THE CHIEF executive of the Health Service Executive (HSE), Prof Brendan Drumm, accused the Taoiseach Brian Cowen of making "unreasonable" and "unwarranted" criticism of the HSE's financial management when he was Minister for Finance, it has emerged.
In a letter to Mr Cowen last September, which has just come into the public domain, Prof Drumm indicated he was particularly unhappy at comments made by Mr Cowen about the use by the HSE of money provided by the Oireachtas as capital and development funding to offset deficits in day-to-day spending.
In his letter Prof Drumm said Mr Cowen's underlying criticism of the health service's financial performance was "unwarranted".
Prof Drumm also maintained he was extremely surprised that Mr Cowen had said it was "unacceptable" for the HSE to use capital and development funds for current spending in order to remain within its official budget. He said this practice was "completely in line with the funding model imposed on the HSE since it was established".
He wrote: "Historically, funds issued to the health services by Government have been issued in the full knowledge that they were not sufficient to meet the cost to deliver planned services. This was justified on the basis that the new developments would be delayed in their first year to generate the savings necessary to make up the shortfall."
Prof Drumm went on to say the record showed this practice had been used for many years by the former health boards and the Department of Health to cover base budget deficits and ultimately to ensure that unfunded services did not have to be withdrawn.
"Clearly the HSE cannot conduct its business using a different model until there is agreement on an alternative and we have on several occasions pointed out the lack of clarity and inherent flaws associated with this current model. The suggestion that the use of this practice by the HSE reflects a need for it to achieve better management of its finances is unreasonable," he said.
Prof Drumm said he had felt compelled to reply to Mr Cowen's criticism "given its potential impact on my standing as vote holder and accountable officer and the HSE's reputation for financial probity".
Mr Cowen had made his comments in a letter to the Minister for Health, Mary Harney, after it emerged the health service at the time had overspent its budget by more than €200 million.
The Government later agreed to allow about €216 million which had been earmarked for the nursing home repayment scheme to be used to bail out the HSE.
Prof Drumm stressed in his letter that the HSE had at all times managed its budget in a responsible fashion and had remained within its budget in its first two years of operation while delivering services in excess of the levels originally agreed.
