Funding to help Fremantle Hospital improve services

6/3/94

The State Government today announced the restoration of nearly $4 million lost to the Fremantle Hospital and the community by the maladministration of the previous Labor government.

Premier and Treasurer Richard Court has approved the funding to help Fremantle Hospital maintain and improve the standard of essential services.

An independent investigation into the development of the computer system at the hospital, instigated by Health Minister Peter Foss last year, raised a number of concerns about other management practices at the hospital.

A further investigation into the financial administration of Fremantle Hospital revealed that $3.9 million, intended for vital hospital programs, had been diverted to a trust fund by former Chief Executive Officer David Lewis and left unspent.

Mr Court said services had been under-resourced while the money sat idle in the trust fund.

"This placed considerable strain on the hospital to maintain conditions and services," the Premier said.

"During that time, wards were closed and money was brought forward to help the hospital stay afloat."

Health Minister Peter Foss said the 'creative accounting' by the previous administration had contributed to Fremantle Hospital facing close to $1 million operating deficit for 1993-94.

"The diversion of funds left Fremantle Hospital struggling," Mr Foss said.

"The hospital was starved of both capital and recurrent funds which were being held illegally in the trust fund beyond the end of the financial year and hence became liable to be returned to the Treasury.

"This came about due to the Lawrence Government's dependence on their network of political advisers emanating from the Department of Premier and Cabinet, rather than insisting on proper lines of accountability."

The Minister said he had taken strong measures - in contrast with the Lawrence Labor Government - to rectify the management situation.

"Warren Jones has now been appointed new Board Chairman and a full board will be appointed shortly," Mr Foss said.

"A new Chief Executive Officer is being recruited and steps have been taken to strengthen accountability significantly at the hospital."

Mr Court added that he had readily agreed, as Treasurer, to the provision of the $3.9 million, on the understanding that this would mean there would be no deficit this financial year.

He said the management practices exposed at Fremantle Hospital should never have been allowed to happen.

"The antics at Fremantle Hospital typify the lack of accountability in government under the premiership of Carmen Lawrence," the Premier said.

"It is disturbing that this could have gone on for so long without being discovered.

"This is just another legacy of the financial mismanagement during the Lawrence Government, which my Government has been forced to rectify."