CRC salaries split to avoid public service pay cuts, report finds

Clinic also criticised over pension deal with former chief executive Paul Kiely

A report by the interim administrator appointed by the HSE to run the CRC has made a number of criticisms of pay structures in the organisation. Photograph: David Sleator/The Irish Times

A report by the interim administrator appointed by the HSE to run the CRC has made a number of criticisms of pay structures in the organisation. Photograph: David Sleator/The Irish Times

Thu, Jun 19, 2014, 13:15

The only rationale for the establishment of the Friends and Supporters of the Central Remedial Clinic (CRC) as a company separate from the disability organisation was the maximisation of the HSE funding of CRC services, the interim administrator appointed to run the facility has stated.

In a report published today interim administrator John Cregan said the inference was that if the HSE had been aware of the level of funds available, “it may have reduced its annual allocation to the CRC”.

The report says the CRC, notwithstanding commitments given to the HSE in 2009, approved a series of appointments to its executive team without consulting the health authority.

It says that the CRC “artificially divided senior management and administrative salaries into two categories - agreed HSE and private CRC - and used the artificial split of the salaries to facilitate the avoidance by senior staff of the full impact of public sector pay cuts”.

It says that that the salary that formed the basis of the pension arrangement made with former CRC chief executive Paul Kiely was “from an employer standpoint, overstated”.

“However, on the basis of legal advice, it is not possible, in the current circumstances for the CRC to revisit the pension calculations already in train under the CRC plan.

In the event of the repayment or recovery of salary paid, it may then be possible to revalue the CRC Plan benefits.”

The report says the CRC Board “appeared to be more concerned about the company’s independence and the attention that revealing the level of the CEO’s remuneration would attract rather than the level of remuneration itself”.

“There is no doubt that the level of the CEO’s remuneration, in the light of the

previous correspondence and discussion with the HSE and the general

hardening of public pay policy in a time of austerity, represented the most

serious governance issue to be faced by the CRC’s Board of Governors and,

yet, they chose not to inform the HSE of the proposed retirement package.”

The report says that “to add fuel to the fire of HSE discontent and further sour the relationship with its main funder, the Board of the CRC, in the undoubted knowledge of the commitments given to the HSE, proceeded to offer, without the prior approval of the HSE, the new CEO position to a former Board member.