Ms Laverne McGuinness:

I will deal with the comments made by Deputy Ó Caoláin. First, he referred to red-circling, which I will deal with in simple terms and Mr. O'Brien will give him more detail on it. An employee of an agency under section 38 might have been in receipt of a salary of €86,000. In addition, as part of his or her contract which could date from ten, 12, 15 years previously, the employee might be in receipt of an extra allowance ranging from €3,000 to €5,000 or whatever the case might be. We have documentation that shows it is a legally enforceable contract. We are reviewing that documentation for the full amount, that is the salary of €86,000 plus the amount of the allowance, whether that is €3,000, €4,000 or €5,000. Based on the legal documentation following the assessment of the individual's contract, we will be recommending to the Department that the total salary package of the individual would be protected for the term of his or her contract but as soon as he or she retires or leaves, the contract for that post would revert to the salary level of €86,000. The term "red circle" means that the terms and integrity of the legal contract are protected. In other words, it is drawing a ring around it. To do otherwise would involve significant issues and major expense.
In respect of the eight senior posts, we have published the interim administrator's report on the web and the committee secretariat has been furnished also with a copy of the report. The CEO who is currently in place is on a salary scale that is in line with the Department of Health's consolidated pay scales and is paid €86,000. The interim administrator has recommended - and the board has accepted his recommendation - that during the term of this board and before the conclusion of 2015, each of the eight posts will be reviewed. A number of these staff have contracts that are due to expire during 2015. All of the salaries will be concluded by the new board in 2015. The new board will have a period of time to review those contacts in detail and the particular tasks that those people were performing. We were before the Committee of Public Accounts previously, and the new chairman Mr. Kieran Timmins made that commitment to the committee. Two of the eight senior staff are due to retire in 2015.
The Deputy made the distinction between section 38 and section 39 bodies and questioned whether there is a level of inordinate flexibility and how this could be clawed back. Mr. O'Brien will elaborate on the new process we have put in place in section 39 bodies, because it is quite distinct and different from section 38 bodies.
In regard to section 38 bodies, it is not a hands-off arrangement that is in place in respect of the services that are provided. There are comprehensive documents on service arrangements with section 38 bodies, we have them available and we can make whatever the committee wants available to the secretariat at any time. The documentation sets out the full volume of service to be provided over the course of the year, the type of service, the quality of service that we expect to be provided, the pay policy, which is now part of the document since 2010, and the amount of funding for the year. The area and local managers would meet with the service providers on an ongoing basis and there is a review of what has been provided on a monthly basis. It is not as hands-off as it might appear. This will also be relevant to the questions asked by Senator Colm Burke.
Prior to this, the governance arrangement was not as rigorous as the service level arrangement, which took a great deal of negotiation. It took almost two years to put in place an arrangement that was agreeable to the large number of agencies. That service level arrangement concluded in 2009 and it was implemented for the first time in 2010 and year-on-year we have continuously striven to improve it, adding additionality, be it with regard to the service, quality and risk and what we expect. For example, it will include care plans for each of the clients in the agency. There is a rigorous review carried out in two parts, part 1 and part 2. One part is reviewed once every two years and the other has to be signed off every year. In order for the body to get funding it must be signed off.