€162k ‘potential’ shortfall for projects

THE internal HSE audit into the CUH Foundation has identified €162,000 worth of “potential” donation funding shortfalls for specifically stated projects in the hospital-linked charity.

One of the main conclusions of the two-year-long audit has noted that despite €288,000 of donations to the charity being the subject of ring-fencing by their providers, only €126,000 of this was put aside for these stated projects.

As a result, it said “a shortfall in funds available to meet specific charitable fund commitments is in the order of €162,000”, and must be addressed by HSE and foundation management “as a matter of urgency”.

In response, HSE South regional director of operations Pat Healy told the auditors that the €162,000 figure relates to “a potential funding shortfall only as the foundation has met all commitments as and when they arise”.

A spokesperson for the HSE also reiterated last night that the charity is now in compliance with all statutory companies office requirements, directorship disclosures, HSE national financial procurement regulations and charitable fund policies.

The ring-fenced donated funding received by the charity during the four years examined by the HSE investigation relates to €188,000 for paediatrics projects, €66,000 for a high-profile relaxation garden for new mothers, and €34,000 on a number of other initiatives.

The Cork University Maternity Hospital (CUMH) garden was the subject of a generous donation from Lord of the Dance star Michael Flatley and included costs of €39,726 in design fees — €8,142 of which was paid by the HSE — €24,106 for garden fixtures and €522 in expenses.

It also stated that in the charity’s accounts for 2008 — the year when the vast majority of the examined expenditure took place — the charity had a loss of €104,130 and retained members’ funds of €126,133.

Note 12 of the accounts for this year, the audit said, confirmed that “there are outstanding monies in respect of ring-fenced donations received. It is the intention of the foundation to honour all outstanding amounts as they fall due”.

A review of the foundation’s cash book for this year by the auditors also found that its bank account was €6,400 overdrawn at the end of December 2008.

During this year the foundation had expenditure of €445,000, income of €193,000. It also received an “innovation fund” of €100,000 from the HSE at this time.

A HSE spokesperson also told the Irish Examiner last night that the charity’s unaudited draft 2010 accounts show it has members’ funds of €135,000.

In order to address the “potential” funding shortfall for ring-fenced projects, the internal audit said the foundation should “adopt a charitable fund policy which will improve controls over the completeness and accuracy of income and also the appropriateness of expenditure, including value for money”.

It added that “the overall governance of the foundation might also be improved by encouraging greater openness and transparency”.

This has been agreed by HSE management.