RNZ's nearly $12 million cost blowout has been called "disastrous" by the broadcaster's shareholding minister.
"Clearly, the buck stops somewhere," David Seymour, who is a RNZ shareholding minister, told Breakfast.
Up to 58 RNZ staff are set to lose their jobs after the public broadcaster revealed an $11.8 million loss, more than 25 times the $470,000 it initially forecast.
The shortfall was driven in part by cost blowouts, the relocation of its Auckland office, and property sales. There was also a $2 million accounting error involving land sales incorrectly recorded as revenue. RNZ said its internal financial reporting failed to alert the board of the deficit.
Seymour, who shares shareholding responsibilities for RNZ with Broadcasting Minister Paul Goldsmith, said he first learned of a financial reporting problem in October, when former chief financial officer Hilary Parker resigned.
"It's not unusual to get news like that, and usually, it's somebody hasn't dotted an I or crossed a T," he said. "Just in the last 24 hours, it's become clear that it was a lot more than that."
The annual loss was more than 25 times its forecast, prompting 58 full-time job losses. (Source: 1News)
Asked if he had been remiss for not asking more questions when problems first cropped up, Seymour said, "You could argue that".
He said based on the financial reporting he was provided, there was "no reason to think" anything was wrong.
"We couldn't have changed anything. All of the damage was done at the point that the chief financial officer left."
"The only people that could have changed something were probably the audit and risk committee by uncovering the quality of the information that was being provided up through the chain much earlier than they did."
Seymour said the loss was "disastrous" for the taxpayer, RNZ's audience, and the staff who will be losing their jobs.
"While I've occasionally had criticisms of RNZ, there are a lot of very good people there who don't deserve to be caught in the middle of this," he said.
He said there had been "a few wrinkles" caused by the election, but it was clear an explanation is needed.
"There needs to be an understanding of who knew what, when, and how something like this could happen.
"There's no suggestion at the moment that there's been criminal wrongdoing or fraud, but there does need to be an explanation of exactly how you lose $12 million?"
RNZ chief executive Paul Thompson is set to leave his role on December 31, and when asked if he should leave sooner, board chair Brent Impey told RNZ Checkpoint: "Someone's got to run the place, don't they? What do you suggest?"
Seymour said the possibility of Thompson leaving earlier than planned was a matter for the board.
"Of course, they will have employment law issues with them, so they need to think about that."
Asked if more heads needed to roll, Seymour said it depended on "getting to the bottom of the facts".
"Clearly the buck stops somewhere," he said. "And past that point, people were being reasonable, doing their due diligence, and nonetheless being deceived; the question is how many people were 'in on it'?"
He suspected some kind of inquiry would take place and needed to figure out how that would work with a caretaker Government.
"Those things will need to be found and discovered, and it may be that the new chief executive and the new chair are in a position to do that, and it may be that they need more help."
Asked if the Government could save some of the 58 jobs set to be axed, Seymour said there was "space to do that because our budgeting assumptions clearly were not true".
"I don't want to create any kind of hope that may turn out to be false.
"We proceeded on the following assumptions when we budgeted. Do our assumptions change as a result of this? Or was it always going to be the case for a given budget?"
He said the accounting error could have also delayed changes that would have already occurred in the organisation.
"Given that we have been proceeding on the basis of false information, we now have correct information. It's going to have to be a re-evaluation."
'Significant questions' about integrity of financial governance
Victoria University media professor Peter Thompson called RNZ's shortfall "unprecedented" and raised some "significant questions". (Source: Breakfast)
Victoria University media professor Peter Thompson said RNZ's shortfall was "unprecedented" and raised some "significant questions about the integrity of RNZ's financial governance".
He said the loss of 58 staff could be a "huge problem" for the organisation, which had been "going really well" in terms of its performance.
"It's increased its trust, it's increased its audience reach, both online and indeed on linear radio. So it's been doing a really good job in many respects, and it's important that any restructuring not affect that core performance."
Thompson said the loss "certainly puts a dent" in the broadcaster's public image, but said there was no reason to doubt the integrity of its journalism and delivery of programming.
"The bigger question would be whether there are mischievous forces in the polity that might seek to take advantage of this situation to paint RNZ in a negative way.
"And certainly, there are enemies of RNZ and public media as a whole who've criticised the broadcaster often on a baseless pretext and indeed have threatened to defund it."
Cuts at RNZ could have a "serious" impact on New Zealand as a whole, Thompson said.
"Radio New Zealand has a key role in emergency management and crisis response. It has a key role in supporting the local democracy reporting scheme.
"I think it would be a terrible shame if we lost some of that quality."
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