Cooking the Books
Lester Levy's recipe for success.
Come with me, and you'll be
In a world of pure imagination
Reach out, touch what was once
Just in your imagination
Don't be shy, it's alright
If you feel a little trepidation
Sometimes, these things don't need
Explanation
Songwriters: Anthony Newley / Leslie Bricusse.
If you don’t ask, you don’t get... Dream big, or go home… Ask for forgiveness, not permission… No harm, no foul...
Stop me when we get to Lester Levy.
Because somewhere on the spectrum from “he’s taking the piss” to “this guy is dodgy as all hell”, you‘ll find ideas like attempting to include anticipated redundancy payments and Holidays Act payment remediations that are happening in the 2024/25 year in the previous year’s accounts.
Nice work if you can get it. It makes the level of expenditure from the last government look worse, and management under the new lot, the ones who gave you the job, look better than it actually is. Not to mention that you come up smelling of roses, which masks the actual odour that should be obvious from the books.
Maybe it’s all a big misunderstanding.
Perhaps Lester thought to himself, “These redundancies are quite unsavoury; let’s just think of them being in the past, even if they haven’t happened yet. It’s easier that way.”
It could be a genuine mistake, and Levy thought he could arbitrarily, eeny, meeny, miny, moe, pick whichever bucket he liked to put those costs against. Accountants are such easygoing people, and it’s probably all the same to them.
And maybe I’m the King of Belgium.
So what happened?
If you’ve seen the news and the headlines, including the one at the top of this newsletter, you’ll know that Ayesha Verrall challenged Commissioner Lester Levy, the coalition-appointed caretaker whose job it is to oversee a reduction in spending that, funnily enough, will not lead to better health services and thus soften the sector up for privatisation, over his accounting saying he was cooking the books.
You might’ve thought steady on that’s a bit harsh. Although given my readership, you were probably cheering, “Stick it to him, Ayesha”, in support of our tenacious advocate. Still, either way, perhaps it’s worth looking at some context as to why emotions might’ve been running high.
During the Health Select Committee, Mr Levy said there are “no cuts” to the health system and that a line should be drawn between “reducing roles and a cut”.
So that’s nice, isn’t it?
Forget all those headlines about hundreds of jobs being lost in the health service, from those much maligned Back Office people who manage preventative programmes that reduce our future health costs to front-line folks who do things like organise equipment and supplies and make beds so the trained medical professionals don’t have to.
Despite all that, Lester, the man in charge of our health service, says it doesn’t mean there are cuts. As you might imagine, the people interested in New Zealanders receiving good quality healthcare were rather less than impressed, and that was probably not helped when Levy described reducing the headcount at Health NZ as “unfortunate”.
As reported by Stuff, Labour’s Ingrid Leary said, “Tell that to the nurses, tell the national public health service”, while Te Pāti Māori co-leader Debbie Ngarewa-Packer put her face in her hands.
Dr Verall accused Levy of “cooking the books” for the reasons above and to make them look even worse than they should have been, enabling the coalition to tut determinedly while explaining to Kiwis why it’s necessary to defund public healthcare.
Verrall also referenced Lester Levy’s history of similar results that was covered in a piece by Janet Wilson a few months back in The Post. That article is paywalled, but I include this snippet:
This week Levy was busy crooning to the Government’s soundtrack, talking about Health NZ being “a bloated bureaucratic organisation” while promising to fix waiting times and boost productivity.
It’s a song he’s sung for National many times before, beginning in 2009 when he became chair of Waitemata DHB, then in 2010 as chair of Auckland DHB, and in 2016 completing the trifecta and chairing Counties Manukau.
During his time at the three DHBs he was able to produce financial surpluses which became deficits after he left. He wasn’t so lucky as crown monitor of Canterbury’s DHB from 2019 to 2022 when the deficit rose from almost $178m to $222m.
This suggests that the Commissioner has a track record of producing financial results that look better than things do soon thereafter.
But is it reasonable to accuse Levy of Cooking the Books? Which can be defined as “to alter official accounting records in order to deceive or mislead.” That seems pretty accurate in this situation to me, but Lester wasn’t so sure.
Levy said he resented the questions, I imagine he did, and the other MP present, Sam Uffindell, who seemed to be there for coalition ass-covering purposes rather than due to any interest in health, said, “Fair shake of the Bed Leg, Ayesha, it’s pretty cooked suggesting Lester here would have any ulterior motive for his accounting approach.”
Big Sam, the unapologetic furniture delivery man, didn’t say that. He warned the opposition that they were “verging on being disorderly”, which, to be fair, is something that Uffindell knows about.
But is it defamation?
If you watched the 1 News report last night, you would have seen Benedict Collins making much over whether the comments were defamatory despite it becoming apparent that he knew they weren’t.
Of course, Lester Levy was outraged by Dr Verrall saying he was cooking the books, and with encouragement from the TVNZ journalist, he said that he thought it was defamatory - despite the Labour spokesperson literally providing examples of other such behaviour.
Having badgered Levy into calling it defamatory, Mr Collins then pointed out that as it was a Select Committee, it was covered by parliamentary privilege and so not defamation. Even as he extrapolated on what cooking the books meant using words that Dr Verrall herself had not.
You can see the clip here if you’d like:
“If it’s not accepted, it’s not accepted” is how Levy described his attempt to record the costs against the previous year, which the Auditor-General rejected.
Which is like saying you tried to do something in a sporting match, but the referee blew the whistle because it was against the rules.
What’s that whistling sound?
Speaking of blowing whistles, it sounds like a bit of that was involved with a meeting between Rosalie Hughes, the agency’s ousted Chief Financial Officer, who, according to this article in Newsroom, is understood to have taken Health NZ to mediation, and the Auditor-General, over the following:
Lester Levy and his team of deputy commissioners are including big allowances for holiday pay remediation, for pay equity settlements and in a surprise move, sources say, for more than $130 million for redundancies provisioned in the 2023/24 books – the books that are now being audited.
That move would be unexpected, because this redundancy provision is for employees the agency plans to lay off in the 2024/25 year, some of whom won’t yet know their jobs are on the line.
According to the article, Hughes would not go quietly, and “sources say she raised concerns about the financial reporting discrepancies, then took the matter to mediation last month.”
The Auditor-General subsequently disagreed with Health NZ’s approach, and the costs of around $212m were included in the 2024/25 year’s accounts.
You cannot help but wonder if Levy would have gotten away with all this and if it would have been accepted if such a conversation had not occurred.
Why should we care?
So why does it matter if the books look worse in the previous period and better in the next? What could be gained, if anything?
Well, if you wanted to justify further cuts or simply explain why you weren’t spending more on health despite such an obvious need, then it’s good to have a bad news story to tell. Especially one that is in the past.
Not to mention that in terms of flogging off the public health system to commercial interests, showing things to be far worse than they actually are is pretty much neoliberalism 101.
On the other hand, if you want to congratulate yourself on getting the books in order, then removing associated costs for redundancies makes the Coalition and the Commissioner look good, even as healthcare gets worse. Hurrah!
Taking millions of dollars of costs for things you’re doing and recognising them against a previous period to make that period look worse and the current one look better is bloody outrageous. In my view, it is not the action of an honest person.
Have an awesome day, all you lovely people - especially Ayesha Verrall, who told Newstalk ZB, “This is pretty fishy. You have this process that is being used to justify health cuts where the Auditor-General says the accounting treatment is not right."
It would be nice to imagine that the people running our health service were primarily motivated by helping people and improving patient outcomes, as Dr Verrall is. Perhaps this next song will help.
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Reti is donkey deep in these lies as well. It is the Trump playbook, and it works in the meme/soundbite world if the media won’t do their job. Ian Powell has written extensively on Levy and his skullduggery
"Consulting" the staff. I have yet to see a process where the decision was not already made prior to the "consultation". Same with consulting the local community!