Western Health Board Report Of The Comptroller And Auditor General

WESTERN 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.

Control overfixed assets

1.1

Buildings Buildings are included in the accounts at insurance valuation, amounting to £230,499,595 at 31 December 1994. No adjustment has been made to this valuation to take account of the age and condition of the buildings. The Chief Executive Officer (CEO) informed me that the valuations included in the accounts are as a result of a comprehensive revaluation exercise undertaken with the assistance of the Board's insurers which was comp 1994. This was undertaken as afirst step in bringing appropriate values into the Ipoard's balance sheet and was carried out over a considerable period of time and with input of resources and time. The next step will involve technical analysis of the Board's buildings with regard to age and condition and this process is expected to be completed for the 1996 accounts, thereby enabling depreciation to be provided. Due to resources and the many otherfinancial systems which the Board has had to implement it was not possible to have the exercise completed to date. I also inquired as to whether the Board had possession of all the title documents fojr these assets. The CEO stated that over the past number of years a considerable effort h is been made to confirm the title of these properties and that this process, while being slow and expensive, will be on-going over the next few years as there are some properties particularly in the Mayo area, which require re-registration in order to perfect and confirm title.

1.2

Equipment and Vehicles The value of equipment and vehicles shown in the accounts, £2,466,297, represents only the cost of such assets that were purchased in 1994 as the Board does not maintain an asset register which would facilitate the exercise of control over assets and the calculation of their value for accounts purposes. The CEO informed me that the Board is in the process of providing an asset register to facilitate the recording of all equipment and vehicles and it is expected to have this information available for inclusion in the 1996 accounts. In addition, a list of all vehicles is maintained by the Board for insurance purposes and a register of computers has been set up by the management services department. Ambulance and transport services are subject to a specific report to the Board each year. Control is also exercised over assets by local supervisors, heads of departments and through independent checks by internal audit staff.

2.

Hospital stocks Stock records are not being maintained in any of the pharmacies or laboratories of the Board's hospitals. The year end valuation of these stocks amounted to £864,382. The CEO informed me that a computerised stores purchasing system has been implemented

by the Board in four hospitals and efforts are currently being made to implement the system for laboratory supplies in one of them. The Board is also currently drafting an operational requirement for a pharmacy system which should facilitate inventory control. However, he stated that progress in both areas was dependent on availability of ad ditional resources. In the absence of a proper system, control is exercised by pharmacists, heads of departments and by way of a comprehensive stocktaking at year end. Billing of patients Income on foot of patients' bills in 1994 was £10.9m and at the end of the year some £3.6m (excluding road traffic accident cases and outpatient charges) was die from patients after taking account of bad debts written off. In the course of audit some weaknesses in controls over the management of p atients' accounts were noted. In one hospital, monthly control accounts were not being maintained although the facility was available on the computer system. However the CEO informed me that they were now being produced regularly. In another hospital where outstanding amounts due in respect of road traffic accident cases totalled some £ 1.9m at 31 December 1994, no action had been taken until late in 1994 to review these cases for follow-up action. Because of the lack of timely review, many of the debts may have become statute barred. In response to my inquiries, the CEO informed me that all outstanding accounts at this hospital, including those relating to road traffic accident cases, had now been written to and where necessary second reminders had been issued and in many cases money had been received in respect of the amounts due. By year end it was expected to have either collected the amounts due, established the collectability of the accounts or written off the debts.

Creditors and accruals An amount of £4,755,972 is included in the accounts as accruals for goods and services received but not invoiced at 31 December 1994. These accruals were not eadily reconcilable with the underlying documentation maintained at various locations dueto the lack of a clear audit trail. The CEO informed me that, as a result of my audit, improvements are to be made in this area. He stated that, by their very nature, many of the accruals such as refunds of drugs and capitation and nursing home liabilities, lad to be based on best possible estimates. Overtime and on-call allowances Following a review of payroll expenditure it was noted that in 1994, fifteen junior hospital doctors earned in excess of £10,000 each for overtime, the highest being £17,321. Twenty other staff earned in excess of £10,000 each from on- call allowances and overtime, the highest being £27,784. In response to my inquiries 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 overtime for non consultant hospital doctors are paid in accordance with rosters which had been agreed with the Medical Organisations. In many cases it was necessary that full cover was provided to all services and that the bare minimum numbers were covered. The CEO also informed me that on-call allowances were examined on an ongoing basis to ensure only emergency calls were made outside of normal working hours due to the high level of costs involved. The systems laid down had been negotiated at national level and little flexibility was available to local management to change the method and system of cover. 6.

Local Authority Contributions The Board is owed an amount of £107,277 since 1993from two local authorities in respect of their contributions towards supplementary welfare allowances. The CEO informed me that the Board was involved in on-going consultations with th[e local authorities and it was hoped that the matter would be resolved shortly.

John Purcell Comptroller and Auditor General ^ j December 1995

Treasury Building Dublin Castle