Charity set up without HSE consent

THE hospital charity at the centre of a two-year health service investigation over its expenditure was set up without HSE consent.

The HSE’s internal auditors have concluded there is “no evidence to confirm approval was given” to establish the Cork University Hospital (CUH) foundation on January 12, 2006.

According to the HSE audit, the foundation was set up as a company limited by guarantee and was designated for charitable tax status.

It was “primarily created to provide a facility for donors to make financial contributions that would enable CUH undertake projects and/or equipment purchases”, with this money coming from donations by patients, families and private individuals.

In December 2005, a CUH official contacted the then HSE South’s local hospital network manager “seeking the approval of the HSE to the establishment of the foundation”. However, the internal audit noted “no response confirming this approval could be found”.

While there was no confirmation that the foundation could be set up with HSE approval, the internal audit said “management at CUH sought legal advice in 2005 on how best to establish the foundation”.

The charity’s memorandum and articles of association were then drafted to ensure the foundation “would act to supplement the work of the HSE rather than to reduce the need for public funding”.

A second “objects clause” was also drawn up to “enable generous philanthropic donors to attach conditions to gifts, thereby further restricting the scope of trustees,” the report noted.

While the HSE had yet to approve the establishment of the foundation, senior officials at CUH created the group on January 12, 2006, one month after the request had been made.

When the foundation was set up, its directors were CUH chief executive Tony McNamara; deputy general manager Tony Long; and director of nursing Dr Mary Geraldine Boyd. Its initial secretary was financial officer Terry Kiely.

The final conclusions of the internal audit said: “The foundation was established as a company limited by guarantee, but there was no evidence to confirm approval was given for this by the HSE.”

A management response contained in the audit said an additional eight new directors were appointed to the foundation last October and November.