By Elias Hazou and George Psyllides
THE auditor-general is calling on the cabinet to examine, as a matter of urgency, the possibility of a conflict of interest in the employment of a senior health official overseeing the implementation of the national health system (Gesy), it emerged on Thursday.
In an urgent letter, Odysseas Michaelides is asking the cabinet to review the appointment of David Nicholson as head of the organisation of state health services (Okypy), which is tasked with overseeing the implementation of Gesy.
In the January 9 letter, the auditor attached a 10-page legal opinion by the attorney-general who said that at first glance there seemed to be a conflict of interest.
According to the letter, the attorney-general is seeking more information about Nicholson’s connection with KPMG and the exact services he had provided the health ministry.
KPMG has won the government contract to make state hospitals autonomous as part of the health system.
Nicholson had said he was a senior consultant at KPMG on health schemes when declaring other interests. KPMG Cyprus said he was not an employee of the local branch but an external associate of KPMG International between 2015 and 2017.
The auditor-general said responsibility for the appointment lies with the current health minister, as well as his predecessor who selected and recommended Nicholson to the cabinet.
But ultimately responsible is the cabinet for rubberstamping the appointment.
While probing the matter, Michaelides discovered a paper trail showing that at the time Nicholson was being proposed for the first time for the Okypy job, in December 2017, Nicholson had listed two capacities that were potentially a conflict of interest.
It raised questions as to how the cabinet had missed this.
The auditor-general asked how an individual – meaning Nicholson – could be effective or productive in his duties when he spent most of his time abroad.
“Perhaps this might explain why in its first year of operation Okypy did little more than make certain appointments.
“We wasted 12 months on making appointments, and plausibly this may be attributed to the fact that certain members of the Okypy board were not fully committed to the job,” Michaelides said.
He went on to recommend that the cabinet replace Nicholson effective immediately.
Taking questions from reporters, the official dismissed fears that Nicholson’s dismissal might throw the organisation into disarray.
“To say that the entire operation of Okypy depends on a single person, even if it’s the chairman, is far-fetched.”
Later in the day, health minister Constantinos Ioannou released a statement noting that he would be “submitting information” to the cabinet concerning Nicholson.
He would not be commenting further on the matter until the cabinet completed its review, he added.
The issue was discussed in parliament early in December.
An audit service report showed that Nicholson had not stated all his business affiliations when applying for the position and as required by law.
The law states that Okypy members have a conflict of interest if they are linked to “any businesses dealing with health issues.”
Okypy members are also required to state the interests of up to 4th degree relatives.
But from an internet search the auditor-general discovered that Nicholson – former chief of Britain’s NHS – had not disclosed several associations.
For example, since May of this year Nicholson has served as interim chairman of the board of the Worcestershire Acute Hospitals NHS Trust, which provides hospital services to three hospitals in Britain.
And on a Register of Interests for Worcestershire Acute Hospitals, Nicholson had listed a number of interests, such as “Chair of Impact Evercare, 1 Billion Healthcare Provider, Africa and South Africa (based in Dubai).”
This data was omitted from his declaration of interests when applying for the job.
It also transpired that Nicholson’s wife is “Chief Executive of Birmingham Women’s and Children’s NHS Foundation Trust.”
Nicholson, who was present in parliament, conceded he had not declared all his professional and business affiliations, some of which might be construed as constituting a conflict of interest.
He had not done so intentionally, he stressed, adding that he has been a civil servant his entire life and has nothing to hide.
Nicholson is also associated with at least a dozen other organisations overseas, leading to criticism that he spends very little time on the ground in Cyprus.