The Ministry of Education contracted and paid a school principal after he had resigned and been struck off for sleeping naked with a student.
Uenuku Fairhall was paid half a million dollars by the Ministry of Education. After Newshub made queries, the Ministry's Secretary of Education, Iona Holsted, has now apologised to the Education Minister and the children involved.
But she has stopped short of resigning.
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Fairhall was a celebrated school principal with thirty years' teaching experience. But on a school trip to Mexico, he slept naked with a student at least twice, and told another to remove his underwear while washing him.
His behaviour has been described as "despicable" and "disgraceful" by the Teaching Council.
"These were very serious allegations," Education Minister Chris Hipkins told Newshub. "That person should not have been contracted by the Ministry of Education."
But Fairhall was and the Ministry of Education paid him half a million dollars to make learning resources, after the allegations were made.
Holsted said the allegations against Fairhall should have raised a red flag.
It didn't. The misconduct took place in early 2017, and on 15 March, police said the Ministry of Education was told Fairhall resigned in April.
It took the Teaching Council until November 2018 to reach a disciplinary decision, and Fairhall's registration was cancelled.
But because of name suppression, it wasn't made public until August this year.
Throughout that time, the ministry continued to pay Fairhall for work.
In total, he was paid for five contracts: Three after he had been struck off.
"We made a mistake," Holsted said. "We shouldn't have contracted with that contractor, he should not have received that money in that time, and I apologise for that unreservedly."
Videos promoting Fairhall were also reloaded online by the ministry in July 2018 when it knew he was under investigation.
The National Party is now calling for an inquiry.
"The ministry has taken down the links in a way which looks like they're covering their tracks," National's education spokesperson Nikki Kaye said.
Holsted said the ministry did not try to cover anything up.
The videos were taken down and contracts ended once the council decision went public. But initially, the ministry insisted it acted appropriately, a line the minister publicly repeated.
Holsted says she doesn't think she misled the minister.
"I don't believe so. I believe I gave him the information I believed to be correct at the time, and I've subsequently corrected the record."
The Education Secretary won't say if anyone at the ministry has been sacked, or even reprimanded.
"I take full responsibility and I have apologised to you, the public and to my minister."
Holsted said she has not offered her resignation to the minister.
"That is not something I've decided to do at this stage."
A statement from the ministry said it has agreed to strengthen its information sharing with the Teaching Council.
A full review is underway into how contracts are commissioned. An external auditor is making sure there are no similar contracts in place.
The secretary has spoken to staff about exercising better judgment.