Wairarapa DHB spent more than $1 million on contractors in its final year, with holiday pay issues making up more than half of that spending.
Details of the contractor expenses were included in response to a question in the Health Select Committee Review of Te Whatu Ora Wairarapa for 2021-22.
The question asked how many contractors and consultants [including those providing professional services], were engaged or employed in 2021-22 and the estimated total cost. It also asked how contractor engagement for the latest period [2021-22] compared to each of the previous four financial years, in terms of the number engaged and total cost.
The answer showed Wairarapa DHB engaged a total of 20 contractors in the financial year to June 30, 2022, at a combined cost of $1,257, 425.
The largest amounts were for items described as ‘holiday pay issues’, which had a total spend of more than $700,000. Robert Walters Associates was paid $341,814, and Beyond Services Ltd. was paid $372,412 for holiday pay issues. Robert Walters charged an hourly rate of $145, while Beyond Services charged $131 an hour.
Frank van Ham, general manager finance and corporate services at Te Whatu Ora, responded to a question from The Times-Age about what the holiday pay issues were and why the expenditure was needed.
“The Holidays Act costs relate to our contribution to the 3 District [Capital and Coast, Hutt Valley and Wairarapa] Holidays Act project which is the project set up to address the rectification of payroll systems and remediation of any identified historical errors as per the Memorandum of Understanding agreed with the unions and Ministry of Health [referred to in the information below].”
The information referred to above, provided by Te Whatu Ora, was entitled ‘Extract from the Health Select Committee Report on Health 21-22 Annual Reviews’, and stated as follows:
“For several years, the Auditor-General has reported on DHB’s efforts to address non-compliance with the Holidays Act and potential liabilities resulting from incorrect payments of holiday pay. The issues have been caused by payroll processes and systems not being configured to accurately meet the requirements of the Act. The complexity of employment arrangments and the 24-hour nature of operations makes the matter particularly challenging for the health sector.
“The DHBs have agreed a memorandum of understanding with the union and the Ministry of Health. This provides a framework for determining the nature of the underpayments and compliance with the Act. An associated framework for addressing the issues with applying the legislation has also been created, which includes phases of work for each DHB to complete. The work includes reviewing payroll systems and determining the level of underpayment for each current and former employee. At the time of the conclusion of the 2021-22 audits, the work to determine the liability was ongoing.”
Other contractors included in the 2021-22 list for the DHB were Advanced Management Systems Ltd, who received $81,574 for an item described as ‘payroll system upgrade and training.”
Other contractor spending in 2021-22 included IT system work, property-related expenditure, and fleet decarbonisation implementation.
Wairarapa DHB spent $1,261,185 on contractors in 2020-21, $922,350 in 2019-2020, and $1,235, 056 in 2018-19.
Sorry, but this issue is nonsense.
I have worked in Health for 20 years, most contractors are the best service providers available.