Queensland hospital contracts at risk of corruption, watchdog says
Staff in charge of contracts at some of Queensland’s hospital and health services have been cutting corners when awarding contracts, opening them up to corruption risks, an extensive audit has found.
The Crime and Corruption Commission conducted an audit of five of the state’s Hospital and Health services - Metro South (which includes the Princess Alexandra and Logan hospitals), Townsville, North West (which manages several regional hospitals including Mt Isa), West Moreton and Sunshine Coast.
The CCC found in multiple cases the procedures in place did not adequately protect the HHSs from corruption, and meant that they were potentially losing taxpayers’ money on expensive contracts where a better value one was available.
“Procurement within Queensland Health has long been known as a high-risk area for fraud and corruption,” The CCC said in the report.
“Employees with specialised knowledge and/or influence over procurement may be tempted or induced to act corruptly, making them a risk to the integrity of the procurement process.”
The watchdog identified 13 areas for improvement across the different HHSs, including improving procurement standards and codifying those standards, after it found big variations in processes between organisations.
“Each year the Queensland Government spends more than $14 billion on a wide range of goods/services to support the delivery of frontline services to Queenslanders,” the CCC said.
“Corruption vulnerabilities have been identified at several stages of the procurement process, from determining the procuring method to initial tendering and selection of preferred suppliers.
“These vulnerabilities were contributed to by employees’ conduct.”
In one case spotlighted by the watchdog, an employee of one of the Hospital and Health Services “drafted a new tender, valued at $100,000, in terms to suit a preferred supplier, and misused funds by unnecessarily replacing an existing system with a new system to favour a single supplier.”
The CCC found the HHS only conducted a cursory follow-up to that incident after concerns were raised, which it called off due to a lack of information.
And insufficient records were kept of the investigations and reviews which did take place.
In a separate example, the CCC said an employee of the Hospital and Health Services arranged three contracts worth a collective $25,000 from a supplier with whom he had a personal relationship.
In that case, the CCC said it appeared there was no actual corrupt conduct, but the officer in question raised serious questions by not declaring the conflict of interest.
The watchdog acknowledged that all five HHSs had indicated they were implementing the recommendations in the report.
“A procurement process that is well documented will reduce the likelihood of challenges or, if there is a challenge, enable the agency to provide an explanation for its actions,” the CCC said.
“Implementing probity is a reflection of an agency’s culture, and demonstrates an agency’s preparedness to be assessed on its procurement decisions and its ability to withstand public scrutiny.”
Queensland Health said it welcomed the report as a way to strengthen its probity measures.
"We have robust procurement and probity processes in places across Queensland Health and Hospital and Health Services," a spokeswomen said in a statement
"It is important to note the report found no instances of corruption throughout its review."