Healthway staff in corporate ticket rort
A Public Sector Commission investigation has found Healthway’s executive director David Malone, chair Rosanna Capolingua, deputy chair Cathcart Weatherly and some staff improperly used corporate tickets to sports and arts events obtained as part of sponsorship agreements for family and friends.
The investigation found Healthway obtained about $220,000 worth of tickets in total, and that the volume and nature of what was obtained through sponsorship arrangements with the Perth Wildcats, Perth Glory, WA Cricket Association and concert promoter Mellen Events was considered “excessive and inconsistent with the obligation to be scrupulous in the use of public resources under the accountability principle in the Public Sector Code of Ethics”.
The investigation found more than half of all tickets obtained by Healthway under its contracts were either used improperly or could not be properly accounted for.
It also revealed “tensions between some board members, and between some board members and the executive director” had distracted the board from its integrity and fiduciary oversight role.
“The investigation concluded that 43 per cent of hospitality resources obtained (by volume) were used for a legitimate business purpose, 21 per cent of these resources were used in a manner considered to represent a private benefit to Healthway officers, their families and friends and 36 per cent of the hospitality resources could not be properly accounted for,” the investigation found.
Use of the tickets also has fringe benefits tax implications that “have not been addressed by Healthway”, the investigation found.
The PSC found “insufficient controls” were established around sponsorship contracts to ensure that hospitality resources were used solely for a public purpose.
“In that environment, Healthway officers including the chair (Ms Capolingua), deputy chair (Mr Weatherly), the executive director (Mr Malone) and some staff derived a private benefit in the form of tickets or seats for their family in corporate boxes,” the report found.
On Saturday, The Weekend West revealed Mr Malone departed Healthway 18 months into a five year contract.
Ms Capolingua said he had resigned to pursue new career opportunities.
The PSC investigation, which covered the period July 1, 2010 to July 1, 2014, was tabled in State Parliament this morning. It follows an investigation by the Auditor General into Healthway’s use of corporate box tickets.
The PSC investigation found Healthway failed to apply relevant State Supply Commission guidelines when it introduced a new sponsorship model.
Key Healthway staff wrongly believed corporate hospitality resources provided by sponsored organisations had “no real monetary value” and were not procured at the expense of other resources or programs.
Healthway’s executive failed to share information with the board about the level of hospitality resources the organisation had received.
“The Board, relevant committees and key staff did not scrutinise the hospitality provisions in contracts or ask relevant questions when attending, or being invited to attend, events hosted in Healthway corporate boxes,” the investigation report said.
“The Board (was) distracted from its integrity and fiduciary oversight responsibilities by other tensions between some Board members and between some Board members and the Executive Director.”
Healthway has been contacted for comment.
In a Healthway response to the findings included in the PSC report, Ms Capolingua said the board had strengthened accountability processes in response to the investigation, including ceasing the current practice and use and distribution of tickets and hospitality.
