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Procurement

HSE criticised for being unable to confirm compliance with procurement rules 

A marquee Dáil committee has sharply criticised the HSE’s response to a request for information on procurement practices as being “disappointing and unacceptable”.

In response to a request for detail regarding the amount of its non-pay expenditure deemed to be non-compliant with public regulations, the HSE told the previous Public Accounts Committee that it could not comply as its procurement is reliant upon “multiple legacy systems”.

The executive said it hoped to be in a position to conduct the majority of its expenditure via one system in four years’ time.

The new PAC will meet to elect a vice chairperson and consider its backlog in correspondence tomorrow morning at Leinster House.

Under scrutiny will be the response from the HSE’s assistant national director of its parliamentary affairs division, Ray Mitchell, regarding the level of procurement within the executive not in compliance with the standards for public procurement.

Mr Mitchell’s response, delivered to the committee on 10 January, stated that due to the HSE not having a single finance and procurement system it does not “have full visibility of all procurement-related activity”.

“As a result (the) HSE is not in a position to provide the information requested by the Committee in relation to the number of non-compliant contracts and the reasons for same,” the response said.

It said that the HSE “has a plan” to have roughly 80% of its procurement expenditure covered by a single system by the first quarter of 2024.

The committee’s chair, Sinn Féin TD Brian Stanley said that the response is “disappointing and unacceptable as the HSE is one of the biggest spenders of taxpayers’ money on procurement”.

“This is something that I think we need to follow up with the HSE,” Mr Stanley said this evening.

Public procurement in Ireland is governed by Irish and EU rules. Examples of non-compliant contracts include those awarded without a competitive process, those without a tendering procedure without justification, or those tailored so that only certain applicants may succeed.

In 2018 the Comptroller and Auditor General, the State’s accountant, found that just under a quarter of HSE expenditure from “sample areas”, or €15.2 million, was non-compliant. In 2016 the figure was 49%, albeit from a much smaller expenditure sample of €30.8 million, with the non-compliant total €15.1 million.

The HSE said that it had, at the time, 1,500 contracts and frameworks in place. It said to improve its compliance it had “established a Procurement Compliance Unit and is actively working with budget holders to determine their compliance profile”.

It’s not clear how the Covid-19 crisis will have affected those procurement figures, given the unwieldy and unprecedented nature of the billions of euro in State spending approved since the beginning of March.

Personal Protective Equipment (PPE) alone is set to cost the HSE €1 billion next year, according to HSE chief executive Paul Reid.

The HSE’s response was initially to have been considered by the PAC at its meeting scheduled for January 23 of this year. However, the meeting never took place after then Taoiseach Leo Varadkar called a general election on January 14.

Regarding the issue of PAC vice-chair, Social Democrats TD Catherine Murphy and Fine Gael TD Jennifer Carrol McNeill are believed to be the frontrunners, with veteran representative Murphy likely the favourite to win.

The request for visibility regarding the executive’s procurement was one of a host of similar requests made of state bodies at the time.

A similar request of St James’s Hospital in Dublin for example showed that 31%, or €38 million, of that institution’s non-pay expenditure in 2018 was deemed to be non-compliant.

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