Four months after the federal government pledged $1.5 million in emergency funding to help the crisis-laden community health organisation stay afloat, cohealth paid a recruitment firm more than $65,000 to find it a new interim chief executive, before ultimately hiring an existing employee who was the only applicant interviewed.
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who → pledge → employee
The prominent local health provider operates general practitioner, counselling and pharmacy services for low-income residents across Collingwood, Fitzroy and Kensington and has been plagued by severe financial and management issues.
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provider → operate → issues
Free medical services and its Collingwood clinic were on the chopping block last year, but were saved following extreme community backlash and a last-minute federal funding pledge.
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services → save → backlash
Further spending can now be revealed during the recent search for the organisation’s interim chief executive, Kate Gillan.
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spending → reveal → executive
A confidential proposal from Melbourne-based recruitment agency Watermark Search International – seen by The Age – was prepared for cohealth in March.
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proposal → base → March
In a projected breakdown of costs, Watermark offered cohealth a discount from its standard fee of 25 per cent of the chief executive’s first-year remuneration package (which it estimated to be between $112,500 and $122,500 in this instance) to a fixed fee of $65,000 plus GST – bringing the total proposed bill to $71,500.
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it → project → 71,500
Watermark’s 51-page-document cites the reduced fee as an acknowledgement of the organisation’s recent financial difficulties.
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document → cite → difficulties
“We understand the critical nature of this appointment and have a genuine commitment to excellent healthcare leadership.
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We → understand → leadership
We would welcome the opportunity to be a long-term partner to cohealth,” the Watermark proposal reads.
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proposal → welcome → cohealth
A cohealth insider with knowledge of the recruitment process, but not authorised to speak publicly, said that the fee was far too expensive for a company experiencing significant financial issues.
“In the middle of a crisis, they paid a recruiter $65,000 to appoint an internal candidate.
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they → authorise → candidate
That is poor stewardship of our money,” they said.
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they → say → money
A spokesperson from Watermark confirmed that the firm was engaged to conduct a search on behalf of cohealth, but declined to confirm their fee.
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firm → confirm → fee
“The appointment process was supported by market insight and a thorough interim search process conducted with appropriate diligence,” they said.
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they → support → diligence
Internal cohealth documents indicate that Watermark initially scheduled interviews with three approved candidates on behalf of the community health organisation.
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Watermark → indicate → organisation
But following the resignation of the then-chair Sam Sondhi, the recruiter scrapped these applicants and instead recommended the “strongest immediately available candidate” – Gillan.
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recruiter → follow → candidate
According to internal documents seen by The Age, Gillan – who was already employed at the organisation – was the only candidate put forward by the recruitment firm.
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who → accord → firm
The Victorian Department of Health – one of the external bodies consulted throughout the appointment process – indicated its preference for an alternate candidate to Gillan.
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Department → consult → Gillan
However, the cohealth board cited immediate leadership requirements and appointed Gillan to the interim position in July, with a nine-month contract and a $488,000 total annual remuneration package (the top end of the salary range outlined by Watermark).
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board → cite → Watermark
A cohealth spokesperson declined to answer questions regarding the recruitment fees or appointment of an internal candidate.
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spokesperson → decline → candidate
They said that Gillan was an experienced executive with a strong track record in reform, governance, strategy and operational performance.
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Gillan → say → reform
“Cohealth engaged [Watermark] to recruit an interim chief executive officer to provide experienced and stable leadership for nine months while recruitment for the permanent CEO position is undertaken,” they said.
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they → engage → position
A Victorian Department of Health spokesperson said it “remains focused on supporting cohealth as it implements the recommendations from the independent review”.
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it → say → review
A spokesperson for the federal Department of Health, which was also consulted regarding the interim executive search, said decisions were ultimately a matter for the board.
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decisions → consult → board
The search for a permanent chief executive will commence next year, with Gillan’s contract due to end in April.
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contract → commence → April
Gillan was approached directly for comment.
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Gillan → approach → comment
The high recruitment fees are the most recent accusations of overspending at the well-known health organisation.
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fees → overspend → organisation
The Age previously reported that across the last eight months, the not-for-profit was spending over $1 million on senior staff salaries and crisis communication fees.
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the → report → salaries
Last month, cohealth’s board also underwent a significant overhaul when, on September 23, three directors officially vacated their positions and six new people were appointed onto the nine-person board to create “an entirely renewed executive leadership team”.
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people → undergo → team
The board was previously on the precipice of being replaced by a state administrator following an independent review that chastised the organisation for severe financial and management failures.
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that → replace → failures
Board monitor Chris Altis was also appointed by the government to the organisation in August for an initial 12-month term.
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Altis → appoint → term
Internal cohealth communications indicate that a gift from the luxury Danish designer Georg Jensen was suggested as a potential thank-you present for the outgoing directors.
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gift → indicate → directors
A cohealth spokesperson declined to answer questions asked by The Age about gifts provided to the outgoing directors.
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spokesperson → decline → directors
“All [directors] are committed to guiding a refreshed cohealth through its next chapter as the organisation continues to respond to the recommendations of the Independent Review into its GP services,” they said.
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they → commit → services
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