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Dáil
‹ Leaders' Questions (Resumed)

Section 38 agency governance and pay

Summary

Brendan Howlin questioned whether HSE-funded section 38 agencies comply with public-sector pay scales and have stopped notified overpayments. The Tánaiste cited signed compliance statements, external governance reviews and ongoing examination by the Public Expenditure and Reform Department.

If the Tánaiste had intended to give reassurance to people regarding accident and emergency departments, she has singularly failed to do so. A very simple sentence is required, which is that no accident and emergency department will be in any way adversely affected by anything that arises from the report. That is what is needed.

I want to raise another matter, if I can. The HSE funds 1,900 voluntary agencies to a value of approximately €3.1 billion per year. A total of 44 of these agencies, which account for annual expenditure of €2.5 billion, are funded under section 38 of the Health Act. The remaining approximately 1,800 are part funded under section 39 of the same Act. The governance context in which the HSE engages with section 39 agencies is different from what applies in the case of section 38 agencies. For example, the employees of section 39 agencies are not public servants, are not members of the public sector pension scheme and, unlike those in section 38 agencies, are not directly bound by Department of Health consolidated pay scales.

In 2009, the HSE developed a national standard governance framework for non-statutory sectors. In 2010, under this framework, service arrangements were introduced between the HSE and section 38 agencies. In 2013, the HSE sought to enhance the governance arrangements in place for these agencies and to strengthen the direct relationship between the HSE and the board of each agency. Part of this enhanced governance was the introduction of annual compliance processes and annual meetings between the HSE and chairs of all section 38 agencies.

Will the Tánaiste confirm that all section 38 agencies are in full compliance with the HSE requirements regarding board and corporate governance? Will she confirm that all agencies adhere now to Department of Health pay scales in all circumstances? Will she confirm that the chairs and directors of all section 38 agencies have signed the compliance statement, as is now required? Will she confirm that all of the overpayments to individuals employed in these agencies which have been notified to the Department of Health have now ceased? Will she confirm the Government is satisfied with the oversight arrangements that are now in place to monitor what is State expenditure of €3.8 billion?

Comment on this

Reviews of all section 38 providers are being conducted by external consultants. These are under way by the Department of Health at present. The purpose of these reviews is to establish the standard of governance in place in these organisations and to confirm independently the very points raised by the Deputy, that governance practice and procedures accord with those set out in the respective annual compliance statements. The reviews involve an examination of key governance processes and documents, including obtaining confirmation that internal financial controls and written financial procedures are in place in these organisations. Six of these reviews are under way and their outcomes will inform the HSE's relationship with the agencies concerned and any further enhancements needed in the overall governance framework.

The HSE provides funding in return for services to 40 agencies under section 38 and to a much wider group under the other section the Deputy raised, which is section 39.

The value of these relationships in terms of the money given by the Government is in the hundreds of millions. The history has been that, to begin with, they were rather informal arrangements, but we have now moved to a point where they are far more formalised and, as the Deputy said, quite a number of changes in governance have been made. The Minister for Public Expenditure and Reform spoke earlier this morning about the payments made to the CEOs of section 39 bodies and the need to examine them to see if they were in line with the FEMPI legislation. Regarding the agencies about which the Deputy has spoken, the Minister is following up as we speak.

Comment on this

This matter has been teed up for some time, but the Tánaiste has not been able to answer my direct questions. Am I to understand neither she nor the Minister for Health can confirm that all of the agencies the Government funds are adhering to the Department of Health pay scales or that everybody employed in the agencies is being paid in accordance with the pay norms set down by the Department of Public Expenditure and Reform? Second, will she confirm that overpayments already formally notified to the Department of Health have ceased?

Comment on this

On the Deputy's first question about compliance, I am informed that the annual compliance statements have been signed by the agencies. The Department is providing another layer to examine, with external consultants, the area once again. Further work is being done to review the position again. As I said to the Deputy about what he described as overpayments, the Minister for Public Expenditure and Reform has spoken about this issue today and said his Department is examining it right now. I understood from what he said earlier today that that was the position. He is following up the matter. It raises very serious concerns about the compliance of certain organisations with the standards laid down by the Government regarding payments to people who are delivering services paid for by the taxpayer.

Comment on this