Health commissioner Lester Levy says comments by Labour’s health spokesperson Ayesha Verrall accusing him of allegedly “cooking the books” at the health select committee today “could be considered to be defamatory and we will have a look at that”.
Auditor-General John Ryan has revealed that he made two changes to Health New Zealand’s draft financial statements.
Health NZ reported a deficit of $722 million dollars for 2024, which was hundreds of millions of dollars short of where it had been forecast.
Labour’s Ayesha Verrall had accused the Health Commissioner of a career of “cooking the books”. (Source: 1News)
In a statement to 1News, the Auditor-General said: “It took Health New Zealand some time to make adjustments after we had made comments on their draft financial statements.
“This is the main reason why the financial statements could only be signed on 14 November, two weeks after the deadline.
“Accounting standards require provisions to be based on best available information. The audit identified that the provision for holiday pay remediation was initially not based on the best available information. The provision in the final accounts was therefore adjusted and we are satisfied that the $1.83 billion provision is reasonable.”
Levy confirmed to the committee that the Auditor-General had intervened to move some redundancy payments from the previous year into the current year and the second matter was related to Holidays Act breaches and how and when those employees and former employees were being compensated.
He said he disagreed with the Auditor-General’s decision regarding the Holidays Act, but didn’t dispute the changes to the redundancy payments.
1News understands former Health NZ financial officer Rosalie Hughes complained to the Auditor-General as part of the audit process, raising concerns about the way Health NZ was reporting its numbers.
Committee questioning
Verrall focused much of her questioning of Levy today on the Auditor-General’s intervention.
She alleged that “creative accounting” had been used to move some of the financial reporting from this year’s budget into the previous years to make the numbers look worse than they were.
She talked about Levy’s record at three previous district health boards, saying: “Dr Levy, given your reputation for cooking the books, did any minister order….”
Verrall’s question was drowned out from calls of points of order from Government MPs on the other side of the room.
NZ First MP Jenny Marcroft said: “I don’t believe its appropriate to attack in that manner.”
Chairman of the health select committee and National MP Sam Uffindell agreed.
Levy then jumped in to say that he “resented that comment”.
Uffindell said: “I think making accusations like that are highly inflammatory and they do have a whole lot of connotations as well, associated as well with them.
“I would ask any members not to engage in accusations like that.”
Levy added: “I will provide any information that prove that to be totally untrue.”
After a couple of other questions, Labour’s mental health spokesperson Ingrid Leary said: “Given your comments just now that there have been no front line cuts, do you accept that the public might have a perception that the books are being cooked to support a manufactured crisis?”
Marcroft jumped back in with a point of order, saying that even with perception in front of it, the comments are still inflammatory.
Leary agreed to withdraw her comments.
Uffindell then said: “I’ve said it before, please don’t do it, we are verging into be a little bit disorderly here.
“I will just say if you’re accusing people or implying or making suggestions that someone is cooking the books per say, look that is a whole lot of criminal intent and consequence, which gets us into a whole other area.”
‘We will have a look at that’
1News senior political reporter Benedict Collins spoke to Levy about Verrall’s comments during a break in the select committee hearing, asking if he considered them defamatory.
Levy responded: “Yeah, I think that it could be considered to be defamatory and we will have a look at that, but it was unnecessary.”
Regarding his budget decisions, he said: “I’ve got all this proof and I’m going to provide it to her and once I’ve provided it to her, I’d like her to reflect on her comments that she made to me that were totally unfair, disappointing and inappropriate.”
Verrall’s comments may be protected by absolute privilege which limits the ability to bring legal action.
‘Accounting provisions’
Asked if he was being a bit “cheeky” in trying to put the redundancy costs into the previous year, Levy said: “I wouldn’t say cheeky, we are from commercial backgrounds, so we see what’s in the best interests of the organisation, these are accounting provisions that’ll happen to be in one year or the other.”
Also responding in the committee break, Verrall said: “I don’t understand how they got something so wrong, putting costs that are occurring now in the financial year, seems like pretty creative accounting.”
She claimed more than $200 million had been moved to initially make the Health NZ deficit look worse.
Verrall said it “is deeply concerning to New Zealanders that they are not getting accurate numbers from Health New Zealand on the state of their health system”.
1News then asked specifically about her “cooking the books” comment.
“I think the envelope is being pushed here on what legitimate treatment of the accounts are,” Verrall said.
When asked about chair Uffindell saying the “cooking the books” comments could be criminal, Verrall said: “Well I don’t believe that is criminal, what we are discussing here, we are discussing an issue about whether or not they are accurately presenting their accounts to Parliament and that’s in the public interest.”
