Minister backs hospital board in CEO sacking

UPDATE 2.30pm: State Health Minister Jill Hennessy has backed the Bendigo Health board’s decision to terminate the contract of former CEO John Mulder as “right and appropriate”, but did not elaborate on the details of the investigation’s findings.

“I’m aware that after the IBAC delivered a report there were matters that were canvassed in that report that the board took the view that warranted further investigation,” she said.

“They’ve thoroughly investigated those matters now and they’ve made a decision based on that investigation to terminate the services of the CEO.”

Ms Hennessy said while the IBAC report uncovered “some really serious issues”, she hinted Mr Mulder’s sacking may be the end of the matter, saying “a lot of the evidence and findings that are made in an IBAC report can’t necessarily be used in other forms of investigations or proceedings”.

“It is true to say that there was an IBAC report that uncovered some really serious issues and while they weren’t the subject of formal findings by the IBAC, Bendigo Health and the board made a decision that they warranted further investigation,” she said.

“They’ve investigated those matters and they’ve made a decision that the services of the CEO ought [to] be terminated and I support their decision.”

UPDATE 1.15pm: Former Bendigo Health CEO John Mulder has requested a copy of the report which led to his sacking, while maintaining his position that he has done nothing wrong.

Mr Mulder said the advice he received from board chairman Bob Cameron on news of his termination “confirmed there were no findings of either gross misconduct or criminality” during his tenure at Bendigo Health.

“Consistent with procedural fairness I have requested from Mr Cameron a copy of the independent investigator’s report upon which the Bendigo Health board directors made their decision,” he said.

“I co-operated fully with the investigation and believe I presented substantive and accurate evidence to refute all of the allegations that were put to me.”

Mr Mulder said previous reports commissioned by Bendigo Health “confirm[ed] no wrong doing on my behalf and no case to answer”.

“I am very proud of the achievements of my team at Bendigo Health under my leadership, particularly the successful delivery of a world-class new hospital for the Bendigo and Loddon-Mallee communites,” he said.

“I firmly believe any judgement from my peers or the people of Bendigo will conclude that I leave Bendigo Health far better placed to meet the health needs of the community than when I commenced as CEO.

“Finally I would like to thank the dedicated staff of Bendigo Health for their support and hard work over the past ten-years and I believe that the people of Bendigo and the Loddon-Mallee region are indeed fortunate to have such a wonderful team of professionals looking after their health care.”

Mr Mulder said he had paid back any money he owed as uncovered by the IBAC investigation.

“The moment that I became aware that property expenses may not have been allocated to my accommodation account as instructed, I ordered a full investigation that concluded up to $5700 of expenses may not have been allocated to that account,” he said.

“The investigation could not determine this conclusively because there were tens of thousands of dollars worth of expenses that had been allocated to my account and paid accordingly, that could not be itemised. Consequently I asked for an invoice to be prepared for the full amount and paid it accordingly, perhaps paying twice for some of those expenses.”

EARLIER: The Bendigo Health board has unanimously resolved to terminate the contract of chief executive officer John Mulder.

The board made the decision at a meeting on Wednesday afternoon and issued a statement on Thursday morning.

“Mr Mulder has been notified in writing of the Board’s decision earlier this morning,” the statement reads.

“Accordingly Mr Mulder has now ceased to be an employee of Bendigo Health.”

The move follows an investigation by the state’s Independent Broad-based Anti-corruption Commission which found Mr Mulder misappropriated up to $10,000 in goods and services for his personal use while CEO.

Among a number of incidents exposed by IBAC were revelations Mr Mulder used hospital resources in the maintenance of two properties he rented in 2012 and 2013, including one belonging to his wife.

The report on the IBAC investigation, dubbed Operation Liverpool, revealed that while living in the Flora Hill property owned by his wife in 2012 Mr Mulder engaged the hospital’s buildings and infrastructure division to conduct repairs to the property’s floorboards.

The work, which took approximately four to five hours to complete, was done on Bendigo Health time at a cost of between $500 and $600 – as estimated by an employee, who later expressed reservations about whether it was an appropriate use of their time.

The IBAC investigation found Mr Mulder also used hospital resources to conduct, “significant” landscaping and painting work at the Flora Hill property, as well as electrical work at another rental property in Spring Gully.

It also found he arranged for a large glass ambulance depot door belonging to a company contracted to work on the demolition of the old hospital to be transported to a property belonging to Mr Mulder in Torquay at a cost of $1319, which was borne by another hospital contractor.

A director of the company that arranged the door’s transportation at Mr Mulder’s request, told the commission the hospital’s former construction manager, Adam Hardinge, who was also implicated in the report, said “we would sort out the bill down the track”.

“When he said this, I knew that this was meant to be a favour and that I shouldn’t send a bill at all,” the director said.

Mr Mulder denied that he asked, wanted or expected private work to be done by Bendigo Health employees or contractors on Bendigo Health time and that he never intended to pay for it.

But investigators concluded that while he “sometimes used words to the effect of requesting a bill”, Mr Mulder was unable to satisfactorily explain what he meant by his use of qualifying words such as “it doesn't have to be a big bill, but needs to be something”.

“The natural meaning of such language by Mr Mulder, in context, was that he only expected ‘token’ bills for the sake of appearances, and not ones for true value,” the report reads.

IBAC found further allegations made against Mr Mulder involving the rental arrangements of a Flora Hill property and another house belonging to his wife in Harcourt North, through which his rent was paid by Bendigo Health, were unsubstantiated.

The finding came despite concerns investigators held about changes made to the arrangements while IBAC investigators were in Bendigo in June 2015.

“While it is difficult to accept that the timing of the termination of such arrangements was purely coincidental with IBAC’s inquiries, at the conclusion of the investigation, the corrupt conduct allegations concerning Mr Mulder’s remuneration arrangements were not substantiated to IBAC’s satisfaction,” the report reads.

At the time the report was released Mr Mulder said he head been cleared “of any corrupt behaviour”.

In its statement released on Thursday, the Bendigo Health board said it had “afforded Mr Mulder due process and procedural fairness in reaching this decision” and would “immediately commence the search for a new CEO to guide the service into the future”.

“For Bendigo Health, today marks the beginning of a new phase in the evolution of our health service,” it reads.

“While our centrepiece is undoubtedly the new $630m Bendigo hospital, our work serves the needs of more than 300,000 Victorians throughout the Loddon Mallee region.”

The board also thanked acting CEO Peter Faulkner for taking up the role after Mr Mulder stood down.

“The board takes this opportunity to recognise and thank Peter Faulkner, who has so capably led Bendigo Health through a complex and extremely challenging period as acting chief executive officer as we have settled into the new hospital,” the statement reads.

“Mr Faulkner’s has invaluable knowledge as a result of being the executive director of [the] Bendigo hospital project and chief nursing and midwifery officer. This placed Mr Faulkner in the unique position of deeply understanding the project in the early stages of settling in to the new hospital.

“The board thanks all Bendigo Health staff, volunteers and our communities for their continued support.”

Former Bendigo Health construction manager Adam Hardinge was convicted and fined $15,000 in the Bendigo Magistrates’ Court in October last year after pleading guilty to nine theft and deception charges stemming from the IBAC investigation.

The court heard Hardinge misappropriated $28,742.69 worth of building materials and equipment belonging to the hospital between May, 2012, and March, 2015.