Mr. Bernard Gloster:

I thank the committee for the invitation to meet to discuss the 2024 HSE financial statements. I am joined by my colleagues, who have already been introduced by the Chair, and I am supported by Ms Sara Maxwell, the general manager from my office.

The committee has received a briefing note on the 2024 annual financial statements, including a number of specific related topics that the committee would like to discuss. Together with colleagues, I am happy to discuss the detail further.

At the outset, I would like to refer to supplier controls as indicated by the Comptroller and Auditor General, which are reflected in the 2024 accounts and in my view are indicative of the need for the reforms, reforms that are now in late 2025 far more substantially advanced. Between 2020 and 2024, the HSE maintained an unprocured relationship with a supplier of respiratory technology, considered quite effective in some instances for monitoring respiratory conditions during the pandemic. Between 2020 and 2024, the HSE spent €15 million with the provider. On becoming aware of this case, I instructed several examinations and legal advice.

In very simple terms and I want to be unequivocal with the committee, the HSE was buying an unprocured product, was discharging payments on invoice with no adequate check as to the stock received, made a double payment of €723,000, cannot fully estimate the stock not drawn down and has no hope of loss recovery. The overall loss could be in the order of €5 million to €7 million based on the advice available to me. While I believe the context and circumstances of this case are extreme, it clearly indicates the need for expedited reform of the HSE control environment and systems.

On taking up post in March 2023, I outlined major priorities, including timely implementation, and this included pursuing at pace the much and long-awaited integrated financial management and procurement system, IFMS. Stage 1 of the project has implemented IFMS in the statutory healthcare system, that is to say throughout the HSE. Since 1 July 2025, all HSE regions and services use this single integrated platform and master dataset. This represents over 80% of HSE funded expenditure. IFMS has also been implemented in Tusla, the Child and Family Agency, since 2023 as it is a shared partner in our financial systems. The project is now moving forward with IFMS stage 2, which extends the delivery of the system, including national standard finance and procurement processes, supported by a shared services operating model, to the 58 voluntary organisations in scope, which comprise all organisations funded under section 38 of the Health Act 2004 and the larger section 39 organisations also funded by the HSE. The Minister for Health has requested of me an accelerated roll-out that would at least include the major section 38 organisations, most notably first the voluntary hospitals. On that basis and subject to detailed planning, I am advised that the aim is to have 100% of acute spend on IFMS by the end of 2027, and over 97% of disability spend on IFMS by the end of 2028, with 100% saturation by the end of 2029. To clarify, when I say "acute spend", I mean the voluntary sector. It is already implemented in the HSE's acute spend.

Cumulatively, from 2016 to the end of August 2025, €198.1 million has been spent on the finance reform programme of which IFMS is the major element. This comprises €92.2 million in ICT capital costs, €59.4 million in IFMS project in-house revenue expenditure, and €46.5 million in revenue expenditure on software and operating costs.

A number of benefits relating to earlier reporting, greater visibility and transparency, and implementation of a strengthened national standard internal control environment have already been achieved. In parallel with progressing an accelerated roll-out to the voluntary sector, work is ongoing to make the necessary changes to business practices in those areas that now have IFMS. That is to ensure we have the full benefit from the new system. In line with this work and to strengthen controls, I have recently approved the change in authority limits for sign-off of expenditure.

There are significant learnings from our past history of weak, disjointed and dated systems, the majority of which were inherited from the health board era.

The majority of these were inherited from the health board era. The introduction of IFMS and, in the case of the people management system, the national integrated staff records and pay system, NISRP, are now combining to strengthen governance and allow the HSE to operate in a more integrated system environment that is easier to control.

Overall in 2024, the HSE, as a service provider, and its partner organisations saw significant levels of demand and response to our 5.5 million people. This is a growth of 100,000 people in the previous 12 months. We saw a record 1.47 million attendances at our accident and emergency departments and a corresponding reduction of trolleys by 10% in that year. In 2024, 73% of people were waiting less than nine months for an elective procedure. Major improvements in waiting times across outpatient departments, OPD, and scope lists have been achieved. It was the first year we reached the maximum intended target in the delivery of home supports to older people, delivering 23.7 million hours. We supported 24,000 people in nursing home care.

Our progress and reforms at several levels continue in 2025, with a principal focus on the productivity of our system and, increasingly, across an extended standard week. Perhaps our greatest challenge in 2026, apart from the obvious one, being access, is consistency. We now have tried and tested examples of best practice and reforms. It is the scaling of those that will feature in the plan for the year ahead. The year 2025 has seen strengthened financial controls and better outcomes now in the HSE's finances in the health Vote, with work yet to be done on the disability Vote. The outturn projected for 2025 is one of the better financial outturns in the HSE's history over the years.

I will make one amendment to the briefing document provided to the committee members. I want to ensure absolute clarity on the information. We have advised that out-of-date stock is due to be destroyed by the end of this year. It will be properly destroyed and there will, therefore, be no further cost to its storage. I have become aware this morning that there is a separate supply of masks that are not yet out of date but which, based on the volume we are carrying versus the volume we are using, I believe will come to fall out of date in 2026 and 2027, and certainly by 2028. I want to make the committee aware of that as it would be disingenuous to not have included this in the first instance.