Dr. Ambrose McLoughlin:

I acknowledge the importance of the report of the Comptroller and Auditor General in highlighting serious weaknesses in the system of governance, oversight and accountability in the allocation and expenditure of these public funds. Implementation of the report's recommendations will benefit not only the health services but the wider public service. The report identifies a number of issues of general concern in the administration of grant funding by public bodies arising from the development and operation of the fund and presents a set of recommendations designed to improve the control over and accountability for State grants. The Department of Public Expenditure and Reform accepts the recommendations and proposes to progress them in co-operation with the Office of the Comptroller and Auditor General. This will address the systems failures and weaknesses in governance which have been identified in the report.

My predecessor, Mr. Michael Scanlon, the former Secretary General at the Department of Health, has already dealt comprehensively with the background matters of my Department's involvement in the funding of SKILL and partnership programmes, the question of foreign travel by departmental officials, the Ernst and Young value-for-money report and the SIPTU report. For my own part, I acknowledge the deficiencies identified by the Comptroller and Auditor General and support strongly the recommendations for change. On deficiencies in maintaining records of issues of public money and receipts into the fund for the years 1998 to 2001, it is a relief to note that the inspection team found no evidence of misappropriation of public money issued to the fund in the period. The inspection team confirmed also that all sums of public money identified as having been issued by public bodies for the fund in the period 2002 to 2009 were lodged to the fund bank account.

Prior to the establishment of a dedicated fund for the SKILL programme, the Department issued various funding sanctions for the training of support staff and for partnership initiatives involving the SIPTU health division. This was against the background of a highly adversarial industrial relations climate, climates existing in the health service and considerable investment in the training and career progression of nurses, allied health professionals and non-consultant hospital doctors. There was high level Government and ongoing ministerial support for these partnerships and training programmes and the various funding sanctions issued by the Department were informed by that support. Partnership was Government policy and the national agreements and social partnership applied across the service. Appropriate partnership structures and funding were put in place in the different parts of the public service. Partnership was seen as an enabler of change and modernisation through the development of a shared vision of the service by management and staff. The report refers to the governance framework for the SKILL programme developed by the HSE in consultation with the Department of Health in 2005 and signed off by the SKILL steering group in June that year.

It is important that I acknowledge that the Department should have been more vigilant to ensure the governance framework was implemented. While the framework might have been imperfect, its implementation in 2005 would have put the HSE in a position to deal with the issues relating to SKILL programme administrative expenditure which only surfaced in late 2009 as a result of its own internal audit. The controversy surrounding payments to SIPTU should not detract from the merits of the SKILL programme itself which, notwithstanding the concerns expressed in the Ernst and Young report, has provided support staff with a solid training framework for career development leading in turn to improved services for patients by enhancing the skills of the health service workforce. Approximately 8,600 staff have been trained under the programme. The availability of the programme is particularly relevant today in the context of reducing other staff and other resources and the need to optimise the skills and effectiveness of the entire health service workforce to protect services to patients and clients.

With regard to foreign travel, five serving and one retired departmental official participated in a total of ten overseas study visits between 2003 and 2009. The officials who participated in those visits did so with the prior approval of their line managers. The visits were relevant to problems being addressed within the Irish health service at the time and the joint management-union composition of delegations reflected the then-policy of developing and supporting a partnership approach to organisational change. Full details of the study visits were furnished to the committee by my immediate predecessor. I confirm to the committee that the Department has no knowledge whatever of the additional foreign travel identified in the Comptroller and Auditor General's report No. 80. I welcome the report of the Comptroller and Auditor General and will do my best to answer the committee's questions.

Before I conclude I wish to add the following. Mr. Matt Merrigan, the demoted SIPTU national industrial secretary, was a trustee of the SIPTU national health and local authority levy fund account. All Department of Health officials dealing with Mr. Merrigan that I have interviewed did so on a bona fide basis in relation to both the levy fund account and broader health issues. Department officials understood that the levy fund account was an official SIPTU account approved and sanctioned as appropriate by the national executive council or head of finance and administration of the union and, thereby, subject to SIPTU governance, transparency and accountability mechanisms. The opening and operation of the levy fund account without the authorisation of the general officers or head of finance and administration of SIPTU is substantially a matter for SIPTU to address. I add those points for clarification.