David Farrar: Little’s mega-merger is tracking $28 billion with Excel!

The Herald reports:

Health New Zealand had been tracking its finances through a single Excel spreadsheet, a financial review of the public agency has revealed.

An independent report by Deloitte, published on Health NZ’s website, found the significant reliance on the use of a single Excel file was a “major issue” for the agency responsible for managing billions of taxpayer dollars.

It also found Health NZ had a lack of control around expenditure and revenue, and its savings plans, intended to balance the gap, were ineffective.

Budgets at the agency were not consistent with expected revenue.

The spreadsheet was the primary data file used by the public health agency to manage its financial performance, and was used to produce several financial reports.

“The use of an Excel spreadsheet file to track and report financial performance for a $28 billion expenditure organisation raises significant concerns, particularly when other more appropriate systems are present on the IT landscape,” the report stated.

It found the health agency was flawed in using the Excel file, as the source of uploaded information was often hard to trace. Errors were not immediately picked up, and there was “limited tracking” to source information.

The report found the sheet was highly prone to human error, such as accidentally typing a number or forgetting an extra zero at the end.

It is beyond belief that the largest entity in New Zealand, is using Excel to track $28 billion of taxpayer spending. This explains so much about how Health NZ kept having blowouts.

I last used Excel for financial reporting for my business around 20 years ago, and we have around 0.005% of the revenue of Health NZ. The thought that the financial reporting of the entire NZ health system is being done via MS Excel is beyond alarming.

The people to blame are Andrew Little and his genius colleagues in Cabinet who decided to ignore Heather Simpson’s advice to merely reduce the number of DHBs, and instead thought it was a brilliant idea to merge 20 DHBs into one entity, in just two years – and during a pandemic.

Merging 20 organisations together with 80,000 staff would normally be perhaps a 10 year project, with the best global leadership available. But instead we got such a flawed initiative, that the end result is they don’t even have a unified financial reporting system. I suspect the 20 former DHBs are still doing their own finances, and Health NZ is just using Excel to try and piece it all together. What this means is Health NZ has no ability to actually get into the details of their spending, because they have no unified financial payments system.

On average, financial reporting took 12 to 15 days, and five days to analyse.

So thanks to Andrew Little’s reform, it takes 20 days to just find out the answer to a financial query!

David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition Leaders.