A CASH-STRAPPED health board has been accused of "cooking the books" after auditors discovered that funds earmarked for digital healthcare was used instead to give a "more favourable" impression of its finances.

An investigation found that NHS Tayside "misrepresented" its accounts by repeatedly banking money supposed to be spent on eHealth initiatives in order to offset general expenditure.

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The practice began in 2012, the same year the troubled health board first had its finances propped up by brokerage loans from the Scottish Government.

It continued until auditors were called in in March this year to carry out an external review into why £5.3m of eHealth funding had been misrecorded in accounts.

The practice was known to NHS Tayside's director of finance, Lindsay Bedford, and the director of finance at NHS National Services Scotland (NSS).

NHS Tayside announced in March that Mr Bedford planned to retire after 35 years' service.

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A report by auditors, Grant Thornton, said: "We have significant concerns around the practices being followed by NHS Tayside in relation to the use of funds to offset expenditure to which the funding had not been provided.

"This process has been embedded into the board’s financial planning and financial reporting processes for a number of years and therefore has masked the underlying operating position of the board."

It added: "No one during the course of our review was able to articulate why NHS Tayside were holding monies but it coincides with when NHS Tayside started to receive financial support through brokerage...Since 2012, the board’s reported financial performance has been misrepresented."

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Referring to correspondence in February 2016 relating to 2015/16 budgets, the report states: "The email trail appears to indicate that the director of finance at NHS Tayside was planning on using the eHealth money as part of their overall income that year, and that the director of finance at NSS was aware of this intention."

NHS Tayside has received £37m in taxpayer loans to date, including £4m this year, but the £5.3m shortfall means it will require another emergency bailout.

The finds will be scrutinised at Holyrood's Public Audit Committee on March 29.

Labour Shadow Cabinet Secretary for Health Anas Sarwar said: "It is bad enough that any health board should be under such severe financial pressure that it is reduced to cooking the books, but for it to happen in the Health Secretary's backyard beggars belief."

It comes after Scotland's Auditor General Caroline Gardner warned that NHS Tayside was "increasingly reliant" on one-off savings to break even and required a "realistic action plan".

Lesley McLay, chief executive of NHS Tayside, said: “The independent review has now looked in detail at this issue with eHealth allocations and found it dates back to 2012. We are clear that this agreement between NHS National Services Scotland and NHS Tayside was not acceptable and should not have happened.

“As soon as we were advised about this issue, I commissioned a formal internal review and an update will be reported to Tayside NHS Board next week.”

Colin Sinclair, chief executive of NSS, said: "I take this matter seriously and having established the initial facts, I put in place a number of immediate actions to ensure there was scrutiny over eHealth funding. I and the NSS board are fully committed to working with Scottish Government colleagues to further develop and implement any longer term recommendations."