The Equality and Human Rights Commission (EHRC) faced renewed criticism today over its financial management, with MPs complaining about the pay awarded to its interim boss.

From May 2009 to January this year, Neil Kinghan was paid £1,000 per day as acting director general of the EHRC – costing a total of £138,000. Kinghan was installed as a temporary replacement for Nicola Brewer, who left to become high commissioner to South Africa.

In a report published today, the Commons public accounts committee insisted that a permanent director general be appointed as soon as possible.

A spokesman for the commission said Kinghan's contract had now been extended to September, with a selection process for a replacement due to be discussed by the board next month.

But he has now been brought within the staff payroll of the commission on a salary of £150,000.

Kinghan's appointment followed a "flawed and inefficient" process of establishing the new commission by merging the previous commissions for racial equality, disability rights and equal opportunities, said the cross-party committee.

"Serious errors" were made in setting up the new body, at a cost of £39m to the taxpayer, with the result that the EHRC was "not ready for business" when it opened its doors in October 2007.

A National Audit Office investigation last year revealed that employees of the three legacy commissions were offered pay-offs totalling £11m in an early exit scheme over which the EHRC had no control, with the result that it started its life 140 members of staff short, and with skills gaps in key areas, said today's report.

Seven senior staff who had taken early severance packages totalling £630,000 were rehired as consultants at a cost of £340,000.

"This is not the way that this committee expects public bodies to be run," the report said.

Committee chair Edward Leigh said the process by which the commission was set up was “patently flawed”.

"The chairman of the commission was in part responsible for the ineffectiveness with which the board scrutinised the set-up process and challenged management's proposals,” Leigh added.

"There are still weaknesses in the commission's controls over staff costs, shown by the unexplained payment of £15,000 to one of the re-engaged consultants. This is not the way this committee expects public bodies to be run, and reinforces the need in future for stronger controls and proper procedures for managing and using public money."