Minister considers future of health board chairman after $17 milliion fraud

Health Minister Tony Ryall has confirmed he is considering sacking Otago District Health Board chairman Richard Thomson over the board’s handling of a $17m fraud devised by former IT boss Michael Swann.

In a three-line statement, Mr Ryall said he was writing to the board as he was “considering removing the current chair.”

"I expect accountability in the public health system and we are now following due process," the minister said, adding there would be no further comment.

His statement follows a meeting between the minister, Mr Thomson, and board chief executive Brian Rousseau in Wellington last week in which Mr Ryall sought answers as to how the fraud could go on for so long without the board being aware of it.

Mr Ryall told NBR last week the case had “severely dented” public confidence in the board and that his job was to restore it.

Swann and his friend and associate Kerry Harford are in custody awaiting their March 11 sentencing for perpetrating the $16.9 million fraud between 2000 and 2006.

While Mr Ryall is insisting on following due process, he is unlikely to linger in removing Mr Thomson, who is a government-appointed chairman but also an elected board member.

The minister will want to minimize the political fallout in a case which has seldom been out of the limelight in recent months.

Mr Thomson has been defiant in his insistence that the board is not responsible for Swann’s criminal actions and that it did all it could to remedy the situation once the fraud eventually came to light.

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21 Comments & Questions

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Surely the CEO of an organization is more accountable for daily operational matters than the Chairman of a Board who should be concentrating on Governance as his main priority.
Rather than finding a sacrificial Lamb let us concentrate on true accountability in the public service.

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Further investigations will reveal the TRUTH, and the wrongdoers will be brought to JUSTICE! After all these are TAXPAYER monies.

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clearly the Chair cannot read a balance sheet and determine where money is being spend. 17 Million for IT expenses - its a simple inefficient hospital system not NASA - clearly not gifted enough in business to continue.

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I don't blame him for not being able to see IT expenses on a balance sheet. Have you ever seen expenses on a balance sheet before? I'd start pointing fingers at the accountants if that was the case.

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if jhl is right about my degree of "giftedness" or lack thereof then he or she should be deeply worried about theirs. I go looking for expenses in the profit and loss rather than the balance sheet. For the record in the three years following my becoming Chair there was no increase in IT spend. In the fourth year, when Swann came under suspicion there was a 15% increase. Perhaps jhl should log onto the ODT website if he wants to get a true understanding as to how this fraud was perpetrated, and how it was handled by me.

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The fraud occurred largely under the jurisdiction of the previous Chairman who was warned about Swann and failed to pass that on to the new board. Ryall will need to be careful as some of those who knew about Swann and did nothing are associated with his party. (NBR might like to do some investigative journalism on this)

The present chairman acted on information provided, resulting in the detection and successful prosecution of the fraud, implementation of improved systems and communication of that for the benefit of other DHB's. The DHB chairman was re-elected by the public of Dunedin in 2007 (second highest polling candidate) when the public knew all about the case - democratic accountability in action.

If Key wants Ryall to clean up health system waste and corruption, he needs to tell him to get on with the important things rather than looking for heroism.

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I have known Mr Thomson for over 35 years. He is a man of considerable competence and the highest integrity. All who have worked alongside him, including the present members of the ODHB, know this. It is also clear that he has earned the confidence of the people of Otago, who resoundingly endorsed him in the last local body elections after details of the Swann fraud were made public. The model provided by the Minister’s recent actions in the matter is shameful, both in terms of the message that it is dangerous to report a crime committed by an employee and secondly in the cavalier manner with which a Minister of the Crown can seemingly ride rough-shod over the principles of natural justice in seeking to remove Mr Thomson from his office. Loss of confidence in the Chairman of the ODHB is not the issue. The significant feature of this unfortunate mess is now the electorate’s growing loss of confidence in the Minister.

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