WA Health’s IT disaster not criminal, but premier keeps CCC option

By Stephen Easton

Monday February 22, 2016

It went so far over budget, it was almost criminal. The Western Australian Department of Health’s massively over-budget IT project won’t be investigated by the Corruption and Crime Commission just yet, but it’s not a good look when the premier has to seriously consider the possibility and refuses to discount it.

Shortly after an audit publicly revealed the details of how badly the project had been mismanaged late last week, the CCC announced it would not be following up a referral from the auditor-general.

The CCC welcomed the “very thorough and significant” audit report, saying it underscored the importance of strong governance arrangements for such a complex and valuable contract, but didn’t think it suggested “serious misconduct on the part of individual public officers”.

Some “matters related to” the shambolic deal with Fujitsu had already been investigated by the corruption watchdog, according to the statement, but it didn’t find any of the serious kinds of misconduct that are its focus:

“The OAG report highlights the risks involved in dealing with large-scale contracts. In addition to the contract management issues identified by the OAG, there is always a risk of serious misconduct in government procurement and the management of contracts, particularly when they involve large sums of money.”

But WA premier Colin Barnett kept the option of calling in the anti-corruption commission if needed. He aimed to assure the public that the Public Sector Comission could still refer the case back to the CCC if there is any whiff of criminality.

The project was originally budgeted at under $50 million but could blow out to more than $175 million by 2020 because of 79 contract variations, according to the audit.

Some staff authorised spending beyond what they were allowed to by orders of magnitude. One bureaucrat had a $100,000 spending limit but made purchases worth over $40 million, and no longer works at the department.

Acting auditor-general Glen Clarke said the audit did not find evidence of corruption and he suspected the extraordinary debacle resulted from a “failure of good governance” but the CCC probe was a routine referral to determine if crimes were committed.

Clarke praised the previous acting director-general of the Department of Health, Bryant Stokes, for bringing the project to his attention:

“He was acutely aware of the prospect of very public exposure of shortcomings within the department, but nevertheless chose this course in the interest of ensuring a rigorous, external and independent review of this significant issue.”

The department says it has already completed two of the audit’s recommendations and made “significant progress” towards the others.

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