The HSE reports its financial performance in line with Financial Reporting Standard 102 (FRS102) issued by the Financial Reporting Council, subject to certain exceptions to Generally Accepted Accounting Principles (GAAP) directed by the Minister for Health in relation a number of areas where the HSE has been directed to diverge from GAAP in how it accounts for depreciation, pensions, capital grants, clinical claims. Costs of contingent liabilities are not provided for or funded in the HSE’s determination until such time as the cost is incurred- for example in relation to clinical and non-clinical claims dealt with by the State Claims Agency on the HSE’s behalf, the liability only crystallises each year when the claims are actually settled. These costs are detailed in note 11 to the HSE’s 2021 annual financial statements which sets out the current year costs incurred together with the estimated overall liability associated with the Clinical Indemnity Scheme.
I am grateful to the Deputy for highlighting this matter and I am happy to clarify that one aspect of the response to the Parliamentary Question response detailed on 8 May 2018 that ‘There has been no crystallisation of a contingent liability for the Department in the last ten years’ should be amended to note as follows:
‘The costs of contingent liabilities are not provided for or funded in advance but are instead funded on a ‘pay as you go’ basis when the costs of the liabilities are settled. In the case of clinical and non-clinical claims dealt with on the HSE’s behalf by the State Claims Agency, the crystallisation of such liabilities occurs when the claims are settled and appropriate levels of funding are provided within the HSE’s determination each year to meet the costs of claims settled within the year.’
