independent

Friday 18 April 2014

CRC Chairman: 'I very much regret the hurt' of top ups controversy

CRC chairman Jim Nugent said board are 'saddened' by controversy - but stops short of saying sorry

Jim Nugent (inset)
Jim Nugent (inset)

The Chairman of the CRC Board has said they "regret the hurt" the top-up payments has controversy caused - but stopped short of apologising.

Appearing before the Public Accounts Committee this morning, chairman Jim Nugent said the board were "saddened" by the controversy.

"I very much regret the hurt that has permeated the organisation. We have visited many of the groups we work with and spent many hours listening to what they had to say," Mr Nugent said.

During the meeting, there were several calls from PAC members for the board of the CRC to resign. PAC members Simon Harris, Shane Ross and Robert Dowds all called for the board to go, given the controversy over the payment of top-up allowances.

On the refusal of former CEO Brian Conlan to appear, Mr Nugent said he had requested him to attend the hearing, but he had declined. Mr Conlan stepped down from the role on Monday.

During a stormy session of the PAC, Mr Nugent was grilled by Independent TD Shane Ross who suggested that he should offer his resignation from the board.

Mr Nugent replied “I don’t believe I have to answer that question”.

It also emerged at the PAC meeting that of eleven senior managers at the CRC, five remain who are still in receipt of the unsanctioned top-ups.

Appearing for the HSE, Laverne McGuinness said they paid €106,900 toward the salary of Paul Kiely's salary. Mr Kiely is the former CEO of the CRC and is Mr Conlan's predecessor. The committee heard that on top of that the clinic paid him an additional €116,949, plus an allowance of €19,019.

Under questioning from Labour TD Robert Dowds, who previously worked as a teacher in a CRC linked institution, Mr Nugent was asked why the post to succeed Mr Kiely wasn't publicly advertised.

Mr Nugent said the CRC board had looked at the internal applicants and said anyone of them would have been suitable for the post.

"We looked at the internal applicants and anyone of them would have been suitable for the post," Mr Nugent said.

Answering questions about the retention of €14 million of funds in the accounts of the Friends and Supporters of the CRC, Mr Nugent said €9 million of that was allocated to the development of a facility in Clondalkin, some of the money was allocated for a site in Swords. He also said there was a need to keep a cash reserve in case of an emergency.

The committee was told that the CRC had a turnover of €19 million in 2012.

Earlier, TD Shane Ross said the CRC put “the two fingers to the HSE” when it went to another source to fund pensions “where the donor never intended”.

Mr Nugent compared the CRC to a private company, where there is nothing unusual about hiring a CEO internally from a pool of employees.

However, as the CRC receives €16m every year in funding from the State, which is the majority of the charity’s funding, Deputy Ross said it was wrong to compare it to a private company.

Deputy Ross also asked about accounts for the CRC which suggest that staff costs increased by €170,000 in 2011 and 2012 despite a reduction in the number of staff members.

Deputy Shane Ross, quoting from the clinic’s accounts, said costs at the CRC increased by €170,000 while the numbers employed at the clinic had reduced in the same period. 

In response, Mr Nugent said that what is quoted in the reports are whole time equivalent figures, and that it may not be possible to draw such an inference from the accounts.

Earlier, the former CEO at the CRC, Paul Kiely, told the PAC that he will receive an annual pension worth up to half of his €223,000 salary.

Mr Kiely confirmed that his pension will be based not on the basic HSE salary figure, but on the higher overall figure of €223,000, which will mean he will get a pension of roughly €110,000 a year, the committee heard.

The session heard that Mr Kiely was paid a total salary package of €242,000, made up of the basic salary plus an allowance of €19,000. It emerged at the committee that all of the salary above the HSE approved level of €106,000 was paid out of the CRC's own resources.

Bosses at the Central Remedial Clinic have told the Public Accounts Committee that the Health Service Executive knew about controversial salary "top-ups" back in 2009.

They also confirmed that the salary package paid to Mr Kiely's successor, Brian Conlan, in excess of the HSE's stated preferred salary level. The HSE said the salary paid was "irregular."

It emerged at the committee this morning that Mr Kiely, the former CRC Chief Executive, was paid salary top-ups totalling €136,000 on top of a HSE approved salary of €106,000.

In relation to Mr Kiely's pension, Independent TD and PAC member Shane Ross, said that was a "staggering" relevation.

Mr Kiely confirmed that a €3 million loan from the fundraising arm of the CRC, was used to pay for his and other staff pensions.

The committee heard that Mr Kiely and Mr Nugent sat as directors both of the clinic and of the fundraising arm - known as the Friends and Supporters of the CRC. Mr Ross told the committee that this represented a conflict of interest.

"It is clear the Friends and Supporters have been stuffed...to fill Mr Kiely's pockets and others," he said.

During heated exchanges between the CRC bosses and Mr Ross, Mr Kiely said he took issue with the use of the word "top-up," saying he was paid his agreed salary package of €242,000 a year.

Jim Nugent told the committee that the clinic had a meeting on June 25 2009 with the HSE in which it said that because of contractual obligations, it said it would pay the balance of salaries to nine executives out of its own resources.

David Martin of the CRC said that as a private company it was legally obliged to pay the rates of pay agreed, describing them as legacy issues. He said a number of those 9 executives were due to retire and that all incoming personnel would be hired on a salary scale agreed with the HSE.

PAC chairman John McGuinness expressed his frustration that Mr Conlan, who retired as CEO of the CRC had failed to attend the meeting. "We can't compel him to appear", Mr Nugent said. Mr McGuinness responded sharply: "We can".

The committee also heard that the HSE had taken the "unprecedented step" of issuing two service provider notices to the CRC given the continual breaches in pay policy.

Ms Laverne McGuinness of the HSE told the committee that such a step had never taken such a step in relation to any other Section 38 voluntary hospital or agency as long as she has been working in her post.

The hearing continues.

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