I begin by thanking members of the committee for the invitation to attend the meeting to discuss matters arising from the Comptroller and Auditor General's report.
SKILL is a training and development programme aimed at 32,000 support staff such as health care assistants, home-help workers, porters and catering staff in the health sector. It was established following a Labour Court recommendation in 2003. The SKILL programme has provided important training to more than 7,000 staff in the health service. The funding was initially allocated by the Department through the former Midland Health Board to be forwarded to the SKILL programme through the Office for Health Management. Since 2005 the HSE has had responsibility for the administration and funding of the SKILL programme.
In April 2009, the HSE's internal audit commenced a detailed audit of the SKILL programme at the request of the HSE's national director for HR. This internal audit discovered and reported in June 2010 a number of serious breaches of HSE controls and regulations. It concluded that these breaches resulted from significant financial control, governance and oversight deficiencies and the failure to adhere to existing controls and procedures, rather than a lack of such controls and procedures. The Comptroller and Auditor General was immediately advised by the HSE of these findings.
I will now deal with important dimensions which arise. The HSE internal audit found that expenses totalling €348,321 were paid by the HSE to a bank account called the SIPTU national health and local authority levy fund, on the basis of invoices submitted by SIPTU. These expenses were not properly vouched or supported by sufficient back-up documentation. This represents a serious breach of existing HSE financial regulations and reflects a breakdown in our systems of administrative and financial control. This is clearly unacceptable. The HSE has put in place measures to prevent such breaches occurring in the future. The HSE has formally requested SIPTU to reimburse these moneys and to provide relevant supporting documentation to support the expense claims.
SIPTU has advised the HSE that the national health and local authority levy fund is not an authorised SIPTU bank account. While it does not accept any legal liability, the union has made it clear that, without prejudice, any amount paid by the HSE in reimbursement for invoiced expenses incurred will be repaid if it transpires that they were not fully vouched in accordance with public service regulations. The union has informed us that it is undertaking an investigation into the issue and pending the outcome it has lodged an amount of €348,321 with a commissioner for oaths as a good faith statement of its willingness to make good any unverified expense payments. Its investigation is ongoing.
Regarding the annual funding grant to SIPTU national health and local authority levy fund, on the instructions of the Department of Health and Children, and prior to the establishment of the HSE, an annual funding grant of €190,000 per year was paid to the SIPTU national health and local authority levy fund by the Office for Health Management from 2002 to 2004. The funding grant was increased by the Department of Health and Children to €250,000 per year in December 2004, prior to the establishment of the HSE. The HSE disbursed the funding grant to SIPTU after its establishment in 2005. The sum total of the approved funding grant, between 2002 and 2009, was €2.005 million.
Arising out of the findings of our internal audit, the HSE recommended to the Department that the funding grant be suspended pending completion of the HSE audit. The Department of Health and Children approved the indefinite suspension of the funding grant to SIPTU.
The Comptroller and Auditor General report notes: "The terms in which the funding paid into the SIPTU National Health and Local Authority Levy Fund Account were described would have been of limited use in enabling either the OHM or the HSE to determine what was expected to be provided by the funding." There was a lack of clarity surrounding the governance of this aspect of the SKILL programme, given its origins. Notwithstanding this, the HSE had accounting responsibility for the disbursement of the funding grant from 2005 and should have sought clarity from the Department on the issue and satisfied itself about adequate controls, validation and value for money.
The HSE internal audit discovered and reported that foreign travel had taken place to destinations including the US, Australia, Hong Kong, Brussels and the UK, paid for out of the SIPTU health and local authority levy fund. The financial records of SKILL did not record any travel, hotel or other expenditure on such trips. The HSE has commissioned Mr. Turlough O'Sullivan to conduct an independent investigation into this matter, as it relates to HSE staff. This report is due shortly. The HSE also awaits the findings of the SIPTU internal investigation when it is expected more information will be available on this foreign travel including details of expenses paid in respect of travel and accommodation to HSE staff from the SIPTU national health and local authority levy fund.
To date, HSE has established the following information. Some 12 members of staff were involved in SKILL or national partnership forum-related foreign trips. Some 31 individual foreign trips occurred between 2004 and 2009. The HSE paid out imprests or subsistence of €7,700 to staff from the SKILL programme for these trips. The travel and accommodation costs for them were not paid by the HSE but paid out of the SIPTU national health and local authority levy fund. This is what we have established to date but I emphasise that until the HSE independent investigation is concluded and we receive the information from SIPTU's investigation this information on HSE staff involved in foreign travel remains incomplete.
There are clear public sector regulations in relation to foreign travel. Since November 2006, the HSE has specific regulations in respect of foreign travel. It is clear that these regulations were not followed by HSE staff in some of these cases. There is evidence of serious breaches of HSE travel regulations and this is unacceptable. These breaches are the subject of the ongoing HSE internal investigation.
These general breaches related to SKILL and occurred in areas such as improper procurement processes, inappropriate use of taxis and non-adherence to recruitment and pension procedures. The HSE has taken immediate and strong measures to ensure full compliance with our regulations concerning payments, travel, procurement, recruitment and pensions and to address the recommendations, which we accept, of both the internal audit report and report of the Comptroller and Auditor General. Furthermore, the steering committee of the SKILL programme has been stood down and its staff and work have been integrated into the HR directorate of the HSE. This provides for greater control and accountability. A value for money study is being undertaken by the HSE in respect of the overall SKILL programme.
On partnership, arising from the issues that have arisen in the SKILL audit, the HSE's national director for human resources has sought an internal audit to be undertaken of the health national partnership forum. This partnership audit, which is ongoing, identified that payments totalling €925,000 were made into the same SIPTU account. We await completion of the full HSE internal audit report into this matter before commenting further.
In summary, the SKILL programme is a worthwhile initiative that has addressed many of the training needs of 7,000 health care workers in the support services area since its establishment. However, there have been significant governance and financial control failures associated with its administration and funding. These are highlighted in our internal audit report and the report of the Comptroller and Auditor General. These failures were identified by HSE internal audit following a detailed audit requested by the HSE's national director of HR and the results were promptly reported to the Comptroller and Auditor General.
It is of particular concern that there appears to have been a systemic failure to adhere to the financial, travel and procurement regulations of the HSE relating to the SKILL programme and HSE national partnership programme. The HSE has taken the steps required to ensure comprehensive compliance with its regulations in relation to payments, travel and procurement and to address in full the recommendations of internal audit and the Comptroller and Auditor General to ensure these failures do not recur. The HSE will revert to the Comptroller and Auditor General once all of the investigations have been completed and a more comprehensive picture exists. This concludes my opening statement.