Management involved in the controversial Ppars (Personnel, Payroll and Related Systems) computer system did not follow official public procurement policies or implement appropriate tax clearance procedures in relation to the recruitment of external contract staff for the project, a confidential report given to the board of the Health Service Executive (HSE) has found.
The report, carried out by HSE internal auditors, also expresses concern that Blackmore Group Assets Ltd, an external recruitment company which received nearly €2 million under the project, had been commissioned given the level of financial and other information provided by it.
Blackmore received the largest amount of any recruitment consultancy firm. However the HSE investigation has been unable to identify its owners. Last year it was described in the Dáil by Fine Gael leader Enda Kenny as a shelf company based in the British Virgin Islands. It has said that none of its shareholders are resident in the Republic of Ireland.
Nearly €7 million was paid out to around a dozen recruitment consultancy firms to secure technical personnel as part of the Ppars project. Around €130 million has so far been paid out on the overall project. The nationwide roll-out of the system, which is in operation in several healthcare regions, remains suspended.
The HSE audit unit was asked by senior management last year to investigate the procedures used to procure external technical staff to install and configure the system following an earlier report carried out by the Comptroller and Auditor General. The HSE auditors' report maintains that this procurement process had not been carried out in accordance with financial regulations or official procedures.
It says that there had been insufficient involvement by Ppars management in the evaluation and selection process of the companies.
It also maintains that appropriate tax clearance procedures had not been followed in respect of payments to the companies.
The report says there were two periods in which external specialist staff had been recruited.
It maintains that during the the first, which ran from November 2001 to May 2003, neither the procurement processes of the former North Western Health Board (where the payment and accounting services for Ppars were based) or the EU were used and that no formal advertising for companies had taken place. "Resources were sourced from companies who had offered staff and the remainder were sourced on the basis of recommendations from existing consultants."
In May 2003 an EU tendering process for such consultancy services was put in place and an outside consultant was brought in to evaluate the bidders.
However, the report says there was insufficient input from the national Ppars team in this evaluation process. "In connection with one of the companies selected from the Official Journal of the EU process - Blackmore Group Assets Ltd - the auditors would have concerns that the financial and background information data submitted was insufficient to qualify the company to progress through to the final stages of the selection process," it states.
It says that the auditors also noticed that a contractor already employed by one company on the project "was being written to in connection with the tendering process for another company". The report said "payments should not have been made in the absence of tax clearance information".
HSE chief Prof Brendan Drumm said that the report did not suggest any financial or ethical impropriety on the part of staff.
