HSE fined €9m for late pay to suppliers

Money management in the HSE has been described as shocking by the Dáil’s financial watchdog after it emerged that €9m was wasted on penalties for late payments to suppliers.

The chairman of the powerful Oireachtas Public Accounts Committee, John McGuinness, said that it “beggars belief” that the health service squander such resources.

The comptroller and auditor general spotted the issue when auditing HSE books as a €9m provision had to be made because the HSE had not implemented new laws stating that unpaid suppliers were due compensation, as well as interest payments on the money owed.

Mr McGuinness insisted that HSE bosses would be probed by the committee regarding the matter.

“That’s extraordinary, that the legislation would, by and large, be ignored as the clock was ticking they were running-up a cost of €9m and nobody felt it necessary to cry stop and pay the suppliers,” said Mr McGuinness.

“It just beggars belief as to the state of the management within the HSE. It’s shocking.”

The comptroller and auditor general said the compensation owed built-up in the 18 months from May 2013.

“There was originally a provision to pay interest on monies that hadn’t been paid to suppliers, but in addition since 2013, there has been a further requirement to pay compensation, and they didn’t implement that,” he said.

“By the end of 2014, the total compensation that had not been paid to suppliers amounted to €9m.”

If a public body fails to pay an undisputed invoice within 30 days, it must pay the supplier interest on the amount as well as compensation.

The chairman of the Oireachtas health committee, Jerry Buttimer, expressed despair at the failure of HSE managers to get a grip on waste.

“This displays excruciatingly bad management on the part of the HSE,” said Mr Buttimer. “Given that the HSE has so many managers, you would have hoped they would be able to spot something like this happening before it develops into a €9m bill.

“It is also a very poor way to treat suppliers and businesses. We really need to see the HSE exercise more control over the money it has, so that it goes on services and is not wasted on late payment penalties.”

Independent TD Finian McGrath said the casual loss of such a large amount of money was appalling given the cutbacks in key areas of spending such as mental health.

“I am totally outraged and appalled by this. It amounts to gross incompetence and unacceptable,” said Mr McGrath.

“My concern is that this sort of thing goes on a lot, they need to up their game at the HSE and start behaving in a professional manner with people’s money.

“This is particularly annoying as parents who send their severely physically and mentally disabled children to a day centre in my constituency have been told the place will not be open in July and August now. That is so they can save €150,000, yet they go around wasting €9m on penalties for late payments.”