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11 Governance Rep ts NMH Annual Rep t | 2020 T wenty twenty was a challenging year for everyone yet at the same time was also a true measure of what can actually be delivered when a team pulls together against immeasurable difficulties. The operations of The National Maternity Hospital (NMH) truly reflected this as has already been noted elsewhere in this report. Managing the significant volume of activity that goes through the hospital in a cost effective manner always requires tight control and not a small amount of juggling. This was brought to a whole new level in 2020 with significant increases in costs, significant staffing challenges as well as undertaking emergency COVID-19 capital works in an aging building. The overall outturn for 2020 reflected a surplus of €1.5m based on HSE funding of €72.8m. The hospital continued to generate income from private and semi- private patients. In 2020 this was €12.02m which was down €2.4m (17%) on prior year figures reflecting a decrease in the average length of stay for patients from the onset of COVID-19. The allocation for the year (which was only confirmed in January 2021) included specific additional funding for COVID-19 related costs of €4.4m. The additional impact of COVID-19 on the finances of the hospital has been segregated out since March of last year and continues to be so to date. This impact includes additional PPE, equipment, lost income, increased staffing costs and increased use of agency staff (which we had very successfully reduced in previous years). This was unavoidable when you consider the number of staff absent due to COVID-19 related concerns at different times during the year. What is frustrating however, is that despite assurances funding would be provided to cover these costs incurred throughout the year, the hospital ended the year in cash flow deficit as it still awaited actual receipt of the money. It has also had to instigate discussions on funding for 2021 seeking confirmation that COVID-19 related spend would again be included. On the cost side, the situation remains similar to previous years. Total costs incurred were €80.6m. Of this €66.4m related to Pay and €14.2m in Non Pay. When COVID-19 related costs were excluded, this came in almost exactly in line with budget, similar to 2019. Excluding COVID-19, Pay costs increased by 5% over the prior year and Non Pay actually decreased by 3%. Hon ary Treasurer's Rep t Pay levels are driven by head count numbers and any agreed changes in national pay scales. Head count level increases reflect certain approved posts that have now been filled. The key items in non-pay expenditure relate to medicines, surgical supplies, laboratory costs and maintenance of the hospital. Given the age of the building and the fact that a move to the new purpose built facility at Elm Park is still some time away, the hospital has to continue to spend money to keep an aging facility as fit for purpose as is possible. That is reflected in maintenance expenditure of €0.3m and €7.8m in additions / improvements to hospital equipment and facilities. Work continues on the new Labour Delivery Unit as well as the provision of new Theatre capacity. This was delayed during 2020 as a result of COVID-19 related stoppages. Despite much correspondence on the matter and repeated assurances that the funding was approved, the hospital continues to have to pre-fund this capital expenditure out of its own cash reserves which are now much depleted. Decisions have to be taken all the time by the Executive Management Team and the Finance Committee on areas of spend to be prioritized to preserve patient safety. However, the consistent theme of ongoing delays in receipt of agreed areas of spend from the HSE, leaves the hospital with very limited financial buffers. Those buffers in the past have allowed the hospital to be very innovative and responsive to patient need with the introduction of new service developments on a timely basis and it is disappointing that this flexibility may be constrained into the future. Other areas of focus by the Finance Committee during 2020 included governance, policies and procedures, management of debtors and monitoring compliance with the Charities Act. I would like to extend my appreciation to all the NMH finance team and my fellow members of the Finance Committee. The finance team have successfully exercised strong financial control whilst concentrating on essential spend to ensure we can continue to deliver excellent care in the midst of a pandemic. The NMH has had an amazing year in the context of such a major health care crisis and it is an organization we are all proud to be a part of. Michele Connolly Honorary Treasurer