The Health Service Executive (HSE) is to review the way it provides almost €1 billion in funding to voluntary groups for disability services following a report which highlighted the need for greater transparency and accountability among service providers.
A report by the Comptroller & Auditor General (C&AG) published yesterday found a widespread failure among voluntary bodies to provide audited financial statements or disclose levels of executive pay.
Around 90 per cent of all intellectual disability services and 60 per cent of physical and sensory disability services are provided by the voluntary - or non-profit - sector.
During the period of the review, 25 non-profit organisations each received more than €10 million, a further 75 organisations received between €1 million and €10 million.
An audit of 42 non-profit organisations between November 2004 and January 2005 found that 12 groups did not file accounts for 2003. These groups received approximately €100 million during the same year. It also noted several cases where financial statements carried qualified audit opinions due to uncertainty over issues such as the verification of fundraising amounts.
In the case of "one significant non-profit organisation", it found that no financial statements had been received between 2000 and 2004. During this time the organisation continued to receive funding worth a total of €288 million.
Expenditure on headquarter costs, overheads and executive pay was not generally reported in a transparent manner, which made it difficult to assess whether costs were being absorbed by administrative costs rather than front-line services.
The C&AG report called for a strategic review of funding relationships with voluntary service providers and noted there had been no evaluation of services by the HSE into the procurement of services from the voluntary sector.
In one non-profit group, the report noted, the number of clients treated decreased to a quarter of 1994 levels while its financial allocation in real terms increased six-fold. In another service, a "custodial culture" had developed due to lack of staff.
The report noted that the State was embarking on substantial changes in the delivery of disability services, with individual needs assessments and new standards for services which will require significant increases in funding.
In response, the HSE said in a statement that the report raised many "critical issues" regarding arrangements between it and voluntary agencies.
