NSW: Health Dept criticised over management failures

AAP General News (Australia)
12-16-1999
NSW: Health Dept criticised over management failures

By Jane Wardell

SYDNEY, Dec 16 AAP - The New South Wales Health Department has come under fire for
a string of management failures, including unauthorised loans, unpaid bills and salary
overpayments.

The poor practices were highlighted today in the 1999 Auditor-General's report, which
gave only one area health service out of the total of 18 a thumbs-up for performance.

The report found many of the services had undertaken loans within the department without
receiving approval from the Treasurer.

"This failure has been raised before, it is a failure that can be easily addressed
by the relevant parties, it is a failure that should not be allowed to occur again," the
report by Auditor General Bob Sendt said.

The services were also struggling to pay off debts in time, with many small businesses
such as greengrocers and drug suppliers waiting more than the required 45 days for money
owed to them.

"This is the third year in a row the Auditor-General has criticised the practice of
reliance on borrowing to meet short-term debts and typically the Carr government has buried
its head in the sand and taken no action," opposition health spokeswoman Jillian Skinner
said.

"The Auditor-General has confirmed that area health services and the NSW Ambulance
Service cannot pay their bills."

The report also found some health services obtained bank overdrafts totalling $9.2
million, while one, the south eastern Sydney area health service, had a 100 per cent increase
in its bad debts to $2.8 million.

The mid-west area health service was singled out for commencing a private hospital
service without seeking expressions of interest from other private sector health care
providers.

The report said because no alternate service providers were sought prior to signing
the agreement with Lithgow Community Hospital and Health Care Ltd, it was not possible
to comment on whether the existing arrangements provided the best outcomes for the community.

"If the company is not sustainable, there will be a leakage of wealth from the public
sector to the private sector and subsidisation of private patients without the benefit
of private patient fees," it said.

A $100,000 loan made by the service to the company did not comply with legal provisions, it said.

The Northern Sydney Area Health Service made salary overpayments of around $627,000
during 1998/99, only $387,000 of which has been recovered from payroll deductions as at
June 1999.

The report said it was expected to take up to three years to fully regain the money.

The report also found there was a question about Y2K compliance within NSW Health because
of a failure by third parties to provide assurances their systems were ready and the ambulance
service was employing an extra 76 officers that was not unfunded.

AAP jw/tsm/cjh

KEYWORD: HEALTH NSW

1999 AAP Information Services Pty Limited (AAP) or its Licensors.