into the issue.
"It's completely unacceptable, and it points to a lack of accountability across the public service."
It comes after van Velden said she no longer had confidence in the chief executive of the organisation, Kerry Gregory, following a "serious breach" of the no surprises clause.
Speaking to Morning Report, she said her job as the minister responsible for Fire and Emergency was "to hold them accountable".
"How can I possibly do that if I'm being actively withheld information?"
Van Velden said she became aware of the situation about two weeks ago - and only because the board chair said she needed to know.
She said that was doing a disservice to the public service.
"It is important that every public agency that has taxpayer or levy payer money going into it is acting transparently and has accountability going to senior levels of officials.
"It is a clear breach of trust when the public service is not allowing that information to flow."
Van Velden told Morning Report FENZ had been referred to the Serious Fraud Office, based on the board's suggestions.
She said Fire and Emergency were acting "in breach of their own law" but couldn't go into further detail.
But other concerns it raised for her were that it appeared the chief executive wasn't aware of the issue for quite some time.
"That's concerning in terms of internal culture."
Secondly, once he was aware, he decided not to let minister responsible for FENZ know, Van Velden said.
"That's the thing that is, I think, despicable because there's constantly been issues within Fire and Emergency," she said.
Issues included levy modelling, payroll, fleet procurement, and making savings in the back office.
"But at least I knew about those issues so that I could hold them accountable to the plans and processes to make them better going forward.
"This was active withholding of information."
She said there were "clearly cultural issues at play" within the organisation, and it was for the board to make sure that they can restore her confidence.
Van Velden also referenced asking DIA to do policy work on whether or not the cultural issues within Fire and Emergency was due to them being a crown entity "at arm's length from ministers", and whether or not there needed to be change to bring better government accountability.
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