Tendering policies defended

Richard Thomson, the Otago DHB chairman who was replaced this week by Health Minister Tony Ryall, has set out his side of the story on Kiwiblog in response to DPF’s observation that the Board needed some decent competitive tendering policies.

Good idea but a bit late. We had those. Funny thing about fraudsters but they tend not to bring their “contracts” before the Board, let alone competitively tender them.

This fraud was perpetrated through a structure set up almost two years before I Chaired my first Board meeting.

At the time IT spend was just under $8m. It remained at that figure for the next three years. So what should a Board have spotted?

The Board I chaired twice bench marked its IT spend (it was lower than DHB averages), had external consltants in to review its procurement procedures, including examining top ten vendors in a number of areas (strangely these “contracts” didn’t appear in those lists – thats because they didn’t actually exist and the fraudster as the CIO had the ability to control what and how information was presented), and yes there was a full internal and external audit programme that never found a problem with our management control environment.

Readers Digest version – Swann was able to divert funds from existing and approved users to users whose bank account he controlled, but in a manner that resulted in no additional spend. If all of you simplistic idealoges want to have an informed opinion I suggest that you read the material that has been put in front of the people of Otago – they, as Christopher has alluded, have taken a rather more generous view as to my actions in catching Swann, than the badly informed above.

He signs off Richard Thomson (used to be ODHB Chair).

Alf has reproduced it here, because he and many of his mates wondered about the health board’s tendering process.

He shared other opinions expressed by DPF about accountability.

But he recognises the strength of an argument against replacing the board chairman: Thomson had been instrumental in having the fraud exposed and the culprits caught.

What sort of example is being set for other hospital board heads by Ryall’s decision to make an example of him? Should they keep quiet, if they uncover a fraud, lest they too be dumped? Or should they do the right thing at the risk of being busted in the ranks for their troubles?

Good point.

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