Audit Office on Hawke’s Bay District Health Board

Donna Chisholm in the SST quotes from an report on the Hawke’s Bay District Health Board. Now I can’t find the report online, but it doesn’t look great for the Government which has effectively sided with and the management, by dismissing the entire Board.

Chisholm states the Audit Office reports finds the following:

  • There was a contract to Wellcare Education, a subsidiary of Hausmann’s company Health Care New Zealand, for a pilot project to train 16 long-term beneficiaries as homecare workers in a partnership with the Ministry of Social Development.
  • A total of 11 failings were found in the process.
  • The $1.1m contract included a $256,000 payment to Wellcare, over two years. Board members say they have never been able to establish the reason for this.
  • Management kept the Board unaware that the contract had been proposed until one month after it had been agreed and signed – despite the fact it involved on of their own board members
  • It is understood Hausmann’s discussions with senior staff about the contract began as early as August 2005, six months before he declared his conflict of interest.
  • The contract processes did not comply with either the board’s procurement policies or public sector good practice and there was no evidence of formal conflict of interest procedures being undertaken.
  • Management could not explain why an open tendering process had not been used.
  • No reasons or justifications for the selection of Hausmann’s company were recorded in files.
  • The contract was signed without evidence of a completed approval process.
  • Payments were made before services under the contract were delivered when they should have been tied to milestones which reflected completed work.

Now bear in mind this is only a report into the $1.1 million contract. We are yet to see the report into the $50 million contract.

UPDATE: Local MP Craig Foss has several relevant blog posts on this issue, citing board minutes and written questions about the fact the contract was not tendered, and how the CEO told the Board initially it had been.

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