Nursing Home Subventions - Special Report No. 3 (Resumed).

Mr. Denis Doherty (Chief Executive Officer, Midland Health Board), Mr. Stiofan de Búrca (Chief Executive Officer, Mid-Western Health Board) and Mr. Pat Harvey (Chief Executive Officer, North-Western Health Board) called and examined.

The Midland Health Board and Mid-Western Health Board last appeared before the committee in respect of the examination of their financial statements on 25 May 2000. The North-Western Health Board last appeared before the committee in respect of the examination of its financial statements on 12 March 1998.

Witnesses should be made aware that they do not enjoy absolute privilege. The attention of members and witnesses is drawn to the fact that 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. Notwithstanding this provision in legislation, I remind members of the long-standing parliamentary practice to the effect that members 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. Members are also reminded of the provisions in Standing Order 149 that the committee should 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 policies.

I ask Mr. Doherty, chief executive officer of the Midland Health Board, to introduce his officials.

Thank you, Chairman. I am accompanied by Mr. Diarmuid Collins, the board's director of finance; John Cregan, the deputy chief executive officer; Pat O'Dowd, general manager of community care services, and Mary Culliton, the board's director of corporate fitness.

Thank you, Mr. Doherty. Will Mr. De Búrca introduce his officials?

Mr. de Búrca

I am accompanied by Ms Winnie Davern and Mr. Paddy McDonald, our director of finance; Mr. Seamus Woods, director of welfare services; and Mr. James Conway, assistant chief executive officer with responsibility for elderly care and other services.

Thank you, Mr. de Búrca. Will Mr. Harvey introduce his officials?

Mr. Harvey

I am accompanied by Mr. Tom Kelly, assistant chief executive officer with responsibility for community services; Mr. Tony Travers, director of Finance, and Mr. Paraic Casey, financial accountant.

Thank you, Mr. Harvey. I ask Mr. Purcell to introduce the financial statements.

Mr. Purcell

I will deal with the accounts first. There are accounts for just one year in the case of the Midland Health Board and Mid-Western Health Board, namely, 1999. There is a clear audit report in each case, with no criticisms arising from the annual financial audit.

There are four years' accounts from the North-Western Health Board outstanding for the committee. There are clear reports for the most recent years - 1998 and 1999 - but a variety of issues arose in respect of the 1994 report in respect of fixed asset accounting, control over pharmacy stocks, computer security, an outstanding contribution from a local authority and standardising applications for national lottery grants. I am glad these matters have since been addressed to my satisfaction. The 1997 audit report referred to the lack of control over hospital equipment and non-compliance with the Department's accounting standards in relation to the valuation of the board's buildings. Again, I am glad to report that these matters have since been resolved.

I will now deal with the performance of each board in relation to the payment of nursing home subvention arrears and I will begin with the Midland Health Board. While the Midland Health Board applied the correct rate to new and existing cases from 1 January 1997, it did not begin paying arrears until May 2000. Once begun, however, the job was finished quickly, with all arrears being paid by October 2000. The total amount paid in that case was £148,000. The 1998 and 1999 accounts of the board were understated by that amount.

The Mid-Western Health Board also applied the correct rate from 1 January 1997. It paid out arrears totalling £142,000 to existing cases in January 1999, but only commenced paying arrears to former recipients of subventions in April 2001. I think that most, if not all, of these arrears have since been paid. However, I note from recent correspondence from the chief executive officer that a further 44 cases relating to deceased recipients of subventions have been identified. It is expected that the appropriate arrears will issue shortly in those cases. In the case of the Mid-Western Health Board, its account for 1998 was understated by £155,000 and the 1999 account by the slightly smaller amount of £133,000.

Last in this segment is the North-Western Health Board. It was tardy in applying the correct rate to new and existing cases - a year later than the other two boards. I am not sure why this should be. That tardiness extended to payment of arrears which only commenced in December 2000, with payment to 13 cases. The overall total of arrears has been calculated at a revised figure of £336,000. It was expected this would be discharged by late 2001. The 1998 and 1999 accounts were understated by that amount under this category of arrears due.

That is a quick summary of the position in these three boards, but I am sure the Accounting Officers will want to elaborate for the committee on reasons for the delays encountered.

Before I hand over to members, I ask the chief executive officer of each of the health boards to make an opening statement which we wish to publish. I call on Mr. Doherty.

I welcome the report of the Comptroller and Auditor General on what is a complex area and the opportunity to provide the committee with the clarification it requires on the administration of the nursing home subvention regulations.

As regards Article 8.2. the so-called pocket money issue, our health board interpreted the regulations in a manner consistent with the advice at the time from the Department of Health and Children on how the regulations should operate on a practical basis. In effect, while one fifth of the non-contributory old age pension was disregarded in calculating means and assessing eligibility, it was not taken into account subsequently in deciding the level of actual subvention payments made.

This continued to be the case until December 1996 when clarification was received from the Department following legal advice it had received. The effect of the revised clarification was that, since the inception of the regulations in 1993, one fifth of non-contributory old age pension should be retained as pocket money by the recipient of subvention without reducing the level of subvention. From January 1997 onwards, the revised interpretation was applied to all relevant cases on a current basis. Funding was received to enable the board apply the revised interpretation on an ongoing basis.

At this stage the board initiated a look-back exercise to assess the level of arrears that may have been due to recipients of subventions for the period 1993 to 1996. The board advised the Department that funding of £150,000 would be required to enable it pay the arrears due. An additional allocation was received in 1998 of £300,000, £150,000 of which related to the arrears element under Article 8.2 and a further £150,000 for ongoing costs in the nursing home area. To have taken the view held by the Ombudsman prior to receipt of the additional funding would have posed a dilemma for the board and its accountability obligations under the Health (Amendment) Act, 1996, whereby it is obliged to stay within its annual allocation. In effect, the board would have incurred expenditure without the available allocation, leading to an over-expenditure position and a subsequent charge on the following years' available allocation.

The work involved in assessing the level of arrears was significant. All 335 recipients of subvention had to be reassessed taking into account the original payments made, changes to the non-contributory old age pension and changes in means, if any. In many instances there were difficulties in tracing patients who had moved between nursing homes, people who had left the board's area and those who had been discharged from nursing homes. Further complications arose requiring legal advice when assessing payments due to the next of kin of former subvention recipients. While this in no way justifies the delay in making the arrears payments, I mention it to enlighten the committee on some of the complexities involved in this area. In 2000, the board commenced paying the arrears and completed the exercise in October 2000. All instances of arrears under Article 8.2, as stated in the Comptroller and Auditor General's report, have been paid by the board.

The board believed at all times it was acting within the letter of the regulations and did not in any way seek to disadvantage or penalise any recipient of nursing home subventions. When the clarification was provided, the board immediately applied the correct rates on an ongoing basis. As stated in the Comptroller and Auditor General's report, the board's financial statement for 1998 did not fully reflect the outstanding liability it had as a result of arrears accruing to recipients. While the sum was not material to the veracity of the accounts, the oversight was not an attempt to absolve the board from meeting its Article 8.2 arrears liability.

As regards Articles 9.1 and 9.2, the family circumstances issue, when these regulations were revoked in 1998, the board again applied the correct subventions on an ongoing basis. Additional allocation was received in December 2001 to enable the board meet its arrears following the revisions. The board has commenced payment of these arrears and expects the exercise to be completed by the end of February this year.

As regards the 1999 annual financial statements, the board received a clear certificate from the Comptroller and Auditor General.

We will now hear a presentation from Mr. de Búrca. We have decided to hear presentations from all three chief executive officers before turning to specific questions. I make clear the committee wishes to publish all the reports.

Mr. de Búrca

We welcome this opportunity to make a presentation on our administration of the scheme in 1998 and subsequently. The context in which this occurs is within the parameters of the 1970 and 1996 Health Acts which imposed obligations on us to stay within our accountability obligations. Despite the allocation of a fixed budget in respect of subventions, external factors and the legislation itself contributed initially to extreme difficulties in managing the scheme because it was seen from the outset from an executive perspective as a demand-led scheme and the funding should perhaps have reflected that. This has been our experience since the inception of the scheme in 1993 and the difficulties since then have been exacerbated by increases in nursing home costs in recent years. It is in this context I wish to outline the board's position regarding its implementation of Article 8.2.

We had to review more than 7,500 files and concluded total cost of arrears in respect of Article 8.2 as £342,000. To date, 82% of these have been paid. We have engaged in continuous efforts to identify the legal beneficiaries of the remaining 76 cases. It is expected this process will be completed by the end of February, with the exception of a very small number of cases where it will not be possible to identify next of kin.

Following the implementation of this legislation in September 1993, there were general difficulties in interpreting Article 8.2 of the 1993 regulations. During that period, the board clearly followed the advice of the Department of Health and Children and did not allow the one fifth non-contributory old age pension in deciding the level of actual subvention payable. Following further discussions and subsequent legal advice, the Department wrote to boards in December 1996 informing them that the subvention regulations would be amended to state clearly that, in determining the amount an applicant should receive in subvention, a health board must disregard a sum equal to one fifth of the non-contributory old age pension for personal use. These new arrangements were immediately implemented by the board from the next payment period for cases in receipt of subvention on 31 December 1996.

The allocation of £950,000 made by the Department to the board was to cover arrears of payments under Article 8.2, the additional expenditure arising as a result of the family regulations in 1996 and expenditure shortfalls arising from increasing demands under the scheme.

Regarding our position on delays in payments of arrears, as the Comptroller and Auditor General rightly said, we addressed the question of current residents in nursing homes in 1998. This involved significant work in assessing the level of arrears in individual cases. The work was completed in late 1998 with the actual payment made at the next available pay period in June 1999. The payments in question amounted to £142,000 and were in respect of subventees resident in nursing homes at the time. However, the arrears payments were not made at the time to former residents as we engaged in discussions with legal advisers and there were collateral discussions with the Department of Health and Children on the legal and administrative obstacles with regard to these people. These included potential inquiries as to the identification of the beneficiaries, the possibility of multiple claims from family members, which is a continuing issue, and the high cost of administering each individual claim.

In 2001, and up to recent weeks, following a further examination of over 7,500 files, the board has concluded that arrears of approximately £200,000 were due to next of kin of former subventees. This brought the total arrears under article 8.2 to £342,000 which is, in effect, 411 cases. To date, 82% of this amount has been paid, £60,000 remains outstanding and the board is continuing in its efforts to identify the legal beneficiaries of the remaining 76 cases. I am now advised that all of these people have been contacted. The board expects the process to be completed by the end of February subject, as I have said, to situations where next of kin may not be identified.

With regard to the application of funds, £950,000 was supplied for elderly care services in respect of nursing home subvention arrears in addition to expenditure in regard to article 8.2, the shortfall in the core subvention budget, the upgrading of substandard nursing home units, accommodation for public and staff, the discharge of elderly care patients which, in effect, was the use of funds to provide aids and appliances to people who would otherwise have been delayed in being discharged from hospitals, and other associated offsets regarding elderly care during that year.

As stated by the Comptroller and Auditor General, the board's financial statement for 1998 did not properly reflect the outstanding arrears position. However, it is our view that the £155,000 does not materially affect the veracity of the financial statements. The comptroller also referred to £133,000 in the 1999 accounts.

In summary, the original decision regarding the application of article 8.2 between 1993-96 was in compliance with the interpretation advice of the Department of Health and Children. When advised of the new interpretation, the board immediately applied the same to the benefit of all existing cases on a current basis. This decision resulted in arrears owing to subventees and-or their next of kin from 1993-96. Payments were made to existing cases as early as possible in January 1999. Difficulties were encountered as we mentioned in administering the arrears process and the board very much regrets delays in respect of payments to next of kin of some former subventees. I wish to use this opportunity to express our apologies on behalf of the board to individuals and families involved. Thank you, Chairman.

Mr. Harvey

Thank you, Chairman, for the opportunity to address the committee. In the letter of determination for 1998, we received £830,000 to meet the cost of arrears payments in respect of the full implementation of the Health (Nursing Homes) Act, 1990, and subsequent regulations. We applied the new arrangement from the current date in 1998. The retrospective application of the regulations was treated separately and there were inordinate delays for which we have apologised to our board, and, through it, to the public.

The detailed assessment of individual cases of arrears was completed in late 2000 and a total of £335,000 odd was calculated as being due in respect of 258 persons, of whom 144 were deceased. The board commenced the payment of arrears in December 2000 and £31,000 was paid in respect of 13 cases in 2000. A further £278,000 odd was paid in respect of 224 persons in 2001 and £26,000 was outstanding in respect of 64 persons at the end of 2001. Of the outstanding cases, we have since made payment in respect of 46 cases, there are 15 cases in respect of which we have tracked and traced and have cheques ready for dispatch and there are some legal indemnities to be signed. Of the three outstanding cases, we have made progress. The more complicated of these cases involves contacts in America.

In dealing with the payment of arrears, my staff made personal contact with most individuals or next of kin - personal visits, contacts with friends, colleagues and so on. The tracing of next of kin has required substantial effort and has given rise to legal issues in some cases. However, these have now been largely resolved. I wish to acknowledge the support and assistance given by officials of the Department of Health and Children in this regard.

I fully accept that the board's delay in respect of the processing of the payment of arrears was unsatisfactory. I also wish to acknowledge the advice of the Comptroller and Auditor General that accruals for arrears should more appropriately have been reflected in the 1998 annual financial statement. As I have said, we expressed regret for these delays when I presented a report on this matter to my board in early 2001. I again wish to apologise to those individuals and next of kin for these delays. Beyond that, while we can offer no defence for the delays, as with my colleagues, there is a context in which all of this was being handled in terms of pressures on numbers looking for subvention, funding issues, etc. However, in many respects that is a parallel issue and the apology is otherwise unreserved.

It is a unique experience for the Public Accounts Committee to have all eight health boards called on the same day. This is indicative of the committee's concern regarding this issue. This matter has caused much hardship and pain to many people over the years and we are grateful for the work of the Ombudsman in highlighting some of the anomalies and injustices which occurred. We are also grateful for the report of the Comptroller and Auditor General.

Do the chief executives of the eight health boards meet on an ongoing basis?

Mr. Harvey

Yes.

How is it that six health boards decided not to implement the regulations in accordance with the original intention? The North-Eastern Health Board and the Eastern Regional Health Authority - the largest board - did not have any difficulties in this regard and did everything correctly. If the eight chief executives were meeting on an ongoing basis, surely you would have discussed how to interpret the rules and regulations regarding this issue.

Mr. de Búrca

We speak for ourselves, and not as a collective, even though there is a sense of uniformity or standardisation, but in each of our presentations - and you will hear other presentations which will, perhaps, mirror this position - we were in effect, from an accountancy point of view, in compliance with the interpretation of the regulations as defined for us by the Department of Health and Children. I can only speak for myself or those who preceded me.

You are saying that the other two health boards are not acting in accordance with the Department of Health and Children in implementing the regulations.

Mr. de Búrca

I am not saying that, Chairman.

That would be a natural inference.

Mr. de Búrca

If you wish, Chairman, but I must address the question from the point of view of my accountability. As I said in the presentation, our position was to implement the regulations and article 8.2 precisely as required of us. When it was brought to our attention that in effect the new interpretation should be implemented, we complied with that exactly. I think that would be a position demonstrated in each of those health boards. I cannot speak for the others. I am simply stating our position.

My point is that if the eight executives of health boards meet on an ongoing basis, surely they discuss this issue. I find it remarkable that all health boards were not singing from the same hymn sheet from day one.

Mr. de Búrca

I cannot answer for the two in question, but we would say that from the very outset, and I would not have been in this office at the time, it was recognised that the whole premise on which the scheme was devised has all of the aspects of a demand-led scheme. This is one of the issues which will recur from time to time. If schemes are introduced, such as demand-led schemes, and they are capped, more from the point of view of the determination of the level of allocation for funding such arrangements, then we may have a fear of a repetition of such occurrences. I say this frankly and honestly with regard to the design of schemes which exist for a purpose and which have parameters that are either clearly spelt out from the outset or subsequently discovered to have inadequacies based on, perhaps, regulation or interpretation. We all accept, as the Ombudsman demonstrated, that in the particular instance the interpretation of the regulation was not correct. The Comptroller and Auditor General can address this question himself. Our obligation is the implementation of law and regulation. Traditionally, the interpreter of that regulation has been the Minister and the Department.

Mr. de Búrca, will you reconcile something for me? In your statement you said that when the board was advised of the new interpretations of regulations in December 1996, it immediately applied it to the benefit of all existing cases on a current basis. A letter from the Mid-Western Health Board dated 4 September 1997 states: "I have had correspondence with your son, J, and he has refused to supply any information that I have requested with regard to his income. In the light of this it appears to me that the only option open to me is to refuse your husband's subvention application which I now confirm is refused." That does not make sense to me if you were issued instructions in December 1996 and you say you were interpreting the regulation. According to the Ombudsman's report that letter was sent to someone in September 1997.

Mr. de Búrca

We are dealing with two different issues. That is not article 8.2.

It relates to it.

Mr. de Búrca

That deals with a different provision which relates to the family easement, in other words, taking into account sons and daughters or family. It is a different issue but obviously they all overlap at some point.

It is an issue that no longer appertains because, as you know, sons and daughters are not taken into consideration.

Mr. de Búrca

That has been corrected in general.

I know it has been corrected in general but how many people have been refused a nursing home subvention on the basis that they did not provide information on sons and daughters living with them as a result of your interpretation of the regulations?

Mr. de Búrca

I cannot give you a specific answer. Our current position is that 488 cases of family circumstances review are now in the process of being dealt with. This has a potential cost of £2.6 million. To date, we have identified 28 families at a cost of £193,000. We are in the process of dealing with the arrears arising in regard to those circumstances. If you wish, Chairman, they are two different frames.

Are you saying this matter will be brought to finality by the end of February?

Mr. de Búrca

No, we are talking about two different matters.

I am talking about overall nursing home subventions and arrears outstanding to people. We want to understand when this whole saga will be brought to finality by the health boards.

Mr. de Búrca

Article 8.2 relating to pocket money will be finalised by the end of February. We are currently processing arrears since we got authorisation from the Department of Health and Children last October to fully deal with arrears on family circumstances. There is currently a full process in place to deal with that issue. I estimate the process will be completed in April or May.

We can expect both parts to be closed by the end of May.

Taking the three health boards as one, we have received everything from apologies to regrets and an acknowledgement that this was unsatisfactory. Basically, the same situation appertained in each of the three health boards with which we are now dealing. Some £150,000 was allocated to the Midland Health Board in January 1998 to enable it to repay the moneys due to patients. The reports of the Ombudsman and the Comptroller and Auditor General referred to this. According to the Comptroller and Auditor General's report and the Ombudsman's report, which first brought this issue to notice, the money was not paid back to patients by the Midland Health Board until May to October 2000, almost two and a half years later. What caused the delay?

I differ from the Chairman who finds it strange that all the health boards were not singing from the same hymn sheet. I find it strange that six health boards were singing from exactly the same hymn sheet in regard to how the issue was handled and the delay in paying back the money. What was the necessity for the delay, apart from what has already been explained? Why could this not have been dealt with when it was proved the money was owed? Was interest paid on the amounts refunded? Was there any reference to the £150,000 in the 1998 accounts, the Comptroller and Auditor General's report or in the estimates for 1999? When a patient died was the money paid into the estate of the deceased person in all cases?

There was an inordinate delay in the payment of these refunds to patients and the estates of patients who died. A number of factors contributed to this, including the significant additional administrative work involved at a time when there was a lot of demand on the staff dealing with the processing of new applications for nursing homes and ongoing payments in terms of the amount of checking and files that had to be revisited. There were multiple files in some cases because patients would have spent time in a nursing home, gone back home, been readmitted or admitted to another nursing home and so on. There was quite an amount of additional work involved. However, I am not putting that forward as a defence, merely an explanation as to why some of that time was consumed on this work. I acknowledge there was an inordinate delay.

Mr. Doherty, on the pocket money issue, it was clarified by the Department that in January 1998 some £150,000 was paid to the Midland Health Board specifically for the purpose of a refund. The Ombudsman's report states that none of this money was paid to any patient in your care until May 2000. You cited administrative workload and so on, but it is a shocking indictment of your health board that it took 17 months before any pocket money was refunded, despite the clarification of the Department of Health and Children's guidelines.

I accept there was an inordinate delay. Apart from the explanation I have given in regard to some of the work involved, I am not attempting to defend that. We have learned a lesson from that and it means we will have to put better tracking arrangements in place to ensure there is not a repeat of such an experience in the future.

Was the money paid to you in January 1998 used for that specific purpose in 1998 or 1999? Payments began in May 2000. Was that money put aside specifically to refund pocket money in May 2000 or was it spent on other aspects of the health board's work in 1998 and 1999?

There was no other reason for not repaying the money. There was not a financial reason for not repaying the money.

I am not asking that question. I am asking if it was spent elsewhere.

The board remained within its allocation in the year in question.

My question, Mr. Doherty, is whether the money was spent elsewhere. If you were given £150,000 in January 1998 during the straitened circumstances that the health boards often find themselves in, I doubt very much you left it in a piggy bank until May 2000. Was it spent elsewhere in 1998 or in 1999?

The allocation would have been given but the drawdown of funds would be a separate matter. That is why I allude to the overall financial performance of the board in those two years. Whether it was drawn down or not, the point that the Comptroller and Auditor General makes is that the money was payable in that year in respect of previous years but there was not a——

We are at cross purposes. I have in front of me what the Ombudsman's report said. A sum of £150,000 was paid to the Midland Health Board in January 1998 specifically for the purpose of refunding under the pocket money scheme as described. The money was paid to you for that purpose. Was the money used for another purpose in 1998 or 1999?

Not to my knowledge. It should have been included in our accounts to reflect the liability which would have had the effect of increasing our expenditure for the years in question, but I think that was the main effect of it.

Therefore, the auditor's report for 1998 reflected that £150,000 was allocated but not spent for the purpose specified.

It was money carried forward. It was a liability carried forward to 1999-2000.

Would Mr. Purcell clarify the matter?

Mr. Purcell

As I understand it the amount involved, £150,000, while a significant amount in itself, in the context of the Midland Health Board's net current expenditure in 1998 of £125 million is something like .01% and that would not cause me a problem as an auditor in certifying the accounts. The effect of it would have been to increase the deficit which in that year was £964,000. If that expenditure had been recorded as a liability in the 1998 accounts then the deficit for the year would have been increased by £150,000 and similarly in 1999 the amount was not accrued and therefore was not treated as expenditure. The Midland Health Board had a deficit on its current account that year of just over half a million pounds, so it would have increased it by that amount. I tend to agree with what the chief executive officers said in their opening statements that in a material sense it would not be significant, but of course for the people involved it was a serious issue. The money was allocated and the health boards for the many reasons that have been outlined were tardy in disbursing those amounts.

All of the reports mention that you acceded to the guidelines subsequent to the clarification from the Department of Health and Children. It is a classic example of where hardship was imposed on people with regard to the area of subvention. As public representatives we were at the coalface with regard to people coming to us who were being assessed for means in order to see how their income would affect the overall subvention. In this case the health board was given £150,000 after a long saga which included the Ombudsman's report and yet nothing was paid until May 2000. This is a shocking commentary and demonstrates a lack of sincerity and a sense of callousness for people who were elderly and in many cases were deceased. Mr. Doherty, and health boards in general, should hang their heads in shame over this saga.

The Chairman has expressed many of my own sentiments. I did not get a clear answer but from the cross-examination I gather it was not included in the 1998 or 1999 accounts. Was interest paid to the patients who were owed money?

No interest was paid with the refunds to the patients. The Deputy is correct in that it was not accrued in either 1998 or 1999.

If the £150,000 was there and was not used anywhere in the accounts it must have been invested somewhere with interest being earned on it. Am I missing something or is that the case?

No, as the Comptroller and Auditor General mentioned, the board was in deficit overall at that point so there was no financial advantage to the board. This did not limit in any way the board's liability, because the liability was incurred at the point where the decision was taken that the regulations were to be changed and funding was made available then.

But eventually the board's deficit for those years was cleared by the Department and therefore the £150,000 was used to reduce in a small way the board's deficit by that amount.

I think it is accurate to say that the deficit was cleared, intentionally, by the Midland Health Board. Additional funding was not provided to clear the deficit. It was a deficit carried forward from an earlier year which was repaid, in effect, over a number of years. There was no financial advantage to the board with regard to that issue.

Chairman, I have a question on the subvention and new regulations. The principal residence of the person seeking a subvention is treated as a special asset and is not taken into account in certain circumstances, such as when a family member is still living in the house. In a case where a person is living alone and they go into a nursing home, it states that the value of their residence may be taken into account. It was always taken into account in the cases I dealt with, in spite of the fact that, as Mr. Doherty mentioned, a patient could be in a nursing home for a time and would then go home and maybe be re-admitted.

Many people will not dispose of or rent their residence while they are in a nursing home because they believe they will go home again. Despite the fact that their residence is not rented or where there is no income accrued from that residence it is taken into account when assessing the person for subvention. I have no difficulty in them being assessed if their home is rented. It would seem to me to be a simple matter to establish whether or not there is an income from the residence for the period that a person is in a nursing home. Why do health boards not take that into account when the provision allows them to do so?

It may be appropriate to say to this committee that if the nursing homes Act and the regulations relating to it acknowledged that the nursing home subvention arrangements are a demand-led scheme such as the refund of drugs scheme where the board recoups the actual cost involved, it would be more feasible for the board to adopt a flexible approach along the lines suggested by the Deputy. The reality is that from the outset it was not acknowledged that this is a demand-led scheme.

My board experienced significant difficulty in managing within the resources made available to it, limiting the discretion of the manager in regard to the type of issue raised by the Deputy. When the costs of the nursing home scheme are examined over the year since the new legislation came into force there is a trend towards over-expenditure in regard to the resources available to the board.

I would say it is quite the reverse. If a person is forced to rent his or her own home, he or she has a far less chance of ever coming out of the nursing home and ceasing to be on subvention. If a person retains his or her home, perhaps to return for four or five months in the summer, there will be a great saving on the nursing home subvention. If the regulations require a person to rent his or her home, there is less chance of making that saving. Common sense should prevail.

The factual rather than the imaginary position should be taken into account in assessing the value of a person's home for subvention.

Mr. de Búrca

In the Second Schedule to the Act the reference is, "A board may impute an annual income equivalent to 5% of the estimated market value of the principal residence of the person." The reality is more in keeping with what Deputy McCormack is saying. In our case, where a person is potentially likely to go home, the value of his or her residence is not taken into account and never becomes a material issue in determining entitlement to subvention.

I know of a recent query with the Southern Health Board where it imputed the value of 5% in the computation of the amount in determining the level of a person's subvention. This is an example of two health boards interpreting the regulations differently.

Mr. de Búrca

Discretion comes into play.

It is a pity that discretion is not used in the interest of the consumer. Your health board uses discretion to one effect while the Southern Health Board uses it to another.

My experience in the Western Health Board is that in all cases where there is an empty house, its value is assessed in the application for subvention unless it is occupied by a spouse, a son or daughter under 21 years of age or a person in receipt of disability or invalidity benefit. There are many people in nursing homes who lived alone or with a niece or nephew who continued to live in the house when the elderly person went into a nursing home. In all such cases the value of the house is taken into account when assessing eligibility for nursing home subvention. This should not be the case.

I want to correct an inaccuracy on my part. The situation was worse than I stated. From 1998 to May 2000 is not 17 months. It was two years and four months before anything was paid.

Paragraph 22 of the Second Schedule states that a person may be refused a subvention if his or her principal residence is valued at £75,000. Have any of the three health boards represented ever refused a subvention on this ground?

The answer in the case of the Midland Health Board is yes, we do.

Mr. de Búrca

In the past we did, but as housing values went up, we took a more discretionary attitude.

The point of a discussion with Mr. Kelly today was to revise the amount to take cognisance of property values in 2002. The Second Schedule states a health board may refuse to pay a subvention. It has discretion in the matter. It is questionable whether one would have bought a house for £75,000 in a housing estate in Limerick. I would like to think health boards are exercising discretion in the interest of the consumer.

Mr. de Búrca

I think it is more flexible now than it may have been in the past.

I hope it is more flexible because £75,000 in 1993 does not reflect house values in 2002.

Mr. de Búrca

Quite right.

That is true, but on the other hand if we were to adopt a more flexible approach, a significant increase in the threshold would have funding implications for the board. Our funding under this heading has always been severely stretched. In addition to changing the approach, it would be necessary to negotiate additional funding for this purpose.

The Department of Health and Children intends to revise the figure to be cognisant of modern times.

Mr. de Búrca

There would be funding consequences for a more liberal interpretation of the regulations.

The questions with which I was concerned were dealt with at the earlier meeting and I am happy with the answers given by the Secretary General of the Department. There is no point in being repetitive. We all have experience of nursing home subventions. I hope the matter will be cleared up and removed from the agenda because we have been dealing with it for nearly two years.

It is not appropriate for members of the Committee of Public Accounts to receive such documentation on the morning of a meeting as we received this morning. It is not possible to deal with such information in the time available. We are dealing with accounts going back to 1997, 1998 and 1999. Only one health board has produced an account for the year 2000. Most of what we have seen is now irrelevant. It would be impossible to take an intelligent approach to the general question of health board finances based on the documentation we have been given.

The committee should direct that accounts be provided for the Committee of Public Accounts within a reasonable period of time at the end of each financial year. Our next session with the health boards should be in June this year when we should be able to discuss the accounts for 2001. The committee should be able to question representatives of health boards on financial reports which are relevant currently. I will not waste my time as convenor on this committee if this practice is repeated. I do not have a solution to the problem. However, the committee must make a firm decision in relation to the matter. We should not waste our time dealing with accounts that are four or five years old.

Mr. Purcell

There are two issues involved, of which one is the consideration of the accounts by the committee, which is a matter for the committee itself. The fact that members may see accounts for 1994 on today's agenda is perhaps the result of the committee itself not noting the accounts for a particular year when they were heard or, in the case of the accounts for 1997 and 1998, choosing not to bring in the Accounting Officers for examination, perhaps because there was not a critical report on the accounts for those years and the committee, in discharging its business efficiently, had other fish to fry.

The second issue concerns Deputy Bell's point that the accounts for 2001 should be considered by June. There is a practical problem with this, partly due to problems in my office with regard to getting the audit of the accounts of health boards, which are in arrears, up to date. Only one of the 2000 accounts, the Midland Health Board's, has been certified by me. The others were returned to the boards for resigning due to amendments arising from audit. There are also arrears, as in the case of the Eastern Regional Health Authority and to a lesser extent the Western Health Board where, for a combination of reasons on both the client and audit side, there are delays. Therefore, there are several different problems concerning how the committee, myself, and the health boards do business.

I thank Mr. Purcell for the explanation, but half a dozen wrongs do not make a right. It is a deplorable situation. Even with a large team of secretaries and researchers, no one could read all the reports in the available time. It is unfair to the committee's members and a bad way of doing business. I expect to see necessary changes being made, as I have said before to this committee and other statutory bodies.

I thank the Comptroller and Auditor General for his clarification. I appreciate Deputy Bell's concerns, but the reports of the four boards from different years were distributed because we had not previously dealt with specific annual financial statements. The Comptroller and Auditor General has over 300 organisations such as Government Departments, vocational education committees, health boards and commercial and non-commercial State sponsored bodies to deal with. It is physically impossible for this committee to visit every one of the accounts. The committee does not focus on the majority which are straightforward and today we wanted to examine conclusively the nursing home subvention, although we distributed all the accounts. We would not normally bring in all eight health boards to discuss their accounts.

Mr. Harvey, why did your health board take so much longer to implement the regulations?

Mr. Harvey

We were current from 1998 and slow in paying the arrears up to 2000-01. We did not take a decision not to pay the arrears. I am conscious of the fact that we may be portrayed as a board which did not have patients in focus. We had a significant deficit in our overall funding for subvention accumulating over some years. By 1997, the gap between the funding earmarked for that year and the spending we had was about £2.5 million. We concentrated on meeting the day-to-day demands and the increasing demands on subvention. We had an aggressive programme of home supports and home helps for the elderly as we have 33% above average dependent population in that age group. We did not get around to paying the arrears.

We offer no defence for that but wish to explain the pressures on us. We maintained our services. For example, in 1998, we provided 3,000 additional home helps——

That is not relevant to my question. Other boards operate with deficits also. My question was why your board was not current until 1998, after it was introduced in 1996 and the other boards were current in 1997?

Mr. Harvey

I am not sure of the answer to that.

That is the answer I seek. You have raised the issue of deficits because of other schemes——

Mr. Harvey

That was about arrears.

However, it is the people on subvention who are penalised because of the delay.

Mr. Harvey

I understand that.

We take note of all the financial statements of the health boards. February and April were mentioned, but we would like to see this matter brought to a conclusion soon.

I recently raised with the Department of Health and Children a case in which a family was asked for letters of probate and administration for just £200. I commend the Department for instructing the health boards that they can exercise discretion in this area. In the case I refer to, the Mid-Western Health Board exercised that discretion. We all want this matter to be concluded and I hope that the boards will exercise discretion where small sums are involved.

The witnesses withdrew.

Sitting suspended at 2.45 p.m. and resumed at 2.55 p.m.