Cancelled Gold Coast conference costs Counties Manukau DHB

Counties Manukau DHB's Ko Awatea centre planned to hold a multimillion-dollar overseas conference at a time finances across the DHB were getting stretched. Photo / NZ Herald

Organisers of a multimillion-dollar health conference on the Gold Coast to be funded by Counties Manukau DHB neglected to seek board approval, forcing its cancellation and incurring more than $800,000 in contract costs. Those costs, conservatively put at $816,000, to cancel the 2017 Asia Pacific (Apac) health improvement forum, were later negotiated down to $323,000.

Future Apac conferences have now been put on hold.

Ko Awatea, Counties Manukau District Health Board's health improvement and innovation centre, had been running the three-day Apac forum since it began in 2012.

The 2016 conference, held in Sydney, cost the DHB $2.5 million.

The 2017 conference was to have been held on the Gold Coast but documents released to the Herald on Sunday under the Official Information Act said Ko Awatea management neglected to seek board approval before going ahead with arrangements.

"Approval for the 2017 Apac Forum was meant to be presented to the previous board in November 2016 but this was overlooked and on 21st June 2017 the Counties Manukau Health Board received a paper from [Ko Awatea] management outlining the plans for the forum to be held in September 2017, requesting approval of the budget," a report by the board said.

It questioned the wisdom of a New Zealand DHB, which was under financial pressure, subsidising a conference in Australia where 90 per cent of the delegates were not New Zealanders and which was not core business for the DHB.

It also reviewed the finances of the previous three conferences and found that instead of making a small surplus each time, as originally reported, the costs had been understated. The three conferences ran up total losses of $972,000.

"The board, taking this into consideration together with the unexpected resignations of both the director and general manager of Ko Awatea, the emerging financial challenges facing the DHB and the potential risks associated with running the conference, made the unanimous decision to cancel the 2017 forum," the report said.

Accounting for some of the $535,936 understatement of costs in 2016 was a failure to mention travel and accommodation costs for DHB staff of $70,489, and $169,475 in costs for staff deemed "integral to the success of the Apac Forum".

Ko Awatea management's conservative estimate to exit the contracts was put at $816,000. The DHB's legal team, with help from Chapman Tripp, assessed the likely costs, which were later settled for $323,000 excluding GST.

Acting Ko Awatea director Campbell Brebner told the Herald on Sunday it was possible a New Zealand-based conference may be held in future but there were no plans at this stage.

He said the conferences were run with the expectation that costs would be met from delegate registration revenue.

"They were high quality educational opportunities and so did deliver substantial benefits for staff and service development at CMDHB and also other NZ health services.

"In that sense they were a good use of money but they were obviously discretionary spend and continuing to hold them could not be justified once the financial risks of holding them overseas had become clear," Brebner said.

Health Minister David Clark declined to comment specifically on Apac but said
the public rightly expected health money to be spent wisely, including any spending on conferences.

"As Minister of Health I have made it clear to all DHB chairs and chief executives that I expect them to be careful guardians of public money. As part of that I want DHBs to make sure that any lessons learned at conferences, both nationally and internationally, are shared widely across the sector," he said.