The Dáil’s spending watchdog is expected to order an immediate overhaul of how goods and services are procured by the HSE after an “alarming” level of noncompliance was uncovered.
The HSE spent around €506m in 2018 on goods and services that were non-compliant with procurement rules, representing almost one-quarter of the HSE’s total procurement in 2018.
In a report due to be published today, the public accounts committee is expected to recommend an immediate plan of action, with annual targets and objectives, be developed to ensure the HSE is fully compliant with procurement rules.
The HSE is due to come in for criticism on a number of fronts in the PAC’s latest periodic report. It is understood committee members have found it was “unacceptable” that this year’s HSE’s capital plan was not published until September.
The committee will recommend the HSE finalise and publish its capital plan by the start of each calendar year and that spending be avoided until there is an agreed capital plan.
The general financial management of the HSE is described as “unsatisfactory” and “does not demonstrate good governance or control”.
While the report acknowledges efforts to implement new methods of financial control to help ensure the HSE remains within budget, it also recommends the HSE examine its operations to identify areas where savings can be made without impacting patient services.
The report details hundreds of millions of euro spent on goods and services that did not meet procurement rules.
The HSE incurs expenditure of approximately €2.2bn on an annual basis in goods and services that are subject to procurement regulations. Any contract valued at €25,000 or more is required to be secured competitively in order to comply with public procurement frameworks.
However, almost a quarter of all money spent on goods and services by the HSE in 2018 did not comply with these rules.
The Comptroller and Auditor General informed the committee that each year it examined a sample of procurement at a number of HSE locations to test whether it was completed in accordance with procurement rules. Between 2013 and 2018, the estimated percentage of non-compliant procurement found in the sample had fluctuated between 14% and 49%.
In 2018, the audit sample, tested at five different HSE locations, indicated a level of non-compliant procurement worth approximately €506m.
The HSE informed the committee it was implementing changes to its procurement procedures, but that it would take a number of years to fully address compliance issues in the organisation. It said it will be March 2024 before a new system is in place across 80% of the public health system.
In its conclusions, the committee will say it remains concerned that it will take so long for the system to be fully implemented.
“The committee recommends that the Department of Health and the HSE ensure that this project is delivered on time, and within budget, and that accountability is maintained for any increases in the delivery time or budget,” it states.
The PAC found a breach of procurement rules in other State bodies and departments, including a number of non-compliant contracts, worth €5.6m, which were entered into by the Department of Agriculture in 2017.
Meanwhile, the Department of Justice recorded 39 supply arrangements, with a combined value of €6.5m, that did not comply with procurement rules in 2017.