North Eastern Health Board

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NORTH EASTERN HEALTH BOARD

REPORT OF THE COMPTROLLER AND AUDITOR GENERAL

This report has been prepared pursuant to Section 6 (4) of the Comptroller and Auditor General (Amendment) Act, 1993.

1.

Buildings.

1.1

The board has included a nominal value of £41 million for its buildings in the balance sheet at 31 December 1994 despite the fact that these buildings have an insuranc e value of £235 million. The Chief Executive Officer (CEO) informed me that due to the fact that most of the Board's hospitals are more than 40 years old, the original cost would now be fully depreciated per the Department of Health guidelines and obtaining a realistic value for these buildings to incorporate additions over the years is virtually impossible. He considers that the value placed on each hospital is reasonable arid provides a starting base and a record which can be worked with.

1.2

It was noted during audit that all title deeds were not available for 49 of the 109 land and building holdings. The CEO informed me that the vast majority of land and building assets held by the Board, which were previously owned by various Local Authorities, became Board property under the Health Act 1970. While the Local Authorities passed numerousfiles to the Board at the time quite a number of property

files were missing and the Local Authorities were adamant in recent years that these files are no longer available. The Board had been systematically compilingfiles on their properties, registering lands in the name of the North Eastern Health Board and ensuring proper maps are available. However due to staffing resources available the Board had not obtained all the correct maps and hopes to make major advances in this area during the coming year.

Hospital Stocks.

Stock records are not being maintained in any of the pharmacies of the Board's hospitals. The year end valuation of these stocks amounted to £267,600. The CEO stated that while there are no stock systems in place in the pharmacies the hospitals have a computerised issues system which records the issues to the various wards. The Board is currently reviewing the system with a view to having an interface to the General Ledger and Accounts Payable systems, and if the current system cannot be adapted it is the Board's intention to install afoil Pharmacy system which will include stock records.

The total value of stocks at Our Lady's Hospital, Navan at 31 December 1994 w as £581,100 of which £536,500 was in respect of medical appliances. The high value of the medical appliances is due to the fact that the Regional Orthopaedic Unit is based in this hospital.

The Board does not have a proper stores administration system or even a proper stores in this hospital. However, the CEO informed me that there are plans to provide a new

stores building in the next phase of developments, if funds are made available. Recently an officer was appointed to oversee the implementation of a stores system at the hospital.

Billing of Patients.

Prior to the introduction of the direct payment scheme with the Voluntary Healt Insurance Board (VHI) in the Board's hospitals in 1992/1993, patients who availed of private and semi-private treatment and were members of the VHI were required to pay the hospital directly and make a claim for a refund from the VHI. In order to make this claim the patient required the relevant consultant to certify a claim form.

It was notedfrom a review of the debtors ledger at 31 December 1994 at one of the Board's General Hospitals that there were accounts outstanding relating to private and semi-private treatment of patients, the majority of whom were members of the VHI These accounts totalled £67,323 for the period 1985 to April 1989 and £73,024 for the period May 1989 to December 1992. In June 1994 the hospital sought approval from the finance officer to write-off the £67,323 but this was refused on the basis thaj; the situation arose due to a consultant's failure to sign VHI forms

In reply to my inquiries the CEO informed me that the £140,347 was the total income forgone by the Board due to the reluctance of one consultant in particular to deal with financial matters. However, the consultant performed medical duties admirably. While the Board had forgone this income and was aware of the problems regarding the noncollection of VHI income in the Hospital, the CEO was of the opinion nevertheless that the Board had been a net beneficiary due to the actions\inactions of the

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consultant. This opinion was based on the fact that the Board had benefitted because the consultant had not been cashing some salary cheques for a number of years, nad not claimed refunds for some medical defence insurance or for parts of the consultant's contract since 1981, had not taken full leave/rest day entitlements and had provided full cross cover thereby not requiring the Board to engage locums which would have cost £126,000 approximately. The consultant has recently requested that outstanding cheques and other matters be honoured and has agreed to accept an amount less than full entitlement. The CEO stated that there had been no loss of income to the Board at any other acute hospital due to the non completion of VHI forms by consultants

4.

Creditors and Accruals

The amount included in the accounts for trade creditors and accruals amounted ijo £6,964,375 at 31 December 1994. Because of the fact that there is no creditors ledger and therefore no reconciliations of suppliers' statements it was difficult to be satisfied that the liability is accurately stated in the accounts. The CEO informed me that while every effort is made by the Finance Department to ensure that only proper accruals are included in the accounts, sums had been accrued incorrectly prior to audit due to a misunderstanding of the accruals principle by some officers. He also stated that friew procedures being introduced will provide strict guidelines relating to accruals ajnd it is hoped that there will be less problems in this area in future

Overtime and on-call allowances

Following a review of payroll expenditure it was noted that 33 staff earned in exlcess of £10,000 each in 1994from overtime and on-call payments including a medical officer who earned £22,980 in overtime. In reply to my inquiry as to whether the system of

overtime and on-call allowances was the most economic way of addressing the needs of patients' care in the Board's hospitals, the CEO informed me that the Board h ad recognised the need to streamline its hospital services and had adopted a policy paper which recommended two groupings of hospitals i.e. Meath/Louth and Cavan/Monaghan. A number of recent medical consultants appointments have been made to the new hospital grouping and a general manager is to be appointed to the Cavan/Monaghan group. These new arrangements will rationalise the acute hospital services and result in a more efficient service to patients.

Medical Professional Indemnity Insurance

One of the conditions of the contract of employment between the Board and its consultants is that the consultant shall at all times while continuing to hold the appointment keep him/herself insured against claims arising from malpractice or negligence in relation to the appointment with the Board. The Board makes a contribution to the consultant towards this insurance, being 90% of the premiuni paid.

During audit it was noted that the consultant referred to earlier in the Report, had not complied with this condition of service while employed by the Board between IV[ay 1990 and October 1993, a fact which the Board only became aware of in September 1995. In reply to my inquiry as to whether the consultant had exposed the Board to a risk of a claim from a third party during this period the CEO informed me that the Board's insurers had indemnified the Board against any claim which may arise for the period when this consultant did not have insurance cover. All other medical consultants have complied with the requirement regarding medical indemnity insurance and all hospital administrators have been instructed to ensure that all consultants have

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medical indemnity insurance in place, whether they claim a refund or not and thalt they fulfil the conditions of contract.

John Purcell Comptroller and Auditor General

Treasury Building

Ity. December 1995

Dublin Castle