‘Potential conflict of interest existed’ for ex-hospital chief

The former chief executive of the Saolta group of public hospitals in the West should have declared to senior HSE management a business relationship he had with a UK company which secured contracts worth nearly €340,000, a HSE internal audit report has found.

The audit report said a potential conflict of interest existed in respect of a number of contracts signed by the Saolta group for the provision of services by the Northgate company.

The audit found the former Saolta chief executive Bill Maher confirmed he had a business involvement with Northgate as a consultant prior to his being seconded to work for the HSE in the West in January 2012.

He said this arrangement continued up until March or April 2013.

Mr Maher told the auditors he was not conflicted as result of his arrangements with Northgate.

Mr Maher said he had informed his then board chairman of his relationship with the company and had recused himself from any subsequent procurement involving Northgate.

He said the consultancy work he carried out for Northgate was aimed at developments overseas as well as in relation to new products and overall marketing strategy.

“My consultancy payments were not tied in any way, shape or form to procurement of services from Northgate,” he told HSE internal auditors.

However, the audit found that the procurement of a clinical information management system, the secondment of an IT project manager and the supply of cleaning and catering consultancy services by Northgate to the Soalta group had all commenced in 2012, before Mr Maher’s involvement with the company ended.

“Therefore, it would appear that a potential conflict of interest existed in respect of these contracts which amounted to approximately €338,000.”

“However it should be noted that the former CEO has stated that he was not involved in the initial sourcing of Northgate as a supplier or in the subsequent approval of payments.”

“It should also be noted that the chief operations officer (in the Salta group, Tony Canavan) also stated that he was not involved in the initial sourcing of Northgate as a supplier.”

The audit said Mr Maher had stated he had verbally disclosed his business interests with Northgate to the former chairman of the Saolta board.

"It is the opinion of internal audit that the former chief executive should have disclosed this interest to senior HSE management as the Board of Saolta University Hospital Group had no executive authority as it had been established on an administrative basis only."

The internal audit report said the procurement of the clinical information management system from Northgate was not carried out in accordance with national financial regulations.

It said the former chief executive and the chief operations officer had stated this was because no other supplier at the time was able to provide the service offered by Northgate.

“In addition, the procurement of the IT project management services and consultancy services associated with cleaning, catering and information technology were also in contravention of procurement regulations which require evidence of appropriate market testing. “

The audit report contains some conflicting statements from Mr Maher and Mr Canavan.

It says that Mr Maher told auditors that in regard to the clinical information management system, that he had no direct contact with Northgate in relation to sourcing it as a supplier and that it was the chief operations officer who had made to decision to purchase the system.

Mr Canavan told internal audit that he did not take the decision to buy the clinical information management system.

“This decision was taken by the CEO (Mr Maher) I did not know that clinical information management system existed as a product prior to 2012. I was introduced to Northgate by the CEO as were many other senior managers in the group.”

“It is true to say that I was involved in management the contract for catering and cleaning. However, it was the CEO’s suggestion that Northgate provide this service to the group.”

Mr Canavan told auditors that he had had concerns in early 2013 about Mr Maher’s “direct connection” with Northgate.

“I brought these concerns to the attention of the (former) CEO and he confirmed that this connection existed. He asked me what he should do about it and I advised that he should declare it to senior HSE management.

“He advised that he had already disclosed it to the chairman of the board and I advised him that I did not consider that to be adequate. A number of weeks/ months later the former CEO passed a comment to me which led me to believe that he had terminated his connection with Northgate”, Mr Canavan told HSE internal audit.

The report said Mr Maher had told internal audit his involvement with Northgate pre-dated his secondment to the Saolta group in 2012 from his previous post at St Vincent’s University Hospital in Dublin.

He said this arrangement was also in place before he had joined St Vincent’s and that this had been disclosed to the board and management there.

“He (Mr Maher) informed audit that he verbally notified the former chairman of the West /North West Hospital Group (now Saolta) which was also confirmed by audit but stated that he did not inform HSE senior management of his involvement with Northgate. “

“The former CEO stated that he ended his contract with Northgate in March or April 2013. Internal audit asked if the former chief executive of Saolta University Hospitals Group had benefitted in any way from Northgate just prior to and /or during the procurement of the clinical information management system contract, to which he replied yes that he received consultancy fees but declined to state the benefit in money terms as he stated this commercial in confidence.”

“The former CEO also confirmed that he did not receive any gifts, hospitality or other benefits from Northgate at any time. He also stated that his work for Northgate was undertaken in his own time and that he did not have any business involvement with any other companies supplying goods or services to the HSE.”