Hospital paid $300K in CEO expenses: IBAC

·3-min read

Victoria's anti-corruption watchdog has found a former regional health service chief used public hospital money to dine out on lobster and travel business class to Thailand.

The watchdog's Operation Meroo special report was tabled in state parliament on Friday, finding the chief executive awarded dodgy contracts and wrongly claimed more than $300,000 in personal expenses.

But the identity of the health boss and the health service in question can't be revealed for legal reasons.

Operation Meroo found that in one instance, the CEO went on a health service-funded $20,000 seven-night trip to Thailand to look at hospital decor with the president and vice-president of the health board.

The trio spent $656 on a lobster dinner, played golf, flew business class and stayed in five-star hotels, and conducted a one-day visit to a Bangkok hospital.

The CEO told IBAC they needed to "obtain a different view of the world".

They defended a predilection for business-class travel, telling IBAC that business class flights were "more reliable" than economy.

The day before the Thailand trip, the CEO spent $311 of the hospital's money dining at the Melbourne Sofitel, telling IBAC the meal "...could have been seen as contributing to the welfare of those of us that went".

In 2015, the CEO used the health service credit card to pay for a trip to the AFL grand final, spending about $2600 on a top-end hotel, while another meal at a high-end Melbourne restaurant cost $772, including oysters, brandy, a $90 bottle of wine, but a measly $30 tip.

As well as hitting the hospital with a $100,000 average annual travel bill, IBAC found the health boss secured jobs for their mates.

Operation Meroo found they awarded a $960,000 contract to a company while they were in a relationship with one of its directors between 2010 and 2017, without putting the contract out for tender or declaring a conflict.

The open-ended contract included selecting furniture, purchasing gifts, fundraising, and compiling the health service's quality-of-care reporting.

The health boss also authorised about $74,000 in payments to an electrical company owned by a relative - without any verification, and up to 11 years after the work was supposedly done.

IBAC found the former CEO was a "prominent member" of the local community, with an intimidating reputation and attitude towards some employees.

As far back as 2005, a health service worker wrote to the board repeatedly with corruption allegations, but received no response.

After the CEO then sued for "significant damages", the employee was forced to declare bankruptcy.

One board member told IBAC the health boss was "known in the town as a little dictator... this was [their] little empire."

The CEO formally resigned after the Department of Health and Human Services began a review of the allegations in 2017.

IBAC also found that the health service provided "deceptive information" regarding at least 10 state and federal funding applications between 2010-13.

In one instance, the service received $65,000 in state government funding to install a new Nurse Call system, but the system was never installed, despite the grant application saying that if the existing system failed, it could lead to "potentially catastrophic outcomes, including unnecessary death".

IBAC Commissioner Robert Redlich said the health service board's inadequate governance had helped facilitate the former CEO's conduct, and the then Department of Health and Human Services also had problems with its oversight.

The report comes as the state's health services are struggling with a huge increase in demand, with ambulances and emergency departments especially under pressure.