Mr. Kieran Lenihan

PAC32-R-47 B

25th July 2016

Mr. Kieran Lenihan, Committee Clerk, Committee of Public Accounts, Leinster House, Kildare Street, Dublin 2.

Dear Mr. Lenihan,

I refer to your correspondence of 20th July re follow up issues from our attendance at the Public Accounts Committee meeting on Friday 15th July 2016. Below please find the response to item 2 in the correspondence. The information for items 1, 3 and 4 is being collated and compiled and I will forward as soon as it is finalised.

A note on the costs associated with the oversight function in the HSE i.e. internal audit, risk committee, compliance unit, national audit committee to include a staffing schedule and qualifications.

1) The Audit Committee is appointed by the HSE Directorate in accordance with the Health Service Executive (Governance) Act, 2013. The Committee’s duties, as set out in the legislation, are to advise each of the Directorate and the Director General of the HSE on financial matters relating to their functions. The Committee operates under agreed Terms of Reference and the focus of the Audit Committee is on oversight of and advice on: (i) the HSE’s financial reporting; and (ii) the HSE’s systems of internal financial control and financial risk management.

The Audit Committee has an independent chair and comprises a member of the HSE Directorate and six other external members. It acts in an advisory capacity and has no executive function. The committee met on seven occasions in 2015.

Audit Committee Members:

 Mr. Peter Cross (Chairman) – Managing Director of Trasna Corporate Finance (and a Fellow of Chartered Accountants Ireland).  Mr. Joe Mooney – former Principal Officer of the Department of Finance  Mr. John Hynes – former Secretary General at the Department of Social Protection

Page | 1  Mr. David Smith – Principal Officer at the Department of Health  Mr. Stephen McGovern – Head of CRH Europe Compliance and Ethics (and a Fellow of Chartered Accountants Ireland)  Dr. Sheelah Ryan – public health physician, former CEO of HSE West/WHB  Professor Pat Barker – Chartered Accountant, Member of the Council of the Institute of Chartered Accountants and Chair of the Institute’s Education Board, and former Associate Dean of DCU’s Business School  Ms. Anne O’Connor – HSE National Director of Mental Health Services.

2) The Directorate established a Risk Committee in accordance with the Health Service Executive (Governance) Act, 2013 for the purposes of providing assistance and advice in relation to HSE risk management systems to ensure that there is a planned and systematic approach to identifying, evaluating and responding to risks and providing assurances that responses are effective. The Risk Committee, which reports to the Directorate, has an independent chair and comprises a member of the HSE Directorate and five other external members. The Committee operates under agreed Terms of Reference and focuses principally on assisting the Directorate in fulfilling its duties by providing an independent and objective review of non-financial risks.

The Risk Committee acts in an advisory capacity and has no Executive function. The Committee met on six occasions in 2015.

Risk Committee Members:  Mr. Tom Beegan (Chairman) – CEO & Managing Director, Tom Beegan & Associates, and former Director General of the Health and Safety Authority  Mr. Simon Kelly – Energy Consultant and former CEO of the National Standards Authority of Ireland  Mr. Pat Kirwan – Deputy Director, State Claims Agency  Ms. Margaret Murphy – WHO Patients for Patient Safety  Ms. Rosemary Ryan - Manager – Client Enterprise Risk Management Services, IPB Insurance  Dr. Stephanie O’Keeffe – HSE National Director Health and Wellbeing

The costs associated with the Audit and Risk Committee The Departments of Health and Public Expenditure and Reform have sanctioned payment of fees to external members of the HSE’s Audit and Risk Committees of €285 per meeting up to a maximum annual fee of €1,710 and they are entitled to claim for payment of travel and subsistence costs for attendance at meetings in line with normal practice and on the same basis as for public servants.

As the HSE Audit Committee is a statutory committee (established under section 40H of the Health Act 2004 (as amended), the sanction conveyed by the Departments of Health and Public

Page | 2 Expenditure and Reform for the annual fee to the Chair of the HSE Audit Committee is equivalent to that paid to the Chairperson of a Category 4 non-commercial state body (€8,978).

Fees are subject to taxation and cannot be paid to serving public servants under the One Person One Salary rules. Therefore only certain members are eligible to claim fees and not all of these members have chosen to claim the meeting fee.

The cost associated with the Audit Committee in 2015 was €14,651.00.

The cost associated with the Risk Committee in 2015 was €5,834.00. 3) Internal Audit Staff:

The Internal Audit function has 49 staff and their qualifications are as follows:

 20 qualified accountants  2 accounting technicians  1 certified information systems Auditor  24 auditors who have undergone various training programmes and on the job training  2 Administrative support staff

The cost associated with the Internal Audit Division in 2015 was €2.96m.

4) Compliance Unit: The Compliance Unit was set up in late 2014 and currently has 12 staff.

It is important to note that at the time of the establishment of the Compliance Unit, the moratorium on public sector recruitment was in place, and in this context, there were limitations on the number of staff that could be recruited or transferred to the Unit given the competing demands of the wider health services.

The cost associated with the Compliance Unit was €845k in 2015.

The Compliance Unit staff includes:  Two qualified accountants (one with a post graduate qualification in Governance).  One with a legal qualification.  One with an IT qualification.  One with an MSc in Management.  7 others who have a wide range of administrative skills and experience and have extensive knowledge of the HSEs relationship with the Section 38 & 39 Agencies.

With the lifting of the ban on recruitment the HSE has agreed to add additional staff with accounting / financial backgrounds to the Compliance Unit to strengthen the team.

Page | 3 If any further information is required please do not hesitate to contact me.

Yours sincerely,

______

Ray Mitchell Assistant National Director Parliamentary Affairs Division

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