HSE internal audits July-December 2015 - Concern over award of €338k contracts

A potential conflict of interest has been identified by the HSE in an audit of the manner in which contracts worth €338,000 were awarded to a private firm by a hospital group whose chief executive had a business interest in the same company.

Bill Maher, former CEO of the Saolta University Healthcare Group (SUHG), still had a business involvement with Northgate, a private company specialising in public service contracts, when it was hired to provide a clinical information management system (CIMS) worth €151,500 for what was then the Galway Roscommon University Hospital Group.

His involvement had not ceased when an IT manager was seconded from Northgate to SUHG at a cost of €148,445 and when catering and cleaning contracts, each worth €4m, were drawn up in 2012, with Northgate assisting in drawing up specifications at a cost of €38,171.

Mr Maher, appointed chief executive of SUHG in December 2011, told the audit team he did not end his contract with Northgate until March or April 2013. Asked if he had benefited in any way from Northgate prior to and/or during the procurement of the CIMS contract, he replied “yes”, that he received consultancy fees, “but declined to state the benefit in money terms as he stated this was commercial in confidence”, said the auditors.

Mr Maher defended his position to the HSE internal auditors, who, in a report released yesterday under the Freedom of Information Act, said they “could find no evidence of a competitive tendering process” for CIMS, contrary to regulations.

Mr Maher’s claims he was “not involved in any aspect of procurement” of Northgate’s CIMS, that it was essentially a matter for then chief operations officer Tony Canavan, were rejected by Mr Canavan.

“The decision to purchase CIMS was not taken by me and I did not contribute to it. As far as I am aware the service was sourced by the CEO and the decision to purchase CIMS was taken by the CEO,” said Mr Canavan.

He said his role was to process invoices for payment. He also claimed he was “not aware at that time that the CEO had any connection with Northgate” and that it was Mr Maher who introduced him to the company. Mr Maher and Mr Canavan both made the point that at the time, no other supplier was able to provide the service provided by Northgate.

The auditors concluded that Mr Maher’s business involvement with Northgate was ongoing when three of six contracts (totalling €393,000) were awarded to the firm, noting his claim that he was “not involved in the initial sourcing of Northgate... or in the subsequent approval of payments”.

The auditors also noted Mr Maher’s claim that he verbally disclosed his business interests to the former chair of the SUHG board but that in their opinion, he should have disclosed it to senior HSE management.

The audit team made six recommendations including that a register of interests be established for senior management in all hospital groups and that this be reviewed when sourcing potential suppliers.


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