février 1, 2023


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PAC said a third of HSE spending on PPE was written off

The Comptroller and Auditor General said that more than a third of the more than 900 million euros spent on personal protective equipment last year had to be written off due to the large volumes purchased and the high prices paid.

Seamus McCarthy also told the Oireachtas Public Accounts Committee that « alleged payroll fraud » at HSE Hospital had been referred to Gardaí.

McCarthy said that HSE spent a lot of money on PPE early in the pandemic « when international demand outstripped supply and prices were abnormally high. »

At the end of 2020, he said, two-thirds of that stock remained in storage.

HSE chief executive Paul Reed said HSE had « important work to be done » in procurement.

« I want to admit that up front, » he said. « It’s something we pay a lot of attention to. »

Sinn Féin TD Matt Carthy said of the 2,200 ventilators for which HSE had paid €81 million, 1,735 had not been delivered, and asked if any of that money had been recovered.

Mr Reed said HSE was « facing the possibility of 40,000 deaths when making purchases ».

« We were dealing with horrific images, » he said.

« We know that Ireland, from an ICU perspective, we don’t measure as strong at all with international comparisons with our ICU facilities, » he said.

He said the latest figures showed 35 million euros owed – less than the 42 million euros allotment that HSE had previously accounted for.

« We anticipate an imminent recovery of another 11 million euros which we expect to receive very soon, » Reed said.

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Some of the other costs on PPE supplies have been offset, he said.

This would leave €23 million to be spent on ventilators that are « not being valued, » said Stephen Mulvaney, chief financial officer for Health, Safety and Environment.

Mr. Mulvaney also said that HSE had « completely exhausted » its regular suppliers before reaching out to new suppliers.

The Comptroller and Auditor General of the Committee said there was a cost of 310 million euros, nearly two-thirds (63%), because the items were less valuable at the end of the year than when they were purchased.

He said the « impairment fee » reflected « change in unit prices ».

There will be an additional cost of €64 million for the 2.5 million « disposable protective suits » that will not be used. McCarthy said HSE calls this « expected obsolescence. »

McCarthy said HSE insists it bought the suits « when there was a shortage of the most clinically appropriate gowns. »

This comes to reduce a total of 374 million euros on spending of 900 million euros.

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The review ordered by the Secretary is expected to provide « important lessons » about « the effectiveness of procurement controls and inventory management in achieving value for money ».

This review was completed when Mr. McCarthy compiled his audit.

He said the Health, Safety and Environment Department overall spent more than 21 billion euros last year, an increase of 3 billion euros compared to 2019.

McCarthy said the increase was driven by the pandemic, but noted that his HSE report includes « a number of unusual transactions. »

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His office is also examining prepayments of 81 million euros made by HSE to 10 companies – none of which they have dealt with before – for ventilators.

More than half of this amount may not be refunded.

« Some requests were fulfilled but after HSE testing I determined that the fans … were not suitable for use as intended, » he said.

HSE has canceled other orders, and is seeking a refund.

At the time C&AG compiled its report, it said all the money spent had not been refunded, and €42.5 million had been set aside to cover it.

He also said that the estimated 10% non-compliance rate in HSE in procurement may not reflect the « magnitude of the underlying problem ».

Mulvaney said they accepted the idea that the 10% was « unlikely to represent the total ».

McCarthy said that « significant weaknesses » in the hospital’s HSE internal controls led to « alleged payroll fraud by an individual employee that persisted for a long time. »

He told the commission that the matter had been referred to Gardy.