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HSE financial statement adjusted after AG advice on prompt payments

During a HSE Audit Committee meeting in May 2016, it was noted that the HSE had received advice from the Department as to whether prompt payment compensation has to be automatically paid.

Minutes of the meeting, seen by MI following a Freedom of Information request, revealed that the advice received by the Department, and subsequently the HSE, resulted in a “significant” adjustment to the HSE’s draft Annual Financial Statement (AFS).

“Therefore the latest draft AFS includes a reversal of the cumulative prompt payment provision of €13.8 million (including €9 million accrued in 2015), which is the most significant adjustment in the draft AFS since they were adopted for audit purposes,” according to the minutes.

“Note 29 discloses a contingent liability of up to €14.5 million in relation to compensation for late payment, which may be claimed by suppliers.”

Under EU Late Payment Regulations, suppliers should receive interest for late payment if the payment is not made on the date specified in the contract or if the contract is silent as to the payment date.

The Committee also noted that certain aspects of the AFS were not yet finalised and asked that the updated paper from the Chief Financial Officer to the Directorate on Key Accounting Issues and Judgements be presented to the Directorate, to assess how all key matters were being addressed in the final draft AFS.

The Committee expressed surprise that no derogation from normal accounting standards was in place in respect of Clinical Indemnity Scheme (CIS) liabilities.

“However, the CFO and Office of the Comptroller and Auditor General team confirmed they were satisfied that no provision in respect of this liability is required, as awards paid to claimants under the scheme are correctly accounted for on a pay-as-you go basis, as the main purpose of the HSE’s annual financial statements is to measure performance against budget,” the minutes stated.

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