HSE's new financial reporting system delayed until 2028 

Bernard Gloster: 'Deficit is guaranteed next year because of funding shortages.'

A new catch-all financial reporting model for the HSE is set to be delayed by a further three years into 2028.

The integrated financial management system (IFMS) will not be delivered in full until the end of July 2028, with the initial budget of €82m also likely to be exceeded, the HSE said.

The IFMS was conceived in 2014 as a means of bringing all of the disparate expenditure attributable to the HSE under one umbrella, making oversight of budgets and management of spending easier.

Budget approval was granted for the system in 2016.

It would also serve to reduce the health service’s use of non-compliant — that is not specifically tendered and competed for — procurement.

The health service, which has consistently overspent its €20bn-plus annual budget in recent years, has been reeling over the past month after a tighter-than-expected budget left it facing swingeing cuts in order to address its €1.1bn overspend.

In the fallout from the budget, all recruitment at managerial level within the HSE was suspended, a development that left the health service struck by a threat of immediate industrial action.

Procurement outside of public spending laws within the HSE was €144m in 2021 and has been consistently recorded as being in the tens of millions for many years.

In 2018, the Comptroller and Auditor General found that just under a quarter of HSE expenditure from “sample areas”, or €15.2m, was non-compliant.

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In 2016 the figure was 49%, albeit from a much smaller expenditure sample of €30.8m, with the non-compliant total €15.1m.

Previously, the HSE had planned to have roughly 80% of its procurement expenditure covered by a single system by the first quarter of 2024.

In an update for the Public Accounts Committee however, the HSE acknowledged that in the build-and-test phase of the project, sometime after September 2021, it had elected to terminate its system integration contract on a “no-fault basis”.

80% delivered by 2025

A new system integrator was selected following a public competition in June last year, the HSE said, and the 80% implementation timeline is now forecast for delivery by the start of November 2025.

Some €17m of the overall €82m budget had been spent at the time the second system integrator contract was granted in June 2022.

While the remainder of the project is budgeted at €59.4m, meaning the total committed amount is still within the €82m budget, the HSE said that committed, and to-be-committed costs, “mean the total costs of the project will exceed the... budget over the next number of years”.

It said that this fact means that “it will be necessary at a future point to seek an adjustment to the current €82m budget”.

Last week the HSE chief executive Bernard Gloster dismissed the notion that the HSE is “a bunch of wasters with public money” but said a deficit is guaranteed for next year because of funding shortages.