Denise Mitchell (Dublin Bay North, Sinn Fein)
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96. To ask the Minister for Health if his Department conducted or is in the process of conducting financial audits of section 38 and 39 funded agencies; and if he will make a statement on the matter. [20941/16]

Simon Harris (Wicklow, Fine Gael)
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Oversight of agencies funded under Section 38 and 39 of the Health Act is the responsibility of the HSE under its establishing legislation. The HSE has a formal national governance framework with national standardised documentation which governs grant funding provided to agencies under sections 38 and 39 of the Health Act 2004. This governance framework seeks to ensure the standard, consistent application of good governance principles which are robust and effective to ensure that both the HSE and the grant-funded agency meet their respective obligations.

The HSE requires that all grant aided non-statutory agencies submit their annual audited accounts to the HSE. As part of its annual audit plans, the Internal Audit Division of the HSE conducts audits of a number of agencies each year, several audits are currently in progress. Such audits generally focus on the systems of internal controls operated by the funded agencies, and compliance with the HSE Service Level Agreement (SLA). The scope is distinct from the statutory annual audit of accounts carried out by the external auditors of the agencies. In addition, a number of Internal Audits have been conducted into the HSE’s own management processes and controls over the funding and monitoring of services provided by non-statutory agencies.

An Annual Compliance Statement (ACS) process is in place whereby the Board Chairs of each Section 38 agency are required to certify on an annual basis that they are compliant with the necessary governance requirements or in cases where they are not compliant, they are obliged to explain why that is the case. In addition, and in order to provide external assurances to the HSE, it was decided that a review of governance at Board and Executive level in all Section 38 Providers, to be conducted by external consultants, would be undertaken. The purpose of these reviews is to establish the level/standard of governance in place in these organisations and to confirm independently that the governance practices and procedures accord with those set out in their respective Annual Compliance Statements.

These reviews involve an examination of key governance processes and documents, including obtaining confirmation that there are internal financial controls and that formal written financial procedures are in place in these organisations. Six of these reviews are currently underway. The outcomes of the reviews will both inform the HSE’s relationship with the agency concerned and any further enhancement of the HSE’s overall governance framework.

The HSE's Audit Committee, also established under the Health Act 2004, advises both the Director General and the Directorate on financial matters relating to their functions. The HSE’s Internal Audit Division is responsible for ensuring that a comprehensive programme of audit work is carried out annually throughout the HSE. The purpose of this work is to provide assurance that controls and procedures are operated in accordance with best practice and with the appropriate regulations, and to make recommendations for the improvement of such controls and procedures. The HSE Audit Committee, to which the Division reports monitors the work of the Division.