HSE financial practices wasting €20m - report

THE FINANCIAL management of the Health Service Executive (HSE) has been criticised by Opposition and Green Party politicians after a report revealed inefficiencies in its banking and payroll practices cost some €20 million.

Reacting to the audit by the National Treasury Management Agency (NTMA), Green Senator Dan Boyle yesterday criticised the financial structure of the HSE.

The HSE was set up "without proper consideration as to how it should structure itself financially, how it should structure itself in terms of personnel", he said.

"You achieve economies of scale in a health service by having centralised resource-giving and decision-making. The problem is that it was all done together," Mr Boyle told Eamon Keane on Newstalk radio. "Instead of being a leaner, meaner machine, it's more or less repeating the errors of the old health board system," he said.

"At a time when health services are under pressure and facing further cutbacks, the loss of €20 million through sloppy practices is simply not acceptable," Labour health spokeswoman Jan O'Sullivan said yesterday.

"This is further evidence of the HSE's dysfunction and lack of cohesion . . . and shows tremendous waste in the HSE as we all suspected," Fine Gael health spokesman Dr James Reilly said.

Details of the report, compiled in 2006 by the NTMA and given to the HSE in early 2007, were carried in yesterday's Irish Examiner.

Among the findings were that, until recently, the HSE was operating more than 250 accounts in seven banks and paying some €2 million in yearly bank charges. The report also revealed there was duplication among almost 1,000 people managing the HSE's finances.

Twenty-five recommendations were made in the report, which was given to the HSE in 2007.

Nine of these are implemented and three are being worked on, Liam Woods, financial director of the HSE, told The Irish Times yesterday. "The bulk of the rest depend on the introduction of a single national payroll system and a single financial system for purchasing and reporting," he said.

"It is critical for us to get capital for investment in information technology," he said, adding he hoped an agreement with the Government was close. The system would take three years to set up and is expected to save the HSE €100 million a year, Mr Woods continued.

Since the report was written, the HSE has reduced its bank accounts from 250 to 31 and Ulster Bank has won a tender to become its sole banker.

The HSE also defended some 1,000 staff managing its finances.

"About two-thirds of the staff referred to [in the report] work in the financial areas in hospitals," he said. "There will be a head count reduction when we bring in a single system."