Comment On Contracting At Ministry Of Health

The State Services Commissioner, Mark Prebble, today commented on the Auditor-General's report on their inquiry into the Ministry of Health's contracting with Allen & Clarke Policy and Regulatory Specialists Ltd.

Earlier in 2005, SSC undertook a review of the factors that contributed to a seven-month delay in the preparation of Ministry of Health responses to a series of parliamentary questions from Hon Murray McCully, MP. That review found the delay arose from a number of factors that included weaknesses in both systems and managerial processes. The SSC concluded that these weaknesses were unacceptable. When undertaking that review, the SSC was clear that it would await the outcome of the Auditor-General's wider review of contracting matters before deciding what, if any, further action to take.

Mark Prebble says contracting is a core function for Public Service departments. "The Auditor-General's report identifies major gaps in the management of the contracts. These gaps are consistent with the findings of SSC's earlier review and are not acceptable.

"Whilst the Auditor-General's report outlines poor contracting practices and poor record keeping, the report does not contain any suggestion of deceit or a fabrication of evidence at the Ministry. Any allegation of a 'cover up' on this issue is not substantiated by the Auditor-General's report, or the SSC's own review.

"Looking forward, I have been assured by Director-General of Health Dr Karen Poutasi that things have changed. The Ministry's contracting policies have been considerably refreshed and new policies enacted. "SSC now expects the Director-General of Health will place a high priority on continuing to implement improvements in contracting practices. Although Audit New Zealand recognised the Ministry's move towards continuous quality improvement in its contracting in its latest report, I have also asked for quarterly reporting from the Ministry on their progress.

"The findings of this inquiry offer lessons for the wider Public Service about the importance of managing contracts and having the appropriate policies and systems in place to ensure good practice prevails," Mark Prebble said.

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