Watch live: ‘Furious’ minister gives update after officials misled her over 'doomed' project

Multiple reviews are being launched amid revelations the Immigration Minister was allegedly misled by officials, who used “creative accounting” to avoid Cabinet scrutiny over a “doomed” project that spanned eight years and led to at least $32 million being wasted.

While terms of reference are not yet established, the Public Service Commission will be investigating officials’ behaviour relating to a project initiated in 2018, intended to upgrade New Zealand’s biometric identity management system.

It is alleged officials tried to “slip” project funding increases into a Cabinet paper and when questioned, reformed the project to ensure it wasn’t seen by Cabinet and at multiple stages did not inform ministers of information that challenged the project’s viability.

The Ministry of Business, Innovation and Employment (MBIE) will also conduct its own review, including assessing another IT project, and will be responding to the commission’s findings.

Speaking exclusively to the Herald, Immigration Minister Erica Stanford says officials’ behaviour was “as bad as it gets” and admits she no longer trusts the advice she receives, accepting the scandal will call into question the integrity of MBIE and immigration officials.

While unaware how widespread such behaviour is in the public service, Stanford claims the Government has encountered “difficulty” in implementing IT projects and believes questions need to be asked about how that can be improved.

Mbie chief executive Nic Blakeley accepts his ministry has “fallen short of the Government and public’s expectations” and will be reviewing all major technology projects.

Stanford is presenting a report to a Parliament select committee this morning detailing the project’s plagued history.

Immigration Minister Erica Stanford is appearing before a Parliament select committee today. Photo / Mark Mitchell 

An MBIE spokesman said the ministry would release a statement about 10.30am today. Stanford is expected to hold a press conference before midday. 

The Biometric Capability Update (BCU) project was intended to upgrade Immigration NZ’s identity management platform, which relied on a 2012 algorithm and was considered expensive and complex, resulting in higher levels of manual processing. 

It was paired with another initiative to replace a biometric enrolment system, named the In Person Enrolment (IPE), which had repeatedly failed and posed risks to border security. 

The report, Stanford said, showed the project was “doomed from the start” thanks to a “very poor business case” and then was made effectively undeliverable because of an early change in scope. 

Stanford, who had analysed briefings to her former Labour immigration ministers Kris Faafoi and Andrew Little, said officials had secured additional funding at several points, however Stanford wasn’t certain whether ministers were made fully aware of the project’s issues, noting Little had declined one funding increase proposal. 

It wasn’t until March 2024 when officials requested the project’s budget increase from $35m to almost $40m that it was interrogated further, given it had exceeded the $35m threshold to be considered by Cabinet. 

It was proposed the funding increase be added to an unrelated Cabinet paper, which was due to be lodged just days after the proposal was given to Stanford. 

When this was refused, officials divided the project so it fell under the Cabinet consideration threshold, a decision made without appropriate governance. Stanford claimed this was intended to avoid scrutiny, saying officials had since admitted to her that this “creative accounting” was done intentionally. 

“Knowingly avoiding Cabinet scrutiny by making a decision to separate out costs … is very serious. 

“It’s pretty galling to know in the background they were doing creative accounting to keep it out of out of Cabinet while telling me, ‘Don’t worry, we can claw [costs] back and we can do this and it’s all good’.” 

Stanford also pointed to an Mbie update at that time that stated an independent assurance review of the project in September 2023 found it was “sound and robust, the build is achievable and the risk management practice is effective”. 

Carolyn Tremain is the former chief executive of the Ministry of Business, Innovation and Employment. Photo / Mark Mitchell 

Stanford later found out the review had in fact highlighted the project’s “poor delivery history and its inability to meet agreed milestones”, expressing doubts the project would “in fact deliver at all and we question its continuation”. 

Stanford said she was later told by MBIE the interpretation of the review had been made by a “junior staffer”. 

In April 2024, Stanford considered the project’s future and ultimately decided to continue it in light of a projected $31m loss in sunk cost and break fees, as well as the project being near completion and the risks posed by a “very unstable” current system. 

Stanford then sought to establish enhanced oversight, involving then MBIE chief executive Carolyn Tremain to oversee the project and introducing an independent consultant to assess its progress. 

It’s understood Tremain, a renowned public service boss, became intimately involved, including travelling overseas to meet with the project’s vendor. 

However, the project was plagued by “defects” and while many issues were resolved, it led to more defects arising, delaying the project into late 2025. 

“Even our independent [consultant] said, ‘It’s deliverable, it’s deliverable, it’s deliverable’ … but meanwhile more and more defects were popping up, “ Stanford said. 

Asked why she persisted with the project, Stanford again referenced the potential cost while quoting assurances she was given the project was close to completion, saying she was told in August 2025 it would be operational the following month. 

“A minister is only as good as the information that we receive,” Stanford said, adding that officials, an independent consultant and Tremain all said “hey, we can deliver this, we’re really close”. 

It wasn’t until November 2025 when then-acting MBIE chief executive Suzanne Stew, who replaced Tremain after she had left the mega-ministry in September 2025, said the project should be terminated. 

Stanford believed Tremain had “desperately tried to deliver the project” and was confident her independent consultant gave advice based “on the information that he was given”. 

Despite her earlier concerns about the potential cost and risks of cancelling the project, Stanford said it was expected at least $32m would be written off and the current “unstable” system would remain in place. 

Public Service Commissioner Sir Brian Roche will be launching a review. Photo / Mark Mitchell 

Pointing to the impending reviews and the high turnover of staff associated with the project, Stanford wouldn’t be drawn on whether resignations were warranted. 

“I think we’ve got a good way to go before that happens, or if at all, depending on the [Public Service Commission] report. I don’t want to wade into that.” 

She acknowledged the commission’s review would include establishing if the project’s former staff were still employed in the public service. 

Asked whether any former project staff should answer for its failures, Stanford responded: “It depends where they are now”. 

Stanford, who accepted it was possible the saga would also prompt a select committee inquiry, said she was “furious” at the circumstances and believed officials’ actions appeared “deliberate” and “co-ordinated”, even claiming today’s critical report tabled in select committee hadn’t been given to her for two months. 

“Of course, I’m hugely disappointed and I’ve lost confidence in the advice that they give me because of this. 

“It is almost deception by omission, by not sitting down and being like, ‘Hello, brand new minister, here is the history of this project and all of the steps along the way’, … rather than piecemeal bits of information, omissions, misleading me in a Cabinet paper, trying to slip things in through a Cabinet process. 

“The integrity of MBIE and immigration will be called into question.” 

She couldn’t say how prevalent such activity was in the public service but did point to successive governments’ difficulties in executing IT projects. 

“I hope this is not endemic … but certainly if you look back over time and IT projects delivered by governments, the same type of thing seems to crop up, so there are questions to be asked about how we can deliver IT projects much better in the future.” 

What does Stanford’s report say? 

The report detailed a review of the biometric projects, involving examining more than 400 documents and conducting 43 interviews. 

It found: 

• The project’s original objectives were clear but its business case was “overly optimistic and insufficiently evidenced”. 
• Governance structures were established late, several early decisions lacked adequate documentation and escalations “frequently occurred outside formal governance channels”. 
• Ministry leaders allowed significant risks to persist without timely intervention. 
• High levels of staff turnover across the project compounded delivery and continuity issues. 
• The project’s completion date was repeatedly delayed, leading to “significant cost overruns”. 
• The relationship with the vendor was “difficult and characterised by ongoing challenges”. 
• Ministerial reporting was inconsistent and at times “overly optimistic or misleading”. 

The review referenced a letter of apology sent by Tremain to Stanford in April 2024, which conceded there was a “clear mismatch” between what Mbie officials understood about the project and what explained to Stanford. 

Tremain said Mbie’s summary of the September 2023 assurance review of the project had been “incorrect and misleading” but she claimed she had found no evidence of a “deliberate intention to mislead”. 

The letter said the summary had been compiled by a “relatively junior staffer and this was not picked up in subsequent reviews”. 

Tremain acknowledged officials’ recommendation to add the project’s funding increase at the last-minute to a Cabinet paper was also a failure. 

“As is often the case, when there are time pressures the likelihood of making process or judgment mistakes increases.” 

The review, completed by a management consultant, acknowledged Tremain hadn’t found evidence of a deliberate intent to mislead. 

However, it established the information received by Stanford “was not supported by any of the artifacts in place”. 

It also referenced Stanford’s concerns about “creative accounting” in splitting the project, which the review found was “largely driven by efforts to avoid exceeding the Cabinet-level funding threshold”. 

Adam Pearse is the Deputy Political Editor and part of the NZ Herald’s Press Gallery team based at Parliament in Wellington. He has worked for NZME since 2018, reporting for the Northern Advocate in Whangārei and the Herald in Auckland.