The HSE has raised significant concerns about the scale of the pension arrangements, part-funded from charitable donations, of the former chief executive of the Central Remedial Clinic (CRC) Paul Kiely.
The HSE took over the running of the CRC following the resignation of the board after the recent top-up payments controversy.
In a letter seen by The Irish Times, Tony O'Brien, the director general of the HSE, has written to the Dáil Public Accounts Committee about "a number of serious matters" which have come to light in recent weeks.
He said the HSE’s interim administrator appointed to the CRC last month had uncovered “significant issues relating to the final salary payment/retirement package approved by the then board of governors of the CRC for Mr Kiely”.
A HSE internal audit investigation last year found that Mr Kiely, prior to his retirement last spring, had been receiving a total remuneration package of €242,865. This was made up of a State-funded salary of €106,900, a CRC-funded salary of €116,949 and a separate CRC-funded allowance of just over €19,000.
The PAC heard last month that after stepping down Mr Kiely received a retirement lump sum of €200,000. The committee was told that his pension when drawn down would be over €90,000 a year.
In the letter sent to the committee in advance of its meeting today, Mr O’Brien stated: “Additionally it appears an amount was paid to a pension fund to ensure that Mr Kiely’s pension/lump sum benefits would not be less than if Mr Kiely had continued to remain on as CEO until November 2016.
“Furthermore it appears the payments to Mr Kiely could not have been made by the CRC without funds received from the Friends and Supporters of the CRC,” [essentially a fundraising arm of the organisation]. Mr O’Brien did not spell out the total amount believed to be involved in Mr Kiely’s pension arrangements.
However, he said “the above arrangements raise a number of serious matters relating to the CRC’s memorandum of association, the cost of the package to the CRC/Friends and Supporters of the CRC and the payment calculations not being fully adjusted for public sector pay cuts”.
Mr O’Brien said he was bringing the matter to the attention of the committee “as the arrangements seem to be considerably at variance from the understanding the committee may have gained from evidence given at the hearing [in December] attended by representatives of the CRC board of governors.
“At this stage it is necessary for the CRC to satisfy itself that the payments made/benefits conferred are reasonable and proper (in the context of its memorandum of association) and that any amounts paid were correctly calculated and authorised.
“In the event of there being a loss to the CRC (or the Friends and Supporters of the CRC), steps to make good that loss will require to be taken.”
Mr Kiely told the committee last month that he had not yet drawn his pension but given that he had worked at the CRC for 36 years it would be 36/80ths of his salary.
The committee heard that Mr Kiely was one of about 70 CRC staff covered by a private pension arrangement organised by the disability group.
