DCC fraud failure

23/12/2014

The ODT says the investigation into fraud at the DCC offers a salutary lesson:

Deloitte’s report into fraud at the Dunedin City Council has proved as damning as suspected.

Not only did it involve the pocketing of money from the sale of 152 vehicles, but it appears former team leader Brent Bachop was at the ”centre of” other potential issues.

The debacle is an indictment on the council and a serious warning to others.

Supposedly, the council had systems and checks, but they failed spectacularly.

It is almost beyond belief that suspect dealings worth at least $1.59 million, and possible considerably much more, took place.

What makes it worse is the way several ”red flags” were ignored or investigated insufficiently.

These included Mr Bachop’s excessive lifestyle as well as questions over the years, including from Cr Lee Vandervis.

While these flags were flying, down the road at the then Otago District Health Board, Michael Swann’s place in a $16.9 million fraud was being uncovered and receiving extensive publicity.

His case should have acted as a sharp warning to other large organisations.

Clearly, in the council’s case, it did not.

In a city renowned for its Presbyterian roots and canny business people it is hard to understand how two cases like this went undetected for so long.

The council, including Mr Bachop’s managers, generally has had good and competent staff.

But something went wrong.

Were they too slack, too trusting, too complacent?

All of the above?

A classic instance concerns the finding Mr Bachop spent $102,908 on a council card – which was also used for vehicle serving and maintenance – on miscellaneous items, including soft drinks, chips, milk, chocolate biscuits, bread and fuel for personal vehicles.

Mr Bachop’s manager regularly signed off those expenses. Giving the benefit of the doubt, it would appear the manager simply did not check the details.

Mr Bachop himself, and the council says no-one else in the council was found to be directly dishonest, was well liked and capable.

That just goes to show that other councils, institutions and organisations have to be on guard.

They not only need appropriate systems, but must follow them. . . .

Complaints about compliance costs – in both financial and time terms –  are rife in an age where it too often looks like exercises box ticking ant butt covering.

But no organisation can be too careful about checking expenses and expenditure, especially when the money at stake is the public’s.

This sorry sage reflects very poorly on the council and its systems and does as the ODT says, provide a salutary lesson not just for the council but everyone with the responsibility for anyone else’s money.


Hope he’s standing for right reasons

04/10/2010

When Otago District Health Board employee Michael Swann was found guilty of a $17m fraud, Health Minister Tony Ryall held board chair Richard Thomson responsible and sacked him.

Thomson was elected to the board, chose to stay on as a member and is a candidate in the current election for what is now the Southern District Health Board which was formed when the Otago and Southland DHB’s amalgamated.

I have no doubt he’ll get back on and I wouldn’t be at all surprised if he tops the poll.

I just hope he’s standing because he can make a positive contribution to the board and health services in the south and not in a misguided attempt to give the fingers to the minister.


DHB fraud fallout highlights stupidity of Clayton’s democracy

17/02/2009

Otago District Health Board chairman Richard Thomson didn’t accept the invitation to jump so Health Minister Tony Ryall has pushed him

No-one is saying Thomson is responsible for the $17 million fraud for which former ODHB employee Michael Swann and his and business associate Kerry Harford were found gulty last year.

But Ryall is holding him accountable  and had he understood his role and responsibilities as chair he’d have resigned before he was sacked.

David Farrar Kiwiblog explains the requirement for accountability at Kiwiblog and in his NBR column.

The letters page of the ODT has had a lot of correspondence on the issue, some of those in support of Thomson point out he was elected to the board, not appointed.

That is irrelevant and just highlights the stupidity of the Clayton’s democracy surrounding DHB elections because, elected or appointed ,health boards and their members are accountable not to their communities but the Minister.

Because he’s elected, Thomson could choose to stay on as a board member now he’s been sacked as chair. But if he didn’t understand why, although he was neither to blame nor responsible for the fraud, he should still have been accountable for it; he’s shown he doesn’t understand the role of the board and to whom it’s answerable.


$16.9m fraud against ODHB

08/12/2008

Michael Swann and Kerry Harford have been found guilty of defrauding the Otago District Health Board of $16.9m.

The ODT backgrounds what is thought to be the largest fraud against a government instituion.

Its editorial asks about the duty of care the ODHB and its predecessor Healthcare Otago had to prevent the fraud or uncover it sooner.

And Health Minister Tony Ryall has called for urgent confirmation systems are in place  to prevent fraud in all DHBs.

Large organisations have to trust their employees, but they also need systems to ensure that their trust is not misplaced.


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