HSE’s €15 Million Payment to Defunct Firm for Respiratory Sensors Lacked Contract Approval
The Health Service Executive (HSE) of Ireland faced scrutiny over a €15 million payment made to a defunct firm for respiratory sensors without a formal contract. This revelation emerged during a session with the Public Accounts Committee (PAC), where HSE’s outgoing CEO, Bernard Gloster, characterized the incident as a severe failure in corporate governance.
The Background of the Payment
This payment dates back to the early days of the COVID-19 pandemic in 2020. The funds were disbursed as part of an effort to secure respiratory sensors necessary for patient monitoring. Unfortunately, the HSE suffered a potential loss of up to €7 million due to overpayments to a now-liquidated company.
Key Findings from the PAC Hearing
- Payments to the company were made quarterly, lacking confirmation of stock received in exchange.
- An invoice totaling €723,000 was erroneously paid twice by different sections of the HSE.
- Efforts to recover the lost funds are futile, as the company in question has already collapsed.
During the hearing, Mr. Gloster emphasized that the issue was first brought to light by a grievance from the defunct company itself rather than proactive measures taken by the HSE. He acknowledged a troubling lack of oversight, stating, “Nobody called it. Nobody said stop.”
Consequences of Non-Compliant Procurement
Mr. Gloster also noted that several key individuals involved in the decision-making process have left the organization voluntarily. He expressed a willingness to accept accountability, stating, “I am not afraid of accountability, but if something is exhausted then it is exhausted.”
Audit Findings on HSE Procurement Practices
Comptroller and Auditor General Seamus McCarthy reported that a recent audit revealed at least 9% of HSE procurement transactions—amounting to €132 million—were non-compliant, suggesting that the actual figures may be higher.
Issues with Employee-Owned Companies
Further complicating HSE’s procurement processes, the PAC was informed of payments made to companies owned by HSE staff. A recent review identified 23 employees as directors of such companies engaged in insourcing and outsourcing activities within the HSE.
University Hospital Limerick’s Procurement Practices
- UHL paid over €2 million to companies owned by its employees without establishing formal contracts.
- The total amount spent by UHL for insourced clinical services reached €14.2 million, with no competitive tenders utilized.
- Payments made were to companies either owned or partly owned by HSE staff members, raising potential conflicts of interest.
Mr. McCarthy emphasized the necessity for compliance with public procurement laws, highlighting that none of the payments made for these services adhered to necessary competitive tendering processes. The HSE’s lack of verification regarding employee disclosures raises concerns about governance and transparency in its procurement operations.
