Stuart McLauchlan, the man charged with monitoring the
Southern District Health Board, says he was not told of legal
advice in 2010 that the South Link Health (SLH) funds dispute
might involve fraud.
This was despite the fact the Dunedin businessman then the
board's Crown monitor, was trying to resolve the long-running
dispute with the independent practitioner association.
He said when contacted yesterday he would have told Health
Minister Tony Ryall if he had been aware of the legal advice.
''If there was any mention of fraud, then obviously, you have
to take it seriously. But as I've said, I'm not aware of that
''If it had come to me, I would have acted on it.''
Opposition MPs continued to question Mr Ryall yesterday in
Parliament about what he knew of the matter.
Board chairman Joe Butterfield revealed the existence of the
legal advice this week, under questioning from Green MP Kevin
Hague, in Parliament's health select committee.
The admission raised questions about why the health board did
not go to the police if fraud was suspected, and what Mr
Ryall knew about it.
Mr Ryall appointed Mr McLauchlan to the special role to
improve the board's financial performance, and report back to
the Government. He was paid an annual fee of $35,000.
Asked if he was annoyed he was not told about the 2010
advice, Mr McLauchlan said:
''I don't know, because I didn't know that it existed.''
He had tried to to steer the parties to a resolution of the
long-running dispute: ''In all the time I was involved, the
word fraud was never raised.''
It was a ''probably a fair question'' to ask why no-one said
anything to him.
However, Mr McLauchlan was sceptical about the suggestion
fraud could be involved, saying the SLH dispute was a
complex, historic matter.
Mr McLauchlan was appointed to the old Southland Health Board
in 2009, and continued as Crown monitor for the new Southern
District Health Board, before retiring from the role last
Yesterday, Mr Ryall insisted in Parliament he did not know
the dispute could involve fraud until the Auditor-general
''I have been aware for quite some time - in fact, probably
even when in Opposition, because the dispute had been going
on since 2002 - that there was a dispute about the terms in
which those funds were being used,'' Mr Ryall told
''I have never been told that there was an allegation of
fraud associated with that. That sounded more like a
commercial dispute to me.''
Mr Hague, who led the questioning, said in a media statement
Mr Ryall's answers raised more questions.
''The Auditor-general should investigate this whole issue
thoroughly to identify when the minister was informed that
there was potential fraud, and what the minister's role in
this whole mess has been.
''While the minister knew that there was a dispute for many
years, how could he never know that there was potential fraud
while the DHB, and the [Ministry of Health] audit and
compliance unit, knew all about it?''
2002-03: South Link Health dispute arises over surplus
funds from 1990s contracts that were agreed with the then
Southern Regional Health Authority.
2010: Southern District Health Board receives legal
advice the row might involve fraud. The matter passed on to
the Ministry of Health's audit and compliance unit.
November, 2013: Auditor-general alerts Health Minister
Tony Ryall the dispute might involve fraud, after board
member Richard Thomson warned the Auditor-general.
February, 2014: Southern DHB chairman Joe Butterfield
tells health select committee that legal advice in 2010
warned the dispute might involve fraud, possibly between $5.3
million and about $15 million.