National MP Melissa Lee had told NZ On Air she believed her company was entitled to money she is now being told to pay back.
Ms Lee, a list MP, was National's candidate in the June 13 Mt Albert by-election and during the campaign faced allegations that her television production company Asia Vision Ltd had misused taxpayer funds for political purposes.
NZ On Air cleared her of those allegations but in the process uncovered $80,000 of unspent contingency funds that should have been refunded.
NZ On Air chief executive Jane Wrightson said the funding body's chief financial officer Wayne Verhoeven wrote to Ms Lee in June to tell her irregularities had been uncovered and seeking her view.
The problem happened because Asia Vision Ltd had a company mark up, called production company overhead (PCO), basically its profit, set at 8 percent. The norm was 10 percent.
For five years the unspent 2 percent contingency money was added into the PCO on the budget line.
"So they saw the 10 percent figure and thought that was correct," Ms Wrightson said.
Ms Lee wrote back and Ms Wrightson said the response was along the lines of "I don't remember, we'll keep looking, but I thought I was allowed 10 percent."
NZ On Air double-checked and was quite sure the written agreement was for 8 percent and an accounting error had been made.
A second letter was sent yesterday requesting the $80,000 repayment. It was addressed to company director Robin Kingsley-Smith.
"I didn't send it to Ms Lee ... because clearly there's a conflict of interest between a politician and a producer."
Labour MPs have criticised Ms Lee and the Government for not disclosing the financial irregularity earlier.
Broadcasting Minister Jonathan Coleman had been informed.
"Quite frankly I'd forgotten all about that, it was just made in passing until this surfaced now," he said this morning.
"There was no mention of money at all at that time ... the gist of it was there was a technical issue around accounting practices which they just had to sort out. It didn't sound like any big deal - if I had felt it was I would have actually followed that up at the time."
Prime Minister John Key this morning accepted the problem arose from an accounting error and did not think it would impact on Ms Lee's career.
