THE board of the VHI meets tonight to consider the appointment of a new chief executive, amid further evidence of tensions in the organisation.

It has emerged that the audit committee of the VHI was asked in August to investigate the issuing of a cheque for more than £20,000.

Meanwhile sources believe that given the tension in the organisation the board could opt to appoint a consultant on a short term contract to act as chief executive.

The cheque, understood to have been for more than £20,000 was due to be issued from the VHI in August. It was money due to some hospital consultants. However it emerged that one signature on the cheque was not a proper one and this was spotted by an executive in the VHI.

The matter was brought to the committee's attention by departing chief executive Mr Brian Duncan some weeks before he announced his resignation from the company. A spokesman for the VHI yesterday refused to comment on the matter.

It is believed that a junior member of the company's staff signed the cheque on the instructions of a more senior figure at the organisation, as a way of expediting its payment.

There is no suggestion that anyone at the company benefited personally from the transaction. The cheque was subsequently reissued.

Last night sources differed on the outcome of the dispute. A number said that the issue had been examined by the audit committee and was now closed. However another source argued last night that it was a serious matter that the proper cheque signing procedures were not followed and said he was not aware of a report by the audit committee to the board on its findings.

The audit committee is chaired by businessman Mr Paul Coulson, who was appointed to the board by the Minister for Health, Mr Noonan, earlier this year. Mr Coulson is seen by insiders as the most likely person to succeed chairman Mr Noel Hanlon when his term at the company is completed in February.

Meanwhile, the VHI board will meet today to discuss the appointment of a new chief executive. Board members are known to be keen to find a new chief executive as soon as possible to prepare the organisation for the challenge from the British healthcare group BUPA.

One option which will be considered is the appointment of a consultant on a short term contract of one to two years.

This would allow the rapid appointment of an acting chief executive without having to go for Government approval for a full time contract, or having to undertake a lengthy recruitment search.

The former chief executive Mr Brian Duncan, resigned after a report from a board sub committee called for his contract to be terminated.

He rejected the report's findings as unjust, but subsequently reached a settlement with the board.

Part of the row between Mr Duncan and the board concerned proposals for the introduction of new products he had put forward but which were rejected by the board. Board members believe that new products must urgently be developed to attract new members.