Manager appointed on €45,000 contract ended up receiving €275,000

A manager who was appointed on a contract that was expected to cost about €45,000 ended up receiving nearly €275,000 when the scope of the role was widened and its duration extended, a HSE internal audit report has found.

The report says that because of the extension of the arrangement, the value of the contract placed meant it had breached the threshold for EU tendering, which is set at €207,000.

Details of the pay rates for the manager concerned were first reported by The Irish Times in May 2014. They were later raised by members of the Dáil Public Accounts Committee, while subsequently members of trade union Impact staged industrial action in protest at the level of remuneration.

The audit report says that at the end of 2012 the HSE sought an interim facilities management manager for the University of Limerick Hospitals Group.

The aim of the contract was to secure an individual who would manage and support soft facilities management services which were described as “portering, catering, security, cleaning and any other soft facilities management services during the time of the assignment”.

The contract was estimated to run initially for three months.

Tender

The report says the contract was not advertised but that known providers of such services were contacted by HSE Procurement and asked to submit a tender.

It says the contract for the "interim management resource" was procured in line with the expected cost of €44,800 and was awarded to a sole trader, Liam Casey FM Consulting. It says the sole trader had subsequently "altered arrangements to act through Starline Management Consulting Limited, set up as a limited company on 31 January 2013".

He took up the role as interim director of facilities for the University of Limerick Hospitals Group in January 2013.

The internal audit says the role was subsequently widened in the first quarter of 2014 to cover all non-clinical management in the hospital group. It says this move was authorised by the chief executive of the group.

“Management did not have a variation order or a new contract to reflect this role and it was confirmed by the chief executive that she had authorised these role changes because of the inability to fill the role by recruitment.”

The audit says the total paid to Starline Management Consulting Limited was €274,413 (gross) from January 2013 to May 2014.

It says an invoice rate of €700 a day plus VAT was charged from the inception of the contract.

The audit says that in addition Liam Casey FM Consulting had been paid €3,444 for a report on facilities management services in the Mid-Western Regional Hospital, Limerick in November 2012.

Separately, the audit says there is no evidence of a conflict of interest in the awarding of a cleaning contract in the autumn of 2013 to Noonan Services Group Limited for services in hospitals in Limerick and Ennis.

Procurement team

The audit says the individual who was serving as the “interim management resource” and who had been a member of the procurement team that recommended the contract go to Noonan Services Group Limited had been a former employee and shareholder in the company.

The report says the individual concerned told the internal audit there was no conflict of interest in respect of himself or his family in the tender process.

“The interim management resource stated that he was a shareholding director of Noonan Group Limited until September 2012,” the report says.