THE Health Service Executive (HSE) has been plunged into fresh controversy over its failure to explain why it didn't stop the Central Remedial Clinic from using charity funds to top up the salaries of its senior managers.
The embattled clinic, which provides services for children and adults with a disability, claimed it sent "regular reports to the HSE" confirming that staff were paid out of public funds as well as top-ups from its charity donations in the past four years.
But the HSE denied it had agreed to the top-up arrangement.
The clinic has been under fire over revelations that it was paying its former chief executive Paul Kiely top-ups of €136,000 in addition to his state salary of €106,000. Eight other staff were also in receipt of extra allowances of more than €35,000 each.
The clinic's former chairman Des Peelo said he had a face-to-face meeting with senior HSE directors Laverne McGuinness and Michael Woods in June 2009 when he told them the charity was unable to break a contract with nine staff who were getting salary top-ups.
The HSE told him it would no longer fund the top-ups from January 2010 but he said it was made aware that the clinic would have to use its own funds to make up the difference.
"It was agreed that the salary levels would continue," said Mr Peelo. "We agreed that from January 1 that we would fund the difference from our private pools. The HSE is fully aware of this.
"There is no secret and it is fully on the record and agreed in writing with the HSE," he added.
Mr Peelo's claim, on RTE's 'Today with Sean O'Rourke', was backed up in a statement from the clinic issued yesterday afternoon which said the HSE was regularly informed about its use of charity funds for this purpose.
In reply, the HSE said yesterday that the arrangement between the CRC and its senior staff was not at any stage agreed to or sanctioned by the HSE.
It confirmed it had a meeting with Mr Peelo in 2009 when it expressed concern about the arrangements which were in breach of public pay policy.
The HSE said it was told by the CRC that it had legal contracts with the staff that could not be broken. It gave a commitment that on the refilling of the posts in the future, rates would be brought in line with public sector pay rates.
But the HSE statement failed to address claims by the clinic that it was fully aware charity funds were used to make up the difference since then. The clinic confirmed that it was now paying 1.1pc of its wage bill from charity donations. Its fund-raising arm, the Friends and Supporters of the Central Remedial Clinic, still has €12m in reserve, despite the clinic cutting services.
The fund-raising arm needs €12m in reserves for capital projects.
A €3m loan given last year by the Friends and Supporters of the Central Remedical Clinic to fund pensions for retired staff has to support 70 former staff and must be paid back by 2017.
It is unclear how the clinic, which relies on around €19m in funds annually from the HSE and charity income, can pay this back. The clinic said five staff were still receiving top ups. The statement said: "Funds donated via other sources, such as the Santa Bear appeal, comedy night, sale of work, golf classic, donor fundraising events, sponsorships, flag days and sales of Christmas cards, are not used to fund these salaries.
"The loan of €3m to the clinic's pension scheme covering 70 former staff was in response to a requirement from the Irish Pension Board together with advice received from the CRC's pension advisers.
"The board of the CRC will participate fully with the HSE and relevant Dail committees in their review of these matters. The members of the board do not receive any remuneration, expenses or payments of any kind," said the statement.
Last night Health Minister James Reilly said he wanted "urgent action" to ensure all hospitals and agencies were compliant.
"The HSE will take whatever actions are necessary," he said, but did not say what this involved.