C&AG - HSE carried accumulated 2022 deficit of €1.24bn

The Health Service Executive was carrying an accumulated deficit of €1.24 billion at the end of 2022, according to today's report from the Comptroller and Auditor General.

The report notes that eventually, "the HSE will require funding to meet the liability as the expenditure has already been incurred".

The report also establishes that despite high-level engagement between officials, different accountancy methods between the HSE and the Department of Health contribute to deficits in health spending.

The report makes clear that the HSE has carried a deficit since it was set up in 2005. Back then it started with an "opening deficit" of €838m which it inherited from authorised expenditure by the then health boards.

This deficit would have been partly rolled over, added to when the HSE subsumed agencies with their own deficits and further added to when the HSE itself incurred deficits.

The report notes that the HSE recorded a surplus of €200m in 2020, which would have reduced its accumulated deficit, but it was directed to return the surplus funds by the Minister for Health.

Today’s report also examines the work of the Health Budget Oversight Group (HBOG) which was established in 2019 to oversee expenditure on health and act as an early warning system on spending overruns.

It comprises officials from the HSE, the Department of Public Expenditure, National Plan Delivery and Reform (DPENDPDR) and the Department of Health.

Despite this level of engagement, the report found the DPENDPDR did not find out until March of this year that the amount allocated under the Health vote through the Oireachtas was less than the amount the Minister for Health agreed to allocate to the HSE.

By year end 2022, €22bn had been allocated from the Health vote to the HSE but almost €22.5bn had allocated by the Minister for Health. A net €438m was then added to the HSE’s accumulated deficit.

A review of HBOG in January of this year found the group’s full-year expenditure forecasts were "very limited" and that "no expenditure management measures were proposed to the group in response to the emergence of mid-year core pressures".

The report concludes that "the roll-out of the HSE’s new Integrated Financial Management System will improve the reporting process".