Two former Northland District Health Board managers have been accused of misconduct after an Australian Integrity Commission inquiry into allegations of nepotism and conflict of interest while they were heading Tasmanian health services.
Gavin Austin and Jane Holden have both denied any wrongdoing after a damning report tabled in the Tasmanian Parliament last week found former Royal Hobart Hospital boss Ms Holden hired her associate Mr Austin without following proper processes.
The report also found that Mr Austin hired several of his past associates and his own son without following due process.
Mr Austin told the commission that Ms Holden and he were members of what he described as the "Dream Team" of high-performing employees at the NDHB.
The report alleges that Ms Holden's husband was paid nearly $200,000 over two years to perform building and maintenance work for which he was not accredited.
Mr Austin's wife and son were given high paying jobs in his organisation outside proper processes, the report said.
"It is the view of the Integrity Commission that the conduct of both officers involved conflicts of interest which were not dealt with in accordance with applicable policy or legislative requirements," the report found.
"The investigation revealed that the two officers failed to comply with procurement and employment policies and procedures ... in every instance identified in the report, a family member or associate of the officers was a beneficiary of the non-compliant conduct."
It found there was evidence that a practice developed of entering into "local" arrangements to boost the remuneration of employees, contrary to applicable State Service policies.
"A consistent theme in the responses of Ms Holden and Mr Austin to the investigation and its findings was that they relied on their staff to ensure compliance with relevant policies and, in Mr Austin's case, that he did not know about applicable policies.
The commission found it was not an acceptable excuse to assert that more junior officers should have ensured that the senior officers exercised their responsibilities properly.
Mr Austin has been stood down on full pay as head of the North-West Health Organisation, while an internal investigation is carried out.
He was quoted on the ABC as saying: "I do want to add it has been my privilege working for the board, the people, patients and staff of the North-West. I do dispute the allegations in the report.
"I look forward to the outcome of the investigation."
Ms Holden has declined to comment and remains on the public payroll, for now.
Northland District Health Board (NDHB) CEO Nick Chamberlain said Mr Austin was the health board's manager financial services in 2001 and became general manager finance and support services in 2003, resigning in 2007.
He returned to NDHB in 2009 as programme manager oral health and resigned in 2010.
Ms Holden was employed at NDHB as general manager surgical and critical care services from 2003 to 2007.
Dr Chamberlain said NDHB had not been involved in the investigation.
The full Integrity Commission report into allegations of nepotism and conflict of interest at Tasmanian health services can be found at: