Committee of Public Accounts Meeting - July 2016

 Opening Statement by Mr. Tony O’Brien, Director General, Health Service Executive

 

Good morning Chairman and members of the Committee.

 Thank you for the invitation to attend the Committee meeting today. 

 I am joined by my colleagues:

  • Ms Anne O’Connor, National Director, Mental Health Division
  • Ms Rosarii Mannion, National Director, Human Resources
  • Dr. Geraldine Smith,  Assistant National Director, Internal Audit Operations
  • Mr Gerry Raleigh, Director, National Office for Suicide Prevention

 

Introduction

Chairman and members you will have received a copy of the HSE Internal Audit Report on Console together with other information related to the topics for examination this morning. In my opening statement I would like to make the following points.

 The HSE funds over 1,700 Voluntary Agencies which operate over 2,600 separate funding arrangements to a value of approximately €3,3bn.  39 of these agencies, accounting for €2.6bn are funded under Section 38 of the Health Act, 2004 with the remaining agencies funded under Section 39 of the Act.

 

Governance and Service Arrangements

 In 2009 the HSE developed a formal national governance framework with National Standard Governance Documentation, Service Arrangements and Grant Aid Agreements to manage the funding provided to these agencies and this came into operation throughout the HSE in 2010.

Four standard documents are in use as follows:

  • Section 38 Service Arrangements cover the 16 Voluntary Hospitals and the group of 23 major non acute voluntary community agencies, in total 39 Agencies which include St John Of God Community Services Ltd.
  • Section 39 Service Arrangements cover all voluntary and community agencies, other than the above, in receipt of funding over €250K, currently 304 Agencies which include Console.
  • Section 39 Grant Aid Agreements cover all agencies in receipt of funding under €250K, the vast majority of Agencies fall into this category with some 1,362 Agencies currently funded; and
  • For Profit Service Arrangements cover all agencies in the commercial for profit sector regardless of funding level, currently some 218 Agencies.

The HSE has sought to enhance governance arrangements with both Section 38 and 39 Agencies over the past number of years. In particular, the HSE has established a Compliance Unit to support the development of a strong and consistent compliance culture across all agencies funded by the HSE. The Service Arrangements underpin the HSE’s relationship with the funded agencies and in addition we have introduced an Annual Compliance Statement (ACS) process whereby the Chair and another Director of the Board of each Section 38 Agency signs and confirms that the agency is compliant across a range of requirements on behalf of the Board.

In early 2015, as part of the ongoing development of the Compliance Process it was decided that a review of governance by external consultants would be carried out in these agencies in order to provide external assurances to the HSE.  These reviews commenced in March 2016 and are ongoing.

The HSE also has a number of processes in place to assure itself that the services it purchases from HSE funded Agencies are of a high quality and provide value for money. I will describe some of these processes in place since 2013 as I provide an overview to two of those Agencies, the charity Console which is a Section 39 Agency and St. John of Gods, a Section 38 Agency.

As the Service Arrangements underpin the relationship between the HSE and these funded agencies it is important to note that the HSEs powers in this regard are confined to the funding it provides and the services provided in return for that funding subject to the terms and conditions as set out in the Service Arrangements.  In this context, with the limited number of HSE Internal Audit and Compliance Unit staff, careful consideration needs to be given to the Section 38 & 39 agencies that are subject to audit and review.

 

Console Suicide Bereavement Counselling Ltd (Console)

There has been much coverage in the media relating to Console and the findings of the recently completed HSE Internal Audit. I thought it would be helpful if I outlined briefly the sequence of events that led to this Audit. Console is a Section 39 Agency that receives approximately 40% of its funding from the HSE.

Funding to Console remained relatively static between 2006 and 2013 when it increased from €252,000 in 2012 to €599,000 in 2013. HSE funding increased at this time to prevent the collapse of a National Suicide Helpline previously funded by another organisation.

This increase in funding to Console at that time was predicated on the charity agreeing to a greater level of scrutiny and enhanced governance by the National Office for Suicide Prevention (NOSP). It was this increased level of scrutiny by NOSP that gave rise to a number of concerns including Console’s continued failure to respond to requests for information, delivery on commitments to commission independent reviews of its service and failure to attend significant meetings (particularly relating to the helpline) and to their Annual Accounts. Arising from these concerns in late 2014, NOSP approached HSE’s Internal Audit Division and requested that Console be included in their Audit Work Plan for 2015.

In April 2015 the Internal Audit division wrote to Console advising that the Audit would commence on the 27th April 2015. Following a request from Console the Audit start was deferred and commenced on the 19th May 2015. This audit should have taken approximately 12 weeks to complete. However, the audit was particularly complex and challenging and the auditors met with considerable resistance from the then CEO. The audit was completed in April 2016. At all times the auditors were careful to follow fair procedures and due process.

The Audit Report which members were copied with sets out the sequence of events that followed.

 

Saint John of God Hospitaller

Finally I wish to advise the Committee that on the on 1st July 2016 St John of God Order (SJOG) informed the HSE that a number of payments had been made to 14 of their senior staff in 2013.

It is important to point out to the Committee that in September 2013 the HSE sought written confirmation from all Section 38 Agencies – including St. John of Gods - that :

All remuneration paid to employees was in accordance with DOH consolidated pay scales.

  • Non- exchequer sources of funding were not being used to supplement employee remuneration to give rise to rates of individual remuneration that exceed DOH consolidated pay scales.
  • If unsanctioned payments were previously paid, all such payments had ceased and the recoupment of any overpayments would be pursued as expeditiously as possible;

An important element of the declarations sought at that time was full disclosure in relation to these matters.

St John of Gods has declared itself as non-compliant with public sector pay policy. This declaration and other recent revelations regarding the payments to the 14staff members are a matter of very grave concern for me and the HSE.

Consequently, I have asked HSE’s internal audit Division to conduct a Review of these matters as a matter of urgency. In this regard, St John of Gods was written to by HSE’s Internal Audit on July 8th 2016 and asked to provide information and points of clarity by July 20th. The HSE received a solicitor’s letter in response to the Audit process. The HSE intends to pursue its internal audit process notwithstanding.

This concludes my opening statement and together with my colleagues we will endeavour to answer any questions you may have.                                                                          

 

Last updated on: 15 / 07 / 2016