Dáil Éireann Debate, Thursday - 20 May 2004
174 Mr. J. Bruton asked the Minister for Health and Children if a management information framework as recommended by the Mullarkey committee has been put in place in his Department; and if he will explain the way it works. [15043/04]
View answerThe management information framework, MIF, is an essential part of the strategic management initiative and arose out of a report in 1999 by a financial management working group of the SMI implementation group of Secretaries General.
The MIF will provide the standard functions of a financial management system — financial accounting, management accounting, cost allocation, together with facilitating the use of financial and non-financial performance indicators. The MIF is being implemented to ensure that the Department, through the availability of a full accrual based accounting system and performance measurement data, has the opportunity to consider fully the planning of investment on the basis of a value added concept.
The Deputy is aware that the wider health delivery system has always operated on the basis of full accrual accounting principles which underpinned a broad management information framework. As with all other Departments, the Health and Children Vote is accounted for on a cash basis. However, the vast majority of the €10 billion Health Vote relates to direct service provision, and in this regard, the health boards incur the expenditure on behalf of the Department. All the health boards account on a full accruals basis, including balance sheet, in accordance with Accounting Standards issued by the Minister.
The system in Health is underpinned by a stringent legislative and control accounting system. The Health (Amendment) (No. 3) Act 1996 introduced a formal requirement on health boards to prepare and adopt an annual service plan setting out the broad level of services they would deliver for the funding allocated to them. Each month, boards are required to submit an integrated management report to the Department. This details financial, activity and employment statistics compared to planned or budget levels. If a board fails to deal with a variance within any one financial year, under the terms of Act, it must be treated as a first charge against the following year's funds. In this way, boards cannot accumulate variances in a reserve account, thereby greatly enhancing the accountability of the boards.
Development of financial and non-financial systems is continuing in the health arena. SAP financial systems are already implemented in the Eastern Regional Health Authority, the North Eastern Health Board and the Midland Health Board. SAP is one of the leading software solutions. SAP is an enterprise solution and, being fully integrated, is activated by a single entry which drives operational and management responses within the system, thereby supporting the business strategy and process. In the health environment it fully supports the devolved management process, bringing efficiency and productivity to the planning and delivery of services together with its ability to support evaluation and accountability, and being a real time system, will significantly improve the day-to-day operations and controls and supply budget holders with an immediate view of their area of responsibility. Modernisation of systems in the remaining health agencies is being dealt with as a joint financial implementation systems project, FISP, which is being driven by the health boards and the interim health service executive.
Phase I of implementing SAP-HR systems — PPARs — has already been completed. Phase II of PPARs, which is essentially the time management element, is now underway across the system and will be fully in place in the boards by mid 2005. St. James's Hospital have already gone live with phase II. These major national initiatives will underpin the information requirements of the health sector and are a vital component in the successful implementation of the reform programme. Each project is a major and significant endeavour in its own right, and will take some years to reach completion. In the short term, full use will be made of the combination of new and legacy systems to create the necessary database for planning, managing and controlling the system at appropriate levels.
Although all the agency accounts are prepared on an accrual basis, and audited by the Comptroller and Auditor General, the appropriation account of the Department is prepared on a cash basis. This is expected to change when the new accrual accounting solution is in place. In this regard, the MIF project for this Department is well in hand. However, it is worth noting that the moneys spent directly by the Department — the administrative budget — are some €41 million or 0.4% of the total Vote in 2004. In relation to the project implementation, management consultants — Deloitte — were commissioned by the Department to undertake an assessment of our management information needs. The report by the consultants determined that upgrading to PROSE V3 was the appropriate option for the Department. FMS V3.0 is an upgrade to the current system, providing a number of significant extensions to the current FMS. Developed by PROSE, FMS V3.0 has the advantage of being a dual system, thereby meeting the needs of users who require both accrual and vote accounting simultaneously. FMS V3.0 is based on the existing FMS and has all of its functionality. However, it adds an extra dimension to the FMS by the provision of accrual accounting, workflow support and web enablement.
Work is now well under way on implementing the system. The basic upgrade itself is scheduled for this month, with additional purchase and asset register modules to be rolled out over June and July. The system will be fully operational before the deadline, contained in the Government memorandum, of 31 December 2004. As recommended in the Mullarkey report, an in-depth review of the Department's system of internal control, including the internal audit function, was also undertaken by the management consultants. While the report commented favourably on the existing system of control, key recommendations from this review are currently being implemented.
