Welsh health board refers contracts to fraud watchdog

29 September 2017

A health board has referred two contracts to a fraud watchdog in the wake of a highly critical report from the Wales Audit Office (AO).

The AO report, published earlier this year, found that Cardiff and Vale University Health Board (UHB) broke its own procurement rules and made “potentially unlawful” payments when it awarded a HR consultancy a number of contracts.

The owner of the consultancy was subsequently appointed HR director at UHB.

In a written statement to the Welsh Assembly Public Accounts Committee (PAC) this week, where UHB’s chair Maria Battle was also questioned over the report’s findings, UHB said it found 10 contracts had been commissioned over the last three years with no procurement oversight. 

All 10 involved manual payments of more than £5,000 being made to consultants or individuals, and two of these were referred to the NHS Counter Fraud Service Wales.

UHB reviewed a total of 227 contractors and suppliers that received these large manual payments over the last three years as a response to the AO report. 

Battle used her appearance at the PAC meeting to apologise for failings identified in the report and said while there were other examples of where there should have been better compliance, this was not symptomatic of wider problem.

Between December 2014 and March 2016 UHB entered into three contracts with HR consultancy firm RKC Associates to address a shortfall in its HR capacity after a director was seconded to another part of the NHS. Two of these contracts were awarded without a competitive tender which, given their size, led the AO to conduct its review. 

The AO report, written by Huw Vaughan Thomas, auditor general for Wales, was published in July and found the UBH failed to comply with its own procurement procedures when it awarded contracts to RKC, making both the contract and subsequent payments potentially unlawful.

It also found the contracts breached public procurement rules and that UHB failed to undertake due diligence of RKC, leaving it open to “unnecessary financial and reputational risk”. 

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