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Warning - being an NHS FD could put you away.
Philip Neal is worth talking about. He’s the NHS FD recently jailed for fraud at Chelmsford Crown Court after he confessed to false accounting to inflate a property valuation.
The false valuation put the Mid Essex Hospital Services NHS Trust into surplus by £1m, instead of being £10m in deficit.
He’s worth talking about because he claimed that pressure to meet strict targets forced him into making the false claims. That was his defense in court and if true that’s a serious problem for public services. Because there was no gain for Neal himself, in the deception. Perhaps being adverts for NHS FDs should come with a public health warning.
He has garnered some sympathy. Former NHS FDs have pointed to the expectation that they were expected to ‘pull a rabbit out of hat’ to meet targets, and that a ‘healthier environment’ is required where people don’t fear for their jobs if the targets are missed.
Neal didn’t profit himself from his wrong doing – though he does seem have received £2,500 bonus on his £100,000 for meeting the target. However, it’s difficult to see that a motivation. £2,500 is relatively small beer.
While dishonesty among public servants can never be condoned, likewise if the pressures of the job are pushing people in that direction, a problem clearly exists. I cannot imagine that there are no other FDs out there who haven’t thought of massaging the figures for the sake of an easier life.
However, if anything Neal’s experience proves that it is always much better to be honest even if, at the risk of sounding soft, 12 months seems a little excessive.
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To be convicted of any fraud or theft, there is an implicit requirement to demostrate and prove a personal gain was made.
I quote "Neal didn’t profit himself from his wrong doing" is therefore dangerously misleading and factually incorrect. Bearing in mind he was convicted, it follows that the Court, Judge and jury all saw and heard the evidence of such gain.
Posted by :Andy W | April 3, 2008 9:30 AM
Can't help but think the issue is whether the sentence is harsh and whether his behaviour signals a problem with the way targets in the NHS are constructed and whether they might pressure FDs into making less than perfect decisions.
Posted by :Gavin Hinks | April 3, 2008 10:28 AM
Interesting to read the comments of Andy W above and as reported back to back with my letter in Accountancy Age for 10th April 2008.
Regarding matters being "factually incorrect", perhaps if Andy had been present at the sentencing he would realise that the charges confessed to were forgery rather than "theft" and that it was the judge himself who confirmed that no money was taken. If Andy had followed the case thoroughly he would also be aware of the "fact" that due to the guilty plea there had been no trial and thus no jury called to hear evidence.
I believe the point that Gavin was attempting to make and certainly the one that I was seeking to identify in my letter is that this case highlights the position of FD in NHS Trust to be far more isolated and exposed than incumbents may be led to believe and that the corporate governance in place within their organisations will not protect them.
Posted by :Nigel Heath | April 11, 2008 11:46 PM
While a fraudulent surplus might be unique or at least unusual, we should query how sustainable some of the financial recoveries have been the NHS. I am doutful whether the NHS in surplus nationally reflects significant efficiencies feeding through.
Posted by :Bob Deed | April 20, 2008 11:02 PM
That's a scary thought Bob. I'm no expert in NHS finance, but that could only leave us only a couple of explanations. There was too much money to spend in the first place. Or that old bugbear of public service funding: it looked like a lot of money, but very little of it would be recurring so setting up new services with it would be impossible in any case, so best not to spend it.
Lastly, the money was not available for spending because it was ringfenced.
Perhaps the most frightening explanation would be that so many trusts were under pressure to meet targets that somehow it became all about the management of the cash on paper and ceased to be about the patients - hence a big surlus.
Posted by :Gavin Hinks | April 21, 2008 11:01 AM