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.