7 Sep 2018

Counties Manukau DHB calls in lawyers to investigate financial reporting

11:14 am on 7 September 2018

Independent lawyers have been hired by Counties Manukau District Health Board to investigate financial reporting irregularities.


A forensic review has raised serious questions about financial reporting on a big construction project at Middlemore Hospital and conferences between 2013 and 2016.

Two further inquiries were initially planned, but Ministry of Health director-general Ashley Bloomfield said there was no point in continuing to probe into the mistakes.

"What I'm really interested in is making sure it doesn't happen again," Dr Bloomfield said.

Counties Manuaku DHB's behaviour was surprising, disappointing, unethical and unacceptable, he said.

He has now passed the ball back to the South Auckland health board.

"It's definitely not trying to make it go away," Dr Bloomfield said.

"I've made the [forensic] report public, I've made public the letter I've sent to the district health board chairs and chief executives which sent a very clear and strong message.

"I have referred the report back to the Counties Manukau District Health Board where there is a new chair and a new chief executive. What I am trying to do is to assure the public that they can have confidence in the board and in the public health system, that we will not sweep these things under the carpet."

The DHB is calling in lawyers to determine whether it should take more legal action.

DHB chairman Vui Mark Gosche, appointed in the fallout from revelations of a swathe of leaky and seismic building problems at Middlemore, said there were issues the $120,000 review from auditors Beattie Varley did not pursue.

"What we want to do is to make sure that there are no more questions left hanging."

Mr Gosche said the board, which had many new members, had not discharged its responsibilities as a board "because we've got to be able to sign off our audits and at the moment none of us are confident in signing off an audit."

Mr Gosche was initially unable to tell RNZ whether if his new chief executive Margie Apa was on the executive leadership team in the period 2013 to 2016 when the financial irregularities occurred.

But he quickly called back to say he had asked her and that Ms Apa had told him that she was one of the managers who challenged the chief executive Geraint Martin at the time.

"She did raise the issue, and it was difficult for people to do that, as you can imagine, but there were people that were standing up for the issues in the ELT [executive leadership team]," Mr Gosche said.

The forensic review said that at least two managers voiced alarm to Mr Martin, telling him the reports they were seeing "must contain some false accounting". Mr Martin was not happy that they did this.

"What I don't know is whether the executive leadership team was fully informed on these matters, and what I have been told is that a lot of the information wasn't even shared with the board," Mr Gosche said.

Ms Apa declined to be interviewed.

Geraint Martin was ultimately responsible as then-chief executive for what went on, Mr Gosche said.

Mr Martin, now chief executive of Te Papa, declined to be interviewed

He pointed to the statement he gave RNZ a day earlier, that said he was pleased the auditors found no evidence of improper conduct or wrongdoing but concerned that he and other key former staff and board members were not interviewed.

Dr Bloomfield said they were given two chances to be interviewed but no one took this up, and they also were sent the draft and final forensic review reports for comment.

The DHB's investigation may not stop here. Mr Gosche is no longer ruling out a further inquiry into how a second, earlier, construction contract was set up even though the ministry and top managers said a review would serve no public benefit.

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