HSE to spend €82m on new expense compliance system

Pandemic has hampered rollout, but 80% of procurement is expected to be covered by new system by 2024
HSE to spend €82m on new expense compliance system

Paul Reid, the CEO of the HSE, which is to spend €82m on the integrated financial management and procurement system (IFMS). File Picture: Brian Lawless

The HSE is to spend €82m on a new centralised procurement system to comprehensively measure expenses non-compliant with public spending rules.

The executive had informed a previous Dáil public accounts committee (PAC) that it was not in a position to estimate how much of its spending was in violation of procurement law due to its reliance on “multiple legacy systems”.

In a briefing note to the current PAC on the planned replacement system, known as the integrated financial management and procurement system (IFMS), the HSE said that €11.99m had been spent to the end of December last.

A budget of €82m applies to the project overall per its approved business case dating from 2014, the HSE said.

€3.9m software solution

The largest expenditure to date, some €3.9m, was spent on the acquisition of a cloud-based software solution to cover the entire organisation, designed by German company SAP.

The contract for implementing that solution was awarded in December 2019, the HSE said.

It was due for completion in 2024, though that date may already have been delayed by Ireland’s extended period in lockdown and the redeployment of personnel within the HSE to deal with the Covid-19 crisis.

The HSE’s project, it said, bears no similarities to a similar payroll project being implemented by the National Shared Services Office, one whose budget had more than doubled to €115m.

Contract suspended

The implementation of IFMS meanwhile had been hampered in recent months, the HSE said, due to the surge in Covid-19 in the community from January of this year.

The project’s governing officials duly suspended the contract for the project’s delivery in order to take advantage of a no-penalty pause as provided for within the deal’s terms. The project was resumed on April 7 after a 12-week hiatus.

Speaking last September, the HSE’s director of parliamentary affairs, Ray Mitchell, said that while the executive does not currently “have full visibility” of its procurement, it “has a plan” to have roughly 80% of that procurement covered by a single system by the first quarter of 2024.

Non-compliant expenditure

In 2018 the Comptroller and Auditor General (C&AG), the State’s accountant, found that just under a quarter of HSE expenditure from “sample areas”, or €15.2m, was non-compliant. In 2016 the figure was 49%, albeit from a much smaller expenditure sample of €30.8m, with the non-compliant total €15.1m.

At the beginning of the Covid pandemic, the HSE spent roughly €1.1bn in just two months on emergency procurement of PPE and medical equipment following the emergency waiver of tendering rules.

That period of spending and the returns from same is expected to be the focus of the C&AG when it publishes its audit of the State’s public service accounts in September.

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