The risk of fraud and corruption within the West Australian Health Department has been described as a “problem that requires immediate and urgent attention” in a report released on Thursday.
The Corruption and Crime Commission report which has been tabled in Parliament, revealed the department does not have adequate processes in place to prevent fraud and corruption across its multi-billion dollar health procurement activities.
The report stated that circumstances surrounding the corruption in WA health system was not unique.
The report states the significance of the “systemic failure” cannot be overstated when billions of dollars are spent on health procurement annually.
“It is a problem that requires immediate and urgent attention from the WA Health executive,” the report noted.
The Commission carried out its review in 2012-13 after the activities of a corrupt facilities manager at a public hospital were exposed.
Wathumallage “Tikka” Wickramasinghe was jailed for four years in January after an investigation by the commission in 2010 found he used his position to corruptly obtain more than $490,000 in benefits from procurement projects he was managing.
Despite the public airing of his activities at public hearings and in court, the commission’s review found many of the flaws that enabled Wickramasinghe’s corrupt conduct to go undetected for six years were still not resolved.
The report says the circumstances surrounding Wickramasinghe’s corruption were not unique to one hospital.
“It was a symptom of systemic failure to manage fraud and corruption risks in procurement across WA Health,” the report said.
Issues raised in the report include widespread non-compliance with legislation and government policies, ongoing failures by staff to declare conflicts of interest, gifts and secondary employment, close relationships with suppliers and contractors and a lack of transparency around procurement contracts, including failing to publish details of many awarded contracts over $20,000 as required by government policy.
A lack of staff training and awareness of corruption risks specific to procurement was also highlighted as well as the limited number of internal audits done to detect procurement fraud.
The report noted that while projects worth $20 million plus, received strong oversight, those worth less than that, including works like those managed by Wickramasinghe, received far less scrutiny.
It described how projects worth about $5million would “drop off the radar”.
A number of recommendations in to how procedures could be impoved to reduce the risk of fraud and corruption were listed in the report.
The recommendations relate to transparency, compliance and improved staff training.
The Commission acknowledged the cooperation by the department during its investigation and the commitment by its Director-General to address the concerns identified in the report.
In response to the report, the Department of Health, in a statement to the commission in February 2014, acknowledged the risks identified and said steps had been taken “to remedy the issues of immediate concern”.
The statement also noted that the department planned to implement all of the CCC recommendations.