Rousseau to head national health-fraud study

Ways of reducing possible fraud in the health sector are being examined nationally with the assistance of Otago District Health Board chief executive Brian Rousseau.

He has been appointed the lead chief executive for district health boards on a Ministry of Health-HealthPAC project looking at fraud countermeasures.

The group is expected to come up with recommendations which will then be put out to the sector.

The Otago board has introduced many measures since the discovery of the $16.9 million fraud in 2006.

Michael Swann, a former board information technology manager, and his friend Kerry Harford are awaiting sentencing in the High Court at Dunedin on the fraud after being found guilty last year.

Mr Rousseau said at the time of the fraud , which took place between 2000 and 2006, the board would have had procedures which were no less robust than other boards.

Board chairman Richard Thomson, who is a businessman, agreed, saying that the processes then would have been standard for most companies.

Fraud risk management was a matter of deciding how significant the risk was and how much you wanted to spend to reduce that risk.

Mr Rousseau said the improved fraud countermeasures put in place by the board would be more expensive than the previous ones.

Measures put in place by the board since the discovery of the fraud include a full forensic audit completed by Price WaterhouseCoopers and an improved fraud prevention strategy which includes -

• Detailed pre-employment screening for all senior staff.

• Fraud awareness training for senior staff.

• Annual forensic screening which looks for things such as "ghost employees".

• A revision of delegation, expenses, fraud and gifting polices.

• Fraud risk identification.

• Revised internal audit procedures which include forensic review.

• Computerised links between delegated authority and payment authorisation.

• Computerised links between contracts and payments are also being developed.

• A central contracts register.

• An 0800 fraud hot line to allow co staff to raise concerns independently.