In a career spanning 20 years, an IBM assistant support engineer had never seen a system as large as the Otago District Health Board's which was not under a maintenance contract, the High Court at Dunedin heard yesterday.
Narend Chand was called in to fix a server at the Otago District Health Board last year, the jury heard yesterday.
Mr Chand said it was clear the server had been patched up to keep it going, but no maintenance had been performed since the system was installed.
Spare parts had been cannabilised from a third machine for the server, a practice that was not recommended.
Firmware, a variation of software which allows computers to talk to each other, should have been updated regularly to ensure systems operated correctly, but it had not been updated since 1999, Mr Chand said.
Firmware is supplied free by IBM and, at the end of 2006, the latest product had been released in 2004.
Mr Chand was one of three witnesses giving evidence on the ninth day of the hearing of multimillion-dollar fraud and dishonesty charges against the board's former chief information officer Michael Swann (47), and his friend and business associate Kerry Harford (48).
Both men deny misappropriating $16.9 million from the board between August 2000 and August 2006 by fraudulently using 198 invoices from a Harford-owned company, Sonnford Solutions Ltd, to charge for computer-related services never delivered.
The Crown says when Sonnford Solutions received the money, Harford deducted 10% and forwarded the remaining 90% to Swann, or structures associated with Swann, including the company Computer South Ltd.
Justice Stevens and the jury also heard evidence yesterday from Grant Fyfe, a lawyer with Checketts McKay, which is based in Central Otago.
Mr Fyfe said he met Swann through Swann's wife, Anna Devereux, in 1988 and started acting for him in a professional capacity about 10 years later.
He initially saw Swann and Ms Devereux socially about four times a year, although they saw each other a little more frequently after they bought property in Wanaka.
Swann was very negative about the IRD and banks, as the IRD had forced his bankruptcy and his bank had been very unhelpful at that time, Mr Fyfe said.
"Michael was keen properties were not retained in his own name or Anna's name and preferred, where possible, that a family trust was used as the entity to own assets."
There were seven Swann and Devereux trusts, and Mr Fyfe said he had little connection with the other trustees, Ms Devereux and Peter Ibbotson.
His instructions generally came from Swann.
Mr Fyfe said Swann instructed him to remove Ms Devereux as a shareholder from Computer South in September 2006.
He did not discuss Computer South with Swann much, but confirmed with him every year that he wanted to keep the company going.
Swann advised him every time money was to be received and gave clear instruction on how the money was to be dispersed, generally for either a property purchase or a vehicle purchase, Mr Fyfe said.
"Generally, transactions were funded in part by funds that were deposited by Sonnford Solutions."
Mr Fyfe said he had discussed how Sonnford Solutions generated income with Swann, but his memory of that discussion was a little vague.
"It was to do with computers and software and my recollection was that it was something Michael had developed and Sonnfords was collecting revenue for it. I knew Michael was very skilled with computers and software and systems and I understood that it was in connection with that."
During cross-examination from Swann's counsel, John Haigh QC, Mr Fyfe said it appeared Swann was engaged in the business of buying and selling boats and cars.
"He often seemed to change his vehicles and boats and I assumed there was a business relationship thing going."
From the first time he met Swann, the defendant had often had "very flash" motorcycles and exotic vehicles like Ducatis and Porsches, he said.
On Thursday and early yesterday, evidence from assistant auditor-general Robert Robertson, who was the auditor of the board and its predecessor Healthcare Otago from 2000 to 2003, was read to the court.
The Sonnford invoices were a tiny fraction of the total number of transactions carried out by the board in any year, he said.
Auditors were interested in systems and controls, and sampling transactions was a small part of their work.
Even if Sonnford transactions had been sampled, it would not be usual to sight a contract or look into the substance of what was being bought.
International estimates suggested external audits discover only 5%-10% of fraud, Mr Robertson said.
