The Auditor-General is to look into how Auckland District Health Boards deal with conflicts of interests following the recent $560 million laboratory contract debacle.
Last month the High Court at Auckland overturned the decision by Auckland, Waitemata and Counties-Manukau District Health Boards to reassign pathology services from Diagnostic
Medlab (DML) to Labtests Ltd on July 1 this year.
Justice Raynor Asher ruled that by accepting a proposal from Labtests, which included former Auckland DHB member Dr Tony Bierre, there was a conflict of interest and the DHBs failed to ensure that the tendering process was conducted fairly.
Today Health Minister Pete Hodgson said the decision prompted him to ask the Auditor-General to conduct an audit into how conflicts of interest were dealt with in each of the three DHBs.
"I said my first step was to ensure a new interim agreement was in place and last Thursday that happened... A next step is to ensure that this doesn't happen again."
Mr Hodgson said the Auditor-General's work would help other DHBs also.
In Parliament today National Party leader John Key asked Prime Minister Helen Clark if the government had sought legal advice on sacking the Auckland DHBs boards.
Miss Clark said that was premature as the period where an appeal could be lodged had not expired; "obviously what is being explored is the full range of options, the full range of course goes from expressing confidence to people going".
The performance audit terms of reference included ensuring that each DHB had adequate ways of discovering conflict of interest and had processes for dealing with them and that they had management and governance structures to support managing conflicts of interest.
The audit would not look at the contract that resulted in the court case or whether the Labtests contract should have been set aside.
Findings will be reported to Mr Hodgson and released to the public.
National Party health spokesman Tony Ryall said the Auditor-General's investigation should not delay the boards being held to account.
He said Labour was "pulling out every stop" to protect the boards and noted there was a prior conflict of interest problem in 2003.
"Obviously changes are needed in the way conflicts are handled. the High Court has said so," he said.
But the Labour Government should not use the Auditor-General as an excuse to further deny accountability for the lab testing fiasco.
- NZPA
