COMMITTEE OF PUBLIC ACCOUNTS díospóireacht -
Thursday, 7 Oct 2010

HSE Internal Audit

Mr. Michael Scanlan (Secretary General, Department of Health and Children) and Mr. Cathal Magee (Chief Executive Officer, Health Service Executive) called and examined.

Chairman

Today we are considering the 2008 and 2009 annual reports of the Comptroller and Auditor General. The committee has decided we will not deal with chapter 40 of the 2008 annual report, namely, the chapter on the Dublin ambulance service (resumed) or Special Report 70, Health Service Executive Emergency Departments. If any of the witnesses present are here to deal with those specifically, they may feel free to leave.

Before commencing, I advise witnesses that they are protected by absolute privilege in respect of the evidence they are to give this committee. If they are directed by the committee to cease giving evidence regarding a particular matter and they continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against a Member of either House, a person outside the Houses, nor an official by name or in such a way as to make him or her identifiable. Members are reminded of the provisions within Standing Order 158 that the committee shall 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 welcome Mr. Michael Scanlan, Secretary General of the Department of Health and Children. I ask him to introduce his officials.

Mr. Michael Scanlan

I thank the Chairman. I am accompanied by Mr. Jim Breslin, head of the finance directorate, and Mr. Larry O'Reilly from the Department.

Chairman

I welcome Mr. Cathal Magee, chief executive of the Health Service Executive. I congratulate him on his recent appointment and welcome him to the committee. I hope the relationship between the Committee of Public Accounts and him and his organisation will be an open and fruitful one, and that the communication process will be a two-way one. I look forward to working with him in the months and years ahead. I ask him to introduce his officials.

Mr. Cathal Magee

I thank the Chairman for his kind introductory remarks. I am accompanied by Ms Geraldine Smith, internal audit division, Mr. Seán McGrath, national director for human resources, and Dr. Barry White, national director for equality in clinical care.

Chairman

They are all welcome. I ask the officials from the Department of Finance to introduce themselves.

Mr. Tom Heffernan

I am from the sectoral policy division and I am accompanied by Ms Una Buckley from the public service management division.

Chairman

The witnesses are all welcome. I ask Mr. Buckley to introduce his report. The full text of chapter 37 can be found in the annual report of the Comptroller and Auditor General or on the website of the Comptroller and Auditor General atwww.audgen.gov.ie

Mr. John Buckley

Thank you, Chairman.

The chapter on the SKILL programme formed part of the recently completed 2009 annual report. The background is that one of the agencies integrated into the HSE on its establishment in 2005 was the Health Services Employers Agency. Its mainline activity, and subsequently that of the unit within the HSE that carries out its functions, was to promote value for money in pay cost management, support and represent health sector employers in managing industrial relations, and assist personnel management through research, education and information initiatives. The agency also had responsibility for processing payments for programmes managed by a separate SKILL function overseen by a steering group that included representation from supervising Departments. In addition to managing the core SKILL programme designed to train and develop supervisors and support staff, this function also processed some payments related to a front-line supervision programme that predated the HSE.

Separately, the Health Services National Partnership Forum, which is a non-statutory consultative group, also administers some of the funding for an action plan for people management. In the period 2004 to 2009, a total of €47 million in expenditure was administered through the SKILL function. Some €16 million went on the direct cost of training supervisors and support staff. Some €28 million was paid to hospitals to allow them to backfill or provide cover for those being trained. Some €1.5 million was paid in grants related to the front-line supervision programme, which I mentioned, and €2.3 million was spent on various forms of administration and miscellaneous grants.

The report raises some concerns about the failure to implement clear and explicit arrangements for the control and accountability of programme expenditure; the fact that sufficient information was not retained to evidence the contract award process for the training that was procured; the lack of any transparent accounting sufficient to confirm the application of the €28 million that was applied in backfilling grants; inadequate central records to align training costs and participation. In the case of grant payments of €1.5 million into an account entitled the "SIPTU National Health and Local Authority Levy Fund Account", there was inadequate specification of the purposes for which the funds were being given, and there was limited detailed vouching of their application.

Certain administrative costs of the SKILL programme were met in the first instance apparently from this account. Reimbursement was made to the account without detailed vouching in the form of third-party invoices in most cases.

The SKILL programme has to be seen in the light of a wider partnership drive in the HSE. In this, something of the order of €900,000 was paid into the same account from the Health Services National Partnership Forum under the action plan for people management. The payments were made to unions to provide for training and development of health sector staff. Associated with the partnership process, and to a lesser extent the SKILL programme, a number of study visits were made. Where civil servants were involved, the Accounting Officers have stated that participation by their staff was with the knowledge of their superiors. While part of the costs are borne on the Votes, it has not been possible to transparently relate the remaining cost to vouchers maintained by the SKILL function.

The HSE has already finalised an internal audit of administrative expenditure borne on the SKILL programme which has been placed before the committee and is conducting further audits of procurement and backfilling costs. Separately, the Accounting Officer of the HSE has instituted an investigation of travel associated with SKILL and partnership activities and will be in a position to update the committee on the progress of that investigation. The chapter itself ends with a set of recommendations for better managing and accounting for this type of programme in the future.

Chairman

Thank you, Mr. Buckley.

Mr. Michael Scanlan

I had intended my opening statement to deal with the two issues we are not dealing with today. I will omit them and deal entirely with the SKILL programme. Chapter 37 of the Comptroller and Auditor General's report for 2009, published on 15 September last, deals with the SKILL programme. The report provides a breakdown on page 494 of the expenditure of more than €47 million on this programme over the period 2004 to 2009. I propose to focus on two aspects: the grant payments shown in the table and the section of the report dealing with study visits. By way of general comment, however, I note that the programme has its genesis in a Labour Court recommendation of October 2003 dealing with a dispute between health service employers and support staff, but also has a clear policy rationale and the full support of the Department.

In July 2001 the Department sanctioned funding for the Office for Health Management for several programmes including €190,000 for the "Front Line Supervisors Programme". The sanction asked that this funding be paid to SIPTU. Sanctions for funding of the same amount issued in 2002, 2003 and 2004 together with further once-off approval for smaller amounts in 2004. These referred to the provision of front-line supervision training by the Office for Health Management and made no reference to SIPTU. In all cases, the funding was provided on a one-off basis.

In December 2004, with the imminent establishment of the HSE, the Department sanctioned ongoing funding of €250,000 a year out of the overall budget which had recently been established for the SKILL programme. The December 2004 letter states that the funding is to be allocated to SIPTU health division to maintain support for SIPTU's human resource/personnel development schemes and the development of management/union partnerships of best practice.

I accept the Comptroller's finding that the terms on which the funding was made available by the Department were not clear and did not adequately inform the Office for Health Management or the HSE about the outputs expected. In addition, the decision in December 2004 to use some of the SKILL funding to meet the cost of the ongoing annual grant to SIPTU has served to confuse matters further.

The Comptroller and Auditor General's report lists a total of 31 study visits identified by HSE internal audit, some of which were part of the SKILL programme and others which were not SKILL programme visits but partnership visits. I asked the Department's personnel officer to conduct a review of participation by Department officials in these study visits and other related matters. I have provided a copy of this report to the Comptroller and Auditor General and it is being published on the Department's website today.

The report shows that Department officials participated in eight of the study visits listed on page 505 of the Comptroller and Auditor General's report plus a further two similar visits not listed in the report. The total cost of subsistence claims paid by the Department in respect of all these visits was €6,290. This is not the total cost of the visits: airline and accommodation costs were met separately from non-departmental sources.

The Department has located and reviewed detailed papers dealing with a number of these visits. The papers show that the visits were relevant to the problems being addressed within the Irish health service at the time. The joint management/union composition of the delegations reflects the policy at the time of developing and supporting a partnership approach to organisational change. Department officials who participated in the study visits did so with the prior knowledge and approval of their line managers. I am advised that all flights were economy class and that standard hotel accommodation on a room-only basis was provided.

Chairman

Mr. Scanlan referred to a report that has gone to the Comptroller and Auditor General and which will go on the Department's website today. Why was the committee not given the courtesy of getting that report to help our business today?

Mr. Michael Scanlan

Sorry, Chairman. My understanding in providing it to the Comptroller and Auditor General was that the Comptroller and Auditor General would provide it to this committee. If I was wrong in that I am sorry.

Chairman

You are totally wrong in that.

Mr. Michael Scanlan

I apologise for that.

Chairman

We are self-standing and independent of the Office of the Comptroller and Auditor General. We would have expected to get a copy of that out of common courtesy.

Mr. Michael Scanlan

That was a misunderstanding and I apologise for it.

Deputy Róisín Shortall

On that point, I wish to ask when the Comptroller and Auditor General got a copy of the report. Can a copy be circulated to us now?

Chairman

We want it immediately.

Mr. John Buckley

We got it, apparently, on Monday.

Chairman

This messing cannot go on. We should get a copy of this report. We are here doing business today and to be left in the dark about this report is outrageous. Put down that marker, Mr. Scanlan.

Deputy Jim O’Keeffe

Will we get a copy now?

Chairman

Can we get a copy immediately, please?

I ask Mr. Magee to make his opening statement.

Mr. Cathal Magee

I begin by thanking members of the committee for the invitation to attend the meeting to discuss matters arising from the Comptroller and Auditor General's report.

SKILL is a training and development programme aimed at 32,000 support staff such as health care assistants, home-help workers, porters and catering staff in the health sector. It was established following a Labour Court recommendation in 2003. The SKILL programme has provided important training to more than 7,000 staff in the health service. The funding was initially allocated by the Department through the former Midland Health Board to be forwarded to the SKILL programme through the Office for Health Management. Since 2005 the HSE has had responsibility for the administration and funding of the SKILL programme.

In April 2009, the HSE's internal audit commenced a detailed audit of the SKILL programme at the request of the HSE's national director for HR. This internal audit discovered and reported in June 2010 a number of serious breaches of HSE controls and regulations. It concluded that these breaches resulted from significant financial control, governance and oversight deficiencies and the failure to adhere to existing controls and procedures, rather than a lack of such controls and procedures. The Comptroller and Auditor General was immediately advised by the HSE of these findings.

I will now deal with important dimensions which arise. The HSE internal audit found that expenses totalling €348,321 were paid by the HSE to a bank account called the SIPTU national health and local authority levy fund, on the basis of invoices submitted by SIPTU. These expenses were not properly vouched or supported by sufficient back-up documentation. This represents a serious breach of existing HSE financial regulations and reflects a breakdown in our systems of administrative and financial control. This is clearly unacceptable. The HSE has put in place measures to prevent such breaches occurring in the future. The HSE has formally requested SIPTU to reimburse these moneys and to provide relevant supporting documentation to support the expense claims.

SIPTU has advised the HSE that the national health and local authority levy fund is not an authorised SIPTU bank account. While it does not accept any legal liability, the union has made it clear that, without prejudice, any amount paid by the HSE in reimbursement for invoiced expenses incurred will be repaid if it transpires that they were not fully vouched in accordance with public service regulations. The union has informed us that it is undertaking an investigation into the issue and pending the outcome it has lodged an amount of €348,321 with a commissioner for oaths as a good faith statement of its willingness to make good any unverified expense payments. Its investigation is ongoing.

Regarding the annual funding grant to SIPTU national health and local authority levy fund, on the instructions of the Department of Health and Children, and prior to the establishment of the HSE, an annual funding grant of €190,000 per year was paid to the SIPTU national health and local authority levy fund by the Office for Health Management from 2002 to 2004. The funding grant was increased by the Department of Health and Children to €250,000 per year in December 2004, prior to the establishment of the HSE. The HSE disbursed the funding grant to SIPTU after its establishment in 2005. The sum total of the approved funding grant, between 2002 and 2009, was €2.005 million.

Arising out of the findings of our internal audit, the HSE recommended to the Department that the funding grant be suspended pending completion of the HSE audit. The Department of Health and Children approved the indefinite suspension of the funding grant to SIPTU.

The Comptroller and Auditor General report notes: "The terms in which the funding paid into the SIPTU National Health and Local Authority Levy Fund Account were described would have been of limited use in enabling either the OHM or the HSE to determine what was expected to be provided by the funding." There was a lack of clarity surrounding the governance of this aspect of the SKILL programme, given its origins. Notwithstanding this, the HSE had accounting responsibility for the disbursement of the funding grant from 2005 and should have sought clarity from the Department on the issue and satisfied itself about adequate controls, validation and value for money.

The HSE internal audit discovered and reported that foreign travel had taken place to destinations including the US, Australia, Hong Kong, Brussels and the UK, paid for out of the SIPTU health and local authority levy fund. The financial records of SKILL did not record any travel, hotel or other expenditure on such trips. The HSE has commissioned Mr. Turlough O'Sullivan to conduct an independent investigation into this matter, as it relates to HSE staff. This report is due shortly. The HSE also awaits the findings of the SIPTU internal investigation when it is expected more information will be available on this foreign travel including details of expenses paid in respect of travel and accommodation to HSE staff from the SIPTU national health and local authority levy fund.

To date, HSE has established the following information. Some 12 members of staff were involved in SKILL or national partnership forum-related foreign trips. Some 31 individual foreign trips occurred between 2004 and 2009. The HSE paid out imprests or subsistence of €7,700 to staff from the SKILL programme for these trips. The travel and accommodation costs for them were not paid by the HSE but paid out of the SIPTU national health and local authority levy fund. This is what we have established to date but I emphasise that until the HSE independent investigation is concluded and we receive the information from SIPTU's investigation this information on HSE staff involved in foreign travel remains incomplete.

There are clear public sector regulations in relation to foreign travel. Since November 2006, the HSE has specific regulations in respect of foreign travel. It is clear that these regulations were not followed by HSE staff in some of these cases. There is evidence of serious breaches of HSE travel regulations and this is unacceptable. These breaches are the subject of the ongoing HSE internal investigation.

These general breaches related to SKILL and occurred in areas such as improper procurement processes, inappropriate use of taxis and non-adherence to recruitment and pension procedures. The HSE has taken immediate and strong measures to ensure full compliance with our regulations concerning payments, travel, procurement, recruitment and pensions and to address the recommendations, which we accept, of both the internal audit report and report of the Comptroller and Auditor General. Furthermore, the steering committee of the SKILL programme has been stood down and its staff and work have been integrated into the HR directorate of the HSE. This provides for greater control and accountability. A value for money study is being undertaken by the HSE in respect of the overall SKILL programme.

On partnership, arising from the issues that have arisen in the SKILL audit, the HSE's national director for human resources has sought an internal audit to be undertaken of the health national partnership forum. This partnership audit, which is ongoing, identified that payments totalling €925,000 were made into the same SIPTU account. We await completion of the full HSE internal audit report into this matter before commenting further.

In summary, the SKILL programme is a worthwhile initiative that has addressed many of the training needs of 7,000 health care workers in the support services area since its establishment. However, there have been significant governance and financial control failures associated with its administration and funding. These are highlighted in our internal audit report and the report of the Comptroller and Auditor General. These failures were identified by HSE internal audit following a detailed audit requested by the HSE's national director of HR and the results were promptly reported to the Comptroller and Auditor General.

It is of particular concern that there appears to have been a systemic failure to adhere to the financial, travel and procurement regulations of the HSE relating to the SKILL programme and HSE national partnership programme. The HSE has taken the steps required to ensure comprehensive compliance with its regulations in relation to payments, travel and procurement and to address in full the recommendations of internal audit and the Comptroller and Auditor General to ensure these failures do not recur. The HSE will revert to the Comptroller and Auditor General once all of the investigations have been completed and a more comprehensive picture exists. This concludes my opening statement.

Chairman

Thank you, Mr. Magee. May we publish both statements?

Mr. Cathal Magee

Yes.

Chairman

Before Deputies engage in questioning the witnesses, I seek more detail on the background to this matter to assist with some of the questions that will be asked. We need to flesh out the issue because much of it is surrounded by vagueness. I ask that the following information be provided immediately, by which I mean at this meeting. I seek the names of officials in each Department or agency — the Departments of Finance and Health and Children and the Health Service Executive — who had responsibility for governance of the funds; the names of members of the steering group that has been referred to; the names of those who administered the steering group and the organisations they represented on it; and details of other sub-committees or groups that may have been administering the fund. I also ask for details of all the foreign trips made, including dates, destinations and the names of the persons on each trip.

A memorandum of understanding must have been drawn up between the Department of Finance and either the Department of Health and Children or the agencies regarding the money for the programme. There is certainly one such memorandum of understanding for the period 2009 to 2016. If there was a memorandum of understanding, I ask for a copy of it.

What was the relationship between the steering group and "Union A", which I am informed is SIPTU? On the exchange of letters between the Department of Health and Children, the HSE and Professor Drumm, there was correspondence about the fund between Mr. Scanlan and Professor Drumm in June. I ask for copies of this specific correspondence immediately.

Does any of the witnesses have the information on names, the destinations of trips and the names of those on the steering group as well as on those who administered and chaired the steering group?

Ms Geraldine Smith

We have details of the 31 trips that we are aware of — the destinations and the dates — and we have indications of some personnel who travelled. However, I must put a caveat with that in that the information we have gathered is based on the recollections of certain individuals. We do not have documentation to confirm that the people whose names have been put forward actually travelled. I put that caveat with that information.

There were two memorandums of understanding between the Department of Finance, the Department of Health and Children and the steering group. One was for 2004 to 2008 and the second one was for 2009 to 2016. I have those documents here so I can provide them.

Chairman

May I have those straight away please? Would it take too long to read into the record the names of those who participated in the trips and the destinations and dates based on documentary evidence and recollections?

Ms Geraldine Smith

No, it would not take too long. There were two types of trips, some to Europe and some to the US. Would the Chairman like details on them all?

Chairman

Yes, please. Could we start with the names of those who administered and chaired the steering group so that we know where we are starting from?

Ms Geraldine Smith

Yes, I do not have a full list of the members of the steering group but I can recall from recollection. The chair of the steering group was Mr. Bill Attley. Mr. Attley has been chair of the steering group since it was set up and continued to be chair until it was stepped down. There was Mr. Matt Merrigan of SIPTU, Mr. Jack Kelly of SIPTU, and Mr. Sé O'Connor, a HSE official. Various HSE people would have come in and out at different times and I would have to check the specific details of that. There was a representative from IMPACT, Mr. Gerry Dolan.

Deputy Róisín Shortall

Will Ms Smith repeat the name?

Ms Geraldine Smith

Yes, Mr. Gerry Dolan from IMPACT. There were two representatives from the ATGWU over time. I will have to check out their names. There were people from the Dublin academic teaching hospitals. There were, I believe, two HR directors. I can give a full list of all the names.

Chairman

We will move on to the trips. Was there a representative from the Department on the steering group?

Ms Geraldine Smith

Yes, there was a representative from the Department of Finance, Mr. Tom Dowling. The first representative from the Department of Health and Children was Mr. Bernard Carey. When Mr. Carey stepped down, Ms Simonetta Ryan took over and when Ms Ryan stepped down another gentleman, Mr. Tony Morris, took over.

Chairman

We will move on to the trips.

Deputy Róisín Shortall

Is that the full complement of the steering group?

Ms Geraldine Smith

No, I would have to go back through the detail. There were some members of intellectual disability services as well. I would have to get a full list but I can provide that.

Deputy Róisín Shortall

Will someone get the list for Ms Smith now?

Mr. Cathal Magee

I will see if we can find it.

Ms Geraldine Smith

In terms of the trips, we have identified 31 trips from information provided to us based on people's personal recollection. The first trip we are aware of is to New York. The dates were from 13 March to 19 March 2004. We were notified that various personnel participated in that trip. These included SIPTU representatives and officials from the Departments of Health and Children and Finance and the HSE.

Chairman

Is Ms Smith in a position to provide the names of those involved?

Ms Geraldine Smith

Yes. The names of those who made the trip are Mr. Matt Merrigan and Mr. Jack Kelly from SIPTU, Mr. Alan Smith general manager of the SKILL programme, Mr. Bernard Carey from the Department of Health and Children, Mr. Tom Dowling from the Department of Finance, Mr. Frank Ahern, a former official at the Department of Health and Children, Mr. Sé O'Connor from the HSE and Mr. Larry Walsh who is a partnership official.

Chairman

What was the purpose of the trip?

Ms Geraldine Smith

We do not know. The major issue that arises here is that there was very little information available to the internal audit unit. The HSE did not have any real information about these trips because SIPTU organised them. We have no information regarding the travel arrangements or destinations relating to these trips or the purpose or outcome of and lessons learned from them.

Chairman

Does the Department of Health and Children have any documentation in respect of these trips? It is obvious that the attendance of civil servants on such trips would have been sanctioned by the Departments in which they worked.

Mr. Michael Scanlan

I have information relating to officials from the Department of Health and Children for those occasions on which claims were submitted to and paid by the Department. I can confirm, therefore, that Mr. Carey was in attendance on the 2004 trip and made a claim in respect of it. There are four further trips in respect of which I would be happy to supply dates and the names of officials involved. I can read the details into the record but they are already contained in the report.

Chairman

We will deal with that matter later.

Deputy Róisín Shortall

Some 31 trips are at issue and members are anxious to see the full list of names. Would it be possible to obtain the information in tabular form? Perhaps the information could be photocopied and circulated to members. The information relating to the 31 trips is quite cumbersome and it would be of assistance if it could be made available to members.

Chairman

It is important for the representatives from the Departments of Finance and Health and Children to read into the record the names of officials who attended on trips. I accept that this is a somewhat cumbersome way to proceed but we must start somewhere. We need to know with what we are dealing before taking the next step. It is important to undergo this process.

Mr. Michael Scanlan

The report I have now circulated shows details of claims submitted to and paid by the Department. The dates for the first trip are shown as 13 March 2004 to 20 March 2004. The description of this trip indicates that it was a health service partnership visit to New York and the officer who travelled was Mr. Bernard Carey.

The next trip for which I have details was from 17 September 2004 to 26 September 2004. The description indicates that this was a partnership delegation visit to pre-hospital and emergency care facilities and hospitals in St. Paul-Minneapolis, Minnesota. Three officers from the Department — Mr. Tony Morris, Mr. Denis O'Sullivan and Mr. Pat Clifford — made claims in respect of the trip.

The third trip for which I have details took place from 15 March 2006 to 21 March 2006. This is described as an employer-union study visit to New York and two officers, Mr. Bernard Carey and Mr. Denis O'Sullivan, were involved.

The fourth trip for which I have details took place between 15 March 2007 and 23 March 2007. This is described as a health service employer-union study visit to Boston Health Service and MIT and Mr. Bernard Carey was the official involved.

The fifth trip for which I have details occurred between 13 March 2008 and 20 March 2008. This is described as an enterprise union partnership study visit to Savannah, Georgia, and it was Mr. Carey who travelled.

These were the trips in respect of which claims were submitted and payment was made by the Department.

Deputy Jim O’Keeffe

Did all of these trips take place in or around St. Patrick's Day?

Chairman

One of them occurred in September 2004.

Mr. Michael Scanlan

Yes.

Chairman

Let us not draw any conclusions at present. Let us just hear the details for the record.

Mr. Michael Scanlan

I do not have details with regard to certain other visits because claims were not made to the Department. On the basis of discussing matters with officials in the Department, however, the personnel officer was able to establish that there were some other visits in which officials were involved but in respect of which they did not make claims to the Department. Mr. Paul Barron was involved in a visit to Vancouver in 2003. I already mentioned the visit to Minneapolis. In 2005, Mr. Frank Ahern was involved in a visit to the US and Australia. In the same year, Mr. Eddie Flood was involved in a visit to New York. I already referred to the 2006 visit to New York and to the 2007 visit to Boston. In addition to the officers I have mentioned, an official who had retired from the Department, Mr. Frank Ahern, was in attendance on several trips. I have also mentioned the Savannah visit, in which, we understand, Mr. Ahern was also involved. There was a trip to Australia in 2008 in which Mr. Jim Breslin was involved.

Chairman

What were the dates for that visit?

Mr. Michael Scanlan

It took place from 8 to 17 October 2008. There was a trip to New York in 2009 in respect of which no claim was submitted. Mr. Bernard Carey and Mr. Frank Ahern, who had retired, were involved in that trip.

I have in my possession copies of the correspondence to which the Chairman referred between me and Professor Brendan Drumm. I will be happy to make this available to the committee. Is the information I have provided acceptable?

Chairman

So far, yes. The documentation we have obtained from Ms Smith and Mr. Scanlan will be published immediately as part of the record. We will now hear from the Department of Finance.

Ms Oonagh Buckley

Only one Department of Finance official, Mr. Thomas Dowling — whose name has already been read into the record — participated in the trips identified by the Comptroller and Auditor General. As the committee will be aware, the Secretary General of the Department, on becoming aware of the content of the HSE internal audit report, ordered an immediate investigation into the participation of the Department in respect of the SKILL programme. Arising out of this investigation, which is not yet entirely complete — I understand the final report will be submitted to the Secretary General in the near future — the relevant information was given to the Comptroller and Auditor General. This was the state of knowledge, at that date, of the trips in which the official had participated. I am now in a position to provide the committee with an update in this regard.

In the context of its review of the involvement of a departmental official in the HSE's SKILL project, the internal audit unit of the Department of Finance has found that there is evidence that the Department's former representative on the SKILL steering group participated in eight of the 31 foreign trips identified in the report during his membership of that group in the period from September 2005 to September 2009. Of those eight trips, five were to the United Kingdom, two in 2006 and one in each of the following years — I will provide the committee with exact dates — and three to the US in the years 2007, 2008 and 2009, respectively. Prior to his membership of the steering group, the official also participated in a trip to the US in 2004. This is believed to be one of those identified in the Comptroller and Auditor General's report.

I do not have the exact dates of the 2004 trip in my possession but I understand that it took place from 13 March to 19 March of that year. I will now provide information on the other eight trips. The first of these was a trip to Southampton, which is described as SKILL project visit to Southampton University and which took place between 24 July and 25 July 2006. The next was a SKILL project visit to Newcastle Hospital and Newcastle University and it took place between 28 November and 29 November 2006. There was a trip from 8 and 9 October 2007 described as a skills visit to London hospital trusts. There was a visit from 24 to 30 November 2007 to New York described as a visit to the City University of New York JFK scholarship conference. There was a trip from 13 to 20 March 2008 to Savannah described as health partnership and local partnership. There was a trip from 14 and 15 September 2008 to London described as meeting with NHS health trusts London.

There were two further trips for which no claim was made to the Department but we have evidence that the official participated in those trips. The dates involved are 14 to 19 March 2009 and 28 and 29 April 2009.

Chairman

You said it was a former official.

Ms Oonagh Buckley

Yes, the official retired in October 2009.

Mr. Tom Heffernan

May I add to that with regard to the other questions raised? The Department of Finance did not have direct responsibility for the particular funds. Mr. Joe Mooney was responsible up to 2007 for managing the HSE Vote and I was the official responsible for managing the HSE Vote from 2007 until the current time. We have one letter that can be made available to the committee. It is a copy of the Department's response to the two recommendations in the HSE's internal audit report that were addressed to the Department of Finance.

Chairman

You are making available the two memoranda?

Mr. Tom Heffernan

The HSE would have those.

Chairman

That is the background to the issue.

Mr. Michael Scanlan

The Chairman asked about steering group members. I have the periods of membership as well as the names. The steering group was set up in 2004, although I am not sure exactly when. Mr. Carey joined the steering group in August 2005 and stayed until April 2006. He was then replaced by Ms Simonetta Ryan from May 2006 to April 2009. She in turn was replaced by Mr. Tony Morris, who was a member from May 2009 until the steering group was wound up.

Chairman

What were their positions?

Mr. Michael Scanlan

All these officials would have worked in what we would call external human resource, HR, and industrial relations, IR, divisions of the Department. They would have dealt with, among other things, IR and HR, nursing and non-nursing activities, allied health professionals, regulation, continuing education and training, manpower planning and so on.

Chairman

Were they principal officers?

Mr. Michael Scanlan

Ms Ryan and Mr. Morris were principal officers. Mr. Carey, during the course of this period was a principal officer at one point, then a director and he is now an assistant secretary in the Department. I am fairly sure that over the period we are dealing with, Mr. Carey was a principal officer; he is now an assistant secretary.

Chairman

Having got all that information, I call on Deputy Edward O'Keeffe.

Deputy Edward O’Keeffe

Can the health authority be sure that all the people they have paid for received training? How many people received training?

Mr. Seán McGrath

With regard to the programme, there are 38,000 support staff in the system. Since 2005, we have more than 7,000 staff in the voluntary or HSE sector having achieved training at various levels, from FETAC level two to level six.

Deputy Edward O’Keeffe

How many vouched and unvouched expenses were there in the SKILL programme?

Ms Geraldine Smith

Is that relating to travel?

Deputy Edward O’Keeffe

Yes.

Ms Geraldine Smith

When we conducted the audit we found there were no travel records available though the HSE. All of the travel records, from what we can gather, are with SIPTU. We have not had visibility of the purpose of travel, who authorised it, who attended the trips and the learning points. The HSE does not have that information.

Deputy Edward O’Keeffe

So the whole issue was open-ended.

Ms Geraldine Smith

It was open-ended from an audit perspective.

Mr. Seán McGrath

We have found out that for the 31 trips for HSE staff, subsistence was claimed internally of €7,700 for the period.

Deputy Edward O’Keeffe

Was that vouched or unvouched?

Mr. Seán McGrath

It was vouched.

Deputy Edward O’Keeffe

A steering group member received €72,000 in respect of consultancy services. Can that person be identified? What were the consultancy services for?

Ms Geraldine Smith

I can talk about that from the audit perspective. One element of the consultancy service related to one member of the steering group who provided consultancy services to the steering group. That was in an IR/HR aspect. Some other consultancy related to the production of various reports. There would have been some consultancy with regard to IT expenditure and so on.

Deputy Edward O’Keeffe

Does that add up to €72,000?

Ms Geraldine Smith

Yes.

Chairman

Deputy O'Keeffe asked who the member was.

Ms Geraldine Smith

The steering group member was Ms Isobel Butler.

Deputy Edward O’Keeffe

Who provided the consultancy work? Was it an outside agency or internal?

Ms Geraldine Smith

Ms Isobel Butler is an independent member on the steering group. Most members of the group are from the HSE, the Department of Finance, the Department of Health and Children or some of the intellectual disabilities agencies. The document setting up the steering group, from what we can gather, set out that there would be an independent consultant on the group. The independent consultant was Ms Butler.

Deputy Edward O’Keeffe

Inefficiencies are also identified in the public procurement in that no evidence was available as to how tenders for the external training providers were evaluated and selected and the HSE internal audit report to the consultant services had not been tendered for. Why was there no tendering system in this case, as it is in all Departments and public bodies?

Mr. Seán McGrath

There was a tendering system within the HSE and unfortunately it was not used. The tendering process did not occur in this instance.

Deputy Edward O’Keeffe

Why was that?

Mr. Seán McGrath

Essentially, the SKILL programme did not go through the process for procurement of this consultancy, which is unacceptable.

Deputy Edward O’Keeffe

The SKILL programme was part of the policy.

Mr. Seán McGrath

That is correct. It is being borne out in the internal audit that there were many activities in the overall programme and from our perspective they breached procedure and are unacceptable. That is what we are trying to get to the bottom of.

Deputy Edward O’Keeffe

There was a total of 31 trips.

Ms Geraldine Smith

Yes, from what we know.

Deputy Edward O’Keeffe

How many professional and non-professional people went on the trips and what was their purpose? We can go through them individually if the witnesses wish to.

Ms Geraldine Smith

From the evidence gathered on the audit to date there is very limited information. What we can say from people's input is that some of the trips were known as SIPTU study visits and social partnership studies. There is no information in the HSE. When we went to audit this in the SKILL office, there were no records available to internal audit. We determined that SIPTU is in possession of those records.

Deputy Edward O’Keeffe

What is the meaning of "multiple sites"? The list includes New York, the UK, Australia, Los Angeles and "multiple sites".

Ms Geraldine Smith

That is a reference in the Comptroller and Auditor General's report. In the internal audit report we have identified the multiple sites as being New York, Boston, Savannah, London, Oxford, Brussels, Southampton, Los Angeles, Hong Kong and Australia. They are possibly some of the elements the Comptroller and Auditor General encapsulated in the term "multiple sites".

Deputy Edward O’Keeffe

Will the witness elaborate? What was to be learned by travelling to all those major destinations in the four corners of the world?

Mr. Seán McGrath

It is clearly part of the overall partnership, with an international understanding of what is happening within the broader health service outside Ireland. That was the intention. We simply do not know what the itineraries were, the value created and the learning transferred to the working place for the HSE. I am aware the Department may have more information regarding the itineraries and purposes of the trips. Unfortunately, there is a lack of information as to where the internal audit got to in the HSE and in this particular programme. That is why we have commissioned an independent investigation by Mr. Turlough O'Sullivan to understand the appropriateness and intent of these trips.

Deputy Edward O’Keeffe

Has the HSE the names of all those who participated in the trips?

Mr. Seán McGrath

Yes, and we will verify them with Mr. Turlough O'Sullivan's investigation and internally in the organisation.

Deputy Edward O’Keeffe

What is the breakdown of the qualifications of those individuals who travelled?

Mr. Seán McGrath

The majority from the HSE were at senior management level such as general managers, grade 8, or assistant national directors. They operated mostly within the skilled programmes or the broader human resources divisions in Dublin and the regional areas. Many would have been involved in partnership and industrial relations over a period.

Mr. Michael Scanlan

I have some but not the complete details of the itineraries and the subject matter of the various trips. The background to the trip to British Columbia, Canada, in September 2003 was that the Department had begun preparations for the dissolution of the health boards and the establishment of the HSE. There had been a similar large-scale restructuring in British Columbia in the late 1990s resulting in a reduction of the number of health agencies there. It was considered beneficial to visit there to see how it had been managed from both sides, employer and trade union.

Among the groups met during the course of this study visit were the Health Service Employers Association of British Columbia, the Public Service Employers——

Chairman

Mr. Scanlan, come off it. This SKILL programme was for home helps and lower paid unskilled workers in the health services. Why the hell was this programme used to look at the restructuring of the health service in British Columbia?

Mr. Michael Scanlan

In the Comptroller and Auditor General's report, the point is made that while a total of 31 visits were identified during the course of the internal audit, it appears some of these were related to the SKILL programme. These were largely the visits to the UK, of which I do not have details. One of our difficulties is the lack of documentary evidence.

I understand many of the other visits were what might be called partnership visits. One of the difficulties is how these visits were funded. If one examines the visits' purposes and itineraries, they do fit in with various issues that were being addressed in the health service at the time. They also fit in with the policy for the development of partnership. As I said in my opening statement, all that was claimed off the Department was standard subsistence and economy class flights.

The Chairman is concerned whether the funding came from a SKILL programme, designed and recommended by the Labour Court for a specific purpose and funded from a grant the Department had sanctioned from 2001, or from the partnership sources referred to by the Comptroller and Auditor General at the start. I am happy to share with the committee all the information I have which concerns the purposes of the visits. There is a difference between the purpose of the visits and whether they were reasonable and then how they were funded and the lack of transparency around that issue.

Chairman

Were reports made about all the visits?

Mr. Michael Scanlan

I have some reports with me but not for all the visits. Some which I have managed to find are contemporaneous. Others were written for me since on the basis of notes and itineraries at the time.

Chairman

Is it correct that the SKILL programme was headed up by a senior official seconded from the HSE?

Mr. Seán McGrath

Yes, he was a HSE official.

Chairman

Who was he?

Mr. Seán McGrath

Mr. Alan Smith.

Chairman

Where is he now?

Mr. Seán McGrath

He retired from the organisation in March or April 2009.

Chairman

Did he report back to the HSE or the Department on what was happening?

Mr. Seán McGrath

From what we can gather, he reported to the steering committee in the SKILL programme. It oversaw the running of the programme. There was a lack of governance and accountability with this programme in the HSE. Where the HSE was fitting into all of this is a question. It is all very unclear and there was a lack of internal governance.

Chairman

I apologise to Deputy Edward O'Keeffe for cutting across his questions. Will he continue?

Deputy Edward O’Keeffe

From 2004 to 2009 the SKILL programme cost €47 million. When broken down, external training came to €15.7 million while internal training came to €28 million. In this latter figure, a grant was made to an outside agency of €1 million. What was this for? Are these the correct figures?

Mr. Seán McGrath

Yes, those figures are accurate. I will have to come back to the Deputy on the grant for the outside agency as I do not have the particular information to hand.

Deputy Edward O’Keeffe

Will Mr. McGrath give me some inkling of what it was about? Was it to a shop or a pub or what?

Mr. Michael Scanlan

Are these the grants referred to in the Comptroller and Auditor General's report?

Deputy Edward O’Keeffe

Yes.

Mr. Michael Scanlan

These are the grants I referred to in my opening statement. What I have to go on are the letters of sanction issued by the Department. The first one I mentioned was from July 2001 which covered more than this programme. It referred to total one-off funding of £410,000 for the Office of Health Management in respect of three items, management development programmes for clinical nurse managers 2 and 3 and middle nurse managers, the front-line supervisors programme, which came to approximately €190,000, and a band 3 directors of nursing programme. The letter stated it would be appreciated if the relevant amount was paid over to SIPTU in respect of the front-line supervisors programme.

In 2002, there was a sanction for €190,000 but it did not refer to the trade union, rather to the front-line supervisors programme by the Office for Health Management. In 2003, there was a reference to once-off funding of €190,000 for front-line supervision training provided by the Office for Health Management. In 2004, there were two other smaller grants. We found a sanction in 2000 for once-off funding of £75,000 being provided by the Office for Health Management for the development of management programmes for front-line supervisors. It does not seem to have been paid to SIPTU.

I acknowledge there is a lack of clarity in the Department's sanctions over the exact purpose of this funding. We are aware from our files that from as far back as 1999, the Office for Health Management had been involved in developing a pilot programme and a training package for front-line supervisors. A departmental official participated in a selection process in which the management development unit of the college of business at the University of Limerick was selected to carry out this work.

I managed to get hold of several annual reports and accounts from the Office for Health Management which referred to the provision of this training programme. On the one hand, I have documentation which indicates the Office for Health Management had commissioned an actual training programme from the University of Limerick. Some of its annual reports refer to it having been provided on a number of occasions to certain groups of staff. On the other hand, I have a sanction for July 2001 which specifically refers to the relevant amount. It states: "It would be appreciated if you would ensure that the relevant amount is paid over to SIPTU." That is what I have to go on.

Chairman

With regard to the document on travel, in most cases all we got were initials which was useless to us. We need the document which shows the actual names.

Ms Geraldine Smith

We can provide that.

Deputy Edward O’Keeffe

How were the persons selected to travel on the SKILL programme? How many public hospitals participated in the programme?

Mr. Michael Scanlan

Is the Deputy asking how many public hospitals they visited? I am not sure how the individuals were selected. Looking at——

Deputy Edward O’Keeffe

Was it an old pals act?

Mr. Michael Scanlan

To be fair, we have named names. I want to stick to the facts as I know them and not form a judgment one way or the other. That is only reasonable. I am saying that what would have happened on those occasions is that it would have been known to the superiors of the officials concerned that they were going on these visits and that would have been approved. The Department would have known at the time what the purposes of the visits were. I can tell myself, just from personal knowledge, that the officials would have been involved in the general change management programme, upskilling, how to manage change and partnership. I am aware that on the trip to Minneapolis, which had a particular focus on pre-hospital emergency care, the officials on that occasion had been working in the acute hospital division of the Department.

The trips varied in nature. I mentioned one at the start which concerned health reform. The Minneapolis one had a particular focus on pre-hospital emergency care at a time when the health system and Department were looking at upskilling emergency medical technicians, as they were called.

Deputy Edward O’Keeffe

How many hospitals participated in the programme? How many hospitals were represented on the trips abroad?

Mr. Michael Scanlan

I apologise. I do not know. I only know about the Department officials.

Deputy Edward O’Keeffe

What hospitals participated?

Mr. Michael Scanlan

On the trips?

Deputy Edward O’Keeffe

Yes.

Mr. Michael Scanlan

I can only talk about the Department representatives. I do not have the details of people from other organisations who were on the trips.

Deputy Edward O’Keeffe

Would they have been paid for by the HSE?

Mr. Seán McGrath

From what we can gather, we did not have anyone from our acute settings going on these trips. It was generally those individuals from the HSE within the human relations or industrial relations environment who went on those trips.

Deputy Edward O’Keeffe

Were they from the health board committees?

Mr. Seán McGrath

From the HSE?

Deputy Edward O’Keeffe

Yes.

Mr. Seán McGrath

Yes, they were from the HSE.

Deputy Edward O’Keeffe

Were they all representatives of the organisation or was there a mix?

Mr. Seán McGrath

A mix in regard to?

Deputy Edward O’Keeffe

Were politicians involved?

Mr. Seán McGrath

Not that we were aware of. All we have are the names of HSE or partnership people who went. That is the information to hand at this point. Unfortunately, the information is incomplete from where we sit.

Deputy Edward O’Keeffe

I thank the Chairman.

Deputy Róisín Shortall

We were promised a list of the steering group members. Is that available?

Mr. Seán McGrath

I do not have it to hand.

Deputy Róisín Shortall

Does anyone have it to hand? Can we have a copy of it?

Chairman

I thought we were going to get the list of the steering group.

Mr. Seán McGrath

I will try to provide it.

Deputy Róisín Shortall

Are we going to get that list?

Chairman

It is on the way.

Mr. Seán McGrath

I do not have it to hand at this point.

Chairman

Is it not amazing that senior people present today do not know who was on the steering group?

Mr. Seán McGrath

We have outlined——

Chairman

Surely the witnesses have a list before them.

Mr. Seán McGrath

We do not have it to hand, unfortunately.

Deputy Róisín Shortall

I ask Mr. McGrath to get it.

Mr. Seán McGrath

I will.

Chairman

Arising from Deputy O'Keeffe's question, what is the work history of Mr. Alan Smith, who was a senior official on the steering group? Where did he start and where did Mr. McGrath come from?

Mr. Seán McGrath

I believe he came from the Department of Health and went into the Office of Health Management in the former Midland Health Board in 2003 or 2004 as part of this initiative. When the HSE was established in 2005 he became a HSE employee at that time.

Chairman

He is one of the key men. He was described as a senior official, originally from the Department of Health, who was seconded onto the local health board in the midlands. Who was he reporting back to? Was he reporting to the Department of Health or the HSE? Was he left out there on his own without any reporting responsibilities?

Mr. Michael Scanlan

Again, I am not 100% certain. I am open to correction. I understand he was an official in the Department. My understanding, which is subject to correction, is that he was seconded when the Office for Health Management was set up in June 1997. It was quite a long time ago. He was seconded into that office. I did not bring information with me but the annual reports and accounts of the Office for Health Management describe the governance structure around that. Someone here may have that information. It was a separate office; it was a conjoined office between the health boards.

Chairman

Who was paying his salary?

Mr. Michael Scanlan

My understanding is that it would have been paid through the Midland Health Board——

Chairman

Coming from where?

Mr. Michael Scanlan

The Midland Health Board allocation. He was no longer, as I understand it, an employee of the Department who reported to the Department. We would do this regularly enough in terms of secondments. Someone would be seconded from or to the Department. I had people in the Department who were seconded from the health service. At that point, once they are in the Department, they are working for and reporting to me.

Chairman

He had no reporting responsibilities to the HSE or the Department.

Mr. Michael Scanlan

No, he would have had no reporting responsibilities to the Department. My understanding is that he would have reported to the health boards at the time. I am not sure what situation pertained in the HSE.

Mr. Seán McGrath

In terms of the HSE, from 2005 he ran the SKILL programme within our offices on Adelaide Road. He reported to the steering group. The issue is about accountability and the governance of the programme within the organisation. Clearly, the HSE is or was responsible for that. We did not actively engage and ensure all the issues raised at this meeting were being fulfilled.

Chairman

Who would have been his senior official?

Mr. Seán McGrath

In my view, it would have been the national director of human resources at that time.

Chairman

Who was that?

Mr. Seán McGrath

There were two individuals. One was Mr. John Magner and the other was Mr. Martin McDonald.

Chairman

No one asked what he was doing with the steering group or what was happening.

Mr. Seán McGrath

They may have asked questions. I am not aware of what they asked. That is the issue at this point.

Chairman

On the Australian trip, we are again going on initials such as "MMCD". Do they refer to Mr. McDonald?

Ms Geraldine Smith

Yes, they do.

Chairman

He went with Mr. Smith to Australia. The two of them went on their own from 6 March until 24 March 2005, a total of 18 days.

Ms Geraldine Smith

The caveat I have with the schedule the Chairman has is that this is the only information we have made available. It is reasonable to us to assume there were more people on the trip to Australia other than the two people to whom the Chairman referred. That is the only information that internal audit has been able to determine at this stage.

Mr. Seán McGrath

In the investigation we are carrying out in the HSE we are trying to determine the purpose of the travel, who was on what trip, how appropriate it was——

Chairman

That is fine, but I am trying to establish who was reporting to whom. I am talking about governance, not the trip. Mr. Smith, who came from the Department of Health, went to the Midland Health Board, had an office in Mr. McGrath's offices on the——

Mr. Seán McGrath

Adelaide Road.

Chairman

He went on a trip with his senior official who was named earlier, Mr. McDonald. They went to Australia for 14 or 15 days and they never discussed what was happening in the steering group. Does Mr. McGrath expect me to believe that?

Mr. Seán McGrath

Unfortunately, I do not have any other information to counter that.

Deputy Jim O’Keeffe

To put things into perspective, we are speaking about the SKILL programme. The figure over the period from 2004 to 2009 was €47 million. I understand the programme was generally a training and development programme for non-clinical and non-administrative people in the health area, such as porters, those in catering and maintenance and support staff of that type. At present, who takes overall responsibility for accounting for the expenditure of these moneys? Is it the Department of Finance, the Department of Health and Children or the HSE?

Mr. Seán McGrath

It is the HSE.

Deputy Jim O’Keeffe

The job of HSE is to collate the information and bring it to the committee to answer the questions members may have.

Mr. Seán McGrath

Yes.

Deputy Jim O’Keeffe

So far, we have Ms Smith's excellent internal report but a range of areas have not yet been dealt with or investigated. What also emerges is that when putting together the internal report for the HSE, Ms Smith did not seem to have access to much information from the Department of Finance and the Department of Health and Children. There is no collation of information. Is this correct?

Mr. Seán McGrath

With regard to the collation of all this information, we have outlined where the money has gone in internal and external training costs at this point. The element we are discussing and investigating is the administration of the scheme and its governance. Unfortunately, we do not have that information. Up to 2008 the system ran within the HSE and it was unaccountable and there was a lack of governance. We sought an internal audit of this particular function within the HSE to find out what was going on. We are very much in the blind in many respects and we are working through a number of investigations to find out exactly what went on in the health service SKILL programme.

Deputy Jim O’Keeffe

We are speaking about quite significant sums of money. I understand it was to be €12 million a year. Did no one take any account of the annual expenditure of such an enormous sum?

Mr. Seán McGrath

If one looks at the overall amount spent to date, 95% of it has gone on either training or replacement costs for staff so it is accountable, verifiable and represented in our internal audit report and in the report of the Comptroller and Auditor General. What we lack is information on the administration in the system of just over €2 million. The majority of the spend has been on training or replacement costs for backfilling staff in the programme.

Deputy Jim O’Keeffe

At what stage did the HSE think it necessary to start looking at the rather odd developments with this expenditure?

Mr. Seán McGrath

I joined the organisation from outside the health service in July 2008 as the national director of human resources. It soon became apparent that there was a significant spend, as Deputy O'Keeffe has outlined, in the broader HR training and development arena over which I had no oversight. As part of discussions, I sought an internal audit of the SKILL programme. It was put on the schedule and operated in early 2009.

Deputy Jim O’Keeffe

Mr. McGrath was the new appointee and he decided this was necessary.

Mr. Seán McGrath

Yes.

Deputy Jim O’Keeffe

Prior to that, had any one thought it necessary to investigate the expenditure?

Mr. Seán McGrath

Not that I am aware of.

Deputy Jim O’Keeffe

I want to go back to the rather extraordinary arrangements involving the steering committee. Do we know who appointed the steering committee? What is its background? Who selected its members?

Ms Geraldine Smith

This was one of the areas I looked at when carrying out the audit and I could not find any indication as to who decided there would be a steering group. A document from 2004 called Training, Education and Development, which is unsigned and undated, identifies that a steering group would be established with a project team reporting to the steering group through a project manager. The document named several members of the steering group, so it had been set up on a date in 2004. As an auditor I have been unable to determine who identified and decided who the people on the steering group would be.

Deputy Jim O’Keeffe

Did the steering group have any executive functions?

Ms Geraldine Smith

This is the key issue.

Deputy Jim O’Keeffe

What was its role in the governance of this business?

Ms Geraldine Smith

In January 2005, SKILL came in as part of the HSE. I located a document from June 2005, which is the governance document. It set out the various reporting relationships and the responsibility of the steering group and various people in the HSE. It was admirable that the document was put in place but, unfortunately, elements of it were not clear. For example, some of the reporting relationships were not clearly set out. Several people did not even realise they had been named in the document as having reporting functions. Therefore, the document left something to be desired.

Deputy Jim O’Keeffe

Then we come to the fund and SIPTU. Who decided to set up the fund? Who decided to make those payments?

Ms Geraldine Smith

As part of the audit, we looked at the amounts that were reimbursed, including the €348,000, and I found there were very few backing details to support it. The SIPTU official was on sick leave at the time and we could not get the documentation. I approached SIPTU and asked it to provide us with the documentation. At that stage, the general secretary of SIPTU stated he was not aware of this, that SIPTU did not make any payments on behalf of SKILL, that it did not seek any recruitment and certainly did not receive any money back from SKILL. At this point, I notified the general secretary that we had also paid grants to SKILL going back to at least 2002. Again, he stated he was not aware of this. In subsequent discussions with the SIPTU official, he informed me that this was an account called the SIPTU national health and local authority levy fund. It had been set up more than 20 years ago, it has two trustees and no trust deed. No contributions were made to it so the funding into it appears to have been from SKILL and, as we later discovered, from the health services national partnership forum. SIPTU has stated the account has nothing to do with it.

Deputy Jim O’Keeffe

Is it now apparent that much of the moneys from that fund went to pay for foreign trips and expenditure of that kind?

Ms Geraldine Smith

We have no records. We have sought records from SIPTU to identify what the annual grant was paid for and to identify the nature of the reimbursements. There are no records as to how much of that has been spent. Essentially, the HSE internal audit identified €2.353 million paid between 2002 and 2009. That comprises grants of €2.005 million and reimbursements of €348,321. From correspondence from the Department of Health and Children which I saw recently, it is possible another €190,000 was paid in 2001. To date, there is no account of what the money was spent on and the current balance.

Deputy Jim O’Keeffe

With regard to these foreign trips, does Ms Smith accept that to assess the situation properly we would need a collation of information from the various Departments, the HSE and, indeed, SIPTU about who was on the various trips, the alleged purpose of the trips and the costs, and not just have the Secretary General of the Department of Health and Children telling us that subsistence was paid but that this was not the total cost for an official? Of course, it was not. Somebody had to pay for a plane trip, hotels, etc. It is reasonable for me, as a member of the Committee of Public Accounts, to look for an overall comprehensive picture of where these moneys ended up.

Mr. Cathal Magee

From the discussion and also from my opening statement, this investigation is incomplete at this point. The HSE, through its audit function, has visibility of certain costs and certain information around the itinerary, the travel and the locations but unless we can match that and complete it with the outcome of the SIPTU investigation, we are not really in a position to get a profile of exactly what the costs were, what was reimbursed, who travelled to what locations and what their itinerary was. We are dealing with an investigation which is not complete but on which there is substantial information, but we do not have a complete picture. What is suggested here is that we need to get the information from SIPTU in order to take a view on all of our staff about what was involved.

I raise a word of caution in the interests of the individuals concerned. Dealing with incomplete information, we need to be careful that we do not prejudge the outcome of our investigations or the complete investigations and we do not prejudge those conclusions, and what attitude the individuals have to those conclusions. That is important.

The investigation is not complete. It raises very serious issues which I outlined in my opening statement. There is a lot of work yet to be done before we have a complete picture and we are fair to all the individuals concerned, but also satisfied around the deficiencies in governance, accountability and controls.

Deputy Jim O’Keeffe

We will not jump to an immediate conclusion until we get all of the information. Do they understand why somebody like me looking at this from outside has a sense that, essentially, here was a slush fund that was being used for the expenditure of public moneys for improper purposes?

I have two other preliminary views — I will not call them conclusions — on that. A number of these outings seem to have been for a week or more around St. Patrick's Day in the United States and different parts of the world and one must question what benefit that would be to the essential purpose of the SKILL programme.

The other preliminary view I would draw is that my understanding was that this was a programme designed to help in the training and development of the porters, catering staff and low-paid workers in the health services. I wonder were any of those people on any of those trips as part of their training and development.

Mr. Michael Scanlan

I agree with Deputy O'Keeffe about the need to see a full picture. The last point is key. It is not just a matter of a full picture in terms of the trips, and who went on them, the purpose and the cost to the whole system. It is actually how much of the total funding was spent on trips, and what the rest of it was spent on.

I admit I am at a disadvantage. I cannot tell the committee that here today. I have admitted that the sanctions that issued from the Department were not sufficiently clear, but I would be very concerned at this juncture. I have no evidence to indicate how much of that funding was spent on trips and I would hope that when the SIPTU investigation is completed we would have a much clearer picture of that. I am at a bit of a loss, like Deputy Jim O'Keeffe, because I do not have all of the information.

I agree with the Deputy on the whole purpose of what was happening, as I understand it, at the time. This predates the Labour Court recommendation which, in a sense, put the SKILL programme and the nature of the training on a much more formal footing. The discussions about upskilling and training the type of workers the Deputy is talking about date back, as far as I am aware, to maybe 1998 and 1999. They follow a period of industrial disputes that involved nurses, where there was a lot of debate and discussion about the education and upskilling of nurses and expanding the scope of practice of nurses, and the big dispute on the Commission on Nursing. There were similar disputes with allied health professionals which all involved the establishment of expert groups and, again, looking at upskilling and career outlets.

My understanding and my recollection is that some time after all of that there were also similar disputes with craft workers, general operatives in local authorities and, as they were called at the time, non-nursing grades in the health service. There was a legitimate view at the time that there was also a similar issue to be addressed around groups like that, both in terms of making best use of skill mix, which we are now starting to see bear fruit, and in terms of reasonable career outlets for people like that. Deputy Jim O'Keeffe is right. While I cannot point to how the money was spent, we have to wait and see what emerges from the SIPTU investigation. However, my sense, like that of the Deputy, was that the purpose was very much what he described it as. My concern is the link between those trips which, in their own right when I look at them, seem legitimate and the grant and the skill. That is the one that would cause confusion and concern.

Deputy Jim O’Keeffe

There are other issues of moneys spent on taxis, etc., that are not fully clarified as yet. Is there more investigation going on to check how such substantial sums of money seem to have been spent on taxis at weekends? Who incurred those expenses and what control was exercised over those moneys?

Ms Geraldine Smith

The audit found that there were completely inadequate controls over the expenditure. The SKILL office did not comply with the HSE's procurement policies, did not use existing HSE contracts, and certainly did not comply with the HSE's taxi policies. Essentially, there was a significant breakdown of controls in the SKILL office.

Deputy Jim O’Keeffe

Is there further investigation ongoing into those expenditures?

Mr. Seán McGrath

In relation to the taxis and procurement, the facts are what are outlined in the internal audit report. There has been a breach. We have had procedures in place and we have had controls. The reality was there was no adherence to these controls. That is where it sits at this point in time, particularly around the taxis and the procurement issues.

Deputy Jim O’Keeffe

My colleagues will want to come in on this. Does anybody take responsibility for what appears to have been improper expenditures of public moneys? Is there any attempt to call people to book for improper expenditures of that kind?

Mr. Cathal Magee

As Accounting Officer, the outcome of the internal audit report is a very serious issue for the HSE which has been intensely discussed at board level, at the internal audit committee level and at management level over the last number of months.

There are three investigations under way which are very important to completing the picture. One is the investigation that Mr. Turlough O'Sullivan is leading in relation to HSE staff and the full information in relation to their engagement with the SKILL programme and with foreign trips. There is a further internal audit under way in relation to the National Partnership Forum, which exists within the HSE umbrella and which also had funds channelled to it, and funds from it were channelled into the SIPTU levy account. Thirdly, SIPTU is also conducting its own investigation on the existence of this SIPTU national local authority levy fund and trying to establish what the expenses element — €348,000 — was actually used for and what documentation exists to support that spend, and also the nature to which the annual fund of €190,000 up to 2004 and €250,000 from 2005, was used for.

The HSE has an incomplete picture and incomplete access to documentation. Until we complete the audit of partnership and receive the outcome of the SIPTU investigation of the documentation to support the expenses claims and to support the use to which the grant was put, we do not have a complete picture. When we do, conclusions arising from these investigations have to be reached. On the individuals impacted, we got an opportunity to comment on those conclusions. We will have to consider the appropriate action to take in regard to all these issues. As Accounting Officer for the HSE, I carry a significant responsibility to ensure that this matter is properly completed and that we put in place changes and processes that ensure that what happened does not recur.

Deputy Jim O’Keeffe

It is clear that the picture is incomplete. It is certainly incomplete as far we are concerned. I presume Mr. Magee will understand that we will want to revisit this issue once we have the complete picture from the point of view of further investigation of what happened in the past and any recommendations we can make in consultation with the Comptroller and Auditor General to ensure that this kind of carry on will not recur.

Chairman

Arising from Deputy Jim O'Keeffe's comment about people not being brought to book, the problem is that what happened here is almost a re-run of what happened in FÁS. Some of the people concerned rode off into the sunset with their pensions — they are gone.

I return to the origin of all of this and the origin of the deal done between SIPTU and the Department of Finance or the Department of Health and Children. Who were the signatories to the agreement? A memorandum of understanding was mentioned. There is one in place at present up to 2016. Was the previous one an agreement between Department of Finance and SIPTU? Who brokered the deal? I would like the names.

Mr. Tom Heffernan

The two memorandums of understanding mentioned in the internal report were suggested by the Department of Finance representative on the steering group to try to clarify responsibilities in relation to governance and on the use of the SKILL money. They were not with any external parties. The Department representative suggested those for deliberation by the committee to come to conclusions about its role and responsibilities.

Chairman

Originally, when the decision was made to contribute to the SKILL programme, I presume it was an agreement between the Department and Finance and SIPTU.

Mr. Tom Heffernan

The SKILL programme — the €60 million fund — had its origins in a Labour Court recommendation. The role of the Department of Finance in that was to provide for the money in the Vote of the Health Service Executive and through its sanctioning powers to ensure that the money would be used for the purpose that was intended in the Labour Court recommendation. The Department of Finance's annual sanction in regard to the SKILL money basically tried to ring-fence the money by not including it as part of general delegation to the HSE to spend within the parameters of its Vote and its subheads. The intention of specifically mentioning it in the sanction was to ensure that if it was not spent for that purpose it would either be surrendered to the Exchequer or a case would be made to the Department specifically to use it for another purpose, if that was required because of spending pressures.

Chairman

Who agreed the setting up of the fund? That is what I am trying to get at. I am talking about the smaller fund of €2.3 million.

Mr. Michael Scanlan

I was not sure to which fund the Chairman referred. The €60 million fund was the one, as was said by the Department of Finance official, that arose from a Labour Court recommendation. What started as one-off payments of €190,000, which I mentioned earlier, related to the Department of Health and Children. All I have is a letter of sanction that issued at the time. I have been unable to find any background papers explaining the purpose of it. This was the finding of the internal audit and the Comptroller and Auditor General's report, namely, that there was an absence of clarity about the purpose of this. There was not a memorandum of understanding about that; it was a sanction letter from the Department.

Chairman

There must have been some agreement somewhere between the Department and individuals.

Mr. Michael Scanlan

When the Chairman says "agreement", I am not aware of one.

Chairman

To make money available for the SKILL programme.

Mr. Michael Scanlan

I accept there must have been some level of discussions. The Department of Health and Children did not just take it into its head in that sense one day to sit down and write a sanction. The Chairman is absolutely right but I cannot find anything in the Department's files by way of background.

Chairman

With regard to the €250,000 that was given to SIPTU, there must have been some agreement between the Department and individuals.

Mr. Michael Scanlan

In the 2001 letter there is specific reference for the first time that I could find on our records to the grant being given to SIPTU, as opposed to the letter the previous year which referred to front line supervisor training. As the Chairman said, the December 2004 letter, which increased the amount to €250,000 and put it on an ongoing basis, also confirms that it should go to SIPTU.

Chairman

A letter is sent to somebody. To whom was it sent?

Mr. Michael Scanlan

The letter went out to the health system. If the Chairman bears with me, I will get a copy of it. What I have is a letter to the CEO of the Midland Health Board of 9 December 2004 — these were called "letters of determination" at that stage for health boards — which covers the determination of the Midland Health Board's expenditure for 2005. Just to clarify, although the HSE would have been set up on 1 January, that is the way the transition was handled, namely, that the letters of determination went out to the individual health boards. In that letter, which is a very long one covering all of its allocation——

Chairman

All I want to know is who it was sent to and from whom it was sent?

Mr. Michael Scanlan

The person it was sent to was Mr. Pat Gaughan, the chief executive officer of the Midland Health Board, and it would have been signed by the Secretary General at the time.

Chairman

Who did it go to?

Mr. Michael Scanlan

The CEO of the Midland Health Board.

Chairman

I mean who did it go to in SIPTU?

Mr. Michael Scanlan

There was a letter to Mr. Matt Merrigan from Mr. Bernard Carey several days after that confirming that those arrangements had been put in place, that there would be ongoing funding of €250,000 a year out of the overall parallel benchmarking budgeting. It goes on to say: to maintain support for SIPTU's human resource personal development schemes and the development of management union partnerships of best practice. It says: the funding has been provided in the Midland Health Board's letter of determination on the basis that it would be channelled to SIPTU via the office for health management, as in previous years. It also says: the effect of this would be to put the current ad hoc arrangement on a firm footing into the future with an enhanced funding provision. That is what the letters says.

Chairman

My final question, arising from Deputy Jim O'Keeffe's questions, is in regard to the levy fund, which was entitled the SIPTU National Health and Local Authority Fund. What is the significance of the local authority in the title?

Mr. Michael Scanlan

I do not know — I have no facts at all — my understanding is that at least one of the visits from the papers I have seen was described as a joint health service-local authority visit.

Chairman

What was the significance of the presence of a local authority official on one of the trips? The reference FK, which was mentioned earlier, referred to Frank Kelly and he was described as being from the local authority. Who is he and where is he from?

Mr. Michael Scanlan

I am speaking from memory; my understanding is that Mr. Kelly was a personnel officer in Dublin Corporation. However, I am open to correction; or I should say Dublin City Council.

Chairman

How was Dublin City Council involved?

Mr. Michael Scanlan

I do not know.

Chairman

Did it contribute to the fund?

Ms Oonagh Buckley

Perhaps I can comment, in order to be helpful. I do not have very much information on this matter. However, I have some information from my informal discussions with the Department of the Environment, Heritage and Local Government. I am aware that funding was provided on an annual basis at central level to the local authority national workplace partnership group, LANPAG, which comprises representatives of management, trade unions and the Department of the Environment, Heritage and Local Government. The disbursement of this funding is overseen by four trustees who recommend LANPAG funding allocations for a range of initiatives in this sector. LANPAG, in turn, approves those recommendations. My informal understanding — I do not have any figures on this — is that some moneys were disbursed from LANPAG into the fund in question, hence reflecting the title. Although I do not have figures on this, I understand there would have been a limited number of partnership trips, of the nature described, involving local government officials.

Chairman

The trips are one thing but I am talking about a local authority's contribution to the fund as well. It is widening now.

Ms Oonagh Buckley

Funding was certainly provided through partnership, under partnership arrangements.

Chairman

Was that provided by Dublin City Council?

Ms Oonagh Buckley

No, my understanding is that it went through LANPAG, which is a joint body. LANPAG is the local authority national workplace partnership group.

Chairman

I am at a loss now. Where did LANPAG get the money? How was it funded?

Ms Oonagh Buckley

The money would have been provided to LANPAG at a central level. It would have been provided by the Department of the Environment, Heritage and Local Government. I am not very familiar with the details of the funding. I am mentioning it to be helpful.

Chairman

Do we need to talk to the Department of the Environment, Heritage and Local Government about all of this?

Ms Oonagh Buckley

Yes.

Chairman

Was Dublin City Council involved?

Ms Oonagh Buckley

I am not aware of which other organisations participated in the trips.

Chairman

It must have been involved. Mr. Kelly was on some of the trips. He was on at least one of the trips.

Ms Oonagh Buckley

Again, that is not information I would have had.

Chairman

We will have to ask the Department of the Environment, Heritage and Local Government about it. Thank you, Ms Buckley.

Deputy Róisín Shortall

I welcome our witnesses, particularly Mr. Magee. I wish him well in his new role. I will begin by asking Mr. Scanlan some questions about the genesis of what the Comptroller and Auditor General has referred to as "the partnership initiative", which saw funds totalling €2.76 million being put into the SIPTU national health and local authority levy fund. The first grant was made in 2001. Can Mr. Scanlan tell us what he knows about that?

Mr. Michael Scanlan

These are the sanctions I mentioned earlier. All I have to go on are the formal records of the Department. I tried earlier to give my general understanding on the basis of discussions with various individuals who were involved, as I was, in the industrial relations scene of the late 1990s. I have to admit I cannot confirm it. The Chairman asked if there are any background papers on the file to support the letters of sanction that went out. I have not been able to find any such papers. My general understanding is that two things were happening around that time. First, the issue of up-skilling was applied not just to front-line supervisors and the ancillary staff, but to health service grades in general. The second issue emerging at the end of the 1990s and in the early 2000s was an effort to move away from confrontational industrial relations and the non-delivery of change towards a partnership approach to such issues. The information I have just heard confirms what I said earlier. It seems there were different levels of funding under different headings. I refer, for example, to the annual grant sanctioned by the Department, to the partnership funding that was mentioned in the Comptroller and Auditor General's report and to LANPAG. It seems to me, although I am surmising, that——

Deputy Róisín Shortall

Fine. Was the 2001 grant the first grant that was made to that account?

Mr. Michael Scanlan

I cannot speak for what went into an account, if the Deputy understands. All I can say is that we found——

Deputy Róisín Shortall

Was that the first grant that was made to SIPTU?

Mr. Michael Scanlan

No, I found a letter from 2000 that does not refer to SIPTU. It was sent to the chief executive officer of the then Midland Health Board from the personnel management and development directorate in the Department. It refers to the provision of once-off bundling of £75,000 to the OHM in respect of the development of management programmes for first-line supervisors. I do not know if that is similar to, or completely different from, the 2001 sanction. I am not sure whether it was for the same purpose.

Deputy Róisín Shortall

How much was granted in 2001?

Mr. Michael Scanlan

The figure for 2001 was £150,000, which I think is equivalent to €190,000.

Deputy Róisín Shortall

What did the letter of sanction say about that money?

Mr. Michael Scanlan

It said it was for a front line supervisors programme. It went on to say it would be appreciated if the board could ensure the relevant amount was paid over to SIPTU in respect of the front line supervisors programme. It covers two other issues, as I mentioned earlier.

Deputy Róisín Shortall

Who signed that letter?

Mr. Michael Scanlan

It was signed by Ms Teresa Cody, who was an assistant principal in the nursing policy division of the Department

Deputy Róisín Shortall

Is she still in the Department?

Mr. Michael Scanlan

She is.

Deputy Róisín Shortall

Has the Secretary General asked her why she made that allocation?

Mr. Michael Scanlan

I have.

Deputy Róisín Shortall

What did she say?

Mr. Michael Scanlan

She cannot recall.

Deputy Róisín Shortall

I do not accept that for a moment.

Mr. Michael Scanlan

Well, sorry——

Deputy Róisín Shortall

If substantial payments from the Department of Health and Children are being made by senior members of staff, it is not enough for the Secretary General to come along and say nobody can recall why they were made, or what their purpose was.

Mr. Michael Scanlan

In fairness, I asked the official about the matter. She was anxious to help, but she does not remember. I cannot say that is not acceptable on her part. I accept that it is not acceptable that the Department cannot account for it, but it is unfair to suggest that she did not tell me something she remembers, or that I am not telling the committee something she told me.

Deputy Róisín Shortall

It might be a good idea for her to appear before the committee because it is hard to understand how a payment of that scale could be made without any justification for it, and with the person who made it not recalling why it was made.

Mr. Michael Scanlan

It may help. I am trying to help. The letter covers three items in total. The two items other than the item we are discussing refer to nursing programmes. The official in question worked in the nursing policy division. My best understanding of it is that, for whatever reason, the front line supervisors programme was also covered in the letter. I do not know why that would have been the case. The official does not recall why. She was dealing with nursing issues but this was also covered in the letter.

Deputy Róisín Shortall

So this payment was routed through the then Midland Health Board. What did the health board do then? Did it issue a single cheque for £150,000? How did it release the money?

Mr. Michael Scanlan

I do not know the answer to that.

Deputy Róisín Shortall

Has anybody inquired into that?

Ms Geraldine Smith

Can I intervene at this point? The audit did not identify the first payment of £150,000 to which the Secretary General has referred. However, we have identified correspondence from 2002 onwards between the Department and the general manager of the SKILL programme. In April 2002, the Department wrote to the general manager, referring to previous discussions regarding the provision of front line supervision programmes by OHM. The letter said that in line with the new health strategy, €190,000 was being provided for programmes and work in this area. That is the only reference we have to a payment of €190,000 in 2002. Subsequent correspondence between the Department and the then Midland Health Board referred to previous correspondence that was sent by the general manager of the SKILL programme to——

Chairman

Who was that?

Ms Geraldine Smith

It was Mr. Alan Smith. The correspondence, which was sent to Mr. Matt Merrigan of SIPTU, referred to discussions with the Department of Health and Children and suggested that in line with SIPTU's understanding with the Department, the matter was brought to a satisfactory conclusion. The cheque was enclosed. In the majority of cases, the cheques were made out to the SIPTU national health and local authority levy fund.

Deputy Róisín Shortall

Can I ask Ms Smith about her investigations into this account? Can she tell us what bank the account is in?

Ms Geraldine Smith

I can. It is in Bank of Ireland.

Deputy Róisín Shortall

What branch?

Ms Geraldine Smith

The O'Connell Street branch.

Deputy Róisín Shortall

Who were the signatories on the cheques for that account?

Ms Geraldine Smith

While we have no documentary evidence, our information based on interviews with various personnel is that there are two signatories to that account, namely, Mr. Merrigan and Mr. Jack Kelly of SIPTU.

Deputy Róisín Shortall

I will go back to the original decision to make these grant allocations. Was the Department of Finance aware that these allocations were being made?

Mr. Tom Heffernan

I have no records from that time that we had any knowledge in the area of monitoring the management of expenditure. The way in which the system works is that we would sanction the use of moneys through the health Vote, after which it would become an operational matter for the Department of Health and Children in respect of the distribution of funds and the management of the arrangements in that regard.

Deputy Róisín Shortall

Were these moneys within the health Vote?

Mr. Tom Heffernan

I presume that any moneys granted to the Midland Health Board would have gone through the grant to the Midland Health Board.

Mr. Michael Scanlan

Prior to the establishment of the Health Service Executive and its separate Vote, my understanding is that all such funding first went into the Vote of the Department of Health and Children. Thereafter, the vast bulk of it was allocated out by way of letters of determination to the individual health boards. As the representative from the Department of Finance noted, my understanding is that there would have been allocations as part of the Department of Health and Children's Vote. While funding might have been agreed under particular headings, the actual disbursement of that money within those headings to health boards or entities such as the office for health management was done by the Department of Health and Children.

Deputy Róisín Shortall

This was just using the Midland Health Board as the vehicle for getting the money out. This did not form part and parcel of the health allocation for health services.

Mr. Michael Scanlan

My understanding is that the chief executive officer of the Midland Health Board was the director of the office of health management. As I understand it, this was simply the structures that were in place. The Health Services National Partnership Forum accounts, which have been audited over the years, described the same thing as money having been "channelled through a health board". That is the manner in which the money was transmitted out into the system and down to agencies such as the office of health management or the Health Services National Partnership Forum.

Deputy Róisín Shortall

Mr. Scanlan has already stated that as far as he is aware, £75,000 was allocated to this fund in 2000 and another £150,000 in 2001. What does he know about 2002?

Mr. Michael Scanlan

There were allocations of €190,000 in 2002 and 2003. In 2004, a further €190,000 was allocated. However, we also found additional once-off funding of €35,000 in 2004. I refer to a letter of 21 June to the office for health management addressed to Mr. Alan Smith, its general manager regarding additional funding of €35,000 in respect of costs associated with research and development in industrial relations and human resource management programmes. A corresponding letter then went out to the chief executive officer of the Midland Health Board. Then there also was once off funding of €50,000 under the action plan for people management, which again has a reference to the front line supervisors' programme. As far as I can see, each year in 2002, 2003 and 2004, the sanction was issued for what then was called one-off funding. In other words, it was not going into the base as one had to reapply or it had to be re-sanctioned each year. In 2004, we found two other smaller payments and then, at the very end of 2004, there is the letter about which the Chairman asked me. This letter related to 2005 and was going to put the funding on an ongoing, as opposed to a one-off, basis and which increased it to €250,000.

Deputy Róisín Shortall

What was allocated in 2005?

Mr. Michael Scanlan

What was allocated under that heading in 2005 was €250,000 per year on an ongoing basis.

Deputy Róisín Shortall

Sorry, the Comptroller and Auditor General's report shows that from 2006 onwards, a regular grant of €250,000 was made. Is Mr. Scanlan saying that a grant of €250,000 also was made in 2005?

Mr. Michael Scanlan

I am. While I would have to consult the Comptroller and Auditor General's report, I think that although this is not shown in the table, it is referenced in a paragraph beneath that table.

Mr. John Buckley

To be helpful, this information is to be found at paragraph 37.29 of the report.

Deputy Róisín Shortall

Who sanctioned all these payments?

Mr. Michael Scanlan

Is Deputy Shortall referring to the payments of €250,000 or——

Deputy Róisín Shortall

Going back further. Mr. Scanlan stated that the particular individual he mentioned had sanctioned the 2000 and 2001 payments. Who sanctioned them subsequently?

Mr. Michael Scanlan

The 2002 payment, which was €190,000, was sanctioned by Frank Ahern, the director for performance management and development in the Department. As far as I can see, the 2003 sanction issued from a man called Kieran Feeley from the nursing policy division. The 2004 sanction for €190,000, was signed by William Beausang, who then was a principal officer in the personnel management and development section of the Department. The sanction at the end of 2004 that I mentioned to the Chairman was part of the letter of determination signed by my predecessor and the letter that went out to SIPTU was signed by Bernard Carey.

Deputy Róisín Shortall

What do the people who sanctioned these grants state was their purpose?

Mr. Michael Scanlan

I have not spoken to them all as some are no longer in the Department. I tried, because on reading the papers and finding the letter of 2001, it was the first specific reference not to the training programme but to the money being paid to SIPTU. That is the reason I asked the aforementioned officer specifically about that because as far as the programme is concerned, I can find earlier references to it on the file and in the OHM's annual report. When I asked one of the other officers about it, that officer's understanding at the end of 2004, which is the next time there is a reference to SIPTU, is that there was a concern at that stage on the part of the individual in SIPTU with the imminent establishment of the HSE. As I stated, up to then the funding had been one-off in nature and there was a concern that they wanted to put it on a firmer footing. It was described——

Deputy Róisín Shortall

That is a separate matter. When did Mr. Scanlan become the Accounting Officer for the Department?

Mr. Michael Scanlan

In April 2005.

Deputy Róisín Shortall

Did it not strike Mr. Scanlan that it was strange that all these large payments were being made from his Department going back to the year 2000 at least although no one knew the reason they were being made or what was their purpose?

Mr. Michael Scanlan

At a personal level, I was not aware that they had been made. However, at a corporate level, I accept that as I stated at the outset, those payments did issue and were sanctioned by the Department. Moreover, it is not clear from the file what was the purpose, what was expected or whether they were to be sent to a particular union or otherwise. I accept that.

Deputy Róisín Shortall

Does Mr. Scanlan accept that this lack of information shows a serious breach in the controls within his Department?

Mr. Michael Scanlan

At one level, the answer obviously is "Yes" because that is not a satisfactory way for payments to go out and it simply is unclear what they were for. It is only my impression but the other work I asked the personnel officer to examine was not just the trips, but what other payments might have issued around that time. It does seem as though there were quite a number of those types of letters with that sort of money, while there was a formal letter of determination that covered the whole funding. What has happened since is that the HSE has been established with its own Vote, so the issue tends not to arise for us as a Department any more.

Deputy Róisín Shortall

No, but Mr. Scanlan knows very well that when the health boards were in existence, nearly every euro or pound that was allocated to the individual health boards was earmarked for specific services and his Department played a very direct role in so doing. Therefore, it is hard to accept the circumstances in which this money was paid. Nobody knew its purpose. Nobody could understand how it had started. Nobody had any instructions about why it should be paid. It beggars belief that this was the case.

Mr. Michael Scanlan

As I was not around at the time, I have spoken to a few people. I can confirm the Deputy's suggestion. One of the comments made to me was that the funding allocations for particular services or projects were sometimes exactly as the Deputy has described. They were sometimes extremely detailed and operational and, arguably, did not leave sufficient discretion for the relevant health board. On other occasions, they seemed to be very general, rather than specific. They seem to have ranged from one to the other.

Deputy Róisín Shortall

It seems extraordinary in light of the kind of controls that existed, such as the letters of determination to each of the health boards, that this fund was based on a little arrangement that was not accounted for. On the establishment of the steering group, what role did the Department of Health and Children have in the establishment of the steering group?

Mr. Michael Scanlan

I am afraid I honestly do not know whether we had any role in it. If the Chairman does not mind, I will look at the list in the document that has been circulated to the committee. It mentions that Mr. Bernard Carey was involved from 2004. My clear understanding is that the Department was not on the steering group until August 2005. A letter from an official in the Department of Finance about the memorandum of understanding — I understand the committee has a copy of the letter — asks that the Departments of Health and Children and Finance be represented on it. I do not think we were represented on the steering committee until August 2005. I do not know what the genesis of the steering committee itself was.

Deputy Róisín Shortall

The Department did not have a representative on the steering group per se until 2005. In light of the huge funds being channelled through the steering group at that point, what good governance arrangements did the Department make for the steering group? What were the specific reporting arrangements to the Department?

Mr. Michael Scanlan

Our membership of a steering group of that sort would not have meant there were reporting arrangements to the Department, to be honest. The money was in the HSE Vote by 2005. That is what Mr. Magee said earlier. We would have had somebody on the steering group. One of the issues identified in the internal audit was the precise role of the steering group. Our understanding of its role was that it did not have executive authority or responsibility to decide to spend money. The role of the Department on the steering group was to try to ensure that the policy underpinning the SKILL programme was pursued and followed through in terms of providing the training and releasing staff. I confirm from my personal knowledge that we were also involved in making sure those who were up-skilled were used effectively within the health system. We were involved in a policy role, rather than in a financial accountability role.

Deputy Róisín Shortall

The Department always has a financial accountability role.

Mr. Michael Scanlan

Yes, but not within——

Deputy Róisín Shortall

The Department made a substantial allocation of approximately €12 million per annum to a body on which the Department was represented. It is not appropriate for Mr. Scanlan to say the Department did not have any corporate governance responsibilities in relation to financial accounting, and that it was only concerned about policy. That is essentially what he is saying.

Mr. Michael Scanlan

I said earlier that the money came through the Department's Vote. From 2005 onwards, however, the money no longer came through the Department's Vote. That is the point I am trying to make. The system of financial accountability changed fundamentally from 1 January 2005.

Deputy Róisín Shortall

That money comes from the Department of Health and Children.

Mr. Michael Scanlan

No, it comes from the Exchequer.

Deputy Róisín Shortall

Yes, but it comes through the Department, does it not?

Mr. Michael Scanlan

No.

Deputy Róisín Shortall

What role does the Department have then? What do the staff in the Department of Health and Children do?

Mr. Michael Scanlan

That is an entirely different issue. I am just saying that in terms——

Deputy Róisín Shortall

What role does the Department have in terms of the financial allocation to the health services?

Mr. Michael Scanlan

I will speak about the financial allocations within the Department. The Department advises the Minister during the Estimates negotiations each year, liaises with the HSE and reports through the Minister to the Government on the in-year expenditure management arrangements. Our role lies in that space of general management, monitoring and reporting to the Government. The system of financial accountability was changed on 1 January 2005 by the Health Act 2004.

Deputy Róisín Shortall

Can the Secretary General tell me about the establishment of the programme before the HSE came into existence? How was the deal to set up this arrangement brokered? Who from the Department was involved in that deal?

Mr. Michael Scanlan

The short answer is that I cannot tell the Deputy about that. At that stage the money was coming through the Department's Vote. I am still the Accounting Officer for that. The records for 2001, 2002 and 2003, and so on, do not show me what that was for. I have offered the committee my best understanding of what happened at the time. It is important to await the outcome of the other investigations, including the work being done by SIPTU itself, so that we can see what the money was spent on. I accept that the written record in the Department with regard to that money does not provide any information about the background to it.

Deputy Róisín Shortall

I suggest to the Chairman that we will have to take this further. We may have to contact some of the staff of the Department who were involved. I find it hard to understand why Mr. Scanlan has not been able to establish why this body was in existence and why considerable amounts of public money were invested in it.

Mr. Michael Scanlan

Does the Deputy refer to the office for health management?

Deputy Róisín Shortall

No, I refer to the steering group.

Mr. Michael Scanlan

Sorry.

Deputy Róisín Shortall

Prior to that, considerable amounts of public money were being put into an account. We do not know the purpose or what its genesis was. I find it hard to understand why the Department has been unable to get to the bottom of that. For that reason, I suggest that some of the officials who were at the centre of these decisions will need to be called before the committee. We will need to talk to them about it.

I would like to move on. Can the HSE outline the nature of the reporting arrangements between it and the steering group? Several HSE officials were involved in the group. Two of them were on it since its inception in 2004 and a further five were on it from 2006. What were the reporting arrangements between the HSE representatives on the steering group and the HSE itself?

Mr. Seán McGrath

As the Secretary General said with regard to the overall SKILL programme, the steering group was established prior to the establishment of the HSE. There were individuals from the HSE on the steering group to ensure the implementation of the policy and the achievement of the overall objectives of the programme. The programme operated within Adelaide Road.

Deputy Róisín Shortall

Is Mr. McGrath saying that the HSE representatives on the steering group were concerned with policy but not with value for money or protecting the public purse?

Mr. Seán McGrath

No, not at all.

Deputy Róisín Shortall

What was their role in terms of financial accountability?

Mr. Seán McGrath

With regard to financial accountability and the funding itself, some €12 million was provided to oversee it. The majority of that funding went into training — either external training or internal back-filling. That was the quantum in relation to value for money. Obviously, we were involved in procurement in respect of who would supply the training and set up the process in relation to FETAC levels and so on. That was all part and parcel of the engagement of the steering group committee.

Deputy Róisín Shortall

What was their role with regard to the moneys that were going into the national health and local authority levy fund?

Mr. Seán McGrath

The role of the individuals on the steering committee was very limited, with one or two exceptions, particularly Mr. Smith. People from the human resources directorate and the broader health service sat on the steering group. They met once every one or two months at various sites to oversee the implementation of the programme. A person who was responsible for the SKILL programme sat on the steering group. He was responsible for the funding and ultimately paid the money into the fund mentioned by the Deputy.

Deputy Róisín Shortall

When did the HSE first become aware that there was a problem with these moneys?

Mr. Seán McGrath

I joined the organisation in July 2008. I became aware of it in September or October of that year as I was learning my way into the brief. As someone who had not worked in the public service or the health system previously, it was important for me to understand the wider remit of the organisation.

Deputy Róisín Shortall

I accept that in regard to Mr. McGrath's role. I am asking when the HSE first became aware that there were accountability issues relating to the moneys going into that account.

Mr. Seán McGrath

My understanding is that accountability issues on that account arose in 2009 when the internal auditor's report was published.

Deputy Róisín Shortall

In 2009?

Mr. Seán McGrath

Yes. I am sorry, I mean 2010.

Deputy Róisín Shortall

Why was that the case given that the organisation was so well represented on the steering group? Was there no reporting back arrangement?

Mr. Seán McGrath

Not that we could see regarding the governance of the funding to which the Deputy refers.

Deputy Róisín Shortall

I understand that the steering group produced bi-monthly reports. Does Mr. McGrath have copies of those?

Mr. Seán McGrath

Not to hand but I can forward them to the committee.

Deputy Róisín Shortall

Are there copies in the HSE?

Mr. Seán McGrath

Yes.

Deputy Róisín Shortall

Has Mr. McGrath gone back through those reports to see whether any concerns were raised about those funds?

Mr. Seán McGrath

Regarding the steering group and its activities, no concerns were raised in terms of what we have investigated.

Deputy Róisín Shortall

Has Mr. McGrath spoken to his representatives on that board?

Mr. Seán McGrath

I have, as part of setting up the internal audit. Much of what has come up within the internal audit is subject to an internal investigation by Mr. Turlough O'Sullivan.

Deputy Róisín Shortall

What was the status of the steering group in law?

Mr. Seán McGrath

It was non-executive. It did not have any remit in terms of accountability for funding.

Deputy Róisín Shortall

Were there not serious concerns within the HSE given that it was allocating more than €12 million a year to a body that had no legal status?

Mr. Seán McGrath

Certainly from where I sat I am not aware of any concerns. I was concerned, which is why I raised the flag on the issue.

Deputy Róisín Shortall

What about before Mr. McGrath's time?

Mr. Seán McGrath

I do not know.

Deputy Róisín Shortall

Was Dr. Smith in the HSE at that stage?

Ms Geraldine Smith

Yes, I was.

Deputy Róisín Shortall

Was Dr. Smith aware of any concerns being raised?

Ms Geraldine Smith

No, not with SKILL. As part of an audit process we carry out cyclical audits. We cannot audit everything every year. As part of our planning process we consult management to see whether it has any concerns or areas that it would like included in the plan. As Mr. McGrath said, in 2008 we consulted management about drawing up the 2009 audit plan. Arising from that the SKILL audit was included.

Deputy Róisín Shortall

Is it not the case that three years were lost in terms of accountability within the organisation? I accept a very unorthodox arrangement was inherited but the group had responsibility for it since 2005 and it was late 2008 to early 2009 before any action was taken.

Mr. Seán McGrath

That is correct.

Deputy Róisín Shortall

That seems extraordinary. What is the current status of the SKILL programme?

Mr. Seán McGrath

The SKILL programme is still a programme within the organisation. More importantly, in terms of the governance of the programme, it has been melded into the HR directorate within the HSE. We have stood down the steering committee. We have relocated the activities of the programme and the staff from Adelaide Road to Dr. Steevens' Hospital. We have closed down accounts payable, accounts receivable and fixed assets and melded them into the ordinary shared services of the HSE in the past six months.

Deputy Róisín Shortall

Fine.

Chairman

Before I call Deputy Rabbitte, going back to Mr. Smith, who was the manager of the SKILL group, did he not make any reports to the HSE? Is there any evidence of him reporting back at any stage?

Ms Geraldine Smith

The audit identified that there was a distinct lack of clarity in reporting relationships. SKILL was essentially a silo. That is what we can see from how it operated. There was certainly confusion among parties connected with SKILL as to who the reporting relationship of the general manager was with. It will be evident from the internal audit report that we have documented people's perceptions as to who the various reporting relationships were with. From an audit perspective there is no clarity on the relationship but the documentation points to the fact that the actual situation should have been that the general manager reported to HR.

Chairman

It acted as an independent republic without any questions being asked. The money went out without any questions being asked.

Ms Geraldine Smith

That is fair to say.

Chairman

Dr. Smith mentioned earlier the signatories to the cheques being issued by SKILL. Were the signatories also the trustees?

Ms Geraldine Smith

Can I clarify whether the Chairman means the cheques issued by SKILL or SIPTU?

Chairman

By SKILL.

Ms Geraldine Smith

The payments from SKILL came through what was known as the Health Service Employers Agency. To provide background, the SKILL project team was based in the Health Service Employers Agency building in Adelaide Road. From what we can gather it was provided with accommodation by that organisation and SKILL used its accounts payable processing so the signatories on the cheques would have been Health Service Employers Agency signatories.

Chairman

Who were they?

Ms Geraldine Smith

They were Gerard Barry who was head of the then Health Service Employers Agency, and possibly Ailbhe Gannon, who was probably an assistant national director in the then Health Service Employers Agency.

Chairman

Dr. Smith referred earlier to Mr. Merrigan and Mr. Kelly.

Ms Geraldine Smith

They were signatories on the SIPTU account.

Chairman

Who were the trustees of the group?

Ms Geraldine Smith

Of the SIPTU account?

Chairman

Yes.

Ms Geraldine Smith

We believe it was Mr. Merrigan and Mr. Kelly.

Deputy Pat Rabbitte

From the little time Mr. Magee has had to look at it, does he consider the programme has merit?

Mr. Cathal Magee

The training and development of the support staff within the acute system and the general system is an important part of the overall development of staff. The SKILL programme itself has merit. We are conducting a value for money audit on it. We have asked for an independent review to establish whether we are getting benefits from the spend.

We are talking about a group of staff in the health service who perhaps has been subject to under-investment in terms of their training needs, given the changes in standards and the regulatory quality requirements that are now in place. The programme has merit. What is unfortunate is that the SKILL programme, which was probably a very important training initiative, has been undermined and damaged because of the administrative processes and structures that were put in place, which to say the least were unorthodox and were lacking in the financial control accountability and normal processes of governance one would expect. We must try to separate the training objectives and the training investment in that group of staff and the branding of that under SKILL from the issues to do with the €2.35 million which was spent via expenses and the funding into the local authority levy fund. Otherwise we tend to undermine what was perhaps a valid training initiative. I cannot——

Deputy Pat Rabbitte

Has Mr. Magee looked at the moneys other than the €2.35 million? I refer to money paid to outside trainers. What absorbed that money? Are there no tales of horror there similar to some of the examples we had in FÁS?

Ms Geraldine Smith

I will take that question. So far we have identified that between 2004 and 2009 a total of €47 million was spent on SKILL. Of that, €15.7 million related to training costs.

Deputy Pat Rabbitte

Was that, for example, paid to outside contractors?

Ms Geraldine Smith

Yes, there were three main parties. The VEC had a training contract and €15.1 million was paid to the VEC under the SKILL-VEC scheme. An organisation called the Open Training Centre received €489,000 and UCD received €28,000. Altogether, those——

Deputy Pat Rabbitte

Was there any validation of the training component? Did some of the courses qualify for FETAC or was there any other validation?

Mr. Seán McGrath

A majority of those who have gone through the programme to date have achieved significant standards in relation to FETAC from level 2 through to level 6, which is at the supervisory level. It certainly has a very high currency within the health service and among this cohort of people.

Deputy Pat Rabbitte

Are similar moneys devoted to other categories of staff? This comprises non-nursing staff, as they used to be called. What about staff who are nurses, people with professional qualifications?

Mr. Cathal Magee

Yes, the genesis of this arose from the fact that perhaps support staff in the health system was the one group for which there was very little training development intervention, relative to the levels of support and investment for medical staff training and nursing staff through the colleges. There is quite a substantial investment on overall education and development within the health system.

Deputy Pat Rabbitte

How is that accounted for in the budgetary system?

Mr. Seán McGrath

In the nursing area, for example, there is a nursing services directorate to oversee both the undergraduate and postgraduate specialist courses for nurses.

Deputy Pat Rabbitte

What type of moneys are we talking about, roughly, compared to this one?

Mr. Seán McGrath

As regards nursing, from memory it is approximately €60 million to €70 million in relation to both the undergraduate and specialist courses. However, I can come back to the committee on that.

Deputy Pat Rabbitte

Did Mr. McGrath not tell Deputy Shortall that the steering group had been stood down?

Mr. Seán McGrath

That is correct.

Deputy Pat Rabbitte

How will the programme from 2009 to 2016, or whatever, now be administered?

Mr. Seán McGrath

The genesis of the programme is still there. Obviously, we are still engaging with the VECs and the external and internal providers. We have brought it into the broader training, development and leadership department within the HSE's HR section.

Deputy Pat Rabbitte

What were these guys doing?

Mr. Seán McGrath

Is the Deputy referring to the steering committee?

Deputy Pat Rabbitte

I am.

Mr. Seán McGrath

From what we can see, they were overseeing the start-up of the programme in 2005 to ensure that they procured external and internal training. They validated and got accreditation for the programme through FETAC and ensured that continued to roll out through the organisation not just the HSE, but obviously the wider health sector. There were oversight functions, too, in relation to that. We have brought that now in-house into the HSE's HR department.

Deputy Pat Rabbitte

Are there minutes of the meetings of the steering group?

Mr. Seán McGrath

Yes, there are.

Deputy Pat Rabbitte

Roughly how many times a year did it meet?

Ms Geraldine Smith

From reviewing the minutes, it would have met, on average, ten times a year, but we can clarify that for the Deputy.

Deputy Pat Rabbitte

As regards the SIPTU fund, was there a similar arrangement in place for any other union?

Mr. Seán McGrath

Not that we are aware. We have become aware of the fact that the moneys went through to this account. With engagements and ongoing investigations of the partnership fund, we have found that this particular health and social levy fund funded other trade unions to the tune of €250,000 from this particular fund. Rather than directly coming from the HSE, the SKILL programme or a partnership forum, it actually came from the SIPTU account.

Deputy Pat Rabbitte

Moneys to train members of other unions came out of the SIPTU fund.

Mr. Seán McGrath

We are currently doing an internal audit of that and trying to put the pieces together. We know, for example, that in the case of three trade unions moneys were distributed from this fund to the tune of €250,000.

Deputy Pat Rabbitte

In terms of the responsibility of the steering group, did it make allocations to specific trainers? What is the steering group doing?

Ms Geraldine Smith

Again, from reviewing the minutes, the steering group certainly set out the strategy for the programme and, as Mr. McGrath said, evaluated and developed the training programmes. There is also evidence that it also approvedad hoc grants to various organisations, and that is essentially what we have seen from the minutes.

Deputy Pat Rabbitte

Did the steering group decide to pay the moneys into the SIPTU fund?

Ms Geraldine Smith

I will take that question. There is no evidence to say that the majority of the steering group was aware of the annual grant to SIPTU.

Deputy Pat Rabbitte

I should clarify that technically it is not the SIPTU fund, but rather whatever this title is.

Ms Geraldine Smith

It is the SIPTU national health and local authority levy fund.

Deputy Pat Rabbitte

Who decided to pay it into it, then?

Ms Geraldine Smith

All I can speak of is the evidence the internal audit has discovered. We have not seen a document saying the grant should have been paid into the SIPTU national health and local authority levy fund. What we have seen is correspondence from the general manager of SKILL to Mr. Merrigan in SIPTU, stating, "Please find attached €250,000..." and it is made payable to the SIPTU national health and local authority levy fund. The instances where we have identified——

Deputy Pat Rabbitte

The general manager of SKILL being——

Ms Geraldine Smith

Mr. Alan Smith of the HSE. Where we see an instruction to pay into the SIPTU national health and local authority levy fund is when Mr. Merrigan is submitting what are known as cost reimbursements to SKILL, and he is saying, in effect: "I refer to the costs which SIPTU incurred on behalf of the SKILL fund. I now wish to seek reimbursement. Please make the cheque out to the SIPTU national health and local authority levy fund."

Deputy Pat Rabbitte

Is it not normal that there ought to have been a service level agreement, in this case with whoever was arranging the programmes? There was nothing like that in existence at all.

Ms Geraldine Smith

No, there was not. Again, from an internal audit perspective, one of the issues which we sought to identify was the entire background to any grant scheme. On that we would expect to see an application for a grant, approval of the grant, communication as regards the notification and awarding of the grant, correspondence disbursing the grant, sets of accounts showing what the money was spent on, etc. None of that was available, and it was in that light that we contacted the Department to see whether it had any of those documents. Unfortunately, the Department has not been able to locate those.

Deputy Pat Rabbitte

From day one the HSE never insisted on a service level agreement.

Ms Geraldine Smith

The audit did not identify any evidence to indicate a service level agreement.

Mr. Michael Scanlan

If the committee does not mind, in fairness to those on the steering group, somewhat like Mr. Magee, perhaps I did not make it sufficiently clear in my opening statement, but the decision in December 2004 was not just to increase the grant to SIPTU and put it on an ongoing basis, but also to fund it out of the SKILL budget that had just been recommended by the Labour Court and set up. I believe and acknowledge that the final piece of the decision has also blurred, but I hope not taking away from the intrinsic merits of the SKILL programme. Bringing the grant into that has further confused matters. In fairness——

Deputy Pat Rabbitte

I do not understand. Mr. Scanlan said earlier that one of the visits was examining health structures in Colombia. What had that got to do with the up-skilling of porters or other non-nursing staff?

Mr. Michael Scanlan

I agree. However, to finish what I was saying, the decision to pay the money out from 2005 on to SIPTU, in fairness, was in the letter of determination I mentioned, dated December 2004. The CEO was acknowledging this, in a sense. Our fault was in not saying what was required, not specifying outputs. That fault was compounded — I do not mean this in a derogatory sense — by the fact that, as the Deputy said, the HSE did not think to ask us or SIPTU account for it.

To go back to the Deputy's second question, and again it is a matter of information, it seems to me that some of the trips, frankly, had little or nothing to do with the up-skilling of front line supervisors or support staff. Some of them are much more into the area of general health reform, specific service areas and general management union partnership. From what I can see many of them are into training, education and upskilling, not just for the support staff but for nursing grades.

Deputy Pat Rabbitte

On whose inspiration were the visits undertaken?

Mr. Michael Scanlan

I do not know.

Deputy Pat Rabbitte

Some members of the steering group tended to travel on some of these visitations.

Mr. Michael Scanlan

My best understanding, as opposed to a written record, is that the 31 trips break into two broad categories, one of which was, I think, specifically SKILL related and the other, which was in some other space. On those trips to the United States and Australia, it was not down to one's membership or otherwise of the steering group. The Department had representatives on the steering group who did not go on visits, but in some cases staff from the Department who went on visits were never on the steering group.

Deputy Pat Rabbitte

In the opinion of Ms Smith, how did cheques issue to a fund such as this? The general secretary of a trade union tends to be the person responsible for finance. Was the Secretary General or the then general secretary of the union involved in this arrangement?

Ms Geraldine Smith

When I contacted the general secretary, he was completely unaware of either the annual grant payments or any of the reimbursements claimed.

Deputy Pat Rabbitte

Is Ms Smith satisfied that there are no other arrangements like this in the HSE?

Ms Geraldine Smith

I would hope not. From the evidence we found of the SKILL programme, there was a confluence of events and it certainly seemed, as I stated in the report, to be a silo. When it was set up, the reporting relationships were unclear and that caused a significant number of problems.

Mr. Cathal Magee

Chairman, one of my concerns as Accounting Officer for the HSE is that we have multiple financial systems, legacy accounting systems for financial control, financial accounting, accounts payable and procurement, which are legacy systems from each of the agencies that existed prior to the setting up of the HSE. We do not have a single financial accounting, procurement, accounts payable system. That is a significant weakness in the governance of expenditure of €14 billion. Until that capability is in place, satellite financial control arrangements are high risk for governance control and acceptable standards.

The HSE has put in place very strong central control of travel arrangements for those undertaking foreign travel. There are very well documented requirements for the payment of travel and subsistence expenses. The infrastructure and controls for foreign travel are much better, but in the absence of a single system for procurement, accounts payable, cheque issuing, there are vulnerabilities, such as those we are dealing with now. Part of the difficulty in this case is that there was a satellite, or as the internal audit called it, "a silo" which had access also to an accounting and cheque issuing system. From my experience of the financial control function, the high risk areas occur when one has devolved and fragmented control systems in place. There is a major requirement in the HSE to build a single, integrated financial control system.

Deputy Pat Rabbitte

How long would it take to put such a system in place, with which Mr. Magee would be reasonably satisfied?

Mr. Cathal Magee

I expect it would be, at a minimum, a two to three year project. It is a high risk project because it is a very large IT configuration and needs very good project management and implementation.

Deputy Pat Rabbitte

Our experience of that elsewhere in the service, to put it mildly, is not good.

Mr. Cathal Magee

That explains why the ambition to put a single system in place has not been realised. There is a nervousness in the various governance arrangements in the Department and board about the ability to execute. Nonetheless, it is an imperative, and as Accounting Officer for that spend and the expectations that I have on financial control from the chief financial officer, it is mandatory to have a single line of sight through a system on both payroll, through cheque issuing, through procurement and for overall financial control. Part of the challenge around driving efficiencies into the health care system is that these systems are in place, particularly on procurement. Without a single procurement system, one cannot leverage the benefits of a national procurement organisation. This system is required for efficiency purposes but it is also required as a basic element of financial control. The fragmentation that exists across all the agencies that were integrated into the HSE at the start up in 2005 is the reason we are here today.

Deputy Pat Rabbitte

The view abroad, partly influenced by the HSE itself, is that there are a great many back office staff. I know that numbers of staff are not the equivalent of good financial control but is it true that streamlining of the back office staff and not just the implementation of new IT systems is required to bring in a unitary system of financial control?

Mr. Cathal Magee

There is a significant amount of manual intervention in the development, consolidation and reporting of our fragmented financial systems environment. There is a huge cost with the processes in place to pull together the monthly reporting on both the vote level and on the income-expenditure level. It is quite a tortuous process, with a high level of complexity. In many ways I would commend the financial team in the HSE for being able to fulfil the public accountability requirements as far as they can through what is a fragmented, multiple system.

There is a link between systems and back office staff. There are enormous resources still engaged in manual reconciliation and reporting and the pulling together of these basic financial reporting systems. It is also the case that there is a view that the area in which we must seek greater productivity and reductions in overheads is in the administrative area because it does not have a direct impact on the health care settings. That is obviously a priority and an objective but we must balance consideration between having the systems in place and the proper platforms to run a national organisation of this size and complexity with the ability to release resources out of the administrative system, which are involved in consolidation, manual reconciliation and checking.

Deputy Pat Rabbitte

Is Mr. Scanlan disturbed that after five years the new chief executive of the HSE would be able to give that as his sober judgment on the capacity of the organisation in this regard?

Mr. Michael Scanlan

If by "disturbed", the Deputy is asking if I am surprised, the answer is "No". If by "disturbed" the Deputy means whether I share the CEO's concerns, the answer is "Yes". This is part of what we have grappled with in consultation and in working together with the HSE. We had the decision to set up a separate vote, multiple financial systems. We had very big issues with the two types of reporting whereby the health board system was used to reporting on an accruals basis, and the vote system — it is not as simple as this — was largely on a cash basis, and one is trying to reconcile one set of accounts to the other. As far as the Government and Government finances are concerned, it is the vote basis. We had a group chaired by a former Secretary General of the Department of Finance who did much good work in that area. Perhaps what Mr. Magee is reflecting is that despite the absence of a good IT system and pulling together of the fragmentation, to be fair, people have put a lot of work into being able to evaluate the information they have and make the type of call we have to make to the Government about where the money is going this year.

We have problems and we need an IT system. I understand that we got a proposal in August that we were able to send on to CMOD, which is now part of the process for peer review. Will it be risky? I think Mr. Magee is right for reasons which the Deputy pointed out. Our track record is such that it makes people nervous. I am not sure how to do this, but we have to balance the risk of implementation with the risk of not doing it. It does hinder the work we do.

Deputy Pat Rabbitte

Chairman, you probably want to move on. Do you think there is merit in asking the chairman of the steering group to appear before the committee to see if we can get any further information?

Chairman

We will consider today's evidence and decide our next line of action. There are a number of reports that are still due, such as Turlough O'Sullivan's report. We have not had time to look at the HSE report we received this morning. The SIPTU report is the third report. The Garda Síochána is investigating some of the aspects of the situation. We will consider what we have heard today and decide where we go from there. We will do that at the start of next week's session.

Deputy Pádraic McCormack

I am still curious about the steering group that was set up to oversee the SKILL programme, which was made up of the trade unions, health employees, the voluntary health sector and representatives from the Department of Finance. They were active — if "active" is the right word — between late 2004 and 2009. How many people were on the steering group?

Ms Geraldine Smith

Ultimately, there were 15 people on the steering group.

Deputy Pádraic McCormack

A nice team.

Ms Geraldine Smith

I have the schedule that is before the committee and I would like to correct two items on it that immediately spring to mind, namely, the membership period of Mr. Tom Dowling from the Department of Finance, which should be from 2005 to 2009, and of Mr. Bernard Carey from 2005 to March 2006.

Deputy Pádraic McCormack

Were the people on the steering group paid for their work, apart from the activity abroad?

Ms Geraldine Smith

Not by SKILL. The independent chairman received a chairperson's allowance which we believe was €1,000 per day.

Deputy Pádraic McCormack

That is nice if one could get it.

Chairman

Who was that?

Ms Geraldine Smith

It was Mr. Bill Attley. The only person who received fees was the independent consultant, Ms Isabelle Butler.

Deputy Pádraic McCormack

Those people all had salaries of their own, yet the chairman received €1,000 per day on top of that.

Ms Geraldine Smith

I would not be aware of the individual's background.

Deputy Pádraic McCormack

If they were trade union officials——

Chairman

To clarify, it was not €1,000 per day, but €1,000 per meeting.

Ms Geraldine Smith

That is correct.

Deputy Pádraic McCormack

How often did this steering group meet?

Ms Geraldine Smith

It would have met eight to ten times per year.

Deputy Pádraic McCormack

That is nice. This steering group also went on trips abroad and that issue was dealt with earlier. How many of those trips took place during the period when the steering group was active?

Ms Geraldine Smith

All the trips identified in the internal audit would have taken place from the time that the steering group was in place from 2004.

Deputy Pádraic McCormack

How many?

Ms Geraldine Smith

There were 31 trips abroad.

Deputy Pádraic McCormack

That was paid for out of the programme which was costing about €10 million per annum.

Ms Geraldine Smith

Yes, ultimately, but it was paid out of the funding provided to SIPTU. It was paid out of the annual grant or the cost reimbursed to SIPTU.

Deputy Pádraic McCormack

Is there still money in that SIPTU account?

Ms Geraldine Smith

The HSE does not have access to that account, but we believe there is still funding in it. We are not aware of the balance.

Deputy Pádraic McCormack

Where will that finish up?

Mr. Seán McGrath

We do not know at this stage because they are doing their own investigation. The HSE and SIPTU are having ongoing discussions on the issue.

Deputy Pádraic McCormack

Was another project team set up along with the steering group that oversaw the SKILL programme?

Mr. Seán McGrath

No, this is the same steering group. It was a project team within the HSE.

Deputy Pádraic McCormack

Were they acting on two different steering groups?

Mr. Seán McGrath

No. The project team——

Deputy Pádraic McCormack

Was that made up of people on the steering group?

Mr. Seán McGrath

There was only one. The project leader for the SKILL programme itself was on the steering group of SKILL.

Deputy Pádraic McCormack

Had the steering group the same chairperson for the four to five years?

Mr. Seán McGrath

Yes, we believe so.

Deputy Pádraic McCormack

Was he or she from the trade unions, the health employers, the Department of Finance or the Department of Health and Children?

Mr. Seán McGrath

He was a former member of the SIPTU trade union.

Deputy Pádraic McCormack

Who established this steering group? How did it get life?

Ms Geraldine Smith

The audit has not identified how or who decided that the steering group would come into existence. All we can determine from the available documentation is that there was a 2004 report, entitled Training, education and development, referring to SKILL and which stated that a steering group was established——

Deputy Pádraic McCormack

By whom?

Ms Geraldine Smith

It does not state that. In the course of the audit——

Deputy Pádraic McCormack

Someone must know that. One could not invent a team of 15 people without someone picking the team. There has to be selectors and a manager.

Mr. Seán McGrath

Many of the people who came together in the steering group would have been involved in industrial relations negotiations, such as with SIPTU, about HSE staff, and all would have been involved in the broader HR remit of training and development of this cohort of staff.

Deputy Pádraic McCormack

Sure, but who brought them together as a team and called them the steering group to oversee the SKILL programme?

Mr. Seán McGrath

I do not know.

Deputy Pádraic McCormack

I do not know either. I do not know if we are making any progress here. Is it still the practice of the HSE to hire outside consultants when it has staff in house that could do the work?

Mr. Seán McGrath

If the skills and competence are available from the training staff, then we will use it in house, but there are occasions where external trainers come in, and we would obviously procure them in line with our own procurement processes.

Deputy Pádraic McCormack

I recently read in the newspapers that there were three outside advisers to Professor Drumm who cost €1 million. Is that practice still going on? I know Professor Drumm is not there now but I thought he was paid enough to be able to do his own work without having three advisers. What were these people doing?

Mr. Seán McGrath

The advisers are no longer in the HSE.

Deputy Pádraic McCormack

I shall leave it at that because we are not making any progress.

Chairman

A member of the steering group brought in relatives and subsequently a relative became an employee of the HSE and received a pension. What process was uncovered there?

Mr. Seán McGrath

The person did not receive the pension. That involves a separate individual within the organisation. This employee came into the organisation, worked in the programme and has a contract of indefinite duration within the HSE. It is important to point out that this employee is a very good employee, is working diligently within the programme itself——

Deputy Róisín Shortall

With all due respect, that is beside the point to the question asked by the Chairman.

Mr. Seán McGrath

Yes. The person is still within the organisation as we speak.

Chairman

Were proper procedures followed in respect of——

Mr. Seán McGrath

No, they were not. Our recruitment procedures, our recruitment licence and our requirements to satisfy public services recruitment rules were not adhered to in these particular circumstances.

Chairman

Who was responsible for the breach of procedures?

Mr. Seán McGrath

The SKILL programme project manager, Mr. Alan Smith, had responsibility at that time.

Chairman

Mr. Smith has retired has he not?

Mr. Seán McGrath

Yes, he has.

Chairman

His name seems to come up a lot. Did he retire prematurely?

Mr. Seán McGrath

He received a severance package from the organisation. Like many people, he was at a level within the organisation about which an agreement was reached from 2005 to the effect that were the office abolished — indeed the position of assistant national director was suppressed — he could apply and go through an independent validation for this package to be signed off by the Department, which is what happened.

Chairman

Was there a top-up element to his pension in respect of added years and so on?

Mr. Seán McGrath

My understanding is that yes, there was.

Chairman

This again follows a trend whereby people who in my view did not pursue their duties have been awarded by top-ups and added years. What about the man in the Department of Finance who was mentioned earlier?

Ms Oonagh Buckley

The official from the Department of Finance retired in 2009. My understanding is that he availed of the incentivised early retirement scheme that was made available to the majority of the public service at that time in 2009.

Chairman

Did that also involve an award of a top-up and added years?

Ms Oonagh Buckley

No, the incentivised scheme for early retirement did not involve added years or any top-up to the pension. It was an incentivised scheme to assist in reducing numbers of public servants in 2009.

Chairman

As for the other people who were mentioned earlier who have retired, what was the nature of their retirement?

Mr. Michael Scanlan

I may have mentioned one retired official. My understanding is that he retired on age grounds in the normal course of events.

Deputy Pádraic McCormack

How much was paid to the SKILL programme in 2010?

Ms Geraldine Smith

Is the Deputy asking how much was paid in the annual grant to SIPTU?

Deputy Pádraic McCormack

How much?

Ms Geraldine Smith

Nothing was paid in 2010 as a result of the audit.

Mr. Seán McGrath

We suspended the payment to——

Deputy Pádraic McCormack

There is no budget for the SKILL programme in 2010.

Mr. Seán McGrath

No, there is. Training is ongoing and there is an annual budget of €12 million or €60 million over five years.

Deputy Pádraic McCormack

A budget of €12 million per year.

Mr. Seán McGrath

A total of €12 million has been set aside in 2010. I am unsure when the programme runs out but €60 million——

Deputy Pádraic McCormack

Does Mr. McGrath consider it to be necessary?

Mr. Seán McGrath

Yes, I do.

Chairman

Has it been stalled or put on ice?

Mr. Seán McGrath

Yes, the grant to SIPTU has been suspended.

Chairman

I was asking about partnership money.

Mr. Seán McGrath

As for the partnership fund, there is a separate silo within the organisation, namely, the Health Services National Partnership Forum, which also was set up as part of a union agreement back in 1999. I have asked the internal audit function to go in there and it is carrying out an audit of that organisation at present. Clearly, what happened at that time is that some funding from there went into this SIPTU national health and local authority levy fund. It is being audited as we speak.

Chairman

While it is being audited, is it still in receipt of funding?

Mr. Seán McGrath

It has funding in its base. We are withdrawing its ability in respect of the bank accounts, its accounts payable and accounts receivable, and are at present centralising that process with the trustees.

Chairman

Does the fact that the HSE is doing this mean there is a suspicion that something is wrong there?

Mr. Seán McGrath

As we know that money went from partnership into the fund, from our perspective it is clear that we want to centralise activities within that. This is the process that is under way at present.

Deputy Pádraic McCormack

Mr. McGrath has stated that €12 million has been allocated for 2010. Does he not think that after five years of up-skilling, everyone would be up-skilled to the neck by now?

Mr. Seán McGrath

The HSE has 33,000 staff in this cohort of support services and, to date, we have up-skilled slightly more than 7,000 of them through this mechanism of the SKILL programme.

Deputy Pádraic McCormack

Are they slow learners?

Mr. Seán McGrath

It is not that they are slow learners but they continue within a 12-month period.

Chairman

In fairness to those people, this is not their——

Deputy Pádraic McCormack

No, I simply am trying to establish the necessity of spending €12 million in 2010 after €12 million per annum has been spent for the past five years.

Mr. Seán McGrath

The majority of expenditure undertaken in any year pertains to backfilling the individuals to release them from their places of employment in order that they can receive this training.

Deputy Pádraic McCormack

That does not make sense to me.

Deputy Róisín Shortall

I just have one point. I note that a great deal of new material has been provided that members need time to digest. However, I refer to Dr. Smith's clarification about the two departmental representatives on the steering group. Did she state that Tom Dowling and Bernard Carey of the Departments of Finance and Health and Children, respectively, did not join the steering group until 2005?

Ms Geraldine Smith

That is correct.

Deputy Róisín Shortall

Does Dr. Smith know when in 2005 that happened?

Ms Geraldine Smith

The September 2005 meeting of the steering group probably would have been their first meeting.

Deputy Róisín Shortall

Okay. I am just curious because I note, when looking at the list of those who travelled abroad on the various trips, that Mr. Dowling, an assistant principal officer in the Department of Finance, did not join until September 2005. However, I note that his initials, "TD", are down for a trip to New York for St. Patrick's Day in 2004, as well as a further trip to New York in January 2005. I seek confirmation that the initials "TD" stand for Tom Dowling.

Ms Geraldine Smith

Yes, they do.

Deputy Róisín Shortall

He was the assistant principal officer in the Department of Finance.

Ms Geraldine Smith

Yes.

Deputy Róisín Shortall

May I ask the representatives from the Department of Finance how it would arise that a senior person from that Department would be going on trips to New York with the steering group?

Ms Oonagh Buckley

When I read out the list of trips on which the Department of Finance was aware the official had participated, I mentioned that he had participated in a trip in 2004, which we believed to be the one identified in the Comptroller and Auditor General's report. I refer to the trip in March 2004, for which a limited amount of subsistence was sought from the Department, was identified as a seminar in New York. We have limited information on file in respect of applications for participation in seminars. However, in general terms, I should state that his supervisors would have been of the view that there was value in study trips in these circumstances. This particular official was an experienced human resources and industrial relations official and there would have been value from the learning obtained from seminars on general partnership issues. Then, when he moved on to the SKILL programme steering group, he went on a number of trips that were expressly linked to the SKILL programme.

Deputy Róisín Shortall

I referred to trips before he joined the steering group. Can Ms Buckley confirm that he went on a second trip to New York in January 2005?

Ms Oonagh Buckley

I have no information on his participation on a trip to New York in 2005.

Deputy Róisín Shortall

Okay. According to the HSE report, the information that he did travel has been confirmed by SIPTU. Is the HSE standing over that?

Ms Geraldine Smith

Perhaps I can clarify the headings on the report. The report sets out all the sources of information that were available to internal audit that we have been able to collate. It sets out the destination, period, persons, skill related travel and by whom the travel arrangements were organised. In addition, it sets out which document provided us with that information. For example, when looking at that first trip to New York from 13 to 19 March 2004, it lists several people who participated, states the skill-related travel was a SIPTU study visit and that the source document was a travel return completed as part of the audit work by one of the participants on the trip. Essentially, this document is compiled from the recollections of individuals who were on the trips.

Deputy Róisín Shortall

I note that for the trip in question in January 2005, a travel return was made by Sé O'Connor. Going on the basis of the report provided to members, it appears as though an assistant secretary in the Department of Finance went on to trips to New York.

Ms Oonagh Buckley

To clarify, the official in question was an assistant principal officer in the Department of Finance, not an assistant secretary.

Deputy Róisín Shortall

I stand corrected, as the official in question was an assistant principal officer.

Ms Oonagh Buckley

I must go back and review his departmental attendance records but this evidence was not made available to me. I was not aware there was a recollection that he was present on a trip in January 2005 but I will go back and check our records.

Deputy Róisín Shortall

However, the Department has confirmed the trip in March 2004.

Ms Oonagh Buckley

We have.

Deputy Róisín Shortall

What kind of circumstances could arise that would justify participation in such a trip by an official of the Department?

Ms Oonagh Buckley

In general, the Department believes study trips are of value in terms of learning. In this instance, the official would have justified his participation on the trip to his supervisors in terms of the learning he could have gained.

Deputy Róisín Shortall

What was his role with the steering group or the SKILL programme?

Ms Oonagh Buckley

The assistant principal officer in question was a senior and experienced officer who worked for many years on the industrial relations issues surrounding these grades, which would have been called non-nursing grades at one time. He was a respected official who delivered much for the Department in his time. Therefore, he would have had a great deal of involvement in industrial relations issues. The study trip in 2004, which was listed as a seminar in New York in his travel and subsistence claim, would have been of value in the context of his role within the Department as an industrial relations expert.

Deputy Róisín Shortall

Was there potential for a conflict of interest?

Ms Oonagh Buckley

I suspect the Deputy is trying to ask whether it was known that the trips were being funded through a SIPTU account. The route of payment for the trips was not known when his travel and subsistence claims were approved by the Department of Finance. It was understood that all of the trips he took, including those expressly identified as relating to the SKILL programme, would have been examined by the steering group while he was a participant on it and accounted for properly through the HSE's accounts in terms of the costs that accrued to the HSE. His participation on a trip that involved other members of the industrial relations arena would not have constituted a conflict of interest.

Deputy Róisín Shortall

Ms Buckley stated the costs accrued to the HSE.

Ms Oonagh Buckley

It was understood by the Department of Finance that those elements of his travel costs not covered by it were covered by the HSE.

Deputy Róisín Shortall

It was understood that the HSE was paying.

Ms Oonagh Buckley

It was understood by his supervisor in the Department of Finance that those costs were being covered and accounted for accordingly within the HSE.

Deputy Róisín Shortall

Has it been established that that was not the case?

Ms Oonagh Buckley

Since the internal audit, we have become aware of how the other amounts were paid for, including the travel costs. That is how we became aware of the role of the SIPTU account.

Deputy Róisín Shortall

I will ask Ms Buckley again. In light of the fact her Department knows that one of its officials went on two trips funded by an unorthodox funding mechanism, an unusual account in the names of two SIPTU officials, did the potential for a conflict of interest arise from his two trips to New York, given his role in the Department of Finance, which was the ultimate funding channel for the body in question?

Mr. Tom Heffernan

I shall interject. The official's role in the steering group related to human resources development, the area in which he worked. There was a separate line in respect of financial responsibility. The Department's sectoral policy division was responsible for the management of the HSE Vote. The Department's representative on the committee was sufficiently concerned about the use of the funds within the steering group to report to the sectoral policy division to determine whether the moneys had been spent and to suggest to the members of the steering committee that a memorandum of understanding should be developed.

Deputy Róisín Shortall

When did he report that?

Mr. Tom Heffernan

In 2005, if memory serves me correctly. It is instanced in the HSE's internal audit report. There were communications between both sides of the Department. On the basis of the knowledge available to it, the Department would have advised the official concerned on the steering group for the SKILL programme as to our knowledge of funding and the provisions in the general sanction. The relevant official suggested that the general sanction to the HSE should include specific ring-fencing of the money to ensure it was spent in line with the Labour Court recommendation.

Deputy Róisín Shortall

On balance, I find it difficult to justify union officials controlling a fund that came from public moneys and was used to take officials from Departments on trips abroad. It does not seem like an acceptable situation.

Mr. Tom Heffernan

The committee has an issue to consider in this regard.

Deputy Róisín Shortall

We will revert to it.

Mr. Tom Heffernan

It is also an issue for us to consider in light of the committee's deliberations.

Chairman

I asked about the individual working with the steering group whose relative was subsequently employed by the HSE. Are there other examples of non-adherence to proper procedures in similar situations or in cases of procurement?

Will the witnesses provide details on another case? One of the HSE's senior executives took leave and was appointed as a consultant for a period, returned for a time, had his salary increased and retired with a top-up pension. Could we have a full report on the issue?

Mr. Seán McGrath

Yes, we can provide it.

Chairman

It seems to be a blatant breach of procurement and employment conditions. It is the worst example of money being wasted at a time when people at the coalface are suffering.

Mr. Seán McGrath

I understand the Chairman is referring to a situation mentioned in last weekend'sSunday Times.

Chairman

Yes.

Mr. Seán McGrath

We are aware of it and have launched an internal investigation into it. Why did someone who was in the organisation in 2004 go on a career break and return to the organisation? I do not have the answer now, but I will certainly——

Chairman

I do not question whether there will be an investigation, but will anyone be disciplined, fired or so on? People are telling us that they are hearing so much about people in FÁS, the HSE and other agencies who do not seem to be paying for their actions.

Mr. Seán McGrath

Regarding that particular issue or this issue, the Accounting Officer has outlined that we need to allow everyone to revert to us to discuss the statements being set in front of them. If the rules and regulations as outlined have been breached, we will deal with the issue appropriately and, more importantly, firmly.

Chairman

I am putting the HSE on notice that it will appear before the committee regarding its Vote later in the session. I hope there will be a full update on this appalling situation.

We have completed what we can today. I invite Mr. Buckley to comment on what he has heard. We will then finish our business.

Mr. John Buckley

Since we are at an interim stage and the committee will consult on the matter in private session, I have nothing to add at this point.

Chairman

We will adjourn. I thank the contributors as well as the Members and witnesses who attended. We will leave this issue and those we deferred open.

Next week, our business will comprise a private session meeting at 10 a.m. with a noon start for our consideration of chapter 8 of the 2009 annual report on public procurement.

The witnesses withdrew.

The committee adjourned at 1.20 p.m. until 10 a.m. on Thursday, 14 October 2010.