Non-compliant procurement at a ‘significant level’ in HSE

The Comptroller and Auditor General has identified a "significant level of non-compliance" with procurement rules within the Health Service Executive.

The HSE’s control systems are failing to highlight the level of non-compliant procurement occurring, according to the Comptroller’s report.

Last year, the HSE had a budget of almost €14 billion, of which €1.6 billion related to the procurement of goods and services for hospitals, nursing homes, and local health offices. This figure does not include procurement by the voluntary hospitals.

The report looked at a sample of 100 purchases made by the HSE and found 36 per cent of them had not been subjected to appropriate procurement processes. By value, these accounted for 47 per cent of the purchase price of the sampled 100 items.

Most of the non-compliant purchases were arrangements that had been in place for a considerable period. Many had expired but the arrangements were allowed to roll over year after year.

Of the 36 non-compliant contracts examined, 31 should have been included by the HSE in an annual report sent to the Department of Public Expenditure. In fact, only three were.

“The HSE’s control assurance statement process does not appear to be highlighting the underlying level of non-compliant procurement occurring,” according to the report.

Under EU procurement rules, framework agreements can be put in place as a way of achieving cost savings. The HSE has an increasing number of such agreements in place – 83 as of last July.

However, the Comptroller found framework agreements had been used in only six of the 100 purchases examined. There was “an apparent general lack of awareness” of the existence of framework agreements.

The HSE achieved €46 million in procurement savings last year. However, the report says it may be understating the level of savings because these are calculated on a comparison between the prices in revised contracts and those in previous contracts, which may have changed.