WA Health facing corruption probe over Fujitsu contract

The WA Department of Health is facing a corruption investigation over the budget blowout of its centralised computing services contract with Fujitsu.

After investigating the contract for a report, the WA Auditor General has turned over the case to the state’s anti-corruption authority.

According to the report, the contract was signed in 2010 with a value of $44.9 million, but has since gone through 79 variations worth $81.4 million and has options to extend the value to $175 million.

Acting Auditor General Glen Clarke said the investigation showed that the department did not effectively manage the contract and that effective governance arrangements were not in in place to manage risk.

“Numerous weaknesses in the management of the contract were identified including no dedicated contract manager, no clear policies and procedures for contract variations, ineffective financial management and limited asset tracking and management,” he said.

The investigation found that the department spent $3.3 million — not including ongoing rental payment for floor space of $90,000 per month — just on equipment that it is not using and may not even use before the guarantee period on it expires.

Some variations in the contract were approved by employees that did not have the authority to make the decisions, with no business case or assessment involved.

“In some cases, the variations were inconsistent with the scope of the original contract and should have led to a new competitive procurement process rather than sole negotiation with the contractor,” Clarke said.

He added that while the department has made some progress towards addressing the issues, there is still considerable work to do.

Image courtesy of jasleen_kaur under CC