WA’s health promotion agency Healthway has been strongly criticised for inappropriate use of perks relating to sponsorship arrangements with major sporting organisations, in a report by the State Government’s public sector watchdog.
The Public Sector Commission’s (PSC) report on Healthway found the volume and nature of perks obtained through deals with a range of sporting organisations was “excessive” and oversight of their use was “inadequate”.
The findings follow the recent departure of executive director David Malone, just a year and a half after commencing in the role.
It found Mr Malone, Healthway chairwoman Rosanna Capolingua, deputy chairwoman Cathcart Weatherly and some staff had all derived a private benefit from the deals.
The investigation, which was launched after concerns were raised by the Auditor-General, examined deals with organisations including the Perth Wildcats, Perth Glory, and the Western Australian Cricket Association.
It found the contracts investigated included more than 1,150 general admission tickets to sporting events and concerts and 650 opportunities for individuals to attend events with VIP “access levels” from 2010/11 to 2013/14.
The report, tabled in State Parliament today, concluded that less than half of those were used for a “legitimate business purpose”.
About a third of them could not properly be accounted for and 21 per cent were used in a “manner considered to represent a private benefit to Healthway officers, their families and friends”.
The benefits were worth around $220,000, or around 15 per cent of the total sponsorship value of those arrangements, with the report describing them as “excessive and inconsistent with the obligation to be scrupulous in the use of public resources”.
Tickets not sought for private use, report finds
However, the investigation noted the tickets and other benefits were not sought for private use but that staff failed to negotiate them out of contracts to be replaced by reduced sponsorship cost or “commitments more relevant to Healthway’s business”.
It found a lack of oversight was a crucial factor and that the Healthway board was “distracted” from its integrity responsibilities by “other tensions” between some board members and the executive director.
“Insufficient controls were established around the sponsorship contracts to ensure that hospitality resources were used solely for a public purpose,” the report stated.
“The board was not informed about the specific nature of hospitality arrangements in contracts.
“There has been no effective internal regulation surrounding the acquisition or use of hospitality resources to ensure their use for a public purpose.
“The inclusion of a high number of general admission tickets, corporate boxes and hospitality resources was inconsistent with public sector management principles.”
Among its key recommendations, the PSC called for Healthway to actively discourage prospective funding applicants from including hospitality offerings in packages.
Dr Capolingua said the findings were “welcomed by the board”.
“The board had already taken action to ensure better transparency and more direct controls over the activities of the sponsorship area,” she wrote.
“The board understands the importance and need for improvement of the executive director role in oversight, transparency and accountability and in the reporting relationship to the board.”
Dr Capolingua said some tickets would be returned and the policy around their use would be rewritten.