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State Services calls for investigation of Waikato DHB's SmartHealth procurement

State Services calls for investigation of Waikato DHB's SmartHealth procurement

Auditor-General asked to conduct an inquiry into SmartHealth product and the procurement process from HealthTap.

Dr Nigel Murray

Dr Nigel Murray

State Services Commissioner Peter Hughes has formally requested that the Auditor-General conduct an inquiry into the Waikato District Health Board’s SmartHealth app and its procurement process from HealthTap.

The request is the latest development in the Commissioner’s investigation into allegations of wrongful expenditure of public money by former Waikato District Health Board CEO Dr Nigel Murray.

Waikato DHB purchased the app to give people access to doctors via smartphones and tablets.

Stuff has reported a source saying board members agreed to buy the app from US-based health company HealthTap in mid-2015, without a full business case. 

Murray was on leave since mid-July following the allegations of unauthorised spending and resigned in October.

“I have concerns over the SmartHealth investment by the Waikato District Health Board,” Hughes said.

“On the basis of the draft Audit New Zealand report I received as part of the investigation, and following discussion with the Ministry of Health, I have asked the Office of the Auditor-General to use its powers to undertake an investigation into the SmartHealth product and the procurement process from HealthTap."

Waikato DHB released the Audit NZ report on Friday, revealing the cost of the project was US$10 million and broad criticism of the approach to the procurment. The purchase did not go through a normal tender process and was made as a two-year trial.

Documentation too support the purchase decision was limited.

Waikato DHB's management response was: 

"It should be noted that the audit recommendations are based on a view of best practice. The audit did not find any non-compliance to Policy, a lack of internal controls nor non-compliance with the Government Rules of Sourcing (which were not mandatory at the time). 

"Whilst we accept their views set out above, we strongly disagree that this implies any lack of internal controls as the HealthTap service was approved in accordance with delegated authorities all the way to the Board."

Interim DHB chief executive Derek Wright said it was important to him that the DHB learns lessons from how it did things in the past. 

"We are already undertaking a review of the HealthTap product to see if it is the right service for our virtual health strategy," he said. "We need to have the Audit NZ information relating to HealthTap in the public domain so we can as open and transparent in this process as possible.”

Hughes said the Office of the Auditor-General has already been looking into the matter and is well placed to inquire further.

The Commission said its own investigation is well underway, covering the circumstances relating to the alleged unauthorised or unjustified expenditure by Dr Murray "in their totality", including all and any other related matters.

This will include the findings of the recent Audit NZ investigation.

The Public Service Association (PSA) welcomed the Auditor-General’s inquiry.

"The Commissioner’s investigation is crucial to restoring public trust in Waikato DHB, which has been harmed by allegations against Dr Murray," PSA national secretary Erin Polaczuk said.

"We are glad the Auditor-General will look at this, as clear and transparent procurement processes are crucial to the proper functioning of the public service."

The SSC investigation is being carried out for the Commissioner by John Ombler, QSO, under the State Sector Act 1988, which grants extensive powers of inquiry to the State Services Commissioner or his delegate.


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