Almost €1 billion paid by the HSE to organisations in the voluntary and community sector last year was not covered appropriate contract agreements, according to documents published on Thursday.
At the Public Accounts Committee (PAC), Comptroller and Auditor General Seamus McCarthy highlighted what was described as “inadequate monitoring and oversight of grants to outside agencies”.
He told committee members just 83 per cent of €6.8 billion in non-capital grant funding to voluntary hospitals and community sector agencies in 2023 was covered by “a completed bilateral agreement of the appropriate type”.
The measures vary somewhat and documents provided to Department of Public Expenditure and Reform show the HSE told it that €6.4 billion, about a quarter of the total HSE budget, had been provided to Section 38 and Section 39 organisations last year.
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The classifications cover everything from large independently controlled general hospitals receiving hundreds of millions of euro to provide services for the State to large well known voluntary organisations like Rehab and the Irish Wheelchair Association to small community care providers and groups. No wrongdoing on the part of any of the recipient organisations was suggested at any point.
The total number of organisations involved is put at about 2,100 and the amount of funding has increased from €4.7 billion in 2019.
Of the €6.4 billion the HSE said it had paid last year, 15 per cent was provided without “an appropriate contract agreement” being in place, the department was told. The exact figure involved is put at €976,696,751.
The percentage figure involved is down on 2022 when it was put at 17 per cent but compares with just 4 per cent in 2017.
The HSE agreed to outline a range of measures it was taking to address the situation and said Contract Management Support Units (CMSUs) had been fully established in 2022 with a view to providing greater oversight and management of the agency’s dealings with the Section 38 and 39 organisations.
Despite this, just 10 audits had been carried out on such organisations, many of which are almost entirely publicly funded, during the first six months of 2023. The PAC had previously suggested its members felt the number of audits being carried out was “very low” given the number of organisations and amount of funding involved.
The HSE has since committed, the department says, to review this number in its plans but also said the establishment of the CMSUs would help address to improve accountability.
At the PAC meeting on Thursday, it was separately suggested that the amount spent on procurement by the HSE on foot of procedures that were not entirely compliant could be about €500 million.
Green TD Marc Ó Cathasaigh put the figure to senior HSE officials, including CEO Bernard Gloster, on the basis that internal reviews of 38 per cent of spending had found the 12 per cent to be based on non-compliant arrangements.
If it applied to all HSE procurement spending of about €4.2 billion, “you’d be talking about quite a large figure,” acknowledged HSE chief financial officer Stephen Mulvany.
Mr McCarthy said, however, there was currently no way of knowing what the precise figure was.
Mr Gloster, meanwhile acknowledged the increase in spend on agency workers by the HSE – up from €423m in 2019 to €780m last year – needs to be addressed and said work on this was ongoing with 900 posts in the process of being transferred to permanent ones.
Asked about one hospital consultant earning almost €1 million last year, much of it for treating patients our of hours, Mr Gloster said systems were being improved as uptake on the new consultants’ contract continued to increase and the highest projected individual earnings for the current year is between €600,000 and €700,000. “So it is a reducing phenomenon”.
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