Oireachtas Joint and Select Committees
Friday, 15 July 2016
Public Accounts Committee
HSE Financial Statement 2015
10:00 am
Seán Fleming (Laois, Fianna Fail)
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We are in public session. Today's meeting is focused on two specific areas relating to the HSE Financial Statement 2015: (i) Internal financial control and the governance of grants to outside agencies under section 39 agreements; and (ii) an update on the payment of specified remuneration and allowances to senior managers, known as top-up payments, in the section 38 agencies and the requirement to comply with Government pay policy.
This meeting is being held principally because of the litany of revelations across the media in recent weeks. We should all allow time for the appropriate public bodies carrying out legal investigations to take place with regard to that organisation, Console. However, the HSE as a body is responsible for distributing more than €3 billion of public taxpayers' money to approximately 2,600 organisations and this is very much of concern to the committee. The committee wants to ascertain what protections are in place to ensure the moneys distributed to these organisations is well spent and provides good value for money for the taxpayer.
I welcome Mr. Tony O'Brien, director general of the HSE. He is accompanied by Ms Anne O'Connor, national director, mental health division; Ms Rosarii Mannion, national director, human resources; Dr. Geraldine Smith, assistant national director, internal audit operations; Mr. Gerry Raleigh, director, National Office for Suicide Prevention; Mr. Brian Purcell, head of compliance unit; and Ms Martina Queally, chief officer community health care organisation, area six.
We are also joined by Mr. Pat O’Mahony, who is a deputy secretary general in the Department of Health; Dr. Siobhán O’Halloran, who is the chief nursing officer in the internal financial control division; Mr. Greg Dempsey, who is an assistant secretary in the internal financial control division; and Ms Teresa Cody, who is an assistant secretary in the pay policy division. We are also joined by Ms Annette Murray and Mr. Paddy Howard of the Department of Public Expenditure and Reform. We are also assisted today by the permanent witness to the committee, Mr. Seamus McCarthy, who is the Comptroller and Auditor General; and by Ms Ruth Foley, who is the director of audit in the Office of the Comptroller and Auditor General. I remind members, witnesses and those in the Gallery to ensure all mobile phones are switched off.
I remind witnesses that by virtue of section 17(2)(l) of the Defamation Act 2009, they are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to qualified privilege in respect of that evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given. They are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. As always, members are reminded of the long-standing ruling of the Chair to the effect that they should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable. I invite the Comptroller and Auditor General to make an opening statement on the matters for discussion at today's meeting as they pertain to his audit.
Mr. Seamus McCarthy:
I thank the Chairman. I would like to begin by giving a little outline of our approach to the audit of the HSE's funding of section 38 and 39 bodies. The HSE's expenditure for 2015 amounted to almost €14 billion. Grants to section 38 and 39 agencies accounted for €3.6 billion, or just over a quarter of the HSE's spend. The HSE's annual financial statements include a comprehensive statement on the system of internal financial control. This includes disclosures in relation to the HSE's regime of monitoring and oversight of grants to outside agencies. Further details on this can be found on pages 120 to 124 of the HSE's financial statements for 2015. Our audit of grant expenditure in the HSE includes an examination of the operation of the HSE's monitoring and oversight arrangements for grants advanced to a small sample of section 38 and 39 agencies. This includes visits to the selected agencies. Such visits are undertaken by agreement. As this work is conducted as part of the HSE audit, any audit issues identified are communicated to the HSE by way of management letter.
In our consideration of grantee oversight, we use a general model that focuses on the key functions that are indicated on the screen that can be seen by members. I will go through that briefly. The first issue that arises is the assessment of grantees when they are being considered for funding. The allocation of funding is another area of interest and concern. When decisions are being made on how much funding is to be provided to an agency, particular attention must be paid to the balance between the level of funding and the service that is expected to be delivered. When a service agreement is put in place, it should formally explain the amount of funding that is being provided, the service that is expected in return for that funding and any conditions that attach to the granting of that funding. The monitoring and reporting mechanism that needs to be in place usually focuses on three areas: financial reporting, governance issues and performance issues. The HSE should have a facility for the audit or investigation of grant-funded agencies, as required. This would be equally true of any organisation that has a significant grant funding structure in place. It is important that mechanisms are in place to evaluate the outcomes so that the Oireachtas can be assured that where moneys have been provided, the services for which they were provided have actually been delivered.
Seán Fleming (Laois, Fianna Fail)
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I thank Mr. McCarthy. I invite Mr. Tony O'Brien of the HSE to make his opening statement.
Mr. Tony O'Brien:
I would like to begin by congratulating the Chairman on his appointment. I congratulate all the other members of the committee as well. They will have received a copy of the HSE internal audit report on Console, together with other information relating to the topics for examination this morning.
The HSE funds over 1,700 voluntary agencies, which operate over 2,600 separate funding arrangements to a value of approximately €3.3 billion. Some 39 of these agencies, accounting for €2.6 billion, are funded under section 38 of the Health Act 2004. The remaining agencies are funded under section 39 of the Act. In 2009, the HSE developed a formal national governance framework with national standard governance documentation, service arrangements and grant aid agreements to manage the funding provided to these agencies. This came into operation throughout the HSE in 2010. Four standard documents are in use. First, section 38 service arrangements cover the 16 voluntary hospitals and a group of 23 major non-acute voluntary community agencies. St. John Of God Community Services is one of the 39 agencies covered by these arrangements. Second, section 39 service arrangements cover all voluntary and community agencies, other than the above, that receive funding of more than €250,000. Some 304 agencies, which include - perhaps I should say "included" - Console, are currently covered by these arrangements. Third, section 39 grant aid agreements cover all agencies in receipt of funding under €250,000. The vast majority of agencies fall into this category. Some 1,362 agencies are currently funded under these agreements. Fourth, for-profit service arrangements cover all agencies in the commercial for-profit sector regardless of funding level. Some 218 agencies currently fall into this category.
The HSE has sought to enhance governance arrangements with section 38 and 39 agencies in recent years. In particular, it has established a compliance unit to support the development of a strong and consistent compliance culture across all agencies funded by the HSE. The service arrangements underpin the HSE’s relationship with the funded agencies. The HSE has introduced an annual compliance statement process, whereby the chair and another director of the board of each section 38 agency sign and confirm that the agency is compliant across a range of requirements on behalf of the board. In early 2015, as part of the ongoing development of the compliance process, it was decided that a review of governance by external consultants would be carried out in these agencies to provide external assurances to the HSE. These reviews commenced in March 2016 and are ongoing. The HSE has a number of processes in place to assure itself that the services it purchases from HSE-funded agencies are of a high quality and provide value for money. I will describe some of the processes that have been in place since 2013 as I provide an overview of two agencies: the charity Console, which is a section 39 agency, and St. John of God, which is a section 38 agency. As the service arrangements underpin the relationship between the HSE and these funded agencies, it is important to note that the HSE's powers in this regard are confined to the funding it provides and the services provided in return for that funding, subject to the terms and conditions set out in the service arangements. In this context, and given the limited number of HSE internal audit and compliance unit staff, careful consideration needs to be given to the section 38 and 39 agencies that are subject to audit and review.
There has been much media coverage in relation to Console and the findings of the recently completed HSE internal audit. I thought it would be helpful to outline briefly the sequence of events that led to this audit. Console is a section 39 agency that receives approximately 40% of its funding from the HSE. Funding to Console remained relatively static between 2006 and 2013, when it increased to €599,000 from €252,000 the previous year. HSE funding increased at this time to prevent the collapse of a national suicide helpline that was previously funded by another organisation. The increase in funding to Console at that time was predicated on the charity agreeing to a greater level of scrutiny and enhanced governance by the National Office for Suicide Prevention, NOSP. The increased level of scrutiny by NOSP gave rise to a number of concerns, including Console’s continued failure to respond to requests for information, its delivery on its commitments to commission independent reviews of its service and its failure to attend significant meetings, particularly relating to the helpline and its annual accounts. Arising from these concerns, in late 2014 NOSP approached HSE's internal audit division and requested that Console be included in its audit work plan for 2015. In April 2015, the internal audit division wrote to Console to advise that the audit would commence on 27 April 2015. Following a request from Console, the audit start was deferred and commenced on 19 May 2015.
This audit should have taken approximately 12 weeks to complete. However, the audit was particularly complex and challenging and the auditors met considerable resistance from the then chief executive officer. The audit was completed in April 2016 and at all times the auditors were careful to follow fair procedures and due process. The audit report, copied to members, sets out the sequence of events that followed.
With regard to St. John of God, I advise the committee that on 1 July, the St. John of God Order informed the HSE that a number of payments had been made to 14 senior staff in 2013. It is important to point out that in September 2013 the HSE sought written confirmation from all section 38 agencies, including St. John of God, that all remuneration paid to employees was in accordance with Department of Health consolidated payscales and non-Exchequer sources of funding were not being used to supplement employee remuneration to give rise to rates of individual remuneration exceeding the Department's consolidated payscales. If unsanctioned payments were previously paid, the HSE sought confirmation that all such payments had ceased and the recoupment of any overpayments would be pursued as expeditiously as possible.
An important element of the declaration sought at that time was full disclosure on these items. St. John of God has declared itself as non-compliant with public sector pay policy. This declaration and other recent revelations regarding the payments to the 14 staff members are a very grave concern for me and the HSE. Consequently, I have asked the HSE's internal audit division to conduct a review of these matters as a matter of urgency. In this regard, St. John of God was written to by the HSE's internal audit unit on 8 July and asked to provide information and points of clarity by 20 July. The HSE received a solicitor's letter in response to the audit process. The HSE intends to pursue its internal audit process notwithstanding that correspondence.
That concludes my opening statement. Together with my colleagues, I will endeavour to answer any questions the committee might have.
Seán Fleming (Laois, Fianna Fail)
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Is the witness happy for us to publish that opening statement?
Seán Fleming (Laois, Fianna Fail)
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Thank you. As Chairman, I will set the context of today's meeting. As the witness mentioned, we have received an extensive internal audit report, running to 229 pages, conducted by the HSE. The HSE's internal audit function is the largest of any State organisation because of the size of the HSE, which has 100,000 employees. How many people are in it?
Seán Fleming (Laois, Fianna Fail)
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I will get these few points on the public record. When did the HSE national audit committee receive this report, which was completed on 14 April, and discuss it? What was its views on the report?
Seán Fleming (Laois, Fianna Fail)
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A national audit committee will receive the internal report carried out by the HSE into Console next Monday, and by then the entity will have been liquidated.
Mr. Tony O'Brien:
Correct. The process by which the audit committee receives and reviews internal audits is following their completion and consideration by the relevant national directors, so they are in a position to assess the effectiveness of the response to internal audit report. That is their standard practice.
Seán Fleming (Laois, Fianna Fail)
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Over three months have elapsed. Is that good practice? Is it the normal practice?
Seán Fleming (Laois, Fianna Fail)
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Will the Department of Health officials comment on that later in the meeting? I find it unacceptable but I will not take up the time before the lead speakers come in. It is extraordinary that this is the governance structure, probably decided by the Department of Health. What lessons have the HSE learned as a result of the recent episode? I did not hear any of that in the opening statement and all the documentation we received.
Seán Fleming (Laois, Fianna Fail)
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I will come back to it. We have received approximately 500 pages of documentation, including service level agreements, internal audit reports and opening statements but I have seen nothing about lessons learned. I will let other people ask those questions but I am just pointing out that we have not received anything about the lessons learned. What work went into the internal audit report? It is highly detailed and complex and it seems much extraordinary work went into it. How many days or weeks of work did it take?
Seán Fleming (Laois, Fianna Fail)
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It is just to put it on the record and it will help the questioners. What was the scale of the work?
Dr. Geraldine Smith:
I had a team of two people on-site and they were on-site from 19 May until they pulled out on 22 May. We returned on 25 May and pulled out on 28 May, again because of inadequate co-operation and lack of documentation. The team recommenced the audit on 8 June until 18 June. During that time they gathered documentation. After that they returned to the office and carried out significant analysis, cross-checking and pursuit of further queries and documentation from the chief executive officer of Console. There was a significant amount of analysis. What is in the report was not handed to us by Console.
Seán Fleming (Laois, Fianna Fail)
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I will let people ask the witnesses about that. I just wanted to get an idea of how many weeks of work went into this. Was it 50 weeks or 100 weeks?
Dr. Geraldine Smith:
No, it was not 50 weeks of work. From June until the end of October we completed the analysis, compiled the report and invited Mr. Paul Kelly and the chairperson, Mrs. Kelly, in to discuss the findings. Just to give an indication of the amount of manual work going into this-----
Seán Fleming (Laois, Fianna Fail)
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We can get to that. I just want to ask about the headline figure. The role of the HSE is what we are most concerned about. I am just trying to get an idea of the level of work that went into this. Dr. Smith is saying it is substantial.
Seán Fleming (Laois, Fianna Fail)
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It was months of work in man-hours.
Seán Fleming (Laois, Fianna Fail)
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Others may tease out the detail. I find it extraordinary that there are 229 pages of very detailed information in the report, none of which I intend to go through today because we are more concerned about the HSE's control over the issue, rather than the specifics of the report. We have been told the biggest State organisation, with the largest internal audit section, the most staff and resources, spent months in an organisation carrying out this detailed report. There were remarks yesterday in the High Court by Mr. Justice Gilligan to the effect that he was satisfied that Console appeared to be "hopelessly insolvent". The HSE was in there for months carrying out detailed investigations into an organisation that everybody, including the High Court, accepted was hopelessly insolvent when the investigation was ongoing. Mr. Hall indicated it was insolvent for a considerable period. What was the HSE doing running around checking how much was spent on bunches of flowers when the organisation was insolvent? Will Mr. O'Brien respond to that comment? It is bizarre that all this work was ongoing. That is my last point. I am just asking for a quick remark but that is the substance of what was going on. We have the report about Console and it does not deal with anything I would like to see in an audit report about Console and its solvency status. It is not mentioned in the 229 pages.
This is like the financial equivalent of the HSE moving around the deckchairs on the Titanicwhen it was already sinking. It was not dealing with the substance of the issue in Console, which was its insolvency. That should have been the sum of the work. I thank Deputy Madigan for her patience.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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That is no problem. I thank the witnesses for coming in. It struck me last night when the French tragedy unfolded that we are coming here yet again to discuss something that is completely unnecessary. There is enough tragedy and destruction in the world and what we are discussing today was absolutely preventable. It should not have happened.
I am very conscious of the fact that I am speaking on behalf of the general public here. I would like the HSE, if anything comes out of today, to re-examine how it does business with these particular charities because it cannot happen again. I have not been a member of the Committee of Public Accounts before. However, I am aware that this it not the first time a matter like this has been dealt with by the committee. It is not good enough, quite frankly. Many people contribute, donate and volunteer their services to charities and there are wonderful staff in these charities including in Console. These people do not have a voice and we, in this committee, are their voice. Therefore, we have a responsibility to ask the HSE questions and ask that its representatives be as honest as possible because the people concerned want answers. Last night's events in Nice were horrific but here we are dealing with something like this that was completely preventable.
I am aware that I am limited in terms of the questions that I can ask and that litigation is ongoing. Therefore, I shall not go outside my remit. I hope that the HSE will help me enlighten the public about the matter. This is not about point scoring between me and the HSE. I simply want to find out the truth and a way forward in order to ensure that something like this never happens again.
The formal national governance framework came into operation in 2010. Does Mr. O'Brien think it helped Console at all?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Mr. O'Brien knows what I meant.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Yes.
Mr. Tony O'Brien:
I will make the point with full respect for the question. We were not Console's regulator. We were not its primary funder. We were purchasing a certain range of services from Console which were being received, which continued until yesterday and which will now continue in another organisation. We have no powers over their fundraising activities or those other extraneous matters.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I heard Mr. O'Brien speak on the Seán O'Rourke programme. He said that the HSE partially funded Console.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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To me, that misses the point. The HSE gave a significant amount of money to the charity. It does not matter whether Console was partially funded or not because the same principles and oversight still apply and should apply. Mr. O'Brien's response is not good enough.
In May 2016, Mr. O'Brien signed the HSE's statement on internal financial control that came into effect, I think, in 2015. Why was it not signed earlier? It is a gold standard governance framework. There seems to be a difficulty between theoretical academic frameworks, written down with the HSE, but they are not implemented. There is no point having a framework unless it is utilised. I ask Mr. O'Brien to explain that to me.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Why was it not done prior to this, Mr. O'Brien?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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The HSE statement on internal financial control, the part of the governance of grants to outside agencies, 4.6 to 4.64. I read it and it is very robust. Why was not brought in prior to 2015?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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We can come back to the matter.
The compliance unit was set up in 2015. Does Mr. O'Brien think it would have made a difference had it been in operation prior to then? Would it have helped Console?
Mr. Tony O'Brien:
It was established in 2014 and it was specifically established in response to issues that were considered here, in the aftermath of our review of compliance with public pay policy across a range of section 38 agencies and, indeed, what transpired as a result of that in organisations specifically like the Central Remedial Clinic. I established it precisely because I felt there was a gap in the architecture from the point of view of the HSE being able to satisfy itself, and the Oireachtas.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Does Mr. O'Brien think that if the compliance unit had been in existence, prior to that date, it would have had a beneficial effect on what transpired in Console?
Mr. Tony O'Brien:
Probably not at that stage. We have pursued this in relation to the biggest grants so we have started the work of the compliance unit in relation to section 38 agencies. Obviously if it had been in existence from the beginning that could have been a great help in a variety of ways. At this point, in the statement of internal financial control-----
Josepha Madigan (Dublin Rathdown, Fine Gael)
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If it would not have helped what is the point in having it if it is not going to be implemented? Surely if the unit was in existence at the time it would have helped Console. There is no logic in the argument made by Mr. O'Brien. I want to discuss some points that he made in his opening statement.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Mr. O'Brien has just said that if the unit had been in existence it would not have made any difference.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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What is the point in having the unit now?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I appreciate that but there seems to be a common theme.
Mr. O'Brien mentioned in his statement that funding to Console remained static between 2006 and 2013 "to prevent the collapse of the national suicide helpline". Pieta House has been in existence since 2003. It confounds all logic that services were not taken over by Pieta House. I do not understand why that was not done and I ask Mr. O'Brien to explain it to the committee, please.
Mr. Gerry Raleigh:
Certainly. In relation to the takeover of the helpline, there are a couple of points to make. First, Console itself had been providing helpline assistance to people who had been bereaved by suicide for a number of years. That helpline capacity had in fact expanded in 2012 to assimilate a rural distress helpline which had previously been run by-----
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Is Mr. Raleigh aware that the helplines were cut back from six to two between 2012 and 2014?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Is Mr. Raleigh saying that the helplines were expanded in 2012?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I appreciate that, yes.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I do not need an explanation of what the helpline does. It is a very valuable service. Why were the helplines not transferred to Pieta House when it was in existence in 2003?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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But it is now.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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So that could have been done at the time. Why was it not done when serious concerns were raised about Console?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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That was not my question. Why were helpline services not transferred to Pieta House?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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That is a nonsense answer, with respect to Mr. Raleigh, and is very alarming.
Mr. O'Brien mentioned in his opening statement that a greater level of funding equals a greater level of scrutiny and enhanced governance and, in 2014, that NOSP requested that Console be included in the work plan for 2015. Is he aware that an employee raised her concerns about Console back in 2006 via a resignation letter, an employee called Jean Casey? Is Mr. O'Brien aware of that matter?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Was anything done about it at the time?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I do not want the history. I ask Mr. Raleigh to answer my question.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I wonder if Mr. Raleigh can answer my question.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Concerns were raised about the running of Console.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Very serious grave concerns-----
Josepha Madigan (Dublin Rathdown, Fine Gael)
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-----in 2006.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Why was nothing done at that time?
Mr. Gerry Raleigh:
Well, again-----
Under the grant aid in May 2013, which was later, there is a provision for inspections of Console. It should have been done at that time when those concerns were raised. I believe questions were raised internally, and Mr. O'Brien has admitted that, so why was nothing done? Millions of people looking at this are asking why nothing was done, and Mr. Raleigh cannot give me a reasonable answer.
Mr. Gerry Raleigh:
There is a record of meetings between Console and the national office early in 2007 where many of the issues raised in the letter from the retired staff appear to have been raised. In particular, the issue of clinical supervision of staff was raised. The issue of an agreement to conduct an external review of the service was raised, and finally-----
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Was there not sufficient-----
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I understand the steps Mr. Raleigh is trying to outline but that does not answer the question. I wonder whether legal advice was taken at that time by the HSE with regard to stopping all funding to Console on the basis that there were grave concerns. I have not got an answer as to whether an inspection was directed immediately into Console to determine what was happening. Under the governance requirements the executive reserves the right to withdraw or reduce the grant in the event of any material changes to the nature, activities or management of the organisation. It is not acceptable to say that nothing was done.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Yes, of course.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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With respect, I think that is fudging with words.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Ms Casey outlined a number of issues regarding the governance of the inner controls of Console and nothing was done. Mr. O'Brien said in his opening statement that the internal audit started on 19 May 2015 and finished on 14 April 2016. I would like to move on to that and ask the auditor, Dr. Smith, if she raised concerns with Mr. O'Brien at any stage during that audit, which should have taken 12 weeks, as Mr. O'Brien said in his opening statement, but took significantly longer than that. Were concerns raised? Did the HSE get legal advice on stopping the funding at that stage? Even with a rudimentary knowledge of arithmetic it would be fairly evident that there was something wrong with the accounts. What was done at that stage?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I did not ask that question. The question to Dr. Smith was on the internal audit and whether she raised concerns with the HSE based on any findings she made during the audit.
Dr. Geraldine Smith:
The first point it is important to make, and it is a very important distinction, is the role of an internal auditor and an external auditor. The HSE was in receipt of the audited financial statements from Console. They were signed off on 5 November 2015.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I was going to come to the external auditors' accounts but we will stay on that issue since Dr. Smith has raised it. Is it fair to say Dr. Smith places a huge reliance on these accounts from external auditors?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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What checks and balances does Dr. Smith put in place regarding these external accounts that come into the HSE?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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How does Dr. Smith assure the public that, in future, these accounts will be bona fide and a true reflection of the financial health of any particular charity? To move forward and in order to be constructive, how can Dr. Smith tell us today that they will be checked?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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But they were not.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I accept that but would Dr. Smith accept the fact that-----
Josepha Madigan (Dublin Rathdown, Fine Gael)
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-----an issue clearly arises and that she will not be in a position now to accept accounts from external accountants? How many more do we know of? Is it correct that the HSE has other charities audited and it has not published the accounts?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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The audits.
Mr. Tony O'Brien:
Ultimately, all HSE internal audits are released under the Freedom of Information Act on a systematic programme.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Does the HSE have audited accounts that are not yet published?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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How many?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Are they all published?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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How many of those 54 have been published?
Dr. Geraldine Smith:
If the Deputy will bear with me I will give her some statistics. There are 54 reports. Of those, there are eight in 2016 which are not yet due for release; they will be due for release in December-January. Three were subject to Garda investigation so therefore they will not be released until those investigations are completed. Nine from-----
Josepha Madigan (Dublin Rathdown, Fine Gael)
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That is quite worrying.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Three other charities have Garda investigations. Is that correct?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Will the audited accounts of the others be published?
Dr. Geraldine Smith:
With respect, it is not the accounts; it is the audit report we publish. The audited accounts of those bodies, if they are companies, are registered with the Companies Registration Office. They are there for every member of the public to see. Nine of those reports are due for release next week. Two of the reports were put on the Committee of Public Accounts website, so therefore we had no requirement to release them under FOI. Twenty-seven have been released and five have not yet been released.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I ask Dr. Smith, respectfully, to release all of those audit reports in due time because transparency is important for the public. It overrides secrecy, and we must make sure that people know that the €3.71 billion is spent properly.
Dr. Geraldine Smith:
If I could say, to put this in context, that over the past six years HSE Internal Audit has issued just under 1,000 reports. They would have been issued under-----
Seán Fleming (Laois, Fianna Fail)
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For what period?
Seán Fleming (Laois, Fianna Fail)
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Were they released or published?
Seán Fleming (Laois, Fianna Fail)
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They are not published on the HSE website.
Seán Fleming (Laois, Fianna Fail)
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Individuals might have requested them.
Seán Fleming (Laois, Fianna Fail)
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They are not publicly available.
Seán Fleming (Laois, Fianna Fail)
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But the HSE does not put them on its website.
Dr. Geraldine Smith:
No, we do not. Again, we have had strong legal advice on that. For us to publish those reports on a website would require additional work in terms of proofing them for defamation, essentially. We have got advice and by publishing them under FOI, that has been deemed to be the correct way to do it.
Seán Fleming (Laois, Fianna Fail)
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Does the HSE intend publishing this report?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Mr. O'Brien spoke about value for money in his opening statement. Does he believe the HSE receives value for money with regard to Console?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Can he explain that?
Mr. Tony O'Brien:
-----because the services that were paid for were provided. The National Office for Suicide Prevention is satisfied as to the quality of those services, and the interim CEO has confirmed that he believes we were underpaying for them. I might ask Mr. Raleigh to give the Deputy his perspective on that because I rely on the work of the National Office for Suicide Prevention in this respect.
Mr. Gerry Raleigh:
There are three elements of service that the national office funds. The first is the historical bereavement counselling service, and we pay just over €200,000 per year for that. On average, at any one time there are about 300 people in active counselling. The second element of service is the 24-hour emergency helpline.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I do not think the services are in dispute. They are all fine and it is good that they are in place.
When talking about value for money, putting the services to one side, it seems extraordinary that Mr. O'Brien could say he is satisfied with what has transpired.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Is Mr. O'Brien abdicating all responsibility for oversight of Console?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I am asking another question.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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That is what Mr. O'Brien is implying.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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With respect, that should have been done many years beforehand. Does Mr. O'Brien accept there are any failings on behalf of the HSE over Console?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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So Mr. O'Brien does not accept any-----
Josepha Madigan (Dublin Rathdown, Fine Gael)
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No, because Mr. O'Brien is saying the failings were within Console itself. Does Mr. O'Brien accept that the HSE had a responsibility towards Console? Does he accept any responsibility related to that?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Why did the HSE not carry out inspections when it could have done that?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Go ahead, but-----
Mr. Tony O'Brien:
Thanks. If I can answer the question, it may answer the next question the Deputy is trying to pose to me. When issues of concern arose about financial governance, the audit was initiated. Prior to that, there had not been unresolved issues which led to that decision. Obviously, officers have to make judgments at all times. With the benefit of hindsight, maybe the decision could have been made earlier, maybe not.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Maybe the decision could have been made earlier. Will Mr. O'Brien accept that there were failings on behalf of the HSE relating to the governance of Console?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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At all?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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So Mr. O'Brien is saying the HSE is absolutely blameless in this scenario?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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That is what Mr. O'Brien is saying.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I have read Mr. O'Brien's transcript at length.
Mr. Tony O'Brien:
No, the transcript of our discussion just now. At no point have I said the HSE is blameless.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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No, Mr. O'Brien is not saying it, but he knows what he is saying. He is hiding behind words and he is very good at it.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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There-----
Seán Fleming (Laois, Fianna Fail)
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One moment. The Deputy should give the gentleman an opportunity to answer the question. That is all.
Mr. Tony O'Brien:
If the PAC were an airline, I would be in the top tier of the frequent flyers programme. I expect to be in here a lot, as I was with the previous committee. I think committee members know what I mean.
We have provided all the specific documentation the committee asked us to provide. We have come as required and we are going to do our best to give the committee all the information that we can, but sometimes it is very difficult if I only get the first few words of an answer out.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I appreciate that.
Seán Fleming (Laois, Fianna Fail)
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The Deputy should let him finish his sentence.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I apologise if I am interrupting Mr. O'Brien. I find it extraordinary that he would try to manoeuvre his way out taking any responsibility for what has happened with Console.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I am sorry, but I have a duty to put that to Mr. O'Brien, with respect. I accept his bona fides and I appreciate him being here today. However, as I said in my opening statement, we are speaking on behalf of the average person out there who does not have a voice here. They are the questions they want me to ask Mr. O'Brien.
Seán Fleming (Laois, Fianna Fail)
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What is the Deputy's final question?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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My final question is as follows, once again: does the HSE take any responsibility for what has happened in Console?
Seán Fleming (Laois, Fianna Fail)
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Let the man answer the question.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I will.
Mr. Tony O'Brien:
I am not trying to worm my way out of anything. I have never come in here and tried to do that and I am sure the Deputy did not imply or wish to imply that I have done that. Clearly at any point in time we could have done things sooner. It is true. Whenever one conducts an internal audit, one of the questions one asks is, "Should we have done it sooner?", particularly when one finds a can of worms such as this.
However, I have to concern myself with whether the decisions the individual officers made at the time appeared reasonable in the circumstances. I believe it was reasonable in the circumstances for this audit to be triggered when it was. Yes, it might have been better if it had been triggered sooner, but all of the wrongdoing that this internal audit uncovers was not done by HSE officials; it was done by others. This was not a public body. It was a body in the public domain, raising funds from members of the public.
One of the questions I have asked myself was whether we should have potentially compromised the internal audit process by doing things sooner, which would have made it impossible to complete the internal audit, but might have had an impact on people who have, in good faith, been raising funds for Console in the last period. Our objectives were simple in this: to get this internal audit; not to allow the process to be jeopardised; and to safeguard the services. We have done those things. We could have done other things, but had we done those other things, it would probably have compromised our primary objectives.
We are not the regulator of charities. We are not the regulator of a whole range of organisations that we have some relationship with. I do not believe it is right to suggest that all of the wrongdoing that is uncovered by this report, can be attached-----
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Sorry, may I correct Mr. O'Brien?
Seán Fleming (Laois, Fianna Fail)
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Let the man finish.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I am certainly not-----
Seán Fleming (Laois, Fianna Fail)
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No, Deputy-----
Josepha Madigan (Dublin Rathdown, Fine Gael)
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-----implying any wrongdoing at all-----
Seán Fleming (Laois, Fianna Fail)
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Let the gentleman finish.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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-----regarding anything the HSE did within Console. I am certainly not implying that. All I am talking about is the HSE's oversight.
Seán Fleming (Laois, Fianna Fail)
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The Deputy cut across the man while he was speaking.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Sorry, but he-----
Seán Fleming (Laois, Fianna Fail)
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We have to be courteous as well as everything else-----
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Absolutely.
Seán Fleming (Laois, Fianna Fail)
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-----as well as thorough and forensic.
Mr. Tony O'Brien:
I appreciate it is also a difficult job to be a questioner. I honestly do. I do not believe the HSE is to blame for what went on in Console.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Mr. O'Brien does not.
Seán Fleming (Laois, Fianna Fail)
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I am now moving onto Deputy Cullinane. Speakers have indicated in the following sequence: Deputies Cullinane, MacSharry, Shortall, Connolly, Cassels, McDonald and Burke.
I expect to take a break sometime around 12.30 p.m. at a natural break, after which we will resume. I do not know how long the meeting will last, but it would be wrong not to have some kind of break around 12.30 p.m.
David Cullinane (Waterford, Sinn Fein)
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I welcome Mr. O'Brien and the large team accompanying him. I will allow him to answer the questions. I understand, as the previous speaker did, the difference between section 38 and section 39 funding. Hopefully, we will not need to repeat that as we want to get the best use of the time we have.
I find Mr. O'Brien's opening statement extraordinary. The answers to the questions put so far are also extraordinary. I refer to answers on the sequence of events that led to the internal audit in the first place, including the value-for-money issue relating to money spent by the HSE - Mr. O'Brien is the Accounting Officer for the HSE in respect of Console - and also the checks and balances, and controls and potential failings within the HSE.
Mr. O'Brien has said that he does not accept there were failings within the HSE and that as far as he is concerned, the failings were all on Console's side. We know there were failings in respect of Console. We have an internal audit report with 60 findings. Page 34 of that report ranks the findings as high, medium or low. Is Mr. O'Brien familiar with that?
David Cullinane (Waterford, Sinn Fein)
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Below the rankings it states that where recommendations may have systemic national or regional implications the rankings are shown as high, medium or low. All of the findings were ranked as high. It continues to define systemic as where particular audit findings of a serious nature may, in the opinion of the auditors, be replicated elsewhere in the HSE. It continues to state that all the findings in the audit have a high rating and many have national implications for the HSE.
The internal audit commissioned by the HSE found that systemic failures potentially could be replicated in the HSE. It is acknowledging there were systemic failings. It states that it has national implications for the HSE although Mr. O'Brien says something else and does not accept that. For many people this could be seen as the tip of the iceberg in respect of a lack of controls.
Mr. O'Brien cannot sit there with all seriousness when dealing with a report that has 60 findings into an organisation that is partly funded by the HSE. Mr. O'Brien signs the cheques as the Accounting Officer. There are clear failings both ways. All those failings are of a high ranking. All show systemic problems and failures within the organisation, and the relationship of that organisation with the HSE, for which Mr. O'Brien is responsible, yet he says there were no failings on the part of his organisation.
In terms of page 34, the rankings and what it says in terms of the internal audit, can Mr. O'Brien first comment on that?
Mr. Tony O'Brien:
These are the standard rankings used in all of our internal audit reports. The aim of internal audit, obviously, is to provide remedial recommendations and also to identify what lessons might be generalisable and what can be gained from this internal audit process that could influence our practice more generally. Therefore, there are some recommendations there which are specific and are fed now into the annual compliance programme which is undertaken by our compliance office. In every audit, whatever it might, however large or however small, there are always findings which lead to the question, "Do we need to look to see what in our systems can be improved in light of the knowledge that we now have?", and that is what is called systemic or systematic.
David Cullinane (Waterford, Sinn Fein)
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This is not an ordinary audit. Its findings are extraordinary. In Mr. O'Brien's experience, has he seen an internal audit before that had 60 findings all categorised as high, and also a report from his own auditors which states that many of them have national implications for the HSE? I am sure Mr. O'Brien is aware that auditors are very careful about the language that they use and they do not use words lightly. When they say that this has national implications for Mr. O'Brien's organisation, it is serious. They have not put that in there lightly. It would seem Mr. O'Brien does not grasp that reality.
One cannot just say that all of the failings were on the side of Console. We acknowledge them and we will possibly at some point deal with those as well but our job here is to ensure that there are proper controls, safeguards and checks and balances in place in respect of taxpayers' money and funding coming from Mr. O'Brien's organisation to Console. The report and the findings of the audit are littered with failures but it seems Mr. O'Brien is not prepared to accept even the internal audit's view, not mine, that this report has national implications for his organisation.
Mr. Tony O'Brien:
I think I already said in my first response to the Deputy's questions that the recommendations do have national implications. There is a difference between whether things were done incorrectly in the past and whether they can be done better in the future. The focus of internal audit reports is to discern what lessons might be generalisable, as in systemic, and, as I mentioned earlier, these will be, and have been, fed into the work of our national compliance office to ensure that we further strengthen our relationship with entities.
With respect, it is a different thing. We are talking about learnings, as the Chairman asked us earlier about learnings. Learnings are not necessarily the result of failings; they are learnings.
David Cullinane (Waterford, Sinn Fein)
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That is Mr. O'Brien's interpretation but people might put a different interpretation on what the auditors meant. Mr. O'Brien is putting a more positive slant on what they meant by national implications. As I stated, with all seriousness, when one considers the gravity of the report, one must accept that this is highly unusual in its findings, in terms of every single finding being ranked as high, and the extraordinary failures. That does not come across in respect of Mr. O'Brien's report.
I will get to a number of other issues, if I can. I will start with the sequence of events because it seems that the clock starts in 2013 in respect of Mr. O'Brien's view as to what the trigger was for the internal audit, and maybe even 2014 because Mr. O'Brien talks about the concerns the National Office for Suicide Prevention had in relation to the helpline funding and that led to the internal audit report. However, in terms of the clock starting, one must go back further than that because concerns were raised, as was said earlier, in 2006. There was an exchange between Mr. O'Brien and the previous speaker on that, and we have heard what Mr. O'Brien had to say. We also had an RTE report, which states that in 2009, an official in the National Office for Suicide Prevention wrote a memo highlighting deficiencies in Console's governance and accounting saying that the 2004 expenditure did not add up, the 2006 accounts had wrong membership of the Console board, the 2007 were not signed-off on by the chairperson and questions needed to be asked of the €145,000 spent on professional fees charged over years. In 2011, further concerns were raised with the then Department of Health and Children. We also know that concerns were raised by a former parliamentary assistant to the former Minister, Senator James Reilly, and subsequently, to an official in the HSE or the Department as well. The clock, with respect, goes back much further than the 2013 start which Mr. O'Brien would have us believe is when concerns were first brought to the HSE's attention in respect of this. The reality is that there were many flags raised and the flags were missed, and there was nine-year gap between when the flags were first raised and when the internal audit report commenced. Would it be fair to say that?
Mr. Tony O'Brien:
It is certainly true that there is a nine-year gap between the earliest date Deputy Cullinane mentioned and the start of the internal audit but I think it is useful to the committee if we provide further information on the nature of the different concerns that were raised at different times and why they would not have triggered the process that this latest issue triggered. My colleague, Ms Anne O'Connor, who is the national director of mental health, can provide that information.
Ms Anne O'Connor:
In terms of 2006 concerns, the letter is in. The concerns related particularly to clinical issues within the organisation. One could argue more governance related matters was the concern raised in 2009, which was internal to the national office where a staff member there raised concerns. At that time, Console were met by the then director of the national office - as Mr. Gerry Raleigh has previously said, everybody has changed in the national office since that time. However, they were met then. They were brought in. They were then signed up to a formal performance management process. At that time, the funding to Console was in the region of €250,000. It increased slightly in 2008-2009 because they were developing standards but the funding was substantially the same. They were advised that they could not get additional funding from the HSE. They were brought in for regular meetings. The concerns were addressed at that time to the satisfaction of the national office. The requests that they made for additional funding between 2009 and 2013 were refused.
It is also important to say that the funding that had been provided to the National Office for Suicide Prevention, NOSP, pre-2013 really had them in the space of being a grant-aid agreement rather than a service arrangement. The arrangement differs once you get past a certain threshold of funding and it is a difference type of governance process. It is a different structure. Their funding in the overall scheme of things was relatively low compared to many other organisations so it did not trigger a significant audit. It did not trigger significant scrutiny because the funding was very low.
The critical point here was 2013 when their funding increased, as we have discussed earlier, on the basis of the helpline. That then moved the organisation into a different category, if you like. It moved it into a service arrangement where there was a different governance. At the time of the increased funding, the organisation were advised that they would be signed up to intensive scrutiny on the basis of their funding, and that happened.
It is fair to say that in 2009, they were met on a regular basis and I suppose a limit was put on their funding. Their funding was not increased and they were advised but the concerns were addressed at that time by the organisation, again, as the director general has said, in terms of the decisions that were made at that time.
David Cullinane (Waterford, Sinn Fein)
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With respect, what I was trying to get to is as follows. I want to move on to another set of issues that relate to this issue as well and direct them to Mr. O'Brien. I thank Ms O'Connor for the response.
If it was just the red flags that were raised by individuals in 2006, 2009 and 2011, then that would be one issue. The problem is that when one then looks at other failings within the organisation that should have triggered alarm bells, it adds to the intrigue as to why the HSE took so long to respond. We now know that there were different sets of accounts, that is, the annual financial statement, that Console had depending on the organisation that was looking for them and different arms of the State were given different sets of annual financial statements for the same year. We also know that there were unsigned service level agreements. There were clear failings in relation to documentation. That also should have added to the concern within the organisation. It was not only that there were flags raised by individuals. There were also issues in relation to documentation that Mr. O'Brien is responsible for overseeing. There are also issues in relation to who were and were not directors, and to salaries. There were all sorts of issues that should have raised red flags for the HSE as well and it would seem that they all were missed.
Before he comments on that, I have a specific question on service level agreements. How many agreements were in place with different arms of the HSE? There were different agreements depending on the arm of the HSE. Can we have copies of them?
What audited documentation was Console obliged to furnish to the HSE? I refer not only to external audit reports but also to secondary documentation such as management letters. Were external audit reports furnished to the HSE for each of the years that they should have been? Was the accompanying management letter, which was also a requirement, furnished? Mr. O'Brien is the Accounting Officer and, therefore, he will know that.
Mr. Tony O'Brien:
The Deputy has asked a series of questions and I will try not to miss any of them as we reply. There was no unsigned service arrangement with Console until 2015. That issue arose during the internal audit process as opposed to being one of the triggers. The Deputy referenced the differentiated accounts, which were, in fact, one of the major triggers for the internal audit, and the National Office for Suicide Prevention identified that.
With regard to the receipt of AFSs and management letters, I will ask Mr. Raleigh to answer the question.
Mr. Gerry Raleigh:
Each year in terms of the national approach to funding agencies including Console, we begin the year by asking people to set out their business case for the year ahead, the quantum of service they are to provide, their staffing structures, etc., and we go through a process of agreeing funding and service quantum for the year ahead through that process.
David Cullinane (Waterford, Sinn Fein)
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I do not want to interrupt but I want to ask a straight question to elicit a "Yes" or "No" reply. I am looking for information. Did the HSE receive the external audited accounts it was obliged to receive every year from Console and did it receive the accompanying management letter each year?
David Cullinane (Waterford, Sinn Fein)
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Perhaps the Comptroller and Auditor General might clarify that.
David Cullinane (Waterford, Sinn Fein)
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That is extraordinary. That is a requirement.
David Cullinane (Waterford, Sinn Fein)
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No, that is not the question I asked. I am talking about the management letter that certifies whether there are problems with the accounts or not. If the HSE did not receive the letter, that flag should have been-----
Seán Fleming (Laois, Fianna Fail)
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Is the document to which the Deputy is referring the letter from the independent auditor to the board of Console.?
David Cullinane (Waterford, Sinn Fein)
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Yes. Does the Chairman accept the term "management letter"? Perhaps the Comptroller and Auditor General could clarify that.
David Cullinane (Waterford, Sinn Fein)
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I understand that.
Mr. Tony O'Brien:
The certificate, a bit like the Comptroller and Auditor General's certificates, has matters of emphasis or qualification where required. A management letter is a letter to the management which gives them indications of areas for improvement. Those are two separate things but the Comptroller and Auditor General might want to clarify that.
Mr. Seamus McCarthy:
No, that explanation is correct. It would be where in the course of audit the external auditor identifies any weaknesses in controls that are supposed to be in place in the organisation. It is not a qualification of the accounts, it is not a modification of the audit opinion, but it provides an opportunity for the board of an organisation to ensure the control system that it has put in place is working. An auditor is obliged to send that if he identifies such matters.
David Cullinane (Waterford, Sinn Fein)
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Would it be unusual if that was not sent? Should it be sent every year?
David Cullinane (Waterford, Sinn Fein)
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My final question relates to value for money. First, I do not doubt that Console provides quality services and we are all conscious that people working for the organisation provided a top class service to clients and I do not want to take away from that. However, I would like to focus on the call centres. Finding No. 52 states:
Console reduce the number of its helplines from six to two between 2012 and 2014. Console confirmed to internal audit that the cost of running its two helplines in 2014 was €346,652 of which the HSE provided €294,000. During the audit, internal audit was not provided with documentation to support these costings.
Mr. O'Brien is the Accounting Officer who signed the cheque book giving an organisation €294,000 and we cannot find documentation to support the costings. We do not know, and Mr. O'Brien does not know, therefore, whether that money was used for the purpose for which it was intended. If that is the case, he cannot say he got value for money. Console responded to this in the report stating: "With regard to internal audit's comment that information was not provided to support cost allocations for the Console 24-7 helpline, Console confirms that all support information was included in the general accounts framework provided to the internal audit for the years 2012, 2013, 2014. No other information was requested by internal audit for the helpline". It goes on to say, "No HSE request has ever been made to Console management to allocate a specific helpline code in Console's general ledger." The auditors responded by saying, "The issue is not about allocating a specific helpline code in Console's general ledger. The issue is that Console did not provide any supporting documentation during or after the audit to show how it determined these costs as being allocated to helpline costs". On that basis, I cannot see how Mr. O'Brien can again say with accuracy that he got value for money. He can, of course, say that the service itself was a quality service but he cannot say he got value for money if he does not have documentation to support the costs. He is the Accounting Officer. The internal report we are discussing states there are national implications for the HSE. Mr. O'Brien does not grasp these implications at all and there is an element of downplaying this. Earlier, I pointed to the finding that states, "Systemic means that this could be replicated elsewhere in the HSE". Nobody can say with certainty that it is not replicated elsewhere in the HSE. People will not be comforted by anything that has been said because of what is in the report. They will be concerned that the reality of the situation has not been grasped by the chief executive officer of the organisation. That is extraordinary. Will he respond to my questions on the helpline? Given there is no documentation to support the costs, how can he say he got value for money?
Mr. Tony O'Brien:
My view and the organisation's view on value for money is grounded on what it would typically cost to provide helpline services of this type - services we know were provided. Benchmarked against other activities, it was good value for money in the sense that we were getting a service, which we now know from information provided to us by the interim chief executive officer was costing Console more to provide than we were paying and, indeed, it will cost us more to provide the alternative service than we were paying to Console. That is a reasonable basis on which to say that we got value for money. As the Deputy said, there has never been a question mark around the quality of that service in recent times. In 2006, there were questions raised about the quality of the counselling supervision for that type of headline, which the organisation at that time addressed by bringing in a separate person as its chief executive officer, who remained there for two years. That is one of the reasons those issues were dealt with satisfactorily at that time.
This is a slightly different matter, though, from the broader issues within Console that have been uncovered by the internal audit, which go far beyond the resources provided by the HSE, but because of the relatively chaotic nature of the way matters were handled in that organisation, which led to its inability even to demonstrate to us at the time that it was spending more money providing services to us than we were giving it, it was impossible for the internal audit to audit everything in the organisation, which is what has given rise to all the information in the internal audit report.
Seán Fleming (Laois, Fianna Fail)
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I call Deputy MacSharry. There will be an opportunity for others to contribute again later.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Did Mr. Raleigh's organisation ever second somebody to Console to help it with accounts?
Mr. Gerry Raleigh:
No. As was already mentioned, Console advertised for a CEO in 2007 or early 2008 through public competition. A person was appointed. It happened that the person was a HSE employee. An arrangement was made, through secondment, to allow that person to work in Console.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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It was a secondment, then.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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But their job was kept open?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Mr. Raleigh said it was a kind of secondment. Can he explain that because I do not understand?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I get that completely.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I fully understand what it is.
Mr. Tony O'Brien:
This was not that but the person did remain with the right to return to work for the HSE.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Were there issues with this person?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Did the person leave Console under any shadow of-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Did the person ever return to the HSE?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is the person still an employee of the HSE?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Was the person every questioned about his or her time in Console in the context of governance, misappropriation or anything like that?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Would it not have been useful to do that, at a time when there was a very unco-operative internal audit process?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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My question is not necessarily for Mr. Raleigh but for the team. My understanding is that somebody in quasi-secondment applied for a job in Console, got it, was CEO for a period and is now back with the HSE. It would be useful for us to know the period in which that person was in Console. Could those dates be made known to us, if available? It would be useful to have them. Did those concerned with the internal audit consult the person in any way as to their knowledge during their time as CEO in Console, now that they are back in the HSE? Obviously, it would have been at the end of a phone involving the team present.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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There was no consultation. I do not even know the name of the person but was aware that a person existed in respect of whom what I have described might have been the case. I suggest that the HSE consult this person on their time in Console. Perhaps the individual could let the Committee of Public Accounts know their view of the circumstances at the time. The person would inevitably have knowledge as to the governance or lack of it within the organisation that would supersede the best efforts of the best qualified internal audit time on the planet, particularly at a time when one is being sent to the Navan Road looking for documents, and then Lucan. Then it had to be postponed and then the HSE had to come back. Even with that, much of the information was not in the response. Did it not occur to anybody at all in the HSE that we have an inside track that we are not using?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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It would be interesting to know the situation. Perhaps we could invite that person to appear before us if it is within our remit to ask him or her a few questions. It was negligent of the HSE not to involve or consult that person.
Has the HSE sought an audit for the period before 2012 to 2014? Has it sought to investigate and look into the entire period through which money was being provided, under a grant agreement or service agreement?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I think it is still in the delegates’ own sphere. I respectfully suggest that they ask the internal auditors to go back over the entire period, even though the organisation is said to no longer exist. I very strongly suggest that the delegates consult immediately the current member of staff who spent a period in control of or in a senior position in Console to see what they have to add to this story.
Other Deputies mentioned that a person contacted the Minister of the day to inform him there were issues and concerns. On the back of that, did any personnel in the Minister’s office or the Department of Health make contact with anyone in the HSE to ask whether he or she had anything to say about the briefing the Minister received and about which he was concerned?
Seán Fleming (Laois, Fianna Fail)
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I invite Dr. O’Halloran, from the Department of Health, to comment.
Dr. Siobhán O'Halloran:
In 2011, a staff member of the Oireachtas contacted a principal officer in the Department in relation to the impersonation of a doctor by Mr. Kelly in the late 1980s in a Dublin hospital. The principal officer in question subsequently tried to ascertain the facts but, as the hospital had closed, this became difficult. In that instance, the principal officer invited Mr. Kelly to the Department to discus the matter. The single item discussed at that meeting was the impersonation as a doctor; there was no reference to any financial or governance matters. It was ascertained at that meeting that Mr. Kelly had impersonated a doctor in a Dublin hospital in the late 1980s. The probation Act had been served at that point in time. Mr. Kelly gave the explanation of his activity having been a prank in this student days. The matter was in the public domain. At that point, it was 30 years old. That was the extent of the involvement of the Department in that matter at that time.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Did the Department inform the National Office for Suicide Prevention?
Dr. Siobhán O'Halloran:
There is no record of the Department having informed the HSE at that point in time.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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To go back the upper tier of the frequent flyer miles for a second, from the recollection of Mr. Raleigh, Mr. O’Brien and Ms O’Connor did anybody contact them saying he or she had concerns?
Mr. Tony O'Brien:
There is nobody here who would have contemporaneous recollection as they were not in their posts at the time. There is no record on our side of the Department having contacted the HSE in this regard. This is consistent with the Department’s records.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is it acceptable to talk about St. John of God?
Seán Fleming (Laois, Fianna Fail)
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Yes. Both are on the agenda.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Maybe we will get back to the issue of Console later.
Mr. O’Brien said in his opening statement that the HSE funds the community service aspect of the St. John of God. While I know a school would not be under the HSE’s remit, was it aware that St. John of God Community Services was to close its supports for St. Augustine's school, saving around €2 million at the same time as top-ups of a little more than that were being considered?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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The reason given was that they were diverting the funds to adult services.
Ms Martina Queally:
I am chief officer in Dublin south east and Wicklow. At one of my regular management meetings with St. John of God's, its officials said they were making some changes to the boarding school element of St. Augustine’s, a small residential component of the school’s service, and that they would have no impact on children attending the school as they were going to phase in the change as the children completed their secondary education. It subsequently transpired that this was not the complete story and that the organisation was making more substantial changes.
We called the management team back in and told it that that had not been approved by us or the Department of Health. Those changes were stopped.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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That followed a meeting with the parents and the now Minister of State, Deputy Finian McGrath.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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It is not going ahead now.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I thank Ms Queally.
Róisín Shortall (Dublin North West, Social Democrats)
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I welcome the delegation, although on that point I will express some concern about its scale. There are at least 16 senior officers present. That is a matter of concern for us as a committee in terms of ensuring value for money and so on. There is a problem with that. Apart from so much senior officers' time being taken up, there are other issues with lines of accountability. If there must be so many people present, there is no clear line of accountability.
I would like clarification of Mr. O'Brien's role in respect of oversight of this spending. My understanding is that the HSE's Vote has returned to the Department. Who is the Accounting Officer for moneys spent by the HSE?
Seán Fleming (Laois, Fianna Fail)
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We will address that question to the Department of Health.
Róisín Shortall (Dublin North West, Social Democrats)
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Accountability for any of this rests with the Secretary General of the Department of Health. I am curious about what Mr. O'Brien's legal position is in terms of spending oversight. My understanding is that the head of the HSE is accountable to this committee, yet is not the Accounting Officer in law. Will Mr. Dempsey clarify the situation?
Mr. Greg Dempsey:
Under the HSE legislation, Mr. O'Brien remains the Accounting Officer. Is that correct?
Seán Fleming (Laois, Fianna Fail)
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Mr. O'Brien might clarify, as we believed that the Accounting Officer was the Secretary General.
Mr. Tony O'Brien:
I can clarify. On 1 January 2015, the Accounting Officer role reverted to the Secretary General of the Department of Health, which until the day before was my role. From that day, I became the accountable person, not the Accounting Officer. The legislation, which dealt with this issue specifically, still requires me as the accountable person, but not the Accounting Officer, to account to the Committee of Public Accounts in the usual way.
Róisín Shortall (Dublin North West, Social Democrats)
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It is an unorthodox arrangement.
Seán Fleming (Laois, Fianna Fail)
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It is unusual.
Róisín Shortall (Dublin North West, Social Democrats)
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We need to consider why the Accounting Officer is not before us to account for this.
Seán Fleming (Laois, Fianna Fail)
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Is there a reason for the health Vote's Accounting Officer not attending or is the protocol among the delegates that, when the accountable officer is present, the Accounting Officer is not? Talk us through it.
Seán Fleming (Laois, Fianna Fail)
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Correct.
Róisín Shortall (Dublin North West, Social Democrats)
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Generally, in situations where everyone is responsible, no one is responsible. That is a concern for the committee.
Mr. McCarthy set out at the beginning of the meeting the standard of good governance, accounting, reporting and auditing that should obtain in any organisation. I am not sure that the HSE meets that standard. I did not get that sense from the presentation. I wish to ask Mr. O'Brien about the strengths and weaknesses of the HSE's oversight arrangements. In his opening statement, he made an extraordinary comment when referring to oversight. He stated: "In this context, and given the limited number of HSE internal audit and compliance unit staff, careful consideration needs to be given to the section 38 and 39 agencies that are subject to audit and review." Mr. O'Brien has told us that one quarter of the HSE's large budget goes to sections 38 and 39 organisations. That €3.6 billion is the equivalent of many Departments or even groups of Departments. It is a considerable amount of money. Why is it that, with a spend of €3.6 billion, Mr. O'Brien is telling us that there is a limited number of internal audit and compliance unit staff?
Mr. Tony O'Brien:
It is a good question. There are three distinct reasons. Prior to 2014, there was no compliance unit. I will deal with that separately, if I may. Prior to the implementation of the public sector recruitment moratorium, the internal audit function was somewhat larger at approximately 55 staff. As the Deputy will recall, there were a number of targeted exit programmes that sought to reduce the number of staff employed in the public service generally, but also in the HSE in what is known as the management and administration category. Large numbers of people were able to raise their hands and leave the organisation. The internal audit function shrank to approximately 40 staff during that period. Although I have had to do so by reprioritising, I have increased that figure to 50 in recent years in response to some of the issues that have emerged. In addition, I have established the compliance unit specifically to examine how effective we are in monitoring our service arrangements and service agreements. Mr. Brian Purcell heads that unit. He has 11 whole-time-equivalents, WTEs, but I am seeking to prioritise three more in order to strengthen that area further.
In all respects, there are limitations on our ability to recruit management and administration staff. There is a bit of a fatwa in that regard, as colleagues will be aware. Management and administration grades are not properly valued in general, but without such staff, one cannot have an internal audit function. Nonetheless, and given the scale of the organisation, although it is the largest internal audit function in the public sector, it is probably significantly undersized. In a previous question, we were asked about why we relied on external auditors' annual financial statements and certificates. Essentially, it is because we have to. We could not replicate that through some other mechanism. It is worth noting that, between 2007 and 2015, Console received a clean audit certificate every year from its auditors.
Róisín Shortall (Dublin North West, Social Democrats)
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It should be a matter of extreme concern to this committee that, as someone who is responsible for a spend of more than €13 billion in the HSE, with €3.6 billion going to sections 38 and 39 agencies, Mr. O'Brien stated that the HSE's audit function and the allocation of resources to oversight were "probably significantly" underfunded. That is not an acceptable response to provide to us, given that Mr. O'Brien is the accountable person for that considerable spend.
Róisín Shortall (Dublin North West, Social Democrats)
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I am not talking about the factual response. Mr. O'Brien, as the accountable person to this committee, is admitting that the HSE's arrangements for oversight and audit are "probably significantly" under-resourced. How can we, as the Committee of Public Accounts representing the taxpayer, have confidence that public money is being spent properly?
Mr. Tony O'Brien:
I would not regard it as an admission, more as simply telling the committee. The overall public health sector is currently over its employment control limit and is required to reduce that slightly. For every extra resource that I put into internal audit or compliance, that is one less resource in health care. These are the choices with which I am faced. Against that, I have increased the internal audit function by 25% in the past two and a half years and I have established a compliance unit that was not there beforehand. I would not want the Deputy to get the impression that I have not significantly prioritised this, but it is not where it needs to be.
Róisín Shortall (Dublin North West, Social Democrats)
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I am highlighting it because it is related to the first question that I asked on who was responsible for ensuring proper oversight. Either Mr. O'Brien is acting under instructions or the constraints of the public service embargo or he is doing his job by ensuring adequate accountability. If he has concerns about the level of resources available for that, presumably it should be highlighted at the highest level in Government.
I wonder has that serious concern been escalated at ministerial level and to the Department of Finance?
Mr. Tony O'Brien:
Obviously I must balance all these things. It is my obligation in terms of the totality of my responsibilities as director general. One of the things we have decided this week is mentioned in the statement of internal financial control. It is an external review by an external firm of compliance within the section 38 bodies over a three-year programme. As a result of the St. John of God issue, I have directed that the programme be accelerated and be completed within 18 months and not three years. I am able to supplement resources in some ways.
We also have a number of internal audit exercises, some of which are well known. I will not mention them here but they relate to organisations well known and discussed here before. They are being pursued via external counting firms or auditors. Many of the issues we are currently discussing arose in a period when the internal audit function was particularly light on resources, and that is why I have added to that resource. In addition, many of the area operations responsible for monitoring the arrangements they have with particular local providers suffered a significant exodus of management and administration grades during that period. Consequently, much knowledge was lost.
Róisín Shortall (Dublin North West, Social Democrats)
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I do not see that as an excuse.
Róisín Shortall (Dublin North West, Social Democrats)
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I know the witness is putting it as a factual position but I do not believe it is an excuse-----
Róisín Shortall (Dublin North West, Social Democrats)
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-----for less than adequate oversight. I presume there is a standard that is recognised and perhaps the Comptroller and Auditor General has a comment on this. In terms of a spend of €3.6 billion, what would be the expected cost for oversight and audit?
Will Mr. O'Brien speak to us a little further on the various levels of oversight in place? We heard about the internal audit and the national audit committee as a separate body. There is also the risk committee and the compliance unit. My concern is that everybody is responsible but nobody is responsible. I am very interested to know how those different bodies within the HSE relate to each other. What is the level of expertise within each of those? I am not asking the witness to provide that information now but perhaps he could provide us with a schedule of the staffing of each of those bodies and the qualifications of people in particular. For example, will Mr. O'Brien tell us today how many people with particular auditing or accounting expertise are involved with those different sections of the HSE? What is the cost allocated to that oversight function?
Róisín Shortall (Dublin North West, Social Democrats)
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Is there a ballpark figure for the cost of oversight and audit?
Róisín Shortall (Dublin North West, Social Democrats)
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Okay.
Mr. Tony O'Brien:
I will comment on the size of the delegation. The size was formed with full respect for the committee. In light of the new procedures introduced where the committee correctly expects us to be able to provide answers on the day, by and large, the Console issue relates to one part of the organisation and the St. John of God issue relates to another part. I have simply brought the people who can provide first-hand information as opposed to hearsay evidence to the committee. That is in an effort to be helpful. If the view of the committee is the delegation is too large, we will certainly take that into account in future.
Seán Fleming (Laois, Fianna Fail)
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For the information of all members and the public, we have changed the letter of invitation to all organisations coming here to ask them to ensure they have staff on hand to assist the people answering the questions so as to provide more information during the course of a meeting than the person leading the answers might necessarily have to hand. If necessary, they can be available to make a phone call to the office and get additional information. It might be a feature of future delegations. We have asked people to be here so we can get the answers on the day rather than everything coming back in writing in the weeks afterwards.
Róisín Shortall (Dublin North West, Social Democrats)
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In 2013, there were scandals involving Rehab and the Central Remedial Clinic and action was taken to strengthen oversight arrangements. The compliance unit was put in place as part of an overall governance framework but three years later, here we go again with yet another scandal. I would like Mr. O'Brien's views on the adequacy of the new arrangements in place and the governance framework.
A second question relates to the level of audit conducted on these organisations. Mr. O'Brien stated there are 1,700 different bodies and I gather from some of the documents provided that 13 of those were audited last year. Will Mr. O'Brien and Mr. McCarthy provide a view on that as a percentage of the overall numbers that the HSE is responsible for? It seems a very small and random audit figure.
Seán Fleming (Laois, Fianna Fail)
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We must move to Deputy Connolly after we get these replies.
Mr. Tony O'Brien:
The circumstances from 2013 described by the Deputy and our response to them have led to where we are today. In other words, without that more vigorous approach, this audit may not have been commissioned by the National Office for Suicide Prevention. Without additional resources in the audit office, they may not have been able to do it. As a result of the work, we now know about the issues in Console. On a benchmarked basis, given our size, the figure I have in mind for the size of our internal audit function would be 75, as opposed to 50 people. The Comptroller and Auditor General will be able to give advice on what he thinks in that regard.
Róisín Shortall (Dublin North West, Social Democrats)
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To clarify, what is Mr. O'Brien's view now on the adequacy of the 2013 governance framework?
Mr. Tony O'Brien:
The governance framework is very effective. The obvious challenge is there can be people out there in the long grass who are not abiding by it. Our job is to catch them. In this case, we have caught one but catching one does not mean there is not another waiting to be caught. That is just an unfortunate reality.
Róisín Shortall (Dublin North West, Social Democrats)
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Is the witness saying he is confident the current arrangements are adequate?
Mr. Seamus McCarthy:
I will respond to the Deputy. There is no individual percentage of total spend that would be appropriate to dedicate to internal audit or oversight. That is why when I made my opening remarks I presented a sort of overall framework in which audit and investigation is just one part. It is very important to recognise that internal audit is only a part of an overall system of financial control. Looking at the HSE's financial statements, the statement on the system of internal financial control is very extensive and covers very many other risks that exist within the organisation.
There must be controls around the taking on of grant-assisted bodies. There must be awareness throughout the organisation that is dealing with grant-funded entities; information must be shared within the oversight organisation. If anything untoward comes to light, it should be brought together and assessed as a whole. It is certainly important to have an adequate internal audit function but it must be set in a context that there are other controls relied upon.
References were made earlier to reliance on the sets of audited financial statements. If the public sector is not able to rely on the audited financial statements of grant-funded bodies, we will grind to a halt. We must rely on them. Bodies like the HSE and the Arts Council, among other entities, rely on those kinds of financial statements. There is an assumption that there is a regime existing meaning the quality of the audit will be sufficient and it can be relied upon. That does not mean it will not fail from time to time. I am not judging what has happened in this case but it is certainly a key control.
The other question was around the adequacy of carrying out 13 audits from a total of a couple of thousand funded bodies. It is a point we have made on a number of occasions. One certainly needs the capacity to respond and carry out investigations where suspicions are raised.
It is also probably very important that there be a regime of random audits conducted for no particular reason other than that it is time to look at a selection of bodies. It may alert them to weaknesses in their own control systems. Even looking at 13, there will be lessons to be learned. The important thing is to harvest those lessons and feed them back into the rest of the control system. Stating there will be a process of random selection may have a deterrent effect, which is probably one of the most important aspects of that type of internal audit function. A body may be selected for no particular reason, it may not have done anything wrong. Sometimes there is a criticism that resources are put into the wrong area by auditing entities about which there is no suspicion, and that it may be a waste of time when auditing should be trying to detect irregularities, but the random selection and testing of a reasonable number should tell things that perhaps need to be addressed. It also has that deterrent effect that anybody can expect an audit at any particular time.
Róisín Shortall (Dublin North West, Social Democrats)
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Does Mr. McCarthy accept that 13 out of 1,700 cannot be regarded as a reasonable number and for people who are so inclined to misappropriate money, their chances of getting away with it are pretty strong?
Mr. Seamus McCarthy:
Yes, there does need to be visibility on a scale and publicity around it also, stating that 20 or 30 random audits were carried out which found lessons that need to be learned. The statements on internal financial control are an opportunity to state random work has been carried out which have found things that were wrong and these have been changed for everybody.
Catherine Connolly (Galway West, Independent)
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I welcome the witnesses. I will ask my questions as someone who admires the public service and who has constantly spoken for a public health service. What was Mr. O'Brien's reaction when he read the audit?
Catherine Connolly (Galway West, Independent)
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Following that reaction, which was my reaction also I must say as I was simply appalled, saddened and angered, what did Mr. O'Brien do? What steps did he immediately take?
Mr. Tony O'Brien:
The steps were taken by the national director of mental health, who has line accountability for this area of service. She was going through the normal due process before reaching her final decision of giving the agency an opportunity to respond, which was the process that was being completed, and she-----
Catherine Connolly (Galway West, Independent)
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I accept that, and after it was completed in April this year what did Mr. O'Brien do?
Catherine Connolly (Galway West, Independent)
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What action?
Ms Anne O'Connor:
I received the report finalised on 14 April. I had to read it and get legal advice. That was the first thing I had to do. I started engagement with Mr. Kelly on 26 April on foot of that advice. Then there was a series of correspondence between me and Mr. Kelly, so I wrote on 26 April and he replied on 10 May. There were letters over and back throughout the end of April, May and into June. The concern for us at that time was that at any point, this process could have been injuncted. The report could have been injuncted up until this week. Legally, we had to be careful. We had to put a lot of work into this and in terms of the responses being received from Mr. Kelly, we were being threatened with legal action. That process continued until the most recent letter I received from Mr. Kelly was on 22 June and the programme aired on 23 June. There was a series of engagements with Mr. Kelly from the time I received the report, basically advising him that I was very concerned that there appeared to be a breach of the arrangement we had with Console and ultimately stating the HSE had the right, therefore, to cease funding and, if necessary, to seek repayment of funds used for purposes not agreed by the HSE. That was the tenor of the conversation. The responses from Mr. Kelly were not satisfactory at any point during that process.
Catherine Connolly (Galway West, Independent)
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I hear what Ms O'Connor is telling me. Did she call a meeting of the audit committee? Does she sit on the audit committee?
Catherine Connolly (Galway West, Independent)
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So she actually sits on that committee. Did it occur to her during that time to call an audit committee meeting, that the HSE had a serious problem on its hands?
Catherine Connolly (Galway West, Independent)
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No.
Catherine Connolly (Galway West, Independent)
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Ms O'Connor, I have difficulty with that management of the situation because we are in the bizarre situation here where we have this report, which we cannot go into, but we can use it in terms of holding the HSE to account. I keep forgetting the number of findings. There are 60 findings. This has already been highlighted-----
Seán Fleming (Laois, Fianna Fail)
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There are 89.
Catherine Connolly (Galway West, Independent)
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No, there are 60 findings.
Seán Fleming (Laois, Fianna Fail)
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Yes, there are 89 recommendations.
Catherine Connolly (Galway West, Independent)
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It has already been highlighted by my colleague that all of the findings in the audit have a high rating and many have national implications for the HSE. At the back of the document, we have 89 recommendations. Of those 89 recommendations, only four are directed to the HSE. A total of 85 are directed to the very person who - one has to be careful here - caused the audit to be had in the first place. This audit is directing 85 recommendations to that very person and that company. These implications are a red alert. Did this not lead Ms O'Connor or any of her colleagues to call an urgent meeting?
Catherine Connolly (Galway West, Independent)
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I have only ten or 15 minutes to ask a question. My question is very specific. Did it not occur to you or to any of your colleagues to call an urgent meeting in relation to the 60 findings and the 89 recommendations, and where they were going as a health executive in relation to this?
Ms Anne O'Connor:
I guess in terms of my response, if the management talking to the director general about the actions to respond to the audit report, the audit report will be discussed by the audit committee at a meeting on Monday and the national director of internal audit will be presenting the findings of the report to the committee.
Catherine Connolly (Galway West, Independent)
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I have to say I believe that is a totally inadequate response. We are reliant on RTE and the programme that exposed this because when I read this - and I will make the same comment as my colleague made in his contribution - I wrote down a question, which was whether the HSE has grasped the nature of the problem. That is my comment on the 89 recommendations, with only four directed to the HSE and the other 85 directed to the person and the body the HSE had been working with for over a year that led it on a merry dance, in a sense, by going to this office and that office. Did alarm bells not ring?
Dr. Geraldine Smith:
These recommendations arose from the specific findings in Console. As is normal in an audit report, we actually addressed the recommendations to the particular issue. Console is certainly a unique case, as we see. At the time of preparing the report, we did not know what the outcome was with Console. These recommendations, as the director general has identified, will actually feed into the learning process for the HSE in terms of its annual compliance process with the various agencies. While they are addressed to the CEO of Console, and Console is no longer, these recommendations do not die. They will be taken on by our national compliance office in terms of informing its learning and interaction with various agencies. Some of those issues have already been taken on board by the national compliance office. There is a lot of learning from this report.
Catherine Connolly (Galway West, Independent)
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Dr. Smith, it is beyond learning at this point. There were 89 recommendations addressed to a body that is not co-operating in any way and Dr. Smith is sitting here today before the Committee of Public Accounts telling us this is learning. I have the greatest respect for the HSE and the services it is trying to provide but there was an abject failure to grasp what was going on. My question at this point is that I believe the HSE made a decision that it could not do without Console and that the helpline and services it provided were necessary and it turned a blind eye.
Catherine Connolly (Galway West, Independent)
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That is okay. Mr. O'Brien can object to it and I will take it back.
Catherine Connolly (Galway West, Independent)
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Just let me finish my sentence.
Catherine Connolly (Galway West, Independent)
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That is how it seems to me. I take it back if I am insulting Mr. O'Brien in any way. However, it seems to me that a decision was made on value for money, to use Mr. O'Brien's own words. Value for money was being provided and the rest was something the HSE could work on in the future. The HSE was fully intending to work with this body. I see heads shaking but 84 recommendations were addressed to this body to help it improve. Correct me if I am wrong, but from what I can see, the HSE had no intention of stopping this process until RTE acted and other events happened that capitulated the whole situation. For practical value for money reasons, the HSE was going to allow this body to continue.
Mr. Tony O'Brien:
That is completely and utterly wrong and I will explain to the Deputy why in order to convince her that the preliminary conclusion she has reached is wrong. First, the matters that arose and were identified by internal audit were brought to the Garda bureau of fraud investigation in February 2016. Second, while we are satisfied that while the agreement continued we had been obtaining value for money, we were concerned to ensure by one means or another - and we now know what that other means is - these services would continue to be available to clients, which must be a primary concern of ours. The only reason we had to go through the sequential steps is because that is the appropriate process for bringing an internal audit to conclusion. I give an example of how the Comptroller and Auditor General or any auditor conducts his or her work. They reach preliminary findings and give the person against whom the findings are made an opportunity to comment and that is the normal process. When this came to the national director of mental health, her concern was to ensure that this audit report and her ability to act on it were not in any way compromised. She had to follow appropriate procedure and give the organisation, with all that we know about it, an opportunity to make submissions to her before she reached her final decision. That final decision, undoubtedly, would have been to withdraw funding from this organisation and to move services elsewhere. That is something that was already well under consideration long before "Prime Time". Just to be clear, without the internal audit, there would have been no "Prime Time" programme. So, there is absolutely no foundation for suggesting that we were sitting back and saying "Oh, we are getting great value for money; we will let Console continue". There is not one single shred of evidence to support that contention.
Catherine Connolly (Galway West, Independent)
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That may well be Mr. O'Brien's view, but there are 89 recommendations, of which 84 relate to working with the very body we see now in the courts. That is No. 1.
Catherine Connolly (Galway West, Independent)
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Just let me finish. I listened to you.
Catherine Connolly (Galway West, Independent)
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I did not interrupt Mr. O'Brien. Second, this report says that Console had charity status. I understand that it did not have charity status going back to June of last year. Is that correct?
Catherine Connolly (Galway West, Independent)
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So, the witnesses cannot clarify for me whether I am right that it did not have charity status from June last year?
Catherine Connolly (Galway West, Independent)
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What did Dr. Smith read in the media?
Catherine Connolly (Galway West, Independent)
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The HSE was not aware of that.
Catherine Connolly (Galway West, Independent)
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That in itself is extraordinary. What is the HSE's policy on Garda clearance?
Catherine Connolly (Galway West, Independent)
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I refer to Garda clearance of workers working for Console and of the CEO.
Mr. Tony O'Brien:
An awful lot is being made of the fact that there are recommendations in the internal audit report that relate to the organisation. It is important to understand that that is absolutely standard practice. Those are matters that could only be remedied by the organisation and any internal report that one finds into any organisation, whether it is a funded organisation or not, will have the bulk of its recommendations typically addressed to the people who run it. Internal audit does not have a role in deciding whether we continue to fund Console. It does not have an opinion on it. It does its work and if it believes there are recommendations that should be made to the board of an organisation, continuing or not, it will make them. There is nothing about that which relates to any thought process about whether Console would continue or not.
Catherine Connolly (Galway West, Independent)
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I accept that which is why I started off originally asking the question of Ms O'Connor why a decision was not made to call the audit committee. I asked Mr. O'Brien why alarm bells did not ring. As such, he is not answering those questions and is going back into the process. On top of that, what were the national implications arising from the 60 findings for the HSE?
Catherine Connolly (Galway West, Independent)
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Actually, they are not. I am sorry. There are 60 findings and it states at the bottom that all the findings in the audit have a high rating and many have national implications. What are those implications and how many are there? What has the HSE done about them?
Dr. Geraldine Smith:
The national implications arise from the recommendations which emanate from those findings. As I have mentioned, those recommendations will feed into the process our national compliance office engages in with the various agencies. Essentially, we are saying that this is what we have found in Console and here is what we are recommending. The national implications are that HSE needs to look at this because it is not solely about Console, so what can we learn from this process. They are the potential national implications.
Catherine Connolly (Galway West, Independent)
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I think my time is drawing to a close. Were service level agreements in place between Console and the HSE? Was that answered? Did I miss it?
Catherine Connolly (Galway West, Independent)
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There were. Under those service level agreements, the HSE was allowed, if it had concerns, to go in and inspect all documents and any premises. Is that right? The HSE had full power to do that under its service level agreement.
Catherine Connolly (Galway West, Independent)
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I am not asking this to put the witnesses on the spot; it is to try to understand what has happened. My colleague has just passed me the 2013 grant aid agreement, paragraph 7(5) of which provides that the organisation will permit the executive reasonable access to the organisation's premises and so on and shall permit the executive to carry out inspections of same. I highlight that because the power was there. Mr. Raleigh says it has not been used. The HSE then went through a process of an internal audit and, to put it mildly, co-operation was not forthcoming. Is that correct? The HSE is saying that. I am not talking about Console. The witnesses are saying that co-operation was not forthcoming.
Ms Anne O'Connor:
The power of the executive to which the Deputy refers is what we use when we ask for an internal audit. The internal audit invoked that power, in effect, by going in and doing a full examination. It was at the request of NOSP that internal audit went in and sought access to records.
Catherine Connolly (Galway West, Independent)
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I do not accept that it was the HSE's skill and detective work in 2013 that led to this. There were many concerns prior to this and some of them have been highlighted. The witnesses have, not dismissed, but dealt with the woman who wrote the letter, which was nothing to do with governance but had to do with counselling. Then we move forward to the PA and the Department of Health has clarified that it did not pass the information on to the HSE. Therefore, that is the second alert. Following Deputy MacSharry, the HSE clarified that someone went into Console in 2009. So, at that stage the HSE had serious concerns.
Mr. Tony O'Brien:
No. I think what Mr. Raleigh reflected was the fact that a person who, at that time, was employed by the HSE, of their own volition, applied for a post advertised by Console, got that and applied to return to the HSE at the end of that period and that was granted. The person was not sent in by the HSE.
Catherine Connolly (Galway West, Independent)
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I understand that, but Deputy MacSharry has raised concerns, which I will not repeat, about what he did or did not say when he came back and what the HSE may or may not have asked.
Catherine Connolly (Galway West, Independent)
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How could the HSE have been satisfied in 2009, or whichever year it was, with governance when this was a family-run organisation? The HSE said that it was satisfied with governance in 2008 or 2009. How could it have been satisfied with governance at that point?
Ms Anne O'Connor:
In terms of what happened, a series of meetings was held and the measures requested by NOSP at that time were put in place. Again, the funding at the time was in the grant aid agreement territory of approximately €250,000.
It was less than what we went to in 2013. There were a series of performance meetings with Console at that time.
Catherine Connolly (Galway West, Independent)
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There may well have been but did Ms O'Connor check who was sitting on the board, who was the chief executive officer, CEO, and if there was a conflict of interest? Did she check any of that or ask questions about how they were receiving money when this was a charity and they appear to have received payments with different names on it? How did she satisfy herself about that?
Ms Anne O'Connor:
The specific issues that were raised at the time, and again none of us here was present at those meetings, as we understand it from a previous director, were addressed then with the organisation. The standing measure that was put in place was a limit on its funding, so there was no increase in funding for a number of years despite the organisation's request for increased funding.
Catherine Connolly (Galway West, Independent)
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There was an increase in funding in 2013.
Catherine Connolly (Galway West, Independent)
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In 2014 when Ms O'Connor was fully aware it went up-----
Catherine Connolly (Galway West, Independent)
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What did the organisation get in 2015?
Catherine Connolly (Galway West, Independent)
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Thank you.
Seán Fleming (Laois, Fianna Fail)
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I call Deputy Cassells next.
Shane Cassells (Meath West, Fianna Fail)
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I thank Mr. O'Brien and his team for attending. I want to say at the outset that my thoughts today are with the staff of Console and, more important, with the 6,000 people who use the service each year. Some two dozen calls will come through to those lines today, responsibility for which has now been taken over by Pieta House. I wish everyone associated with those services the very best.
Reflecting on the Comptroller and Auditor General's comments on the audit system some moments ago, it is stated in the report that funded organisations have a duty of candour to their funders, in this case the HSE, and that the audit identified that there were three different versions of each year's accounts, one version given to the HSE, one given to the National Office of Suicide Prevention, NOSP, and two versions given to the CRO. Considering that these audited financial statements are there to tell the full financial story of the business, does Mr. O'Brien feel duped by the versions that were issued to him?
Mr. Tony O'Brien:
It is difficult to give the Deputy my honest answer to that without potentially veering into the territory that is subject to an investigation by the Office of the Director of Corporate Enforcement. Any opinion I give would be prejudicial to that. I do not wish to be in any way unhelpful but I can only honestly answer that by giving the Deputy my opinion of what I think happened, that would veer into difficult territory.
Shane Cassells (Meath West, Fianna Fail)
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Mr. O'Brien acknowledged in the report that there are three different versions of the accounts.
Shane Cassells (Meath West, Fianna Fail)
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Dr. Smith mentioned earlier the other audits and 54 agencies in that six and half year period. Does Mr. O'Brien acknowledge that similar scenarios could exist given he has already mentioned three Garda investigations across the board in that respect also?
Shane Cassells (Meath West, Fianna Fail)
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If one reads section 2.4 of the grant aid agreement with Console, it provides that the organisation must use the grant only for the purpose set out in the service specification schedule. Does Mr. O'Brien feel angry at what he had read in the internal audit? Does what he read in it make his blood boil, given the language used in the grant aid agreement with Console?
Mr. Tony O'Brien:
The internal audit report generally is one that would induce very negative feelings about what it says and the people who were responsible for what happened there. It is not, however, clear from the internal audit report, and there is no basis for me to draw the conclusion, that what we might generally call the misuse of funds related to the funding provided by the HSE, or that the HSE was at a loss in terms of the services that it was paying for, which continued to be provided during the period. That in no way, however, diminishes the appalling vista that one sees when one reads the report, which is about the totality of that organisation and all of the things that went on there.
Shane Cassells (Meath West, Fianna Fail)
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I asked that question because, as public representatives, we work week in, week out with groups that would be accessing funding from the HSE, groups that are hanging on by their fingernails to survive and to provide a service. I have a letter from the Committee of Public Accounts, PAC, from 26 January of this year to Mr. O'Brien in respect of a community development association, which is in conflict with the HSE, and the PAC wrote to Mr. O'Brien supporting the association's demand for funding, and that has also been referred to the Taoiseach. That association is uppermost in my mind today when I read this report and the small amount of money in respect of which it is in conflict with the HSE.
Focusing on the helpline funding, it increased from €250,000 to nearly €600,000 in 2013 to prevent the collapse of the national helpline, as set out in finding No. 52. The number of helplines reduced from six to two during that period at a cost of €346,000, of which the HSE provided nearly €300,000. In an earlier response to Deputy Cullinane, Mr. O'Brien said that he was happy with the service, but the issue of the helpline is highlighted. His statement indicates that particularly relating to the helpline, that sparked the internal audit based on concerns of the National Office for Suicide Prevention. I listened to his statement and also his response to the Deputy and it that not a contradiction in that Mr. O'Brien said that he was happy with the service yet the context that sparked the internal audit was the helpline, which he highlighted in his statement, where it says particularly relating to the helpline.
Shane Cassells (Meath West, Fianna Fail)
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The National Office for Suicide Prevention said that it had grave concerns in terms of the helpline, requests for information, delivery on commitments, failure to attend significant meetings and again it is about the helplline. Will Mr. O'Brien explore that in order that I can better understand it?
Ms Anne O'Connor:
What that relates to is the increase in funding with the additional funding allocated to the helpline and, as I mentioned earlier, it moved the organisation from what was a grant aid agreement into a service arrangement. Part of the conditionality of that extra funding was that the organisation would open itself to enhanced scrutiny because the funding had increased. Again, as I mentioned, prior to that it was relatively low in the overall scheme of things, but once the helpline funding was added to it, a more comprehensive engagement took place in respect of performance management. It was that more robust process that identified or highlighted the difficulties with the organisation. The engagements that took place on foot of the allocation of that additional funding became very difficult. The organisation did not supply the information that was being sought. In a way the additional funding came with an enhanced level of governance and the organisation could not respond to that and that is really where the red flag started to go up. More questions were being asked and more information was being sought but that was not being made available to the HSE and it was on that basis that the real concern about the organisation started to emerge. It was not the operation of the helpline, per se. It was the fact that the funding increased as a result of the helpline and then the governance changed between the organisations. That is really where the difficulties started to come about.
Shane Cassells (Meath West, Fianna Fail)
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There were never any issues in respect of the value for money for the helpline service that was being provided?
Shane Cassells (Meath West, Fianna Fail)
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Ms O'Connor never had any concerns in that respect.
Ms Anne O'Connor:
No. I would reiterate that we have been very clear from the outset of this process that our concerns have not related to the actual service provided. The work that has been done by the interim CEO since he has gone in has highlighted that again in terms of the service that is provided. It was the relationship that changed on foot of the additional funding that was able to highlight the concerns, their lack of response and their refusal. As they had previously committed to engage in an external review themselves, we had asked for that. We had offered to fund that. We were told that it was happening. It did not happen. There were all those things that came with the extra funding that really highlighted the difficulties.
Shane Cassells (Meath West, Fianna Fail)
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There is an aspect that I am trying to get my head around and it comes back to the statement by Mr. O'Brien at the outset, namely, that the HSE got value for money for the service that it purchased. I cannot square that opening gambit. Does Mr. O'Brien believe that there were no funds from the HSE that were used in an inappropriate manner? That goes to core of this. We could read all the reports all day long, but the core of this discussion and the core of what people listening to and viewing these proceedings today are seeking from us is if Mr. O'Brien believes the HSE got value for money when it purchased these services, does he also believe none of the public funding allocated to Console was misappropriated in any way?
If Mr. O'Brien believes the HSE got value for money when it purchased these services, does he also believe none of the public funding allocated to Console was misappropriated in any way?
Mr. Tony O'Brien:
I need to answer that in two chunks. First, we know that the cost to Console of providing this service exceeded the amount we paid for it. Given what we now know, one almost wonders why no attempt was made to get us to increase the funding. It seems that no such attempt was made. It will not be possible to discern whether any of the funds we provided for Console were ultimately misappropriated along the line until we see the full liquidation report. In other words, we will have to see whether there are remaining debts, etc., that would not remain if the HSE funding had been applied for the intended purposes. We know that in the overall course of events, the helpline was provided and highly valued by those who used it. As members have said, we know that it was of a good quality. We also know that it cost Console more to provide it than we paid for it.
Shane Cassells (Meath West, Fianna Fail)
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I acknowledge that, but I feel it is being used as a defence. Mr. O'Brien can say the service cost X and that the HSE provided Y, but that does not address the core of my question. In the light of the level of detail into which the internal audit has gone - I am not going to refer to specific individual expenditure items - does Mr. O'Brien not have any sense whatsoever that there is a correlation between the public funds allocated to Console and the obvious items of expenditure that did not relate to the provision of the services for which Console was given funding?
Mr. Tony O'Brien:
The audit report makes it clear that the person to whom we are referring as the former CEO either could not or would not provide information for the internal audit division in support of the figures he had provided. That is the first fact. The second is that the service provided objectively represents good value for money. I do not mention this as a defence but as a factual statement. We need to see the net balance in the organisation to reach a conclusion on the final question that arises in this context, which is whether any of the money transmitted to Console was diverted for other purposes. These details will flow on foot of yesterday's appointment of a High Court liquidator. One of the challenges identified by the internal audit division was the absolute confluence of the funding. As members will be aware, Console raised a great deal of money from many sources. While we were not in a position to unpick all of it, we were able to identify that there was lots of very strange expenditure. We believe this expenditure was most likely funded from fund-raised money.
Shane Cassells (Meath West, Fianna Fail)
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I suggest we need to go full circle and return to the core issues raised by Deputy Róisín Shortall and the Comptroller and Auditor General about the audits of these bodies. If the HSE's belief is that the services were provided and that there is no need to delve any further, how can we get to the actual meat of the issue, which is whether public funds were misappropriated?
Mr. Tony O'Brien:
First, our internal audit division made a report to An Garda Síochána last February. That matter is ongoing. The internal audit division made the report for the obvious reason that it was concerned that a Garda investigation was necessary. It is of significance that the report in question was made to the Garda Bureau of Fraud Investigation. I am not trying to be evasive in any way. We need to see the net funding position. If there are bills left over at the end of this exercise which should have been paid from the funding we provided, a certain conclusion can be reached. The formal referral to the Garda Bureau of Fraud Investigation was made on 25 April, but there had been contact with An Garda Síochána before that.
Shane Cassells (Meath West, Fianna Fail)
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To be clear, is Mr. O'Brien saying he does not believe there has not been any misappropriation of public funds-----
Shane Cassells (Meath West, Fianna Fail)
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-----or is he saying he is not prepared to comment?
Seán Fleming (Laois, Fianna Fail)
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I thank Deputy Shane Cassells.
Mr. Tony O'Brien:
Before we take the next question, I want to clarify something I said earlier. I may have chosen my words a little too loosely. Deputy Catherine Connolly and I had a discussion about the interplay between the internal audit report and the "Prime Time" programme. It is important to stress that the "Prime Time" programme covered some parallel issues not covered in the internal audit report. If I suggested those involved with the "Prime Time" programme needed to rely on the internal audit report in making that programme, I am happy to clarify that I used a loose choice of words which were not intended by me.
Seán Fleming (Laois, Fianna Fail)
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It is now 12.25 p.m. Would Mr. O'Brien and his colleagues prefer to take a break now for approximately 20 minutes to have a cup of coffee and resume before 1 p.m., or to hear from one more speaker and take a break in 15 minutes?
Seán Fleming (Laois, Fianna Fail)
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We will break now and come back in approximately 20 minutes. That will give everybody a chance.
Seán Fleming (Laois, Fianna Fail)
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We resume our discussion on the matters on today's agenda. The next speaker is Deputy McDonald, to be followed by Deputies Burke, Aylward and Kelly in that order.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I welcome Mr. O'Brien and all the other witnesses. This feels like Groundhog Day. Many of the issues we are examining today are issues the committee grappled with in the last Dáil.
I put it to Mr. O'Brien and to the officials from the Department of Health that the relationship between Console and its funders, the HSE and the Department of Health, has been dysfunctional from the beginning. Whereas for the reasons Mr. O'Brien has set out, the audit focuses on recent years, I ask him and the Department of Health officials to furnish us with a full report going back to the first tranche of funding which I think was in 2005, but perhaps one of the witnesses from the HSE or the Department of Health might correct me. This should set out in clear unambiguous language the history and pattern of non-compliance and lack of accountability by that organisation from that time to now. Can that be provided to us?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I thank Mr. O'Brien. Can the Department of Health officials confirm that the first tranche of funding was in 2005 or was funding given prior to that?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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What about the HSE?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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We need to see the full picture because what we see here is not just something that happened by accident. My reading of the situation is that this was a very calculated and considered rebuff of any kind of standards on the part of Console. I believe the HSE and the Department of Health have been caught with their pants down and were asleep at the wheel.
We have heard a lot about oversight, but I want to turn to the grant aid and service level agreements. On these, I am struck by the fact that there are nominated persons and authorised signatories. Will Mr. O'Brien tell us, for the purposes of these agreements, the function of the nominated person?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay. We have limited time so we need short, information-rich answers, please.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Of the contract.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Does he or she have a role in terms of compliance and oversight?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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And the nominated person has oversight of that.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Overall.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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What about the authorised signatory? What is that all about? Who are they?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay. I am trying to establish that, in addition to the overall protocols, one actually has within the grant aid agreement or service level agreement nominated go-to people, if I can use that term, in respect of that relationship between the funder and the funded organisation. Is that a fair summary of it?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay. Thank you, Mr. Purcell. In 2014, Mr. Raleigh was the authorised signatory for the service level agreement. In that year the nominated person was a Paula Forrest. Does Ms Forrest still work for the HSE?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay. Thank you very much. Indeed, Ms Forrest was also the nominated person in 2010. In that year, Mr. Geoff Day, who, if I am correct, was Mr. Raleigh's predecessor-----
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Just to clarify for the committee, Mr. Day was the head of the National Office for Suicide Prevention.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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That is the role that Mr. Raleigh holds.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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He resigned in 2011 actually.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Yes, thank you. In 2015, the nominated person and the authorised signatory is one person, a Ms Stephanie Lynch. Does Ms Lynch still work for the HSE?
Ms Anne O'Connor:
That is not the main NOSP arrangement. A question was raised earlier in terms of the number of arrangements. The main service arrangement sits with the national office and the organisation. There were three other small arrangements, one in the west, one in the south and one in the south east, with smaller local initiatives under the resilience funds.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay, but that is not clear from the documentation that the HSE has given to us.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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The point is - Mr. O'Brien might want to sit back into his seat and I do not think we should miss this as a committee - that it is not good enough for the HSE simply to say in a general way that it introduced these general protocols and systems. The real accountability, and what we need to get to, is the issue of the nominated people who had a specific role in respect of these agreements with Console. Since Mr. Raleigh is one of those persons and he is here, I would like him to answer to this committee how he discharged his role as an authorised signatory and as one of those who had a direct responsibility for the arrangements with Console. From what I have heard so far, it seems to have been a laissez-fairepolicy and very hands off, which troubles me.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I know that.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Outside of that, is it Mr. Raleigh's practice to meet the organisation? Quite aside from the paper exercise, does he do a face-to-face meeting?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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How often would Console have been met?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Are minutes kept of those meetings?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Can we have the minutes of those meetings?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I would like Mr. Raleigh to be as expansive as he can in terms of the minutes he can provide to us. What was Mr. Raleigh's relationship with Mr. Kelly? Would he have known him professionally over the years?
Mr. Gerry Raleigh:
No. I met Mr. Kelly, from a business point of view, six or seven times in recent years, most frequently at the business meetings we had with the organisation, but also at a couple of events I participated in for Console. One was its ceremony of light which it held each year in Maynooth, and the second was when I spoke at its conference in 2013. Apart from that, I would have met Mr. Kelly maybe once or twice.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Would that also have been the case for Mr. Raleigh's predecessor, Mr. Day?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay. Where is Mr. Day now?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Is Mr. Raleigh still in contact with him?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay. When Mr. Raleigh rang him, did Mr. Raleigh ask him if he responded to the letter that has been raised by Deputy Connolly, the correspondence from Jean Casey, back in 2006? That raised not just clinical issues about clinical supervision, but also governance issues. Did Mr. Day respond to that letter?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay. In that response he says, "As Console's major funder, your concerns have to be raised urgently by the National Office for Suicide Prevention". He attached a great deal of importance to this letter from Ms Casey, did he not?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I would think it is manifestly so from the letter, which I have in my hand.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Then what happened next?.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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What did Mr. Day do next?
Mr. Gerry Raleigh:
Mr. Day has indicated to me that he would have raised the issue with Console - probably with Mr. Kelly. I cannot be sure of that. In terms of reading the file, there are indications of a meeting in April of 2007 where matters germane to the issues raised by the former staff member were raised.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Did Mr. Day write to Mr. Kelly?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Is there not a record on file, an unsigned letter, from Mr. Day to Mr. Kelly?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Right. I am going to put it to Mr. Raleigh that there is. I think, Chairman, albeit that Mr. Day is retired, it is my understanding that he had a very clear analysis of how serious things were in respect of Console. I accept entirely that Mr. Raleigh cannot answer for a situation when he was not in position, but if we are to get to the bottom of what happened here and why, I suggest, Chairman, that we need to have Mr. Day come and give some account to the committee.
What I cannot figure out, as other members have said, is that so many flags were raised at so many junctures at very senior levels, and yet the system sat back.
Let us be honest about this. I am glad Mr. O'Brien clarified with regard to RTE. I understand RTE had been working on this story over a number of years, from as early as 2012. I suspect that was a factor, which was good work on its part, in encouraging the audit and uncovering what was uncovered. However, if we are to get to the bottom of this, we must know the dynamics at that time, what was done, what letters were sent, what meetings were held, what was not done and why it was not done. We must establish that there was no inner sanctum or circle or just pure sloppiness on the part of people who were charged with protecting public money. Can Mr. O'Brien see the point of view of the public, after everything we went through in the last term, that this looks as if the HSE has not only not learned anything but perhaps that it is not in the business of learning anything? Does it not scream sloppy?
Mr. Tony O'Brien:
The Deputy is raising various theories and sharing her suspicions about things that happened seven or eight years ago. In terms of learning, which was the Deputy's specific question, and particularly in regard to discussions we had with the committee about our audit of pay compliance which led to issues that were heard before this committee relating to the Central Remedial Clinic, CRC, and another organisation, the facts that we have carried out this audit, that we have established a compliance unit and that we have strengthened our internal audit functions are evidence of learning. I cannot speak to the Deputy's suspicions or theories about that period of time because I have no direct, or even indirect, knowledge of that period of time or what was in the minds of those officials at the time.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I will try to help Mr. O'Brien, because I am not theorising or giving vent to my idiosyncratic suspicions. I am looking at a memorandum to Geoff Day, director, National Office for Suicide Prevention from a Declan Behan, SEO in the National Office for Suicide Prevention. It is dated 1 February 2009 and it sets out a review of documentation going back to 2004 and raises very serious concerns in terms of the accounts, governance and identifying risks. My problem, in the limited time available to me today, is that there is a paper trail and that trail shows explicitly that there is a problem here. It is said not once, but repeatedly, yet the system looked the other way. That is the nub of the problem.
Seán Fleming (Laois, Fianna Fail)
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I am not familiar with the document you are referring to.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I have it here.
Seán Fleming (Laois, Fianna Fail)
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Do other members of the committee have it?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I do not know. I will be happy to make it available if that helps.
Seán Fleming (Laois, Fianna Fail)
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It is hard for us to follow and deal with correspondence that we have not seen. Certainly, I am at a loss to know what this is about.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I accept the point. I am raising this not to bamboozle the committee but to illustrate that the HSE had plenty of internal correspondence to identify, without a shadow of doubt, that it was dealing with a deeply problematic situation. It might be helpful if the committee asked the HSE to provide all of the correspondence between the HSE and Console, including the internal e-mails, memoranda and so forth. Much of this has been made available in respect of a previous freedom of information request. It is only when committee members see the full paper trail alongside the audit, on which we are limited in our commentary, that we can start to make a judgment as to whether people were on their game and doing their jobs, to put it bluntly.
Mr. Tony O'Brien:
It is obviously a fair point that before making a judgment one needs access to the maximum amount of information. We absolutely agree with that. We have already agreed to give the committee a dossier, going back to 2005, of the financial and other dealings with Console and any correspondence related to that can be included. However, Mr. Raleigh, in response to a question from another Deputy earlier, talked about the response to the issues that were raised in 2009, which I understand related to whether Console was a going concern. I will not go into it in great detail because we will provide the paperwork to the committee, but at that time there was an examination as to whether Console was a going concern.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I have a limited amount of time and I wish to move to a second issue. That might be Mr. O'Brien's judgment but he cannot ask this committee to make any judgment, good, bad or indifferent-----
Mary Lou McDonald (Dublin Central, Sinn Fein)
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-----without sight of everything. That includes internal memoranda and e-mails between persons within the HSE and the Department of Health. We need full access to that information.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I thank Mr. O'Brien. I have a question about the situation in St. John of God services. Mr. O'Brien said in his opening remarks that he wrote - I remember it well - to all the section 38 organisations. That was back in 2013.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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He wrote to them to inquire about compliance. At that stage there were several stand-out examples of non-compliance. Mr. O'Brien wrote to them. Did they write back to him in 2013?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I want to know what they replied when Mr. O'Brien inquired about their state of compliance.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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They misled the HSE.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Does the witness have a copy of that response from St. John of God services?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Can we be provided with that? To recap, at the time there had been great concern. Section 38 organisation employees are public servants and Mr. O'Brien has set out what that means by way of respecting the public sector consolidated pay rates and so forth.
Alan Kelly (Tipperary, Labour)
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If the witnesses have the letter with them, it would be helpful if it could be circulated to the committee.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Is it feasible to have it circulated?
Seán Fleming (Laois, Fianna Fail)
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Can the Deputy clarify what letter she is referring to?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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In 2013, the HSE wrote to the section 38 organisations - it did not single out St. John of God services - regarding compliance with public sector pay norms. We are now informed that, in response to that letter, St. John of God services wrote back to say that they were in compliance.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Yes.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Can we take a two or three minute break for that?
Seán Fleming (Laois, Fianna Fail)
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There is no need to take a break. A staff member who is here should be able to check that.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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The main thing is to get access to the letter.
David Cullinane (Waterford, Sinn Fein)
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We should get all correspondence, not just that letter, on this issue.
David Cullinane (Waterford, Sinn Fein)
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No, with St. John of God. There is more than one letter.
Alan Kelly (Tipperary, Labour)
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Mr. O'Brien might not have all of those letters with him, but if he has the specific letter mentioned by Deputy McDonald it would be useful for the committee if if was circulated in the next few minutes.
David Cullinane (Waterford, Sinn Fein)
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There is a number of letters.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I was conscious that Mr. O'Brien had written to St. John of God services and my initial question was to establish what they had replied. It appears, and we will see this letter, that they wrote back giving an assurance of compliance with public pay policy. That was the gist of their response.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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It has now materialised that, in fact, this was not the case. That, in and of itself, is a concern. I hope that is not the case with other section 38 organisations.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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That is very welcome.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Mr. O'Brien indicated in his opening remarks that he has had subsequent correspondence with St. John of God services, obviously when it came to his attention that far from being in compliance they were, it appears, flouting the rules. When was that correspondence sent?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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That is 8 July of this year. Is that correct?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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From 2013 to the correspondence of 8 July, is there any other paper trail between the HSE and St. John of God in respect of conformity with public pay norms?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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What do we call this document?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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In that compliance statement does St. John of God reiterate or claim again that it is in compliance with public pay policy or indicate these top-up practices?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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There is another issue around compliance with public pay for this organisation. Is that correct?
Mr. Tony O'Brien:
They themselves have identified one issue that they regard as non-compliance. There are 14 other issues in the public domain that they maintain do not amount to non-compliance. We have the review to get at that. It will look at the totality of compliance with pay, particularly at managerial level in St. John of God.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Mr. O'Brien cannot tell us any more than that. Is that the case?
Mr. Tony O'Brien:
I think it would be premature until we have the review. I am in the same position as Deputy McDonald. I am reluctant to make statements or reach conclusions until we have the benefit of the evidence. We have initiated a process. Also, I should draw the attention of the committee to the concern of St. John of God officials about fair procedures. We have had legal correspondence from St. John of God and I am at pains not to do or say anything that could give those involved grounds for non-co-operation with our review.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I understand that and I do not want Mr. O'Brien to do that either. However, I do not believe there is any difficulty with committee members asking questions about a chain of correspondence and establishing the facts. I fail to see how that would intrude on the matter.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Help me again, please. The HSE writes to St. John of God in 2013. The organisation writes back saying everything is kosher. What happens next? Does the HSE write back thanking those involved and saying it is good to hear St. John of God is in compliance? Can the HSE officials help us and bring us through that chain or sequence?
Ms Rosarii Mannion:
Yes, I hope so. There is considerable context and background relating to this issue, as the committee will beware from previous interactions. At a previous committee hearing, information was furnished to members in respect of the internal audit and the outstanding recommendations. Two recommendations were not fully implemented at the time, May 2015. One of these related to the sizing and payments for staff in the section 38 agencies. A second issue related to 85 business cases. These would previously have been brought to the attention of committee members. HSE staff were engaging with colleagues in the Department of Health and the Department of Public Expenditure and Reform in respect of a process around red-circling these business cases and ceasing these business cases, etc.
There was significant interaction between the HSE, the Department of Health and the Department of Public Expenditure and Reform from September last year. On 14 September, the Department of Health furnished us with the relevant circular. We can establish this as we go on but it might be more helpful to committee members if we give the committee all this correspondence in one go because we may need to reference it. I have all the correspondence that I will be referring to before me. On 14 September, we received clarification from the Department of Health relating to the salary rates for chief executive appointments at section 38 agencies. On 3 September, we received interesting correspondence from the Department on how we would deal with unapproved allowances and remuneration levels in section 38 agencies. This gave us a mechanism to deal with the 85 business cases that had gone to the Department of Health which I have referenced. Using the criteria set out in this circular from the Department, we were able to analyse each of the 85 business cases and make determinations on them. We have done that. I have each of the decisions set out on a decision template. This is complex.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Was St. John of God one of these?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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What did that report state?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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No, tell the committee what it states - it is also relevant for viewers.
Ms Rosarii Mannion:
In the case of St. John of God, there was one specific issue relating to a consultant. The relevant documentation is for circulation with the committee.
The business cases relating to St. John of God were managed internally in the pre-Department interaction. We got the correspondence dated 13 September. We went through the 85 business cases and forensically analysed them against the criteria. Then, we were in a position to make determinations. This resulted in 41 salaries being approved, while a total of 49 allowances were approved. This related to allowances and salaries that were not compliant with public pay policy. That is the mechanism by which we have arrived at the figure. That information will be fully available to the committee.
It came to our attention during this forensic analysis that St. John of God had not responded in respect of two correspondences that I had issued on 5 May and 20 May of this year. Again, I have all this correspondence with me.
On 1 July-----
Mary Lou McDonald (Dublin Central, Sinn Fein)
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What did the HSE say to St. John of God officials on 5 May and 20 May? What I am hearing thus far is that HSE officials knew there was breaking of the rules, they knew there were anomalies that had be resolved and then business cases had to be submitted. Then, St. John of God did not go through the September framework to make a claim for the business case because those involved were telling the HSE they were in compliance as things stood.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Then Ms Mannion wrote to them in May. Is that correct?
Ms Rosarii Mannion:
I wrote to them twice in May, on 5 May and 20 May. They were told about this circular and the FEMPI regulations and requirements as well as Government pay policy - this was the circular of 2013. This was set out clearly. They were asked to provide clarification relating to a number of queries as follows: that all remuneration paid to employees was in accordance with the Department of Health consolidated pay scales; that non-Exchequer sources of funding were not being used to supplement employee remuneration to give rise to rates of individual remuneration, including perks, etc., that exceed Department of Health consolidated pay scales; if unsanctioned payments were previously paid, whether they had ceased and to provide the relevant details; and, where appropriate, in respect of the Financial Emergency Measures in the Public Interest Acts, if there were any overpayments, that St. John of God would have them addressed.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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What did St. John of God officials say? They did not write back to Ms Mannion. Is that correct?
Ms Rosarii Mannion:
I wrote on 5 May and there was no response. I followed up on 20 May. This was overtaken by events at that stage. To answer Deputy McDonald's specific question, St. John of God officials wrote back to me on the matter on 6 July. I have the response before me and I will furnish it to Deputies.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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What did they say?
Ms Rosarii Mannion:
In correspondence dated 6 July, they made reference to my e-mail of 20 May - this was a follow-up email - the original e-mail was 5 May. The correspondence stated that all remuneration, including perks paid to employees, was in accordance with Department of Health consolidated pay scales, with the exception of the chief executive salary, which had been identified by the chairperson of the board of St. John of God Community Service in the annual compliance statement 2015 as being non-compliant. That is correct; one case had been identified as being non-compliant. The correspondence further stated that non-Exchequer sources of funding were not used to supplement employee remuneration to give rise to rates of individual remuneration, including perks, that exceeded Department of Health consolidated pay scales. It continued by stating that if unsanctioned payments were paid previously, then all such payments had now ceased. Finally, the correspondence stated that where appropriate all overpayments had been or were in the process of being recouped as expeditiously as possible.
Again, I have the correspondence and I can share it with committee members. We were notified on 1 July by St. John of God. The correspondence goes through the full chronology in a detailed letter. St. John of God notified us that significant payments had been made to 14 senior managers. One paragraph of particular interest in the letter states:
It is acknowledged that details of the above regularisation arrangements and the external financial advice received at this time was not shared with the HSE. The order... understood and took it that arrangements entered into on the basis of salary advice received was regularised in salary arrangements in compliance with consolidated pay scales.
It is very important to note that 1 July was the first time that the HSE was made aware of these payments to the 14 managers. The names and payments are listed.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I thank Ms Mannion. I am conscious of time.
Seán Fleming (Laois, Fianna Fail)
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The Deputy's time is up. If correspondence is being circulated, we will discuss it again before the end of the meeting. Will we be provided with copies of the correspondence?
Seán Fleming (Laois, Fianna Fail)
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Does the HSE have a mechanism to circulate the correspondence today?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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It would be useful if we had a chance to read the documentation and ask questions on it.
Seán Fleming (Laois, Fianna Fail)
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Otherwise, we will have to view it at next week's meeting.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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We will not have a chance to scrutinise it.
Seán Fleming (Laois, Fianna Fail)
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If it is possible to e-mail it to the committee secretariat, we will see if the secretariat can circulate it to us. The HSE must be careful in this regard.
Seán Fleming (Laois, Fianna Fail)
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We will not take an unnecessary risk in the next hour. I ask the witnesses if they can circulate it in the coming hours. We will meet again next week and, if necessary, we will consider correspondence we receive, alongside other information we have, at that meeting. There is probably a considerable volume of material. I call Deputy Peter Burke who has been waiting patiently for some time.
Peter Burke (Longford-Westmeath, Fine Gael)
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As someone with a background in the private sector, I am amazed at the lack of oversight of sections 38 and 39 agencies. The director general, who is head of the Health Service Executive, is spending one quarter of his budget on agencies which are not subject to clear oversight.
I do not want to focus on Console but on the macro-issues in terms of how the HSE is spending money on sections 38 and 39 organisations and what protocols are in place. On the internal audit, would it be unusual for an audit to take more than a year to report back from the date on which it was initiated?
Peter Burke (Longford-Westmeath, Fine Gael)
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Does Mr. O'Brien find that acceptable?
Peter Burke (Longford-Westmeath, Fine Gael)
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In that scenario, a limitation of scope would be placed on those carrying out the internal audit. If a limitation of scope is presented to an individual, appropriate action should be taken to ensure funds and taxpayers are protected. Is Mr. O'Brien satisfied that the HSE reacted to that limitation of scope if it had been found that it was not getting the answers it desired and management within the agencies in question were not co-operating? Does Mr. O'Brien believe the HSE took appropriate and timely action?
Mr. Tony O'Brien:
I believe that the actions taken were reasonable in that they enabled the important services to continue while the internal audit was taken to conclusion. Internal audit did not back off in any way in its pursuit of the issues and it had certainly been made clear by internal audit that it was finding things which, of necessity, it needed to continue to pursue, even though these things did not have a direct bearing on the service relationship that was at the heart of our dealings with Console.
Peter Burke (Longford-Westmeath, Fine Gael)
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We are all aware of the importance of the services and the need to keep vital lines open to ensure people and service users were protected. However, it is astounding that where the HSE is not getting basic co-operation from the management of an agency it is funding, it does not take immediate action to protect its interests and those of the taxpayer and to ensure it gets value for money. I find that amazing.
Mr. Tony O'Brien:
My answer will be general and not just about Console. We obviously have to take decisions in real time across a balance of issues. There were alternative possible explanations for the behaviour which would not have led to what we now know. Had we taken precipitative action without having the full facts available to us, we would be aware of the impact on the service. We would also be aware of the impact on the organisation and the charity sector more broadly, particularly in light of our previous experience dealing with things like the Central Remedial Clinic. We would, therefore, wish to be certain of our facts. Bear in mind that at the time in question, as I said earlier, we were satisfied that the service that we were paying for was continuing to be provided. If we had any view that the funds we were providing were not resulting in the service that we were buying, that obviously would have changed matters but that never arose as a view.
Peter Burke (Longford-Westmeath, Fine Gael)
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The service is currently being transferred. While I do not want to go into the internal audit report, having seen the list of recommendations, failings and shortcomings, I do not accept that the HSE did not receive all that information because it is very clear, based on a broad analysis and without getting into detail, that there was huge evidence that this money was not being spent appropriately and that the HSE should have taken action in that regard.
Peter Burke (Longford-Westmeath, Fine Gael)
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How many internal audits of sections 38 and 39 organisations are carried out by the HSE every year?
Peter Burke (Longford-Westmeath, Fine Gael)
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In terms of timelines, how long does such an audit generally take?
Dr. Geraldine Smith:
It depends on the individual audits. I hope the Deputy will acknowledge that the audit of Console was absolutely unique. I do not believe we will ever come across another situation like Console. In fairness to the agencies we audit, they are usually very co-operative and provide the information we seek. They have a duty of candour and are quite truthful and open with us. Console was not like that; it was absolutely an aberration.
Peter Burke (Longford-Westmeath, Fine Gael)
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On sections 38 and 39 agencies, can the director general confirm that all agencies being funded by the HSE have an up-to-date tax clearance certificate, that he has evidence that the registration of such organisations that are registered as charities are in tack with Revenue and that Companies Registration Office documentation is reviewed in terms of auditor registrations, etc? Are there protocols in place and can Mr. O'Brien guarantee that they are operating in these agencies?
Mr. Tony O'Brien:
There are systems in place to track that. Without checking whether we are in discussion with anybody about a failure to provide any of that at this moment, I will not give the Deputy a 100% guarantee. Interestingly, however, I can tell him that on the Revenue website today, Console is listed as a charity. I can also tell him that we are in receipt of an up-to-date tax clearance for Console and the management letter that was discussed earlier for Console for the period 2014, and that it was a clean management letter.
Peter Burke (Longford-Westmeath, Fine Gael)
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I find that incredible. The HSE should take up the matter with the Revenue Commissioners because we have seen in terms of the payments and details, which I will not go into, that Revenue rules were not applied. It is absolutely incredible that that is the position considering all the revelations we have had to date.
Peter Burke (Longford-Westmeath, Fine Gael)
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I have questions concerning a letter issued by the National Office for Suicide Prevention, which is among the items in the pack circulated to members. The letter was sent on 12 November 2014 to all sections 38 and 39 agencies. It advises them that there has been no current service agreement in place since December 2013. This means it was sent 11 months after the service level agreements had expired. According to the letter, all the agencies on which €3.5 billion of taxpayers' money is spent were operating for this period without a service level agreement. Is that correct?
Mr. Tony O'Brien:
No, that is not correct. What the letter goes on to say is that in accordance with the provisions of the previous service agreement, that agreement had been extended. The reason for that was that this again coincides with the period of time when lots of things were being uncovered about pay in the Central Remedial Clinic and so on and we took a decision to strengthen the service arrangements. In order to not renew, in terms of issuing new documentation until we changed it, we exercised a valid option simply to extend the validity period of the previous agreement.
Peter Burke (Longford-Westmeath, Fine Gael)
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It is very clear from this letter that the HSE was aware that these organisations were operating without strong governance. This is clearly pointed out in the second paragraph of the letter.
Is it acceptable to issue a letter 11 months after the detailed service level agreement had finished? The letter clearly states that on 31 December 2013 all service level agreements would cease. We need these agreements in place to ensure that there is robust management and oversight.
Peter Burke (Longford-Westmeath, Fine Gael)
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Even though it is quite clear that the agreement had expired and an expiry date was stated.
Seán Fleming (Laois, Fianna Fail)
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We have the full letter. We have received the full letter.
Seán Fleming (Laois, Fianna Fail)
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I refer Deputy Burke to the last paragraph which reads:
Notwithstanding the expiry of the term of the service arrangement on 31st December 2013, the HSE has been, and will continue to, provide funding to your organisation for Services provided to service users in receipt of services since that date until the introduction of the new service arrangements and requires your organisation to continue to care for service users on the basis set out above.
Seán Fleming (Laois, Fianna Fail)
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I had to put the matter in context.
Peter Burke (Longford-Westmeath, Fine Gael)
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In terms of the contract change note that was issued to Console advising it of increased funding of €147,000 from the National Office of Suicide Prevention, it is a one-page letter without any detail. I know agreements were in place. What protocols did HSE put in place on foot of a request for more funding? Value for money is one of the key things that is listed on the documentation. What protocols were in place to ensure that the money was being spent appropriately when there was a huge concern about the spending of public money?
Ms Anne O'Connor:
In terms of the change notice, that is where additional funding or there is a significant change within the year. So where there is a signed arrangement - in this case, in 2013, the additional funding was provided for the helpline, as we have previously discussed - that change contract notice is a part of the existing service arrangement that is completed. It means we are not issuing a new service arrangement mid-year and then it is incorporated at the beginning of the following year. It is a standard process where we provide additional funding or make a different change, not just funding related, mid-year.
Peter Burke (Longford-Westmeath, Fine Gael)
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Would that be indicative in different agencies to follow that?
Seán Fleming (Laois, Fianna Fail)
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A mobile phone is causing interference with the recording.
Peter Burke (Longford-Westmeath, Fine Gael)
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My big concern is that we seem to be reacting very slowly to issues of the past. It is clear that the stable door has been bolted but the horse is gone to a certain extent when one sees the annual compliance statements. Will the witnesses confirm that section 39 agencies now have those compliance statements? Is that practice in place to self-certify to the HSE as a body?
Peter Burke (Longford-Westmeath, Fine Gael)
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At the moment, €750 million is being spent without organisations self-certifying or having a clear governance procedure that puts the onus back on them.
Mr. Tony O'Brien:
They are required to submit, as we discussed earlier, certified annual financial statements carried out by appropriately licensed auditors and will always carry the signatures of two directors. As the Comptroller and Auditor General pointed out earlier, it is a matter of necessity that we are in a position to rely on those. If it becomes apparent, generally speaking, not just for the HSE but for the public sector, that we cannot, then we do have a very fundamental problem which will not be solved in the funding agencies. It will have to be solved by changes in all their practice.
Peter Burke (Longford-Westmeath, Fine Gael)
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In terms of the management of these service agreements, it is stated that bodies in receipt of less than €500,000 have only one meeting with the HSE in terms of performance review. Is that acceptable?
Mr. Tony O'Brien:
That is a formal meeting. I think the Chairman will come back and ask us about what I would consider to be learnings from this. There are fundamental questions, probably beyond the numbers of meetings, about the relationship between the State, as represented by the HSE, and section 39 bodies, particularly what might be called MONGOs - my own NGOs. I think there are now very serious questions about where we go with that.
Peter Burke (Longford-Westmeath, Fine Gael)
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The buck stops with Mr. O'Brien as director general of the HSE. He must ensure that we have good governance. It is clearly evident from anyone's analysis here that it does not look to be the case. Efforts are being made, but they are being made at a very slow pace and internal audits are taking a long time. The HSE has taken a long time even to try to get the process of an annual compliance statement for section 39s and it is still not in place. Mr. O'Brien must take responsibility for the vast budget he has, the spending of that and the protection of the taxpayer at all costs.
Mr. Tony O'Brien:
Sure. The Deputy is correct and that is why I am here. That is part of my function, to answer these questions with him. In answer to previous questions, I have set out a number of steps that have been taken, at my initiative, in response to earlier adverse events. Good governance is not a static concept. One has to introduce things continually, find out what loopholes people have found and then try to plug them. As I said, we introduced the annual compliance statement for section 38s, which is where the vast bulk of this money goes. It is typical, when managing risk, that one starts with one's greatest area of risk which is, generally speaking, related to the greatest amount of money. We established the compliance unit because, frankly, over the years of massive change, reduction of staff and a lot of attrition of people with significant experience, I reached the view that many of those at local level were overstretched in terms of what was being required of them and did not have either the time or the ability to track this in an efficient way. We set up the national compliance unit to provide oversight, as Mr. Purcell described, and we are continually strengthening that.
Peter Burke (Longford-Westmeath, Fine Gael)
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After years of funding agencies where there was a complete absence of clinical oversight that was so badly needed, and we still have not got it for section 39s.
Peter Burke (Longford-Westmeath, Fine Gael)
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Yes, detailed oversight-----
Peter Burke (Longford-Westmeath, Fine Gael)
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-----in terms of money that has been spent. There should be more urgency attached to Mr. O'Brien's briefing when he says that the HSE is trying to get oversight in place for section 39s. One meeting a year is all that is required in a performance review for a body in receipt of €500,000. That is totally unacceptable.
Mr. Tony O'Brien:
I am sorry but I was thinking about the Deputy's first point and missed his second point. What I will come back to him and say is that we have taken a rigorous approach to strengthening governance. I think we did not start in the best place and it takes time to fix all those. Our statements of internal financial control are probably the frankest statements of internal financial control that will be found anywhere. We identify very specifically what we see as the weaknesses and what, in the year in question, we are seeking to do. We have followed through on all of those. This has to be judged in terms of where does one start.
There were two founding documents for the creation of the HSE, whether one thinks it was a good or a bad idea. One was the Commission on Health Sector Finance by Niamh Brennan. She set out what the infrastructural requirements would be to have a national statutory health executive and how it could function to the best effect in terms of financial systems and so on. I can say that was not part of the design of the HSE. The HSE had some inherent weaknesses when it was created. We are seeing the product of that and we are moving step by step to address those weaknesses. Without those step-by-step attempts to address these weaknesses, we would not be talking about Console today. Console would be carrying on in its own merry way, doing what it was doing and that would come out later. There should be some credit for the action that has been taken. I am not saying this is a good story but I am saying it is evidence of progress.
Peter Burke (Longford-Westmeath, Fine Gael)
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I thank the director general for his time. I hope he will communicate those concerns to the Revenue Commissioners because that is an outstanding revelation to make in terms of the website, their registration being intact and having a tax clearance certificate. It is amazing and incredible for the premier body that looks after our affairs.
In terms of auditors who are registered with the Irish Auditing and Accounting Supervisory Authority, IAASA, and the oversight bodies, it should be communicated to those oversight bodies that audit reports were issued on foot of huge revelations. I hope Mr. O'Brien's office would do that.
Peter Burke (Longford-Westmeath, Fine Gael)
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That needs to be looked at in the future.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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We are almost four hours questioning the witnesses and I am none the wiser. There are a lot of questions still to be answered on governance, efficiencies and how money is spent - €3.5 billion between 1,750 charitable organisations. It is a major ask. Console has proven what can be going on if something is going on behind the scenes.
There are still many questions to be asked. Console was set up 14 years ago in 2002 and was funded from 2005 by the HSE under two different arrangements - grant aid initially and then service agreements from 2013 onwards. That the CEO of the HSE can come to this committee and say that the quality of services was top notch and that they were actually underpaid, that they should have received more money for services they provided-----
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Mr. O'Brien did say that; it is what I have written down here. Maybe I misinterpreted it.
Seán Fleming (Laois, Fianna Fail)
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Will Mr. O'Brien clarify that?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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With regard to a report you gave, we know there were eight different organisations, groups or businesses - whatever one would like to call them - under Console. How satisfied is Mr. O'Brien that the money spent by the HSE under section 39 went where it was supposed to go and was not spent in another jurisdiction outside Ireland? I say this in the context of the Console branch set up in the UK, which involved a member of the same family.
Mr. Tony O'Brien:
We had no funding relationship with Console UK. I understand it did have some funding from the Department of Foreign Affairs. With regard to the totality of Console, as I said earlier, I think the final definitive view will have to await the outcome of the liquidation process - in other words, what is the net product of that liquidation process and how does it relate to the funding the HSE gave.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Did Mr. O'Brien know about the other businesses or establishments there, the other six or seven? How were they tied up in funding? Did the HSE actually have any knowledge of these parts of the organisation and in what way they were spending the money? Under whose remit was it to check this out?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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That is not answering the question I asked.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I will come back to the original question. Is Mr. O'Brien sure that the moneys - which were increased by the HSE by 18% in 2012, 36% in 2013 and by 43% in 2014 and I do not know by what percentage in 2015 - were spent accordingly and that proper procedures were in place?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I may have to ask the same questions. Sorry about that.
Mr. Tony O'Brien:
It is just that in order to know what the net effect of all the funding has been one has to understand the net closing position of the organisation Console. The High Court appointed an interim liquidator yesterday. The interim liquidator will pursue that issue and then we will have the benefit of their knowledge and can reach a view. That will not, however, change our view that the HSE received the services that it paid for. I am unable to give the Deputy the definitive answer he is looking for because I do not have that final piece of information.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Under the service level agreements - and I did not know this until today - the HSE had other powers that it could have used. It also keeps telling us that the internal audit in 2015 was the first real procedure that was put in place to check what was going on in Console.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Mr. O'Brien can answer in a minute. Why did the HSE not use the other powers it had? As my colleagues have asked in questions here today, red flags were raised on numerous occasions in Console's 14 years, particularly from 2005 when the HSE started grant-aiding the charity. It was known. Why did the HSE not use the powers it had under the service level agreements to actually go in and investigate the concerns of those people in whom it now places so much trust?
Ms Anne O'Connor:
I might deal with that. We have discussed the concerns from 2009, the meetings that were held and the discussions with the previous director. At that time measures were put in place to restrict or cap the funding available to the organisation. That remained the case until 2013. The service arrangement process to which the Deputy refers did kick in, because what really brought all of this to immediate attention was the submission of the audited accounts for 2013. Those audited accounts were submitted in 2014 and it was in light of the findings, and other concerns that arose at that time, that we asked internal audit to go in. We were invoking our powers to go in and expecting full co-operation from the organisation, as we get from any organisation in an audit. That was what we did at that time; we used our service arrangement and our actual power to carry out the audit.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Is the witness sorry now that the HSE did not use its other powers that would have allowed it to go in like a raid and check and take out material? That is my understanding of the powers the HSE had under the service level agreement - that the HSE could walk in and take over.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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The witness said already that the power is never used. The witness said that there were powers under the-----
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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It was the wrong word.
Mr. Tony O'Brien:
We do not have those kinds of powers. We cannot knock down doors and force entry. We can go in at any reasonable time and reason would suggest that we have to go in by appointment and arrangement. The internal audit report goes through that process but we do not have the type of power that the Garda Bureau of Fraud Investigation has or any power of that type whatsoever. We can only use civil powers. If we were faced with a refusal, obviously we could stop the money, provided we had good grounds to do so, or we could seek a court order forcing them to give us information, but we cannot raid people. I do not think the public would be pleased to see us going around raiding-----
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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"Raid" was not the proper word to use. Gardaí would be used to perform a raid; I understand that.
With regard to the non-co-operation by the CEO of Console, the chairperson and the external auditor, I presume Console hires an external auditor as a consultant to perform its audits, as most private businesses do every year, and then to give the books over to the HSE for scrutiny. Are there questions marks from this external auditor? I do not know who it is. I presume it was done in a private capacity. From what I read in the HSE report, those auditors seem to have ignored the HSE requests for information and took a long time to answer. They told the HSE they were too busy to meet for two months. I find it strange that a consultancy, whose good name in the profession as an auditor it would try to keep, would refuse to meet the HSE for two months while the HSE was the paymaster of the charity's funding.
Mr. Tony O'Brien:
Yes, there are certainly professional regulatory questions to be asked. The Chairman asked earlier on about the liquidity of the business and whether our internal audit focused on that. An internal audit does not focus on issues of that type. However, as recently as September the 2014 accounts were signed and, as the committee knows, any material event since the completion of the audit should be reflected at the time of the signing. They were signed as a going concern at that point. The Deputy is correct in that there are questions to be asked.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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The external audited accounts were not exact. There were discrepancies or omissions in them.
Mr. Tony O'Brien:
I would just issue a caution, for both our sakes. We know the documentation that was presented as audited accounts appeared in multiple forms. We cannot say that was any fault of the external auditor who produced the actual annual financial statement. We are aware, and it is set out in the documentation, that we were unable to reconcile different sets of accounts which purported to be for the same period. In other words, there were discrepancies. However, I am not suggesting that the auditor produced those.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I know we all have to be careful what we say; we have been warned about that. After 11 years of grant aid and payments of public money to Console - and I understand he has been asked this question several times - is Mr. O'Brien happy that the HSE did everything in its powers to ensure there was no wrongdoing or misbehaviour? Is he happy to sit here today and tell us that he did everything within his remit during those 11 years of charity aid to Console? In hindsight, does he feel he could have done more in those years?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Whatever name you would like to put on it.
Mr. Tony O'Brien:
They raise charitable funds on their own account in the way with which we are familiar. I have two separate answers to that question. Having had the discussions I have had with the officials available to me now, do I think the decisions they took and the considerations they made at the time were reasonable steps? By and large, I think they were. Clearly, if one or other of those officials had reached a different view at that time and triggered the internal audit, this might all have come to a head much sooner. I do not know when these practices that are detailed in the internal audit started. I cannot answer that question.
In response to an earlier question, I have absolutely no intention of trying to get an internal audit back to 2005. I see no useful product in that. It would be a poor use of the resources available to me, which are better deployed considering other agencies at this stage. Maybe we could have done something differently earlier, had a different view been formed. So far, however, it seems to me that the views that were formed were not unreasonable in the circumstances and at the time when they of course did not have access to the information that we all have now. Hindsight is a wonderful thing but it only comes in 20/20 vision. Foresight is a little more difficult.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I have two more questions. Could Mr. O'Brien clarify when Console was a charitable organisation? Was it a charitable organisation from 2002 or from 2005? I am mixed up about when it became a charitable organisation and how long it has been a charitable organisation. Has it been a charitable organisation for the full 14 years or for part of that time?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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My last question concerns the remuneration at St. John of God. My understanding is that 14 individuals have been paid outside the public service guidelines as set down. That is what we are here to probe. If that money were proven to be paid - they are trying to claim it was paid from private sources within St. John of God - and if it were proven that they breached the guidelines laid down by the HSE under section 18, what powers could the HSE use to get that money refunded from individuals or from St. John of God as a whole?
Mr. Tony O'Brien:
It depends to some extent, of course, on the exact circumstances, which will be revealed to us all when the internal audit review is complete. Clearly, it can be dealt with through the level of funding that we give to St. John of God. Only St. John of God may be in a position to recover that money. We do not know the exact circumstances. It is being suggested that whatever money was involved was funded from private income. We would need to be satisfied that that is the case and that it was not in fact the recycling of public funding. I am not reaching any judgment on such matters because to do so would prejudice the process, and I am very clear that St. John of God at this point is co-operating with this internal review, as far as we know, notwithstanding a legal letter. I want the review to reach conclusions so that we all have the full facts, and then we can decide on the appropriate-----
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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If they do not comply, can the HSE cut funding to St. John of God by the outstanding amount?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Does Mr. O'Brien think the HSE could use that power if it is necessary?
Seán Fleming (Laois, Fianna Fail)
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The Comptroller and Auditor General wants to intervene for a moment.
Mr. Seamus McCarthy:
I wish to put on the record that when we audit the oversight by the HSE of section 38 and 39 bodies, we examine a sample of those bodies, as I mentioned earlier on. We visit them by agreement. It is not an audit of those entities and, therefore, we do not make a report - or at least a public report - on it. If issues come to light, we bring them to the attention of the HSE. In 2013 one of the bodies that we selected was St. John of God, so we visited its campus. We went through a number of issues with them, including the remuneration of the CEO. We identified a salary being paid from St. John of God community services which was compliant, but what we also identified with them was that there was a top-up payment from another source. We were not told what that source was and we were not told the amount. We saw the CEO's contract but the salary details were blanked out. We informed the HSE of that and, lest it be misunderstood, that information was with the HSE in 2013. Obviously, it was not the only organisation in which we had seen top-ups, and this was happening at the time of the internal audit investigation of top-ups.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Was it just one individual, the CEO? What about the 14 other individuals who have been mentioned?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Has Mr. McCarthy any comment on the issue of the 14 other people?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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They are subject to internal audit.
Mr. Tony O'Brien:
It may be helpful if I add to that information. As the Comptroller and Auditor General has said, that information was made available to us at the time of our embarking upon our review of compliance with pay policy in section 38 organisations, and this information was taken into account. Without prejudicing the other process, by the time our review was undertaken, we were given an assurance that the pay in that case had been brought into compliance. One of the questions is whether it was brought into compliance through this mechanism that we hear about regarding 14 people. By the way, that CEO is a different person from the current CEO.
Róisín Shortall (Dublin North West, Social Democrats)
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When was Mr. O'Brien given that assurance?
Alan Kelly (Tipperary, Labour)
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Like my good colleague, Deputy Aylward, I find today to be a pretty incredible meeting for many different reasons. Four hours later we have not really got anywhere. I want to talk a little about that. Trying to get to the bottom of what is going on here is like pulling teeth. We have a duty to do so. In his role as CEO, as the accounting manager or officer or whatever phrase is used now, considering the change in role of the Department of Health, does Mr. O'Brien accept that he is responsible for ensuring that all public moneys are spent appropriately and must in general do everything he can to ensure that happens?
Alan Kelly (Tipperary, Labour)
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That is established. Therefore, when it comes to the organisations - and a huge number of them are funded - there are various ways of analysing their performance and of looking under the hood at what they are doing. For instance, outside of the actual financial auditing, which is a big strand that should net issues, were the characters in question, the people who are heading up many of these organisations or in key roles, checked? Would they have been checked out by the HSE? Would the HSE have looked at all these organisations, ensuring that the people who are running them did not have track records over which there are questions, or did not have issues in the past such as pretending they were people they were not, or anything like that? I ask in general terms. Does the HSE have a track record of checking out the people behind many of these organisations in general?
Alan Kelly (Tipperary, Labour)
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I know and accept that, but that is not really my question. My question relates to the fact that the scenario since 2006 has been that various alerts were put in place which, for various reasons that we have not fully got to the bottom of, were never checked out. My point is that in such scenarios, such alerts should trigger audits. I am trying to get beyond the technicality of statements to the effect that the HSE did not have a process by which a financial audit would have happened.
I am trying to get to the point of whether there was any initiative in the HSE to consider if there were any problems. Was there any foresight to ask if the issues raised should be checked out, as the normal net of financial checking and auditing had not worked? Was it basically a case of boxes being ticked so the area would not be opened? Was it a case of ensuring the HSE was covered in paperwork rather than ensuring public money had been spent appropriately?
Alan Kelly (Tipperary, Labour)
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Answer the question anyway.
Mr. Tony O'Brien:
The Deputy stated in his question that nothing about these previous red flags was ever looked into. In 2006, the issue was not financially related; it was around the supervision of counselling. As has been answered before, changes occurred in that organisation at that time that were understood to have addressed that issue. Those issues are not found to be present today. In 2009 the query was raised as to whether the organisation was a going concern; it was examined and the organisation was found to be a going concern. I know it is possible now, with what we know as a result of Dr. Smith's work, to put all these together, particularly in the context of some of the antics we now know about, and say there was of course a clear evidential trail. I do not believe it was at the time. It is not fair to say nothing was done. It is already on the record of this meeting what was done. Certainly, one could take issue with whether that was enough but to say that nothing was done does not seem fair.
Alan Kelly (Tipperary, Labour)
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I accept what the witness is saying but I am trying to get to the issue. The HSE must look after an incredible number of funds and public money and this committee must ensure that is done appropriately. I will have questions for the Department of Health in a moment. The HSE is an organisation. It is not just about the financial tracking and auditing, which is clearly critical, but there must be intelligence in the organisation from various means - it is a small country - that should from time to time check out these organisations to ensure that public money is being spent appropriately and the people leading the organisations are appropriate to serve public money. I understand they are appointed by a board but they produce the services.
As an organisation spending this amount of money, is the HSE being rigid? Arising from this rigidity, do those processes, protocols and checks work sometimes but not at other times?
Mr. Tony O'Brien:
That is not the answer. Reading this audit report is a bit like reading the script of "Catch Me If You Can". One wonders if we are talking about Leonardo DiCaprio or somebody else. I get that and it is extraordinary. How does a process that took place in 2013 as to whether to rescue a helpline reflect back to a news report in 1987 about this individual impersonating a doctor, for which there was no criminal conviction, or that at one point he wandered the streets in an airline pilot's uniform? How does one gather that kind of intelligence? Obviously people will come out of the woodwork and tell us once the issue is out there but how can we get that cold? It just does not happen and it is not realistic to suggest that.
With regard to the central point of the question, if the HSE was being truly rigid, my response to this would be to stop section 39 funding completely until I could audit all of them internally but that is just not practical.
Alan Kelly (Tipperary, Labour)
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I will get back to that. With regard to the funding given out and whether there was misappropriation of public funds, it must be the case if one believes the following logic. These organisations are funded collectively through funding given by the HSE and various fund-raising mechanisms. One might imagine a big pie. Nobody can distinguish which money is being used for what. This document, which is one of the most incredible that any of us has ever seen or read, demonstrates that public money is being misappropriated. We do not know which part of the pie is used in all the cases. Does the witness agree with that statement?
Alan Kelly (Tipperary, Labour)
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I will rephrase it. I shall say, to correct the record, it is possible that it is the case. Would the witness agree it is possible?
Alan Kelly (Tipperary, Labour)
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This brings me back to the very good point from Deputy Burke that I was going to raise. I will get into a little more detail. When this process started, how did it take 11 months for it to stop when issues arose? The body in question was still allowed to provide a service. I cannot understand how the HSE did not mobilise more quickly and do something about it more quickly.
Mr. Tony O'Brien:
If we were playing what I would metaphorically refer to as the "cover your arse" game throughout this process, that would probably have been a good thing to do. I would have shut it down before it made its representations and due consideration had been given. If we had been wrong, we could have destroyed not just one charity but perhaps the overall charity sector. We needed to follow the steps, conclude due process and follow the principles and practice that internal audit is required to follow before reaching a conclusion based on the full evidence.
When the report was provided to the national director who had to make a decision on what to do, the legal advice on it was again very clear, given that we have a contractual arrangement. She needed to give the body an opportunity and, right up to the day before it was completed, additional alleged evidence was being provided to try to put things in a different light. If we do not go through those steps, we do not get the right conclusion. The other issue is that throughout this period, the services we were buying were being provided in a way that was valued both by the clients using them and by ourselves. We must take that into account and we did.
Alan Kelly (Tipperary, Labour)
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I accept the last point but the HSE could have acted more quickly while ensuring services were provided. In doing so, there may have been a better response. That is a subjective view.
I was taken by some of the answers from Ms O'Connor and Dr. Smith. I do not want to put words in the witnesses' mouths but what I got from the submission was that there is an equation between the amount of time and effort taken for auditing and the fact that there are so many organisations, with some of them dealing with smaller amounts of money. One must create a balance and justify it in that sense. There are three categories of funding, which are below €250,000, over €250,000 and section 38 versus section 39. I should say that €250,000 is not Mickey Mouse money. It is an incredible amount of money. That equation needs to change. If one applies to a local authority to get a grant of €8,000 for insulation in a house, there is a volume of checks, balances and paperwork that we all know about. It is incredible. There is one meeting per year about these organisations, with a couple of boxes being ticked on a piece of paper. For the people looking at this from the outside, that cannot happen any more.
I have questions about the governance framework for the Department of Health. It is absolutely unacceptable that the Secretary General of the Department of Health is not here today. There has been a change in the relationship with the HSE and the Secretary General should be here to close that circle. Whoever is representing him here today might answer the following question. Is the Department of Health satisfied the HSE has the best governance framework and controls in place to ensure that public money is being spent appropriately by all these organisations?
Seán Fleming (Laois, Fianna Fail)
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Who is going to answer?
Seán Fleming (Laois, Fianna Fail)
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Just to clarify, we invited the HSE. We did not specifically invite the Secretary General. The invitation went to the HSE.
Alan Kelly (Tipperary, Labour)
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I accept that. To be honest, and in fairness to him, Mr. O'Brien said earlier on he is a frequent flier. By the end of this process he will be living in the plane by the looks of things, because he will be here so often. That is not his fault either.
Alan Kelly (Tipperary, Labour)
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We can see that from the witness's contributions.
Mr. Pat O'Mahony:
Thank you, Chairman. In response to the comment from the Deputy and earlier comments, I make specific reference to the letter of invitation issued from the committee to Jim Breslin, the Secretary General, which specifically said, "I am directed to request that you designate a senior official from your Department". The Secretary General was requested to send some senior officials, rather than coming himself, so we are very clear.
Alan Kelly (Tipperary, Labour)
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I accept that. I thought he would use his initiative though and come himself.
Mr. Pat O'Mahony:
I think the question the Deputy asked is whether we are happy with the HSE framework.
Alan Kelly (Tipperary, Labour)
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And controls.
Mr. Pat O'Mahony:
And controls. We share the view that the moneys involved with Console are very significant. The overall amount of money across all these various agencies is very substantial. There is probably a question around what triggers should institute certain actions and whether that needs to be worked on further, but we in the Department are supportive of the systems and structures the HSE has put in place, is developing and is continuing to develop. We support what is being done there, but we expect things will be enhanced and improved over time. I hope that is an adequate answer for the Deputy.
Alan Kelly (Tipperary, Labour)
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It is not. Does the witness believe the framework for governance and the controls in place are the best they can be for the HSE, yes or no?
Mr. Pat O'Mahony:
A yes or no is quite difficult, based on the answers we heard earlier, in particular from the Comptroller and Auditor General. Across public sector funding generally, one might always want to have stronger controls, but there is a question of proportionality in terms of the cost of the controls and whether we bring the whole system to a halt by virtue of doing so. The reference to local authorities and the installation grant is interesting. It would be interesting to see what the cost and the checks and balances on that €6,000 grant was, but in the overall scheme of things there is a system in place. It needs to be improved. We are clear on that and it is a process that is ongoing. I could not say that the system is adequate, but it is difficult to say how we would define what would be adequate in the overall context of proportionality.
Alan Kelly (Tipperary, Labour)
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The proportionality is this - there is a big difference between the Department with responsibility for the environment, which I know a lot about, working with other organisations to give out grants for installation, and €3.6 billion. When we talk about proportionality and costs associated effectively with framework, management structures, controls etc., it is quite obvious to me and the rest of the committee that the balance in place for managing this process, the controls framework, simply is not up to the level required. Based on that, does the witness think it would be better in future if the Department of Health directly managed the allocation of these funds to section 38 and section 39 organisations?
Alan Kelly (Tipperary, Labour)
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I am not asking about that. We will talk about resources if we have to. We might be able to help with that. In principle, given what we are hearing now, given the scale of this funding, given the direct responsibility of the Secretary General, who is the official Accounting Officer, for want of a better phrase, does the witness think that would be a better or stronger process than what we have in place now?
Mr. Pat O'Mahony:
I do not think it would necessarily be any stronger or better by having it in the Department or in the HSE. It would be a policy decision at Government level to decide where it should sit. If it were asked of the Department we would be willing, but we would not advocate for that or consider it could be done any better within the Department than it is currently being done in the HSE.
Alan Kelly (Tipperary, Labour)
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I know Mr O'Brien cannot answer this definitively, but does he suspect that there are many more organisations that have serious questions relating to appropriation of funds, compliance or anything like that across the section 38 and section 39 organisations?
Mr. Tony O'Brien:
We know that our internal audit process turns up issues, not just in compliance, which is a very particular word, but in the probity space. There are organisations currently having to address that. I do not think, being realistic about it, that we will ever get to a point across this number of organisations, many thousands of organisations, where we would be able to say there is not a single one of them that does not have an issue going on. It would be foolhardy of me to reach that view or to suggest it to the committee.
Alan Kelly (Tipperary, Labour)
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It would be foolhardy, I agree. However, we need to get to a space where the witness is absolutely confident that everything possible, whether through the auditing process or the information flow within the organisation, is pulling out all the issues as much as is absolutely possible in this space.
Mr. Tony O'Brien:
To refer back, and not to deflect the Deputy, the statement of internal financial control identifies the areas of weakness and what we are currently doing to address them. Every organisation will identify areas of weakness and seek to address them. In this context, we need to further strengthen the work of our compliance function. We are, as the committee knows, bedding down nine community health organisations, which will have a very significant responsibility around the management of contracts for services. We have virtually completed the management arrangements for those. A whole series of steps are being taken that will undoubtedly improve the compliance, value for money and safeguarding environments, but they cannot be done instantaneously or in one go. Even when we have done them all we will need to think of more things we have to do, because there will always be weaknesses in the system.
Alan Kelly (Tipperary, Labour)
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It is quite obvious there will be various different stages of the Committee of Public Accounts looking at aspects of this into the future, given the scale of it. We have asked for various documentation. I have no doubt the witnesses will supply that. I am not suggesting anything, but it would be helpful as a group, and there is a serious group here, if collectively as a management team - I say this to the Department of Health as well - they could forensically go back through documentation in their organisations and in the Department, and bring to our attention any documentation, correspondence, e-mails, references that they feel it is worthy for this committee to have relating to us dealing with this subject matter. In other words, we will give a pass as regards a period of time to go and find and give us whatever information. In this period of time we cannot ask for every single piece. We found out about letters today that we did not know about. There may be other documentation that we will not even ask about because we do not know about them. Would the witness and those in the Department please forensically look and then bring it to our attention? Subsequently, if it is not brought to our attention, we would have questions.
Alan Kelly (Tipperary, Labour)
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No, on issues relating to section 38 and section 39 organisations. In other words, is there any other correspondence.
Alan Kelly (Tipperary, Labour)
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Shudder away. I will narrow it down for the witness so he does not find it comical - any issues raised between the organisations or to the organisations of a concern relating to how funds are appropriated. That narrows it down.
Alan Kelly (Tipperary, Labour)
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From 2005 to now.
Alan Kelly (Tipperary, Labour)
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I will tell the witness what we will do. When we are in private session afterwards we will discuss that question and come back with a timeframe.
Seán Fleming (Laois, Fianna Fail)
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We will come back with specifics on that because that is too broad. Nobody will be interested in 2005.
Alan Kelly (Tipperary, Labour)
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Basically, if anyone has raised any issues relating to organisations, we must make sure they were followed up.
Does the witness believe we would be discussing this today if the "Prime Time" programme had not taken place?
Alan Kelly (Tipperary, Labour)
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I have a question for the representative from the Department of Health. When issues were raised about Console, why did the Department not notify the HSE? The witness said earlier that there was no evidence of correspondence to the HSE. That is a factual statement. Why was there none?
Dr. Siobhán O'Halloran:
When the principal officer met with Mr. Kelly it was evident that the Probation of Offenders Act had been served. The incident had occurred over 30 years ago, so for that reason there is no record that the HSE was notified.
Alan Kelly (Tipperary, Labour)
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I know that. Why?
Alan Kelly (Tipperary, Labour)
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I just have a request for documentation before I conclude. Earlier Mr. O'Brien said that given the volume of audits that the HSE carries out - just under 1,000 - the process is to release them under freedom of information. Is it correct that they are not on the website?
Alan Kelly (Tipperary, Labour)
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How can we seek the audits if we do not know the organisations that have been audited? Is there a list of organisations that have been audited so we can request them?
Alan Kelly (Tipperary, Labour)
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Is the list of organisations on the HSE website for the public?
Alan Kelly (Tipperary, Labour)
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How can one ask for audits that one does not know have been done?
Alan Kelly (Tipperary, Labour)
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Yes, but there are thousands of organisations.
Alan Kelly (Tipperary, Labour)
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That is fine.
Alan Kelly (Tipperary, Labour)
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I am sure they will.
Noel Rock (Dublin North West, Fine Gael)
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I thank Mr. O'Brien for answering all of the questions so far. Some of what I will say is related to what Deputy Kelly said. One of the perils of being among the last questioners is that one's questions may have been asked in some form already. All of the good ones are gone, but I will roll out the greatest hits from the committee so far. I am curious about what was said previously and the belief that no public money had been spent inappropriately. I find that hard to understand, and many in the public would also find it hard to understand. As Deputy Kelly put it in his pie metaphor, if 42% of the money is going to an organisation from the HSE in a given year and 58% of the money is coming from other sources, that goes into a bank account. If I donate €1 to an organisation and the HSE also donates €1 to it, if €1 is spent inappropriately, it is 50% of the money from both of us that is spent inappropriately. Proportionately, it would appear that public money has been spent inappropriately. Would this not be the case in that theoretical example?
Noel Rock (Dublin North West, Fine Gael)
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I am talking about a theoretical context.
Mr. Tony O'Brien:
-----from the interim liquidation process, which will produce a bottom line position. Second, we were not donating money. We were buying a service, and we got the service. We are not a donor. We were not putting money in the Console box. We were seeking a specific service which we know we received. Had it had a more effective system of accounting, one that would have served it better in the circumstances, probably our audit would have only looked at our money and looked for corollary expenses equivalent to it. We are told by the former interim CEO that, in his view, the costs incurred by Console over that period of time were greater than the amount of money we were giving. That is how I form that view, but I have not reached, and cannot reach, a definitive view until we see the end product of what is in the net residual balance sheet.
Noel Rock (Dublin North West, Fine Gael)
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I accept that. Is that not a low threshold of expectation to the extent that the witness says he bought a service, received that service and perhaps paid less for it than it cost, in view of the fact that the association of this organisation with the HSE gives it a veneer of credibility such that people are inclined to donate also?
Mr. Tony O'Brien:
I do not think it particularly used its relationship with the HSE to obtain credibility. In fact, very few people do, to be frank. This is a charity which had an extraordinarily high public presence and reputation. In fact, one of the boxes of evidence that was sent to us by the former CEO to show that we should not have any concerns was a box full of photographs of all of the amazing people he had been photographed with, including foreign heads of state. I do not think it sought to leverage its relationship with us to establish its brand at all. In fact, recent weeks withstanding, it had a fabulous brand. I am aware of the net point the Deputy is making, but I do not think it was used to that purpose.
Noel Rock (Dublin North West, Fine Gael)
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Perhaps not in this case, although it took my office only ten minutes to find literature that was being distributed that carried the HSE logo. There definitely is a clear case that Console utilised its HSE link to a certain extent to establish a veneer of credibility whereby people would presume that there had been an internal audit process, probably before the recent internal audit had taken place.
Mr. Tony O'Brien:
First, we insist that funded bodies acknowledge that they get funding from the State through the HSE. Sometimes they are dragged kicking and screaming to include the HSE logo, for the reasons I alluded to earlier. However, this is an organisation that had clean audits by its external auditor. It had a tax clearance certificate and a clean management letter. Even now, it is on the charity list. External consultants in a review, known as the Ruby review, that was provided to us in January 2015 - I think it was provided to us to try and head us off - said that Console had a high standard of corporate governance and financial management. The organisation had many ways to try and bolster its public credibility. Let us face it: this is an astonishing fall from grace. If I had asked a random sample of 100 people six months ago where they would put Console on the ladder of credibility, it would have been right up there.
Noel Rock (Dublin North West, Fine Gael)
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I accept that. Has the committee been provided with a copy of the Ruby review?
Noel Rock (Dublin North West, Fine Gael)
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I would appreciate that.
Mr. O'Brien mentioned external audits. There appears to have been a systemic failure of external audits in this case. I am not sure how far Mr. O'Brien can comment on that, but does he have any plans to review the interaction with external audits?
Mr. Tony O'Brien:
This is a real challenge for us. One ought reasonably to be able to rely upon the annual financial statement and its audit certificate, as provided by registered audit practitioners who are in a regulated profession and filed with the Companies Registration Office. As the Comptroller and Auditor General said earlier, the entire public service, not just the HSE, must be able to rely upon that. We have had occasion in the past to make complaints to professional regulatory bodies in other well known incidents, but it has not got us anywhere. This will be pursued, but if we find - and I am not suggesting we have found - that this is a widespread problem, it would be a fundamental problem on a whole-of-society basis. It goes to the heart of corporate governance architecture for both the public and the private sectors.
Noel Rock (Dublin North West, Fine Gael)
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Absolutely. From a practical point of view - Mr. O'Brien alluded in his opening statement to lessons learned - I understand that the staff numbers in the HSE's internal audit team - forgive me if I am wrong - were 55 pre-crisis, then 40, and now 50. Is that correct?
Noel Rock (Dublin North West, Fine Gael)
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Mr. O'Brien has sought more.
Mr. Tony O'Brien:
It operates in a large pool of staffing. Obviously, as the opportunities arise, although we are currently over our total, I will seek to prioritise recruitment into both the compliance unit on the one hand and the internal audit function on the other. I cannot give the Deputy a timeframe at present.
Noel Rock (Dublin North West, Fine Gael)
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I appreciate that. With regard to the HSE's capacity to carry out internal audits - this is probably a "how long is a piece of string" question - how many audits can take place in parallel and how many audits are taking place in parallel currently?
Dr. Geraldine Smith:
We have nine teams around the country and we would have seven audits ongoing at any one time in each of those offices. By the very nature of internal audit, some audits would be at planning stage, others would be in the middle of field work, others we are analysing, etc., and others are waiting on management comment. We could have a number of audits ongoing at any particular stage.
Mr. Tony O'Brien:
Can I offer an additional piece of information on the internal audit process? It is not directly related to Deputy Rock's question but I think it is an area that will be of interest to the Deputy because there was some discussion earlier about the role of the HSE's audit committee. For clarity, documentation was sent on request to the committee yesterday that had certain information that is not really reflected in the discussions that we are having today.
The audit committee was briefed in relation to this audit on two occasions - once at the end of last year and once at the beginning of this year. The audit committee has a cyclical approach to its meetings, not unlike the Committee of Public Accounts in some respects. Consequently, once an internal audit has been completed, in this case on an external party, and then goes to the relevant national director for action, once that period has been completed, the internal audit committee looks to see if the HSE has dealt with the issue in an effective way and what are the lessons. An inference was being drawn that in some way there ought to have been an emergency meeting of the audit committee. The audit committee does not have an executive function. It is very similar to other audit committees in the public sector and if the committee is in any doubt, it may be helpful for the Comptroller and Auditor General to speak to this issue as well.
Seán Fleming (Laois, Fianna Fail)
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Has Deputy Rock completed his questions?
Noel Rock (Dublin North West, Fine Gael)
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I have a few more questions but perhaps I will conclude on one more, in particular. Deputy Kelly hit on this as well. At this stage, should the HSE's practices be changed to ensure that boards of directors are verified or at least contacted prior to an internal audit, and that perhaps it should not take getting to the stage of such a drastic measure as an internal audit simply to verify the board of directors of an institution that is receiving funding at a service level agreement level from the HSE?
Mr. Tony O'Brien:
Deputy Rock is referring to the fact that various individuals have, as it were, expressed surprise that they were directors of this particular entity. We will certainly be looking at that as part of the outcome of this process. The Charities Regulator was, in fact, established as a result of some discussions that we were party to, not in this room but the equivalent room that the Committee of Public Accounts sits in on other occasions. Its role is developing and it will have investigative powers. We will have more regulation generally, and this will be of benefit to us in this regard. We will have to look to see what we might have to do arising from this issue.
It is not a normal process for an internal audit to contact all directors of a board. Normally, they obtain their information and reflect back to the CEO and then in due course we expect that the final report is considered by a board. That is what normally happens. Obviously, in this case, that would not have added any value.
Noel Rock (Dublin North West, Fine Gael)
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One can see, even with the Charities Regulator, which is a welcome development, that without launching an investigation there would be a clear advantage to establishing the bona fides of an organisation that is receiving funding from the HSE by simply knowing that its directors are its directors.
Mr. Tony O'Brien:
Sure. What I would not want to do, however, is to have the HSE take on a whole series of responsibilities which are wider than the HSE and which might more properly be done by other public bodies. It is interesting that if one's name appears on the list of directors filed at the Companies Registration Office, even if one does not know about it, one is a director in law. When this all came out, persons who were in that situation found themselves having to act as directors of Console during this interim period and making the decisions about liquidation, etc. At a macro level, it would be far simpler and more effective that rather than the HSE, given that we are basically a health service provider, having to start verifying the names and legitimacy of registrations of directors, that such might be a change to the way we handle the registration of companies at a societal level. That would be more effective. Otherwise, one would have all arms of the public sector, rather than just one, having to do this.
Noel Rock (Dublin North West, Fine Gael)
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I accept that. Naturally, because the funding comes from the HSE, it seemed like an appropriate question to put to Mr. O'Brien. I appreciate Mr. O'Brien's answers and thank him.
Seán Fleming (Laois, Fianna Fail)
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At this stage, let us draw our breath for a moment. We have gone through the first round of questions. A number of members did not get to complete their questions. I ask members to be as concise as possible on their second round because everyone has contributed on the first round. The following members have indicated: Deputies MacSharry, Madigan, Shortall, Cullinane, Connolly and Alyward. Some members will be very brief.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I will be as brief as I can. Returning to the issue of the HSE employee, I may have got confused with my question.
Seán Fleming (Laois, Fianna Fail)
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I am conscious that Deputy MacSharry might be identifying a specific individual and I ask the Deputy to be careful.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I will not be naming the person.
Seán Fleming (Laois, Fianna Fail)
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Deputy MacSharry is identifying the person, however. That person will be known to persons, although maybe not to Deputy MacSharry or me. The Deputy should be conscious of that. There is identification, not only being named.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I will do my best and the Chairman should stop me if he feels I am-----
Seán Fleming (Laois, Fianna Fail)
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Deputy MacSharry can ask whether there is knowledge in the HSE from previous contacts that could have been useful.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Mr. O'Brien mentioned earlier that staff were not in post, and I appreciate that. He might elaborate to the extent possible on whether any member of staff of the National Office for Suicide Prevention was ever given any special role to do with liaising with Mr. Kelly or Console.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Was it ever judged in the HSE that there was any sort of a familiar, or for want of a better expression "unhealthy", relationship between the National Office for Suicide Prevention and Console?
Seán Fleming (Laois, Fianna Fail)
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I am not aware of what the Deputy is referring to.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Was there any reason given to the HSE at the time as to why the organisation that funded the phone line withdrew its funding for it?
Mr. Gerry Raleigh:
There was another organisation. There was no specific reason given. We tried to pursue this with both the 3Ts organisation, who had been the previous funder, and Console. We tried to bring them together to try to make sure that the helpline that had been in existence, called One Life, continued or was decommissioned in an orderly way. Our best information was that there was just a fundamental breakdown in the relationship between both parties.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is it that there was no indication that they had reservations or anything like that, and it was merely that they were not funding it anymore?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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All right, that is fine.
Returning to the issue of when officials knew things, does Ms O'Connor recall, as acting director, receiving a call from a former employee here in 2011 advising her of concerns about Console?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Was anybody or are we aware of any contact that was made?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is it fair to say there is no record of somebody contacting the HSE?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am not allowed to say. I cannot mention a name, even though I have the permission of the person to use it. Is that in order?
Seán Fleming (Laois, Fianna Fail)
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No, because the person then might seek right of reply and attendance here. I want to be careful before I start opening it up. I received an e-mail - I suspect from the same person - suggesting that and I am not going that route now.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Okay. Can I ask the Department of Health then if a principal officer was contacted by an individual and given a significant briefing as to issues far in excess of the one that it has highlighted to do with impersonation of a doctor in 2011?
Seán Fleming (Laois, Fianna Fail)
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I am accepting that answer on the public record as a full answer to that question now.
If Dr. O'Halloran has more information, it can be forwarded to us another day. I am accepting that answer for today.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Was the National Office for Suicide Prevention contacted in 2011 to advise of serious concerns about Console or, indeed, other organisations in the sector?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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With regard to Mr. Raleigh's daily work, do officials speak to each other and ask whether anybody was contacted about this stuff previously? Prior to the internal audit, was it case of everyone thinking it was perfect and then it was "shock, horror"?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Did "Prime Time Investigates" contact the National Office for Suicide Prevention a number of years ago in respect of this?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Did reporters make contact and ask for comment on this?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Even two, three or four years ago?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I have many questions still but I will limit myself. Following the "Prime Time Investigates" programme, it took two weeks to sign off on the final audit. Why did the national director take two weeks to sign off on it and to meet David Hall to protect the services?
Seán Fleming (Laois, Fianna Fail)
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Somebody's telephone is on again. It is interfering with the recording.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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The national director did not sign off on the final audit for two weeks after the "Prime Time Investigates" broadcast. I do not know why there was a delay. Why did it take so long to meet Mr. David Hall in respect of protecting the services?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Did Ms O'Connor need to sign off on anything following the "Prime Time Investigates" programme?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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How soon after the programme did Ms O'Connor meet him?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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That was not the information I had received so there must be-----
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I stand corrected if that is the case.
Seán Fleming (Laois, Fianna Fail)
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Will Ms O'Connor clarify who brought him in? It was not the HSE.
Seán Fleming (Laois, Fianna Fail)
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Will Ms O'Connor explain that process? I compliment them on the great job but people are wondering who brought them in. Who did they represent?
Seán Fleming (Laois, Fianna Fail)
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The directors?
Ms Anne O'Connor:
Yes, the directors as opposed to Paul Kelly. With regard to the process that happened, "Prime Time" was aired on the Thursday night and immediately before the programme, it was announced that Paul Kelly had stepped aside as the chief executive officer and it was also announced that David Hall and Tom Murray were being brought in to do what was then described as a "review" of Console. The terminology then changed because they went into the courts seeking different permissions. When we met them on Friday afternoon, they were there as reviewers of the organisation on behalf of the organisation's legal team. They then sought to have Mr. Hall put in as interim chief executive officer in order that he would have power to act------
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I am sorry to cut across Ms O'Connor and I acknowledge I have a habit of doing that but my understanding is that she met David Hall the next day but there was no discussion about protecting services.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I do not want to speak on behalf of Mr. Hall.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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The information I have is there was no discussion about protecting services-----
Josepha Madigan (Dublin Rathdown, Fine Gael)
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That is not his understanding but I will leave it there.
Seán Fleming (Laois, Fianna Fail)
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Deputy Shortall is next. I ask members to be as quick as they can.
Róisín Shortall (Dublin North West, Social Democrats)
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A number of members asked about complaints relating to Console going back to 2005 and it is strange that it has been said three times that all the personnel have changed since then. That is a poor reflection on systems within the HSE. If there were robust oversight systems, it would not be down to individuals. The system should operate properly and records should be kept of complaints. I acknowledge there has been constant churn in the HSE but saying that everybody has changed roles is not an answer to a question about whether there was a complaint ten years ago. There is an acceptance that concerns had been raised of one kind or another since 2009. I think the officials will accept that. How was it then that, in 2013, Console's funding increased by 120% given many of those concerns were live and under consideration? Why did the HSE increase the funding by 120% without, apparently, due diligence?
My second question relates to St. John of God and why action was not action. We were told that the HSE was informed by St. John of God in 2013 that it was in breach of public sector pay rules. The Comptroller and Auditor General told us that he informed the HSE in 2013 in the same vein, yet Mr. O'Brien said in his opening statement: "Consequently, I have asked the HSE's internal audit division to conduct a review of these matters as a matter of urgency." This matters were brought to his attention by St. John of God and the Comptroller and Auditor General in 2013 and, therefore, it is hardly "as a matter of urgency" that he is dealing with them in 2016. What is the reason for the three-year delay?
My final question relates to auditing. The HSE funds 304 organisations in excess of €250,000 a year. There are questions about others. Could Dr. Smith take us through the procedure? Presumably, all 304 organisations are required to have audited accounts. Does the HSE receive copies of those accounts? What is the oversight scenario regarding such accounts? Dr. Smith referred earlier to accounts on which she conducts the external audit. Who were Console's auditors? Did they at any stage raise concerns with Dr. Smith about probity issues?
Mr. Tony O'Brien:
I will deal with the St. John of God issue first. I will ask Ms O'Connor to address the 2013 funding issue for Console. Dr. Smith will get some information on the audit and will deal with that in turn. The 2013 event was not St. John of God representatives telling us they were not in compliance; it was telling us that they had addressed their compliance following work done by the Comptroller and Auditor General, as a result of which having declared themselves compliant, they were out of the major process that went on with section 38 bodies. The national compliance unit, as part of the work described in the statement of internal financial control, is "rolling through the 38s". A review commenced in April, which is being carried out by external consultants from Deloitte. Did the process start in May?
Róisín Shortall (Dublin North West, Social Democrats)
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This year.
Róisín Shortall (Dublin North West, Social Democrats)
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The Comptroller and Auditor General informed the HSE in 2013 about breaches. What has happened in the three years since?
Mr. Tony O'Brien:
I am going on to that. After that, St. John of God representatives gave us written assurance - and we have agreed to provide this correspondence - that they had addressed the issue of non-compliance. We then went through that massive health sector wide pay compliance issue. As part of our general controls following the establishment of the compliance unit, we had decided to go through each organisation sequentially and it just happens that that process is under way in St. John of God. What is now urgent is that the suggestion has come out into the public domain, not having been disclosed to us, that 14 persons received substantial lump sum payments to buy out their non-compliant pay.
"Buy out" may not be the right term. There are instances in which buy outs can be approved in certain circumstances. If someone has got ten years to go, they might buy out one or two years. In this instance, it appears the full ten years may have been paid out. This is the subject of the review. The reason it is urgent is that it is one of the organisations that declared itself compliant some time ago. It has brought to our attention only one issue of non-compliance, which was not related to these 14 people. That is why I am having an urgent review now. It is nothing to do with what happened in 2013, although it obviously relates to 2013 because it may be that the assurances given to us in 2013 were not whole and complete.
Róisín Shortall (Dublin North West, Social Democrats)
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Leaving aside the self-certification issue that Mr. O'Brien seems to accept, what was the information given to him by the Comptroller and Auditor General in 2013?
Róisín Shortall (Dublin North West, Social Democrats)
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Has that been dealt with?
Mr. Tony O'Brien:
It is my understanding that individual has left that post. However, I do not want to be definitive until I have the benefits of the review. What I am saying is that that organisation signed the necessary documentation to say it had dealt with this issue and that it was in compliance. We now have information that casts that in doubt. That is why, at this point and in light of that information, I have asked internal audit to do this on an urgent basis in order that it takes priority over other things it might have been doing otherwise.
Róisín Shortall (Dublin North West, Social Democrats)
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In relation to the individual, did the HSE not have that information since 2013?
Mr. Tony O'Brien:
The information we had since 2013 was that the individual's pay had been regularised but there was no disclosure of any substantial buy out. No business case was made and no approval was sought. In many instances throughout this process, individuals simply voluntarily gave up their additional payments without any buy out. That happened on a large basis throughout this process. Unless it was disclosed to us, we would not have known that through, apparently, some separate entity - part of the family, so to speak - the funds said not to be public funds were used to pay an additional sum in respect of the surrendering of that entitlement. Again, I speak without the benefit of the results of this audit. We will happily share all of the outcome of the internal audit once it is complete.
Seán Fleming (Laois, Fianna Fail)
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The next speaker is-----
Ms Anne O'Connor:
The concerns in 2009, which we mentioned earlier related to whether it was a going concern. Those issues were discussed with Console. In 2013, the funding increased. At that time, it was urgent. The helpline was about to collapse and there was a very significant focus on supporting people who were bereaved by suicide at that time. An immediate action had to be taken. Console were already a provider of a similar helpline and it was felt that was the best fit at that time. The concerns that we see here in respect of the audit came to light and really materialised in 2014. It was when the audited accounts for 2013 were presented to the HSE in 2014 that the red flags went up. At the time the funding was given for the helpline in 2013, we did not have that information.
Róisín Shortall (Dublin North West, Social Democrats)
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Is Ms O'Connor saying the HSE did not have any concerns raised with Console about any aspect of governance until 2014?
Ms Anne O'Connor:
We had the concern that was mentioned earlier of an internal employee raising concerns in 2009. The issue really related to the financial situation of the organisation and some concerns in governance. The previous director met the organisation in 2009 to discuss those concerns and to agree, through a series of performance management meetings, what the action needed to be. A cap was put on its funding. It requested additional funding in subsequent years and did not get it. The only time it received additional funding was in 2013 when it took on the helpline.
Róisín Shortall (Dublin North West, Social Democrats)
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On what basis was the HSE happy to go ahead and give Console an increase of 120% in 2013?
Ms Anne O'Connor:
The increase was the cost of the helpline. It was not a general increase to Console's funding. It was to specifically provide a helpline. It was locked into Console agreeing to greater scrutiny and an external review of its services. Again, I apologise, but I was not around at that time. It was a matter of timing. It was an urgent situation and there was not another provider. Again, I cannot comment on the detail because I was not involved in it. However, as I understand it, at that time it was urgent and a body had to take on the helpline. Console was the provider already providing a helpline in that space. It had the skills and experience to do it. It is important to state that there have not been concerns about the service. Our priority always has been to support the service users. There was not a concern about Console's capacity to provide the service it was providing.
Róisín Shortall (Dublin North West, Social Democrats)
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But there was concern about governance.
Seán Fleming (Laois, Fianna Fail)
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No. We do not need to do that.
Róisín Shortall (Dublin North West, Social Democrats)
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Is that not public information?
Seán Fleming (Laois, Fianna Fail)
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We will discuss those matters in private session after the witnesses leave. As of now, it is the private auditor to an organisation that is not under the remit of this committee. I am just not going there at the moment.
Róisín Shortall (Dublin North West, Social Democrats)
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Sorry. An auditor has to put its name to accounts. Presumably-----
Seán Fleming (Laois, Fianna Fail)
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It is in the CRO.
Róisín Shortall (Dublin North West, Social Democrats)
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Yes, but-----
Seán Fleming (Laois, Fianna Fail)
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I am not saying no, but I just want to move on. We will discuss it in private session. There is another issue to discuss. That organisation is not specifically under our remit and that is why I am being careful at the moment.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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That information can be got.
Seán Fleming (Laois, Fianna Fail)
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Of course it can.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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That information is out there.
Seán Fleming (Laois, Fianna Fail)
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Every member is free to get it.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Anyone can find out who is my private auditor.
Seán Fleming (Laois, Fianna Fail)
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That is fine. Was there another question?
Róisín Shortall (Dublin North West, Social Democrats)
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My question is about the audit and the 304 organisations that receive in excess of €250,000. Do all of those organisations have to pass on their audited accounts to the HSE?
Seán Fleming (Laois, Fianna Fail)
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I am moving on. We still have Deputies Cullinane, Connolly and Aylward to speak.
Róisín Shortall (Dublin North West, Social Democrats)
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There was one other question about the auditors - whoever they are - of Console. Did they at any stage raise any concerns with the HSE?
Seán Fleming (Laois, Fianna Fail)
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Deputies Cullinane, Connolly and Aylward are the remaining speakers. I ask them to be brief.
David Cullinane (Waterford, Sinn Fein)
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First of all, I wish to come back to the St. John of God issue. There was a lengthy exchange between Teachta McDonald and Ms Mannion about the timelines of communication between the respective organisations in terms of compliance with pay. My questions are to both Mr. O'Brien and Ms Mannion. Is Mr. O'Brien aware of a press note that was sent to the media last week from St. John of God on that issue?
David Cullinane (Waterford, Sinn Fein)
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Is Mr. O'Brien aware of what is in it? Has he read it?
David Cullinane (Waterford, Sinn Fein)
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Can he read it out?
David Cullinane (Waterford, Sinn Fein)
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Yes.
Mr. Tony O'Brien:
I wish to make it clear for the record that I am reading out a notice issued by a PR company on behalf of St. John of God to all media on 13 July. The heading is "A note to editors". It states:
A review is underway into the St John of God Order’s payments to mitigate a future possible pension liability and contractual obligations in 2013, which resulted in payments of €1.64m to 14 employees. On Friday 8th July, the HSE stated to the media that the Saint John of God Order was not in compliance in respect of these payments. This statement was made before the review had even commenced and the Order believes such a statement is seriously prejudicial to a fair review.
Separately the Order is still awaiting a response from the HSE on this matter, following a letter it sent to the HSE on Monday of this week.
I will cut in here to say that that letter was from a firm of solicitors acting for the order. It goes on to state:
The Order is very keen to co-operate fully with the HSE review once a fair and due process is followed.
Understandably, subsequent media coverage has reflected the prejudicial nature of the HSE statement confirming the result or final determination of the proposed review. Radio and TV interviews and commentary and press headlines and reporting have included frequent references to "salary top-ups to 14 St. John of God" personnel.
In the interests of fairness and factual correctness, the order humbly requests that editors would use "payments (totalling €1.64 million) to St. John of God employees, which are now subject to HSE review".
Then in bold print one line appears which states:
To describe them as salary top-ups is simply incorrect.
The payments were made following independent professional advice to discharge a possible future pension liability and contractual obligations, and should not be described as a salary top-up.
Further, also note the St. John of God Order is a worldwide organisation. St. John of God Community Services (Ireland) is a section 38 entity. Unfortunately, there have been frequent general references to the St. John of God Order and also references to St. John of God Hospital. The hospital is not a section 38 entity or part of St. John of God Community Service.
We would therefore request that TV footage or photographs do not feature the hospital.
Our office will be happy to accommodate the media by arranging permission to shoot or photograph the appropriate facilities that are part of the section 38 St. John of God Community Services.
Kind regards.
It is signed by a named individual for a named PR company. Then it states, "On behalf of the St. John of God Order". I will not name the PR company in this instance.
David Cullinane (Waterford, Sinn Fein)
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Can Mr. O'Brien give us his opinion on the content of that release?
Mr. Tony O'Brien:
We are in receipt of a letter from St. John of God that tells us that they have a non-compliance with pay policy. We have not used the terminology "top-ups". It is the popular phraseology for payments that might be received that are outside the approvals given in the Department of Health consolidated scales. They are obviously seeking to draw a distinction between an actual salary payment that occurs every month and these payments which, it has been alleged in some media circles, were effectively the advance payment of those. They are clearly stating that they have legal advice and so on.
A procedure was put in place as part of the regularisation and the process of dealing with all of this, which involved the HSE and the two Departments that are here, whereby agencies that wish to seek sanction for buy-outs - special arrangements based on the legal situation in which they found themselves - could in certain circumstances have been approved, all other things being equal. These were not part of that process, so, whatever these payments are, they were not sanctioned or approved in accordance with that process.
David Cullinane (Waterford, Sinn Fein)
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If I can come back quickly to the Console issue, I have a number of points to be clarified by the director general. My general view of the internal audit report seems to be different from Mr. O'Brien's. We established that earlier. I have a number of quick questions, the answers to which can be "Yes" or "No". If that is not fair or possible then that is fine.
First, does Mr. O'Brien believe there was a serious lack of financial and governance controls within the Console organisation?
David Cullinane (Waterford, Sinn Fein)
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Does Mr. O'Brien believe that there was a lack of accountability within the organisation?
David Cullinane (Waterford, Sinn Fein)
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Within Console, yes.
David Cullinane (Waterford, Sinn Fein)
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Is this one of the most serious internal audits that Mr. O'Brien has seen?
David Cullinane (Waterford, Sinn Fein)
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Would Mr. O'Brien use the word "extraordinary"?
David Cullinane (Waterford, Sinn Fein)
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Okay, so what Mr. O'Brien wants us to believe is that all of that is only the fault of the organisation itself and does not raise questions for the HSE. Because, if what Mr. O'Brien is saying is correct - and he has just accepted that these were very serious failings in terms of finance and governance and that this was extraordinary, possibly one of the worst that he has seen in terms of failure - surely that proves that the controls within the HSE failed. One of the questions I asked Mr. O'Brien earlier was whether he believed there were any failings on behalf of the HSE, and he said "No". Yet the actual internal audit report says something else, so how does he square that?
David Cullinane (Waterford, Sinn Fein)
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With respect, that is not the question. If Mr. O'Brien accepts that there are serious failings of an extraordinary nature, in terms of finance and governance, within an organisation that is funded to the extent of 40% or more by the HSE-----he may not be the Accounting Officer - and, by the way, the Secretary General of the Department should have been here - but as the Accounting Officer to him-----
Mr. Tony O'Brien:
I have no doubt that if the Secretary General had been invited he would have been here, but as the deputy Secretary General has shown, and the Chairman has agreed, he was not invited. So I do not think it is appropriate to criticise him for not being here when he was not invited, because I have no doubt he would have come.
To go back to the central point, however, the issues that have been well documented in the internal audit report were failings within the organisation.
David Cullinane (Waterford, Sinn Fein)
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But Mr. O'Brien failed to notice those failings right through. It is so extraordinary, so unbelievable that this could happen, and yet it happened. The HSE put controls in place to ensure that such things do not happen. If these things did happen, it means that the controls that Mr. O'Brien's organisation has in place have failed. The fact that he cannot accept that or cannot say that, I find extraordinary.
David Cullinane (Waterford, Sinn Fein)
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But Mr. O'Brien has service level agreements in place. The service level agreements are clear in relation to governance and financial issues, and the relationship between them and his organisation.
David Cullinane (Waterford, Sinn Fein)
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It is clear - a full accounting of money spent.
Mr. Tony O'Brien:
Those agreements were related not to the entirety of Console but to specific services. There has been a good discussion of what those services are - I will not seek to reiterate it in the interests of time - which were purchased or paid for from that organisation for the benefit of clients who received that benefit. Had there at any time been an issue about the quality of those services in this period, then that would have been a different thing. It was concerns identified by the National Office of Suicide Prevention, particularly these incompatible sets of accounts, taken together with its failure to co-operate with the enhanced governance arrangements that flowed from the increase in funding for the helpline, that triggered an audit. Because the organisation had not properly segregated what it was doing, we could not only audit the services we were providing for; the audit had to be global in nature.
David Cullinane (Waterford, Sinn Fein)
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I think different views were expressed by different members about what exactly triggered the audit, but if I could just make one final observation-----
David Cullinane (Waterford, Sinn Fein)
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Absolutely, but it does not necessarily mean that other people's views are not correct. My final observation-----
David Cullinane (Waterford, Sinn Fein)
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Of course.
David Cullinane (Waterford, Sinn Fein)
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People will make up their own minds on all of these issues. If I can, I will go back to one central issue. Our job here is to make sure that controls are in place that are robust and sufficient to ensure that taxpayers' money is being spent appropriately, and that there is sufficient oversight and governance. It seems to me, from reading the report, that there are questions for the CRO about its processes. I know somebody who contacted the CRO to establish a company and was told that he did not need photographic identification. He was not asked for a PPS number.
Seán Fleming (Laois, Fianna Fail)
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In fairness, Deputy, that is not our job.
David Cullinane (Waterford, Sinn Fein)
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No - hang on a second. This is directly relevant to this.
Seán Fleming (Laois, Fianna Fail)
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That is not our job.
David Cullinane (Waterford, Sinn Fein)
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No. I am sorry, but it is. There are questions here. This internal audit raises questions for the CRO, the Revenue Commissioners, the Department and different arms of the HSE.
It also raises questions for the external auditor and the internal auditor. Regarding the fundamental checks and balances which failed, we have asked for information from the HSE. We will get that information. Teachta McDonald, who has left, has asked me to speak on her behalf on that. We believe that we need to meet again next week once we have been furnished with the-----
Seán Fleming (Laois, Fianna Fail)
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We will discuss that in private session as soon as possible when we conclude-----
David Cullinane (Waterford, Sinn Fein)
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Yes, but I am making the point in the presence of the witnesses who are here.
I have one question for the Comptroller and Auditor General. With regard to the relationship and the information flow between the Companies Registration Office, the Revenue Commissioners, the Department, the HSE, the internal auditors and the external auditors - I do not know whether he has read the internal auditor's report-----
David Cullinane (Waterford, Sinn Fein)
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What is the Comptroller and Auditor General's view on the controls that are in place in terms of the respective organisations, and the reason they failed so badly?
Seán Fleming (Laois, Fianna Fail)
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If the Deputy is talking about the CRO, we are not discussing the CRO today. If he is talking about Revenue-----
David Cullinane (Waterford, Sinn Fein)
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I am talking about the HSE.
Seán Fleming (Laois, Fianna Fail)
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-----we are not discussing Revenue today. If he wants to talk about other State agencies he should put it on the agenda for the next meeting. This discussion is with the HSE.
David Cullinane (Waterford, Sinn Fein)
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With respect, the Chairman is missing the point. The relationship between all of those organisations-----
Seán Fleming (Laois, Fianna Fail)
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They are separate State organisations.
David Cullinane (Waterford, Sinn Fein)
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-----in terms of controls is inextricably linked. That is my point.
Mr. Seamus McCarthy:
I will say, and I agree with the Chairman's point, that I would be reluctant to make definitive statements about a range of bodies, the relationships between them and the exercise of their functions without doing a piece of work to underpin that opinion. In regard to any system of internal financial control, it is almost impossible to design a system that will definitively prevent any abuse, fraud or irregularity. It is almost impossible to do it. The best one can do is put a system in place that gives reasonable assurance that controls operate in the way that is expected. Obviously, it is important, having put the system in place, to check that it is working. I discussed that yesterday regarding a number of bodies - I think it was the ETBs - where I drew attention to the fact that the annual review of the effectiveness of the system of internal financial control had not been carried out, and I made the point that that is a very important exercise that is done. In fairness to the HSE, I would have to say it does take that very seriously. It does carry out that review of the effectiveness of the system and it accepts and discloses in the statement on internal financial control that it is not perfect and that it needs to be improved. We make recommendations along those lines, and it engages with us seriously, but there are things that have to be improved in the system.
Catherine Connolly (Galway West, Independent)
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I have two questions and I will make two observations. First, it was helpful that the witnesses came here today and attempted to answer questions. That is welcome, and it is good for society.
I have made observations and asked questions. I am sticking with those on the HSE's lack of action before and after the audit. I will not go over it again. I compliment the witnesses on the audit, which is very detailed. My difficulty is that there was no action before by the HSE and I questioned its action afterwards.
It has been pointed out that the HSE received signed, audited reports - this was touched on by Deputies earlier - over a number of years. Is that correct?
Catherine Connolly (Galway West, Independent)
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If that is the case, then a very serious issue arises that was touched on by various members and the Comptroller and Auditor General in regard to audited accounts which the HSE relies on but which would appear not to be reliable. That is a very serious issue.
Second, with regard to staffing levels, has Mr. O'Brien ever put in a request for additional staff to allow him carry out his functions, given the number of organisations - 1,700 - under his remit? How can he possibly assure the public that he can monitor those if he does not have adequate resources? Has he requested adequate resources?
My final observation is separate from that entirely, and concerns responsibility on the part of the HSE. When we as a society raise an organisation to the level we raised it generally, where the person gets a Person of the Year award and the President of Ireland is patron of that organisation, serious questions must be asked of ourselves in regard to unaccountability.
My two specific questions are on the audited accounts and whether Mr. O'Brien made a request for extra resources. With regard to the accounts, Mr. O'Brien made an extraordinary statement, and I do not doubt him, that he made complaints to regulatory bodies in the past-----
Catherine Connolly (Galway West, Independent)
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-----to no avail. Could he respond on those two issues?
Seán Fleming (Laois, Fianna Fail)
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Briefly.
Catherine Connolly (Galway West, Independent)
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Signed and audited.
Mr. Tony O'Brien:
Yes, with clean certificates and all of that good stuff that would normally give one considerable reassurance. Not in this case yet, but in regard to other matters, we have made complaints about professional regulation in respect of individual practitioners to their professional regulatory bodies and we would not regard them as having any outcome from that process. I think that is the totality of the Deputy's questions. Am I right?
Catherine Connolly (Galway West, Independent)
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Yes.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I was the first person who raised the principle of outside auditing, to which I will now return. I am self-employed and have to pay a good sum every year to get my accounts professionally audited and sent in for tax returns. All those outside consultants are governed by a code of conduct and proper procedures. I believe an oversight body deals with that. I will ask a question that was asked already. Since 2005, when the HSE started giving grant aid to Console, have there been audited accounts every year for those 11 years? Are those audited accounts signed off by the consultant and were they to Mr. O'Brien's satisfaction?
I have a broader question about the 1,700 charitable organisations. Do they submit audited accounts every year signed off by professional people who put their name to them and who have a standard of conduct to adhere to? Does the HSE take their audited accounts as bona fide? If there is a problem or skullduggery - that is probably the wrong word to use - with audited accounts, we have a bigger problem in the system overall.
I have another question.
Seán Fleming (Laois, Fianna Fail)
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That is not a question for the HSE to answer. We will come back to it.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I am making a general observation.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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The first part dealing with 2005 and-----
Seán Fleming (Laois, Fianna Fail)
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Did the HSE get audited accounts?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Was the HSE happy with the audited accounts it received for those 11 years? Did it find any discrepancies in those accounts?
Dr. Geraldine Smith:
I will take that question. Console as a company was established in December 2006. The first set of accounts registered with the Companies Registration Office, for the year 2007, was registered in 2008. The accounts for 2007, 2008 and 2009 stated that the company was non-trading. In 2010, the CRO records the first set of accounts. They were done for half a year from July to December 2010. From then on - 2010, 2011, 2012, 2013 and 2014 - all of the accounts got clear audit certificates from their external auditors.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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In hindsight, are there question marks over the audited accounts submitted for those years? Given what we see in the HSE report, is there a question mark over someone? I do not want to name anyone or say anything wrong, but are there question marks over those audited accounts the HSE accepted? Are there questions to answer, particularly since 2010?
Seán Fleming (Laois, Fianna Fail)
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It is not for the HSE to deal with audits.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I have to highlight it.
Seán Fleming (Laois, Fianna Fail)
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The Deputy has done that.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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My final question is on governance and procedures. Mr. O'Brien said he was learning every day about procedures and enforcement. With regard to the general structure in Console, the CEO, the chairperson and the board, or so-called board, was in place. From what I read it seemed to involve three members of one family, although other names might have been mentioned. Did warning bells not ring in the HSE? We are talking about 1,700 organisations.
What was in place to make sure the board or whoever was running the institution was up to scratch or providing the HSE with answers as to whether there was a proper structure or proper governance in place? It seems to me that there was no proper structure in Console for years, only an individually run, family-controlled one. Did it not signal a warning somewhere along the line that there were no outside board members, no proper board, no proper report and no proper, minuted board meetings and that when the HSE looked for information, there was no board there to answer?
Mr. Tony O'Brien:
The founder CEO and family-type NGO model is not unique to Console and, to be fair, many very effective NGOs have operated that way in the past. It is clearly no longer best practice. We have seen that emerging through the sector. My view on the matter - it is a fact, actually - is that the composition of the board is a matter for the company itself. There may need to be some examination of that issue, but what has happened in the charitable sector is a bit like what happened in the banking sector. I am sure this matter will be discussed in other circles. Whether there is a need for a fit and proper person test to be a director of a charity is a question that emerges from this issue.
With the Chairman's indulgence, I will add one final point. We have talked a lot about section 38s and section 39s. It is not a distinction that we have created. The sections are in the 2004 Health Act. They were created by legislation. They reflect the will of the Oireachtas at the time. They create a distinction between different types of organisations. That is why they are funded under different legislation. It is a matter of fact that the HSE is not responsible for the running of section 39 agencies, whereas it has a much higher level of responsibility in respect of section 38 agencies, which are regarded substantially as public sector bodies. The others are not.
Shane Cassells (Meath West, Fianna Fail)
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I have one last quick question. In respect of the helpline and its continued existence, Mr. O'Brien said that it costs more than the funds that were being provided for its running. The service has now been transferred to Pieta House. Has there been a full appraisal of the real cost of providing this service, with real checks and balances, against what was indicated to the HSE, and will it now be funded to the true cost and the process involved in ensuring its continued existence to its full, optimum requirement?
Mr. Tony O'Brien:
Ms O'Connor will give the Deputy the full detail of that but, before she does, I want to share one important piece of clarification. This has not been a transfer of service; this has been the provision of a replica service by a new organisation. That could only occur once the interim liquidator had been appointed by the High Court. For the sake of the avoidance of doubt, Pieta House has not taken over any of Console's services. It is running a replacement service.
Ms Anne O'Connor:
Regarding the funding, we are working with Pieta House now to examine the true cost. It has only become apparent in the last three weeks that the cost was not what we thought it to be because we had not been asked previously for additional costs. Pieta House is now working with the liquidator and with us to examine the real cost of that service and we will continue to work with them in that regard. It is absolutely our intention to continue to support those services.
Seán Fleming (Laois, Fianna Fail)
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At the beginning of this session I asked what lessons the HSE has learned. I ask the witnesses representing the HSE to send a response to that to us by way of a note. We will not start, at this hour of the afternoon, opening up the discussion to the lessons to be learned, but that is what it is all about, that we learn lessons for the future.
For the sake of clarification, Mr. O'Brien made quite the subtle point that we will not know the final financial position of Console until the liquidation is completed. That could produce a situation whereby the HSE pays Console for all the services it provided, whereas the people who provided those services, that is, some of the people on the helpline, may not have been paid. The HSE could find that, even though the service was provided, some of the resources that it provided for the service were not used to pay the people who provided the service. That is possibly yet to be determined.
Seán Fleming (Laois, Fianna Fail)
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At this stage, as it is very late in the afternoon, on behalf of the Committee of Public Accounts, I thank all our witnesses from the HSE, the Department of Health, the Department of Public Expenditure and Reform and the Comptroller and Auditor General for having participated in the meeting and for the material they supplied to the committee. We will have further meetings with the HSE. Of that there is no doubt. I want to put on the record that no decision has yet been made by this committee on the publication of any documents that we have received in respect of this process. We will discuss that in private session, but I just wanted to be clear on that. Mr. O'Brien has made it clear in correspondence submitted to the committee, although the point was made more subtly earlier, that the HSE does not normally publish the internal audit report on its website. It supplies them on the basis of one-by-one requests under freedom of information. It does not publish them as a matter of course.
Seán Fleming (Laois, Fianna Fail)
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Under freedom of information?
Seán Fleming (Laois, Fianna Fail)
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To individuals who ask for them?
Mr. Tony O'Brien:
Yes, which is basically the entire Irish media. However, there is a reason for that. If we were to publish them, the burden in producing those reports would be such as to delay their completion significantly and diminish the impact of our internal audit division quite considerably.
Seán Fleming (Laois, Fianna Fail)
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On that note, we must be equally careful regarding the quality of information. If the HSE has an issue publishing them as a matter of course, we must be equally conscious about ourselves as Members of Parliament in what we publish. I thank the committee members and witnesses for their attendance.