C&AG says HSE must explain errors in financial statements

The Comptroller and Auditor General (C&AG) has said the HSE will be expected to explain any errors in its financial statements but cast doubt on the possibility of a “material loss of public funds”.

Seamus McCarthy made the comments as the Dáil's Public Accounts Committee (PAC) discussed plans to haul in the HSE and Department of Health to quiz them on claims that there has been "sloppiness" in the HSE's financial reporting and "fake targets" for hiring staff.

A whistleblower has sent a dossier of disclosures to the PAC which includes an account of a meeting of Department of Health officials in January where the claims were made.

Last weekend, the Business Post reported details of the discussion between the officials who did not know they were being recorded.

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During the discussion, the officials spoke of the prospect of a prior year adjustment in the HSE’s financial statements that was probably in the region of “hundreds of millions”. It was claimed that the it was an issue that the C&AG also had to answer for.

On Sunday, the HSE said there would not be an adjustment in the order of “hundreds of millions of euro” to its accounts. It said there may be a technical accounting adjustment of a much smaller amount and “If this happens, it will reduce not increase the level of reported expenditure.”

‘Very seriously’

Mr McCarthy, addressing the issue at a meeting of the PAC on Thursday, said a potential prior year adjustment in the HSE’s 2021 financial statements is being taken “very seriously” by his office.

He said he would expect a note in the financial statements “to explain why the errors occurred, why the existing controls did not pick them up and prevent them, and what the HSE has done to ensure that they do not recur.”

However, Mr McCarthy said he wanted to make an observation about what has been reported in the media.

“I understand the context in which the Department of Health officials were raising concerns which is in trying to plan and control the rate at which Exchequer funding flows to HSE so that it has sufficient funds to operate but doesn’t hold excess funds,” he said.

“I do not see anything what has been reported about the potential prior year adjustment to suggest that it is related to any material loss of public funds.”

Mr McCarthy said he will be “keeping an open mind” and “if any material loss is in fact identified, the committee can be assured I will report on it in the normal way.”

A number of PAC members raised concern at the claims about funds being allocated for recruitment for hiring targets that could not be achieved.

Fianna Fáil TD Paul McAuliffe said: "We have to make sure that if funds are secured that they are spent and that's certainly an issue I want to get to the bottom of in any session we have with the Department of Health and the HSE.

The PAC agreed to write to the HSE and the Department of Health to seek a response to the claims reported by the media this week and also to hold a meeting with representatives of both bodies on the matter at a yet to be determined date.