Hospitals in breach of pay policy could face cuts in State funding, HSE warns

Voluntary hospitals and health service agencies that continue to pay more to their executives than permitted under Government policy could face cuts in their State allocation next year, the head of the Health Service Executive Tony O’Brien has said.

Addressing the Dáil Public Accounts Committee yesterday he said that the HSE would be taking into account the extent of co-operation provided by voluntary hospitals in achieving compliance with pay policy when determining new funding agreements for next year.

Mr O’Brien said that while there had been much media attention on individuals in State-funded hospitals and agencies who received additional top-up payments, the focus of the HSE was on the governance of organisations that had acted or may have acted outside of their authority in inappropriately offering and then paying amounts that were neither sanctioned nor authorised.

He maintained that the people who had questions to answer were “those who purported to authorise such payments rather than those who received them”.

A recent HSE audit found that at least 36 separate allowances were being paid to health service managers from HSE funds at the cost of €3.224 million. Separately, 13 organisations were found to be paying additional remuneration or benefits totalling at least €912,000 from private sources.

Compliancy claims
Mr O'Brien said that that some State-funded hospitals and agencies were claiming to be compliant with Government pay policy while identifying individual exceptions to the rules governing remuneration for senior staff .

He told the committee that of 42 responses received from voluntary hospitals and health agencies (known as section 38 organisations), 30 had listed themselves as being compliant with Government pay policy, with 12 saying they were not.

He said that of the 30 bodies which were asserting compliance, 15 had also indicated that remuneration was being paid which was not in line with official policy.

He said seven of the 30 organisations claiming compliance had been identified through material provided to a recent HSE internal audit as paying non-compliant remuneration while another body had submitted a formal approval given by the Department of Health for a non-compliant allowance which was being paid.

Mr O’Brien maintained that seven organisations were considered by the HSE to be compliant with Coalition pay policy.

He said that to date one organisation had not responded to HSE queries as to whether it was compliant with official policy in relation to executive pay.

Mr O’Brien said the HSE had embarked on a process of verification in relation to agencies which had maintained they were complying but where there was a recorded deviation from the official policy .

The Government’s policy on pay states that bodies funded under section 38 of the Health Act 2004 may not supplement approved rates of remuneration for staff either with exchequer funds or non-exchequer sources of income.

Mr O’Brien said that for the avoidance of doubt, the HSE would deem any hospital or health board to be non-compliant when any one of its employees had pay which was not conforming to health service policy.

He also said the HSE would regard as non-compliant any organisation that did not apply the pension levy or the various public service pay cuts to executive remuneration.

The Department of Public Expenditure and Reform told the committee that it could trace no records of authorising additional top-up payments to health service mangers.