Ministry of Health's furniture shuffle 'Cash Converters financial management'

Health Minister Jonathan Coleman (File)
Health Minister Jonathan Coleman (File)

Labour's accusing the Ministry of Health of pulling a 'Cash Converters' act after it sold $1.5 million worth of office furniture, then leased it back to itself.

Earlier this year the ministry had to ask the Government for an $18 million bailout after bungling the cost of a refit to its Molesworth St office.

Newshub can now reveal the ministry sold the office furniture it bought, and is leasing it back to itself.

Financial documents detailing ministry spending did not name the buyer.

Labour health spokeswoman Annette King has described the situation as "Cash Converters financial management".

"First they buy the furniture, then they sell the furniture, because they're broke they lease it back," she says.

She says it's a waste of money and the whole handling of the building upgrade had been a "disaster."

"They withheld information from the Minister of Finance about the $18 million that they didn't have," she says.

"At the end of the day the final buck rests with the Minister [of Health Jonathan Coleman]."

Mr Coleman said he didn't know about it and directed Newshub to the Director-General of Health.

Ministry of Health Acting Chief Financial Officer Fergus Welsh says leasing furniture is standard practice.

"As a result of leasing the furniture the Ministry released some funds which are then available for other operational costs and capital investment," Mr Welsh says.

The project to refit the Wellington head office was approved by the Government in 2014, after the ministry said it could meet the $24 million cost.

But the ministry later learned its financial team had miscalculated and it couldn't afford to finish the project, and asked Government for a bailout to finish the job.