Audit reveals major flaws in health ministry’s vehicle management

An audit by the National Audit Office (NAO) has exposed major flaws in the health ministry’s spending and internal controls for leased and hired vehicles. 

The NAO’s Annual Audit Report of Public Accounts found numerous compliance issues in the Fleet Management System (FMS) in 2020, nearly all of which remain unresolved according to the 2024 Follow-Up Audit Reports. 

One key problem was the lack of centralised control over vehicle leasing and hiring. The ministry’s Central Procurement and Supplies Unit (CPSU) made the agreements but individual departments and entities managed them, and this fragmented approach led to poor contract monitoring and increased risk of overspending. 

Despite appointing a director (contracts) in March 2022 to establish a centralised Contracts Management Unit, effective central management is still lacking. 

The procurement process also has significant deficiencies. Government policy favours purchasing vehicles over leasing unless clear economic benefits are demonstrated. However, many health ministry vehicles were leased without the required justification, including vehicles for senior officers leased at daily rates that exceeded approved limits.

General-use vehicles also lacked the necessary cost-benefit analysis to justify leasing over purchasing. 

The audit also uncovered irregularities in the leasing of non-emergency ambulances. A 2016 contract continued to be used beyond its expiration date and without proper re-tendering, relying on less favourable negotiated procedures. The urgency cited for these procedures by the ministry was questionable, and supplier invoices lacked specific details, making it difficult to verify the vehicles provided. 

Deviations from contracted terms were common. On Sundays, non-emergency ambulances were billed €260 per day instead of the contracted rate of €100, leading to unnecessary extra costs.

Some vehicles were also billed for periods before their actual collection from suppliers, indicating a failure to adhere to agreed terms. 

The audit also revealed data deficiencies in the Fleet Management System that hindered effective control over transport expenditure, including missing fuel quotas, outdated odometer readings and incomplete vehicle expense records. These incomplete records impeded the monitoring and control of transportation costs. 

Several contracts lacked performance guarantees to protect against contractor defaults, and poor management of the fuel procurement process increased the risk of misuse. Manual modifications of fuel requisition forms were possible, allowing for the concealment of excessive fuel consumption.

Although some improvements were noted, such as a decrease in revisions to manual modifications, the overall monitoring of fuel use remains inadequate. 

The NAO urged the health ministry to prioritise compliance with public procurement regulations, ensure centralised contract management, and maintain accurate records in the Fleet Management System. These steps are crucial for improving transparency and accountability in the ministry’s management of transportation expenditures. 

While some progress has been made, substantial work is needed to address significant deficiencies in the health ministry’s handling of leased and hired vehicles.