The financial status of the Blood Transfusion Service Board over the 20-year period 1971-1990 was laid bare yesterday, and it did not make a pretty sight.
Indebtedness, income shortfalls and unsustainable capital expenditure were almost permanent features throughout the period, climaxing in 1982 when the banks refused to honour selected BTSB cheques, and the Department of Health was forced to bail out the State agency to the tune of £1.65 million.
Mr John McStay, an accountant and insolvency expert hired by the blood bank to report on its financial history, described the situation succinctly: if the board had been a private company he would have recommended liquidation.
His diagnosis of the source of the board's troubles raised a theme familiar to another tribunal - living beyond one's means. Unlike Mr Charles Haughey, however, the BTSB has a strong case to argue that its overspending was in the interest of the general public.
In particular, the board can cite its decision in 1978 to move to new premises at Mespil Road from Leeson Street - the cause of its severest financial crisis - as necessary to aid the expansion of services.
Whether the decision was prudent, however, is another matter. Mr McStay, on his first day of evidence yesterday, agreed that the BTSB had made inadequate provision for the large capital expenditure involved. The board was already stretched to the limit and running up debts that were a multiple of the board's bank overdraft. In doing so, Mr McStay said, it was "storing up trouble".
Asked how the board planned to fund the move, Mr McStay said he understood there were discussions with the Department although he said he did not know "what promises were made".
The suggestion that the Department gave tacit approval for the move will be strongly contested, and it is noticeable that no documentation has been presented to show this was the case.
On the issue of finances, the Department is also expected to challenge the notion that the board sought a radical change in the way in which it was funded. Counsel for the Department, Mr Ian Brennan SC, criticised Mr McStay for making claims without citing documentary evidence in support. He said Mr McStay's assertion that the BTSB asked for funding mechanisms to be changed was merely "hearsay".
Whatever about responsibility for the financial crisis, its severity is beyond dispute. In March 1982, the board wrote to the Department saying its bank had recently ceased honouring certain cheques "notably those issued to the Revenue Commissioners and other Government organisations". In the same month, Mr McStay said, the board noted that it needed a minimum cash injection of £900,000 "to avert financial breakdown".
Against this backdrop, the tribunal will examine key decisions of the board which affected the welfare of haemophiliacs. In particular, it will seek to establish why the board in 1983 suddenly, and without explanation, abandoned a research project which, if successful, might have stopped many haemophiliacs from becoming infected.
The project, aimed at producing Factor 8 and Factor 9 clotting agents at Pelican House, was rejected in favour of a commercial arrangement with the Travenol drugs company to have the products made overseas using Irish plasma.
Mr McStay agreed yesterday that the Travenol contract was of significant "financial advantage" to the BTSB and produced a surplus which "helped to run the whole organisation".
The importance of this and subsequent contract arrangements to the board was illustrated by a breakdown of income and expenditure. Income from plasma and "blood derivatives", including Factor 8 and Factor 9, as a proportion of the board's turnover rose from 14 per cent in 1983 to almost 20 per cent in 1987, and 26 per cent in 1990.
Exactly how much the board made through contract arrangements with specific pharmaceutical companies was not, however, evident from the figures.
Mr McStay will continue his evidence today.