Serious Fraud Office investigates DHB ICT

The suspected fraud could involve up to $16 million spent on contracts over six years

Michael Swann, former CIO of the Otago District Health Board, is currently at the centre of a Serious Fraud Office investigation involving $16 million spent by the DHB on ICT contracts during the last six years. Swann was sacked for “gross mismanagement” on October 19 after having been suspended on full pay earlier last month.

“The SFO is continuing its investigation and that could take some time,” says Richard Thompson, chairperson of the Otago DHB. “The contracts under investigation total $16 million. If there is fraud, the value of that fraud could be anywhere between $1 and $16 million.”

Thompson says the DHB has lodged a civil claim in the High Court seeking damages.

“If the SFO were to prosecute for fraud [worth] $16 million and the court were to find that that was the case, I think our ability to recover that kind of sum of money would be very small indeed,” he says.

However, if the potential fraud is defined as a relatively small amount, the DHB expects that the amount could be recovered through a combination of civil action and insurance policies, he says.

The Otago Daily Times reports that an asset protection order, enacted in mid-October, protects a range of property, vehicles and boats, including a 50-metre luxury yacht, owned or part-owned by Swann, from being sold.

The Otago DHB has not appointed a new CIO. At the moment, it is using Southland DHB resources to keep the IT department up and running.

The Ministry of Health wouldn’t comment on the issue.

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