Allegations of a possible multimillion dollar fraud at an
independent Dunedin health provider have not been referred to
police, a select committee has been told.
Southern District Health Board (SDHB) was questioned in
Parliament's health committee today about its long-running
dispute with Dunedin-based GP organisation South Link Health.
The dispute concerns whether South Link has to return $5.3
million of savings from contracts - a figure that could be as
high as $15m with interest since the 1990s.
The Auditor-General has asked for the dispute to be resolved
without delay but the parties are still in negotiations.
Southern DHB chairman Joe Butterfield told the select
committee that the DHB had received legal advice that there
was a possibility fraud may have occurred.
However, that needed to be investigated further, and it was
not for him or the board to decide whether fraud had taken
Mr Butterfield said the matter had not been referred to
police and, if fraud was established, then it should be
referred to the Serious Fraud Office.
"If there is fraud, of course we will refer it on to the
appropriate authorities. We have not established there is
fraud yet, and may not, obviously."
Mr Butterfield said the DHB's aim was still to reach a
commercial settlement that was accepted by both parties.
"The other issues are peripheral to our aim to achieve that."
In December, the Auditor-General said it expected the DHB to
resolve the dispute "without further delay". Mr Butterfield
said the DHB has received no further advice from the Ministry
of Health since then.
Green Party health spokesman Kevin Hague, who has called for
an investigation, said it was extraordinary no complaint had
been laid with police or the Serious Fraud Office.
Mr Butterfield said he had been assured the money was safe,
but Mr Hague said a significant amount had been spent.
Mr Hague has asked the Auditor-General's office to
investigate the actions of the ministry and Health Minister
Tony Ryall, who today denied downplaying the allegation of
fraud in the case.
When asked during Parliament's question time whether he
discouraged the DHB to take the allegation to police in 2010,
Mr Ryall replied:
"I do not have any recollection of being aware of it, so I
cannot have actively discouraged the district health board."
Mr Ryall also said he never directed the Auditor-General to
remove the word "fraud" from the audit office report to the
South Link Health lawyer Frazer Barton said the organisation
was surprised allegations of fraud had been brought up by
politicians in Wellington.
"These savings that were identified have all been returned to
the community via health programmes and medical and nursing
The dispute over the "savings that were spent" was a complex
civil matter between the DHB and South Link Health, he said.
- additional reporting Teuila Fuatai
- Matthew Backhouse of APNZ