No justification for millions in 'unorthodox' fund

On 7 October 2010, HSE chief Cathal McGee (pictured) had his first outing to the Oireachtas in his new role as CEO. Appearing before the Public Accounts Committee (PAC) alongside officials from the departments of health and finance, a catalogue of bad governance, bad accounting and no transparency was revealed for money allocated to the controversial SKILL programme. By Sara Burke.

The SKILL fund was money allocated to train non nursing/clinical health service staff – porters, care assistants, cleaners, caterers in the public health system – who are essential but often low-paid staff.

€60 million was allocated on training these low-earning health service personnel (€12 m a year for five years) – and there is no controversy over this aspect of the fund. It is the €2.4 million that has been paid since 2000 that there is trouble with.

 Between 2000 and 2004, this money went from the Dept of Health (DoH) via the Midland Health Board to the Office of Health Management to what is called the 'Siptu national health and local authority fund'. This is not a Siptu account but its bank account has two Siptu officials as its signatories.

Between 2000 and 2004, each year a one-off payment was made to this fund, but just before the HSE was established in 2005 it was secured as an annual grant and went from being €190,000 a year to €250,000 a year. And from 2005 this money went from HSE to the 'Siptu' named fund.

And this was the money used to fund these 31 controversial trips to America, Australia and Asia as well as other payments like extensive restaurant accounts and taxi fares. So what was new about the PAC information was that we got much more information – who travelled, when, with whom. And while we knew about these trips before, it has very much been skewed as the 'Siptu missing money'.

But this public money was used to bring many public servants on 'study trips'. There were union officials on the trips but there were also one or more officials who worked or had worked in the Departments of Health and Finance (DoF), health board officials, the HSE and one or two from the Dublin Teaching Hospitals. And some of these people were on lots of trips and some brought their spouses.

Information was presented to the PAC from 2004 – every year the trips coincided with St Patrick's Day to New York in 04, Australia in 05, New York in 06 (from where 18 went on to Savannah and Boston), Boston in 07, Savannah in 08, New York again 09. Unbelievable!

The trips varied and for some of them they don't know what they were doing, there are no records or reports from officials who participated in them.

Michael Scanlon, Secretary General of Dept of Health talked about a trip to British Colombia before the set up of HSE where they had gone researching reform. Another was a trip to Philadelphia looking at pre-ambulance care services. They were known as 'social partnership study trips'.

But they had very little, if anything, to do with upskilling low-paid health service staff. Both the HSE and DoH admitted that at the PAC. Cathal McGee spoke about 'no clear rationale, unvouched expenses, unacceptable financial controls, no governance'.

And why did we not find out about this before now? Who was in charge of this money? The money paid into the account was a one-off grant for four years (2000 – 2004) and for the first three years of the HSE (2005 – 2008) it went virtually unnoticed.

There was a steering group set up to oversee the annual grant in 2005 but it had no executive functions, and although there were many members of HSE and DoH and DoF on it  – it was accountable to no one. And only in 2008, when Sean McGrath took up a new post as HR director did he order an audit which was carried out and brought public attention to the fund earlier this year.

Yet we still do not have all the facts. It was very clear at the PAC that HSE, DoF and DoH had spent a lot of time preparing for today and doing their own investigations but Siptu are also doing an investigation and their findings will be key.

It was also very clear that the three state organisations are not talking to each other. And it seems unlikely anyone will be held to account as many are retired, some with top-up pensions or years added.

But what was most interesting about the PAC hearing on the 'Siptu' account was that it told the story of the backroom politics of the boom. This fund was a result of a Labour Court ruling and agreements between government and unions – it was all connected with social partnership and it was classic Bertie Ahern style politics; keep the unions on side – set up an ad hoc fund, then mainstream it and yet no one is accountable for it and or for any of the money spent.

What was also evident is the failure to put structures in place to make all public money accountable, the remaining lack clarity on who is responsible for what – between the HSE and the DoH.

Cathal McGee acknowledged the problematic nature of what is coming out, but he also made the point that these sort of things will happen if there is not one central financial management system and 6 years in to the HSE we don't have that for overseeing €14 billion. This is very problematic and the legacy of the old system is still in place.

And why don't we have a unified financial system? For one, it's complicated and takes time but also, after the fiasco of PPARS, both the departments of finance and health have been very reluctant to invest in a new IT and central financing system but this, as McGee pointed out, is central not only to transparency but also efficiency.

There is also another HSE audit into spending of other partnership funds and it was hinted that there may be more to come in that...