Tuesday 27 September 2016

Central Bank handed out severance payment of €32k to person 'who did not work for it' - watchdog

Another two exit packages worth €61k each were made to staff who had worked at the bank for less than two years

Anne-Marie Walsh

Published 05/04/2016 | 14:36

The Central Bank in Dublin
The Central Bank in Dublin

The state spending watchdog has criticised the Central Bank for handing out a severance payment worth €32,000 to an individual who had not even begun to work for it.

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The bank suffered costs of €73,000 as a result of the case as it had to cover its own and the recruit's legal fees.

Another two exit packages worth €61,000 each were made to staff who had worked at the bank for less than two years.

The Comptroller and Auditor General said the three payments “suggest that the Central Bank needs to review its procedures for managing recruitment and probation”.

It also noted that a long-term contractor who had never been an employee of the bank was awarded €60,000.

The report identified 14 expensive discretionary severance payments, amounting to nearly €1.5m, that were made by public sector bodies between 2011 and 2013.

The Central Bank made six of these payments, which amounted to over €540,000 including legal costs.

Between 2011 and 2013, the report said the bank had “more recourse” to termination agreements and severance payments than the other public sector bodies it examined.

“The frequency of payments could imply weaknesses in the Central Bank’s procedures for managing performance or addressing other human resource issues,” it said.

The bank clocked up its own legal costs and the costs of the employee in all but one case, but details of the legal advice it received were not documented in some cases.

The report noted that such severance payments are often made when the employment relationship breaks down "irreconcilably".

It also says severance payments may be made to attract desirable candidates to short-term jobs.

An examination of formal severance payments awarded between 2011 and 2013 under six public sector schemes, found they had a value of €17.9m. It said nearly €11m of this was related to pension enhancements. like added years.

It found broad compliance with scheme rules in most cases, except for a scheme for chief executives of state bodies.

The report found two state bodies, who are not named, made severance payments in the form of pension enhancements worth over €1m without the Department of Public Expenditure and Reform’s prior approval.

According to the report, the governor of the Central Bank said the cases it was taken to task over arose in a period of unprecedented renewal and growth at the bank, as staff numbers grew by one third between 2009 and 2013.

A spokesman for the Comptroller and Auditor General said the Central Bank was the only public body named in the report, aside from the departments responsible for signing off on severance payments, because of the high number of discretionary payments it made.

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