HSE accounting systems ‘outdated’

ARCHAIC accounting systems mean the Health Service Executive cannot manage its €15 billion budget properly.

A high-level report found the legacy of old health boards within the new HSE meant its accounting practices were “not fit for purpose”. Its finances needed to be more transparent, more coherent, more compatible and consolidated in a single bank account, it said.

Concerns with how organs of the HSE managed and built up debt prompted the commissioning of the Considine Report.

It said since the HSE assumed responsibility for its accounts from the Department of Health, financial controls were not adapted to meet the change.

“The accounting systems inherited by the HSE are no longer fit for purpose, in that they were not designed to cater for the current HSE structure,” the report said.

It said the two annual accounts the HSE was obliged to produce did not match up.

On the one hand it had to itemise the money allotted to it in the budget, and in a separate procedure it had to produce annual roll-over accounts.

But certain items, like outstanding debt, were included in one but not the other.

The report recommended the two systems remain but said the HSE should manage them better.

It revealed that in 2006 the National Treasury Management Agency warned the HSE it should not allow hospitals and agencies to build up hefty overdrafts.

The NTMA said it cost more to service the loans than take directly from national funds.

However, the report showed at the end of 2007 hospitals had built up a combined overdraft of €112.3 million. The overdraft facilities included:

* €19.4m for Tallaght Hospital.

* €18.7m for St Vincent’s.

* €16.4m for the Mater Hospital.

* €16.1m for Beaumont.

Last night the HSE said it did not have an overdraft, but said that individual hospitals could.

The report said the HSE had no control over local debt but it was the HSE’s responsibility to fix the issues. An internal steering group has been set up in advance of a new national financial system promised for 2011.

The report said the HSE had identified legal issues with eliminating overdrafts altogether and in the meantime the overdraft limits should be frozen.

The recommendations, which were published yesterday, were made by the working group on certain practices in the HSE, chaired by former secretary general of the Department of Finance Tom Considine.

Early submissions from the Department of Finance asked the HSE for a clearer outline of financial controls and the responsibilities of its chief executive Professor Brendan Drumm.

Launching the report, Health Minister Mary Harney said it had brought clarity to who had overall responsibility for the HSE budget.

“Over €15bn in taxpayers’ money is made available annually to the HSE and financial management and control systems are, clearly, hugely important,” she said.