HSE finances: The board of the Health Service Executive (HSE) was informed in a series of financial reports late last year and early this year that management planned to use up to €53 million in funding earmarked for minor capital works to address projected expenditure deficits.
There was major controversy last month when Minister for Finance Brian Cowen revealed in the Dáil that around €56 million originally planned to be carried forward from last year for capital projects had in fact been used by the health service to meet costs under the current expenditure heading.
Provision had been made in the Appropriations Act for the carrying-over of the €56 million in health capital funding from last year for use in 2006.
Mr Cowen said his Department had only been informed late on January 17th that the money had actually been used to cover expenditure costs.
However, official HSE financial reports, which have been seen by The Irish Times, reveal that management had flagged to the board on a number of occasions at the end of last year and early this year that it planned to use the minor capital funding to address the projected deficit.
In a financial report for the month of October, which was presented several weeks in arrears to the meeting of the board of the HSE in December, management said that "to address the projected €68 million net expenditure deficit, the following can be taken account of: €43 million - application of minor capital funding within the National Development Plan for which formal approval has been sought and is expected; any potential for application of further minor capital funding from within the National Development Plan - currently being examined".
In its financial summary presented at the meeting in December, HSE management said that "in vote terms we will be seeking to vire [ move] monies across sub-heads with the support of both the Department of Health and the Department of Finance".
In its financial report for November, which was presented in arrears to the January meeting of the HSE Board, management forecast a projected financial deficit for the year of €58 million less a provision of €53 million which was expected for minor capital funding.
The financial report said that "any projected deficit in the net vote on a revenue basis will be offset by buoyancy in the Appropriations in Aid and also a capital underspend on a vote basis.
"The final outcome of the vote will be known when the Appropriation Account is completed," according to the report.
The financial reports for both October and November, presented at the December and January meetings of the board of the HSE, maintained that management's financial projections were based on "significant phasing of developments such as the accident and emergency and disability packages.
"The implementation of these developments in 2006 will surface as financial cost pressures next year."
The board was told in November that a projected over-run of €58 million on community demand-led drug schemes was being covered in 2005 without any specific funding.
Management told the board of the HSE in January that by moving monies across the votes and by continuing to control expenditure levels that it was confident that it would achieve a financial break-even position for the year.
