Midland Health Board

Report of the Comptroller and Auditor General

This report has been prepared pursuant to Section 6(4) of the Comptroller and
Auditor General (Amendment) Act, 1993.

Fixed Assets - Buildings

Buildings are reported in the accounts at a valuation of £159m at 31 December 1994.

The valuation reflects their value as assessed by a quantity surveyor employed by the
Board's insurers within the past ten years, adjusted to take account of additions and
disposals which have occurred since the date of his valuation. It was noted in t he
course of audit that no adjustment had been made to take account of the age and
condition of buildings as is required by the Department of Health accounting
standards. The Chief Executive Officer (CEO) informed me that the implementation
of the requirement to take account of the age and condition of buildings and provide
for depreciation would call for further clarification from the Department of Health.
It is intended that following such clarification the annual financial statements for 1996
will comply fully with the accounting standards in this regard.

I also inquired as to whether the Board had possession of all title documents for these
assets. The CEO indicated that with the exception of documents for a small number
of properties which were transferred by the local authorities to the Board when it was
established under the Health Act, 1970 the title documents for the Board's properties
were available. In regard to the properties for which title documents were not
available the Board will undertake a legal process to establish title.

Fixed Assets - Equipment

The total of equipment shown in the accounts (£389,683) comprises only the valtie
of those assets purchased in 1994. The Board does not maintain an adequate record
of equipment nor has its cumulative value at 1 January 1994 been incorporated into
the financial statements. In response to my inquiries the CEO pointed out that die
Board's Technical Services Department had developed and maintained an equipment
and plant register over the past number of years in all the main cost centres in the
Board which had facilitated the control of these assets and also their planned
maintenance. He assured me that strong emphasis was placed on the physical
safeguarding of all assets throughout the Board and especially on high value items and
items which would have a market value.

In addition, the recent acquisition of a computerised fixed asset register would enable
the Board to comply with the accounting standards including a provision for
depreciation in the 1996 financial statements.
Pharmacy Stocks

Stock control records are not being maintained in any of the Board's pharmacies. The
total expenditure on drugs and medicines purchased by the Board amounted to £1.9
million in 1994. The CEO informed me that a computerised pharmacy system is
being implemented on a phased basis and that modules implemented to date enable
drug costs to be allocated on the basis of issues to wards and provide cost control
reports by ward and by drug classification. The system includes a stock control
module which is targeted for implementation in 1996.

Call out payments and allowances

Laboratory staff and radiographers receive an on-call allowance for being rostered for
on-call duty and an additional fee for each patient in respect of each occasion they are
called out. Twenty nine radiographers received a total of £206, 093 in respect of c all-
out payments and £14,572 in respect of on-call allowances. Thirty laboratory
technicians received a total of £169,713 in respect of call-out payments and £14,064
in respect of on-call allowances. I asked the CEO if the Board is satisfied that the
system of on-call allowances is the most economic way of addressing the needs of
patients' care in the Board's hospitals. In reply the CEO stated that the agreements
relating to on-call and call-out payments for laboratory staff and radiographers are
negotiated nationally and the Board is not in a position to depart from these
agreements. He also stated that the level of these payments is monitored on
an
ongoing basis at local level and that every effort is made to reduce the level of call-o
ats
to an absolute minimum consistent with providing an adequate service and that strict
certification procedures are in place for such payments.

Patients' Private Property

The Board acts as trustee of the funds held on behalf of the long stay patients in the
Board's psychiatric and geriatric hospitals and, in common with the other health
boards, it levies a charge based on time spent by its staff on administering these funds
The private property accounts of patients are independently audited. It was noted
from a review of these accounts that a deficit of £52,253 was reported in 1994.
major contributing factor to the deficit was a £100,000 administration charge levied
by the Board which was greater than the total interest earned on these funds for the
year. In response to my inquiries the CEO stated that for the first time the amount
of interest earned in the year was less than the administration charge because of the
low interest rates prevailing in 1994. The annual charge for each of the years 1993-
inclusive was £100,000. However, as part of its triennial review of the charge, the
CEO informed me that a survey of the workload was nearing completion and this
would form the basis for the charge to be applied for the years 1996/98. The revised
charge will be independently checked as part of the audit of private property accounts
of patients.

Jotrn Purcell
Comptroller and Auditor General Treasury Building
I«+ February 1996 Dublin Castle