PAC Hearings: HSE slammed over financial management

The HSE has been strongly criticised over how it manages its finances after the Public Accounts Committee heard that a future settlement with Revenue about underpayment of tax is likely, and about €2.7m worth of medicines passed their use-by date.

The director general of the HSE, Tony O’Brien, and senior colleagues in areas such as procurement yesterday appeared before the PAC to discuss a number of issues, including the huge amount of money— €290m — the HSE is owed by private insurers.

Mr O’Brien also came in for some personal criticism over a recent trip he made to a health conference at which he spoke in Madrid, the costs for which were covered by the company which organised the event, the medical device manufacturer Acelity.

The PAC heard the HSE owes €9m in compensation for failure to make prompt payment for the period from March 2013 through to the end of last year, while St James’s Hospital and Beaumont Hospital are owed €389,000 and €299,000, respectively. Most creditors should have been paid within a 30-day period.

There were also drugs — including hi-tech medicines — to the value of €2.7m that had gone out of date, but the Comptroller and Auditor General said that this figure “probably understates the actual level of wastage of hi-tech drugs over the course of the year”.

Regarding the stock of medicines, the C&AG said a balance must be struck so required drugs are available, while minimising wastage.

On the issue of late payment, Mr O’Brien said: “Almost half of the payments to vendors in 2014 were for payments of less than €5,000, with only 10% of suppliers receiving payments of €100,000 or more.”

Director general of the HSE, Tony O’Brien
Director general of the HSE, Tony O’Brien

He said the HSE processes almost 2m invoices every year to more than 20,000 suppliers through eight major payment centres using multiple financial payment systems.

Mr O’Brien also outlined how, following a detailed internal review of HSE tax heads for 2011, 2012, and 2013, the HSE agreed a final payment of underpaid taxes including penalties and interest of €22.4m with Revenue last August.

He also signalled the possibility of a similar future settlement by stating “there may be broadly similar issues arising in 2014”.

Conversely, the HSE is owed €290m by the private health insurers, with PAC members querying the slow rate of collection. PAC member Seán Fleming of Fianna Fáil responded by stating: “I have never seen such a bad catalogue of disregard for the laws of the land as we have seen here today.”

On questions over a recent RTÉ PrimeTime programme on allegations surrounding hospital procurement practices — which sparked an internal inquiry at St Vincent’s Hospital — the PAC heard the HSE could not break off working arrangements with the company in question until there was a legal grounding to do so. Mr O’Brien said: “We have nothing but allegations at this period of time.”

St Vincent’s Hospital
St Vincent’s Hospital

On the issue of Mr O’Brien’s attendance at the Madrid conference — for which costs were covered and a donation made to an Irish charity — Mr O’Brien said he had spoken at the conference, and that it had been decided a member of the HSE procurement team should not accept an invite as, unlike Mr O’Brien, there was more likelihood of direct dealings.

But John Deasy TD said: “I do think it opens you up to compromise.”

Regarding money owed to the HSE, the PAC heard that the level of querying by insurers had increased, which has led to an element of delay. The HSE wants a payment on account system.

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