Brennan Report - Department of Health and Children

Report of the Commission on Financial Management and Control Systems in the Health Servicetwo staff headed by an Assistant Principal. The Department of Finance expressed the concernthat internal audit units should have the capacity to enable them to operate effectively and tobe well placed to bring to the accounting officer issues arising from inadequate or ineffectivesystems. The internal audit function in the Department of Health and Children concentratesonly on the ¤ 30 million or so administrative spending incurred directly by the Department.Pending the establishment of the Executive, we consider that internal audit systems should beput in place to cover the entire ¤ 9 billion of health service spending.Recommendations on Internal AuditR8.8 The Secretary General of the Department of Health and Children, the board of the Executive, boards of theregional health boards, boards of agencies and other bodies under the remit of health boards and boards of otherstatutory agencies should ensure that there is an adequately resourced internal audit function. Where it isconsidered inefficient, for reasons of scale, for an agency to have a dedicated internal audit unit, the regionalhealth boards should either provide the service centrally or have the function outsourced.R8.9 The internal audit unit should report directly to the non-executive Chairman of the audit committee.R8.10 The audit committee should determine powers and duties of the internal audit unit.R8.11 Internal audit reports should be made available to the external auditor.8.5 RISK ASSESSMENT AND MANAGEMENTDuring the course of our work, we encountered a number of examples where the assessmentof risk associated with policy decisions (and the management of those risks) was not adequatelyundertaken. For example, in Chapter 2, we highlighted the outcome of the negotiationsrelating to the extension of the medical card to all people over 70 years. In this case, the fullrisk, for a range of reasons, was not identified nor arrangements made for the management ofthe risk at the time the decisions were being taken.We believe that the Department of Health and Children must have a strong, proactive riskassessment role in relation to the development and monitoring of national policies. This wouldcover two broad areas; risk assessment at policy design stage and risk management atoperational/executive levels. We recommend that the Department of Health and Childrensubstantially enhance its capabilities in this area.Policy Risk AssessmentA professional assessment of the risks associated with national service development, building inthe necessary control measures in advance of the introduction/extension of new services, isessential. In this national policy context, risk assessment involves systematically (and at the veryearliest stages of policy development) analysing, evaluating, monitoring and communicating therisks associated with planned activities so that potential losses are minimised and opportunitiesare exploited in the best interests of the taxpayer.Risk ManagementIn this context, we refer to "risk management" as the ongoing monitoring and review of systemsand procedures in place in all bodies responsible for service delivery (the Executive, regionalhealth boards, hospitals, voluntary agencies etc.). As such, we see the risk management function106