The financial position of the Blood Transfusion Service Board was "disastrous" at the end of the 1970s and early 1980s, mostly because it embarked on a move to new premises which it could not afford, the Lindsay tribunal heard.
A financial expert engaged by the board to review its finances for the tribunal said the organisation was effectively insolvent by 1981 and if it was a private company it would have been liquidated.
In 1982, the Department of Health was informed by letter that the banks were unwilling to honour selected cheques "notably those issued to the Revenue Commissioners and other governmental organisations".
Mr John McStay said in evidence that the BTSB was not making enough of a surplus during the 1970s to put money aside for growth and by the late 1970s it was "juggling" the way it issued cheques to ensure they would not exceed the board's overdraft.
Cross-examined by counsel for the tribunal, Mr Gerard Durcan SC, Mr McStay said this was "not a very good idea".
Mr Durcan suggested the BTSB was "storing up trouble" by doing this. Mr McStay agreed.
Figures presented to the tribunal showed the board went from having a surplus of £16,282 in 1978 to having a deficit of over £1 million in 1981.
Mr McStay said the main reason for this was a move by the BTSB from a premises in Leeson Street to Mespil Road, where Pelican House is still located.
Mr McStay said that for a time the board was paying for both properties even though it was only occupying one of them, the cost of refurbishing Mespil Road was more than double the original estimate of £350,000, the board took out a loan to finance the move during a high interest period and its underlying business was unprofitable. He added that increased wage demands around this time also contributed to the deficit.
Mr McStay said that applications by the BTSB to the Department of Health to increase the price it could charge for units of blood at this time were often delayed, only partly acceded to, or rejected.