Tuesday 15 October 2019

Outrage over minister's bid to shift €198m HSE liability

Health Minister Simon Harris. Photo: Gareth Chaney, Collins
Health Minister Simon Harris. Photo: Gareth Chaney, Collins

Ralph Riegel

The Government was accused of an "outrageous attempt" to "whitewash" the Health Service Executive accounts by ordering auditors to omit a €198m liability.

Health Minister Simon Harris sent a directive via the Department of Health to the HSE, meaning the loss to be recorded was €85m - rather than €283m had the €198m liability been included in the 2019 accounts.

The Public Accounts Committee (PAC) was told by Comptroller and Auditor General Seamus McCarthy the directive issued to the HSE was fully within the minister's rights and remit.

The €198m liability arose from an action taken by hospital consultants over remuneration they claimed they were owed under their 2008 contract.

Under a remuneration ruling, the award of €198m is scheduled to be paid by 2021.

The Dáil watchdog was told that, under normal private sector accountancy rules, a liability is included in accounts in the period in which it is incurred.

However, PAC chairman Seán Fleming said the two senior accountancy officers for both the Department of Health and HSE would now be called before the PAC to explain the situation.

The Fianna Fáil TD said: "I consider this so serious we will have an emergency meeting with the accounting officer of the Department of Health and the HSE."

He said the PAC may even formally reject the submitted HSE accounts, on the basis of what he called a blatant attempt to "whitewash" the figures.

"The accounts as presented for the HSE - and I am speaking as a chartered accountant - do not represent a fair and accurate picture of the HSE. It is outrageous," he said.

Mr Fleming said it was clear the €198m liability was incurred in 2019 and should be included, by all accountancy norms, in the current year accounts. "I take this very, very seriously," he said.

Mr Fleming said that the move radically altered the state of the accounts presented by the HSE, with its deficit effectively reduced by more than two-thirds for the year in question.

"I find it very unusual that this was done the day before the accounts were signed off," he said.

Catherine Murphy TD said she echoed the outrage of the PAC chairman over the 11th-hour directive.

David Cullinane TD said it was clear the incident was an attempt to "massage the HSE accounts" and effectively represented "a sleight of hand".

It came as the chief economist at the Department of Finance warned the scale of recruitment by the health service is "becoming problematic" amid evidence spending by the health service is once again racing ahead of its budget.

The run-in to last year's Budget was dominated by the €600m black hole in health spending, which hit other ministers' scope for spending increases and tax cuts.

Speaking yesterday at the ESRI's Budget Perspectives 2020 conference in Dublin John McCarthy, chief economist at the Department of Finance, said rising recruitment by the health service is "becoming problematic" and could yet become "really problematic".

That view echoed that of Irish Fiscal Advisory Council (Ifac) chairman Seamus Coffey, who warned last week of significant overruns in health spending.

In Ifac's latest report on the Government finances, the budget watchdog said there was no clear evidence to suggest problems in planning and monitoring/controlling health spending have been resolved.

Ifac said the fact spending was continually increased without consequences for those failing to manage within budgets was a factor.

"The dangerous feedback loop between unrealistic forecasting and an anticipated relaxation of spending ceilings in health areas is likely to have reinforced the problem of a 'soft budget constraint'," the council said.

Meanwhile, the PAC also heard that child protection agency Tusla recruited 150 new social workers last year but lost the same number through departures.

Tusla interim chief executive Pat Smyth confirmed that social worker numbers remained static because of the rate of staff departures offsetting recruitment figures.

Around 180 further Tusla staff are on maternity leave at any one time, with the agency's workforce being overwhelmingly female.

Irish Independent

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