Health Minister Mark Butler has launched an investigation into the National Mental Health Commission after questions from The Saturday Paper revealed a culture of dysfunction, alleged bullying and psychological harm at the agency.

This month, the commission sacked a quarter of its workforce. The agency, set up to hold governments to account on mental health policy, is the subject of at least two additional investigations over its operations.

One relates to a public interest disclosure – a specific mechanism for public officials to report potential serious wrongdoing – about the awarding of a $535,000 communications contract to a company with connections to senior staff. That disclosure is still being investigated.

The other relates to a Federal Circuit Court case that will begin next month, examining a “general protections” claim involving a former staff member who was allegedly sacked while on sick leave after raising concerns about “financial irregularities”.

At a meeting of senior leadership held late last year, chief executive Christine Morgan disclosed that Health Department secretary Dr Brendan Murphy had facilitated a “preliminary fact-finding” investigation into fraud and corruption allegations at the commission. That followed an October 8 “formal” report related to “inappropriate travel”, “fraud and corruption in relation to procurement” and “fraud and corruption in relation to conflicts of interest in appointment into commission”.

According to staff notes from the meeting, seen by The Saturday Paper, Morgan said “there are no issues requiring further investigation”. This preliminary investigation was sent to the Department of the Prime Minister and Cabinet, Health Minister Mark Butler and Assistant Minister for Mental Health Emma McBride.

In a statement this week, related to broader questions about the commission,  a spokesperson for Butler said: “The Minister for Health takes allegations of this nature seriously in any part of the Health portfolio. An investigation into the operations of the NMHC has been commissioned. While the investigation is under way it would be inappropriate to comment on allegations.”

An investigation by The Saturday Paper, including interviews with more than 15 current and former employees at all levels of the mental health agency, has revealed a troubling picture of the body charged with supporting the country’s mental health policy.

One senior employee says the commission is currently operating in breach of new positive legal obligations under employment law to ensure a “psychologically safe” workplace.

In more than one case, employees have developed suicidal ideation linked directly to the demands placed on them by a “fractured” workplace.

In the 2021 Australian Public Service Employee Census, an official report within government, the commission ranked 99 out of 101 agencies on staff wellbeing. It came in just ahead of the Department of Home Affairs.

The 2022 results were a mild improvement after an intake of new staff, but the 2023 report due in June is expected to show a dramatic drop in wellbeing and satisfaction.

“Which is ironic,” a source says, “because it’s the National Mental Health Commission and it is funded by the Commonwealth government to lead the National Mentally Healthy Workplace Alliance … That’s $12 million or something along those lines, to establish, you know, a whole leadership of what a good, mentally healthy workplace looks like.”

Christine Morgan was named chief executive of the National Mental Health Commission in late 2018 and began in the role in March 2019. Morgan had become a familiar face to the Coalition government after advocating strenuously as the head of eating disorder not-for-profit the Butterfly Foundation. Prior to that she had been a senior manager at Wesley Mission and Telstra.

Scott Morrison in particular was impressed by Morgan and four months after she started in her new role he made her national suicide prevention adviser. For Morrison, this was a central appointment.

“Suicide takes far too many Australians, devastating families and local communities,” he said in announcing Morgan’s role. “One life lost to suicide is one too many, which is why my government is working towards a zero suicide goal.”

Later, he said “Christine has an outstanding record of service to the mental health sector, and I have every confidence in her ability to lead the commission”.

She “brings extensive experience and expertise to the role, and I look forward to working closely with her to ensure that Australians have access to the mental health services and support they need”.

Soon after the appointment, Morgan gave an interview to the Bible Society Australia’s publication Eternity News. It revealed her thinking about mental health and wellbeing.

“In terms of spirituality, it’s really interesting as I travel the country and consult with communities, particularly our Indigenous communities, about mental health and wellbeing,” she said.

“There is a strong call for recognition that as human beings we have a visible component, we have a mental health component and we have a spiritual component, whatever that may mean for people.”

Morale at the mental health commission is at its lowest ebb. In more than 13 hours of interviews conducted by The Saturday Paper, multiple staff have described a culture of dysfunction where senior employees are not able to access information such as the financial accounts or other decision-making documents. Four senior staff have taken stress leave this year alone.

Many staff who spoke to The Saturday Paper pointed to a nationwide “tour” completed last year as indicative of the commission’s problems.

As part of the Making Connections 2022 tour, Morgan and her principal adviser, Jenny Muir, flew business class and stayed at top-tier hotels in almost 40 communities. That same tour, which reached just 1500 people, generated $535,000 in fees for Primary Communication, where Muir served as chief counsel before joining the commission in 2020. The Saturday Paper is not suggesting anything improper in the awarding of the contract.

The “roundtables” and “community conversations” that took place in each state and territory were often poorly attended and in some cases the number of staff present exceeded members of the public. Primary Communication spent as little as $2 a day advertising some of the regional events through social media.

For example: a phalanx of commission executives, staff and contractors hosted a Palm Island roundtable on August 24 last year but met with just two people at it. In notes prepared later, obtained by this newspaper, it was recorded that the two attendees were “predominantly First Nations”.

The Saturday Paper has been told the national tour was so poorly run that Indigenous groups became furious with the “tin-eared” intrusion in their communities.

“It was a photo opportunity,” someone familiar with the situation said. “And they didn’t even have the courtesy to check cultural protocols.”

Another staff member at the commission, who is not authorised to speak publicly, said the “tour revealed little that could not have been obtained from online forums or that was not already known or obvious”.

“For example,” they said, “housing and financial stress is driving mental distress. Even more money is now being spent trying to retrofit some quantitative analysis of the comments.”

The commission has paid $136,000 to Orima Research Pty Ltd to produce a report based on the Making Connections 2022 tour. As one commission employee said, however, there were often so few people in attendance at the forums that it would be “using junk data to try and justify this when really it should just have been dropped”.

When the commission was established by Mark Butler in 2012, its purpose was clear: use evidence, research and analytics to advise governments on what policy interventions work and hold them accountable for their decisions. That has not been the reality.

“Rather than a data-driven organisation ensuring accountability of governments for mental health investment, the NMHC has focused on producing documents that describe a utopian ideal based on opinion, popular appeal and anecdote,” a source says.

“The organisation does not produce critical, evidence-based assessments of government initiatives, practices and reforms as intended. Nothing has been published on the Fifth Plan [the Fifth National Mental Health and Suicide Prevention Plan] since 2020. The last spotlight reports and position statements were published in 2019.”

On October 11 last year, Jenny Muir was involved in an alleged incident with a junior staff member. Following the episode, Muir was stood down on leave for three months.

“I acknowledge that this incident was distressing and am sorry it occurred,” Morgan wrote in an email to staff on October 23.

“In order to better understand what happened, and any relevant circumstances, we have appointed Mr Paul Casimir as an independent party to undertake an assessment.”

The initial investigation, which involved interviews signed by staff, was unable to reach a conclusion so the matter was sent to officials connected with the Australian Commission on Safety and Quality in Health Care, which was unable to survey enough evidence to support a finding that the public service code of conduct had been breached. By this stage, the junior employee had left the commission and did not participate in the investigation.

On November 17 last year, every director in the commission agreed on a consolidated list of problems at the agency and 13 met with the executive to raise them. Those itemised concerns, obtained by The Saturday Paper, detail a “culture of risk aversion, secrecy and blame in the organisation”.

“Sensitive information is tightly held, rather than having transparent, honest (and difficult) conversations, and trusting in people being able to manage their own responses,” the document says.

“We’ve also experienced that when discussing challenges or dissenting views, members of the executive have pressed to know specific names of who has said what. This implies blame.

“Our workplace is not best practice when it comes to providing a mentally healthy workplace. If we are to achieve reform, we need to be best practice ourselves.

“We need to move to a culture of safety, inclusion, respect and trust. A culture that sees everyone as valued and important, regardless of their background or where they sit in the hierarchy.”

The executive team, led by Morgan, responded with the offer of a “social contract” for staff and members of the executive some four months later.

“Firstly, there is an open acknowledgment of the fractures that exist and we are finalising a ‘social contract’ for the Executive which will shape the way we work together,” the response says.

The director group that forced the initial meeting responded, in short, with a simple question: what would a social contract do and how is it different to employment contracts already in operation?

“This is what they do,” a staff member told The Saturday Paper. “Push and push and push, then pretend to act when they’re caught out and then nothing changes.”

New suicide data is due to be released later this year. People with an understanding of the data expect the rate to be the highest in at least 20 years.

“Among soaring cost of living and times when mental health has never been more important, the mental health commission should really be leading, guiding governments,” a source says.

“It is moribund. Effectively, it is completely sidelined.”

Insiders say it is impossible to untangle the financial decisions of the executive from the culture of blame and dysfunction at the commission. Together, these problems have stripped the commission of credibility in the sector.

Staff turnover has been extreme. In addition to the 10 roles terminated earlier this month, others have remained unfilled after staff departures.

The Saturday Paper has seen an email sent by a staff member, raising concerns about the conduct of a contractor. Its tone is one of resignation. “My gut says this is a little bit of a rort,” the email says, referring to spending by the contractor. “If it’s a rort, just let me know and I will leave it.”

Christine Morgan and Jenny Muir declined to respond to detailed questions from The Saturday Paper, referring instead to the statement from Mark Butler’s office.

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