HSE warned CRC it was considering withholding funds in appointment row

The Health Service Executive

told the board of the Central Remedial Clinic last August that it was "minded" to suspend the provision of nearly €250,000 in funding arising from a serious dispute over the appointment of its new chief executive.

Confidential internal files show the HSE considered the tensions in its dealings with the CRC as "unprecedented" in its relationship with any non-statutory organisation providing State-funded services.

In late April, the CRC told the HSE its long-time chief executive Paul Kiely intended to retire and that it was starting a succession process.

As far back as 2009, the HSE had raised with the CRC concerns at the salary levels paid to some of its staff. In a memo to a HSE official in September 2012, national director Laverne McGuinness said she had learned that Mr Kiely was being paid well in excess of the Government €200,000 pay ceiling.

Not 'approved'
On June 13th, HSE area manager Anne O'Connor wrote to the outgoing CRC board chairman Ham Goulding expressing concern she had been made aware the board intended to appoint Brian Conlon as chief executive from the start of July: "I would note that I have neither seen nor approved any application to replace Mr Kiely."

She said the filling of any post above grade VIII without prior approval from the HSE represented a clear breach of its service level agreement. On June 26th HSE regional director of operations in Dublin North East Leo Kinsella told the new CRC chairman Jim Nugent: "For the avoidance of doubt and the removal of any ambiguity I am hereby formally advising you that there is no approval to proceed with the filling of this post and the process for recruitment must be stopped with immediate effect."

On July 19th, Mr Nugent told the HSE the CRC was an independent company. “We are empowered by the terms of our memorandum and articles of association to make this appointment and we do not believe that any other agreements or arrangements can or should be able to override this essential right and obligation.”

Ms McGuinness told other HSE staff in an email the same day that the CRC was effectively telling them to “get lost”.

On July 23rd, the HSE told Mr Nugent it was serving the CRC with a performance notice, and this was followed by a second performance notice on August 6th. The HSE sought a plan of action and a timetable for addressing what it described as non-compliance with the service level agreement. It warned if this was not done it was minded to suspend €242,865 in funding.

On August 22nd, Mr Nugent told the HSE it would hand over the CRC file on the recruitment of the chief executive and the employment contract would be fully compliant with official pay scales from October 1st.

On September 16th, the HSE told Mr Nugent the recruitment file revealed there had been no external competition for the post, contrary to the requirements of the Public Appointment Service. It said the person appointed was formerly a board member of the CRC.

Salary curtailed
The HSE also set a salary level of €64,812 for the chief executive position, later revising this to €83,252 .

On September 25th, Mr Nugent told the HSE that the chief executive position would be compliant with agreed pay scales, adjusted for Croke Park and Haddington Road agreement pay cuts, by the beginning of October.