Committee of Public Accounts says issues identified by C&AG in report on Emergency Procurement of Ventilators by the HSE warrant further examination

Deputy Stanley said the C&AG highlights matters in the spending of public money which are of serious concern to the Committee and which warrant further examination by PAC.

Deputy Stanley said: “The C&AG reports that in March and April 2020, as part of its emergency response to the spread of Covid-19, the Health Service Executive (HSE) ordered almost 3,500 new ventilators at a total cost of €129m. This is nearly double the 1,900 sanctioned by the Department of Health, and more than 10 times the number the HSE’s clinical staff had estimated would be needed as part of its ‘surge capacity planning’.

“The C&AG also reports that advance payments totalling €81m were made to new suppliers to secure orders for 2,198 ventilators. Subsequently, 1,731 of these orders were cancelled and the HSE received a number of refunds of advance payments, totalling €50.5m. However, the HSE did not receive benefit or use from expenditure of €30.5m, which therefore represents a loss of value.

“The HSE is pursuing refunds of €22.3m for orders that were cancelled or where the ventilators received were deemed not fit for purpose. A further €8.1m is considered to be unrecoverable and some €6.8m of this relates to ventilators purchased that the HSE ultimately did not need. These have since been donated to health authorities in India.”

Deputy Stanley said the C&AG has identified a number of serious issues in the HSE’s procurement process which the Committee intends to examine further.

He said: “The C&AG has raised issues relating to the HSE’s assessment of need for ventilators, how the HSE identified and sourced new suppliers of ventilators, and the quality of the ventilators procured, given that 41 out of one batch of 100 failed performance tests and two other batches did not meet EU standards. 

“The C&AG was unable to find a business case prepared by the HSE to support the requirement for 1,900 ventilators. Instead, the quantity for which sanction was requested appeared to have been based on the orders that the HSE had already placed with potential suppliers and orders that were at an advanced stage of negotiation.

“A further issue identified by the C&AG is that the weekly expenditure report which the HSE sent to the Department of Health and the Department of Public Expenditure and Reform only included expenditure for ventilators that had been delivered and did not include the payments in advance and refunds received from cancelled orders. The C&AG said this was ‘seriously misleading and negated the effectiveness of the Departments’ oversight of the expenditure’.

“The special report also recommends the development of practical guidance for public bodies on the use of advance payments and it sets out various areas where specific guidance is required. This recommendation has been accepted by the Office of Government Procurement at the Department of Public Expenditure and Reform.”

Deputy Stanley said the Committee will consider the C&AG’s special report at its meeting on Thursday afternoon.

PAC is a standing committee of Dáil Éireann which focuses on ensuring public services are run efficiently and achieve value for money.