Mr. Seamus McCarthy:

The National Paediatric Hospital Development Board was established in 2007 to oversee the development of a children’s hospital at the site of the Mater Hospital. Between 2007 and December 2013, the board had incurred costs of just under €42 million. Funding for the project was provided by the Health Service Executive. The cumulative expenditure by year is shown in figure 1 of the document circulated. The breakdown of total expenditure at the end of 2013 is shown in figure 2.

By December 2013, the business services team had incurred expenditure of €24.5 million in respect of business and health care planning and programme management. Cumulative expenditure of the integrated design team, of €6.4 million, related to engineering, architectural and quantity surveying activities. The project management team had incurred expenditure of just over €3.2 million, mainly relating to design costs and €7.6 million had been incurred in respect of administration costs, including salaries. All of the expenditure incurred had been capitalised and recognised as an asset in the National Paediatric Hospital Development Board'sbalance sheet. The carrying value of the asset was impacted upon by the Government decision on 6 November 2012 to change the location of the hospital.

In December 2012, the term of the existing board expired. Following its appointment in August 2013, the new board undertook a review of asset values, which took account of the extent to which the outputs produced could be used on the project at St James’s. The audit of the 2013 financial statements included a review of the impairment calculation. The financial statements for 2013 reflect the writing down of €35.5 million of the accumulated expenditure. The breakdown of total expenditure to December 2013, as between amounts written off and value retained by type of expenditure, is set out in figure 3. At December 2013, taking account of the write-down of €35.5 million, the asset was valued at €6.2 million.

My office completed the audit, including examination of the impairment review and its impact on the 2013 financial statements, by 14 October 2014, which was just before the committee’s previous examination of the board. However, the Department of Health and Children wished to consider the impairment further in consultation with the HSE and the Department of Public Expenditure and Reform. My office received signed accounts for 2013 from the board on 17 February 2015 and these were certified by me on 20 February 2015. The audit certificate noted a clear audit opinion but drew attention to the significant impairment charge in the year.

The 2014 financial statements were certified on 1 October 2015, again receiving a clear audit opinion. Further impairment was not required. As I mentioned earlier, they have been presented for the committee.