The Chief Ombudsman says new arrivals in the country were able to mingle at a hotel with other guests, including his staff.
All Covid-19 isolation and quarantine facilities set up for people arriving from overseas will now be inspected.
The inspection was announced by Chief Ombudsman Peter Boshier at Parliament's Governance and Administration Committee this morning; afterwards he told reporters about the experience of his own staff, that resulted in all of them having to be tested.
"When we came up to Auckland to inspect a prison, it was all arranged for the next day, my staff were all set to go, without warning a whole lot of people came from overseas, placed into quarantine and there was mingling.
"Now that to me is a facility that wasn't well organised," Boshier said.
Ombudsman staff were unaware they were put in a position where they could've been in close proximity with people who had just arrived from overseas, he said.
"It should've been managed better than that," he said.
Boshier said he was "livid" and the mismanagement forced his staff into isolation, setting their work back by weeks.
"Unless the process goes according to plan, if a chain is weak, it messes up everyone and that's what happened to us."
The government is under fire after women in isolation were allowed to drive from Auckland to Wellington without being tested for Covid-19, then later both tested positive.
Health Minister David Clark is now suggesting the military could oversee managed isolation as part of the government's response to Covid-19.
The Health Ministry had oversight but that was now under review, he said.
The National Party is calling for his resignation as minister.
In April, Clark offered to resign after he revealed he breached level 4 lockdown rules by taking a trip to the beach. Prime Minister Jacinda Ardern had then said under normal circumstances she would have sacked him, but demoted him.
What inspectors will focus on
Boshier said isolation facilities fell within his designation, so a new inspection programme would independently monitor and report on them.
He said the public needed to be assured that people who were being isolated for health reasons were being treated fairly and their basic human rights were being respected.
Boshier said he understood about 3500 people were in managed isolation or quarantine, as at 16 June.
"Thousands more have completed their mandatory 14 days in isolation since border control measures were introduced on 9 April 2020. The Ministry of Health is providing accommodation in multiple facilities including hotels."
Boshier said the government-funded programme aimed at helping stop Covid-19 was of an unprecedented scale and was likely to continue for many more months while New Zealand's borders were closed.
"People may be staying in hotels but they are not actual guests. People in quarantine can't leave their rooms and those in managed isolation are not allowed to leave the premises without permission of health officials. Even then, their outside activities are closely supervised."
Boshier said the inspection team would be small and the inspections would focus on specific Covid-19 criteria.
"Among other things, inspectors will be looking at the policies in place to manage suspected cases of Covid-19.
"We'll also look at people's access to fresh air and exercise. We'll also consider whether people in managed isolation are able to keep a physical distance from members of the public including other hotel patrons and staff."
The inspections would be conducted under OPCAT (the United Nations Optional Protocol to the Convention against Torture). Investigations are likely to follow similar lines to those recently conducted in prisons, mental health facilities and aged care facilities.
The inspections are due to start next monthand ombudsman staff will be wearing protective equipment when required.