Hard News by Russell Brown

Read Post

Hard News: The Trophy Hunter

166 Responses

First ←Older Page 1 2 3 4 5 7 Newer→ Last

  • Russell Brown,

    However, the issue is governance, not whether Thomson knew how much it costs to upgrade your firewall or whatever.

    The thing is, it required the kind of expert audit that you'd expect your CIO to actually conduct. The fact that software upgrades hadn't been conducted as billed was discovered when Dunedin Hospital servers broke and some independent software engineers came in and they discovered that the software hadn't been upgraded as specified.

    Even then, it doesn't seem to have been immediately evident what the extent of the crime was -- Swann was dismissed for "gross mismanagement" in the first instance, but Thomson also took it to the police.

    Auckland • Since Nov 2006 • 22850 posts Report Reply

  • Don Christie,

    Kyle, I think you are missing Craig's point. If the DHB Chair had been found guilty of corruption he would have missed out on being elected, but only just. Like the Alaskan senator guy.

    HTH.

    Wellington • Since Nov 2006 • 1645 posts Report Reply

  • Glenn Pearce,

    The thing is, it required the kind of expert audit that you'd expect your CIO to actually conduct....

    Sort of, I'm not sure whether the overall IT spend at ODHB was completely out of whack or not.

    If it was, the sort of review I'm talking about would have picked it up.

    It if wasn't and Swann was clever enough to fly "under the radar" so to speak, then you're right it would have required a very detailed audit to pick it up.

    But, you might suprised at the level of detail some auditors will go to, I have seen them actually ask to see version numbers and physical evidence of invoiced work having been performed. Most of the big auditing firms have specialist IT teams.

    However, a determined fraudster can still get around these things.

    Is there any evidence that Thompson had these things in place ?
    Or are you suggesting they're not worth bothering with because IT is just too complicated and it's fair enough to just trust your senior managers ?

    Auckland • Since Feb 2007 • 504 posts Report Reply

  • James Green,

    There is quite a bit of additional material in the ODT today that's not online. Having followed this through the ODT over the years its been unfolding, it's kind of frustrating watching some more uninformed comment.

    *There's a lot of emphasis on 17mill figure, but less on that that being 6 years worth of fraud.
    *During Swann's employment 8year ODHB he claimed they handled 2.4 billion dollars worth of funds (current year figure 511).
    *Therefore, the size of the fraud on an annual basis, and as a proportion of total funds is relatively low.
    *Swann was fingered by an internal audit by the CFO.
    *There was an increase in IT expenditure, but there is an extent to which they were paying money they could have been paying, but were not receiving any service for the money. So while the budget was larger than expected, some of the defrauded money would have been spent on IT had they had a competent manager.

    Dunedin • Since Nov 2006 • 703 posts Report Reply

  • Sacha,

    Is there any evidence that Thompson had these things in place ?

    Thompson is the Chair, not the CEO. Of course, Ministers can't sack CEOs..

    Ak • Since May 2008 • 19745 posts Report Reply

  • Sacha,

    And nor can Ministers appoint CEOs, of course.

    Ak • Since May 2008 • 19745 posts Report Reply

  • Stuart Coats,

    It's a bit like typifying artists as deriving there creativity from depravity.

    I take much of my creativity from depravity, but deprivation also has a part to play.

    This seems a good time to remind anyone in Wellington (or visitors) that it is Fringe Festival time again. A good chance to see artists strut their stuff and help them along with some of your hard-earned dosh. You may even see some depravity......

    Wellington • Since Nov 2006 • 192 posts Report Reply

  • Russell Brown,

    @Glenn:

    There were both external and internal audits conducted through the course of the fraud, and they didn't pick it up. The external auditors said in court that they would only pick up about 5% of this kind of fraud. Swann had the massive advantage of being in charge of the department he was stealing from.

    Is there any evidence that Thompson had these things in place ?

    Yes, I think it was gone through extensively in court.

    Or are you suggesting they're not worth bothering with because IT is just too complicated and it's fair enough to just trust your senior managers ?

    They actually seem to have handled it well when it emerged there might be something bad going on -- including staying the right side of employment law in case they were wrong about Swann, and then handing it on to the SFO.

    Auckland • Since Nov 2006 • 22850 posts Report Reply

  • Glenn Pearce,

    Thompson is the Chair, not the CEO. Of course, Ministers can't sack CEOs..

    I realise that, who does the CEO report to do you think ?
    Ultimate reposnbility is with the board and chairman.

    James - thanks for the further info, $17mill spread over 6 years doesn't make it any better in my mind.

    The implication of the article abot the CFO is that prior to his involvement in 2006 there was much in the way of governance going on ?

    Auckland • Since Feb 2007 • 504 posts Report Reply

  • Steve Barnes,

    Of course, if they had used Open Source Software, they would have saved a fortune. I blame Microsoft. ;-)

    Peria • Since Dec 2006 • 5521 posts Report Reply

  • Grant McDougall,

    Craig, I think you know about as much as what is happening in Dunedin as I do as what is happening in your neck of the woods: Scottish Fitba Association.

    There is an extensive article in today's Otago Daily Times in which every other board member and various doctors, etc, all say that Thompson is an exemplary chairman, etc, and that he should not be held to blame.

    This is a lot more to do with National wanting a trophy scalp, as Labour sought with Christine Rankin, than with Thompson's performance.

    Dunedin • Since Dec 2006 • 760 posts Report Reply

  • James Green,

    It if wasn't and Swann was clever enough to fly "under the radar" so to speak, then you're right it would have required a very detailed audit to pick it up.

    There's some answers to your questions in these. The IT spend was high (but not ridiculous), and the level of spending seemed constant (they were looking for exceptions).

    http://www.odt.co.nz/news/dunedin/33754/swann-firm-top-10-odhb-suppliers

    Also, Thompson wrote a letter, the latter part of which is interesting reading. I've got a few interesting bits here:

    "Michael Swann's significant advantage was that he was in charge of the department he was stealing from, it was an area that few had the technical expertise to fully understand, and he never tried to hide his wealth."

    "I didn't know Swann outside the work environment and apparently was one of the few people in Otago who didn't know he was wealthy.
    But those who knew him did know that he was wealthy.
    Most to whom I have since spoken believed that he was independently wealthy."

    " One of Brian Rousseau's early actions after his arrival here was to get an independent review done of our IT strategy.
    The reviewers' list does not include the "contracts" because, if they existed at the time, Swann made sure they were not available to review."

    Also, I can't find the bit in the ODT, but I believe he got the first invoices through during a change in command, and subsequently, it was assumed that the appropriate scrutiny would have been applied when the invoices started arriving (assumption being the MOAFUs of course).

    Dunedin • Since Nov 2006 • 703 posts Report Reply

  • Russell Brown,

    Therefore, the size of the fraud on an annual basis, and as a proportion of total funds is relatively low.

    It seems people were flabbergasted that Swann had been able to hide it -- but IT expenditure was flat and trending downwards. They didn't have a blowout to investigate and their statutory external auditor didn't find anything either.

    Auckland • Since Nov 2006 • 22850 posts Report Reply

  • Glenn Pearce,

    Someone should given Swann a job as an Auditor when he gets out of the big house

    Auckland • Since Feb 2007 • 504 posts Report Reply

  • Kyle Matthews,

    Kyle, I think you are missing Craig's point. If the DHB Chair had been found guilty of corruption he would have missed out on being elected, but only just. Like the Alaskan senator guy.

    Yes I see now.

    And apparently he was appointed by the Minister anyway so... I've lost Craig's point if he had a valid one.

    Since Nov 2006 • 6243 posts Report Reply

  • James Green,

    Glenn -- I was arguing that it occurring over 6 years makes it less obvious.

    Oh, I just saw this.
    "The guilty verdict on the fraud charges isn’t the end of Swann’s legal woes — he faces a charge under the Secret Commissions Act of accepting a kickback of $757,685 from Innovative Systems, a firm run by Dunedin businessman and longtime friend Robin Sew Hoy. Innovative provided contract IT helpdesk services to the DHB between 2000 and 2006.

    The DHB ran an in-house helpdesk until 1998, with Innovative providing a small amount of services. After 1998, according to an NZPA report, the crown alleges there was a “significant increase” in the work carried out for the board by Innovative.

    The work done by Innovative between 2000 and 2006 was charged out at $95 per hour, “which the crown contended was excessive and above industry standards”, according to NZPA.

    During the six year period, the DHB paid $4,743,167 to Innovative. Of that amount, $757,685 went to Swann-controlled Computer South, despite no invoices being generated by Computer South."

    Dunedin • Since Nov 2006 • 703 posts Report Reply

  • Glenn Pearce,

    Glenn -- I was arguing that it occurring over 6 years makes it less obvious

    Fair 'nuff

    The cynic in me would suggest the evidence to the court by the external auditors would be an ass covering exercise.

    You could argue the same about Thompson's letter to the staff.
    He's a good communicator that's for sure and know's how to do PR.

    Auckland • Since Feb 2007 • 504 posts Report Reply

  • Russell Brown,

    Anyway ... how good is it that Lucinda Williams is coming in April? Got our tickets this morning.

    Auckland • Since Nov 2006 • 22850 posts Report Reply

  • giovanni tiso,

    Anyway ... how good is it that Lucinda Williams is coming in April?

    Oh, it's great.

    Who is she?

    Wellington • Since Jun 2007 • 7473 posts Report Reply

  • Steve Barnes,

    Oh, it's great.

    Who is she?

    Lucinda Williams (born January 26, 1953[1]) is an American rock, folk, and country music singer and songwriter. She recorded her first albums in 1978 and 1980 in a traditional country and blues style and received very little attention from radio, the media or the public. In 1988, she released her self-titled album, Lucinda Williams. This release featured "Passionate Kisses" a song later recorded by Mary Chapin Carpenter which garnered Lucinda her first Grammy (Best Country Song, 1994). Known for working slowly, Lucinda recorded and released only one other album in the next several years (Sweet Old World in 1992) before her greatest success came in 1998 with Car Wheels On A Gravel Road. This album presented a broader scope of songs that fused rock, blues, country and Americana into a more unique style that still managed to remain consistent and commercial in sound. It went gold and earned Lucinda another Grammy while being universally acclaimed by critics. Since Car Wheels, she has released a string of albums that have also been critically acclaimed, though none have sold in the numbers of her 1998 breakthrough. She was also named "America's best songwriter" by TIME magazine in 2002.[2]

    Stolen From Wikipedia
    ;-)

    Peria • Since Dec 2006 • 5521 posts Report Reply

  • Craig Ranapia,

    Anyway ... how good is it that Lucinda Williams is coming in April? Got our tickets this morning.

    Bloody good -- not the biggest fan of the whole "alt-country" deal, but she does do it well. Makes me regret that she's hardly prolific -- eight or nine albums in thirty years, isn't it?

    North Shore, Auckland • Since Nov 2006 • 12370 posts Report Reply

  • Steve Barnes,

    Yay, king of cut and paste. :-)
    Now I rekon it's time for a pint. Don't nobody shoot no-one on the motorway. It took me 3/4 hour to get there last week.

    Peria • Since Dec 2006 • 5521 posts Report Reply

  • Sacha,

    Glenn, I mention that distinction in roles because you're using the word "governance" to refer to operational management by the CFO.

    Ak • Since May 2008 • 19745 posts Report Reply

  • Sacha,

    Or is that CIO. Must be time to head for the same pub as Steve..

    Ak • Since May 2008 • 19745 posts Report Reply

  • Glenn Pearce,

    Sacha, I meant governance by the board.

    But like everyone else I've had a gutsful of this.

    How about that Waterview tunnel then ?

    Auckland • Since Feb 2007 • 504 posts Report Reply

First ←Older Page 1 2 3 4 5 7 Newer→ Last

Post your response…

Please sign in using your Public Address credentials…

Login

You may also create an account or retrieve your password.