KEY POINTS:
Spending by Otago District Health Board's information technology (IT) department dropped from $7.996 million to $1.876 million in the year after the board sacked its chief information officer Michael Swann and IT head Kerry Harford, the High Court at Dunedin was told yesterday.
Swann, 47, and long-time friend
and business associate Harford, 48, both deny misappropriating almost $17 million from the board by fraudulently using 198 invoices from Sonnford Solutions Ltd, a Harford-owned company, to charge for computer-related services never delivered.
The Crown says the two men charged the board a total of $16.9 million, effectively for nothing, but the defence says the charges were for an insurance type of risk mitigation service, and that if a major problem occurred with any of the hospital servers, Sonnfords would call in the expertise and services needed.
At the start of the second week of the trial, a ODHB senior business analyst Grant Paris said he analysed historical information after Swann's dismissal to check the IT department's actual costs and spending trends during the years Swann was in charge.
During the years from 1999, the budget for software, hardware maintenance and operating leases increased from $1.4 million to $5 million, the actual expenditure for those items being almost $8 million in 2006.
Mr Paris told Crown counsel Robin Bates, the charges that came through were actually inflated as although the invoices presented for payment were dated 2006, they were for the 2007 period. And when Swann left the organisation, they had to account for the charges within the 2006 year.
Asked whether he had spoken to Swann about variances in maintenance costs increasing beyond the budget, Mr Paris said he had d and Swann had asked him "what to you want me to do - turn the f-ing things off?" (referring to the hospital's three main servers).
He had not discussed the matter with Swann any more after that as he sometimes found conversations with him "intimidating".
The analysis he carried out after Swann's departure was of the Sonnfords contract schedules and the payments made by the ODHB from the invoices.
Although it was difficult to tie the invoices to the contracts with 100 per cent accuracy, Mr Paris said he established that between 2000 and 2006, the board paid Sonn-fords $16.9 million.
Earlier yesterday, board CEO Brian Rousseau said contracts signed by Swann with Sonnford's were "very irregular", and that Swann's signing authority was limited to invoices totalling not more than $200,000 a year.
The trial is continuing.
- NZPA