To introduce this and to refresh the committee's memory on these matters, the entitlement of a person to a nursing home subvention depends on the level of dependency and on an assessment of their means. In calculating a person's means, regulations made in 1993 provide that health boards should disregard a sum of money equal to one fifth of the non-contributory old age pension. This money was to be retained by the person for personal use.
As a result of a lack of clarity about how the regulations should be implemented, even within the Department itself up to December 1996 - the Ombudsman has been critical of the Department in that respect - different interpretations of the regulation emerged between the health boards. Definitive legal advice was obtained by the Department at the end of 1996, but this conflicted with the practise in most health boards. The effect of the incorrect interpretation was to reduce the amount of subvention towards the cost of maintaining eligible persons in nursing homes. In 1998, the Department provided an additional £4 million to six health boards to enable them eliminate the arrears and meet other liabilities in connection with the scheme.
Earlier this year, as the committee is aware, the Ombudsman issued a report on his investigation into nursing home subventions which established, among many other things, that most health boards had not been applying the rules regarding means properly and had been slow to pay arrears to those who had been underpaid as a result of the misinterpretation. In his report the Ombudsman stated that untangling the detail of what precisely happened the additional allocation would involve a separate investigation.
Consequently in my capacity as statutory auditor of the health boards, I instigated a special audit to determine the extent to which the health boards in question had met their obligation to pay arrears of the subvention to the affected persons from funds provided for that purpose by the Department. I established that the six health boards in question, the Midland Health Board, the Mid-Western Health Board, the North-Western Health Board, the Southern Health Board, the South-Eastern Health Board and the Western Health Board, were slow in paying the arrears. Even though the money was provided in 1998, four of the six health boards did not start paying arrears until 2000. Looking at it another way, the total amount of arrears payable was £2.2 million, but by June 2001 just over half this amount had been paid out. Funds provided for the payment of arrears were generally used for otherservices for the elderly within the health boards.
In the report I also make reference to an inconsistency in the awarding of a discretionary top-up payment to nursing home patients and this is in addition to the matter that Iinvestigated. For example, in the case of the Western Health Board, which makes these discretionary payments on a particular basis, it has been estimated that arrears of £2.25 million could be payable. As I understand it, thepractice in other health boards may differ from that.
In the light of what happened on nursing home subventions, I would have had a concern that the use of different criteria across health boards for deciding on the award or the level of award of discretionary payments could ultimately have negative financial implications for the Exchequer. The Department's view does not foresee such an outcome. I hope they are right on this occasion.
In summary, the initial failure on the part of the six health boards to correctly apply the means provisions to nursing home regulations was compounded by the inordinate delay in paying arrears to those who had been disadvantaged by the misinterpretation. In my opinion it is incumbent on public bodies such as health boards to have procedures in place to ensure that those who are deprived of their entitlements because of administrative error have the matter remedied within a reasonable period. All six health boards were less than diligent in this regard.
Finally, Chairman, I wish to put on record that I received a letter today from the chief executive officer of the North-Western Health Board informing me that the figure for arrears of subvention furnished by that board for the purpose of my report was overstated by £83,243 due to an error on their part in classification. The relevant figures in my report should therefore be adjusted accordingly.