The Digital Health Record went live in 2022, replacing about 40 different systems. Photo: Claire Fenwicke.
An internal audit by ACT Health has not found any instances where it paid the Digital Health Record host for services not rendered after concerns were raised about $66 million in payments.
It was revealed in August last year that the directorate paid several invoices to private company NTT for hosting the DHR but wasn’t able to confirm whether it had actually received what it had paid for.
An Auditor-General report later labelled ACT Health’s processes for managing payments for the eventual $110 million contract as “poor” and “ineffective” given the directorate couldn’t provide an assurance that “services paid for were actually received or that the price paid for those services was the correct price”.
When questioned by Shadow Treasurer Ed Cocks during a public hearing to amend the budget bill (to allow for the government to pay for its acquisition of Calvary Hospital) about what efforts had been made to recoup the money, Health Minister Rachel Stephen-Smith said the invoices had been re-examined.
“They haven’t found a single instance where an invoice was paid for a service that was not received,” she said.
Ms Stephen-Smith said the lack of assurance had been down to invoices not containing sufficient detail about what they were for, or that evidence hadn’t been kept to justify the payment.
Several reviews into the matter have been completed and some changes made to ACT Health’s processes and invoice record-keeping.
Ms Stephen-Smith said the reviews had found while there had been “ineffective financial management and cost control” on the DHR project, overall it had achieved “successful clinical and technical delivery”.
When asked if this work had resulted in any savings, and potential money that could be used for the Calvary payout, she said it had not.
“There is no money available because there is no evidence that the money was spent on things that were not received.”
The ACT Government forcibly acquired the North Canberra Hospital in 2023. Photo: Claire Fenwicke.
The hearing had been held as the government needs to amend the 2025-26 Appropriation Bill to move some money around to pay for the compensation deal.
While the initial announcement detailed that the compensation amount was $65 million, to be paid by 15 October, a further ministerial statement clarified that there were further costs bringing the total acquisition amount (since 2023) to $150.6 million.
Acting Under Treasurer Scott Austin explained a contingent liability of $89.565 million had been made in the 26/27 forward estimates for non-financial assets, and there was an additional $66.239 million on the Canberra Health Services’ books as fair-value assets.
“That provision as set up in 23/24, [and the money was] essentially carried as orders of negotiation proceeded,” he said.
“[The $48 million in employee liabilities] were recognised in the 23/24 financial statements with CHS.”
He further explained the money would be contained in the 24/25 Budget papers due to the “rules of accrual accounting”.
“I think it’s basically [the audit office’s] view that the conditions were all in place for the payment,” Mr Austin said.
“Effectively accrual accounting implies that you take the liability when the conditions exist.”
Given the provision had already existed, no extra money will need to be appropriated or borrowed to make the compensation payment.
ACT Greens leader Shane Rattenbury questioned if there had been any benefits realisation reviews done into the acquisition of the now-North Canberra Hospital.
Ms Stephen-Smith said none had been done “at this point in time” but that had been considered over the longer-term when the government had been deciding whether to go ahead with a forced acquisition.
“The assessment at that time was that the assessed range of costs associated with that would be outweighed by the benefits, but that was over about a 20-year, or at least a 10-year, timeframe,” she said.
“Part of the motivation of the acquisition was to ensure that we could build the hospital that Canberrans needed, that would be owned by Canberrans.”
As for whether the ACT Government will need to ask the Assembly for more money relating to this issue?
“There is nothing on my radar that would suggest that we would be coming back with further requests for funding,” Ms Stephen-Smith said.
“Like every jurisdiction, we have faced health funding pressures, but this particular cost is one that has been factored into the budget for many years.
“It’s not an unknown pressure.”
