A top ministry official says it missed early opportunities to identify the theft, attributing dodgy documentation to incompetence rather than malice.

Faith Helen Ruggiero was convicted of felony larceny at a Connecticut court earlier this year after being arrested in July 2016.

The ministry commissioned an external review into “financial irregularities” it uncovered in February 2016 as it prepared to wind up the Maritime Helicopter Capability Project, set up to acquire and upgrade 10 Seasprite helicopters.

According to a ministry document, an internal investigation found about US$100,000 (NZ$146,530) “unaccounted” from the Connecticut-based project team office’s $US7.8 million administration budget.

After American authorities investigated, Ruggiero was convicted of felony larceny in March and given a five-year prison sentence, suspended for five years.

The ministry received a one-off restitution payment of US$50,000 from Ruggiero in April, with the court ordering further payments worth US$40,000 over five years. . . . . .