The chair of the Central Remedial Clinic’s board has told an Oireachtas committee today that the organisation is legally obliged to continue paying top-up allowances to senior staff.
At least five senior staff are still receiving private allowances - totalling about €130,000 - which have been part-funded by charitable donations. These payments are in addition to their State-funded salaries.
James Nugent, chairman of the CRC’s board, told the Dáil’s Public Accounts Committee today these staff had employment contacts which entitled them to these payments.
“We can’t just walk in and say, ‘sorry, we’re going to take away had of your salary. Legally, you can’t do that. It’s an employment [CONTRACT]problem,” Mr Nugent said.
He declined to say whether he planned to resign in light of controversy over these top-up payments which have been authorised by the board.
“I believe I don’t have to answer that question,” Mr Nugent told Deputy Shane Ross.
However, he insisted the HSE had been aware from 2009 that the organisation had been paying senior staff private allowances.
Mr Nugent pointed to correspondence sent four years ago in which it told the HSE it was funding excess salaries from its own resources.
He also defended the use of charitable funds for top-up payments on the basis that public fund-raising had been used to pay salaries at the organisation for decades.
“For the first 25 years of our work, all salaries were paid from public contributions... in the case of the CRC, it was 1977 before we received State funding,”Mr Nugent said.
Former CRC chief executive Paul Kiely also confirmed to the committee that his pension has been part-funded from charitable donations made to the clinic.
Mr Kiely, who retired from the organisation earlier this year, received a salary of more than €240,000, which was topped-up with charitable donations.
He confirmed that his pension fund - which includes 70 other staff at the organisation - had also been boosted by a €3 million loan from a charitable company linked to the organisation.
This company, the Friends and Supporters of the Central Remedial Clinic, has charitable states. Mr Kiely was a secretary of this company and Mr Nugent was listed as a director.
Under questioning from members of the committee, Mr Keily agreed that his pension will be around half of his total salary. He also confirmed that it had not been subject to the pension levy.
Mr Nugent agreed with Deputy Simon Harris that it was time to reform governance arrangement to ensure directors of the CRC were not also directors of the Friends and Supporters company.
He also said he expected that the €3 million loan - which was used to fund a hole in the pension fund - would be paid back to the Friends and Supporters company.
This was despite its description in company accounts as “unsecured, interest-free and not repayable in the short term”.
Deputy Shane Ross insisted this description suggested it was “gift”.
The CRC’s chief executive who resigned earlier this week, Brian Conlan, was not present at today’s meeting.
Mr Nugent said he was unable to compel him to appear since he had resigned from the organisation.
The Public Account Committee hearing is continuing.