NHS Highland chiefs have been accused of insulting fellow board members by “keeping them in the dark” over a bail-out deal with the Scottish Government.
And as they were grilled by members of a powerful Holyrood committee yesterday, they admitted for the first time they had made mistakes in the handling of their finances.
The board’s senior managers also insisted lessons had been learned and vowed there would be no repeat of the blunders which left them facing an inquiry by MSPs.
It was the second time that chief executive Elaine Mead, chairman Garry Coutts and finance director Nick Kenton had been quizzed grilled by the Scottish Parliament’s public audit committee over the way they dealt with the board’s financial difficulties
They were summoned to give evidence in Edinburgh yesterday because questions remained “unanswered questions” from a previous session in Inverness in February.
NHS Highland’s finances have been probed since it emerged last year that the health board had to borrow £2.5million from the government – known as brokerage – in order to break even.
Highlands and Islands MSP Mary Scanlon said she was “very seriously concerned” about the way the board was informed about the loan.
She said that, according to available records, board members were informed on March 3 last year that NHS Highland would break even – but three days later a brokerage deal was agreed with the Scottish Government.
The board was never asked to approve the loan, just “note” it when informed on April 1, she said.
“Whatever informal arrangements or discussions you had, the audit trail says that your board members, non-executive directors, were kept in the dark and that is a serious concern in terms of audit,” Ms Scanlon said.
“You obviously were doing all this behind the board members’ backs, telling them they would break even but behind their backs negotiating a loan.
“As a local member I’m concerned, but if I take it in the grand scale of all the audit reports we get, this is a matter of very serious concern that you are not including the non-executive board members in the decisions.”
She added: “Basically what we have are the board members and the general public in Highland thinking NHS Highland is breaking even, that’s the public face of NHS Highland.
“The private face, which we don’t know if board members were aware of, is you’re doing backroom deals or seeking loans from the Scottish Government, then asking them to ‘note’, which is really the final insult to the board members.”
Ms Mead insisted board members were kept informed at informal meetings, but admitted there were no minutes of the discussions.
She told MSPs she had a mandate to take whatever action was needed to break even without their formal approval.
“I agree on reflection actually it was remiss of me to ask the board to ‘note’,” she said. “That was unacceptable, we should have asked them for their clear understanding and agreement.
“I understood I had that permission from the board. I would agree with you that it would have been better, on reflection, for us to have asked for that absolute agreement from the board.
“We’ve now made the informal discussions that we’re having with the board noted and minuted so that in the future there will be an audit trail of those discussions.”
Mr Coutts, who at times looked uncomfortable with the questioning, said: “In light of the report we will amend the way that we work and I can assure you that if, and I hope it will never happen again, we require brokerage, that we will deal with things differently.
“Informal meetings are about information, about briefings, about developments, so that we understand the complex system we’re managing.
“It’s not about decision-making and there have been no decisions made by the board in secret meetings.”