An Otago District Health Board board accountant said he was told a company called Sonnford Solutions was saving the board "hundreds of thousands of dollars" for IT-related services and negotiating deals the board "couldn't possibly negotiate", a Dunedin High Court jury heard yesterday.
Murray Bell, assistant accountant for the Otago and Southland District Health Boards, said he first became aware of Sonnford about 2000 or 2001 because invoices for payment tended to arrive "in an unusual manner".
They were all personally delivered by the information technology manager, Michael Swann, who would ask for immediate payment, Mr Bell said.
He had become aware of the invoices because he had to be told of any significant payments - generally over $50,000 - so he could ensure there were sufficient funds.
He asked Swann about Sonnford in mid 2004 and was told the company was a broker/dealer in international software licences.
Swann described it as a big company with two offices, one in Wellington and one in Queenstown.
Mr Bell said he could find no listings for the company in either the white or the yellow pages, but when he checked the Companies website he found listings in Queenstown and the Wellington area with the names of two directors, Kerry Harford and a woman whose name is suppressed.
When he next saw Swann he said to him, "I see Sonnfords is run by two ladies," to which Swann replied, "Yes, and a very good job they do, too."
Swann (46) and his friend and business associate Kerry Harford (48) are accused of using 198 Sonnford Solutions invoices to defraud the board of $16.9 million between 2000 and 2006 for IT services which were never provided.
The two men deny doing anything dishonest or fraudulent, and are represented by John Haigh QC and Billy Boyd, of Auckland (Swann) and Greg King, of Wellington (Harford).
Robin Bates and Anita Killeen are prosecuting in the trial before Justice Stevens and the jury.
Earlier yesterday, former board chief executive Prof Bill Adam, of Shepparton, Victoria, gave evidence by video link.
He said that, as chief executive, he was aware contracted work was provided to the board's IT services, but he did not recall anyone at Healthcare Otago telling him of the company called Sonnford Solutions Ltd.
"I understand certain contracts have been unearthed, dated within my time as CEO, which record a contractual relationship between Healthcare Otago [and its successor the ODHB] and Sonnford Solutions Ltd relating to service and maintenance services for the hospital's IBM RS6000 servers."
Had those contracts been of significant size - "as I have been informed they were" - he would have expected them to have been drawn to his attention during the board's approval process, Prof Adam said.
And he would also have expected the contracts would have been recorded on the board's Contract Register.
Evidence continues today.
