Tánaiste and Minister for Finance Brian Cowen has said he is seriously concerned that the Health Service Executive needs to improve its financial management after it recorded a deficit of €255 million this year.
His comments are contained in a letter to Minister for Health Mary Harney after he was asked to approve the use of money which had been set aside for nursing home refunds to bail out the HSE.
Some €216 million set aside for these refunds which was unclaimed was used to help the HSE balance its budget this year. Another €20 million of its deficit was covered by using money allocated for capital spending on information technology in 2007 which was not spent.
Mr Cowen wrote: "As you are aware from previous contacts in regard to the HSE's budgetary problems, I am seriously concerned that the HSE needs to improve its financial management and control performance to bring its spending under control in line with the estimates allocated by the Dáil."
The fact that money had to be moved around to offset the HSE deficit was, he said, "the latest indication that the HSE spending is not being managed efficiently".
His letter, sent last week, continued: "I am not satisfied that the HSE has provided a full and proper explanation as to the circumstances giving rise to this supplementary estimate or that it is giving sufficient priority to tackling the underlying causes of its budgetary problems.
"The diversion of development monies [some €205 million this year] provided by Government for priority health services and the slow pace of delivery of NDP health infrastructure cannot be allowed to continue in 2008 and future years as a consequence of poor financial management."
It was, he said "with great reluctance" that he was sanctioning the supplementary estimate.
"I have asked my department to work closely with yours to consider what steps can be taken immediately to improve the HSE's management of its budget in 2008 . . . I have asked my department to impose whatever conditions are necessary on the HSE's drawdown of expenditure in 2008 to support these aims," he went on.
He stressed that it was very important that health service employment numbers were "properly managed" next year.
Following a report in yesterday's Sunday Tribune that Mr Cowen had criticised Ms Harney about the HSE's overspending in 2007, a statement issued by the Government information office stressed Mr Cowen and Ms Harney were at one in requiring that the overrun in the HSE budget could not be allowed to recur in 2008 and would work together on the issue.
"The Minister for Finance has made no criticism of the Minister for Health's handling of the health votes," it said.
Meanwhile, a former secretary general of the Department of Finance, Tom Considine, has been appointed by Ms Harney to examine accounting systems within the HSE. The HSE says it has developed a new budgeting process for 2008 with every budget holder in the organisation identified and their responsibilities made clear to them.