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The Auditor-General has condemned Auckland health chiefs for failing to tackle conflict-of-interest issues following the failed $560 million community lab testing court case.
The Auditor-General has criticised Auckland District Health Board for failing to make significant changes towards dealing with such conflicts since the High Court decision over Diagnostic Medlab.
In a damning report, Kevin Brady criticises the practices and procedures at the Auckland board.
"We had expected that, if anything, the Auckland DHB might have a higher sensitivity to conflicts of interests, because of the previous conflict-of-interest concerns," his report said.
It follows the Diagnostic Medlab case, in which board member Tony Bierre's conflict of interest helped derail the $560 million regional laboratory contract awarded to a new contractor, Labtests Auckland.
Following a High Court challenge by Diagnostic Medlab, Justice Raynor Asher overturned the contract in March, ruling that the process was unfair and that Auckland's three health boards did not fulfil their obligation to consult primary health organisations. Labtests Auckland is appealing.
The report into the management of conflicts of interests in the boards said the chairs and chief executives at Counties Manukau and Waitemata were attentive to such issues and had administrative staff who took a proactive role in such matters.
"By contrast, at the Auckland DHB it was not apparent to us that the board made any significant attempt to engage with conflict-of-interest issues," the report said.
There was a common attitude at Auckland that mere disclosure of interests was enough to deal with any potential issues.
"In particular, it was extremely rare to see examples of a member declaring a conflict of interest in a particular matter at a meeting and withdrawing from participation in the matter. This was surprising, given the range of interests that members have," the report said.
"We formed the view that some people considered that, because most members have a range of interests, everyone was conflicted to one degree or another and that, so long as members' interests were well known, nothing more could or should be done about it."
The report's recommendations included:
* Auckland and Counties Manukau boards adopt a policy on conflicts of interests aimed at members.
* Auckland and Counties Manukau boards identify and record conflicts of interests of members for particular matters that arise at meetings.
* Auckland assign an administrative staff member or team to lead, foster and co-ordinate the management of conflict-of-interest issues.
Auckland spokesman Ian Bell said the board was implementing or addressing the recommendations.
Staff were being reminded of how to deal with conflicts of interest and board members had a policy for identifying and recording them.
