COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 24 Jul 2003

Vol. 1 No. 26

Western Health Board - Annual Financial Statements 2000 and 2001.

Dr. S. Ryan (Chief Executive Officer, Western Health Board) and Mr. P. Gaughan (Chief Executive Officer, Midland Health Board) called and examined.

Chairman

I welcome Dr. Sheelah Ryan, chief executive officer, Western Health Board, and Mr. Pat Gaughan, chief executive officer, Midland Health Board. We are dealing with the annual financial statements for 2001 in respect of the Midland Health Board and the annual financial statements for 2000 and 2001 in respect of the Western Health Board.

Witnesses should be aware that they do not enjoy absolute privilege and apprised as follows. As and from 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act 1997 grants certain rights to persons identified in the course of the committee's proceedings. These rights include the right to give evidence; the right to produce or send documents to the committee; the right to appear before the committee, either in person or through a representative; the right to make a written and oral submission; the right to request the committee to direct the attendance of witnesses and the production of documents and the right to cross-examine witnesses. For the most part, these rights may be exercised only with the consent of the committee. Persons invited to appear before the committee are made aware of these rights and any persons identified in the course of proceedings who are not present may have to be made aware of them and provided with a transcript of the relevant part of the committee's proceedings if the committee considers it appropriate in the interest of justice.

Notwithstanding this provision in legislation, I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House, or an official, either by name or in such a way as to make him or her identifiable. They are also reminded of the provision contained in Standing Order 156, that the committee shall refrain from inquiring into the merits of a policy or policies of the Government, or a Minister of the Government, or the merits of the objectives of such policy or policies.

I ask Mr. Gaughan and Dr. Ryan to introduce their officials.

Mr. Pat Gaughan

I am accompanied by Mr. John Cregan, deputy chief executive officer, and Mr. Diarmuid Collins, director of finance.

Dr. Sheelah Ryan

I am accompanied by Mr, Séamus Mannion, regional manager, community services, and Mr. Liam Minihan, director of finance.

Chairman

I ask Mr. Watters, Department of Health and Children, to introduce his official.

Mr. Eunan Watters

I am accompanied by Ms Fiona Prendergast, assistant principal officer, finance unit.

Chairman

I now ask the Comptroller and Auditor General to introduce the accounts.

Mr. John Purcell

I am aware that you wish to take both sets of accounts together. The accounts of health boards are laid out in a format prescribed by the Department of Health and Children. They are detailed and give a fair picture of how the financial allocations have been spent. Current expenditure is categorised as either pay or non-pay and analysed under three programmes - general hospitals, special hospitals and community care, with figures for central services spending. Income is analysed under the same heading, as is capital expenditure. The accounts are prepared on an accruals basis, except for a few classes of income and expenditure, where it would be inappropriate to do so. Examples include income in respect of road traffic accidents, where it is unclear what would be ultimately received. There is also a balance sheet, on which fixed and current assets and liabilities are recorded.

Generally, health boards have been living within their financial allocations in recent years, except for the last year or so where there has been a tendency in some for capital deficits to start appearing. This is an issue I am examining and on which I expect to report later this year. On an operational basis, health boards have not been over spending, which is to their credit. The question arises, however, as to how well they are using the money allocated to them each year to provide the required services. Here we must consider factors such as how the annual budget is determined, how spending priorities are set, the manner in which staff numbers are determined, controls over grants to outside agencies and specific value for money initiatives undertaken by the boards and, ultimately, measurement of their performance.

The accounts are limited in their value as a means of comparing one health board against another because the financial outturn will reflect difference in catchment population, size and type. To move towards assessing performance, one would need to get behind the figures in the accounts to establish meaningful ratios. Perhaps the annual publication of this type of information is a matter to be looked at in the context of the new structures for delivery of health services proposed in recent reports.

Turning to the accounts before the committee, I was able to give a clear audit certificate to the Midland Health Board on its 2001 accounts. As I mentioned in private session, the fieldwork on the 2002 accounts has been completed. Once some review points have been resolved, I hope to be in a position to certify the accounts well in advance of the statutory date - a real advance in terms of time limits.

The position in the Western Health Board is slightly different. There was a serious problem in finalising the audit of the 2000 accounts, mainly due to an inability on the board's part to show how important figures in the accounts were derived from the underlying records. This took some time to resolve, with the result that the accounts were not certified until July 2002. The circumstances are set out in a separate report which should be included in the members' papers. This had a knock-on effect for the 2001 audit but the board appears to be back on track as far as the 2002 accounts are concerned, the audit of which is under way.

Chairman

We will now hear an opening statement from Mr. Gaughan.

Mr. Gaughan

The health board's annual financial statements for 2001 were formally adopted by the board at its meeting on 21 March 2002 and forwarded to the Comptroller and Auditor General on 28 March. The audit of the accounts was completed by the Comptroller and Auditor General in February 2003. A clean audit certificate was issued by him; it was not necessary to issue any notice under sections 4 and 6.

At the beginning of 2001 the health board had a small opening deficit of £24,000. During 2001 it received an additional allocation of £1.307 million in respect of the year 2000 and prior years' expenditure on demand-led schemes and superannuation. This resulted in a revised opening surplus of £1.283 million in respect of 2000 and earlier years. For the year 2001 the board's net expenditure was £242.209 million as against an allocation of £241.507 million, giving net over-expenditure of £702,000. The gross cumulative surplus carried forward to 2002 was £581,000.

As was the case in previous years, this overspend included costs incurred under certain Supplementary Estimate headings such as demand-led schemes, superannuation and medical indemnity for which funding was due to the health board. In 2002 subsequent adjustment for these items resulted in a final net surplus in 2001 of €775,000. During the course of the audit all matters relating to the accounts raised by the staff of the Office of the Comptroller and Auditor General were replied to by the board to the satisfaction of the auditors.

Chairman

I invite Dr. Ryan to make a statement on behalf of the Western Health Board.

Dr. Ryan

Does the Chairman wish me to address the 2000 and 2001 accounts together?

Chairman

Yes.

Dr. Ryan

The Western Health Board submitted annual accounts for 2000 in accordance with legislation. Committee members will be aware from the Comptroller and Auditor General's report that accounting anomalies were highlighted and queried by him and that these have been addressed. The principal changes needed were in the balance sheet. On one side the outstanding capital receipts figure which should have been posted to the 2000 accounts as a debtor were omitted and, on the other, a figure for outstanding cheques was also omitted. Coincidentally, these figures were the same which meant the discrepancy was not picked up until after the draft accounts had been submitted. The errors have been corrected, there is no fraud, loss of public funds or intention to deceive. We ended the year with a €1.3 million credit balance, or 0.35%.

Notwithstanding the exceptional personnel circumstances that gave rise to the pressures in completing the audit, additional measures have been put in place to prevent any recurrence of the problem. All the processes in finalising the accounts are documented. The completion process is not dependent on specific personnel and, therefore, vulnerable in their absence. I am satisfied with the current checks and balances in place. We hope to change to SAP financials in the not too distant future.

The 2001 draft accounts were delayed, as the Comptroller and Auditor General reported, as a direct consequences of the 2000 experience. They were approved by the health board on 4 November and we received a clear audit certificate. We ended the year with a cumulative credit balance of €2.7 million, or 0.45% of our budget, and are now almost back on track with the timescale for the financial accountability process.

I thank the Comptroller and Auditor General for his report and apologise to him and his staff for both the delay and the additional work caused, especially in 2000, the first year the health board had ever received a qualification to the accounts. We have learned from the experience.

Chairman

In the light of the pending changes in the health boards, we hope over the next few weeks to deal with each board. The issues to be explored will be: management and delivery of services, primary care services, child care, family supports, services for older people, services for persons with a disability and mental health services. These will be analysed in the accounts to see which health boards are performing well in which areas. Duplication, value for money in capital spending within each health board, how money was spent in each category and central purchasing are other possibilities for scrutiny. Other important areas for examination would be the duplication of administration as well as sections 26 and 65 which involve the disbursement of a huge amount of funds by health boards to bodies within their remit and examining what controls they have to ensure money is well spent. I hope members, in focusing on these issues, will produce a successful analysis in order that, in the final report, we can assess where each health board has performed better than the others in the area of services and ensure the money provided for services resulted in their being made available.

This is the format we intend to pursue with each health board. This meeting is the beginning of the process. We hope that, by the time we have covered all 11 health boards, we will have an overall report that will indicate where we believe each has been effective.

Deputy Connaughton

My first questions are addressed to Mr. Gaughan. I congratulate his health board on meeting the requirements of the Comptroller and Auditor General. This is a unique occasion for him and us in the sense that his board is being disbanded. The funeral arrangements are being made as we speak. While my questions will relate to the necessity for him to ensure delivery of services and fulfilment of commitments in his board area, perhaps he will indicate at some stage before he finishes how he sees the new arrangements assisting in saving money or where he believes the cash injections will have to be made. What will happen in the future is more important than what happened in the past.

I have noted three matters from the accounts, despite the clearance from the Comptroller and Auditor General. I have no idea how many are employed in the health board. I would like a breakdown of the number, not only for the year under review but also 2000. I was not able to obtain the figure from the accounts. There has been a huge increase in the allocation for pay and non-pay items. Either staff were highly paid or a huge number of additional staff were employed. Perhaps you will answer that question first.

Mr. Gaughan

I do not know if it is appropriate to quote Mark Twain regarding the Deputy's opening remarks but perhaps I will leave it there. Overall, in 2001 we had 4,831.26 whole-time staff equivalents, to be precise.

Deputy Connaughton

What about the year 2000?

Mr. Gaughan

I am not sure if I have the figures for 2000 but if the Deputy wants me to give an overall idea of the——

Deputy Connaughton

This is a central and important matter. The committee wants to know the figures. More importantly, we need to know the number of employees in 2002.

Mr. Gaughan

I can give the figures for the increases by category between 1997 and 2001, if that would be helpful. I can certainly make the other information requested available.

Deputy Connaughton

By being helpful, was it consultants, nurses, doctors and administrative staff? Can you give us information on where the big increases were made.

Mr. Gaughan

Between 1997 and 2001 there was an increase of 1,500 in the number of whole-time equivalents broken down as follows: 51, medical and dental; 310, nursing; 176, paramedical; 676, nursing care support staff; and 22, maintenance and technical. The breakdown for administrative staff was front-line posts, 242; central administrative staff, 123.

Deputy Connaughton

How about 2002? Was there a major increase on the numbers for 2001?

Mr. Gaughan

There was a substantial increase. Overall, our numbers would have gone from a figure of 4,800 to approximately 5,500 at the end of 2002, to be more accurate.

Deputy Connaughton

Many of those are administrative staff. Generally, where are they assigned?

Mr. Gaughan

In general, 242 are front-line staff - ward clerks put in place to relieve the workload of nurses and other staff on wards to help clinicians and so on such as social and child care workers. There continues to be a demand for such staff from the professionals because of the growing and onerous amount of paperwork involved for all professionals. We are constantly under pressure to provide clerical support.

Deputy Connaughton

No one knows about the new proposed system, other than that it will be organised centrally. Can you see it being rationalised, or will more staff be involved under it?

Mr. Gaughan

I do not see the number of staff reducing as one will always need support. On those working in headquarters, if one was to amalgamate and centralise the finance and personnel departments, for example, over time one could see some reductions.

Deputy Connaughton

I cannot glean from the accounts how your budget for the following year is set, for example, how the budget for 2001 was set. I cannot see how that is done. Therefore, how can one judge from the outturn the performance against the budget? Is this normal practice? From the point of view of pre-planning how sure can you be that you have done what you set out to do?

Mr. Gaughan

What we set out to do is set out in the in-service plan which we prepare using the letter of allocation we receive in conjunction and consultation with staff throughout the services. The process usually starts after the summer of the preceding year. That is when bids start to come in. We then receive our letter of allocation and have 40 days to produce a service plan and bring it to the board for sanction. This is the forward planning document.

Deputy Connaughton

What about the capital commitments entered into by the health board? I do not see those listed. For instance, are there buildings built for a specific reason, or equipment purchased or leased not being used? Are there wards in hospitals now closed - wards built for a certain reason, such as those in Mullingar, but never opened?

Mr. Gaughan

That is included in our annual report.

Deputy Connaughton

It is not in the accounts.

Mr. Gaughan

Any expenditure incurred is included in the accounts.

Deputy Connaughton

I know that——

Mr. Gaughan

I think the Deputy is asking us what we have done with the capital. In the case mentioned, Mullingar, a decision was made, as an addition to phase 2, to develop the building in advance. What has happened is that the work documents for phase 2B have been drawn up and the money ring-fenced within the national development plan to provide the capital required for the overall development of the campus. The decision that the health board should go ahead with shelling out the building was made some years; it made architectural sense to do so at the time. Our plans to complete the job will serve us well as there will have to be some decanting. The intention is that the development will be advanced as an aspect of phase 2B. Obviously, this is dependent on the capital funding that will flow but there is money identified within the NDP——

Deputy Connaughton

Can you give us some idea of how much money has been spent which has not been used productively? What are the capital costs to date of a building or project one cannot use?

Mr. Gaughan

Off the top of my head I cannot give a figure for the shelling out but the overall cost of the project at the time was £23 million. As for the cost of the shelling out——

Deputy Connaughton

Would it have been £10 million?

Mr. Gaughan

No, it was probably £2 to €3 million. It all depends on how one looks at this - it would cost an awful lot more to build it now. However, there is a difficulty in that stage 1 of the project is scheduled for completion this year and next but we are unsure when stage 2 will come on stream. It is part of general public capital works. Overall, the decision to shell out the building was a wise one which will serve us well when it comes to completing other work on the campus.

Deputy Connaughton

Regarding the accounts, specifically line 10, page 12, on the cost of blood, will you indicate how the cost to the health board rose from a figure of £332,000 in 2000 to £768,000?

Mr. Gaughan

There was a substantial price increase in the cost of blood——

Deputy Connaughton

We have heard about this from other health boards. How does it manifest itself at hospital level?

Mr. Gaughan

Generally, the level of usage is also going up, which adds to the cost. There are, however, more blood substitute products now available which probably eases the pressure. The additional cost is mainly attributable to the additional cost per unit of blood with which we are being supplied.

Deputy Connaughton

Medical-surgical supplies increased dramatically. The cost in 2000 was £8 million and in 2002, £12.27 million. What was the reason for the increase?

Mr. Gaughan

First, as the Deputy will be aware, medical inflation generally outstrips normal inflation. Second, the level of activity, particularly day case activity, increased considerably in the period. This was the main contributor to the additional cost.

Deputy Connaughton

Like everywhere else, your insurance costs have doubled from a figure of £1.9 million to £3.7 million. I would be thankful if you could give us your views as to how these spiralling costs can be stopped. Did the situation get worse in 2002 and will it get worse again this year?

Mr. Gaughan

As the Deputy is probably aware, the Department is introducing an enterprise liability scheme which will help to slow down the rate of increase. In common with industry in general, insurance costs for health services have increased on a yearly basis. Obviously, there is a very strong litigious culture, particularly in relation to health care. We are involved in a risky business and it costs a lot to cover these risks, no matter what system is in place. The system being introduced will, at least, help to slow the rate of growth in costs.

Deputy Connaughton

Are there many cases of fraud? How does the health board deal with fraudulent claims?

Mr. Gaughan

We have a risk management unit and have been pioneering in the work we have done around risk management. We have staff who analyse and try to inform behaviour and change practices within the health board in order that we can reduce risks. We are working on this systematically throughout the system.

Deputy Connaughton

Is it working? Are there fewer claims than previously?

Mr. Gaughan

It is probably a little early to say. While I do not have definitive statistics to hand, I will be pleased to give the committee anything I have. Some aspects that cause a lot of claims are back injuries, slips and so on. However, the number of these instances has decreased. I will supply to the committee the figures I have to hand. Risk management slows down the rate of increase. Much of this boils down to common sense and continuing to look at existing policies, including the way wards, clinics and so on are run.

Deputy Connaughton

Do you believe your health board has been ripped off in that regard?

Mr. Gaughan

I am not sure there is evidence to support that view. However, I share the concern of many managers in both the public service and private sector that people have made the most of their injuries and so on but it is very difficult to prove this other than to look at the increase in costs. We are taking steps to try to ensure our approach and procedures will minimise the number of fraudulent claims. While nothing is 100% foolproof, we are trying to put procedures in place which will reduce the level of risk exposure.

Deputy Connaughton

In so far as grants to outside agencies are concerned - my personal view is that agencies and bodies generally are an integral part of the system and nothing will work without them - as in the case of other health boards, we distribute huge amounts of money to various groups. This is a good concept because, were it not for voluntary effort, we would be a lot worse off. In so far as the monitoring and auditing of money is concerned, are you satisfied these huge amounts are being spent in all cases for the proper reasons?

Mr. Gaughan

By and large, in a service where we are spending over €1 million a day one can never be complacent about these issues. We have service agreements with the major organisations which are worked through the service planning process. We have quarterly reviews. We go over their accounts and look at the level of service they are providing which we review on an ongoing basis. Generally we get good value for money, given what we spend on the various voluntary organisations. We also hold a retainer of 5% until we are satisfied at the end of the year that we got what we set out in the service plan. Obviously, there will be variations in certain situations, just as there are within our own service, depending on the level of demand and unexpected issues. The biggest amounts in the midlands are in the area of learning disability.

We have a professional relationship with the agencies involved with which we work on a partnership basis. There are joint committees. We work hard at fostering this relationship both from the point of view of service provision and accountability. I am comfortable that we get good value for money for what we spend.

Deputy Connaughton

In relation to bequests, a sum of £699,821 was received from a B. Healy in 2001. What was the background, from where did the money come and what was it for?

Mr. Gaughan

Many years ago a Longford woman bequeathed money to the health board.

Deputy Connaughton

Where there strings attached to how the money could be spent?

Mr. Gaughan

There were at the time. We could only use the interest to fund patient comforts at St. Peter's, Castlepollard. That was acceptable to the health board at the time and has been a great help. I was not involved at the time. However, from talking to colleagues, I believe it has helped a lot in the comforts provided for patients in the area.

Deputy Connaughton

It is a pity we could not find a few more women from Longford.

Mr. Gaughan

We would love to. We invested at the rate of 5.5% and the money is being used. I do not want to advertise but we would gladly accept donations from others.

Chairman

On the value for money report, have you drawn up specific reports?

Mr. Gaughan

We have. We have done a lot of work across a range of areas. We did a very good project on our laboratories in respect of which we restructured the whole non-pay side. This provided much needed money to recruit additional staff to expand the service. As a result of this work, we were able to recruit approximately 12 additional technicians who were badly needed. This was done without incurring any additional costs to the taxpayer from a reworking of the way in which we handled the non-pay side. It was also done with the co-operation of the staff and management of the laboratories, senior management and the health board.

We have done quite an amount of work in the purchasing area, both within the health board and in conjunction with other boards in conjoined purchasing, an area in which there is room for further co-operation and, possibly, savings. Other areas include an examination of the approach to sick leave from the point of view of pay.

Chairman

Does the health board have an evaluation team to carry out reports?

Mr. Gaughan

It does not have an evaluation team solely devoted to this work. There is a combination of staff from the finance and purchasing departments and, as required from time to time, the service end. There are various projects based on this.

Chairman

Are there specific reports on audits available and on which evaluations would be carried out?

Mr. Gaughan

Yes.

Chairman

Will the health board furnish the committee with same as we are hoping to do an overall assessment? The committee is interested in assessing the effectiveness of the board in terms of value for money. How many such reports are carried out per year?

Mr. Gaughan

The health board wants to develop a value for money culture. There is a certain benefit to be gained on projects but even greater benefit in developing a culture across the system at both clinical and managerial level. The board is trying to do this. I will have no difficulty in furnishing the committee with any of its reports.

Chairman

Does the health board see the merit in having an evaluation team which carries out audits in various sections? It is a pity this did not happen before now in a more managed way.

Mr. Gaughan

I did not say it did not happen because during the years I can recall various projects undertaken but perhaps not as systematically as was desirable. Care must be taken not to send a signal within a large organisation that value for money is the responsibility of a certain individual or unit. I like to say to every manager and everybody involved in the system that they have a responsibility to take advantage of any value for money possibilities that arise. Many good ideas come up the line from those delivering the service directly and who see opportunities or a way of doing something more efficiently and effectively. A balance is needed. While it will be helpful to have people with expertise in this area, we do not want to send a signal that it is their responsibility and that management and the rest of the staff can carry on regardless.

Chairman

There is an economy of scale in staffing levels in health boards. A huge organisation needs a team focused on value for money.

Mr. Gaughan

I agree. There are examples within the health board, between the board and the Mid-Western Health Board and between all health boards. In recent years there has been a tendency to allocate financial expertise to services. Accountancy expertise is now nearer the coalface. Part of its function is to prompt constantly in relation to value for money. The Chairman is correct that a large organisation can never be complacent about this issue. Even if the board is achieving absolute best value today, it must be aware that tomorrow will present another opportunity. Advantage can also be taken of changes in technology. In the context of future changes, there will be opportunities to do a lot of this work on a national basis.

Deputy Ardagh

It is stated on page 14 of the health board's submission that total gross expenditure in 2000 was £203 million and in 2001, £261 million, an increase of 29%. The figure for office expenses, rent and rates went up from £5.7 million in 2000 to £9.1 million in 2001, an increase of 60%. It is stated on page 11 that management administration costs in 2000 were £10.6 million and in 2001, £14.9 million, an increase of 4.5%. These are huge expenditures.

I wish to find out how the health board fulfils its responsibility for the control and management of the accounts and the governance of the Midland Health Board. Does it have a code of corporate governance in place? I understand the Department of Health and Children requested that all bodies develop such a code. What I am talking about is an internal audit committee which is both independent and effective, a finance committee which does its job in ensuring board members operate at arm's length as much as possible and in a manner which is for the good of the board.

Mr. Gaughan

Obviously, Standing Orders cover many of the issues relating to the conduct of board members. There is a finance committee which undertakes reviews on an ongoing basis.

Deputy Ardagh

I wish to deal with the question of an internal audit committee. Does the health board have such a committee?

Mr. Gaughan

It does not. We are in the process of setting one up.

Deputy Ardagh

How far advanced is the process? What will be the composition of the committee and its line of report?

Mr. Gaughan

The principles are laid down in departmental guidelines. The intention is to have a small committee comprised of a number of board members and people from outside with financial expertise.

Deputy Ardagh

Why should they be people from outside?

Mr. Gaughan

To give an element of objectivity in examining industrial norms.

Deputy Ardagh

Does the health board have an internal auditor?

Mr. Gaughan

Yes.

Deputy Ardagh

To whom does he report?

Mr. Gaughan

The chief executive officer.

Deputy Ardagh

Does he at any time report to the board independently of the chief executive officer, without the chief executive officer being present?

Mr. Gaughan

No, he does not.

Deputy Ardagh

Does the health board have a finance committee?

Mr. Gaughan

Yes.

Deputy Ardagh

How often does it meet?

Mr. Gaughan

It meets on a quarterly basis but as required if there are specific issues to be addressed.

Deputy Ardagh

How many members does it have?

Mr. Gaughan

All board member are ex officio members of the finance committee. Under Standing Orders, a quorum is required. Normally, approximately one quarter of the members would be in attendance.

Deputy Ardagh

What business is conducted during meetings?

Mr. Gaughan

All issues relating to finances. The review of the service plan is a standing item. We are assessed on how we are progressing with the plan, as laid out and adopted by the health board at the start of the year. Issues relating to any financial transactions are considered.

Deputy Ardagh

How detailed is the variance report? Does the health board produce a report for the finance committee to examine? Does the report set out details of the allocation or the service plan?

Mr. Gaughan

It includes details by cost centre and programme. It compares our performance to the targets set out in the plan. I will be happy to make copies available to the committee.

Deputy Ardagh

No. You have said all members of the board are ex officio members of the finance committee. Do all the members who attend meetings of the committee stay for the entire meeting?

Mr. Gaughan

Originally, a smaller number of board members could become members of the committee but a proposal adopted at a recent meeting allows all board members to become members.

Deputy Ardagh

Do the members stay for all of the meeting to go through all of the business?

Mr. Gaughan

Yes, by and large, it has been our experience that members stay for the entire meeting and take a strong interest in the discussions. Meetings can last two or three hours.

Deputy Ardagh

Let me ask about the service plan the health board brought forward at the beginning of 2001. How much gross expenditure was projected in the plan?

Mr. Gaughan

It is based on the letter of allocation.

Deputy Ardagh

Do you have a figure?

Mr. Gaughan

It was £241.507 million.

Deputy Ardagh

That was included in the service plan.

Mr. Gaughan

Yes.

Deputy Ardagh

How much was provided for in the letter of allocation?

Mr. Gaughan

Some £215.91 million.

Deputy Ardagh

What was the end of year figure?

Mr. Gaughan

Some £241 million. There would have been adjustments during the year.

Deputy Ardagh

Does the figure of £215 million relate to gross or net expenditure?

Mr. Gaughan

It relates to gross expenditure, minus minor income.

Deputy Ardagh

Is the minor income of about £18 million included in the figure of £215 million?

Mr. Gaughan

Yes.

Deputy Ardagh

What was the gross expenditure provided for in the letter of allocation? I do not refer to the net figure.

Mr. Gaughan

A gross figure is not given.

Deputy Ardagh

How much income was included in the figure?

Mr. Gaughan

Some £16.09 million.

Deputy Ardagh

If one adds £16.1 million to the figure of about £215 million, one has almost £232 million.

Mr. Gaughan

The figure is £232.4 million.

Deputy Ardagh

The actual allocation in 2001 was £232.4 million.

Mr. Gaughan

Yes.

Deputy Ardagh

Expenditure amounted to £261 million.

Mr. Gaughan

Gross expenditure amounted to £242 million.

Deputy Ardagh

No, it did not. It is stated on line 44 of page 14 that gross expenditure amounted to £261 million.

Mr. Gaughan

We are comparing two different matters. The letter of allocation, drawn up at the start of the year, is adjusted during the year.

Deputy Ardagh

Can we get the figures before we move on to an explanation of how they are compiled? Do you agree gross expenditure amounted to £261 million?

Mr. Gaughan

Yes, I do.

Deputy Ardagh

Do you agree that the figure at the start of the year was £231 million?

Mr. Gaughan

The figure at the start of the year was £232.4 million, which had increased to £261.134 million by the end of the year.

Deputy Ardagh

There was an increase of about 12% over and above what was agreed at the beginning of the year.

Mr. Gaughan

Right.

Deputy Ardagh

Why did that happen?

Mr. Gaughan

It was mainly due to developments. One receives money for various developments during the year.

Deputy Ardagh

What were they? We are talking about expenditure of £30 million not agreed at the beginning of the year.

Mr. Gaughan

A great deal of the increase can be accounted for by pay awards and developments. Certain pay awards were made during the year. For example, the figure for pay at the start of the year was £147.7 million. The figure at the end of the year was £156 million.

Deputy Ardagh

That is expensive. Is the health board a regional health authority?

Mr. Gaughan

It is a health board.

Deputy Ardagh

Does it deal with a health authority or the Department of Health and Children?

Mr. Gaughan

It deals with the Department of Health and Children.

Deputy Ardagh

What battles did it have with the Department to receive the extra £30 million?

Mr. Gaughan

Without wishing to be evasive, I was not chief executive officer of the health board at the time but can imagine some of the issues that would have arisen. For example, if the board wished to expand or develop its cancer services - the cancer services were expanded and developed - it would normally submit an estimate of what it required in that regard. There would be some discussion of the submitted estimate with the Department, for example, to ascertain whether it agreed with our figures.

Deputy Ardagh

The health board would argue its case.

Mr. Gaughan

Yes.

Deputy Ardagh

There was an increase of 29% in 2001, compared to 2000. What is the projected increase in gross expenditure in 2003, compared to 2002? The net figure will suffice if the gross figure is not available.

Mr. Gaughan

We are talking about a figure of 8.7% at the start of the year, in gross terms.

Deputy Ardagh

Is that before the various pay awards are taken into consideration?

Mr. Gaughan

Before any additions occur in 2003.

Deputy Ardagh

What do you expect the end of year turnout will be? What will be the increase over the previous year? I know I cannot hold you to it but what magnitude do you expect the increase to be in the order of?

Mr. Gaughan

There have been changes this year. Supplementary Estimates were provided and an allowance made for demand-led schemes in previous years. We have been told that no such extra moneys will be made available this year.

Deputy Ardagh

What about benchmarking? Was it provided for in the letter of allocation?

Mr. Gaughan

No.

Deputy Ardagh

Will it be an extra?

Mr. Gaughan

It will. I imagine that the overall percentage increase will be lower than in previous years.

Deputy Ardagh

Will it be lower than the figure of 29%?

Mr. Gaughan

I think it will.

Deputy Ardagh

Do you not think it will be lower than 19%?

Mr. Gaughan

I cannot provide a figure for benchmarking off the top of my head. I am told it will cost about €10 million. If that figure is added to the accounts, the Deputy will probably be right - it will be under 19%.

Deputy Ardagh

I wish to discuss the care element of the health board. You have mentioned that there have been certain developments in oncology. What are the regional specialties in the health board area? For what specialties do patients come from adjacent health board areas because the health board has expertise over and above that available in adjacent health boards?

Mr. Gaughan

I do not think the health board claims to have super-regional specialties in the acute hospitals sector.

Deputy Ardagh

It has hospitals in Portlaoise, Tullamore and Mullingar.

Mr. Gaughan

Yes. Its regional specialties are ENT, orthopaedics and oncology services in so far as they have been developed.

Deputy Ardagh

There is often a waiting list for hip replacements in the Dublin area. What is the waiting list in the Midland Health Board?

Mr. Gaughan

It is quite good at present. I think we are down to something like six to eight weeks.

Deputy Ardagh

To eight weeks.

Mr. Gaughan

Yes, although that is probably exceptional. Much of my background is in the hospital sector. A few years ago if somebody had told me we would be able to have waiting lists for hip replacements down to that kind of time period, I would probably have said it was not realistic. However, the waiting list is particularly short in the midlands. In that regard, I think the point to which the Deputy is alluding is whether we can offer capacity. We certainly can. Through the waiting list initiative, we have said we are prepared——

Deputy Ardagh

Yes, a number of questions arise. There are specialist hospitals in Dublin such as St. James's, St. Vincent's and the Mater which supply cardiology services and other national specialties. Does the Midland Health Board pay for its clients to go to these national hospitals? Does it pay St. James's, St. Vincent's or the Mater for the services given to its clients?

Mr. Gaughan

No, we do not - not on a fee per item basis.

Deputy Ardagh

On that basis, is it possible for clients of consultants in St. James's or the Mater to be referred on to a consultant in Tullamore which provides orthopaedic services in order that a job can be done there? I do not know if this is the case in other parts of the country but a number of people have contacted me to seek to have appointments for hip replacement operations moved. If they can be obtained in six to eight weeks in Tullamore General Hospital, why are people in other areas not using its facilities?

Mr. Gaughan

I understand the point the Deputy is making and he has certainly picked a good example in relation to hip operations, although the position in Tullamore is probably exceptional. We do have a short list and have offered capacity through the treatment purchase fund. Even as we speak, work is ongoing to process patients on lists in the Dublin area.

Deputy Ardagh

How much is charged for a hip replacement?

Mr. Gaughan

The going rate, which includes a number of bed nights, is about €12,000, which compares competitively. I absolutely agree on the broader point of using capacity sensibly. If we have capacity, there is no reason we cannot offer it elsewhere. It does happen from time to time but it is happening in a more organised way now under the treatment purchase fund.

To revert to the point about paying for operations in Dublin hospitals, we argue that Dublin hospitals are allocated money centrally to handle national specialties. As regards the board's core funds, in the earlier years a 15% levy was apportioned to the Dublin area to cover patients referred from the country for treatment. This was part of the historical make-up of budgets.

Deputy Ardagh

Obviously, now that more centres of excellence are being developed and national specialties are being provided in certain areas, a greater number are coming to them than was intended in the case of the original 15% levy.

Mr. Gaughan

Yes, that is obvious but, on the other hand, some specialties are regarded as normal regional specialties for which we do not have sufficient capacity. For example, 50% of all the country's consultants are located in Dublin. Traditionally, many appointments were made on the basis that consultants would meet sessional commitments to the midlands. Under the present strategy, however, there is greater emphasis on regional self-sufficiency. This will also have to be examined in relation to other specialties.

Deputy Ardagh

What about step-down beds? Those not described as acute patients - generally elderly senior citizens - may be taking up 20% of the beds in acute hospitals. There is a huge problem in finding accommodation for them in nursing care and the convalescent system. Does the same problem arise in the Midland Health Board?

Mr. Gaughan

Not to the same extent, although from time to time there are ebbs and flows. In some instances, there is an occupancy rate of over 100% in acute hospitals, which is not the ideal way to run them. They should be run at a 75% to 80% occupancy level in order to provide some leeway.

Deputy Ardagh

Dublin hospitals are running at an occupancy level of 97% or 98% plus.

Mr. Gaughan

I understand that. To be fair, on occasion, we have figures of over 100% and running up well into the nineties. What helps us quite a bit, however, is that we have a good supply of beds for the elderly, both on the public side and in private nursing homes. What has also helped a lot is that we have pioneered home rehabilitation in the midlands, which has worked well. Therefore, there is a good interface between the hospital and the community, including a link with GPs. We have paramedical staff who visit the homes of the elderly to help them, which enables us to provide a home based rehabilitation service.

Deputy Ardagh

There has been a massive increase in paramedical expenses.

Mr. Gaughan

That is part of it.

Deputy Ardagh

If we take the Midland Health Board as being representative, it appears health boards in the Dublin area are way behind in resources and the number and type of problems they have. This is a matter that will have to be addressed at a national level.

Deputy Connaughton

I could point the Deputy to a few other places also.

Deputy Noonan

I have a technical question, if I am permitted to intervene, which arises directly from Deputy Ardagh's questioning on matching the health board's service plan estimate to the letter of allocation and the final outturn. Perhaps it is something I do not understand but looking at the accounts it seems the allocation from the Department of Health and Children includes a sum for all employees' gross pay, which includes superannuation. As part of its income, the board shows contributions from staff. It seems that in the statement of income and expenditure the board is double counting. The block grant from the Department has to include total gross pay. Individual payroll cheques provide for a superannuation deduction which the board is showing as part of its income.

Mr. Gaughan

No, it is net of superannuation.

Deputy Noonan

The health board's accounts show superannuation expenditure of approximately £10 million for the year in question but income of about £5.5 million. However, as this income is already included in the block grant allocation, is the board not counting it twice?

Mr. Gaughan

No. There is not a double count. One figure represents what we pay out in pensions and lump sums, while the other represents a deduction from salaries. Public officials pay superannuation contributions.

Deputy Noonan

That is right and the board is showing them as income.

Mr. Gaughan

As income to the board.

Deputy Noonan

Right.

Mr. Gaughan

Sorry, it is the net figure we receive from the Department. Therefore, there is not a double count.

Deputy Noonan

That is not clear; it looks like double counting.

Mr. Gaughan

There is not actually a double count.

Chairman

Is Deputy Noonan saying superannuation is deemed as income on the balance sheet?

Deputy Noonan

I presume the allocation from the Department, under all headings, is included as the first module of income, the bulk of the board's finances. Separately, there is an income stream, one of the main elements of which is deductions from staff for superannuation. However, these are already contained in the block grant.

Mr. Gaughan

The block grant is net of what it is estimated we will take in during the year as superannuation contributions.

Deputy Dennehy

When we raised the issue with other Departments, they indicated they could not pay it as part of the block grant because they could not calculate the amount that would be needed during the year due to retirements and so on. Therefore, under the mandate scheme, superannuation and pay increases have all been funded retrospectively. Is that correct?

Mr. Gaughan

The debate on demand levies usually centres on the amount we pay out during the year. Because one cannot predict 100% accurately when people may retire early, the amount exceeds the Estimate agreed with the Department at the beginning of the year. That is where the demand-led issue arises. We have been told we will not get it this year.

Deputy B. O’Keeffe

May I turn to the Western Health Board?

Chairman

Yes.

Deputy B. O’Keeffe

In her opening statement Dr. Ryan said that she never had a problem with the Comptroller and Auditor General prior to the accounts for 2000 when the first difficulty arose. To say it was a difficulty is an understatement. When the accounts were presented to the Comptroller and Auditor General, he said there were several inaccuracies in the financial statements presented which were completed long after the time scale. Dr. Ryan went on to say they were unable to produce accurate accounts because of a unique situation - staff changes and shortages coupled with the need to deal with a number of other projects. However, the basic tenets of good management are absent. The report states the financial controller "left". What does this mean? Was the person concerned fired? Did he or she move to another position or pensioned off? There was also a lack of full documentation for the system which it made it difficult for an assistant to produce accounts. This is not a very convincing statement. There were several vacant posts in key areas which sounds like there was a lack of control.

Dr. Ryan went on to deal with the euro changeover project and the transfer of Portiuncula Hospital, all of which raise questions about proper planning and management within the system. The Comptroller and Auditor General's report raises serious managerial questions about the whole operation in the west. In a further damning indictment, in order to clear the matter up, the very person who had "left" was brought back to train others. Obviously, therefore, there was no training provided prior to the individual in question leaving. Can I assume that all of the methods and mechanisms mentioned have been put in place and there will not be a repetition of the lack of this type of managerial control?

Dr. Ryan

The Deputy's analysis is correct and I totally accept what he said. Any health board is subject to the usual pressures and vacancies. However, in our circumstances in the year in question, it was not the traditional pressures and vacancies which created the difficulty but the personal circumstances of three key individuals in terms of serious ill health and personal family health. We did not expect lightning to strike three times in the same place at the same time. The Deputy is correct to point out that we were unprepared for such a scenario. I can only give the committee guarantees that we are prepared now because not only is there no piece of work in any of the finance sections dependent on a single individual, there is also shadowing of work in order that we do not rely on any one person in any step of the process.

More importantly, when we knew there were going to be delays, we sought external accountants but because our systems were 13 years old and involved much manual activity, the learning curve for new staff and external accountants would have been a minefield and was unacceptable. On the Comptroller and Auditor General's advice, we documented every single step almost like a definitive manual on what to do and standard operating procedures in order that no matter who came in, if he or she had a financial background and received basic training, he or she should be able to map out the various steps. Ours was the only health board which had such a definitive operational manual covering every single step of the accounts process.

The Comptroller and Auditor General's staff were aware of the personal difficulties of our staff and gave us extra time. Where we fell down was that this was not enough and we allowed the Comptroller and Auditor General to come in before the accounts were reconciled which was when all the anomalies arose. The accounts were subsequently reconciled and it turned out that there was no fraud but sloppy work for which we accept total responsibility.

Deputy B. O’Keeffe

What about in-house training?

Dr. Ryan

It is a normal feature of what happens now in departments. We have provided extensive training since, part of which involves shadowing in order that staff rotate between departments and experience the different steps. We have also provided external training in which we have involved finance and support staff in all of the hospitals, community care facilities and so on, who will take part in making sure documentation submitted for the audit process is quality assured. It is a testament to the commitment of staff, in recognising that they wanted to support the individuals concerned, that when the audit was complete, it was found there was proper use of public money.

Deputy B. O’Keeffe

Does the Comptroller and Auditor General wish to add anything to this? Did he have to send back the 2001 accounts and look for changes to be made?

Mr. Purcell

Not to the same extent as in 2000. Normally, there are some adjustments to be made but they were not unusual or of the same scale as in 2000. Matters have improved. There was a knock-on effect because, as the chief executive officer said, training was ongoing and new processes were put in place. We have started the audit of the accounts for 2002 and the initial feedback from my staff is that matters are much improved.

Deputy B. O’Keeffe

How come in 2001 we had a major problem with pension costs and the health board not being au fait with the requirements laid down by the Department of Health and Children in regard to the figures to be made available under the pension cost heading - FRS 17?

Dr. Ryan

My understanding is that it was a national issue. It was a new standard introduced by the Comptroller and Auditor General. When we went back to the Department, it said the matter needed to be addressed on a national basis, that there was a need for an actuarial assessment of all the staff costs for pensions which would appear in our accounts. That work is ongoing in the private and semi-State sectors which are absolutely up to their eyes but it has not been brought forward anywhere in the public service. This is an issue for all health boards and the Department is working with us on it. It is not as yet an adopted accounting standard for it.

Mr. Purcell

The health boards are in a unique situation. Their accounting policies are set down by the Department of Health and Children and it is first and foremost its responsibility to establish the extent to which these liabilities should be recognised in their accounts. As Dr. Ryan said, it is a national issue affecting all of them. The latest word from the Department, whose representatives are present and can elaborate on this, is that for the immediate future Financial Reporting Standard 17 which requires recognition of pension liabilities should not be applied to health board accounts, certainly for 2003.

Dr. Ryan

When we got the advice of the Comptroller and Auditor General, the chief executive officers collectively set up a small working group to explore it. The expertise to deal with actuarial issues such as this is so tied up in the private sector that it cannot be accessed even to guide our committee.

Deputy B. O’Keeffe

I know this does not impinge on the 2000-01 accounts but I must raise the issue of management. You will recall that in July 2002 the board was told there was an overrun of €5 million to €6 million. At the end of the year an overrun of €13 million was expected. A total of 200 job losses would be required and there was a public quarrel with the Minister which caused him serious problems with the trade unions and also because of the publicity attendant on the incident, yet at the end of the year the board came out in the black to the tune of €8 million. Looking at the predictions and the control measures supposedly in place, one can see that the forecasts for 2002 were absolutely wayward. How can this committee be absolutely confident in these circumstances that management is on track, as you are suggesting to us?

Dr. Ryan

Most of what the Deputy has quoted is taken from media rather than actual reports of the board. I had no quarrel with the Minister whatsoever and I am glad to have the opportunity of putting the record straight at this forum because I have certainly tried to do so a number of times at our public board meetings. It seems that once figures and so on get into the media they are churned out over and over again.

When we went to the board last June, spending on the hospital and acute hospital programmes combined had gone over allocation by €13 million, the figure always thrown around in the media for the Western Health Board. They never quoted what I had told the board, that under the heading corporate contingency we had a sum to negate this and that the worst scenario, if we did nothing, was a €5 million overrun at the end of the year. If we took action, however, we expected to break even. The idea of going to the board in June was to make sure there would be a service plan to set it back on the proper course of action and which considered how to reduce reliance on contingency provisions and investigate cross-programme supports. The board took very difficult decisions and stood by them because it expressed a vote of confidence in the way management was protecting front-line services and doing even more than we said we would, which was to break even within the allocation.

The complication which arose subsequently was that part of our service plan review considered what we would do in terms of jobs locally - locums, cross-cover, re-engineering work and so on. Within two weeks a Government decision was made about targeted reductions in the number of administrative jobs. Certain details got into the media which had nothing to do with the Western Health Board - in fact, the figures were never correlated. It was said we had created 400 more jobs than had been approved. We have never found out from where this came but essentially we had to absorb 70 additional posts, as the Government decision directed, in the plans we had adopted, which created certain sensitivities over the summer period for staff.

Some of the lack of understanding was due to the fact that when difficulties arose, the chief executive officer would adopt a command and control approach and order that no posts be filled, that hospital beds be closed, that the order books be taken away and so on. However, because we had been undergoing a process of organisational development and I believe in working through partnership with staff and the trade unions, we adopted a far more measured approach to dealing with the reduction in staff numbers. This meant there was significant consultation up front with staff instead of covert action. Every staff member knew exactly what his or her rights and entitlements were, what contracts were being examined, the quotas at local level, which additional projects needed to be brought to a conclusion, where cross-cover would apply and where, when vacancies arose, there would be re-engineering of the work. This process took a full six months; it was an organisational rather than a command and control approach which benefited staff and resulted in a very positive industrial relations climate and strong financial benefits going into this year, which will still be a challenging one.

Deputy B. O’Keeffe

I copied the reports of the time from The Irish Times on the Internet and have them here. It is extraordinary that from that July date until this day no statement in any of the press releases has suggested in any way that you disagreed with the figures being given out from July to September. However, all of the reports mention the difficulties with the trade unions in terms of the number of jobs being lost and the disagreement between the health board and the Department about whether 200 jobs or 85 jobs were to go, which never seemed to be adequately explained. Nowhere is there a mention from any member of the board of the contingency fund that was available. It seems extraordinary that it is only in July of the following year that you have had an opportunity of setting the record straight. Having read all the newspaper cuttings from the time, I find this hard to understand.

To return to the question of controls and management, can you make available to the committee the staffing levels in 2000, 2001 and as far as June 2002 and the numbers at the end of 2002? Can you explain the reason there was such a difference of opinion between the Department and the health board? The Department was looking for a figure of €1.1 million and the loss of 85 part-time positions while you absolutely insisted that 200 had to go.

Dr. Ryan

This is not the first time I have set the record straight on this matter; I do it at every single board meeting. What the media choose to publish is a different matter. I did make a full report to the Department of Health and Children and have never heard of any doubts it had about the veracity of its budget figures or HR numbers. Several times, publicly and privately, the management team has been complimented by the Secretary General of the Department on how we dealt with the situation and the way we managed our finances. I cannot account for the media, I can only account for what is on the public record. I am sure the Department will confirm this, if asked. In the last five years the board has been one of the top three performers of the 11 health boards.

Deputy B. O’Keeffe

When meeting the Minister after the initial publicity——

Dr. Ryan

I did not meet him.

Deputy B. O’Keeffe

Was the meeting with officials of the Department?

Dr. Ryan

Yes.

Deputy B. O’Keeffe

From reading the transcripts, there seems to be a variation between the Minister's understanding of the outcome of the meeting and yours in terms of the number of jobs that were to go as a result of the €1.1 million claw back. Is there an explanation for this?

Dr. Ryan

It is not as simple as one figure versus the other. The process in the Department by which personnel numbers were controlled had changed that year. Previously, individual applications had to be made for specific posts which would have been approved on a ward or service basis. That year, when we received our allocation, we said how many jobs we needed for the year which was automatically signed off when we presented for our service review. In that year we would have a proportion of jobs that we believed we needed to implement the service plan.

Subsequently, money became available during the year, or did so in the boom time, with which letters of allocation about HR numbers would not have come. There would have been money for us to set up a new ward, a medical admissions unit in UCH, which would have taken 25 nurses multiplied by the shift work factor. When we received the developmental money, there was almost and additional €25 million not included in the letter of allocation with which we provided personnel numbers to initiate the services. They had not been included in the Department's baseline because it was running from year to year on foot of what it had approved in the service plan. That is the only way I can explain the discrepancy. The situation has changed since. Every health board has an end of year ceiling, with which we were fully compliant.

Deputy B. O’Keeffe

As someone who has been a member of a health board for a long time, my understanding is when an allocation is made for the appointment of a consultant or supporting staff, the Department is very much aware of the number of staff contingent on additional appointments and capital projects. Are you suggesting it did not take into account the additional jobs that would be part of the development arising from the extra €25 million given to the health board?

Dr. Ryan

I am saying our ceiling, approved at the service plan meeting that year, was not adjusted by the additional posts.

Deputy B. O’Keeffe

It was not adjusted by the Department?

Dr. Ryan

No.

Deputy B. O’Keeffe

May I have a comment from the Department on the issue?

Ms Fiona Prendergast

I am not entirely au fait with the setting of employment numbers but my understanding from our personnel division is that employment numbers are set on an annual basis and adjusted for developments approved for the various health boards and hospitals during the course of the year. Perhaps at mid-year there may be a problem because of developments coming on stream in the course of the year but by 31 December of any year the employment ceiling would be adjusted to take into account any approved developments that have come on stream in the course of the year.

Deputy B. O’Keeffe

Is that adjustment taken into account at the end of the year rather than during the year?

Ms Prendergast

Yes.

Deputy B. O’Keeffe

Therefore, what Dr. Ryan is saying is absolutely accurate?

Ms Prendergast

Yes.

Deputy B. O’Keeffe

Let me ask about bad and doubtful debts. It appears the Department is extremely generous when it comes to patient debtors. In 2000 patient debts amounted to £3,292,782 while there were debts of £2,577,789 in 1999. In 2001 there were debts to the amount of €4,884,323, an increase of over €1 million in one year. How did this come about? Is the health board happy with the level of collection as it is an astonishing increase? We are talking about punts in one case and euro in the other but there is still an increase of €1 million in patient bad debts in that one year. If this trend was to continue, it would be extremely serious.

Dr. Ryan

They are not bad debts but moneys yet to be collected. It is our intention to collect them. There is a policy that deals with what is included as a proportion of what might be doubtful debt collection but it does not mean we do not make every attempt to collect it. We intend to do so. Our performance on collection of debts over the two years is the same. It should have improved but it did not. The reason behind the increase in the amount is that charges almost doubled that year. Therefore, the cost went up but our performance was roughly the same. In the latter year we provided for direct billing with the VHI and expect this will make a difference in terms of debt collection.

I am not happy about this. Some 1.8% of patients do not pay their bills and our procedure is clear. We issue two reminders and every effort is made to ensure they are sent at the right time - not when someone dies or they have forgotten about it and it is too late. Much work has been done with the timing of bills and reminders. If after two reminders we hear nothing, the bill is referred to a debt collection agency. Using a debt collection agency is a new system for the health board because we used to refer debts to solicitors. Some years ago we looked at the cost and performance of sending them to solicitors as opposed to a debt collection agency and found that the debt collection agency performed to a much higher standard for less money in a pilot scheme. As a result we transferred all of our debt collection matter to the agencies and their performance has improved our debt collection, even though the average performance figure is probably no better. There was a huge increase in activity in recent years when we dealt with many more bills - around 30 million invoices - even though our average performance stayed the same.

Deputy B. O’Keeffe

A person does not get out the door from a private hospital without settling the account. How systematic is the health board?

Dr. Ryan

Direct billing does not even have to involve the patient, there is a smooth process in recovery from the VHI which intends to install a computer system that will make the collation of bills internally a smoother process, with a laboratory bill, an X-ray bill, and three or four different consultant referrals included in one invoice. This will be collated for every patient and drawn down in a direct payment system. A computer system is being put in place to help us do this. There is a backlog in debt collection in terms of the VHI which has given us an absolute assurance that it is committed to paying this. That is the reason I feel confident, even though the money is outstanding, in telling the committee that we do intend to collect it.

A difficulty has been pointed to in the case of of accidents and emergencies, an area in which we have certainly improved. However, the improvement has not netted us a huge increase in income because we had to put in place administrative supports and an IT system around the clock for our big hospitals but it has brought our income collection level in the case of accidents and emergencies up to about 50%. The problem we find in evaluations is that in an emergency people come with no money. Therefore, we must try to collect it afterwards. A lot of those involved are students, travellers or visitors to the region during the summer period. Galway receives one million visitors. If I am being asked about my hopefulness with regard to accident and emergency charges, I am less confident but it does not mean we do not pursue them. We have taken test cases to court on a number of occasions and are at the stage where we have myriad small bills and the cost effectiveness of collection and going through the courts is very doubtful.

Deputy B. O’Keeffe

I asked you for the employment figures for 2000 to 2002.

Dr. Ryan

I have some of them. In 1999 the health board had 6,725 full-time equivalents; in 2000, 7,201. I do not have the 2002 figure but can give the Deputy the current——

Deputy B. O’Keeffe

The 1999 figure was 6,725. Did you say the figure for 2000 was 7, 201?

Dr. Ryan

Yes. Currently, we have 8,800 staff who include 640 employees who arrived with the transition from Portiuncula and probably should be excluded from comparisons. I do not have figures for the interim years but can certainly send them to the committee.

Deputy B. O’Keeffe

You are saying we should take out the figures for Portiuncula. Therefore, is it right to say we are talking about an increase of 1,000 in the number of staff between 2000 and 2002?

Dr. Ryan

Yes, most of whom would have been taken on in one year alone. There was an increase of 476 between 1999 and 2000. There was one particular year in which we received the maximum budget and there may have been recruitment of about 700 staff, the highest number in any one year.

Deputy B. O’Keeffe

What percentage of those recruited would have been placed at the coalface of service delivery?

Dr. Ryan

We have breakdowns for categories of staff in 2000 which I could run by the Deputy, if he likes. For example, management and administration staff would have accounted for 17% of the figure, under the old classification used by the Department whereby personnel such as health inspectors, EHOs, CWOs, environmental health officers and so on would have been included in this categorisation. The position has changed since. Some 3% were junior doctors; 6%, consultant medical staff; 7%, nurses; 14%, paramedical staff; 3%, support staff and 7%, maintenance-technical staff. Currently, the core figure for the management-administrative-support category is 14%, of which 3% is accounted for by headquarters staff. With our policy of devolution, the remaining 11% are located either in hospitals or community care services. If one takes the health board overall, we estimate the breakdown at a ratio of 60:40 but if one takes out the figure for headquarters staff and looks at staff in local areas, the ratio is about 70:30 - 70% being coalface administrative staff such as ward clerks, secretaries to consultants, admissions staff and so on. The remaining 30% would be involved in finance, IT, materials management, human resources - functions devolved to both community care services and hospitals.

Deputy Rabbitte

I must ask you the obvious layman's question as to how in an organisation with 7,500 staff, the departure of an accountant could have led to such problems in 2000.

Dr. Ryan

The answer is very simple. The priority always was that when money became available, it would be put into recruiting frontline staff. When I came to the health board five and a half years ago, we had two accountants in headquarters looking after a budget of €400 million. We had two accountants in the University Hospital, Galway, the biggest in the region. There was no other qualified professional dealing with community care services or any of the other hospitals in the region. Rightly or wrongly, we now have ten. We only have one extra accountant in headquarters, which shows the director of finance is very reluctant to take on staff, even when they are offered. The others are located in community care services and hospitals. Mr. Minihan also tells me that we were dependent on very old systems which involved quite a lot of manual work. If one is relying on just one or two people in a department to know the business of health boards when it is not computerised and one does not have documented processes or standard operating procedures, it is only when somebody is missing, that there is a hiccup. Normally, there would be another person shadowing but when we lost three key personnel due to personal circumstances, we fell down.

Deputy Rabbitte

I do not want to probe unreasonably. We are all vulnerable to illness and so on but the accountant who left took up alternative employment. Obviously, he must have, if he returned as a consultant. Was it in the private sector?

Dr. Ryan

He moved to the VEC.

Deputy Rabbitte

The Western Health Board is a huge organisation. What is its current and capital budget? It must be over €600 million.

Dr. Ryan

It is €750 million which includes the provision for benchmarking.

Deputy Rabbitte

Thus, it is three times as large as that for the Department of Arts, Sport and Tourism.

Dr. Ryan

It is fairly big. We are the biggest employer in the region.

Deputy Rabbitte

It is two and a half times as big as that for the Revenue Commissioners and three times as big as that for most of the leading private sector construction companies such as Barlow or Ascon. Therefore, it is a very big organisation. Are you happy with the corporate governance procedures in place? Would you describe them for the committee?

Dr. Ryan

Yes. On the finance side, we have made the changes I have outlined to the Deputy. In addition, we are always looking at good practice. Matters that Comptroller and Auditor General brings to our attention such as bank reconciliations used to be dealt with on an ad hoc basis but are now done monthly and up to date. We have introduced technology to provide for the automation of bank reconciliations. In terms of corporate governance generally, we have had all the required elements for a number of years.

I suppose because I come from a clinical rather than a financial background it is one of the areas on which I zoned in on joining the health board. We have our internal audit committee and audit mandates as well as very strong board involvement. The members are intimately involved in all finance matters with the result that each standing committee has information not only on its own programme but on the whole board every month. They can explain the variances and have a chance to talk to each of the regional managers and question exactly what is what.

The finance committee receives reports from each of the standing committees. It meets bi-monthly; additional meetings are held, if necessary. It would not be unusual to have standing joint committees meetings, the equivalent of a board meeting, to deal with financial aspects. Budgetary matters are also dealt with in the chief executive officer report and every month at the board meeting. We do have——

Deputy Rabbitte

What kind of persons, for example, comprise the internal audit committee?

Dr. Ryan

Our internal audit committee was set up before the code of governance recently recommended by the Department of Finance was brought forward. Therefore, it includes a cross-section of staff, including senior management, middle managers and clinicians. It is chaired by an external qualified accountant-auditor recruited through open competition. The number of internal audit staff has increased in my time. Although he reports to me and agrees a plan, the internal auditor——

Deputy Rabbitte

Why did a committee of that competence not pick up the mistakes in 2000?

Dr. Ryan

They were not in place. They were only introduced properly in 2001-02. We learn as we go along.

Deputy Rabbitte

I know you were not chief executive officer at the time. However, I am a little surprised that an organisation as big as the Western Health Board with 8,000 permanent employees and a budget of €750 million has traditionally not had an internal audit committee. One could reasonably have expected it to have such a committee.

Dr. Ryan

It was not the practice in the public service. The position on accountability changed significantly after legislation was introduced in 1996, when I came through the system at management level.

Deputy Rabbitte

Does the health board have an internal auditor? Has a post now been established?

Dr. Ryan

Yes, there is an audit plan, an agreed three year programme which is reviewed every year and signed off by me. The internal auditor also sits on the audit committee. The external auditor has a mentoring and supervisory role with the internal auditor. He also appears before the finance committee with his annual report when board members can question him on any aspect of the controls. I am in attendance.

Deputy Rabbitte

He presents his report to the board?

Dr. Ryan

To the finance committee.

Deputy Rabbitte

Is it a finance committee or the board in another guise?

Dr. Ryan

It is the finance and property committee and consists of the chairman, vice-chairman of the board and a member from each of the three standing committees.

Deputy Rabbitte

That is very impressive reform. We normally do not use this committee for political purposes to ask Ministers indirectly or settle old scores. However, the new conventional wisdom is that we would not have difficulties in the health service if it were not for all the waste, health boards, duplication, inefficiencies and so on. What do you say to this?

Dr. Ryan

There is no simple answer to it. We all feel the reforms which are at a high level are necessary. We look forward to contributing to what their substance and shape might be. There is no doubt we are all under pressure and none of us can continue the way we are, particularly given the level of public dissatisfaction among those who cannot access services. The level of satisfaction among those who can access services is high and well-documented.

As I see it, the main change is a move from what has been traditionally a patient value system to a much more business-like approach. We need to take on the accountability and governance expected from one minding the public purse. Traditionally, we have not placed people in areas such as finance, internal audit, coding and value for money. When it comes down to money, posts are always allocated to nursing, paramedics and so on. In the sharing of services the expertise needed in the health service might be provided professionally as it is not part of our core business. We all welcome this. We have nothing to be ashamed of.

Deputy Rabbitte

Could it be done centrally?

Dr. Ryan

It could be but some will be done locally. Where costs can be incurred and management is paying the bills, there may be small business units attached to clinical units linking spending with bills and accountability. That is basic governance not provided for in current contracts. This is not a criticism of consultants who are operating to the contracts under which they were appointed. There is, however, a problem with the contract in terms of governance.

Deputy Rabbitte

Will you tell the committee again the breakdown between additional administrative and medical - those at the coalface - staff recruited?

Dr. Ryan

As an overview, we looked at the same areas as the Brennan commission. Overall, there was a 60:40 medical-management/administrative ratio. In other words, 60% of employees were employed at the coalface with 40% in infrastructure. When we look at the Western Health Board, 14% of the overall number of staff could be classified as management and administrative support staff. Of this, 3% are based at headquarters where there is centralisation of a certain amount of IT, human resources, auditing and value for money resources. The remaining 11% have beem delegated to units. In respect of this figure, the ratio is not 60:40 but 70:30. This means that 70% of management and administrative staff are involved at the coalface, including admissions, issuing medical cards, acting as ward clerks, doctors' secretaries and so on. The others provide pure support in bill collection, financial systems, recruitment and human resources. I must apologise as we do not have the figures but I will forward them to the committee.

Deputy Rabbitte

There has been significant additional recruitment, as you have agreed. We would like to see the breakdown between categories of staff recruited in the boom years. I stripped a figure for management and administrative pay in 2000 - £19 million. Without labouring the point, I repeat that in an organisation in which £19 million was spent on management, one would have expected it to be possible to pick up mistakes. It is a concern that in such a large organisation with a large financial managerial budget there were no other staff with skills in management who might have been allocated to fill the gap. May I take it from what we have been told that this was picked up in Galway only when the Comptroller and Auditor General's staff went in?

Dr. Ryan

No. We knew we had difficulties when things started to happen. We tried a number of possibilities in looking for staff, either through secondment or the private sector. Because of our systems and the manual nature of the information, people did not want to touch it. The learning curve was too steep, given that the processes had not been mapped out. Eventually we had to get somebody back and pay them.

Deputy Rabbitte

One would not have a board of such a large size in the private sector. How does anyone function with a board that size?

Dr. Ryan

Geographically, the board is extremely large because we work from over 300 locations which presents difficulties in terms of accountability. We board also has to deal with the largest island population. It has been its strong policy that there is equity in the provision of services on the islands. There are unique challenges in the area, particularly with——

Deputy Rabbitte

The Western Health Board does not operate a management board system also.

Dr. Ryan

The elected board has 31 members. Much depends on how one works with the board as to whether it is manageable. What appears at a monthly board meeting is only the tip of the iceberg in terms of my engagement with it. As chief executive officer, I spend up to 20% of my time with it. I meet its members at standing joint committees. I meet them on a county basis across political parties, as representatives of individual political parties and on single issues. I have other regular meetings when we discuss major issues of concern. The board is actively engaged and I welcome its advice. That is democracy. It leads to the situation where the meetings of the board held in public are an anti-climax and perhaps not always reported on positively.

Deputy Rabbitte

Do you not think you have overcompensated for the 2000 experience? You have accountants falling off the ceiling and staff shadowing staff, with too many around the place.

Dr. Ryan

No. We are still under pressure.

Deputy Rabbitte

They are all productively engaged.

Dr. Ryan

Very much so. This issue arose in the Midland Health Board. One of the significant moves we made last year was to get an accountant for the voluntary sector. We now deal with over 500 voluntary agencies. While perhaps only five are very big, there are probably 200 or 300 small ones, on which we must ensure we are not exerting undue pressure and yet account for public funds.

Deputy Rabbitte

How do you handle this? For example, the organisation, Brothers of Charity, on the list at the back of your report is the recipient of significant amounts of moneys each year. How do we know that that they are being used productively? What surveillance is there of the systems within the organisation to see that they are being used for the purposes for which you allocate them?

Dr. Ryan

It is one of our biggest organisations. In that situation there would be a formal service agreement and an audit of its accounts. Such agreements are new. Mine was the first health board to bring them forward. The essence of the service agreement, as discussed and negotiated nationally, was, in the first instance, probably a little vague, with no more than the service provider coming to the boards. However, in the last year or two they have become very specific. For example, when moneys are drawn down for disability services and I know those services will be provided by the Brothers of Charity, they are allocated only on the basis that the brothers will identify the exact number of clients, the locations and services. It all comes down to a head count.

Deputy Rabbitte

You say the accounts are audited. By whom?

Dr. Ryan

It gets its own accounts audited and submits them to us.

Chairman

I have one or two questions regarding health service reform. How did it affect the areas of success in the health board? Was it very much driven by the primary care services? How many primary care facilities have you developed in the last ten years? I am a great believer in the development of primary care services, in which some health boards have performed very well.

Dr. Ryan

If you are talking about the primary care pilot projects initiated under the strategy, every board has just one model that it is developing. We have one in Erris, County Mayo, the first model for a rural area where people work at a distance from each other. Much of it is technology based. If you are talking about health centres where, by and large, one has GPs and one-stop shops, there has been huge development in the west.

Chairman

Like Deputy Rabbitte, I am very concerned about the perception of health boards on the part of the media. They can be analysed incorrectly. One must examine their performance in child care, family support, services for older people and those with disabilities and carry out an in-depth analysis of mental health and hospital care services and all those critical areas that are not clearly analysed. The benefits are not clearly analysed in any sense when the performance of the health board is adjudicated. In the reshaping of the health boards, it would be wrong if there was no reassessment of these key areas and elements. An area very close to my heart is better health promotion. Some health boards spend more money on preventive medicine, also a critical area. How much of your budget is spent on health promotion?

Dr. Ryan

My colleague, Mr. Minihan, will look up the figures. We are very proud of the large investment we have made. It was a deliberate policy of the board which asked me three years ago to try to achieve a 1% swing in our budget away from hospitals to community services in order that people would have the option of remaining in the community longer. Notwithstanding this, there are still community pressures but we have over one million hours of home-help services available to people living in the west, a remarkable achievement. I do not know how many hundred or thousand per cent an increase this represents over the last five years. We have effected a significant shift in our preventive work, particularly in the area of child care and protection. We are leading the field because, I am proud to say, we have excellent staff. We have the lowest number of children in residential care. We also have the lowest number in trouble with the law, being placed in high support and high cost care. We have the greatest number in families in family therapy and being supported by local, community based services. We have the highest performance rate for examining models of best practice elsewhere such as the YAP programme, health advice café and mentoring services for adults in the community who look after young people and so on. I invite anyone to come and see the range of services we offer.

Chairman

The peripherality of the regions is an issue for health boards such as the North-Western Health Board. Its success stories in acute services, seen against those on the east coast, are apparent. The level of services offered in many critical areas is better. In any reform of the health boards it would be wrong if all of these were lost in a new formation. I am deeply concerned about this. The national development plan heralded a major increase in capital funding for health services from 2000, far in excess of what had been spent previously. While the Department of Health and Children indicated strongly that health boards should accelerate development in many ways, it has left a huge number of projects built without departmental approval. Are there any such developments in your area?

Dr. Ryan

While I am conscious that the Comptroller and Auditor General is examining the issue, I am happy to stand over what we are doing as a health board in that regard. Much depends on how one comes up with definitions and how approvals carry over from year to year. If you ask me the simpler question of the amount the Department formally regards as unapproved debt, the answer is just under €5 million, of which €2 million comes under a definite agreement I reached with it. One could call it a breach of faith as circumstances changed. Notwithstanding this, I would never proceed without either agreement in principle, the support of the health board or a contingency plan to pay if the money could not be recouped from the Department. I offered to clear our capital balances through once-off revenue. This had the net effect of reducing our allocation by €2 million. Despite putting this amount aside, we still have enough. We are still trying to find deeds to old properties and sites and so on. I believe I am accountable.

Chairman

I am not in any way critical because I know the partnership with the local authorities and communities has been an effective model. From close observation in my area, I know chief executive officers have been innovative. In one sense, this has achieved a huge amount. That is the reason I hope that, in this study, you will give us any documentation that will help us in compiling the overall report, indicating where you believe you have excelled and how you evaluate your effectiveness in acute services, primary care, child care and family support. Perhaps you will come back to me on this within the next few weeks. You may not have all the answers today. In the overall assessment of health boards I would like to look at acute services, primary care, child care, family support, services for older people, home help support and respite care support services, all of which are critical. Improvements such as increases in staffing in community hospitals, are also very important.

With regard to investment in aids and appliances for people with disabilities, what is the health board's policy? What is the position on mental health services and the transfer of in-patients to community based residences? I would like a report on how the health board is performing in this area. How effective has it been with regard to hospice care? Given the proposed reform of the health service, it is critical that we ascertain the local implications. The level of co-operation between hospitals and community based services also needs to be looked at. Another big issue is waiting lists.

It may not be possible to get answers to all these questions today. I would be obliged, therefore, if you would address these concerns and reply to the committee secretariat in due course. I would like you to indicate in a short document, especially in the case of acute services, where it is believed the health board has performed particularly well, areas that should not be lost sight of in any new formation of the health service.

Deputy Connaughton

I agree with the Chairman that whatever new formation is arrived at should not scupper the schemes we hold dear, in deference to better account keeping, particularly in rural areas.

Chairman

I feel strongly about that because, while the accounts must be reviewed in detail in preparation for the new formation, the services in peripheral areas in this region and how they impact on people, must be protected. The document should indicate what the health board takes pride in doing in relation to those critical areas.

Deputy Connaughton

I have two questions for Dr. Ryan. First, on the area of health promotion, I compliment her and the Western Health Board on the regular publication of health news items in local newspapers. I understand these are well read by every spectrum in the community. I have two specific questions. The Portiuncula Hospital was mentioned. I understand, and it is the understanding of the hospital authorities, that the sum of €4 million was promised at the time the hospital was taken over by the health board. That is money they have not got, as far as I understand it. Is this in the pipeline? Who was supposed to give it? Was the actual commitment given or is this an ongoing matter?

Dr. Ryan

Essentially, when Portiuncula transferred to the Western Health Board, in the context of valuing it for the purposes of a negotiation price, a report was carried out on the needs of the hospital. There was no doubt it needed capital investment. It had not had capital investment for a long number of years.

Deputy Connaughton

Was €4 million mentioned?

Dr. Ryan

The sum of €4 million was mentioned as the most immediate figure required to begin the upgrade over the three year transfer period.

Deputy Connaughton

Who mentioned that €4 million?

Dr. Ryan

It would have been in a professional report to advise the health board of what the upkeep or status of the building would have been. That would have been made available both to Portiuncula and to the Department of Health. It was an estimate of the amount of capital work necessary to bring up the hospital to modern standards. We are not sure where the issue about it being "promised" originated. What was anticipated - or hoped for - was that if the economy remained as good as it had been, the money might come as a goodwill gesture to support the transfer of the hospital into the Western Health Board. Under the national development plan at that time, the hospital would have been funded directly by the Department of Health - so it would not have appeared anywhere in the health board's list of priorities as submitted to the Department. When it was transferred to us, it was almost as if it fell between two stools. It was not in our plan - neither was it getting direct funding from the Department. Much store was set on the fact that €4 million was needed and the question was where was it going to come from. It never was the subject of a promise or pledge by the Department or health board. I know it was an expectation. Obviously, as our board gets its NDP figure, it continues to include Portiuncula in all the improvements we try to make - in equipment, refurbishment and so on - but it needs fairly major capital investment. It is probably the only hospital we have that has not had major capital investment for an accident and emergency department etc.

Deputy Connaughton

Finally on that, is it normal to assume the people generally in the Ballinasloe community, not just the hospital authorities, feel very let down that they did not get their €4 million? Would you accept that?

Dr. Ryan

I would, indeed.

Deputy Connaughton

I have another more recent problem I wish to raise, the Galway Hospice Foundation? As you are aware it is not taking in-patients at present - I know out-patient services are continuing as normal. You might tell the committee the connection between the Western Health Board and the Galway hospice. Do I understand correctly that the health board pays the consultant?

Dr. Ryan

The Galway Hospice Foundation is an independent voluntary organisation and we have a service agreement with it for the provision of services, including beds and home care. I believe we will pay €2.3 million in funding towards it for this year. When the national palliative care report was published last year, it anticipated palliative care services changing throughout the country, to become more professional in many ways, more medical, and with a better balance between in-patient services which would be serviced by consultant medical staff as well as the traditional home care elements. When the Western Health Board got its first consultant in palliative care, a number of sessions were written into the contract service agreement. This was to ensure the consultant would provide the medical leadership in that hospital - including full medical accountability as well as admission and discharge authority.

Deputy Connaughton

In your view, why is there only one patient there, when there should be 12? Are you aware that terminally ill cancer patients in County Galway applied for a bed there and were not allowed to enter the place?

Dr. Ryan

I have to be very careful about commenting on another agency.

Deputy Connaughton

I am not asking you to comment on anything for which you are not responsible. The taxpayer is paying €2.3 million to the consultant in that foundation. Obviously there is a public interest in this. The people of County Galway and the west want to know why eligible terminally ill patients cannot get a bed there and why their entry to the hospice is blocked.

Dr. Ryan

We understand there are difficulties and they are being resolved.

Deputy Connaughton

What are the difficulties?

Dr. Ryan

That is not for me to say.

Deputy Connaughton

It has been announced that they relate to the clinical procedures, but nobody can tell me what that means. Does it mean there was maladministration or does it mean there was——

Chairman

That might be an issue outside Dr. Ryan's remit.

Deputy Connaughton

In so far as taxpayers are concerned and the commitment they have to this unit - I have no doubt Dr. Ryan is very worried about this because it is something in which she has been deeply involved over the years - I want to know where all this is leading and just how serious is the problem. I consider it very serious.

Dr. Ryan

I assure the Deputy, in so far as I can, that I am satisfied public money is being spent properly in relation to the hospice services and certainly in relation to the patients. The correct balance between in-patient and community services may not be in place at present, but I am very satisfied public moneys are being fully accounted for and spent on hospice patients. I do not want to comment on clinical matters because we understand, accept and admire the fact that the hospice has announced its own investigation. We have offered whatever help is necessary or appropriate to work through its difficulties as we always do in a partnership approach. The matters referred to are clinical and we have to leave it to the clinical domain to sort them out.

Deputy Connaughton

Thank you. On behalf of everyone who spent many hours to get that hospice up and running, it is important the public confidence that undoubtedly exists for a whole variety of reasons is not dented or erased and that every effort is made to get the hospice back on track immediately.

Dr. Ryan

We share that opinion.

Deputy J. Higgins

In passing, might I say it would be helpful if the chief executive officer of the health board were to request the hospice to make a more detailed statement on the precise questions at issue, without making a judgment at this stage because, as has been said, an investigation is taking place. However, it involves taxpayers' money in a general way.

I will be very brief because it is getting late and the health board representatives and the staff have been here for three hours without a break. I am a little intrigued. To return to the issue of 2000, as Dr. Ryan said earlier, it was like lightning striking in three places at once, which is unfortunate. The Comptroller and Auditor General states that the lack of full documentation for the system made it very difficult to produce the accounts without the assistance of the financial accountant. Is it true to say that at that point there was only one single person in the whole organisation who understood the system and, therefore, had full control of the system and of the recording of the expenditure and income?

Dr. Ryan

For a short period of time, due to the unexpected illness of three people and another leaving, only one person knew the whole system and other people were new or were learning.

Deputy J. Higgins

With the extra staff that have been taken on in the accounts section, how many people would now be au fait with the system and could participate in producing the accounts?

Dr. Ryan

The situation now is not so much how many people but the fact that there is a definitive manual and everybody in the department knows every step of the way because it is documented. They know where to source information, what to do and how to do it. Technically speaking, somebody coming in on day one with a basic background should be able to follow the manual.

Deputy J. Higgins

I am sure this is fine because the Comptroller and Auditor General passed it. However, in regard to the documentation that was missing at that time, were you subsequently able to make up for that?

Dr. Ryan

Yes. We put much effort into that.

Deputy J. Higgins

The former financial accountant was presumably taken on on contract. What was that contract worth?

Dr. Ryan

I can check that and let the committee know, but the director of finance tells me it was a couple of hundred pounds and was for a short period of time. I will forward the details.

Deputy J. Higgins

It was not a significant amount?

Dr. Ryan

It was for a short period and for a set piece of work. It went through payroll, through the normal channels. He was not paid in any other way except above board.

Deputy J. Higgins

Presumably now there is ongoing training of the relevant staff in the accounts department?

Dr. Ryan

Yes.

Deputy J. Higgins

Thank you very much.

Chairman

Before we wrap up, Mr. Purcell would like to say something.

Mr. Purcell

I want to make a comment. I will not go over old ground. I was very interested to hear that in the health board sector one can suffer for being open and transparent, as Dr. Ryan suggested happened when she wanted to clear her capital deficit. In a sense that goes to the heart of the relationship between the Department and the health boards. There always has been a certain amount of uncertainty about the level of authority needed for a particular type of activity. We saw it in terms of staff over the years when it was blowing hot and cold. There were staff ceilings. Then people realised they had budgets and could do what they liked within those budgets. However, when they found that staff numbers were growing, all hell broke loose and they reverted to a fairly rigid system. The same problem arises in relation to what might be called questionable capital expenditure. To put it at its simplest, health boards took the fact that a capital programme was included in the national development programme as a green light to go ahead but then found that, for specific projects, they needed the specific approval of the Department. In some health boards, not particularly in the Western Health Board or in the Midland Health Board, this led to large capital deficits because of the level of uncertainty. Over the years the Department and the health boards lived on the basis of this general uncertainty. Perhaps it suited both in times of plenty, but when things get tighter there is a need for openness and transparency. I hope it does not cost too much because in dealing with health generally, everybody should be clear as to accountabilities and their responsibilities.

Deputy J. Higgins

Someone might ask the Minister for Health and Children to set up a website, as the Minister for Education and Science has done, to outline exactly who will be in and who will be left out in the cold.

Chairman

I agree with Mr. Purcell that openness and transparency in management and the delivery of service is essential. It is critically important that people know exactly what they should do. This has been a very good meeting. I thank Dr. Ryan and Mr. Gaughan and all the officials from the Departments. I would like them, if possible, to come back so that we can deal with the outstanding matters and the performance of health boards. What happens in the future is important. In regard to the document going forward and the assessment of all the health boards, the peripherality of the regions, the acute services, cross-Border services, services in the midlands, western and other areas, it is important to get a fair assessment. It would be very wrong if any critical decision were taken without having all the facts on the table. The Committee of Public Accounts can help in that regard.

I thank Mr. Purcell and his team for their outstanding work. The reports of the accounts tell a huge story. I am thoroughly impressed by the level of service I observe as a rural-based Deputy and the dedication and motivation of the health professionals working in health care to provide a service to the mass public. That is paramount and they will be judged on that. There are also anomalies and some people do not get that service, but clearly this meeting has been very effective.

Is it agreed that the committee should note the accounts for 2000-01 for the Western Health Board and 2001 for the Midland Health Board? Agreed.

The committee adjourned at 2.10 p.m. sine die.