HSE Audit and Risk Committee meeting minutes 14 February 2025

Members Present:

Yvonne Traynor (Chair), Anne Carrigy, Michael Cawley, Pat Kirwan, Éimear Fisher, John Moody and Sharon Keogh

Apologies:

Michelle O’Sullivan

HSE Executive Attendance:

Kate Killen White (REO Dublin Midlands), Joseph Duggan (Chief Internal Auditor), Stephen Mulvany (Chief Financial Officer), Mairead Dolan (Asst Chief Financial Officer), Brian O’Connell (ND, Head Strategic Health Infrastructure & Capital Delivery), Joe Ryan (ND Public Involvement, Culture and Risk Management/Chief Risk Officer), Dara Purcell (Corporate Secretary), Patricia Perry (Office of the Board)

Joined the Meeting:

John Crean and John Byrne (C&AG), Monica Percy (GM Governance & Compliance), Gareth Morton (ND Procurement), Fran Thompson (CIO), Margaret Kilmartin (AND SAP Centre of Excellence), Emmet Galvin (Data Analytics Manager), Elaine Kilroe (AND Enterprise Risk Management), David Langton (AND Central Compliance Function)

Minutes reflect the order in which items were considered and are numbered in accordance with the original agenda.  All performance/activity data used in this document refers to the latest information available at the time.

The Chairperson held a private session to consider the agenda, papers and the approach to conducting the meeting.

The Chair introduced and welcomed new Committee members Ms Anne Carrigy and Mr Michael Cawley.

2.1 Conflicts of Interest

No conflicts of interest were declared.

2.2 Minutes

The Committee approved the minutes of 04 December 2024.

2.3 Action Log and Follow Up Items

The Chair advised that she had reviewed the ARC Action Log with the Board Office and all actions were being progressed as per the Update Report.

2.4 Review of Committee effectiveness 2024 - verbal

It was agreed that external Committee members would forward individual comments to the Chair.

Anne Marie Hoey, Chief People Officer joined the meeting

3.1 Revised Policy on Fraud and Corruption

The CPO advised the Committee that the revision to the HSE Policy on Fraud and Corruption was implemented in January 2025, and outlined the objective and updates included in the Policy.

The Committee discussed the Policy and the responsibilities of the Committee in providing oversight and advice related to anti-fraud in the HSE. The Committee requested that the Policy be strengthened, to mandate staff to report fraud rather than encourage and highlighted the strong internal controls to reduce the opportunity to commit fraud and serve as a deterrent.

The Committee questioned if an organisation potentially defrauds the HSE, can monies be reclaimed, and it was agreed that the CFO would revert.

C&AG Officials John Crean and John Byrne joined the meeting

4.1 Comptroller & Auditor General (C&AG) Audit Planning Memorandum - audit plan for year ended 31 December 2024

The Deputy Director of Audit C&AG presented to the Committee the audit plan for year ended 31 December 2024, which set out the C&AG’s proposed approach for the audit of the HSE, which will be conducted in line with International Standards on Auditing (ISA’s). The audit will provide an opinion on whether the financial statements properly present the state of the HSE’s affairs at year end and the income and expenditure for the year in accordance with the accounting standards specified by the Minister for Health (in consultation with the Minister for Children, Disability and Equality), as set out in the basis for preparation section of the accounting policies.

He identified for the Committee the significant business and financial statement risks faced by the HSE and explained the approach to dealing with these in the audit. Any matters of significant importance identified during the course of the audit would be reported to the Committee. It was noted that a further update will be brought back to the Committee before the final audit report in May 2025.

The Committee discussed the IFMS rollout to Section 38 agencies and requested that an outline of timelines be brought to a future Committee meeting. With regard to a discussion relating to an IFMS control issue, the CFO indicated that he would check if it was compliant and revert to the Committee.

C&AG Officials John Crean and John Byrne left the meeting

4.2 AFS Timelines and Issues 2024

The Committee noted the briefing paper circulated, outlining the statutory and regulatory background to the production of the Annual Financial Statements (AFS), the associated timelines and an overview of any issues which may have a material impact on same. The paper provided an overview of key issues of the Audit of AFS 2024 and the key issues that have arisen in the past 2 years that are reflected in the Statement of Internal Controls and/or Audit Certificate only.

The Committee discussed the current significant issues and judgements impacting AFS 2024 and asked that the section regarding Weaknesses in Grants to outside Agencies, reflect the final position for 2024 while noting the delays in the signing of the Service Arrangements.

The Committee noted that the final draft AFS would be brought to the March meeting for recommendation to the Board.

4.3 Financial Outturn 2024 (Preliminary Results pre AFS completion)

The CFO provided the Committee with an update in relation to the Financial Outturn for 2024. The Committee noted that the HSE operated within the available cash of €1.749bn & €162m supplementary funding approved by the Oireachtas for the Department of Health (DoH) and Department of Children, Equality, Disability, Integration & Youth (DCEDIY) funded services respectively to end 2024, which is in line with the 2-year agreement reached with DoH for funding of services.

As of 31 December 2024, the HSE was marginally over the combined overall funded DoH Expenditure Limit and DCEDIY Budget by €65.4m / 0.3% (Surplus €5.1m / .001% DOH funded and deficit €70.6 / 2.3% DCEDIY funded). Within that the Health Regions were over their respective expenditure limits by €670.5m / 4.1%. Underspends within National Schemes / National Services and Corporate areas offset the overspend against limits in the Regions.

The Committee queried figures presented which indicated €87m overall patient income surplus across the six health regions and it was agreed that the CFO would revert to the Committee.

4.4 Non-Pay Savings 2025

Gareth Morton, National Director of Procurement

The CFO introduced Mr Gareth Morton, National Director of Procurement to the Committee. The CFO presented an update to the Committee and advised that substantial non-pay savings need to be delivered in 2025 with focus on non-pay savings initiatives within the economy space (lowering input costs) including price reductions, price harmonisation and interchangeability of products where same can lower costs. He outlined elements of this improved approach and initiatives to be coordinated with the National Finance and Procurement Division.

He advised that he and the ND Procurement will engage proactively with the REOs and their teams to facilitate their necessary support for the prioritisation of these initiatives within each region, with regional leadership in terms of ensuring sufficient focus across each region for the various tasks related to these savings being the key.

The Committee outlined further initiatives that should be considered, and requested a more detailed plan be brought back to the Committee at the April meeting outlining savings and timelines so that the Committee can track the progress. The Committee asked that the CTTO attend a future meeting to provide an update on the Individual Health Identifier.

A discussion took place in relation to the Joint DoH/HSE Productivity & Savings Taskforce and the HSE National Productivity Unit, and the link with the Committee. It was agreed that a briefing paper be brought back to the Committee at a future date.

4.5 2024 Review of Effectiveness of System of Internal Control within the HSE – Controls Assurance Review Process

Monica Percy, General Manager, Finance Governance & Compliance joined the meeting

The Committee were presented with an update in relation to the 2024 Controls Assurance Review

Process (CARP) by the General Manager, Governance & Compliance. The Committee were advised that 4,323 staff and senior management completed the CARP, an increase of 2% participation on 2023, and that participation levels of clinical staff had increased by 3%. She outlined that the delivery of training for participants was provided online, and an independent external verification process had been completed to provide additional assurance on the integrity of responses, who tested the responses of 6% of the CARP participants.

The Committee noted as part of the CARP Leadership process, Senior leadership were required to review key results for their area and agree to addressing the areas identified for improvement and implement assigned action plans to address same. These proposed Action plans were provided to each SLT member as part of the review process by the Governance & Compliance team on review of the results for each area and serve to support ongoing improvements within the local areas.

The Committee highlighted the need on continuing focus in improving controls across the organisation, and increasing and expanding the breadth of participation with the CARP process. The participation rate of 58% of the 7,398 staff who were invited to complete the CARP was discussed along with the lesser participation rate in the health regions. The Committee highlighted the importance of a 100% completion rate and requested that each of their non-participating staff complete the process for 2024 and an update be brought back to the Committee. The Committee stressed the importance that the mandatory nature of the process be formalised for 2025.

4.6 Procurement Compliance (Progress of self- assessment of non-compliant procurement)

The ND Procurement presented a paper outlining the update with regard to the Procurement Compliance Self-Assessment returns for Q1 – Q3 2024 based on data received as of 18 November 2024 which recorded circa 90% compliance rate and circa 10% (€91m) declared not compliant.

The Committee noted that the reported compliance for assessed invoices shows a steady increase over 2024 and is currently on target to meet the Board Strategic Scorecard target of an increase in reported compliance from 2023 by 2.5% for Q3 2024 and 5% for Q4 2024. Of the €91m returns self-assessed as being non-compliant, circa €57m (63%) related to E Health spend; €52m of which is charged to Corporate E Health cost centres and the balance of €5m is voice / data charges allocated across Hospital Groups, CHOs and other Corporate areas.

The Committee welcomed that HSE Procurement has launched a new training programme to support budget holders, which will educate participants on how to procure in a compliant manner and meet HSE’s obligations under the National Financial Regulations.

It was noted that a detailed full year report for 2024 will close mid-February following by an independent verification exercise and will be provided at the April meeting.

4.7 Contract Approval Requests

Fran Thompson, CIO and Margaret Kilmartin, AND SAP Centre of Excellence joined the meeting

The National Director of Procurement and the Chief Information Officer presented to the Committee the following Contract Approval Request (CAR).

The Committee considered the details of the proposed CAR and agreed to recommend to the Board for approval.

ND Procurement, CIO and , AND SAP Centre of Excellence left the meeting.

5.1 HSE Internal Audit Plan 2025

The Chief Internal Auditor (CIA) presented to the Committee the planning approach and proposed plan for Internal Audit for 2025, which was developed based on the Audit Universe for 2025, along with suggestions by management and the Committee, taking into account existing and emerging risks, and designed to meet the focus areas for Internal Audit as set out in the National Service Plan (i.e. assurance on HSE-wide control issues and risk based planning and priorities).

He advised that the Plan is driven by the HSE’s objectives, and the risks that may prevent the HSE from meeting those objectives. Given the ongoing changes to HSE structures with the appointment of Regional Executive Officers and the implementation of Health Regions, the Plan presented proposed 44 operational and 17 ICT topics, totalling 61.

The Committee reviewed and approved the Internal Audit Plan 2025.

5.2 IA Monthly Report

The Chief Internal Auditor (CIA) provided the monthly report update to the Committee in relation to the reassignment of Internal Audit staff and advised that a meeting is to be held with Forsa in the coming week to progress the Internal Audit Change Programme.

The Committee discussed overdue audit recommendations remaining in excess of 80% as presented at the December 2024 meeting, and requested that the CIA would identify an appropriate list of managers that the Committee would ask to attend to explain the overdue recommendations in the area of their control.  The CIA outlined that Internal Audit is assessing all overdue recommendations for their continuing relevance and significance. The Committee requested a list of outstanding recommendations that are closed due to the passage of time be brought back to the Committee.

5.3 IA Balanced Scorecard

The CIA introduced Mr Emmet Galvin, Data Analytics Manager to the Committee, who provided an update in relation to the Internal Audit Balanced Scorecard which will be the strategic management framework used to track all Internal Audit’s overall performance. The Committee welcomed the update and approved the approach to the IA Balanced Scorecard which will replace the previous KPI metrics, and outlined suggestions for consideration relating to timeliness/aging of recommendations closed; cost of an audit (e.g. days, travel & subsistence); and measurable impact of recommendations implemented (e.g. reduced cost, process improvement).

Brian O’Connell, ND, Head Strategic Health Infrastructure & Capital Delivery joined the meeting

6.1 Future Health Infrastructure Delivery Model

The final draft report regarding the Future Health Infrastructure Delivery: Development of an effective health infrastructure and asset management service function within HSE, was tabled for consideration by the Committee for recommendation of acceptance.

The report had been considered by the Committee at the meeting on 07 December 2024 where clarifications were sought. The National Director (ND), Head Strategic Health Infrastructure & Capital Delivery had presented a composite response to the Committee’s queries via email and further clarifications were submitted by the Committee.

The Chair welcomed the responses received by the ND, Head Strategic Health Infrastructure & Capital Delivery and a discussion was held. Further to the consideration of the Future Health Infrastructure Delivery, the Committee agreed to recommend to the Board for approval, and requested that as part of the updates on the implementation of the Capital & Estates Strategy, that the ND, Head Strategic Health Infrastructure & Capital Delivery provide regular updates to the Committee on the development of the overall structure for the function.

6.2 Review of Capital Plan 2024 outturn

The ND, Head of Strategic Health Infrastructure and Capital Delivery presented to the Committee a briefing on the HSE Capital 2024 Outturn. The Committee noted the allocations for 2024; the reallocation of funding during 2024; and the 2024 Final Outturn, and that the active management of the Capital Plan throughout 2024 resulted in a successful outcome including the full and efficient maximum utilisation of all available capital funds including increased allocation to address critical healthcare infrastructural deficits.

6.3 Quarterly Report - Delegated authority for property transactions

The ND, Head of Strategic Health Infrastructure and Capital Delivery provided a summary report on transactions approved between €2m & €10m and low value/nominal CAT 3a transactions for the period of 01 October – 31 December 2024, which was noted by the Committee.

The Committee discussed a number of property transactions included in the report, and queried the delegated authority to the National Director for the approval of property transactions between €2m & €10m, and the authority for certain property disposals (freehold and leasehold) at nominal value to charities, approved housing bodies or local authorities be reviewed with a view to bringing these transactions to the Committee for approval. The Committee asked for a review of all property transactions under the current delegation in order to consider any adjustment required to policy going forward.

6.4 Building Contracts and Properties

The National Director, Head of Strategic Health Infrastructure and Capital Delivery presented the following proposed contract to the Committee, who considered with close scrutiny the detail, and agreed to recommend to the Board for approval.

1. Strategic Acquisition of Hertz Europe Service Centre Ltd, Seatown, Swords, Co Dublin – supplemental briefing

Elaine Kilroe, AND ERM and David Langton, AND Central Compliance Function joined the meeting

7.1 HSE Corporate Risk Register Q4 2024 Report

The Chief Risk Officer (CRO) presented to the Committee the Q4 2024 Corporate Risk Register (CRR) Report. The Committee noted the 10 Open risks and 7 Watched risks on the Register, of which 3 Open risks were rated High, 7 Open risks rated Medium, and changes in residual ratings of two risks.

The Committee held a discussion relating to R004 Health Care Acquired Infections and Anti-microbial Resistance, and watched risk W005 Health and Wellbeing of the Workforce and the placement in the new health regions. The CRO informed the Committee that Health and Wellbeing was currently situated centrally under the People directorate and its placement in the new health regions would form part of the overall organisational reform that the Chief People Officer could elaborate on. The Committee requested clarification of the new Regional Structures for the management of all Staff Workplace Health and Wellbeing functions. The Committee discussed the insufficient access to occupational health for staff and asked for assurance that occupational health facilities are available for all staff.

The Committee discussed clinical risk and the responsibility to provide oversight of certain clinical and patient related risks, which comes under the Committee’s authority, and were advised that a meeting is being held with the Board Chair, CCO and CRO with regard to the Clinical Risk Register on 26 February 2025.

The Committee noted that going forward, under the new organisational structure, that risks previously owned by the CRO are to be collectively owned and reviewed by the REOs or National Directors as relevant, and concludes the transitional arrangement previously in place and supports ongoing visibility of risks at both regional and national level.

7.2 2024 Annual Report – Protected Disclosures and associated PDA-1 and PDA-2 forms

The 2024 Annual Report – Protected Disclosures was deferred to the March 2025 meeting.

The AND CCF advised the Committee that under Section 22(1) of the Protected Disclosures Act the HSE shall provide information to the Minister for Public Expenditure, NDP Delivery and Reform on the number of the reports made in each preceding calendar year by 01 March. The Committee considered and approved Form PDA-1 (information concerning reports made to the HSE via internal reporting channels); and Form PDA-2 (information concerning reports made to the HSE or transmitted to the HSE via external reporting channels). The Committee noted that both Forms will be shared with the Department of Health, and Department of Public Expenditure, National Development Plan Delivery, and Reform before the 01 March 2025 deadline, and published on the HSE website before the 31 March 2025 deadline.

AND Enterprise Risk Management and AND Central Compliance Function left the meeting

8.1 Half Year Report on Strategic Legal Matters

The Half Year Report on Strategic Legal Matters was deferred to the March 2025 meeting.

There was no further business. The Chair thanked the Committee and SLT members.

The meeting ended at 1.55pm

Terms of Reference: Audit and Risk Committee