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Friday 24 January 2020

Rehab confirms probe under way into alleged fraud at one of its subsidiaries

(Stock photo)
(Stock photo)

Gordon Deegan

Rehab has confirmed that an alleged instance of fraud is under investigation at one of its subsidiaries.

A note attached to its 2018 annual accounts states that the company concluded a preliminary investigation in 2019, which identified an alleged instance of fraud at one of its wholly owned subsidiaries.

"The matter has now been disclosed to the relevant authorities," the note says.

A spokeswoman for the organisation said the alleged fraud came to its attention as a result of a protected disclosure made at a subsidiary.

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"As the matter is subject to an investigation at this time, no further comment can be made," she added.

The cash-strapped organisation last year received a Government bailout in order to deal with escalating costs across a number of areas and the accounts show that the bailout occurred after Rehab recorded a loss of €2.79m in 2018.

The Rehab spokeswoman said that already €1.5m has been received from Government and "we anticipate receiving a final €500,000 imminently".

The spokeswoman also confirmed that the rebranding of Rehab had been paused, due to the organisation's financial circumstances.

In 2018, Rebab awarded a €30,000 to €40,000 contract for rebranding to be carried out as the group's name "is no longer fit for purpose". The Rehab spokeswoman said the rebranding project was now at an advanced stage with much of the project work completed.

However, she said: "It was deemed prudent to put the project on hold whilst we worked to restore the financial sustainability of the organisation. The board of Rehab will decide in due course when this project will recommence."

The accounts also show that six of Rehab's former top earners shared €720,491 in redundancy in 2018.

A note attached to the accounts states that the annual savings to Rehab from the redundancies totals €489,000.

The spokeswoman for Rehab said that since 2014, Rehab Group had introduced a range of cost reduction measures "in line with our board of directors' mission to transform the organisation".

"This involved very significant pay cuts for continuing senior leadership team members, which saw an average base salary reduction of almost 20pc and termination of any bonus arrangements," she said.

The accounts show that in 2018, Rehab's total income came to €140.7m, which included a grant from the HSE of €73.8m, and the organisation's total expenditure came to €143.6m.

At the end of 2018, Rehab employed 3,069 and staff costs came to €96.8m.

Irish Independent

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