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Hard on the heels of news of a “physical contact” complaint against one top executive seconded to Health NZ, Newsroom has learnt another senior adviser was censured for failings as an auditor.
First, it emerged that Commissioner Dr Lester Levy had arranged that John Bennett be headhunted from ACC on secondment. RNZ last week reported complaints that Bennett had made “physical contact” with another staff member, and that he had appeared shirtless on a work video call. Levy says no issues had been raised about those complaints, when the two agencies’ CEOs agreed to the secondment.
Now, Newsroom can reveal that Health NZ cost-cutting specialist Leo Foliaki had previously been publicly censured for failings in the audit of Fonterra. He and Brent Goldsack, both former PwC partners, were parachuted into the chief executive’s office at Health NZ as a “turnaround team”, alongside Levy.
It was their shared PwC history that previously raised the Institute of Chartered Accountants’ concern, culminating in Foliaki’s censure in 2023. He and another PwC auditor had failed to fix financial headroom figures, nor to document issues of independence, when Goldsack was on Fonterra’s board.
One Health NZ employee, who asked not to be identified, says: “The Commissioner has a group of staff that he personally brought into the organisation. None of these people went through a recruitment process.”
The staffer says there have been multiple complaints, personal grievances and resignations because of behaviour by a few among the large group of new appointees. “The organisation can barely function – so many delegations of authority have been removed, senior leaders can’t even approve travel and contracts. Invoices are going unsigned as the backlog builds.”
One former senior leader says Levy brought in Foliaki, Goldsack and deputy commissioner Roger Jarrold when he was first named commissioner.
“Their official role was ambiguous, but their authority was clear from the start – they acted and spoke directly for Lester. They led the business reviews and have driven the cost reduction. This has been brutally managed. Neither understands healthcare, and yet they have a massive say in what stops and what continues.”
The former senior leader says they are the classic accounting receivers-cum-turnaround team … except they don’t really work as a turnaround team. “Effective turnaround teams recognise that they have two key roles – to find and fix problems, and to motivate those who remain to positively change. You can’t remove everyone. You need the bulk of the remaining people to buy into and embrace the change.
“However, this is not how Brent and Leo operate, and this is the fatal flaw in Lester’s approach. Brutality demotivates people – good people depart or psychologically ‘check out’. Safety and self-preservation become paramount, which makes positive change even harder. The net result is what you’re seeing today in the organisation – a broken, or at least breaking, culture.”
Another former senior leader says nobody should have to work in such an environment; a third says staff had reported offensive comments, and scant regard for employment law. “This behaviour is not acceptable in any leader, does not motivate people and will not solve the underlying dilemma of health system affordability in New Zealand.”
Levy has brought in a cadre of deputy commissioners (Roger Jarrold, Ken Whelan and Kylie Clegg) – the four commissioners are paid nearly $1m between them. He’s also overseen the external recruitment of deputy chief executives (Cath Cronin and Martin Keogh), and other executives (John Bennett and Bevan McKenzie).
They have replaced senior executives like Margie Apa, Abbe Anderson, Fionnagh Dougan, Leigh Donoghue, Andrew Slater, Peter Alsop and Rosalie Hughes, who were forced out.
Levy’s also driven the headhunting of advisers with corporate backgrounds (Foliaki, Goldsack, Andrea Duncan, and a Deloitte consultant).
And in addition, he’s built his own office alongside that of interim chief executive Dr Dale Bramley, staffed by four of his own strategic and PR advisers.
Asked by Newsroom whether reference checks had been conducted on Foliaki, Bennett and all the other top level hires since he took office as commissioner last July, Levy declined to answer.
“Currently Brent Goldsack and Leo Foliaki are not part of the Commissioner’s office, they are working directly with management,” he says.
“Mr Foliaki was appointed as a consultant by the office of the Health NZ chief executive to assist management and commissioners with the back-to-budget programme, based on his extensive specialist experience and knowledge.”
Foliaki’s role is as a part-time adviser, with no decision-making authority. Levy says that as part of the check process, Health NZ was aware of the censure. “It was considered not material to the scope of the role.”
The role of Levy, himself, has come into question after new Health Minister Simeon Brown hesitated to express confidence in him. A “reset” of Levy’s “turnaround” is being promised, this month.
Asked if he was committed to continuing much beyond this month’s reset, Levy again avoids answering. “The Commissioner and Deputy Commissioners are fully focused on and committed to the performance recovery of Health New Zealand as they have been since their appointment,” he replies.
This week, Brown and Prime Minister Christopher Luxon announced an extra 100 placements for overseas-trained doctors to work in primary care, and incentives for the recruitment of 400 graduate nurses a year.
They said Health NZ would also put an extra $285m towards general practice, but the extra funding will be linked to performance. A new 24-7 digital service will also be set up to allow all New Zealanders to access online medical appointments.
“We want to get rid of the bureaucracy, and we have to,” Luxon says. “We have more workforce in the frontline parts of our system, and yet we’re getting poor results, and so we need those results to be stepped up. And the reality is, we know we’ve got a low performing organisation, and we need to turn it around.”
For more see: www.newsroom.co.nz
