Committee of Public Accounts (PAC) criticises ‘unacceptable’ 20-month delay and €40 million budget increase for critical HSE integrated financial management project

The Committee of Public Accounts (PAC) has criticised as unacceptable the 20-month delay and €40 million budget increase for a crucial integrated financial management project within the HSE.

In its report published today on the Examination of the 2020, 2021 and 2022 Financial Statements for the Health Service Executive, and related financial matters, PAC identifies the key issues arising from the Committee's engagements with the Health Service Executive (HSE) following a total of nine meetings held from September 2021 to October 2023.

Based on its analysis of the matters under examination during its engagement with the HSE, the Committee highlights six issues arising, and makes a total of 16 corresponding recommendations:

1. Implementation of the HSE's Integrated Financial Management System;
2. Child and Adolescent Mental Health Services;
3. Oversight and governance of Section 38 and Section 39 agencies;
4. Procurement of ventilators during the COVID-19 pandemic, and obsolescence of COVID-19 vaccines;
5. Recruitment across the HSE, and high remuneration of staff at the organisation;
6. Collapse in the availability of public dental services.

Deputy Brian Stanley, Cathaoirleach of the Committee of Public Accounts, said: "A business case was approved in 2014 for a new integrated financial management system (IFMS) for the HSE, with a capital cost budgeted at €82 million. The HSE set out a target of 80 per cent completion by the first quarter of 2024, as per its original plan in February 2020.

"The HSE informed the Committee in September 2021 that the timeline for the IFMS project had been pushed back by one year to the first quarter of 2025, due to delays arising from the HSE's response to the COVID-19 pandemic, and the cyberattack on the HSE. The Committee received correspondence in October 2023 which outlined further delays to the IFMS project, where 80 per cent completion will not be achieved until November 2025. This represents a 20-month delay to this phase of the project.

"The Committee was told during its meeting with the HSE in October 2023 that there have been 'significant post-implementation difficulties' following the rollout of the IFMS in the east of the country. The HSE also told the Committee at the same meeting that, while 'the contractual commitment arising from the 2022 SI tender can be accommodated within the current allocation of €82m […] the total costs of the project will exceed the €82m budget over the next number of years'."

Recent correspondence from the HSE, received by the Committee in April 2024, outlined significant updates to the IFMS project, including that the Department of Health has provided additional funding of €40m in the HSE's 2024 Letter of Determination, in order to accelerate the rollout of the IFMS.

Deputy Stanley said: "The Committee has kept the implementation of the IFMS project under close review and welcomes that implementation of the project is well underway throughout the HSE. The organisation is already learning lessons to ensure further delays are mitigated as it moves through the implementation groups for the system.

"Notwithstanding this, the Committee believes that allowing a 20-month delay for such a crucial project for financial management within the HSE, amid rapidly increasing Exchequer funding for the organisation, was unacceptable.

"The Committee notes the significant additional funding for the IFMS through Exchequer funding, and while it welcomes the decision to accelerate the project to mid-2025, the Committee underlines the importance of justifying additional expenditure of €40 million to the taxpayer."

The Committee recommends that the HSE provides it with a quarterly progress report on the IFMS project, from September 2024 until full implementation, and further recommends that the Department of Health reports to it, by September 2024, on the decision to provide additional funding of €40 million to the HSE in respect of the IFMS project, how this figure was arrived at, and its view on how value can be achieved from this outlay.

The report also sets out a further 14 recommendations in relation to five further issues, including:

• That the HSE include a note in its financial statements, starting from its 2024 financial statements, to outline the annual expenditure on mental health services, broken down by CHO, and the proportion of which that is spent on CAMHS;
• That the HSE sets out increased targets for the number and frequency of its audits of Section 38 and Section 39 agencies for 2025 and provides the Committee with same by end-2024; and
• The Committee recommends that the HSE work collaboratively with the Department of Health, and representative groups for dentists, to find ways of rapidly increasing the number of dentists contracted to provide services under the Dental Treatment Services Scheme, the school dental programme for children and any other dental schemes operated by the HSE, and reports to the Committee on the matter by September 2024.

The PAC report Examination of the 2020, 2021 and 2022 Financial Statements for the Health Service Executive, and related financial matters is available on the Oireachtas website.

The Committeeof Public Accountsis a standing committee of Dáil Éireann which focuses on ensuring public services are run efficiently and achieve value for money. Further information on the role and remit of the Committee can be found here.