All spending in the health service of more than €10,000 on non-clinical items must now be approved by the chief executive of the Health Service Executive in Dublin under new rules aimed at controlling expenditure.
All expenditure on clinical items or services to the value of more than €10,000 has to be authorised by the head of each HSE region, rather than locally in hospitals.
Minister for Public Expenditure Jack Chambers, meanwhile, said on Wednesday the HSE had a financial deficit of about €400 million, but that its cash position had improved in June. He said HSE chief executive Anne O’Connor was taking additional corrective measures to deal with the service’s budgetary issues.
Labour Party health spokeswoman Marie Sherlock, however, said under the new restrictions hospital chiefs were “having to literally spend their time sending on documents [to the chief executive] for approval for the fruit and vegetable bills as well as on taxis for dialysis [patients]”.
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One memo which was issued to health service staff in the south of the country on July 9th said the new requirements regarding approval of expenditure greater than €10,000 were “in line with directives from the Minister for Health and the Minister for Public Expenditure”.
The memo said that, effective immediately, all payment orders exceeding the above figure for clinical and non-clinical expenditure must be approved by the HSE regional executive officer and must not be authorised locally.
However, the Department of Health said the approvals (required under the new instruction) are not at regional executive officer level.
“The instruction issued by the HSE CEO [chief executive] was that, with immediate effect, all purchase orders above €10,000 require CEO approval, with no exceptions, with weekly chief financial officer review utilising the Integrated Financial Management System to support compliance,” it said.
It said the relevant directive “was issued by the HSE chief executive officer, following discussions with the Department of Health in relation to the HSE’s financial position and the need to bring expenditure back within approved budget limits”.
It is understood that, within the directive, there are two separate instructions for approval for payments of greater than €10,000. Authorisation of non-clinical items must be provided by the HSE chief executive in Dublin, while payments for clinical items have to be authorised by the regional chief executive.
The department said Minister for Health Jennifer Carroll MacNeill and her officials have been continuously engaged with the HSE chairman and chief executive and the Minister for Public Expenditure “throughout the year in relation to the HSE financial position, the requirement for improved financial controls and governance arrangements, and the requirement for productivity improvements”.
The Department of Health said O’Connor had issued the additional instruction on cost control on June 19th.
It said the controls applied across the HSE and not only to regions subject to earlier escalated oversight arrangements.
Sherlock said the measures set out in the new directive were reckless and created new bottlenecks in the health service. “No mid-sized company would be allowed [to] run like this, nor should our health service,” she said.
O’Connor’s June directive was the second aimed at controlling costs issued within weeks.
On May 5th, she had told her senior management team that the HSE was “significantly over budget” and that its financial position had “significantly worsened”.
She placed three HSE regions – Dublin and South East, Dublin Midlands and the South West – in what is known as tier three escalation, which involved the introduction of employment controls and greater scrutiny on spending. Effectively, this meant that in these three regions a pause on recruitment was introduced across all non-frontline, non-critical posts.
Speaking at the launch of the Government’s Summer Economic Statement on Wednesday, Chambers said, unlike in previous years, the gap between the official health budget and spending in the Health Service Executive had not continued to grow. He said corrective actions continued to be taken.
