In December 2011 Queensland Health identified a fraudulent transaction of $11 million of public funds paid to Healthy Initiatives and Choices (HIC), a trading name registered to one of its own employees, Hohepa Morehu-Barlow (Barlow). Further investigation identified this transaction to be the latest in a series of 65 fraudulent transactions totalling $16.69 million and committed over a four-year period commencing October 2007.
In March 2013, Barlow pleaded guilty to fraud-related offences and was sentenced to 14 years imprisonment and will be eligible for parole in December 2016. In June 2013, more than $11.8 million worth of assets was recovered for the State through proceeds of crime action in the Supreme Court.
The CMC’s public report, tabled in Parliament on 25 September 2013, provides an account of the fraud committed by Barlow between September 2007 and December 2011 and describes the impact of that discovery. It aims to:
- highlight public servants’ responsibilities — and accountability — as stewards of public money
- raise their awareness of the potential for fraud in the workplace, of their own responsibilities to prevent it and, finally, of the high cost of managerial inaction.
The report also includes a summary of lessons to be learned from the Queensland Health experience— the factors that allowed the fraud to be committed and remain undetected for so long, as well as recommendations to managers and staff of public agencies.
Report (tabled in State Parliament 25 September 2013)
- CMC public report into Queensland Health fraud tabled in Parliament (25 September 2013)
- CMC returns millions to state coffers in Morehu-Barlow case (13 June 2013)
- CMC restrains final property in Morehu-Barlow case (13 December 2012)
- CMC restrains $12 million worth of assets in alleged Queensland Health fraud case (18 January 2012)
The report, Fraud, financial management and accountability in the Queensland public sector, gives an account of the $16.69 million fraud committed by Queensland Health (QHealth) employee Hohepa Morehu-Barlow (Barlow) over a four-year period commencing October 2007. It describes Barlow’s fraudulent activities, the specific mechanisms by which he committed the frauds, and the organisational factors within QHealth that helped facilitate them.
This report highlights the responsibilities – and accountability – of public servants as stewards of public money. It also seeks to raise their awareness of the potential for fraud in the workplace, their own responsibilities in preventing it, and the high cost of managerial inaction.
Key learnings from the QHealth experience
The QHealth experience demonstrates that any agency can harbour a high-risk employee, and that internal weaknesses put agencies at risk. Section 3 of the report contains important messages for all public sector employees, whatever their agency:
- Compliance with policy and procedures is a strong defence against fraud
- Public servants are accountable officers under the Financial Accountability Act
- Proactive, engaged supervision is fundamental to public sector integrity
- Effective change management should identify emerging risks or vulnerabilities
- Fraud awareness and prevention is the responsibility of all employees
- Information from complaints and audits are important early warnings.
Recommendations to managers and staff of public agencies
The report also identifies five main areas in which agencies should be particularly vigilant:
- Financial management
- Managerial standards and accountability
- Acceptance of gifts and benefits
- Managing risk in a context of organisational change
- Fraud awareness and prevention.
These are discussed in more detail in Section 4.
The CMC recommends that agencies consider and address these issues at all levels of their organisation including but not limited to, executive management, with particular consideration by members of risk and audit committees. All managers and supervisors are encouraged to review their local processes and practices in order to identify any emerging issues.
