Mr. John Swords:

Let me say what we have done about it as that might help. It is important to recognise that we have taken action on the report. There are four elements to what we have done. We have put in place a procurement management system to identify the pipeline of contracts on which we are working. It also gives us information on what is in place and its achievement by way of savings and statutory reports which we are required to give to the Office of Government Procurement, our partner in this process. Our procurement assistant system identifies contracts which are visible on a web portal which has been live since March this year.

We have 124 users and over 100 contracts on it.

We have also put in place a national distribution centre which I mentioned briefly. That is being rolled out. It is reducing our stockholding arrangements within the hospital areas. We are operating using a hub and base process in which we have hubs in Letterkenny, Sligo, Galway, Limerick, Tralee, Cork, Wexford, Dublin and County Louth, from which we will distribute all of our products. It will have the effect of consolidating all of our stock purchases, which will greatly assist in dealing with the compliance issue raised in the audit. We have statistics to support this. We reduce the inventory first time out, increase productivity, put our staff at point of use and reduce the clinical time nursing staff spend on stock management. It is measured in the format of four to six hours per week, which is per ward.

On top of this, we have also changed the culture of spend. We will easily meet the industry standard of 7%. On an amount of stock of €400 million, one can work out the figure of 7%, which is annualised. We will save approximately €30 million per annum in those areas.

With regard to compliance, we are working with the Office of Government Procurement and have segregated all of the work that will come to us, as we move into the new structures for hospitals, with the seven groups, and the CHO areas, of which there are nine. We are actively engaged in all of these areas to build a three year rolling plan. We are workng actively with the hospitals and the community health organisations to establish what is required across the entire HSE. This includes, for the first time ever, the voluntary sector. I consider this to be good progress.