Radio New Zealand’s board chair says the broadcaster’s financial reporting failure demands fundamental change, after internal reports suggested it was on track for a surplus while its finances were deteriorating.

Brent Impey told Sean Plunket on The Platform that senior management and the board had received figures that did not reflect RNZ’s true position. An independent review is now being set up to establish what went wrong and who was responsible.

“I’ve never seen anything before like it, anywhere close to it,” Impey said.

The chief financial officer resigned in mid October. Impey said he was told later that night, appointed an interim CFO the following morning and informed chief executive Paul Thompson the next day, while Thompson was returning from overseas leave.

“By the middle of the following week, we started to get, and got pretty quickly, the numbers that were all wrong,” Impey said.

The RNZ annual report records a deficit of $11.846 million for the year to June 30, compared with a budgeted deficit of $470,000. It says internal financial reporting did not reflect RNZ’s underlying position, limiting the opportunity to act during the year.

Asked by Plunket whether the former CFO had been lying, Impey said the review needed to determine whether the problem involved individuals or the organisation.

“So far, there is no evidence of any criminality or fraud,” he said. “The review has got to be robust and it’s got to be made public. This is public money.”

Impey said RNZ had linked up with Treasury and the Auditor General’s office, and that independent advisers would help conduct the review. He said the findings would be made public.

The annual report also disclosed that RNZ entered into a $5 million debt facility in June without the required ministerial approvals. The facility was drawn to a maximum of $2.3m during the year and was undrawn at June 30. The Auditor General drew attention to the breach in the audit report, while leaving the audit opinion unchanged.

Impey said he had informed the Minister for Media and Communications the morning after the CFO resigned. He had also spoken with Labour’s broadcasting spokesperson, Reuben Davidson, saying RNZ wanted to be open and avoid surprises.

The broadcaster is also preparing to cut 58 positions. Impey told Plunket the changes would reduce RNZ’s staffing from 347 to 289 as it works towards operating within its means from July 2027.

“I do agree,” Impey said when Plunket asked whether the crisis should be a wake up call for RNZ’s culture. “I think that what this shows is that the organisation needs to fundamentally change around cultural issues.”

He later described it as a “massive wake up”.

The annual report says personnel expenses were $3.2m above budget, including $1.4m in redundancy payments. Operating expenses were $6.4m above budget, with costs associated with the Auckland office relocation and property disposal programme among the reasons.

Impey said RNZ had forecast a further $7.8m deficit for the current financial year while it worked towards a sustainable position. Together with the $11.8m loss recorded for the year to June, the projected shortfall across the two years is about $19.6m.

Plunket also asked about Paddy Gower taking over the Saturday morning programme. Impey declined to disclose the presenter’s pay, calling it private employment information, but said the new programme would cost less than the previous show.

Thompson is due to leave at the end of December after 13 years as chief executive. Impey said the review and restructuring work would be under way before a new chief executive started in the new year.

A police spokeswoman said the matter was not subject to any police investigation.

The Serious Fraud Office has been approached for comment.