The Auditor-general's office expects the Southern
District Health Board to resolve its long-running
multimillion-dollar wrangle with South Link Health ''without
Board chairman Joe Butterfield said yesterday he was hopeful
the matter would be ''clarified'' in the new year.
He was reluctant to comment as it was a dispute under
Details of the dispute have not been made public. It is
understood the disagreement relates to contracts the
independent practitioners association South Link Health held
for pharmaceutical and laboratory services in the 1990s, in
the days of the Southern Regional Health Authority.
The dispute, which originally involved $5.3 million but may
now have blown out with interest penalties to about $15
million, was referred to the National Health Board's
Christchurch audit and compliance unit by the DHB nearly
three years ago.
It appears there has been little progress since then and
concerns have been raised by the district health board with
This week, in response to questions, the Auditor-general's
office said it was advised about the dispute in October
(during the board audit process for 2012-13) and discussed it
with the DHB.
''We were told that there is a renewed focus on resolving the
matter and that this will be done with some urgency,'' the
''We expect the DHB to resolve the matter without further
delay and will be checking to see that it has done so during
our next audit.''
Mr Butterfield said he wanted to make it clear the dispute
was the DHB's, not the NHB's.
The board may have sought an investigation or advice from the
NHB but ''at the end of the day it's our problem to try and
resolve it and we will do that''.
Health Minister Tony Ryall, asked if he was concerned, said
it was not appropriate for him to comment.
Further questions to his office about his understanding of
the legal status of the dispute went unanswered and his
office suggested contacting the NHB. The NHB
has not responded to questions put to it a week ago and
reminders about them. In late 2011 it said the matter had
been held up by the earthquake because the unit had been
based in the red zone. The referral of the dispute to the NHB
followed years of behind-the-scenes discussions, involving
all the South Island district health boards. An attempt at
mediation failed to settle the dispute.
The money in dispute involves savings made on the contracts
by South Link Health and the parties were unable to agree on
whether agreement was reached on how the savings would be
spent. South Link Health's position has been that it has done
nothing wrong and owes no money, while the DHB considers the
money should have been returned to it.
The figure under dispute has grown with interest. It
was listed as a $14.4 million liability in South Link
Health's financial statement for 2012 (the most recent
statement filed online), but is likely to have climbed to
about $15 million.