I am astounded.

I’ve just read the wrap up of the Otago District Health Board fraud case. For those of you who haven’t caught up with it – former CIO of the ODHB defrauded the board of close to $17million for supposed IT risk mitigation charges (this from a entity whose total risk mitigation and insurance spend is around $300k a year).

Basically the CIO had his accomplice invoice the health board for fictitious services which he would then sign off before passing to the accounts department. His accomplice kept 10% of the invoice amount for his troubles while the CIO kept the remainder.

$17million over a six year period – that’s a significant amount of money for a small health board to just lose. What’s even worse is that;

Midway through this period (2003) the board was in dire financial straits, having been deemed to be over-funded according to the Crown’s population-based funding system by $32 million. It also had an operating deficit of $11 million.

Apart from the fact that the former CIO and his accomplice should spend a fair few years living on brad and water and breaking rocks, both the CEO/CFO and the board at large needs to fall on their sword for this. On a number of levels this is bizarre;

  • What board, facing a massive deficit, fails to reassess departmental spends? What audit protocols were in place there?
  • How can a CEO fail to put in place systems to avoid this sort of thing – whatever happened to budget negotiations?
  • How can a CFO fail to do a simple benchmark analysis that would have highlighted this completely out of kilter spending

The lot of them should be replaced with people that can actually do the job.

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

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