Mr. Tony O'Brien:

I thank the Chairman and members for the invitation to attend today. I confirm that I concur fully with the Secretary General's opening statement. In the interests of brevity, therefore, I do not propose to repeat any of the points that he has made.

The HSE welcomes the report of the Comptroller and Auditor General and his review of the financial records of the unauthorised account and, in particular, the additional transactions identified. All of the audits conducted by HSE internal audit and the Comptroller and Auditor General between 2009 and 2013 identified serious breaches of HSE controls and regulations which resulted from significant control, governance and oversight deficiencies and the failure to adhere to existing controls and procedures rather than a lack of such controls and procedures.

Following these audits, the HSE took immediate action to address these issues. For example, the HSE subsumed both the SKILL programme and the health services national partnership forum, or HSNPF, within the HR directorate of the HSE, strengthened its foreign travel procedures, commissioned Mr. Turlough O'Sullivan to examine the overseas travel undertaken by HSE staff, engaged Ernst and Young to undertake a value for money review of the SKILL programme and took steps to ensure comprehensive compliance with its regulations on payments, travel and procurement.

Between 1998 and 2009, funds totalling €3,383,536 were paid into the unauthorised account by the office for health management, or OHM, the SKILL programme and the HSNPF. I have given a breakdown of the individual sums in the briefing note circulated to members. To date, refunds totalling €1,026,619 have been received from the five trade unions on foot of HSE audits. This includes an additional €27,618 recently received from two unions following the publication of the Comptroller and Auditor General's report. The 18 additional trips recently identified by the Comptroller and Auditor General bring the total number of SKILL and partnership foreign trips undertaken between 1997 and 2009 to 74, of which 54 were arranged and paid for from the unauthorised account. Of these, four were possibly paid for by SKILL or the OHM offices and 16 were arranged and paid for by the health service national partnership forum.

Many of the governance issues and controls weaknesses that emerged from the SKILL audit reports related to the fact that the SKILL programme had operated as a silo outside the HSE. There was a lack of clarity and a great deal of confusion among various parties as to the programme's governance arrangements. There was a lack of clarity in reporting relationships and lines of accountability. The fund administrator of the unauthorised account was a key member of the SKILL steering committee who was allowed by SKILL management to have a close involvement in the executive function of the programme and SKILL management, and the office for health management did not query with the Department of Health the lack of terms and conditions for the award of significant grant funding to the unauthorised account. The governance issues and controls weaknesses that emerged regarding the HSNPF payment of partnership moneys to the unauthorised account arose from the nature of the partnership operating model and the role played by the HSNPF joint chair who was also the fund administrator of the unauthorised bank account. It is important to state that the current and former HSE managers interviewed by HSE internal audit confirmed that they were unaware that the SIPTU national health and local authority levy fund was an unauthorised account of the union. They believed they were dealing with the fund administrator in his official capacity as a senior official of the union.

The HSE acknowledges that the issues identified by our own internal audits and by the Comptroller and Auditor General's reports on these matters represent significant and unprecedented failures in control and governance. Such breaches were and are unacceptable to the HSE, which has moved very quickly to address the issues by implementing the extensive range of actions recommended by both internal audit and the Comptroller and Auditor General. A clear message has issued to the system that such breaches of the HSE's governance and controls framework are completely unacceptable and will not be countenanced in any circumstances. I commend the detailed investigative work conducted by the HSE's internal audit at the request of the HSE's national director for HR which uncovered these control breaches in the SKILL programme, the office for health management and the health service national partnership forum. We are happy to respond as fully as we can to any questions the committee has.