Auditor general rejects inquiry into Health Benefits Ltd

Procurement changes continue to be an issue for IT suppliers

The auditor general has rejected a request from Labour health spokesperson Annette King for an inquiry into Health Benefits Ltd (HBL).

King's request, made in June, followed her questions in Parliament late last year about the ability of HBL to achieve its target of $700 million in health savings, positioned by the government as savings from procurement activities.

In June this year, King again raised questions of the Minister of Health, quoting a letter written by the chief financial officers of district health board, expressing concern about the flagship finance procurement supply chain programme.

King subsequently sought the inquiry by the auditor general, Lyn Provost, who says in her reply that her office has paid particular attention to the arrangements for the national finance, procurement and supply chain programme.

Provost notes recent changes to government arrangements for the programme to provide for stronger participation by district health board management in governance, and that the programme is undergoing a re-planning exercise with most activities paused pending the outcome.

“In light of the changes that HBL and DHBs have made to the FPSC [finance procurement supply chain] programme governance, the oversight role exercised by the Ministry of Health, and the re-planning of the programme now under way, I do not consider that starting a separate inquiry would add value at this time,” Provost says.

She says she has briefed HBL's auditor on King's concerns and asked that he consider the information King has provided when conducting his 2014 audit.

Procurement changes continue to be an issue for IT suppliers.

HBL was established by the government in 2010 to work together with the health sector to deliver sustainable support for health services. Its target was to make $700 million of savings in its first five years of operation.

Computerworld NZ reported in April that HBL had made savings to date of $214 million.

The organisation has an annual operational budget of around $6 million.

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