Brennan Report - Department of Health and Children

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Report of the Commission on Financial Management and Control Systems in the Health Serviceplusany Budget day packageplusany other technical or policy changes which have emerged between Budget day and publicationof the Revised Estimates for Public Services.III.THE DETERMINATION PROCESSLetters of DeterminationThe Letters of Determination, signed by the Secretary General of the Department of Healthand Children, set out for each health board and the Eastern Regional Health Authority theamount of funding available and the terms for the expenditure of any new funding. The letteralso includes details of each health board’s overdraft limit, the limit on each health board’soverall level of indebtedness and the areas of funding that are eligible for supplementaryfunding (see Section IV below). It therefore sets out the overall policy and control contextunderpinning the funding approved.Under the terms of the Health (Amendment) (No.3) Act, 1996, the Letter of Determinationmust issue from the Department of Health and Children to the health board/authority within21 days of the publication of the Estimates for Public Services (Abridged Version). In practice,the Letters of Determination issue on, or just after, Budget Day in December.Each line division in the Department of Health and Children is responsible for dividing fundingwithin their policy remit between the various health boards for inclusion in each health board’sLetter of Determination. Aggregating this information, the Finance Unit of the Departmentbuilds up the approved level of expenditure for each health board. Senior management and theMinister for Health and Children must finally review and approve the health board allocations.The determination or allocation for each health board/agency is calculated as:The previous year's final revised determination;less any once-off increases allowed in the previous year;plus full year cost of any service developments started part way through last year;plus the full year cost of any pay awards implemented part way through last year;plus any inflation factor;plus any new development funding – i.e. new money made available for new or enhancedservices;plus or minus the relevant casemix adjustment (see Box 1 below).Box 1: CasemixCasemix is the comparison of activity and costs between hospitals. In this way, hospitals’ efficiency can be measured relativeto each other.A "budget neutral" adjustment is made to each hospital’s allocation annually. Those hospitals whoseefficiency relative to the others is above the norm are rewarded, and those below the norm are penalised. The net effecton the Exchequer is neutral.A more detailed description of the Casemix programme is contained at Appendix 5.164
Appendix 4The most detailed element of the Letter of Determination relates to new developmentfunding. The new development funding is additional funding available to health boards forservice improvements. All other funding is committed to fund existing services together withthe full year costs of services begun part way through the previous year. The funding isallocated on an incremental basis, with the detailed analysis and commentary in the Letter ofDetermination focused strongly on funding for new initiatives. As such, health boards’ ServicePlans tend to concentrate on new services rather than on the core or existing services, whichinvariably account for over 97% of the total cost of services delivered by health boards.There are a number of agencies, other than the health boards, that receive funding directly fromthe Department of Health and Children. These agencies are funded from a separate VoteSubhead (Subhead B.4 for 3 agencies, and Subhead F for the majority of the remainder). Thedetermination process for these agencies mirrors that of the health boards, althoughresponsibility for issue of the letters of determination rests with the relevant line divisionwithin the Department of Health and Children (i.e. Food Unit has responsibility for thedeterminations for the Food Safety Advisory Board and the Food Safety Authority of Ireland;Personnel Unit has responsibility for Comhairle na nOspidéal etc.).Service PlansUnder the Health (Amendment) (No.3) Act, 1996, health boards are required, within 42 days ofreceipt of their Letter of Determination, to adopt and submit to the Minister for Health andChildren an annual Service Plan, outlining the planned activity which they will deliver for thefunding they have received. As the Letters of Determination are issued in the first week ofDecember, the deadline for submission of Service Plans falls in mid-January.In order to be in a position to meet their statutory obligations, health boards engage in aprocess of advance preparation. In advance of receipt of their determination, health boardsthemselves will have assessed their own minimum funding requirements to deliver the samelevel of service in the following year as in the year about to end. For example, a health boardmay, at a detailed level, calculate each cost centre’s pay costs and non-pay costs (updated forinflation) with adjustments for once-off expenditure which will not be repeated, costs of knowncontracts and the full year costs of staff recruited part way through a year.By comparing the outcome of this with the allocation in their Letter of Determination, eachhealth board’s finance department can advise senior management of difficulties, if any, whichrequire corrective action to ensure a balanced budget. This highlights areas of fundingdifficulties before the year begins so that immediate corrective action can be taken by the chiefexecutive officer and the relevant care group manager and allowed for in the Service Plan.At the end of the process, all funding is allocated between pay and non-pay cost elements acrossthe health board’s cost centres. Health board cost centres include all hospitals, child residentialunits, etc. Allocations to individual cost centres are then consolidated to derive programmebudgets and care group budgets (see Box 2 below).165
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Commission onFinancial Managementan
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TABLE OF CONTENTSEXECUTIVE SUMMARY
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6.4 COMMUNITY DRUG SCHEMES 80Medica
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Executive SummaryEXECUTIVE SUMMARYT
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Executive SummaryWe do not underest
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Executive Summary"demand-led" schem
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Terms of ReferenceTERMS OF REFERENC
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GlossaryEstimates for Public Servic
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Chapter 1 Introduction and Backgrou
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Chapter 1 Introduction and Backgrou
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Chapter 2 Overview and Issues2.2 OR
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Chapter 2 Overview and IssuesAppend
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Chapter 2 Overview and IssuesFigure
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Chapter 2 Overview and Issuesother
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Chapter 2 Overview and IssuesTable
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Chapter 2 Overview and IssuesFigure
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Chapter 2 Overview and Issues●●
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Chapter 2 Overview and IssuesIn 200
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Chapter 2 Overview and IssuesThe an
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Chapter 2 Overview and IssuesTable
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Chapter 2 Overview and IssuesProble
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Chapter 3 Managing the Health Servi
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Chapter 4 Service Planning, Budgeti
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Chapter 5 Accountability - Hospital
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Chapter 6 Accountability - General
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Chapter 7 Accountability - Employme
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Page 101 and 102: Chapter 8 Audit ReformCHAPTER 8AUDI
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Page 107 and 108: Chapter 8 Audit Reformaudit reports
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Page 119 and 120: Chapter 10 Information SystemsStrat
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Page 123 and 124: Chapter 11 ImplementationRecommenda
Page 125 and 126: Chapter 11 Implementationbeing brou
Page 127 and 128: Appendix 1Appendix 1COMMISSION MEMB
Page 129 and 130: Appendix 1He has held this position
Page 131 and 132: Appendix 2SIPTU*South Eastern Healt
Page 133 and 134: Appendix 3Name of AgencyBord na Rad
Page 135 and 136: Appendix 3Name of AgencyIrish Blood
Page 137 and 138: Appendix 3Name of AgencyWomen’s H
Page 139 and 140: Appendix 4Department of Health and
Page 141: Appendix 4collated and assessed by
Page 145 and 146: Appendix 4Ratifying and Submitting
Page 147 and 148: Appendix 4changes to the Service Pl
Page 149 and 150: Appendix 4advised of their existenc
Page 151 and 152: Appendix 4Approvals Required in lin
Page 153 and 154: Appendix 5Appendix 5DIAGNOSIS RELAT
Page 155 and 156: Appendix 5Figure: Ax.1 Casemix Adju
Page 157 and 158: Appendix 6Appendix 6AUDIT OF STRUCT
Page 159 and 160: Appendix 7(vii)(viii)(ix)participat
Page 161 and 162: Appendix 8Appendix 8 - Integrated M
Page 163 and 164: ADDENDUMNumber Recommendation IT Ti
Page 165 and 166: Number Recommendation IT TimeframeR
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Brennan Report - Department of Health and Children

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