But former board members have labelled the Health Ministry commissioned report a ‘‘whitewash'' that fails to canvass many of the key issues that eventually tore the board apart.
The report stems from allegations that Government-appointed board member Peter Hausmann used his position to gain an advantage for private company Healthcare New Zealand (HCNZ), which he partly owned, in tendering for a $50 million contract.
The tender was later scrapped after a whistle-blower raised concerns.
The report, released yesterday by Director-general of Health Stephen McKernan, found the board had ‘‘failed the most simple test of good governance'' - lacking basic safeguards for dealing with conflicts of interest.
Several conflicts had been improperly managed and the report found a ‘‘culture of mistrust and dysfunction'' between the board and management that was ‘‘a significant road block'' to good performance.
The board also frequently meddled in operational matters, accepted little blame for problems and needed outside help if it was to rectify its many problems.
The report cleared Mr Hausmann of using his board position for personal gain in relation to the community health care contract, but found he failed to fully disclose his ‘‘extensive prior involvement'' in the tender process at a September board meeting.
That involvement included HCNZ receiving a version of the tender documents two months before anyone else.
It says board chairman Kevin Atkinson knew of Mr Hausmann's extensive involvement in the tender process, but also failed to disclose this to the board at the meeting.
The report also found that once HCNZ was identified as a preferred provider for the contract, Mr Atkinson gave Mr Hausmann the go-ahead to engage with management in a limited capacity.
However, the report said Mr Atkinson should not have let Mr Hausmann get involved at all.
It found in early 2006 that Mr Hausmann also became involved in another discussion with DHB management over a home-care training contract for HCNZ subsidiary Wellcare.
The report said he should have declared this to the board.
The report also found other board members had conflicts of interest that were not properly managed.
They included Peter Dunkerley, who had a shareholding in pharmacy company Radius, but failed to fully disclose his interest.
It found he participated in board discussions and talked directly to management over issues relating to the company.
Health Minister David Cunliffe said yesterday the report vindicated his decision to sack the board.
‘‘This report is effectively a guide on how not to operate at a board.''
But Mr Atkinson said the report was a ‘‘whitewash'' that failed to address key issues.
‘‘The final report reeks of political interference. Irrelevant matters seem to have been given importance to provide a smokescreen for the real issues.''
He said the report failed to deal with the appointment of Mr Hausmann by former Health Minister Annette King, whose husband Ray Lind was the DHB's chief operating officer at the time.
It also failed to look into what appeared to be management's favourable treatment of HCNZ.
He said the issues should be referred to the Auditor-general.
But report author Ian Wilson said that if the report had looked into every issue in depth it would have taken several more months to complete.
He said the three-man panel that wrote the report was completely independent and he took a swipe at the former members for selectively leaking misleading information about the report to try to protect their positions.
He said a first draft, which the ministry has suppressed through a court injunction, should not be released, as some of its findings were wrong and had been amended after submissions from those involved.
A statement issued by HCNZ said Mr Hausmann welcomed the report, which cleared him of ‘‘unethical or illegal practice''.
It acknowledged he could have done better in terms of ‘‘good practice'', but his failure occurred in the context of a board that had poor procedures.
