Hague Kevin: Questions for Oral Answer — Questions to Ministers Questions to MembersText is incorporated into the Bound VolumeHague Kevin: Questions for Oral Answer — Questions to Ministers Questions to Members[Sitting date: 20 February 2014. Volume:696;Page:16184. Text is incorporated into the Bound Volume.]3.KEVIN HAGUE (Green) to theMinister of Health: Was he told in 2010 that the Southern District Health Board had received legal advice that suggested there was the possibility of fraud in its dispute with South Link Health?Hon TONY RYALL (Minister of Health): Thank you for the question. Since yesterday’s question in the House we have gone back through the records in the office and double-checked with the Ministry of Health and the district health board’s records and can find no reference to being advised at that time. This is a complex commercial dispute over between $5 million and $6 million of savings generated through laboratory and pharmaceutical contracts during the 1990s and whether there was agreement on how those savings would be reinvested back into health.Kevin Hague: When the Minister said in the House yesterday that he had been aware of the wider issue of the dispute for quite some time but not the allegation of the misuse of public funds what precisely did he think the dispute involved?Hon TONY RYALL: I have been aware for quite some time—in fact probably even when in Opposition because the dispute had been going on since 2002—that there was a dispute about the terms in which those funds were being used. I had never been told that there was an allegation of fraud associated with that. That sounded more like a commercial dispute to me.Kevin Hague: What was discussed when the Minister met the chair and chief executive of the Southern District Health Board in October 2010?Hon TONY RYALL: If the member was able to put that question down on notice I would be able to give more advice in respect of that date.Kevin Hague: What discussions did the Minister have with Ministry of Health or National Health Board officials including Michael Hundleby Chai Chuah and StuartMcLauchlan about this issue since 2010; and what did they tell him about the likely need for legal action—criminal or civil—on the matter?Hon TONY RYALL: The member is going back 3 years or so on this issue. I would have to know specifically the dates of those things. What I do know is that as Minister of Health I have been aware of this issue for quite some time and I am aware that at the end of 2010 the district health board referred the dispute with South Link Health to the ministry.Kevin Hague: Is he seriously asking the House to believe noting the very high political and public awareness of fraud especially in this particular district health board that when the Ministry of Health received a letter in 2010 stating that there could be elements of fraud concerning more—potentially much more—than $5 million no one briefed him on this possibility?Hon TONY RYALL: The ministry has advised me that it has no record of having received the 2010 letter until 2014. What I can tell that member is that I am certain that if someone told me there was evidence of fraud at a district health board then I would have taken the appropriate action.Kevin Hague: Is it acceptable to him then that for 3 whole years officials would withhold information from him about the possibility of a fraud to which they were apparently alerted in December 2010?Hon TONY RYALL: The issue really hinges on the nature of the 2010 letter. The 2010 letter actually says that there are elements here that could be fraud but equally those elements could be a commercial dispute and further work is needed to draw any conclusion. That letter was never referred to me; nor did the ministry have a copy of that until I think 2014.Kevin Hague: When the Southern District Health Board wrote to the Ministry of Health’s audit and compliance unit in December 2010 seeking an investigation and recommendation as to what it should do why did it take 3 years for the ministry to respond?Hon TONY RYALL: Look that is a very good question and it is not a matter of it taking 3 years to respond. The audit and compliance people are based in Christchurch and you will be aware that in the weeks after the letter was referred there was the second substantial Christchurch earthquake. Towards the end of 2010 work was undertaken by the audit and compliance people there was an effort to try to mediate a settlement further in 2011 and there were a number of discussions with lawyers for the district health board and forensic accountants during that time. So action was being taken.Hon Annette King: Did he phone Murray Tilyard of South Link Health at the end of last year to ask his advice on a possible chair for the Southern District Health Board knowing that Mr Tilyard was in dispute with the board over $5 million to $6 million and having by then been told there could be elements of fraud?Hon TONY RYALL: It would have been before—I would have spoken to Professor Tilyard well before the end of November I believe. Yes I did speak to him and I did actually speak to a large number of people in the Southern District Health Board area.