Thank you, Chairman. I welcome the opportunity of appearing before the committee to explain exactly what has happened under my regime since I took office in October 2001 in relation to the multi-storey car park project. In setting out my statement regarding this matter, it is not my intention to repeat the facts as set out in the value for money report of the Comptroller and Auditor General, which has just been summarised. Accordingly, in this opening statement, I will concentrate on the events that may not be specifically referred to in the report but which may indicate to members of the committee the ongoing work being undertaken by me on behalf of the hospital arising from the problems identified early in 2002 relating to car parking at Beaumont Hospital, which is the subject of the value for money report.
The work undertaken at the hospital includes the following: (i) to establish the facts leading to the losses incurred in the period from 1998 to 2002, as detailed in the VFM report, that were the result of a failure to properly control public parking as set out in the legal agreement with the multi-storey car park operators, Winston Properties; (ii) to negotiate a settlement with Howard Holdings, the parent company of Winston Properties, that would allow the two parties to resolve any dispute that had arisen with respect to the imposition of fines leading to a significant loss of income to the hospital; (iii) to prepare accounts for the subsidiary company known as Beaumont Hospital Car Park Company Limited, a wholly owned subsidiary of Beaumont Hospital board, and then to arrange for the winding up of this company as had been intended to take place once the multi-storey car park was established but which, due to an apparent oversight, did not in fact take place; and (iv) to undertake the measures necessary for the transfer of the land on which the car park is built back into the beneficial ownership of Beaumont Hospital, thus allowing the hospital to benefit from any settlement reached between the two parties in dispute.
I wish to restate at this point that Beaumont Hospital welcomes the publication of the VFM report on car parking at Beaumont Hospital. The hospital management has co-operated with the preparation of the report at all stages. I understand that the internal audit report, referred to later in my statement, which was prepared by the hospital's internal auditor and issued in March 2002, has assisted the investigation undertaken by the Comptroller and Auditor General.
By way of background, on 6 December 2001 I received a letter from the Office of the Comptroller and Auditor General, dated 4 December 2001, relating to outstanding issues arising from the hospital's annual accounts for the year ended 31 December 1999. As I had only taken up my post as chief executive eight weeks earlier, I was unaware of the issues referred to in that letter. On the day I received the letter, I gave a copy to the hospital's financial controller, asking that I receive a report on the matters in the letter without delay. On 13 December 2001, the day before my response was due, I contacted the Office of the C&AG in order to assure the C&AG that I was personally involved in following up on the issues raised in the letter of 4 December.
During the weeks that followed, I continued to make internal inquiries in the hospital while maintaining regular contact with the Office of the C&AG in order to keep it apprised of my progress in answering the queries raised by him in respect of the hospital's accounts for 1999. From the time of receipt of the December 2001 letter, there followed a two month period during which I made a significant effort to gather the information required to prepare a satisfactory response to the questions raised by the C&AG. By the middle of January 2002, however, it was clear the hospital was not in a position to respond to the queries raised by the C&AG, primarily due to a lack of records and information relating to Beaumont Hospital Car Park Company Limited and the accounts of that company.
On 14 January 2002, the Office of the C&AG issued a formal audit query regarding the matter. Towards the end of that period, information was brought to my attention indicating that rental income due to the hospital from the multi-storey car park had not been received for 2000 or 2001. On the basis of this information, on 4 February 2002 I requested the internal auditor to investigate the matter, in particular the financial position of Beaumont Hospital Car Park Company Limited and its financial records and to prepare a report. At this point, I should explain that the internal auditor who is with me today is not the person who was in that post at the time to which I refer in this statement. The occupant of the post at that time was Ms Mary Keaney. In the course of her investigation, the then internal auditor established evidence of significant deficiencies in the manner of operation of car parking on site that led to the imposition of fines and, furthermore, that documented evidence of the subsequent losses incurred by the hospital was not readily available.
On 22 February 2002 I issued a formal response to the audit query raised by the Comptroller and Auditor General. On 26 March 2002, I received an internal audit report relating to the development and operation of the multi-storey car park at Beaumont Hospital. The report confirmed that Beaumont Hospital had suffered a considerable loss or reduction of projected income relating to the operation of the car park. A copy of this internal audit report was furnished to the Office of the C&AG for information. On 17 April 2002, approximately three weeks later, I met with the Comptroller and Auditor General, Mr. John Purcell, and two of his senior staff, Mr. Gerry Smyth and Mr. Michael Buckley and briefed them on the updated position with respect to the multi-storey car park, Beaumont Hospital Car Park Company Limited and other related matters.
Throughout the period referred to above, I informed Beaumont Hospital board of the problems as they had been identified at that time. I subsequently updated the hospital board at successive board meetings on the progress of the investigations and subsequent negotiations and continue to do so to this day. At an early stage, I briefed officials of the Department of Health and Children and the Eastern Regional Health Authority who are responsible for funding the hospital.
In May 2002 I wrote to Howard Holdings, the parent company of Winston Properties, indicating that the hospital disputed the level of fines for so-called illegal parking on the hospital site and the manner in which the fines had been applied. In the 15 month period from March 2002, the legal and financial experts engaged by me on behalf of the hospital have sought to collect and collate all the relevant documentation relating to the car park. It has taken many months for these records and documentation to be gathered.
In March 2002 the Beaumont Hospital board agreed that I be appointed as a director of Beaumont Hospital Car Park Company Limited, along with the then chairman of Beaumont Hospital board, Mr. Peter Webster. Mr. Pat Lyons, former chief executive of Beaumont Hospital, remained on as a director. At a board meeting on 20 November 2002, the board of Beaumont Hospital Car Park Company Limited accepted the resignation of Ms Evelyn Hempenstall, former financial controller of Beaumont Hospital, as a director of the company.
I will now bring the committee up to date on what has happened in the course of the last number of months in relation to negotiations and arrangements. The outstanding concerns in relation to matters identified in the value for money report which have yet to be resolved are twofold. These matters, which have been referred to by the Comptroller and Auditor General in his introduction, are the arrangements for car parking at Beaumont Hospital that will eliminate the imposition of fines on the hospital for so-called illegal parking and the transfer of the car park land back to the hospital and the winding up of Beaumont Hospital Car Park Company Limited, the subsidiary company of Beaumont Hospital board.
In relation to the first of these matters, I met with Howard Holdings in December 2002, in the first of a series of meetings over a period of four months during which we agreed draft heads of terms that have subsequently been agreed in principle by Beaumont Hospital board at a meeting held last Tuesday, 20 May 2003. These heads of terms are intended to form the basis of future arrangements with respect to car parking on the hospital campus with a view to eliminating the imposition of fines by the multi-storey car park operators on Beaumont Hospital.
There are a number of actions yet to be taken as part of the process of resolving the problems relating to the control of car parking on the hospital campus. The hospital has introduced a new access ID system that allows for more strict control of parking in staff car parks, as well as access to the hospital in general. In addition, the hospital is in the process of installing bollards on footpaths and verges around the site to prevent cars being parked inappropriately in such areas. It is intended that all cars belonging to the public will be parked in the multi-storey car park, as agreed by the hospital in 1998.
A number of actions need to be taken in sequence in relation to the transfer back to the hospital of the land on which the multi-storey car park is built and this process is under way. One of the actions relates to establishing the position of the hospital with respect to VAT on the land transfer. I received a response in February 2003 in this regard from the hospital's financial advisors at the time of the development to questions raised by the internal auditor relating to the payment of VAT on car park transactions and other issues. On foot of this response, the hospital's current financial advisors wrote to the Revenue Commissioners on 4 March about VAT matters relating to the transfer of the freehold of the car park site back to the board of Beaumont Hospital. In a letter dated 16 May, the Revenue Commissioners confirmed that the transfer of the freehold by Beaumont Hospital Car Park Company Limited to the board of Beaumont Hospital will not give rise to a VAT liability in the circumstances outlined.
As indicated in the value for money report, we may intend approaching the Revenue Commissioners about other outstanding matters after the accounts for Beaumont Hospital Car Park Company Limited for 1999, 2000, 2001 and 2002 have been prepared. This action is under way. The hospital is addressing the issues referred to in paragraph 4.30, views of the chief executive, and paragraph 4.31, further risks to the hospital. We have made considerable progress in this regard.
As the chief executive of Beaumont Hospital, I have given an undertaking to the Office of the Comptroller and Auditor General, which is the hospital's auditor, that I will take all actions within my power to ensure the outstanding issues relating to the matters raised in the value for money report are resolved as soon as possible. I have also given an undertaking to the hospital board that I will prepare regular reports for it, detailing the progress on each of the actions identified as being necessary to resolve the outstanding issues referred to above. I would be glad, similarly, to assure the Committee of Public Accounts that the outstanding issues will be resolved as soon as possible, taking into account the hospital's statutory and regulatory obligations. I am happy to answer any questions that may arise from the information I have given or to deal with any other matters relating to my statement about which the members require further clarification or information.
