HSE review unable to explain advance payments for ventilators

None of the 465 machines received from China was ever used in a clinical setting, after 41% of 100 machines received failed the HSE’s clinical engineering tests. Picture: AP/John Minchillo

A HSE internal review of the acquisition of ventilators from China at the beginning of the Covid pandemic was unable to establish why 2,755 machines were bought and paid for in advance, when the "identified need" was for just 235 ventilators.

The internal audit review, released to the Irish Examiner under freedom of information, found that, between regular supply lines and machines procured from China via 10 separate suppliers, some 2,755 ventilators were paid for in advance between February and April 2020.

However, an estimate of ventilator requirements made by the HSE’s Medical Devices Criticality Assessment Group (MDCAG) in April 2020 had concluded that the “identified need was for 235 ventilators”.

“The basis on which the need for 1,900 ventilators as presented to the Department of Health on 21 March 2020 was estimated has not been provided to Internal Audit,” the review said.

With the HSE paying an average of €37,100 per ventilator, the overspend could be estimated at some €93m for the 2,520 excess machines.

None used in clinical setting

A total of 465 machines were received from China but none was used in a clinical setting, after 41% of 100 machines received failed the HSE’s clinical engineering tests, while of the 2,194 machines ordered from China, 1,729 were never received at all despite having been paid for.

The review said that “approval of orders and prepayments was ad-hoc with a formal audit trail unavailable in all instances to show appropriate approvals”.

No contracts with the 10 suppliers commissioned to provide ventilators from China, none of whom had a trading history with the HSE, were provided to the reviewers.

Meanwhile, a confidential due diligence position paper prepared by the HSE’s Health Business Services (HBS) section regarding one supplier, which highlighted “numerous concerns” but which nevertheless recommended actioning the deal, was never signed off formally by either the HSE’s chief executive Paul Reid or its chief clinical officer Colm Henry, the review said.

Aside from that paper, “no evidence was obtained by Internal Audit of any form of due diligence or risk assessment performed in relation to the other suppliers”, the review found.

In one instance “concerns” were raised with the HSE by a consultancy firm regarding another supplier, which had revenues of just $6.6m in 2019, yet the HSE subsequently paid the supplier an additional €8.2m despite those concerns. None of the 300 ventilators contracted for with that supplier was ever received.

Regarding that decision, and a similar decision to order 561 ventilators from regular suppliers during February and March 2020, “no evidence was provided to internal audit of who had approved these decisions or on what basis they had been made”, the review said.

A review of internal correspondence further found that in March 2020 a member of MDCAG was “informed verbally” by the Department of Health to “source as many ventilators as possible”.

Storing unused machines

Separately, since April 2020, the HSE has been incurring a cost of €750 per week with a logistics company which is storing the unused machines at a site in Dublin, the review said. This cost comes to around €48,000.

The internal audit review made three recommendations on the back of its findings, all three of which were rated high, denoting “significant risk of substantial financial loss”, “major non-compliance with procedures”, and requiring “immediate action”.

It recommended that in future an audit trail of all decisions and authorisations be kept regarding emergency purchasing decisions, that HBS continue to pursue “outstanding refunds of €35.2 million due to the HSE”, and that an “appropriate” decision regarding what should be done with the 465 unused ventilators received from China be taken.