Serious allegations were made under privilege in Parliament yesterday.
JAMI-LEE ROSS (National—Botany): I move, That the House take note of miscellaneous business.
In the next few minutes, using the privilege of this House, I’m going to outline a series of alarming and disturbing issues that have taken place under David Clark’s watch. The issues I will outline involve, firstly, an audit into fraudulence—unauthorised and excessive uses of hundreds of thousands of dollars at the Counties Manukau District Health Board (DHB)—secondly, the former DHB CEO and matters being audited subsequently being reported back to him as Director-General of Health; and, thirdly, the Minister of Health later sacking the very board members that raised the audit issues with his ministry.
On 29 January this year, the Auditor-General wrote to David Clark regarding Counties Manukau DHB and raised significant matters discovered by DHB board members during an internal audit. The Auditor-General was referring to this report: a report containing findings of an auditor’s investigation which identified remuneration and benefits paid to a senior DHB executive which were either unauthorised, excessive, or unjustified, and multiple areas where that executive exceeded their delegated financial authority. The word “fraudulent” also appears in the report.
The audit was so serious and troubling that mid-last year, two new board members, Rabin Rabindran and Mark Darrow, were involved in seeking assistance from the State Services Commissioner and the Ministry of Health. After the internal audit report was complete, using the powers of the Director-General of Health, a review was commissioned, carried out by forensic accounting firm Beattie Varley. Beattie Varley were assisted by the former Solicitor-General Michael Heron QC and Deloitte.
In December last year, the Minister issued a press release welcoming the appointment of Stephen McKernan as acting director-general. Mr McKernan’s previous experience includes him once serving as DHB CEO at Counties Manukau. The final Beattie Varley report into a DHB he once was the CEO of would eventually land on Stephen McKernan’s desk.
The situation is alarming. It’s alarming because, as a former Counties Manukau CEO, Stephen McKernan was directly mentioned in the auditors’ report, multiple times, over successive years as being involved in some of the inappropriate and unauthorised salary transactions. The Minister of Health is also involved. In March 2018, the final Beattie Varley report was returned to the ministry. A summary was requested for presentation to the Minister. Within weeks of that summary being prepared, the two DHB board members that were involved in the first discovery of the financial negligence and mismanagement, Rabin Rabindran and Mark Darrow, were sent letters by the Minister removing them from the DHB. While those board members were told the Minister wanted to rejuvenate the board, Mr Rabindran and Mr Darrow were the newest members of the board. They’ve also not been replaced, and their positions are still vacant on that DHB.
The nature of this situation is serious. We have a review of an audit that was provided to the Director-General of Health into a matter that he himself was implicated in during a past health role. We also have a Minister whose only action in this matter so far, despite having had the Auditor-General raise it with him directly, seems to have been to remove from the district health board the very members that discovered the financial negligence. They investigated it, sought an independent audit, pushed for a ministry-led review, and then got sacked from that board as soon as the review was completed.
What did David Clark do when the Auditor-General told him of significant matters involving financial practices at the district health board back in January? Why didn’t the Minister take action to ensure that the director-general, Stephen McKernan, did not play any part into a review into matters he himself was involved in while that review was being carried out using his powers as the director-general? And why is the Minister not now acting on serious issues involving the use of public money that he has known about for almost five months?
Members of a district health board have found an issue, they have investigated it, and the only thanks they’ve had for that is to be sacked from that district health board. We also know that the Minister of Health has attempted through voicemail messages to gag that district health board member—the former chairperson—from speaking publicly.
There are serious issues that David Clark—
Dr David Clark: I raise a point of order, Mr Speaker. I take offence at that characterisation that the member’s making, saying that I attempted to gag someone. It has been clearly established that that’s not the case.
Mr SPEAKER: The member will resume his seat. We are—I know this is a serious speech and an important speech. We are in the general debate where the rules are quite a lot wider than they are, for example, at question time and I have been listening very carefully to this speech for a number of obvious reasons, and it is my view that the assertion is a refutable one and that may be the appropriate action to take.
JAMI-LEE ROSS: It’s clear from the voicemail message left by David Clark for Rabin Rabindran that the issue of future appointments was raised and the issue of media problems was also raised. That is the only real contact that member’s had from the Minister of Health recently regarding media issues. I say that these issues need serious consideration by the Auditor-General and the State Services Commissioner in future. End quote.
I would remind commentators here that they are not protected from defamation charges in the way that MPs are in the house, so be mindful with what you say.
For my part, this appears to offer a plausible reason for some of the questionable actions reported on over the past few months. If proven, these allegations look to be extremely serious.
I would like to say that I expect the Labour Party will stand down the Minister concerned while the Auditor General conducts an investigation, but I'm not about to hold my breath.