23 Oct 2018

Counties Manukau DHB seeks full investigation by SFO

2:12 pm on 23 October 2018

Counties Manukau health chiefs are asking the Serious Fraud Office to investigate "potential fraud or serious wrongdoing" by former staff.

It follows the long-awaited release by the Ministry of Health early last month of an official audit by Auckland forensic accountancy firm Beattie Varley.

The audit, also known as the Review of Financial Management and Expenditure at Counties Manukau District Health Board, followed a request from a former board chair that the ministry commission a review of some management and governance decisions at the DHB prior to 2017.

The review raised serious concerns, including that senior hospital managers reported that a series of health conferences made $500,000 profit when in fact they made $1 million loss. The Beattie Varley review provided no firm answers to many questions yet also said no further inquiry was needed.

The Director-General of Health, Ashley Bloomfield, responded early last month that the DHB had engaged in actions that could be perceived to be deliberate construction of financial arrangements to avoid external scrutiny, adding that was what had troubled him most.

"This behaviour does not meet the ethical standard that the public would expect of us and I do not consider it acceptable," he said.

However, Dr Bloomfield said no "wrongdoing" had been identified, and there would be no sanctions because the DHB had appointed a new board and new top managers since the matters investigated, which ran from 2013 until 2016.

In a statement today, the Counties Manukau DHB board said, "as the result of further investigation and legal advice" following the release of the Beattie Varley report, the board "considers it has evidence that can be reasonably assessed as indicating that fraud or other serious wrongdoing by former staff may have taken place at the DHB".

Counties Manukau DHB chairman Vui Mark Gosch, said: "The potential fraud or serious wrongdoing is historic but of concern, and the DHB's Board has decided to seek full investigation of these matters by referral to the Serious Fraud Office."

He said the DHB would be making no further comment on the matters "to avoid prejudice to any investigation". The DHB has declined to release the legal advice that led to this latest step, on the basis that it is legally privileged.

Former DHB chief executive Geraint Martin told RNZ today he knew nothing about the events. He said he had never been interviewed about any of the details in the Beattie Varley report, and also did not know who had been interviewed for that report.

Mr Martin said he had also not been contacted by the DHB at any point. He declined to comment further.

The SFO is yet to respond to a request for comment, including on whether it will investigate.

Get the RNZ app

for ad-free news and current affairs