Further revelations about unorthodox partnership funds at PAC

At a long session of the Public Accounts Committee (PAC) on 16 December, there was further grilling of Michael Scanlan, Secretary General in the Dept of Health and Cathal McGee, HSE chief (pictured) on the unorthodox SKILL fund and new information on another health services partnership fund. By Sara Burke

This was a follow-up meeting to the PAC on the SKILL fund held in October and it won't be the last as many of the pieces of the jigsaw remain unknown. Up to €4 million was lodged in a National Health and Local Authority Levy Fund which paid for senior officials from government departments and the HSE to travel abroad on numerous foreign trips.

A significant piece of information came from Michael Scanlan from the Dept of Health that the Department was paying out money to these funds as far back as 1998. Also, in very robust exchanges Scanlon admitted that it was not appropriate that senior officials from the Department go on trips with trade unions officials with whom they would subsequently be negotiating on behalf of the government especially when the trips were paid for by an 'unorthodox account'.

He named four officials who sanctioned payment into these funds who also went on trips. He also stated that there was no 'impropriety or irregularity' and therefore disciplinary action was not necessary.

These were the trips we heard about before to the USA, Australia, and the UK which were organised by the National Health and Local Authority Levy Fund, which was run by Siptu officials but was not an official Siptu account.

At the PAC, Roisin Shortall spoke about how the story keeps changing and gets more and more complicated, how it is a quagmire. We already knew that senior officials from the Dept of Health, the Dept of Finance and HSE went on these trips which were paid for by the National Health and Local Authority Levy Fund – at the PAC, it emerged that these trips were sanctioned by their bosses, Michael Scanlon himself cleared some of them and then their subsistence was paid by the Department or the HSE. And as Roisin Shortall asked "no one thought anything wrong about this?"

Michael Scanlon tried desperately hard to explain the context of the time, lots of industrial unrest, the partnership agreement and more or less that such trips and collaboration between unions and senior officials was the norm at the time – which tells us a lot about the culture of government.

The HSE commissioned ex-IBEC chief Turlough O'Sullivan to investigate foreign travel taken by HSE staff and paid for by the National Health and Local Authority Levy Fund. Eleven out of the 12 officials who took part in the trips were interviewed but one of them has now retired; Alan Smith was the general manager of the SKILL fund and has refused to co-operate. Cathal McGee speaking this morning said that "there has been a clear and systemic failure to adhere to financial, travel and procurement regulations".

So is this just another 'systemic failure' or will anyone be held to account? To date, nobody has as both the HSE and the Dept of Health say they need the Siptu inquiry to join up all the dots. But McGee implied that he was very keen to get to the bottom of it, that it was doing huge reputational damage to the HSE and the SKILL fund the majority of which is being spent on upskilling low-paid workers in the health service.

Details of another fund also emerged. This fund is called the National Health Services Partnership Fund and the HSE has just completed an audit of it. Its findings are as damning as those of the other fund. It was set up in the year 2000 as part of the social partnership agreement of that year. It was made up of senior officials from the Dept of Health, the then health boards and subsequently the HSE, the unions, and other employees such as voluntary hospitals. It had a budget of €40 million, about €1 million of that went into the National Health and Local Authority Levy Fund.

What was most startling about the PAC's proceedings was the disclosure that, strictly speaking, this was funded and staffed by the health services but it operated as an independent entity. McGee referred to it as "an artificial construct with no statutory basis" and "a satellite entity outside of the mainstream management control systems".

The National Health Services Partnership Fund officially existed and payments were made up until 2005 under the HSEA. In 2005, however, it should have been subsumed into the HSE – this never happened even though a HSE HR Director sat on the forum's board and they were paying its budget and staff – and despite noises contrary to it, there were 21 foreign trips undertaken through this fund so, 16 of these trips were new trips. There were trips to London (3), Stockholm (2), Boston, New York (6), Brussels, Savannah, Paris, Lyon, Barcelona, Belgium Scotland, Moscow. Some with very large numbers. The HSE audit highlights payments not properly authorised, self-certified credit card payments and poor and confused governance.

According to Michael Scanlan, the trips were worthwhile and valid. Cathal McGee was making no attempt to justify the trips, Michael McGrath of Fianna Fáil referred to them as 'jollies'. However key info which emerged from the PAC session is that officially the Dept of Health and the HSE were responsible for the funds however they had no proper oversight; these two groups operated independently and put €2.3 million and €1 million into the National Health and Local Authority Levy Fund. And that this unorthodox or unknown fund then paid for senior officials from the health services, the departments of Health and Finance and HSE to go on these trips. As Roisin Shortall said "these two organisationss existed inside the HSE for so long and no one realised it".

Bernard Allen, chair of the PAC made it very clear that instead of the all the different reports we needed one comprehensive report, he asked the HSE to demand the Siptu report by year end. And there is an expectation that the HSE and Dept of Health will put their heads together on it in advance of the next PAC meeting in mid-January. Members of PAC expressed concern that they don't have time on their hands and are keen to get this sorted but there seems to be at least another episode or two to go before getting to the bottom of this. And in the meantime many people are trying to cover their backs...