Committee Reports > List of Committees > Dáil > 1988 > Committee of Public Accounts > Report - Appropriation Accounts 1984

AN COISTE UM CHUNTAIS POIBLÍ

(Committee of public Accounts)

Dé Céadaoin, 7 Eanáir, 1987

Wednesday, 7 January, 1987

The Committee met at 11.30 a.m.

Members Present:

DEPUTY D. FOLEY in the chair

Mr. P. L. McDonnell (An tArd Reachtaire Cuntas agus Ciste) called and examined.

VOTE 47 (1984)—HEALTH.

Mr. P. W. Flanagan called and examined.

788. Chairman.—Paragraph 65 of the Report of the Comptroller and Auditor General reads:

Subhead G.1.—Grants to Health Boards in respect of net expenditure (excluding expenditure on Cash Allowances and Cash Grants and payments to the General Medical Services (Payments) Board).

Subhead G.2.—Grants to Health Boards in respect of Cash Allowances and Cash Grants.

The charges to those two subheads represent payments on account made to Health Boards throughout the year on the basis of their estimated expenditure, any balances due for earlier years being paid from subhead G.5 following the submission of audited accounts.

The accounts of the Health Boards are audited by Local Government Auditors whose reports are made available to me.

The following table shows the position regarding the completion of the audits of the accounts of Health Boards at 31 December 1984.

In his report dated 15 September 1983 on the accounts of the North Western Health Board for the year ended 31 December 1981 the Local Government Auditor drew attention to a number of accounting malpractices and deficiencies in the control of the Board’s fixed assets.

He stated that a concerted attempt had been made to charge expenditure incurred in 1982 to the 1981 accounts and that the measures employed to achieve this included, inter alia, the alteration of the dates on suppliers’ invoices and an arrangement with a consultant architect to backdate his certificates of amounts due to building contractors so as to give the impression that building work had been completed in 1981 even though the relevant contract had not been signed until 1982. As a result the Local Government Auditor disallowed expenditure amounting to £194,574 charged in the 1981 accounts but was of the opinion that this did not represent the full extent of the malpractices complained of as many of the alterations made had been so skilfuly done as to render detection difficult.

In relation to the control of assets the Local Government Auditor stated that even the most basic control on the movement of fixed assets was non-existent as the register of real property had not been written up to date and no inventory had been made of plant and equipment. As a result it had been impossible to determine whether the board still retained control of various assets taken over from local authorities in 1971 and of other assets acquired in the meantime.

As the Board’s expenditure in 1981 totalled approximately £57 million and was substantially financed by grants totalling approximately £50.5 million paid from the Vote for Health, I asked the Accounting Officer what action was being taken by the Department to rectify the weaknesses referred to and to eliminate the malpractices noted by the Local Government Auditor which could lead to excessive grants being paid to the Health Board by the Department.

In his reply the Accounting Officer stated that in relation to the alteration of dates on invoices the total amount involved was £280,000 and that this represented funds allocated in 1981 for which commitments were entered into in 1981 but for which delivery of the goods or the execution of the works concerned did not take place until 1982.

Similarly, the altered architect’s certificates referred to by the Auditor arose in relation to a hospital contract for which funds were allocated in 1981 but on which work had not commenced until 1982. The architect’s certificate had been improperly back-dated solely to charge the expenditure to 1981 rather than 1982. The Accounting Officer assured me that the need to ensure that strict accounting practices were constantly observed had been emphasised to the Board’s Chief Executive Officer by the former Accounting Officer who was satisfied that the Chief Executive Officer had since taken the necessary steps to ensure that there would be no recurrence of such breaches of accounting practices.

In regard to the control of assets, the Accounting Officer stated that the abstract of accounts which Health Boards are required to prepare do not require a full balance sheet as is normally prepared for commercial organisations, but that the issue was under consideration in the context of the new computerised accounting systems now being considered for instalation in all Health Boards. In the interim a system was being installed by the North Western Health Board which would give a continuous up-dated fixed asset register and which would be integrated with the Board’s financial and management information systems.

Mr. McDonnell.—This paragraph outlines the position at 31 December 1984 regarding the completion of the audit by local government auditors of the accounts of health boards. It then goes on to deal specifically with the report of the local government auditor on the accounts of the North-Western Health Board for the year ended 31 December 1981 in which he drew attention to what he called a number of accounting malpractices. They are referred to in the paragraph. He also drew attention to deficiencies in the control of the board’s fixed assets. The Accounting Officer’s reply to my inquiry is also outlined in the paragraph and you will see that it is stated that the necessary steps have been taken to ensure that there will be no recurrence of those problems.

I understand that the accounts of the North-Western Health Board for subsequent years up to 31 December 1984 have since been audited by the local government auditor and that no adverse comment was made by him in respect of the matters raised in relation to 1981.

789. Deputy G. Mitchell.—Has there been a problem with the health boards in recording or collecting amounts due to the health boards for health deductions from farmers and, if so, what is the problem?

Mr. Flanagan.—In relation to health contributions, the Government decided that with effects from 6 April 1984 the Revenue Commissioners would take over responsibly for the collection of health contributions. The health boards were left with the responsibility for collecting any arrears due prior to 1984. We have endeavoured to assist them in two ways in doing this. We have made it a requirement that people presenting for hospital treatment and who have not paid should be required to pay £150 in respect of the treatment they are seeking. They are not refused treatment though the money is collected afterwards. In the meantime we have endeavoured to encourage the health boards to collect the amounts due by letting them keep those sums which they have collected. In a couple of instances, particularly in the case of the South-Eastern Health Board, legal proceedings were taken against 22 farmers for the non-payment of health contributions and levies. Twenty of those paid arrears to the board prior to the court case and two farmers were prosecuted by the board and fined £300 and £250. They also had to pay legal costs. There is a difficulty emerging and there is a case sub judice at present in that board’s area. The health board on 10 December last prosecuted four County Waterford farmers at Dungarvan District Court for the non-payment of health contributions and levies in respect of 1982-83 and 1983-84. The defendants’ solicitors submitted that under the summary jurisdiction legislation the prosecution should have been brought within six months. The judge has postponed a decision on that case. It will be heard again on 11 February. This case will have a bearing on how the boards will proceed.

790. Deputy G. Mitchell.—With regard to the accounting procedures referred to, do the health boards show at the end of each year, in particular at the end of 1984, an amount outstanding in this area and, if so, what is the figure?

Mr. Flanagan.—The amount outstanding over the various health boards as at 30 September last was, in the case of the Eastern Health Board, £452,000; the Midland Health Board, £785,592; the Mid-Western Health Board, £791,835; the North-Eastern Health Board, £1,284,134; the North-Western Health Board, £293,005; the South-Eastern Health Board, £1,047,372; the Southern Health Board, £1,336,969 and the Western Health Board, £958,049, making a total of £6,948,956.

791. Deputy G. Mitchell.—Can we take it that the collection of these amounts will be pursued?

Mr. Flanagan.—They will continue to be pursued, whether they will be achievable or not. I mentioned earlier that we would put on the charge at the point of seeking of service and although only £24,900 had been collected by that method as of June 1986, it has had a significant effect in encouraging defaulters to pay.

792. Deputy Crotty.—With regard to the paragraph, why is there a delay in auditing the health board accounts? At the end of 1984 some of them went back as far as 1980, 1981 and 1982.

Mr. Flanagan.—One of the factors in this is the shortage of staff. The up-to-date position is that at present the accounts of all health boards for the year ended 31 December 1985 with the exception of those for the Eastern Health Board, are available for audit. The accounts for 1985 for the Eastern Health Board will probably be available by the end of February of this year. All accounts up to the year ended 31 December 1982 except those for the South-Eastern Health Board have been presented to the Oireachtas. Those of the South-Eastern Health Board up to December 1983 are available to the Department for presentation to the Oireachtas. We will make that presentation as soon as the printed copies of the accounts are received from the printers. The audit of all health board accounts for 1984 except those of the South-Eastern Health Board are scheduled to be completed by the local government auditors by 28 February 1987. This means that the overall delay has been reduced. There has been an improvement in the situation due to the assignment of a principal auditor duties to a local government auditor in June 1985. However, overall staffing in the local government audit service is, I am told, well below requirements and, therefore, there will be delays in the elimination of arrears.

793. Deputy Crotty.—Are you happy that there are delays and have you taken any action to bring about this change? Why was it allowed to go on from 1980 to 1984 and what action was taken by your office?

Mr. Flanagan.—We have set up an interdepartmental committee to carry out a comprehensive examination of all aspects of the role. That committee will report to the Minister for the Environment in due course. We are represented on it and we are pressing for the earliest possible audits we can get. Given the staffing constraints which are there for all of us in the public service at present, we are pressing as much as we can.

794. Deputy Crotty.—What you are saying is that lack of staff necessitates that audits are not carried out.

Mr. Flanagan.—It is a contributory factor. We have set targets for the audit of health boards accounts and we are endeavouring to press for them. We are endeavouring to have the accounts completed by 1 July of the year following that to which the accounts relate and we are trying to work to a situation in which the certified audits will be completed by 31 December of the year following that to which the audited accounts relate. We press for the filling of vacancies which we perceive as vital to the services generally, but it is a question of the priorities accorded to particular staff vacancies.

795. Deputy Crotty.—Is it the situation that auditing has a low priority?

Mr. Flanagan.—I am not saying that. It has no low priority so far as we are concerned. We support the audit section of the Department of the Environment in its endeavours to get a priority for its staff vacancies.

796. Deputy Crotty.—We are talking about a four year delay. At the end of 1984 some accounts had not been completed for 1980.

797. Deputy Crotty.—Would this be acceptable to the Revenue Commissioners coming from a private firm or enterprise? Why should it be tolerated in the public service?

Mr. Flanagan.—I am afraid that is something the Deputy will have to pursue elsewhere — we are not particularly happy with it — but we are pressurising to the greatest extent possible.

798. Deputy Crotty.—Can the representative of the Department of the Public Service comment on this situation?

Mr. O’Farrell (Department of the Public Service).—I am afraid that I do not deal with the staffing of the Department of the Environment. I deal with the staffing of the Department of Health and this matter relates to staffing of local government offices.

799. Deputy Crotty.—Could we have a representative here who could answer this question, who would be responsible? I feel this committee should be properly serviced.

Chairman.—Is that possible?

Mr. Flanagan.—I could ask my colleague to send a note. The staffing of the Civil Service is split between two officers. Since the Department of Health are being dealt with and since I deal with the staffing of that Department, I am here. I could ask my colleague to communicate with the committee on this issue if that is acceptable.

Deputy Crotty.—The person responsible should be here to answer these questions.

Chairman.—Is it possible to locate him, is he in this building?

Mr. O’Farrell.—I can try and locate him and ask him to come down. I would imagine he would need a few minutes to prepare but certainly I will be glad to ask him.

800. Chairman.—Could I ask about the malpractice in the North-Western Health Board and which is referred to in the accounts. I do not know whether one could describe it as fraud but the wording here in the accounts is very disconcerting. It is said that many of the alterations made had been so skilfully done as to render detection difficult. Could we have some comment from the Accounting Officer on this episode? First, why was it necessary to alter invoices, to get a professional consultant to alter his invoices, and why was it allowed? Our Accounting Officer mentioned this morning that the Accounting Officer in question said he is happy that it will not happen again. Who was initially responsible? Was it the CEO? If so, has he been surcharged or what action has been taken against him? This is a very serious matter. If it happened in any private firm certainly the people concerned would be brought before the courts.

Mr. Flanagan.—I must start by saying that it is quite an unsatisfactory situation to have occurred. Successive Accounting Officers have emphasised to the Chief Executive Officer that it must not happen again. To answer the Deputy’s question: ultimately responsibility for it would rest with the chief executive officer of the board. I must emphasise two points. There is no question of fraud or misappropriation of public funds, or of diversion of public funds. The chief executive officer shares fully our concern that such an occurrence should not happen. While the alteration of invoices, the changes of certification in the circumstances described by the auditor — and picked up by the Comptroller and Auditor General — are reprehensible, I would suggest that they were based on an enthusiasm by budget holders to preserve their annual allocation, knowing that they had incurred expenditure which, if it was picked up in the subsequent year’s expenditure, would reduce their capacity to provide services. It was based on an enthusiasm to provide the best service. That does not excuse it in any way. But I must emphasise that there was no element of fraud, although potentially it is a very reprehensible accounting procedure. I am satisfied, having spoken to the chief executive officer about it that it is essentially a product of the system by which we get our allocations on an annual basis. I must emphasise that it occurred in 1981 and into 1982. It has not happened again. It is an enthusiasm to do the best job one can with the resources misapplied. In fact the Comptroller and Auditor General has already mentioned that the auditor’s report, dated 23 May, 1985, on the board’s accounts for the years 1982 and 1983 is of relevance, he said that

“the board is to be congratulated at this stage on providing comprehensive health services, in both years, without exceeding the financial restraints imposed by restricted grant allocations. Indeed it is a measure of wise and careful management that the full allocation was not spent in either years.”

In other words, they worked within a tight allocation very effectively and by wise management. Therefore the strictures of the auditor were taken very much to heart. I would repeat that there was neither fraud nor misappropriation of moneys involved.

Chairman.—May I be excused as I have to attend a party meeting?

Deputy G. Mitchell then took the Chair.

801. Deputy Crotty.—What action was taken against the CEO? To say the least this was sharp practice. I take the explanation given by the Accounting Officer but it appears that this gentleman was taking undue advantage vis-à-vis the other health boards. I have heard of other CEOs being criticised for not being aggressive in procuring funds for their boards. Was this type of action condoned or perhaps encouraged by the Department? Finally, was the allocation which they would have lost due to fiddling the figures and that is how I would describe it — reduced in later years?

Mr. Flanagan.—The Deputy’s suggestion is that the CEO himself actually was involved in the transactions which were picked up by the auditor. That was not so, they were budget holders, but, like myself, he is responsible overall for the accounts of this area. He was called in by the Accounting Officer on at least two occasions as this saga involved and was very severely dressed down for the practice. The unsatisfactory nature of the control was emphasised to him. He was asked to make it clear to all his budget holders, to the people of a responsibility similar to those who were engaged in the practice, that it should be pointed out very strongly to them that this has not to be condoned. No financial penalty was imposed.

802. Deputy Crotty.—Why not?

Mr. Flanagan.—It was not of such nature at the time as would be regarded as necessary to penalise the board for the enthusiasm and the misguided enthusiasm of the officers concerned. It has been emphasised that, should it occur again, it would be a sacking matter.

803. Deputy Crotty.—The Accounting Officer appears to be saying that the misguided enthusiasm is being condoned.

Mr. Flanagan.—No, I am not condoning it.

804. Deputy Crotty.—The very least we can say is that these figures were fiddled to get extra funds. That was mentioned by the Accounting Officer here this morning. Is that not correct.

Mr. Flanagan.—No, they were not fiddled. I did not change the basic allocation of the health board, it was money which would have had to be surrendered in the normal course. But, taking one year with another, it did not increase the basic allocation to the health board in any way.

805. Deputy Crotty.—But it would have reduced the allocation. If the funds had not been spent in 1981 they would have been surrendered.

Mr. Flanagan.—That particular health board had a saving in the following year. The issue as Deputy Crotty has pointed out, was not picked up for a couple of years until the audits were done and that is a factor of concern to us. Therefore, the Exchequer overall was at no loss in public funds as a result of the activity but I do not accept that I would condone the practice. I merely take account of what happened. In all circumstances where there is any question of a lack of accounting accuracy, all the circumstances are taken into account. The chief executive officer was dressed down. He has been told that if it occurs again, it will be a matter where the issue of removal from office will arise. That was the judgment of the time and remains the judgment in relation to the issue. That it occurred is, as I said, reprehensive but it has not repeated itself nor is it likely to repeat itself.

806. Deputy Crotty.—I do not want to dwell unduly on this, but the lack of accounting practice, as mentioned by the Accounting Officer, amounted to fiddling the figures, fiddling invoices and fiddling returns by consultants. That is not lack of accounting practice. I do not want to be too extreme in what I would call it but certainly, as far as this committee are concerned, the Accounting Officer got a dressing down, I do not know how many years afterwards. As a result of the sharp practice certainly they did gain funds for their board to which they were not entitled and those funds were not recouped from them at any stage. They were not penalised financially in any way. Could I have an explanation of why not?

Mr. Flanagan.—On the occasion, the dressing down, the warning that it was a sacking matter for the future, the fact that there was no fraud and that the Exchequer in the sense did not suffer were regarded as sufficient response to the exercise.

807. Deputy Crotty.—I do not think that can be accepted by this committee. I do not know what further action we should take but in my opinion adequate action was not taken against the officer concerned.

Acting Chairman.—Since we are dealing with the 1984 accounts we might consider drawing attention of the House to the particular section.

Mr. Flanagan.—It is the accounts of the year 1981 into 1982 that are at issue in Deputy Crotty’s question.

Acting Chairman.—Reported in 1984 by the local government auditor.

Mr. Flanagan.—Yes, precisely.

Deputy Crotty.—It would have been reported sooner if we had had the accounts available.

Mr. Flanagan.—Can I make a further point in relation to Deputy Crotty’s comment. Really it is the force of the PAC itself, showing its dissatisfaction with the general audit situation which is of more relevance than anything else. We are all — as officers in the Public Service — Department of Health and elsewhere — concerned about the audits. The additional pressure from a committee of this prestige would be of assistance in relation to delays in accounts.

Acting Chariman.—The Accounting Officer will be aware that the committee did call in the chief executive officers of some of the health boards last year, directly, in order to try to assist in that regard.

Mr. Flanagan.—Yes, of course.

808. Acting Chairman.—And there are still some outstanding problems from 1984 which are referred to in paragraph 66. We may need to draw the attention of the House to it but we can decide that in our final report.

809. Deputy Crotty.—I think we should. It is the fiddling of figures I take grave exception to. The Comptroller and Auditor General has very correctly referred to it here. He did not draw back from it — it was fiddling of figures, sharp practice, a particular officer trying to get more than he was entitled to for his board. That should not be condoned.

Acting Chairman.—I think the committee can agree that we will draw the attention of the House to the matter.

810. Deputy Naughten.—I agree with the sentiments expressed by Deputy Crotty. There is not question about it, there was malpractice involved. It is quite clear to the committee that there was alteration of documents in co-operation with health board staff and consultants employed by the health boards. That is something this committee could not condone. How many other cases similar to this have surfaced in the past few years?

Mr. Flanagan.—None that I am aware of.

Deputy Naughten.—None whatsoever?

Mr. Flanagan.—None that I am aware of.

Deputy Naughten.—None that has been picked up?

Mr. Flanagan.—None that has been brought to my attention. I would think that the watchdog effect of the local government auditor will have had a deterrent effect on anybody who might be seeking to emulate it. Certainly in the North Western Health Board it is unlikely to recur with the threat of sacking over the head of anybody who attempts it.

811. Acting Chairman.—I think the Accounting Officer has given a very strong response to the concerns expressed by the committee. There is a number of other subheads and matters to be dealt with. We have travelled this quite extensively——

812. Deputy Naughten.—My question was: were there any other cases which were somewhat different? Regarding the question asked Mr. Chairman, earlier on with regard to——

Acting Chairman.—I was totally out of order and, had I been in the chair then, I would have so ruled—

813. Deputy Naughten.—With regard to farmers’ contributions, I would like to ask the Accounting Officer how accurate is this figure of £6.5 million? Is it not a fact that some of the farmers owe money under this heading may well be medical card holders and therefore not have any liability? Second, they may have been levied with sums which were far in excess of what they should have to pay. Would that not be the situation?

Mr. Flanagan.—The amounts outstanding cover the period since the introduction of the flat rate scheme in October 1971. There is no write-off procedure. The probability is that a substantial proportion of the arrears will never be collected. In the situation which existed, health boards did allow farmers to argue with them once it moved to being an income related matter. There may be substance in what the Deputy says; I do not know … it is a figure with which we have been furnished and which we are operating to. Since it is in the accounts of the health boards we have to endeavour to collect it so far as we can, or that the health boards with our encouragement and assistance try to collect it. I am not in a position to comment in depth on its accuracy or otherwise. The Deputy may have a point. So far as health boards are concerned, in the interests of providing services, they are endeavouring to collect as much as they can of it. I suppose in the final analysis the courts will determine the accuracy or otherwise of the claims. In the 20 cases which were taken to court 20 farmers in the southeast obviously acknowledged that they owed the money and paid up without further ado. Whether one can draw any conclusion from that I do not know.

Acting Chairman.—We still have to deal with No. 21 with the Chairman of the Revenue Commissioners when that subject arises again.

814. Deputy McGahon.—How is money collected from the farmers? What method is used, the Department having issued them a statement?

Mr. Flanagan.—It is the Health Boards who do so; they pursue it and, ultimately, they serve summonses on the farmers concerned.

815. Deputy McGahon.—An amount of £6 million is a staggering figure to be in arrears. I understand that the North-Eastern Health Board had tremendous success last year by sending men out into the field, knocking on doors. Certainly a figure of £6 million should not be left uncollected when much of it can be collected.

Mr. Flanagan.—I take the Deputy’s point. Significantly enough, since they were allowed to keep what they got the rate has been picking up. Health boards were allowed to retain amounts collected by them in 1985 of roughly £1.5 million. I have not got the full figure for 1986 yet. They are collecting it and when they are allowed to collect the arrears, assisted by the fact that they can levy a charge of £150 upon somebody presenting who has not his arrears paid, it all helps to engender enthusiasm for collection.

816. Deputy McGahon.—I would like to express my concern about the situation that Deputy Crotty has been speaking about. He referred to it as fiddling. I would refer to it as cooking the books. Irrespective of what view you take of it or from what angle you look at it, it is certainly highly undesirable for a Government body to be engaged in such practice. It is deplorable. I accept that the CEO obviously had a good record, otherwise you would have sacked him, but he certainly should have been demoted to some extent. Basically he had a good record in the Department, but having been involved — as you say, ultimately he was the person responsible — in a malpractice of this sort certainly he should not be left in that position. He should have been demoted as a deterrent to other people in the public service who might be concerned about that. I would like to draw attention to paragraph 66 where in the Southern Health Board there were discrepancies between the staff complements designated by the Department of Health and actual staff numbers employed. In other words, they were putting down men as being employed who were not there at all.

Acting Chairman.—We are about to come to paragraph 66.

Deputy McGahon.—Nevertheless let me ask for an answer. Sometimes you anticipate it. I am only following your example, Chairman.

Acting Chairman.—But I am a most disorderly Deputy.

Mr. Flanagan.—With your indulgence let me repeat what I have said. The CEO in question was not personally involved in the activity that was condemned by the auditor and picked up by the Comptroller and Auditor General. He did not personally do any of the things which are being picked out. He was unaware that it was happening—

Deputy McGahon.—He should have been aware.

Mr. Flanagan.—until the auditor reported. I add that he has to accept responsibility as I would have to in the same circumstances.

817. Deputy McGahon.—Was anybody demoted within the service?

Mr. Flanagan.—No, nobody was demoted. People were very heavily rebuked for doing it.

Deputy McGahon.—Rebuked?

Mr. Flanagan.—Yes, rebuked and warned that it was a sacking matter in the future.

Deputy McGahon.—In reply to Deputy Naughten you said you were not aware that this had occurred before.

Mr. Flanagan.—Rather I would say that I am not aware that it has occurred elsewhere.

Deputy McGahon.—Perhaps it had been occurring before and you were not aware of it. Perhaps this was not the first time it was attempted.

Mr. Flanagan.—Well, the auditors would have been very quick to pick it up. It is interesting that the auditor commented that it was skilfully done. Nonetheless, it was picked up. Therefore, we will rely on the excellence of the auditors to obviate any recurrence. They would be more alert to it now. Whether it happened in the past it would be impossible for anybody to say, but I think it unlikely that the auditors would not have picked it up.

818. Deputy Crotty.—I am labouring this point, but it states here that it was very skilfully done. Expenditure amounting to £194,574 was charged in the 1981 accounts, but the auditor was of the opinion that this did not represent the full extent of the malpractice. Has the full extent been established? Seemingly we have very good auditors, but even though they are very good the people in these health boards seem to be cleverer in that he could not even pick out the malpractice in the situation.

Mr. Flanagan.—Le me repeat what we said to the Comptroller and Auditor General in relation to that issue. In relation to the charging of expenditure incurred in 1982 through the 1981 accounts, the board’s chief executive officer arranged for a complete examination of all vouchers paid in 1982 but charged to 1981. As a result of this examination the chief executive officer reported that the total involved amounted to £280,000. This represented funds allocated in 1981 for which commitments were entered into in 1981 but for which the delivery of goods or the execution of the works did not take place until 1982. The £280,000 should have been charged against the 1982 allocation rather than the 1981 allocation. It is a question at issue. The auditor subsequently on the accounts for 1982 and 1983 to which I have referred commended that board for wise management. In fact, they achieved savings on their allocation and did not draw down sums of £776,000 in the following years on an allocation of £62 million. To the extent that it is being pressed the issue was taken in hand very hard by the CEO and he was obviously very concerned about what had occurred. I could not accept that Donal O’Shea, the Chief Executive Officer of the North Western Health Board who is a man of outstanding ability, would in any way engage himself in any such practice. Having had the matter brought to his notice he took very strong and very stern steps to bring it under control. I cannot add any more than that.

819. Deputy Crotty.—It is reasonable to accept that the chief executive officer of a health board would not be aware of this type of malpractice to this extent involving an outside consultant?

Mr. Flanagan.—I am afraid I cannot comment further on it other than that he was not aware of it.

820. Deputy Crotty.—If he was not, he is not too good a CEO in my book. He should not be a CEO if he was not aware of it.

Mr. Flanagan.—I can only point to the fact that he serves the area through a health board on which there are public representatives. At the time of the occurrence and since the occurrence that board, in my presence, in the Minister’s presence and, indeed, in many Deputies’ presence, have made it clear that he provides them with an excellent service conscientiously and not sparing of himself in the hours that he works. I would so regard him. Not only does he serve the North Western Health Board, he is chairman of the Health Education Bureau for which he receives no remuneration. He is also on the General Medical Services Payment Board and he is an extremely conscientious officer. The committee, of course, are entitled to their view, charged with their responsibility, but to single him out in the way in which he is perhaps being singled out is unfair to a very dedicated public service officer.

821. Deputy Crotty.—I am not singling anybody out. I am talking about a chief executive officer of a health board. We are examining his functions here this morning and he has not preformed well. I do not mind what boards he serves on. Maybe if he served on his own board alone we would not have this type of situation arising. I do not know the name of the man or who he is or anything else about it. This type of situation should have been known to him. As a member of this committee I do not accept that he did not know. If he was not aware he should have been. I would like to ask one final question. What amount was involved in the accounts submitted by this particular consultant?

822. Acting Chairman.—Before you reply, Mr. Flanagan, we want to find out what the public service situation is regarding the original question because I have a number of other sections.

Mr. Flanagan.—I am sorry, I do not have the specific amount in relation to the consultant. The total sum involved, as the CEO discovered, was £280,000.

823. Deputy Crotty.—It struck me — an aside, but it is relevant — did this consultancy firm pay income tax on these funds for 1981 or 1982?

Mr. Flanagan.—I do not know. The only point I can make about the tax situation is that the tax year and the audit year are different.

824. Deputy Crotty.—Can we get a note on that?

Mr. Flanagan.—Certainly.

825. Deputy McGahon.—I accept Mr. Flanagan’s explanation. I do not know the person either. I am not happy with the situation, but I would accept that this man must have overall a very good record to have got away with this situation. I feel that somebody should be accountable. To get off with a rebuke in my opinion was not sufficient. I cannot understand how the Department could be happy with people working on their behalf who are prepared to cook the books or bend the rules to the degree that was done in this case. I accept that there was no gain to any person but I would have felt that this was nearly a criminal offence. It is a very serious situation. People should have been demoted if not sacked.

Mr. Flanagan.—All I can say in response is that I note the strength of the views that are being expressed. It will certainly condition my approach to issues of this nature in the future.

826. Deputy Naughten.—Did I hear Mr. Flanagan correctly when he stated that that health board in 1982 left £762,000 which they did not draw down? Is that right?

Mr. Flanagan.—They effected savings of that amount.

827. Deputy Naughten.—Am I correct in saying that in the last quarter of that year health board budgets were cut by approximately 4½ per cent?

Mr. Flanagan.—I will certainly have to take notice of the question. There was a cutback in the summer of that year.

828. Deputy Naughten.—It was the equivalent of 4½ per cent in the last quarter, about 1½ per cent of the budgets of the health boards. If that cutback had not been introduced, would there not have been huge savings in that health board alone which obviously indicated that they were allocated too much money at the beginning of the year?

Mr. Flanagan.—Yes, on the surface of things. I would like to look at the particular situation that you represent in relation to the health boards. It has happened in the past in funding that from time to time health boards, in my view have had too much money at their disposal. It is not likely to occur again. Do you want specificity on that, Deputy?

829. Deputy Naughten.—Has that health board lived within its budget since?

Mr. Flanagan.—It has overrun its budget in common with most health boards at present.

Deputy Naughten.—To what extent?

Mr. Flanagan.—About £1 million at the moment — roughly, until the final figures are audited but it is of that order.

830. Acting Chairman.—In regard to the public service, what has happened to our witness?

Mr. O’Farrell (Department of the Public Service).—As I told the secretary, my colleague, Mr. Gallagher, is on an interview board today. He deals with the Department of the Environment. I deal, as explained earlier, with the Department of Health. I would not have the detailed information in respect of the staffing of the Department of the Environment.

Acting Chairman.—You might ask Mr. Gallagher to let us have a written note and advise him that we may wish to call him thereafter.

Mr. O’Farrell.—Certainly.

831. Acting Chairman.—Given the extent of the comment made today, we should ask the Department of Finance for a specific minute of this section as to what guidelines they will lay down in future to ensure there is no recurrence of the practices. It is only fair to point out, in view of the fact that the term “criminal offence” has been used, that nobody personally gained by any of the transactions which were involved and the money was spent by the health board. In fairness, that should be pointed out. The committee could agree to ask for a specific minute on what steps should be taken to ensure that this practice is stopped not just in the Department of Health or the health boards, but in general.

832. Deputy Crotty.—Before we move to paragraph 66 let me quote from page 28: “In relation to the control of assets the Local Government Auditor stated that even the most basic control on the movement of fixed assets was non-existent as the register of real property had not been written up to date and no inventory had been made of plant and equipment”. Could we have a comment on that?

833. Chairman.—Paragraph 66 relates to a number of similar problems. Perhaps the Comptroller and Auditor General could comment and then we could take the two together. It does specifically mention inventories and lack of controls in this area.

Deputy Crotty.—I thought we were going away from it.

Acting Chairman.—No, we can pursue it.

Mr. Flanagan.—If I could deal with the specific point that Deputy Crotty is raising in relation to the asset register, the board have installed an asset register and they are now in a position to give a list of all of the board’s assets with valuations. This form of asset register is being used to prepare similar asset registers in other health board areas. These asset registers will facilitate the introduction of a balance sheet provision in health board accounts as soon as the more general installation of computerised financial accounting systems allows us to progress further proposed new formats of accounts for health boards. The health board has now got an asset register.

834. Deputy Crotty.—I accept that, but seemingly the other health boards had asset registers. Why had not this health board got one?

Mr. Flanagan.—It now has, Deputy. The model is being used for the development of similar systems for other health boards.

835. Deputy Crotty.—That does not answer the question: why did it not have an asset register? Did they give any explanation? Every other health board could have it, why did they not? It is referred to here in the report as a serious matter by the Comptroller and Auditor General. The least we could have is a reason why this register was not available or maintained.

Mr. Flanagan.—I can only answer that it is obviously a matter of dissatisfaction. It is an expensive thing to do but it was necessary to do it and they have set about correcting it. I will take note of your comment that you have dissatisfaction with the fact that they had not got it.

836. Acting Chairman.—Paragraph 66 of the Report of the Comptroller and Auditor General reads:

In his report dated 15 November 1983 on the audit of the accounts of the Southern Health Board for the two years to 31 December 1981 the Local Government Auditor drew attention to a number of accounting and control deficiencies. These related mainly to:—

Stock Records—expenditure on drugs and medicines for the two years amounted to £3,769,020, but proper stock records for drugs and medicines were not kept in any of the Board’s hospitals.

Expenditure on medical and surgical appliances for the period amounted to £2,525,008, but the records kept in respect of these items were minimal.

Staff Complements — There were many discrepancies between the staff complements designated by the Department of Health and actual staff numbers employed.

Farm Accounts — Due to the inadequacy of the records at two of the Board’s three farming locations proper management or financial control could not be exercised over farm activities, while at the third location no operating, trading or profit and loss accounts were kept.

Analysis Fees — Fees received by a Biochemist under a private arrangement with a pharmaceutical firm were retained by him contrary to the terms of his employment with the Board and even though the management of the Board became aware of the matter steps were not taken to recover such fees.

Medical Cards — It was not possible to check the validity of medical cards issued during the two years under audit as the application forms for medical cards and the reports on these applications had, in a considerable number of cases, been removed from the files and destroyed.

The Board’s expenditure in those two years totalled approximately £202 million which was substantially financed by grants totalling approximately £185.5 million from the Vote for Health and I asked the Accounting Officer what action was being taken by the Department to rectify the accounting and control deficiencies revealed in regard to the Board’s operations. I also enquired as to the present position regarding the recovery of the analysis fees.

Mr. McDonnell.—This paragraph refers to the Report of the Local Government Auditor on the accounts of the Southern Health Board for 1980 and 1981 in which he drew attention to a number of accounting and control deficiencies as outlined in my report. There are five points mentioned. The Accounting Officer has since told me that the health board had acknowledged that the existing stock records for drugs, medicines, and appliances were inadequate and had claimed that this was due to staff restrictions. Pending the implementation of standard computerised pharmacy systems in health agencies, arrangements had been made for the Department’s professional accountant in conjunction with the board’s finance officer and the local government auditor to review the situation to ensure that essential improvements were effected to existing arrangements. In relation to the second point i.e. the staff complements, the Accounting Officer said that this issue was taken up with the health board as a matter of urgency, and their investigations indicated that during the course of 1980-1981 the number of permanent staff employed in any particular cost centre did not exceed the approved staff complement but the total number of staff could show frequent variations depending on such factors as the number absent on leave, the number of such staff replaced by temporary staff, etc., and the number of temporary staff employed under the authority of the CEO to deal with urgent requirements. In regard to the third point i.e. farm accounts, the Accounting Officer said the accounts for 1981, 1982 and 1983 had been prepared and that the 1984 accounts were in the process of finalisation and an officer of the board had been given specific responsibility for the preparation of the accounts and the maintenance of adequate records. On the question of the fees earned privately by an employee of the board, the Accounting Officer informed me that the fees had been recovered. With regard to the question of the medical cards, the Accounting Officer stated that the health board indicated that due to lack of storage space a system operated whereby application forms were destroyed on the expiry date of medical cards and replaced with the current year’s application. The board had been requested to revise this procedure as a matter of urgency and had confirmed that the documentation would in future be retained until the relevant accounts had been audited.

837. Acting Chairman.—In regard to these accounting and control deficiencies, are you satisfied from your 1985 report that they have now been eliminated or are there continuing problems? In other words, has notice of your 1984 comments been taken and the matters dealt with?

Mr. McDonnell.—There were still some problems arising in the following year’s report by the local government auditors, but I would be subject to correction on that. I have not got the later report with me, Chairman, but perhaps the Accounting Officer would have it. I think there were still some deficiencies arising.

838. Acting Chairman.—On the general question, Mr. Flanagan, the matters drawn to the attention of the committee by the Comptroller and Auditor General — the accounting and control deficiencies — have they been addressed?

Mr. Flanagan.—Yes, They have been addressed. I think that the position in relation to medical card records is now regarded by us as satisfactory. Proper farm accounts have been kept since 1984. The board is actively considering the position of these farms and whether they should be retained. We have got proper accounts in place. On the issue of the analysis fees which the auditor raised and on which the Comptroller and Auditor General commented, £650 was recovered. The officer concerned was allowed to keep £150 out of pocket expenses actually incurred by him. That issue is a touchy problem; it has arisen in relation to another officer in the Cork Regional Hospital and he is taking court action.

839. Acting Chairman.—What about the question of stock records and staff complements?

Mr. Flanagan.—The Department are engaged with all health boards in endeavouring to get a grip on staff complements. It was Deputy McGahon who made the point that they were paying people who were not actually employed. That is not the situation. It is really that they have more staff on their books than the complement which has been approved by the Department for them. It is in the nature of health services that it is very difficult to determine numbers. We tend to work in whole time equivalences, particularly in the area of institutional services and so on. The census and the pursuit by the personnel divisions of the Department of an analysis of that census and of a continuous monitoring activity are bringing the situation more and more under our control to our satisfaction. It is a difficult exercise but it is very much in hands. As to the stock records, taking the particular board in question, we have had a major involvement with the entire financial management situation in the Southern Health Board area. We are putting in computerised systems in the major cost centres and as they go into place with patient number controls, we will proceed to stock controls. The exercise in identifying what is on the ground to prepare it for computerisation has, in fact, brought an intensive control into the area which perhaps was not there hitherto. So there is a concentration both by the Department and the finance officers of the health boards.

840. Acting Chairman.—Expenditure on drugs and medicines for the Southern Health Board for the two years amounted to £3.76 million, but proper stock records for drugs and medicines were not kept in any of the board’s hospitals.

Mr. Flanagan.—That is so.

841. Acting Chairman.—Has that changed?

Mr. Flanagan.—That is being concentrated on and will change. It is changing and will change and it will be computerised.

842. Deputy Naughten.—The first question I should like to ask the Accounting Officer is whether it is not rather unbelievable, to put it mildly, that no accounts were kept on two of the farms attached to two hospitals. It was not a question of the health board being set up for just one year; it was in fact nine years set up at that stage. Is it not unbelievable that that situation could have been allowed to continue for nine years?

Mr. Flanagan.—Yes.

843. Deputy Naughten.—Was there any control whatsoever by the Department of Health over this particular health board?

Mr. Flanagan.—Yes, the health board was subject to the normal controls that we impose on the expenditure of money. The fact that there were not individual farm accounts kept was the continuation of practices which had been in existence for many years and was totally unsatisfactory and was drawn to our attention. But the health boards have a certain autonomy in the manner in which they operate their activities and I am the last person in the world to believe that we have totally adequate controls on the manner in which health boards ordain their affairs or the satisfactory nature of the statutory controls which we have. We have raised on several occasions the issue of the manner in which they handle their expenditure. To answer your question briefly, the health boards should have had, and once it was brought to our attention we insisted that they should have, such controls. In relation to stock controls, we have sent our officers out to assist professional accountants and otherwise, but I accept the stricture of the report. It is primarily directed at the health board and its management.

844. Deputy Naughten.—All I can say is that it surprises me that the Department of Health should have to request that farm accounts be kept. I would imagine that the chief executive officer of the health board should have insisted on this. In fact, I would see this as being even more serious than what we referred to earlier on about another health board. God knows what haemorrhage of funds was taking place from those two particular farms. Going from that I would like to ask Mr. Flanagan why if there was no stock record of drugs or medical appliances, if no farm accounts were being kept, and records of medical cards were not retained, it appeared that there was a substantial increase in the numbers of staff over and above that permitted by the Department of Health?

Mr. Flanagan.—Yes, putting it as it is, it remains true but one cannot link growth in numbers of staff with the failure to maintain records. The growth in staff numbers occurred throughout the service and essentially in many instances those would be people concerned with the delivery of services.

845. Deputy Naughten.—My understanding of what the Comptroller and Auditor General said was that the reason for not having proper stock records was limitations of staff. Is that correct?

Mr. McDonnell.—Yes, I was quoting from what the accounting officer said in his reply.

Mr. O’Farrell.—The numbers grow, in my experience, in the treatment and provision areas, not in the clerical and administrative areas.

846. Deputy Naughten.—What percentage of administrative staff would be in this health board?

Mr. Flanagan.—I will furnish you with that information.

847. Deputy Naughten.—This is one of the health boards which has been very critical about the way it has been left short of finance but because of the types of control they were carrying out there is little wonder that they have gone over budget, that is, if the same type of control is in existence all the time.

848. Deputy Crotty.—There is a number of areas that were not controlled. Was there ever any control over these since the foundation of the health boards in 1970? We are talking about 1981-82.

Mr. Flanagan.—I have to answer Deputy Crotty’s point obliquely. The local government auditor is an agent of the Minister and his function is to examine the manner in which the health boards account for the money they are given. We act on his report the same as the Comptroller acts. We assume a certain degree of responsibility at board level. The auditor examines, as is his function, the exercise of that responsibility. When he draws attention, we pursue. That is the practice to a greater extent now. Over the past few years we, as a Department, have been more concerned with value for money so far as we have the staffing resources to work closely with the health boards but that is not always welcomed. There is a certain autonomy with boards. The genesis of the present health board situation is one on which we could argue for quite a while. When the boards presumably drew their resources from local taxation there was greater concern at local level for responsibility but perhaps because the Exchequer bore a greater extent and times were easier there was less concern with the detail of resources. As I have stated, wherever there is a breach of accounting safeguards and the auditor draws attention to it, we go after it.

849. Deputy Crotty.—Are you saying that when there was plenty of money around there was no strict supervision on the spending of it?

Mr. Flanagan.—No, that is an interpretation, Deputy. I am saying that perhaps the boards had supervision. Nonetheless there are agents of this committee and of the Department who see to it that there is not an abuse of the system and when an abuse is brought to their attention they pursue it immediately.

850. Deputy Crotty.—Was this matter referred to by the local government auditor at any stage before this stage?

Mr. Flanagan.—I will have to check that because I cannot recall.

851. Deputy Crotty.—I want to ask the public service representative that question?

Mr. O’Farrell.—We would not know that because we do not deal with the staffing or procedures of the health board.

852. Deputy Crotty.—I am talking about the supervision of funds and the auditing of their accounts. Was it because there were no stock records ever reported on by the local government auditor that there was no control on medical and surgical applicances?

Mr. Flanagan.—I am not aware of it. The auditors and the Comptroller can help us on this if we are dealing with a particular year. If they have drawn attention to something they would have been more lacerating. I am just going on that.

Acting Chairman.—It may be a matter for the Comptroller but I do not think it is a matter for the public service.

853. Deputy Crotty.—From the point of view of the provision of auditors it is a matter for the public service.

Mr. Flanagan.—It is not an unreasonable assumption in your own experience to say that if an auditor’s comments in relation to the Southern Health Board and the Comptroller and Auditor General’s comments were ignored and not properly answered from one year to another one could get a fairly different report in relation to the subject we are dealing with now. The auditor drew attention to the situations he felt concerned him. Different auditors have different styles and different concerns. Things change as the personnel change.

Mr. McDonnell.—Notwithstanding what the accounting officer said about different styles, the question of stock records in the area we are talking about is so basic that any auditor, seeing the lack of those records, would comment on it. It would be very wrong not to comment on it as an auditor. My practice of reporting to this committee in regard to the matters which come to my notice on the local government auditor’s report is as a general practice of fairly recent origin. Deputy Crotty discussed this at previous meetings. I have adopted this practice because of the very thing the accounting officer referred to — the situation now where the vast bulk of the funding of the health boards and local authorities comes from central Government sources. If I had seen any comment of that nature in the last four or five years I would have drawn attention to it. It is my practice to peruse and scrutinise all available reports of local government auditors.

854. Deputy Crotty.—I am quite disturbed that there were no stock records, particularly for drugs. Not only can a tremendous loss arise in this situation, where there is an expenditure of nearly £4 million but the abuse of drugs is a big problem for our population. This was actually encouraging the misuse of drugs. Was there any question of that? Were the people conscious of this type of situation or were they completely negligent in the management of this aspect of their hospitals?

Mr. Flanagan.—The essential element of criticism is valid. I have no reason to believe that there was any irresponsibility on the part of the medical or pharmaceutical profession in the manner in which they took custody or used those drugs.

855. Deputy Crotty.—Has it been brought to the attention of the CEO of this board that this situation could arise?

Mr. Flanagan.—If they took custody of or used those drugs, I am not aware of it.

856. Deputy Crotty.—Would you agree or has it been brought to the attention of the CEO of this board that this situation could arise and maybe did arise?

Mr. Flanagan.—I would accept absolutely what the Deputy says; I must emphasise that we are putting in a computerised system, but that in the meantime when the auditors’ comments were received we sent the professional accountant of the Department to look into the situation in association with the Health Board finance officer and the local government auditor to ensure that immediate action was taken to effect essential improvements in the situation pending the installation of the computers. The Deputy is probably aware that stock records, in the drug area particularly, even in the more advanced countries in that field where there is a particular emphasis have proved a very difficult installation. The review of the situation in the Southern Health Board and in other health boards has focused in the last year and half to two years tremendous concentration on the use of drugs and the manner in which they are recorded, stored and so on. I would suggest to the committee — and Deputy Crotty would know this from his experience in the south east — that boards have become increasingly conscious in the last few years of the necessity to record, to purchase and to get value in the use of drugs.

857. Deputy Crotty.—One further question in relation to farm accounts. I take it that farm accounts have been undertaken in this health board since this report. What has been the result of those audits in relation to these farms that are mentioned? Have they been run at a profit or at a loss or what is the situation?

Mr. Flanagan.—I do not know; I have not seen the accounts, but I know that accounts are being kept. I would imagine that, since the board are considering the situation now about the disposing of them, they may not be as profitable as might otherwise have been thought.

Deputy Crotty.—Could we have a note on that?

Mr. Flanagan.—Certainly, we shall send the committee a note on that.

858. Deputy McGahon.—Over the past few years I have been amazed by the cavalier attitudes of our State bodies to the presentation of accounts and overruns. Despite the best efforts of the Comptroller and Auditor General they seem to continue. The Department of Defence did not keep any control on their stocks. The Department of Social Welfare did not know that there was fraud or what was happening at all until we told them and even then they seemed to be in another world. The record of the Southern Health Board is deplorable and indefensible. The keeping of records is an elementary facet that should have been apparent long before now and should have been apparent to the Department of Health. The other question I am concerned about is that raised by Deputy Crotty about drugs. Before I leave that point, I want to state that the Revenue Commissioners actually prosecute firms for failing to produce adequate records. It is a question of double standards here. Why should firms in the private sector by pilloried and dragged through the courts when State bodies can get away with it? I resent that; it is wrong. Regarding drugs we have a question of double standards. Chemists are required to provide security for drugs and yet hospitals and the North Eastern Health Board exempt themselves from providing secutiry. Everybody knows that there is a growing menace of the availability of drugs and I believe that there have been cases where drugs have been misappropriated from hospitals. Can you confirm that?

Mr. Flanagan.—In general terms, not specific instances, I have a concern about it. The necessity to maintain drugs in secure, situations has been brought to the attention of health boards over and over again.

859. Deputy McGahon.—Can you confirm that there have been cases of misappropriation of drugs from hospitals?

Mr. Flanagan.—No, I have no personal knowledge of drugs being misappropriated. There have been allegations which we have never been able to substantiate. The more we improve the record keeping system and the more sophisticated it becomes and the more conscious we are about value for money, the more the scope for misappropriation, if it existed, would cease to exist. There is no exemption for a hospital or a health board from keeping drugs of potential addiction in secure situation. They are obliged to do that. Any failure to do so is not only the responsibility of the Department of Health but also of the Pharmaceutical Society of Ireland who are conscious also of any loopholes.

860. Deputy McGahon.—But the Accounting Officer would agree that it is totally undesirable not to effect control in the drug area.

Mr. Flanagan.—Absolutely.

861. Deputy McGahon.—This was not done in this particular case.

Mr. Flanagan.—Perhaps I could ask for a little more precision. Are you talking about drugs capable of being abused or the control of stocks generally?

Deputy McGahon.—I am talking about the desirability of controlling stocks generally but also, more specifically, hard drugs.

Mr. Flanagan.—So far as I know there is not a health board that has not been involved with us in taking drugs of addiction into proper care and recording over the last few years. I would be surprised to be told that there is a laxity of major proportions in the storage and custody of drugs capable of being abused.

862. Deputy McGahon.—The Accounting Officer is saying that there has been no incidence of any description, while confirming that there have been allegations made to the Department.

Mr. Flanagan.—We have had this in the Committee on Public Accounts and to a lesser extent in the Committee on Public Expenditure. But specifically I am not aware that there has been abuse of drugs capable of being abused, taking them our of their situation. It is accepted, I think, in general health circles that the professions which provide care are, to a slightly higher percentage extent, vulnerable to drugs of abuse in that sense. There have been numbers of instances of doctors who have succumbed to use of drugs but it is over a long period. It has not shown any marked direction up or down, if that is what you have in mind.

863. Acting Chairman.—I think we can mark that section “further information to be forwarded”, as Mr. Flanagan has promised. First of all, I feel a certain sympathy for Mr. Flanagan because in some of these cases it is a pity we do not have the Chief Executive Officer indeed, perhaps, accompanied by the chairman of the particular health board before us today. Mr. Flanagan, you are Accounting Officer for the second largest Department of State. We still have to deal with three sections and your Vote and it is now 12.55 p.m. I was wondering if the committee might consider adjourning the remaining items for consideration, perhaps next week, when we get on to the three remaining notes and the Vote at that stage. We are dealing with the second biggest Department of State and I think we should give it due consideration. What could the committee feel about that?

Deputy Crotty.—I am quite happy.

Acting Chairman.—Would this day week suit everybody?

Deputy Crotty.—At about the same time.

Acting Chairman.—Perhaps we could start at 11 o’clock. Is that OK?

864. Deputy Naughten.—I requested information with regard to the administrative staff employed by the Southern Health Board. Would it be possible for Mr. Flanagan to have for the committee next week a breakdown of the staff employed by each health board and the different categories of staff?

Acting Chairman.—Perhaps you could let us have a note on that in the meantime.

Deputy Crotty.—Could I also request that a responsible officer from the Department of the Public Service should be present to deal with local government?

Acting Chairman.—Perhaps Mr. Gallagher could be in attendance as well as yourself.

Mr. O’Farrell.—The interview board he is on convenes two days next week.

865. Acting Chairman.—In the event of Mr. Gallagher not being present would you arrange for one of his superiors to be present? We want somebody here who can answer the questions.

Mr. O’Farrell.—I will brief myself.

Deputy Naughten.—Regarding paragraph 66 a considerable amount of drugs are purchased by each health board. Does each health board purchase individually or is it done centrally?

Mr. Flanagan.—Each health board makes its own arrangements but we will be going through the accounts further. We have had special studies done about purchasing and the objective is to encourage coming together in all of that area. To date, they have tended to purchase and to make their own arrangements.

Deputy Naughten.—I am surprised it has taken so long for the health boards to come together because I am sure if they purchased as a unit it would reduce the cost of drugs. When they are dealing with multinational companies it would be much easier to purchase for the eight health boards rather than individually.

Acting Chairman.—There was a report on that.

Mr. Flanagan.—We have been conscious for years that the purchasing potential of the health services can be realised and we negotiate a discount arrangement with the Federation of the Irish Chemical Industries and we can give you details of that agreement for the next day if you wish.

Acting Chairman.—We might raise it under the general heading of expenditure.

Mr. Flanagan.—That has a beneficial spread effect even into the private sector of the negotiation.

Acting Chairman.—Thank you.

The witness withdrew.

The Committee adjourned at 1 p.m.