Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I welcome Mr. O'Brien and his colleagues before the committee. We have met representatives of the HSE for a good few years but there is something very different today. What the Comptroller and Auditor General has stated was confirmed in the HSE statement. The HSE's purpose is to deliver the health service to the country but the witnesses have told us it is an organisation not compliant with the taxation rules of the State. They have told us that the annual report indicates the organisation is not compliant with its own procurement rules. The HSE's annual financial statement for 2014 confirmed that €56.5 million of contracts were awarded by the HSE without competitive tendering processes. Shockingly, this figure is up by €38.7 million on the 2013 figure of €17.8 million. This represents a systemic problem that is deteriorating, based on the HSE's annual financial statements.

We have also found out that the HSE has breached prompt payment legislation and there is a compensation issue involving €9 million, which the executive wishes to discuss with the Department of Health. Moving on, we find the HSE is not in compliance with the guidelines issued by the Department of Health regarding the collection of income from private insurance companies and patients. As well as that, there is inadequate control over the supply of high-tech medicines, with the taxpayers paying €2.7 million for medicines sitting on a shelf or in a fridge out of date. We are expected to shrug our shoulders and say nothing about that. I understand that recently the HSE has cancelled discussions with the Irish pharmaceutical representative association regarding a new contract for medicines.

If this is how HSE national governance works and that is how it runs its end of the business, is it any wonder we have a crisis in the health service? This is the worst catalogue I have seen. We could just take this as a routine meeting, as we do all the time, as representatives of the HSE appear here regularly, but I have never seen such a bad catalogue of disregard for the laws of the land by a State agency. I actually asked myself where I should start as we could spend a day on each of those topics.

I will start with the taxation issue that has emerged. I do not have the HSE's audited 2014 financial statements so will the witnesses confirm if the €22.4 million was included in that? I know the Comptroller and Auditor General has included it in the appropriation account but I do not know if it is in the HSE financial statement. It is disturbing that the €22.4 million only relates to 2011, 2012 and 2013, and we will return next year to discuss how much money was not paid to the Revenue Commissioners for 2014. It is obviously continuing this year because the HSE has only recently completed the process for the past three years. It has indicated that it expects to see improvements in tax compliance to be reflected in 2015 and continuing into 2016. The HSE has not yet got to the end of the issue. There is a three-year bill for 2011 to 2013, inclusive, but we do not know the figure for 2014 and 2015. Based on what the witnesses have said, this will continue to some extent into 2016. When will the HSE start being tax-compliant?

I can understand mistakes in interpretation in contracts for service, for example, but the witnesses must give us a detailed note as to how this arose and how a State body did not get this right to this extent. I accept the figures from today but I did not like the witness going on, as chief executive of the largest organisation in the country, to in some way minimise this by saying it only represents 0.05% of the budget, or in other words, it is 0.6% of all taxes paid. I expected a bit of contrition today when the HSE indicated it did not pay its taxes. The Minister will be coming to the Dáil seeking a Supplementary Estimate for this before the end of the year because the HSE did not meet its taxation liabilities. We will want to know the liability for this year and 2014. An effort to come here and almost minimise the issue by saying it is a tiny percentage of the overall figure is not good enough. If I heard people found not to be properly paying tax, with their names published in the newspaper, whinging about it being only a small amount of tax relative to the tax they paid, I would tell them to get lost, "'fess up" and face it. The witnesses have come in here with a little whinge about it when they should be apologising.

I will deal with this as a first question. Will the witnesses give a run-down on why the HSE did not know how to meet its taxation obligations? My second question will deal with what is primarily a procurement issue.