Oireachtas Joint and Select Committees
Thursday, 19 December 2013
Public Accounts Committee
2012 Annual Report of the Comptroller and Auditor General and Appropriation Accounts
Vote 38 - Health
Vote 39 - Health Service Executive
Section 38 - Agencies Remuneration
10:35 am
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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We will deal now with No. 7, 2012 Annual Report of the Comptroller and Auditor General and Appropriation Accounts: Vote 38 - Health, Vote 39 - Health Service Executive, Section 38 - Agencies Remuneration. Before we begin our meeting I ask members, witnesses and those in the Visitors Gallery to turn off their mobile telephones because they interfere with the sound transmission of the meeting. During last week's meeting we got numerous complaints in this regard. I also ask members, witnesses and those in the Visitors Gallery to keep their mobile telephones away from the desks and microphones.
I advise the witnesses that they are protected by absolute privilege in respect of the evidence they give this committee. If they are directed by the committee to cease giving evidence in relation to a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against a Member of either House, a person outside the House or an official by name or in such a way as to make him or her identifiable.
Members are reminded of the provisions in Standing Order 163 that the committee should also refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits of the objectives of such policies. I welcome Dr. Ambrose McLoughlin, Secretary General, Department of Health and ask him to introduce his officials.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Thank you. I welcome Mr. Barry O'Brien of the HSE and ask him to introduce his officials.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Thank you. I welcome Ms Mary Day, chief executive officer, and Ms Caroline Piggot, financial director, of the Mater Misericordiae University Hospital to the meeting. I also welcome Ms Buckley and Mr. Brazel from the Department of Public Expenditure and Reform.
We propose to deal first with the issues relating to the Mater hospital. The witnesses representing the hospital may, if they wish, leave the meeting when we have completed our discussion on that issue. They may find our discussion so riveting they will want to remain. I invite Ms Day to make her opening statement.
Ms Mary Day:
I joined the Mater Misericordiae University Hospital in 2008 as director of nursing and was appointed CEO of the hospital in January 2013. I am joined by my colleague, Ms Caroline Piggot, director of finance. I thank the committee for the opportunity to clarify the situation regarding the pension scheme administered by the Mater hospital on behalf of circa 180 staff members of the Central Remedial Clinic, CRC.
The Mater hospital administers this scheme at the direction of the Department of Health and with the full approval of the HSE. The payment of €660,000 per annum made by the CRC to the Mater hospital is the CRC's employer's contribution in respect of its staff pension scheme. For historical reasons, which I will elaborate on later, the Mater hospital administers this scheme for the CRC staff as part of the voluntary hospital superannuation scheme, which is known as the VHSS, and is the pension scheme applicable to all voluntary hospitals in the country. In return for these contributions the Mater hospital assumes the liability for CRC staff members' pension payments as and when they fall due, thus relieving the CRC of future pension payments to its employees. I would like at this point to make clear that the Mater hospital receives no payment for this service to the CRC.
In relation to the pension mechanism, the scheme is in line with public sector pension policy, whereby all pensions are funded from current revenues, namely, no specific ongoing fund is built up for future pension payments. Further, while the Mater hospital administers all payments through the scheme, the HSE's pension section in Manorhamilton authorises the authenticity of payments.
To respond to the question as to the reason the Department of Health directed the Mater hospital to undertake this scheme on behalf of the CRC, I need to take the committee back in time. The CRC had been in operation for a number of years when it sought Department of Health funding in the mid-1970s. However, for technical and legal reasons, the Department of Health at the time could not provide any funding to the CRC as it was not a hospital. To overcome this difficulty, it was decided that all funding for the CRC should be provided through a voluntary hospital. The Mater hospital being the nearest hospital to the CRC, with joint clinical commitments and through the Sisters of Mercy, provided significant support to the clinic and was, therefore, chosen to be the channel for such funding.
In 1977, the Mater hospital requested permission from the Department of Health to admit the CRC staff into the VHSS. These letters of January and August 1979 have been supplied to the committee. The Department of Health gave permission to the Mater hospital to enrol the requested CRC staff to the VHSS on the basis that funding for the clinic was processed through the hospital. This is articulated in the August 1979 letter from the Department of Health. Further correspondence to the CRC dated 2 November 2004 is a latter from Patsy Carr to the CRC from the pension policy unit in the Department of Health again reaffirming the arrangement in place with the Mater hospital. It also confirms that the CRC did not qualify to administer its own VHSS and that the Department of Health was satisfied for the arrangement to continue.
I refer finally to the correspondence from the pensions unit in the Department of Health to Mr. Paul Kiely, then chief executive of the CRC in May 2010, which again reaffirms the pension arrangement between the Mater hospital and the CRC.
10:45 am
Ms Mary Day:
I have provided supporting documentation for this which I trust will give the Chairman and members of the committee an understanding of why the Mater hospital has responsibility for the pension scheme for approximately 180 staff members at the CRC and, most important, that the Mater hospital is not paid for this service.
Eoghan Murphy (Dublin South East, Fine Gael)
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Does this mean everything is in order with the pension scheme? We heard previously that additional percentages were paid as an add-on simply for processing the money. Is that the case?
Ms Mary Day:
There is no additional percentage. The percentage that is paid from the CRC is the employer's contribution. I refer the Deputy to the letter from the Department of Health in 1979, which specifically states that the Mater hospital was directed by the Minister for Health to set up this scheme and that the arrangements entailed that the salaries of the staff members, plus 10% of salaries to meet superannuation costs, would be recouped annually from the CRC. The letter reiterates that the ordinary 5% superannuation contribution of the staff, plus the 10% of salaries referred to earlier, would be credited to the voluntary hospital superannuation scheme in the Mater hospital accounts.
Eoghan Murphy (Dublin South East, Fine Gael)
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Does Ms Daly understand the point Mr. Kiely was trying to make when he was with us previously?
Eoghan Murphy (Dublin South East, Fine Gael)
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Someone used the expression - I will not attribute it to him - that it involved the operation of a phantom pension fund to benefit the Mater hospital not to any individual. He felt it was not appropriate and I think he said he tried to raise the issue but had been asked not to pursue it.
Ms Mary Day:
That is not correct. We operate the pension scheme in line with the voluntary hospital superannuation scheme, which in turn is in line with public pension policy as directed by the Department of Health. The letter sent in 2004 from the pension policy section to the then administrator at the CRC, Mr. Tony Kett, clearly states that the 10% employer contribution, along with the staff contribution mentioned in the letter, was to be credited to the Mater hospital superannuation scheme to ensure sufficient moneys were available to meet pension costs as they arose. The letter adds that spouses and children's contributions of 1.5% are due to be paid by both employer and employees. It was explained to Mr. Kiely in 2010 that the CRC was unable to provide a voluntary hospital superannuation scheme in its own right because it was not seen as a voluntary hospital.
Shane Ross (Dublin South, Independent)
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The relevant point in Ms. Daly's statement was her assertion that there was no charge for the arrangement. The accounts of the Central Remedial Clinic describe this arrangement as involving a fee. Is that correct? The accounts state that the Mater hospital acts on behalf of the Central Remedial Clinic as an agent for the operation of the scheme and charges a fee.
Shane Ross (Dublin South, Independent)
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The auditors and the Central Remedial Clinic got that wrong.
Shane Ross (Dublin South, Independent)
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The 10% of €669,000 is not a fee. That should be corrected in the accounts.
Shane Ross (Dublin South, Independent)
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I ask Ms Daly to explain how this operates. I think I know but perhaps she could explain what happens to the approximately €669,000 that is paid into the fund per annum.
Ms Caroline Piggot:
On foot of the letter of 1979, that income is shown as part of our superannuation income in our financial statements in the year that we receive it. Likewise, any pension costs are shown under pensions and lump sum costs in the year they are paid out. That payment is the CRC's payment to the Mater hospital for the future liability of the pension costs for the clinic's staff. The CRC does not have a pension liability because the Mater meets the liability for the clinic's staff. That is the basis for this charge. The income is booked in the year it is received. It is not put into a fund, which is in line with accounting policy for all public sector schemes.
Shane Ross (Dublin South, Independent)
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I understand the Mater hospital has a liability and income on its balance sheets but does that money go into the pot to be spent as the hospital wishes? There is no fund.
Shane Ross (Dublin South, Independent)
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Is it ring-fenced?
Shane Ross (Dublin South, Independent)
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It is a fund.
Ms Caroline Piggot:
No, if we have shortfall between what we receive and what we pay out, in effect it is underwritten by the Minister. We would outline to the HSE that we need a supplementary fund to meet our shortfall in pensions.
Shane Ross (Dublin South, Independent)
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Does the hospital have a shortfall?
Shane Ross (Dublin South, Independent)
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It has a surplus.
Shane Ross (Dublin South, Independent)
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I do not quite understand that. The money comes in and it is ring-fenced somewhere.
Shane Ross (Dublin South, Independent)
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It is notional, in effect. It is not put into a separate account.
Ms Caroline Piggot:
No, we have a budget figure that was calculated by the HSE on the basis of our expenditure in 2011. From 2012 onwards, that is ring-fenced.
Ms Mary Day:
To clarify, we are operating under the voluntary hospitals superannuation scheme. We are administering the policy as laid down by the Department and the HSE, which manages the scheme. From the hospital's point of view, it is not a Mater scheme. It is in line with guidelines and recommendations. The letter is clear on how the contributions are credited to the superannuation account to ensure sufficient moneys are available to meet pension costs as they arise.
Shane Ross (Dublin South, Independent)
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However, these costs are underwritten by the Department of Health, which will pay if there is a shortfall.
Ms Mary Day:
Yes, but to refer again to what the Department prescribed at the time, the employer's contribution was intended to future proof the pension scheme. As we were holding the liability for the CRC staff. The CRC did not have a liability for the cost of their pensions. We were taking on that liability.
Shane Ross (Dublin South, Independent)
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In effect, there is no liability because it is underwritten. The Mater hospital will not lose anything on it.
Ms Mary Day:
Ultimately we will not lose anything because it is underwritten. We are adhering to what was prescribed in the Department of Health and HSE guidelines for voluntary hospital superannuation schemes.
Shane Ross (Dublin South, Independent)
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Can Ms Daly provide a copy of the legal document setting out the agreement with the CRC?
Shane Ross (Dublin South, Independent)
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Can we have a copy?
Shane Ross (Dublin South, Independent)
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I thank Ms Daly. How does the Mater hospital account for the money? Does it show up in its accounts?
Shane Ross (Dublin South, Independent)
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May we have a copy of the accounts?
Shane Ross (Dublin South, Independent)
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Are the accounts for 2012 available?
Shane Ross (Dublin South, Independent)
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Last week the hospital issued a statement calling on Paul Kiely to withdraw what he had said. Has Ms Daly heard from him?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I presume Ms Daly would like to hear from him.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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It was with some astonishment that the committee got word of this pension issue at the end of our last meeting.
I wish to clarify the point. As with all other public servants, the fact that the scheme is underwritten by the State does not discount the obligation of the employee and employer to make a contribution to the scheme. Is that so? Furthermore, it is fully accounted for in line with-----
10:55 am
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Ms Day has clarified things absolutely. I imagine the approximately 180 staff whose pensions are managed by Ms Day must have been rather troubled to hear the public commentary in respect of their pensions, given the grave difficulties in so many pension funds.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I wish to put a question to Mr. O'Brien from the HSE. I understand that the HSE pension section in Manorhamilton deals with these matters. Is that correct?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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What is Mr. O'Brien's relationship to the pension section? Is Mr. O'Brien the line manager?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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When did that happen?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Therefore, up until three months ago Mr. O'Brien was the line manager for this pension section in Manorhamilton. Is that the case?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Mr. O'Brien is the head of human resources. Is that correct?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I find it astonishing that Mr. O'Brien, as the person in charge of human resources for the HSE and as the person who, until three months ago, had direct line management responsibility for the pensions section in Manorhamilton, was not in a position to clarify all of this at our last meeting. Mr. O'Brien will recall when the issue of the pension arrangement arose and can look back on the committee report. Mr. O'Brien was speechless and he said he had no knowledge of this arrangement. I am keen to know how he can account for that.
Shane Ross (Dublin South, Independent)
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Okay.
Shane Ross (Dublin South, Independent)
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It was €667.
Mr. Barry O'Brien:
Yes. He made reference to a fee being charged by the Mater Hospital to the CRC. Mr. Kiely said that was correct and that he had on numerous occasions made efforts to cease the practice. Mr. Kiely was the chief executive of the CRC when the documentation was written between the Department and the Mater to agree to have 180 people from the CRC brought into the voluntary hospital superannuation scheme. What I said was that I was astonished that Mr. Kiely was claiming that there was a fee being charged by the Mater. I said that I found it more astonishing that if this was the case then why had Mr. Kiely, in his role as a board member and board secretary, not raised the issue with Mr. Conlan, who was then chief executive of the Mater and also a board member of the CRC. My view was that surely he could have been in a position to give a direct reply to Mr. Kiely on why the Mater was putting in such a charge. In fact, I was clear on how the pension scheme operates. I undertook, for the members of this committee, to bring a pensions manager today. Mr. Seán Keane, beside me, is a senior pensions manager with us.
In essence, I was surprised that Mr. Kiely was claiming that this was something extraordinary which no one had ever twigged before. We all know now that if we leave out the word "fee", it is clearly set out, historically, in 1979, reconfirmed in 2004 and reconfirmed again in 2010 that this liability was agreed and signed off. In fairness to Ms. Day, she has just confirmed to Deputy Ross that she will forward the legal agreement which sets this out.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I appreciate all of that information from Ms. Day. However, I put it to Mr. O'Brien that I find it extraordinary, whatever about the confusion around the term "fee", which I accept, that in public session at an Oireachtas committee hearing in respect of this pension issue, Mr. O'Brien could give no account or context in respect of the matter. The word that went from this committee which, frankly, was mystified by the turn of events, was that vast sums of money were being moved in respect of pensions from the CRC into the Mater Hospital to a phantom fund, phantom account or non-existent account and that Mr. O'Brien, as the person charged nationally with responsibility for human resources and, therefore, pensions, was not in a position to comment, clarify or mitigate the position in any way. I find that extraordinary.
Mr. Barry O'Brien:
I have a responsibility as a public servant to bring facts before the committee, not supposition. Mr. Kiely made the extraordinary claim. He did so in a direct response to Deputy Ross. He said he had been attempting to cease the practice for years. However, he must have been fully aware that 180 people who he, as the chief executive, employed were in the VHSS and that there was an agreement with the Department on how their contribution would be managed. For me to make a comment in the heat of that moment, when every member of the committee said it was extraordinary and made reference to the potential of a phantom fund and commented that a major issue had been uncovered, would have been completely inappropriate.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I accept that the issue of the fee was a curveball and that Mr. Kiely misrepresented the position. However, as the national director of human resources, Mr. O'Brien would or should have been aware of the manner in which pension contributions were made by section 38 organisations. Mr. O'Brien should certainly have been aware that if there was any mention of a fee, it would not be in line with standard procedures. In fact, it would fall far outside them. Furthermore, Mr. O'Brien should have been in a position to clarify all of that.
Mr. Barry O'Brien:
To be fair, the Chair specifically asked for me to prepare a report and to present a pensions expert before the committee today so the matter could be clarified. I do not believe that my giving a potential answer to what the fee might or might not be would have added anything to the interaction that day.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Mr. O'Brien should have been in a position to know that no fee was appropriate and that there would be no cause for any fee for the administration or handling of this pension matter. More to the point, given the fact that the HSE has been immersed in consideration of section 38 organisations, given that audits have been done and given that it has been a matter of public comment, I would have expected that Mr. O'Brien, as the person in charge of human resources, would have been on top of his brief and that he would have been fully conversant with the manner of payment via the Mater for those 180 employees. I find it extraordinary that Mr. O'Brien was not. I find it all the more extraordinary that the meeting concluded in the manner it did, especially in light of the staff in question, the 180 persons who may have wondered what all of this was about and whether they had been contributing to some form of phantom fund. I consider that to be absolutely extraordinary. How long has Mr. O'Brien been in the job?
Mr. Barry O'Brien:
With respect, I am a public servant of 37 years' standing. I am quite proud of my public service record. I wish to state clearly that we were over five and a half hours at the last PAC meeting and we were afforded a ten-minute break. We answered every question to the best of our ability. What we are discovering this morning is that Deputy McDonald is telling me that it would have been appropriate for me to question the audited accounts of a separate statutory organisation, that is, the Mater Hospital, by hearsay and suggest a statement made may not be correct and that I thought the word "fee" was wrong. Deputy Ross has just placed it on record that the audited accounts of the Mater need to be factually corrected.
Simon Harris (Wicklow, Fine Gael)
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It is the accounts of the CRC.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I am unsure whether accidentally or deliberately Mr. O'Brien is missing my point.
11:05 am
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I accept all of that but Mr. O'Brien should hear me all the more clearly. I would have thought, and still think, given the turn of events of the last committee meeting and given the fact that Mr. O'Brien is in charge of human resources nationally - and pensions are a significant subset of that function - that he would be in a position to explain to the committee precisely the mechanisms and the manner by which contributions are made to the voluntary hospital scheme and, whatever about the audited accounts, to state that a fee would not be payable or appropriate, and that he would not have let that matter go unchecked. I find that extraordinary.
Does the Mater cater for other section 38 organisations? Does it handle pensions for other section 38 organisations?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Does it, Ms Piggot?
Ms Mary Day:
They are actually our employees because they are subsidiaries of the Mater Hospital. The child and adolescent account service is transferring to the HSE from 1 January.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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At this juncture, would Mr. O'Brien have the details of how other section 38 organisations handle their pension matters?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Who does Mr. Keane report to?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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To whom does Mr. Smith report?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Whom does Mr. Woods report to?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay. Thank you.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I thank Deputy McDonald and call Deputy Dowds.
Robert Dowds (Dublin Mid West, Labour)
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I will waive my questions at this stage.
Kieran O'Donnell (Limerick City, Fine Gael)
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Can I just go back to get a bit of clarity? I have read the correspondence to the Mater hospital, dated 9 January 1979, effectively from the secretary general, about the CRC. It also makes reference to St. Paul's Hospital. My question is for Ms Day. The amount paid annually from the CRC is €660,000. Are those 180 people employees of the Mater hospital? Of the €660,000 that is paid, is some of that wages and some of it contributions to a pension fund?
Kieran O'Donnell (Limerick City, Fine Gael)
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At this moment in time, how many of the 180 CRC people are in receipt of a pension? For how many former employees of the CRC is the Mater paying a pension?
Kieran O'Donnell (Limerick City, Fine Gael)
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Of the 180?
Kieran O'Donnell (Limerick City, Fine Gael)
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What is the balance of the difference between the amount the Mater hospital has received to date from the CRC and the pension contributions that have been paid out? How much has the Mater received to date?
Kieran O'Donnell (Limerick City, Fine Gael)
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€0.7 million.
Kieran O'Donnell (Limerick City, Fine Gael)
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When does Ms Day anticipate that that will kick in? There is a surplus of about €8.8 million in that fund at the moment.
Kieran O'Donnell (Limerick City, Fine Gael)
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That is €9.5 million minus €0.7 million.
Kieran O'Donnell (Limerick City, Fine Gael)
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So there is a surplus of €7.8 million in the fund.
Kieran O'Donnell (Limerick City, Fine Gael)
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In the Mater's in-house scheme, is 10% set aside? Is the same percentage of salary set aside into the superannuation fund?
Ms Caroline Piggot:
No. This goes back again to why the CRC and our other section 38 organisations are paying this. The Mater is left with a future liability for these pensioners. The CRC does not have a future liability for the pensions, so that is why that contribution is being made. We do not make a contribution on behalf of our own staff because we meet the liability as it falls due.
Kieran O'Donnell (Limerick City, Fine Gael)
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With regard to the situation whereby the Mater is in surplus every year on the payment, does the hospital combine the payment received from the CRC? Ms Piggot said the Mater was in surplus every year with the payment of pensions. Is she talking specifically about the CRC or the overall scheme for the Mater, the CRC and the other bodies?
Ms Caroline Piggot:
No - in the overall scheme. We went back to the HSE in past years and got supplementary funding to allow our incomings and outgoings to meet. We have done that in the past, but currently we have a set budget figure for pension obligations that has been agreed with the HSE from 2012 onwards. We are within that budget figure, so to speak. One could say it is a surplus. That surplus is not retained in our books. It flows through to the bottom line so, in effect, it goes against patient care.
Kieran O'Donnell (Limerick City, Fine Gael)
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I have a question for Mr. O'Brien. From 2001 to date, there is effectively a surplus of €7.8 million on the fund paid from the CRC to the Mater. This is more a funding issue for the Mater itself. Looking at the funding, I take it that the CRC is funded by the HSE for the €660,000 that is paid per annum to the Mater. Is that correct, Mr. O'Brien?
Kieran O'Donnell (Limerick City, Fine Gael)
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Our remit in the Committee of Public Accounts concerns public funds. We are being told there is a surplus of €7.8 million in the amount paid from the CRC to the Mater for the last 13 years. Is that amount, which is paid from the CRC to the Mater, funded by the HSE? In that context, is it taken into account by the HSE in funding the Mater? I have to ask the hard questions. We have a situation here whereby funding was coming from the CRC to the Mater which provided a cashflow advantage to the Mater over a number of years. I am putting the question because I think it needs to be answered. It is unsatisfactory from the HSE's viewpoint that the Mater cannot give us a response to that. There may be a simple explanation but we need to have an explanation. Ms Day might explain the mechanics of the Mater's funding mechanism from the HSE. Does she understand my question?
Kieran O'Donnell (Limerick City, Fine Gael)
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No. The question I am asking is about the Mater being funded by the HSE.
11:15 am
Kieran O'Donnell (Limerick City, Fine Gael)
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About 10% of the salary is paid by way of superannuation from the CRC to the Mater. Is there a line in the Mater’s budget in which the HSE gives the hospital 10% of the salaries for Mater employees to fund their future pensions?
Ms Mary Day:
No; we do not receive funding from the HSE for the Mater employees’ pension scheme. In the Mater voluntary hospital superannuation scheme, there is no employer’s contribution, as the director of finance explained earlier, as we are taking on the ongoing liability for those funds.
Kieran O'Donnell (Limerick City, Fine Gael)
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With the mechanism put in place for the CRC, if for argument’s sake the CRC was able to come in under the VHSS, it would not be coming to the HSE for the €660,000 per annum. Is the CRC’s contribution taken as an income line by the HSE?
Ms Caroline Piggot:
It is shown as our superannuation income. We would have gone looking to the HSE to make up our shortfall. Whether the CRC managed its own VHSS or it was managed through the Mater’s, it would be the same cost to the Exchequer.
Kieran O'Donnell (Limerick City, Fine Gael)
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Was Ms Day surprised by Mr. Paul Kiely’s comments at this committee last week? Did the hospital have communication from him regarding the pension set-up?
Kieran O'Donnell (Limerick City, Fine Gael)
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Did he ever communicate with Ms Day or her predecessor on this issue?
Kieran O'Donnell (Limerick City, Fine Gael)
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If the Mater were not receiving the €660,000, would the HSE be obliged to pay it?
Kieran O'Donnell (Limerick City, Fine Gael)
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If the Mater had a surplus in its superannuation scheme, would that feed in as part of the income on an annual basis for funding from the HSE?
Kieran O'Donnell (Limerick City, Fine Gael)
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Let us assume the Mater had no pension payments to make on an annual basis and it received €660,000 from the CRC on annual basis but had a deficit of €500,000 in its operating costs. Would the hospital receive the €500,000 from the HSE to make up the deficit or would the HSE claim the €660,000 from the CRC could be used to balance the deficit?
Kieran O'Donnell (Limerick City, Fine Gael)
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The point I am making is that the Mater could have had a serious cashflow advantage, which would have been a cost to the Exchequer, in respect of pension costs that would only arise 20 years down the road. Will Mr. O’Brien clarify that?
Seán Fleming (Laois-Offaly, Fianna Fail)
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Ms Day and Ms Piggot have clarified matters. Do superannuation deductions for Mater hospital staff go into that fund?
Seán Fleming (Laois-Offaly, Fianna Fail)
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Effectively, the Mater is a conduit between the Department of Health and the CRC. If there is a shortfall in the pension scheme, it will be picked up by the HSE and, essentially, the taxpayer. These employees are getting the benefit of public service pension arrangements even though they have a fixed contribution scheme.
Seán Fleming (Laois-Offaly, Fianna Fail)
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It is beginning to seem that Mr. Kiely’s statement that there was a fee involved is not accurate. He should be given the opportunity to correct the record. This statement did damage to the Mater, the CRC and the fundraising activities of all charities. I take grave exception to someone throwing a comment such as this at this committee which caused much collateral damage. The record must be corrected. Mr. John Cregan, the current chief executive officer of the CRC, should make whatever arrangements necessary to ensure the record is corrected. These comments have affected the delivery of front-line services by many charitable organisations.
Two other people owe an apology and a correction: the directors who signed those accounts on behalf of the CRC who said that. We now know, and I have checked this with my colleague, Deputy Ross, that Mr. Hamilton Nugent and Mr. Jim Goulding as directors of the CRC have primary responsibility as to the accuracy of their accounts, and they need to correct that. Those accounts have been lodged with the Companies Registration Office and they are not accurate, from what we now hear. Their auditors, Ernst and Young, EY, owe us an apology. Mr. Paul Kiely, Mr. Nugent, Mr. Goulding and the auditors, EY, have all sent a lot of people on a merry dance and done a lot of collateral damage.
I am very hurt. From the very beginning when the issue of the section 38 top-ups broke weeks ago, my very first comment was that I was afraid this would damage the fundraising activities of charities, and it has. These remarks have added to that. On the radio this morning the Chairman said we need to restore public confidence in these organisations, and I agree with him. These matters must be sorted out, but I want corrections on the record from all those people I mentioned and an apology for any collateral damage they have caused.
11:25 am
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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At the last meeting I asked about the auditors and we were told about EY. We acted on the accounts from CRC where it clearly states that this is a fee. One can spread the blame from EY to the directors who signed the accounts and then to Mr. Kiely who raised it as he did. Enormous damage has been done to the charities and to the sector. Much as we were shocked by the revelations about the accounts through Deputy Ross, it is even worse this morning now that we know about how this accounts saga was put before the general public through this committee.
I agree with Deputy Fleming that they owe an apology to the committee, the sector, the CRC and the Mater Hospital. Given the fact that it is Christmas time maybe they should go beyond an apology because substantial damage has been done to those out there trying to collect for the charities. They should consider the comments being made here at the Committee of Public Accounts and the damage that has been done, and they should respond publicly within the next few days so that we can correct the record and get the matter sorted.
Mr. Kiely said he had raised this matter with the Mater Hospital on numerous occasions and that he was tired asking about it. He said he had been told to get lost, that he had to continue to pay. Is there any paper trail in the Mater Hospital that would indicate that before Ms Day took up her position, Mr. Kiely had raised this issue on numerous times as he declared he did? Did he get a written response or were last week's comments made from the top of his head?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Could Ms Day or the HSE check that Mr. John Cregan is now there acting for them? A valid point was made last week on Mr. Brian Conlan being on the board. Do any board minutes indicate that Mr. Kiely raised this matter with Mr. Conlan or the board at any time, or was it just last week that it was raised here at the Public Accounts Committee meeting?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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We have to get this information out. Deputy Fleming stressed the point of public confidence and trust. This is a matter of major public concern. This committee must address that. Last week Mr. Kiely said his suggestions around this fund were "kicked out of the water". He said, "I was told it is what it is and that is the way it is to stay." It gave the impression a case had been made and Mr. Kiely went on to say it was ridiculous. As CEO he should have known. Again, I read from the transcript of last week's meeting. He said:
He has brought Dr. McLoughlin's Department into the firing line as well.
I tried to break it on numerous occasions but nobody wanted to know. The Department of Health did not want to know. I do not know whether I raised it with the HSE, but nobody wanted to know.
Ms Frances Spillane:
Some information from our files shows the position was reviewed in 1989. It is quite likely the CRC was trying to have a changed arrangement from the arrangement with the Mater Hospital. It was reviewed in the Department at that time and it was decided to continue with the existing arrangement.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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So that was one occasion.
Ms Frances Spillane:
Yes, 1989. We have some evidence of correspondence with Mr. Kiely at a later stage about the staff in the CRC who were not covered by the voluntary hospitals superannuation scheme, VHSS, and they are in their own pension scheme. The VHSS was closed off to new employers from the 1990s and has not been open to them since then.
Simon Harris (Wicklow, Fine Gael)
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I do not disagree with anything the Chairman or Deputy Fleming said. Those who potentially misled the committee last week should certainly apologise to the committee. The serious damage that has been done to the charity sector was due to the fact that the CRC directors were directly taking money raised by fundraising. They put their hands in that pot and put it into their own pockets. That did the most damage throughout this controversy. It has been very useful to have Ms Day and Mr. O'Brien here today to provide clarification on this.
This comes back to the broader issue of corporate governance in section 38 agencies and gives us a real insight into the chaos in the sector where a board of directors is signing off on accounts and submitting them to the Companies Registration Office in a go-along-to-get-along mentality and then crying foul over something in the accounts. This never would have come up if Deputy Ross had not been quoting directly from the audited accounts that were submitted to the Companies Registration Office. The auditors have significant questions to answer. Mr. Conlan, who was CEO of the Mater Hospital before Ms Day, was on the board of the CRC at the time and should have been extremely well placed. When he comes before us in January I hope he can cast more light on this regarding what was going on at board meetings that inaccurate accounts were submitted to the Companies Registration Office. Directors have a legal obligation under company law to provide a true and fair view in their accounts of the company's activities. Mr. Conlan could cast some light on the fact that the directors were signing off on accounts and that audited accounts were being submitted that clearly were not true or fair in the case of the pensions.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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To close this part of our meeting and go to Dr. McLoughlin, we will write to the directors of the CRC who were there at that time, Mr. Kiely and EY, along the lines of what Deputy Fleming suggested. We will send them a transcript of the last meeting and this meeting and ask each of them to respond. We will do that immediately. I thank the witnesses for attending and I invite Dr. McLoughlin to make his opening statement.
Dr. Ambrose McLoughlin:
I thank the committee members for the invitation to assist the committee in its examination of remuneration in section 38 agencies as outlined in the internal audit report of the HSE.
I am accompanied by my colleagues, Ms Frances Spillane, Mr. Fergal Goodman and Ms Lara Hynes. I thank the Chairman for acknowledging that the public health and social service system is hugely reliant on the contribution of organisations funded under section 38 of the Health Act 2004. Like the Chairman, I recognise the contribution made by the 35,000 dedicated staff and supporters of these organisations, which is highly valued. It is important to stress that the vast majority of staff in these organisations are paid in accordance with the Department of Health's approved salary scales. These staff are working within Government pay policy and have taken pay cuts while also playing their part in the reform of our health services through new working practices and co-operation with structural reforms. I wish, therefore, on behalf of the Minister, Deputy Reilly, and the Department of Health, to acknowledge the high quality care, support, services and treatment that these organisations have delivered for many decades, and continue to provide, to a wide range of patients and clients.
I would like to acknowledge the excellent work of the HSE in carrying out this comprehensive internal audit. For the first time and, despite efforts over a number of years, this exercise has succeeded in eliciting a much greater level of information on the remuneration arrangements in the section 38 organisations than had previously been obtained. The Minister, Deputy Reilly, initiated, through me as chairman of the HSE and then CEO of the HSE, the investigative process arising from the HIQA report on Tallaght in May 2012. The HSE conducted an audit of all section 38 recipients. As a result of this audit, a considerable number of funding recipients have been found to be in breach of Government pay policy in regard to the remuneration of their senior staff.
In response to the findings of the HSE's internal audit report, and following consultation with the Department of Public Expenditure and Reform, the Department of Health drew up a pay policy for the health service, with a particular focus on the section 38 organisations. This pay policy was issued to the HSE on 27 September 2013. The pay policy states clearly that section 38-funded agencies may not supplement approved rates of remuneration with Exchequer funding or non-Exchequer sources of funding. The HSE has taken decisive action to implement the terms of this pay policy and is keeping the Minister and Department of Health briefed on developments. The executive has a team of senior managers working with all of the organisations and hospitals concerned to ensure that a clear plan to achieve full compliance with health sector pay policy is developed by each agency. As set out in the Department's pay policy, if an organisation wishes to make a business case for the continuation of an unapproved allowance, it is open to it to do so and any such cases will be considered by the HSE, with the involvement of the Department of Health and the Department of Public Expenditure and Reform, as necessary.
I understand that the HSE is also instituting a new requirement in relation to an annual compliance statement, which will have to be approved by the board of each agency on an annual basis, signed by the chairman and another director on behalf of the board and submitted to the HSE together with the organisation's annual audited accounts. This is a major advance in the improvement of governance arrangements in these organisations. This annual compliance statement will be required in addition to the annual service agreement between the agency and the HSE.
As Deputies are aware, the HSE also grant aids a wide range of organisations - more than 3,000 - to a greater or lesser extent under section 39 of the Health Act 2004. Employees of section 39 organisations are not public servants. They are not included in the HSE employment control ceiling and are not bound by the Department of Health consolidated salary scales and are not members of a public service pension scheme. However, on foot of the findings in regard to pay arrangements in section 38 agencies, the Department, on behalf of the Minister, has asked the HSE to write to section 39 agencies asking them to have due regard to Government pay policy, in particular for senior managers. The committee may also wish to note that the HSE in its correspondence with the 353 section 39 agencies that receive more than €250,000 per annum in funding, has reminded these organisations that under the terms of their service arrangements, they are required to disclose the salaries of their senior managers to the HSE. Separately, I have issued a national pay policy to the health agencies under the aegis of the Department of Health.
I would also like to emphasise the priority with which the Minister, Deputy Reilly, and Ministers of State at the Department of Health, Deputies Kathleen Lynch and Alex White, are according to improving governance within all organisations in the health sector. One of the fundamental reasons for the major health reform programme now being delivered on is to enhance accountability across the whole health system, improve its governance and to deliver more cost-effective quality safe services that deliver best outcomesforthe patients and public we serve. The Minister has recently established a governance forum for the health sector to support and help chairpersons, board members and CEOs to fulfil their accountability and governance roles. We will be insisting on structured induction programmes for all new board members and a system of independent regular governance audits. As part of these new induction programmes, it will be made clear to new board members of section 38 agencies that they have no discretion to make extra payments to staff which are not encompassed by and in line with the Department's consolidated salary scales. All health sector agencies will be encouraged to publish details of payments, whether salary or otherwise, to all senior managers and senior clinicians in their annual reports and to make details easily accessible on websites. I would strongly encourage all agencies to publish their independent governance audits as part of their annual reporting process.
I wish to endorse the recent statement by the Chairman of this committee in which he encouraged the public to continue to donate to charities. I also want to acknowledge the important role of the Committee of Public Accounts in enhancing accountability and transparency and, thus, in maintaining public confidence in the civil and public service. I welcome the opportunity to answer any questions members may have.
11:35 am
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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May we publish Dr. McLoughlin's statement?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I welcome the statement made this morning by the Minister in which he told St. Vincent's University Hospital that there would be serious consequences if it did not provide the committee with the information it required. Has Dr. McLoughlin heard since from St. Vincent's University Hospital?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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When did Dr. McLoughlin last have contact with the hospital?
Dr. Ambrose McLoughlin:
The hospital would be in contact with the HSE. I would encourage St. Vincent's Hospital to co-operate fully in line with the what the Minister has said and in line with the requests from this committee. Mr. O'Brien may be better able to respond to the Chairman's question in this regard.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Perhaps Mr. O'Brien would say when he last had communication from St. Vincent's University Hospital.
Kieran O'Donnell (Limerick City, Fine Gael)
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From whom is that letter?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Can you circulate that letter?
Mr. Barry O'Brien:
Yes. Clarity is sought in regard to whether prohibition on supplementation refers only to additional payments from public funds or to private funds or to both. It also states that clear policy statements are called for in the HSE internal audit and that it looks forward to receipt of same, along with the standardised terms and conditions of employment of senior personnel in section 38 agencies, which is referenced.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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On what date was that letter issued?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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What communication has been received since then?
Mr. Barry O'Brien:
The next communication is from the director of HR, Mr. John McPhillips on 19 November 2013 which states:
Dear Mr. O'Brien,
We refer to the above and acknowledge receipt, once again, of the following documentation as set out below:1. Memorandum dated 30th September 2013 [which is with regard to the pay policy].....
2. HSE HR Circular [which is the circular I issued and to which I attached DOH Circular on policy].....
3. HSE Audit Report: Section 38 Agencies' Remuneration.....I have been asked, as Director of HR, to respond on behalf of St. Vincent's to your recent letter to Professor Noel Whelan, Chairman, Board of Directors, dated 5th November 2013 and to draw your attention to the points made in his letter dated 29th October (copy enclosed).
We note that you acknowledge in your letter of 5th November to Professor Whelan that the HSE is not instructing St. Vincent's to breach the confidentiality of any individual contracts of employments. You will appreciate that St. Vincent's Healthcare Group has statutory obligations under the Data Protection Acts to its employees. Further, the HSE and St. Vincent's Healthcare Group have Data Protection contractual obligations via our Service Level Agreement with the HSE.
I now write, as Director of HR, to confirm, having reviewed our files again, that St. Vincent's is compliant with the above Circulars based on our interpretation of same and subject to the issues as highlighted in the next paragraph.......
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I think that is totally unsatisfactory.
In the light of the Minister's comments this morning, the serious concern expressed by the Committee of Public Accounts and the fact that we are fed up with that nonsense, will Mr. O'Brien send someone from here to ring Mr. McPhillips to ask him what he will do next? Mr. McPhillips heard the Minister's statement this morning, knows what is happening here and should clarify whether he will co-operate with us and comply. We have a right to know before we break today. Will Mr. O'Brien send somebody to contact him and express our annoyance, to express again the Minister's view which he publicly stated this morning and to ask him if he will respond or hold that position? Before we finish our meeting today we will have to consider what we are going to do.
11:45 am
Robert Dowds (Dublin Mid West, Labour)
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I welcome Dr. McLoughlin, Mr. O'Brien and their staff. On the length of time it is taking to sort out the salary top-up issue, it appears there have been indications of unauthorised salaries through the HSE dating back to 2008. There are arguments that there was knowledge much earlier than this. Why is the matter unresolved? Why did the HSE not put pressure on the agencies to comply, particularly when the country was broke and most of us were having to tighten our belts?
Dr. Ambrose McLoughlin:
This matter first came to my attention in May 2012. I discussed it with the Minister and we took fairly swift action arising from HIQA's Tallaght report. From examining the correspondence, I am aware that there were concerns in the HSE and that my predecessors, particularly Mr. Michael Scanlan, wrote to the HSE and that there was correspondence between Mr. McGrath and the relevant agencies. We are where we are and it is my determination, with the Minister, to have this matter resolved quickly, learn lessons and move forward with a strengthened governance system. This matter came to light for me personally when I received HIQA's report. I considered it with the Minister and on 21 May immediately wrote a letter to have the matter resolved. Because the committee has examined the matter I have examined the correspondence very carefully. As Ms Spillane is familiar with the correspondence, I will allow her to deal with some of the details.
Ms Frances Spillane:
Deputy Roberts Dowds is correct. We have correspondence on this issue between the Department and the HSE on file since 2008. As the Secretary General has stated, his predecessor sent a detailed letter to the HSE on the issue in February 2011. We are working very closely with the HSE to try to resolve the issues involved. At the committee's last meeting it came out that on many occasions the HSE would have contacted the section 38 organisations and there were comments about having to chase information; therefore, there have been efforts made over a long period of time. I am not sure how much detail the Deputy would like me to go into.
Robert Dowds (Dublin Mid West, Labour)
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I am staggered that Dr. McLoughlin only became aware of this issue in May 2012 because, according to my information, between February and October 2011 the Department of Health wrote to the HR department of the HSE on five occasions to establish the level of compliance by section 38 agencies. The HSE replied only to two of the five letters. Surely, alarm bells should have been going off. Why was the Department of Health not more proactive in getting replies from the HSE? Why was the HSE not responding to these letters?
Dr. Ambrose McLoughlin:
I took up duty in the Department of Health on 17 April 2012 and the matter was brought to my attention in May. I immediately consulted the Minister and we acted very swiftly. I examined the files. My predecessor had concerns, as did the HSE because matters were raised with the section 38 organisations. The interest of the Committee on Public Accounts has been central to finding us in a position where we are getting a thorough assessment of these issues in a fair manner. In my statement I said I recognised the important contribution of the committee. We are trying to move the issue on. When we have the final report from the HSE and had time to consider it in the Department, we can learn lessons and ensure we will have strengthened governance across the system as part of the Government's reform programme. Ms Spillane will be happy to answer specific points on any letter received.
Robert Dowds (Dublin Mid West, Labour)
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How did Dr. McLoughlin's predecessor react?
Dr. Ambrose McLoughlin:
He had concerns, the details of which Ms Spillane can outline. As chairperson of the HSE, I was very concerned because, as I pointed out, most of the people employed in section 38 organisations were complying in full with Government pay policy. The issues raised relate to a very small number of people. Mr. O'Brien and I agree that the correct way to deal with the issue is to finalise the process in which Mr. O'Brien is engaged and receive a final report. Any assistance the committee can give would be very valuable in bringing these matters to a conclusion.
Robert Dowds (Dublin Mid West, Labour)
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Why did the Department of Health not pursue the HSE when it did not reply to three of its five letters? When this was happening, the country was under huge pressure. We were all being asked to take pay cuts and I would have thought it was obvious that it would have greatly upset people to see that there were people who were not complying, particularly when they were on very senior salaries.
Dr. Ambrose McLoughlin:
There were concerns that were documented and followed through. I can only speak about the time when I was Secretary General of the Department and chairperson of the HSE. With the Minister's full support, we took swift and immediate action, which is being followed through rigorously and robustly.
Robert Dowds (Dublin Mid West, Labour)
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Can Mr. O'Brien throw any light on this?
Mr. Barry O'Brien:
I refer Deputy Robert Dowds to the internal audit report which sets out the fact that the Department of Health wrote to the HSE's HR director on five occasions between February 2011 and October 2012 to establish the levels of compliance. On 24 February 2011 the Department of Health asked the HSE HR director to write to all section 38 agencies confirming that no employees were in receipt of remuneration greater than the level approved by the Minister for Health or to provide details of any such unapproved payment. Two weeks later on 8 March the HSE national HR directorate wrote to the CEO and secretary or manager of 45 section 38 agencies funded by the HSE. Responses were received from all except two. On 30 March the HSE national HR directorate provided the Department of Health with details of the replies received from the section 38 agencies. From 24 February to 30 March 2011 the HSE wrote to all the agencies and supplied all of the replies received to the Department.
Robert Dowds (Dublin Mid West, Labour)
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Why has this practice continued, given that the HSE wrote to them? Why are we still having to deal with this issue more than two years later? Surely the HSE could put a screw on any voluntary organisation getting funding from it. He who pays the piper is supposed to call the tune; therefore, the HSE was in a very strong position to ensure compliance on the part of all of the agencies it was funding.
Mr. Barry O'Brien:
As the Secretary General said in his opening statement, one can see the length of time it has taken, even with the detailed internal audit report, to have full engagement with and compliance by section 38 organisations.
Even today, we do not have full disclosure, which, in itself, is a major challenge. There is a situation, acknowledged in the internal audit report, where several of these allowances or top-ups have a historical aspect. There is certainly an onus on the HSE to afford due process to any individual who may be in receipt of these payments by way of a contract or any other arrangement.
It is clear that the current pay policy issued in September sets out clearly what every section 38 agency must now do. An agency must make full disclosure. If it wishes to retain or seek approval to retain any of these payments, it is set out clearly that it must make a business case. That approval process extends as far as the HSE, the Department of Health and the Department of Public Expenditure and Reform, where necessary. For the first time we are putting in place significantly improved governance procedures to ensure we will deal with this matter correctly and effectively in the future.
11:55 am
Robert Dowds (Dublin Mid West, Labour)
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If the HSE is not satisfied that a particular voluntary organisation is complying at this stage, what is it going to do?
Mr. Barry O'Brien:
This week the 12 agencies which declared formally in their replies that they were non-compliant are being met by the regional directors of performance and improvement to discuss the relevant matters. We have supplied the people concerned with the replies of the agencies. In the first two weeks of January we will meet all of the other agencies, 22 in total, which have advised us that in their view they are compliant but which have identified individual exceptions. This will be done using the same mechanism. Last Thursday we had a detailed meeting with the chairmen and one other board member of all section 38 agencies. We have set out that there is now an additional requirement to provide an annual compliance statement. We have issued a draft compliance statement - we have supplied the committee with a copy today - which clearly sets out what the requirements are for the agencies concerned. There has been a very positive response.
Robert Dowds (Dublin Mid West, Labour)
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Will the HSE withhold funding if they do not comply and are not straightforward about it?
Mr. Barry O'Brien:
The first thing we are going to do is deal with all of the agencies involved. In the first instance, they will be asked to set out their position. They will be asked to accept in full the new annual assurance statement which includes pay and, in particular, makes a dedicated reference to full compliance with public pay policy. Then, if agencies are non-compliant, it will be a matter for HSE management to determine how to deal with this. The Minister made it clear this morning that no one was in a position to tolerate people who believed they could operate outside stated Government pay policy.
Robert Dowds (Dublin Mid West, Labour)
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Does that mean the HSE will withhold funding?
Robert Dowds (Dublin Mid West, Labour)
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Obviously, that would be the last step, but-----
Robert Dowds (Dublin Mid West, Labour)
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If Mr. O'Brien takes the view that the HSE will not withhold funding, is he not of the view that if the HSE seriously intended to withhold funding, the voluntary organisations would fall into line?
Mr. Barry O'Brien:
It is possible to withhold funding under the heading of pay without affecting front-line care. To be fair, those of us on the statutory side and in the section 38 agencies are all public servants. Some 99.9% of public servants are fully compliant with public pay policy. We are dealing with a handful of people in this case. In the interests of everyone and the work we all do, it is important to make it clear that necessary action will be taken to ensure full compliance.
Robert Dowds (Dublin Mid West, Labour)
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Given that I worked for a section 38 institution, I acknowledge that a vast amount of good work is done by all of these organisations. Furthermore, this practice is damaging them and the entire charity sector. I support the calls made by others to continue to support charitable organisations.
The Chairman has dealt with the issue of St. Vincent's University Hospital and the top-ups made. I endorse his remarks because in the world in which we live now people must be transparent. That is essential. Does St. Vincent's University Hospital still receive charitable donations or do the top-ups come from the shop or the car park? Has any light been thrown on that issue?
Robert Dowds (Dublin Mid West, Labour)
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Therefore, we do not have a clue.
Robert Dowds (Dublin Mid West, Labour)
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I call on the hospital to be absolutely transparent. That is essential.
We received correspondence yesterday listing the top-ups paid by various organisations. I presume all of these organisations receive most of their funding from the State in one way or another, while some receive voluntary funding also. Is the HSE in a position to state in the cases of the organisations which supplied information in the correspondence received yesterday from where the top-ups come? I am referring to the Coombe Women's & Infant's University Hospital, the Mater Misericordiae University Hospital, the National Maternity Hospital and St. Michael' House. Let us consider St. Michael's House, for example. I presume it receives charitable funding.
Dr. Geraldine Smith:
I will take that question. Some of the agencies have indicated or have given a general description of from where the funding has come. It is certainly not from HSE funds. It could be income from retail or various other sources. There are a range of descriptions. Some have not stated exactly from where it is coming, while others have stated it is from a group company, perhaps. I am referring to St. Michael's House in that case.
Robert Dowds (Dublin Mid West, Labour)
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What did Dr. Smith say about St. Michael's House?
Robert Dowds (Dublin Mid West, Labour)
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The top five salaries are all over €100,000. They are all getting an externally funded salary also.
Dr. Geraldine Smith:
I emphasise that this information was part of the internal audit conducted last year. St. Michael's House stated that in 1981 the organisation became a direct funded body. This afforded staff an entitlement to membership of the nominated health agencies superannuation scheme, NHASS. From 1981 to date, salaries in excess of the level set by the Department of Health for pension purposes were paid by St. Michael' House out of its own resources and pensionable.
Robert Dowds (Dublin Mid West, Labour)
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Does that mean voluntary funds which the organisation collected?
Robert Dowds (Dublin Mid West, Labour)
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Again, it is another example of an organisation that needs to come clean with the public and give full information. Dr. McLoughlin said a compliance statement would be required from all section 38 organisations. Presumably, despite the difficulty in getting a straight answer from Mr. O'Brien, the HSE will insist that they comply.
12:05 pm
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Deputy Dowds referred to St. Michael's House. What is Dr. McLoughlin's view on its declaration of "Not stated"? What will Dr. McLoughlin do about that?
Dr. Ambrose McLoughlin:
The position of the Minister, and myself as Secretary General, is that he will expect all of the agencies to comply in full with the requirements of Mr. O'Brien and the HSE in terms of the audit. We expect, and I look forward to, full co-operation. Under the pay policy that is being promulgated by my Department, there is no other option.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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What are Dr. McLoughlin or Mr. O'Brien going to do about the question raised by Deputy Dowds, which is about the information that has not been given by St. Michael's House? What will they do next with them?
Mr. Barry O'Brien:
As well as meeting, on a one-to-one basis, the agencies that are identified as being outside the pay policy, we have issued them all with an assurance statement with which they will be required to comply. It covers the financial year 2013 and every year thereafter. It is an absolutely clear and specific public pay policy. Clearly, the service level agreement plus the assurance statement put the responsibility on the board of these organisations to ensure that there is no deviation from public pay policy. Therefore, they will put themselves at risk with the level of funding they are currently in receipt of, as the annual service level agreement and the new assurance statement are the safeguards for the HSE in managing public funds. There is a serious implication if any organisation chooses not to be in full compliance.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I know what Mr. O'Brien is going to do in the future, but what will he do about the fact that, according to this table, the organisation simply has not provided the information? Has Mr. O'Brien gone back to it and said that he is appearing here today and wants the information?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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And there has been no response?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Okay.
Dr. Ambrose McLoughlin:
I wish to make it clear that I expect that all of these agencies will supply the information. I look forward to their full co-operation to the maximum possible extent. That is the strong view of the Minister and the Department of Health - that everybody must come up with the numbers.
Robert Dowds (Dublin Mid West, Labour)
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Can we get an updated report on that, as Dr. McLoughlin gets it? I know I will be questioned on St. Michael's House tonight. I have to meet somebody about that.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Does Dr. Smith wish to reply to that?
Dr. Geraldine Smith:
Yes. In the response to the audit on 30 January 2013, following the seeking of some clarification, it said that any amounts concerning private funds are funded from the St. Michael's House group private funds. Therefore, it is another company. That is the only additional information we have.
Robert Dowds (Dublin Mid West, Labour)
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Is this similar to the CRC and Friends and Supporters of the CRC? Do we know how those boards are constituted?
Dr. Geraldine Smith:
We know that the St. Michael's House group seems to be the holding company. There are subsidiary companies, one of which is St. Michael's House itself, and there are various other companies as well. That is all set out in the St. Michael's House accounts and the group accounts as well.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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What about the directors? Are they all the same or different?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Yes.
Robert Dowds (Dublin Mid West, Labour)
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That is a question I want to come back to in a couple of minutes. While Dr. Smith is looking that up I wish to ask about a document we were given, dated 27 November. We were given a list of 12 different bodies that were non-compliant. Some of these, a slim majority, have given information which appears on correspondence 3C(2) before us. However, we have not received any response from several of the organisations, including Carriglea Cairde Services, Dublin Dental School and Hospital, the Royal Hospital Donnybrook, the Adelaide and Meath Hospital, and Cappagh National Orthopaedic Hospital. How does Mr. O'Brien intend to deal with that? They ought to have had that information for us.
Mr. Barry O'Brien:
They are actually being met this week by senior HSE management on a one-to-one basis and those direct questions are being put to them with regard to full disclosure on funding.
Robert Dowds (Dublin Mid West, Labour)
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Does Mr. O'Brien have any sense as to why they are being so slow in replying?
Robert Dowds (Dublin Mid West, Labour)
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The last area I want to ask about is the whole issue of governance. It strikes me that part of the problem with the voluntary agencies is that they probably started off with few funds and a dedicated group of volunteers. As the State gave them more support they have had to deal with a great deal more money. As they are dealing with our public money, by and large, the whole issue of governance is really important. As in the case of the CRC, we saw last week that it was a tight group that was essentially self-electing. All the members and friends of the CRC were on the board of the CRC.
How much does Dr. McLoughlin know about how the boards of these organisations are set up? Let us take as an example either St. Michael's House or St. Vincent's hospital. If we are to have good use of public funding, it is really important that boards are put in place which represent all the different stakeholders in any organisation, be they patients or staff, of all types.
Dr. Ambrose McLoughlin:
The establishment of the Government's forum is an important response by the Department and the Minister. We do need good governance across the whole sector. We need to get best practice into every agency across the sector. The forum will develop a work programme to assist everybody in the section 38 and 39 sectors, as well as the wider HSE sector.
We face some challenges. We need to prioritise governance; I agree with the Deputy very much in that regard. We need guidelines on what makes for an effective board. We need to be clear that boards can contribute to improving the quality of services in their institutions. We must ensure that boards hold their executive teams to account, and we need to strike a balance between the board's maintaining its independence and complying with best practice as laid out by the Department of Health. This is an area that we have been following vigorously in the Department.
I would encourage every agency to have an independent governance audit carried out every year to satisfy everybody that they are in compliance with evidence-based best practice and governance. This is an issue and a challenge for a lot of agencies across the world. There are volumes in the literature about this. The new hospital groupings, the new structures we will put in place for community health, and the whole reform programme are driving forward this governance agenda. Ministers in my Department are keen to ensure that there is a regular and systematic audit of performance from now on. I want to give the committee the maximum level of reassurance and respond positively to the Deputy's questions.
Robert Dowds (Dublin Mid West, Labour)
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Can that be tied in with the requirement Dr. McLoughlin is expecting on compliance from each of these agencies, whereby they will demonstrate that they have satisfactorily constituted boards that are representative of all interests involved?
Mr. Barry O'Brien:
I will draw the Deputy's attention to appendix 1, which we have issued to all the section 38 organisations. It is headed "Board and corporate governance requirements". It sets out how the board should be structured and the wide diversity that a board should have. It also sets out the maximum length of time for which people should be board members. It states:
The executive reserves the right to appoint a named individual to work with the board and directors to assist in resolving any identified governance or performance issues relating to the running of the agency, and in exceptional circumstances may require the board to appoint an independent member, nominated by the executive, as a condition of ongoing funding.
Robert Dowds (Dublin Mid West, Labour)
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How long does Mr. O'Brien expect it will take before that is put into practice?
12:15 pm
Robert Dowds (Dublin Mid West, Labour)
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Given that most of these bodies’ funding comes from the HSE, will it have a representative on their boards?
Robert Dowds (Dublin Mid West, Labour)
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Could I suggest to Mr. O’Brien that it is important that there be a HSE or government-appointed representative on these bodies? They are getting State funding.
Robert Dowds (Dublin Mid West, Labour)
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Can we see it put into practice?
Dr. Ambrose McLoughlin:
The highest levels of the Department, including the Minister, are very anxious to ensure the highest level of compliance with the guidance referred to by Mr. O’Brien. It would serve everyone’s best interest if there were a public interest representative on these bodies’ boards. I am sure most boards would welcome it.
Robert Dowds (Dublin Mid West, Labour)
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Are the boards of St. Michael’s House or St. Vincent’s hospital self-elected in the same way as that of the CRC?
Dr. Ambrose McLoughlin:
There is a variety of ways of appointing these boards. I draw the committee’s attention to the fact the Government is determined to put in place hospital groups and the chairs of these groups have been appointed. The Minister will soon appoint the boards and chief executive officers to each of these groups. In early 2014 there will be a different governance landscape. There will be six hospital groups. The Minister has indicated that he will use competency-based assessments to appoint board members.
Robert Dowds (Dublin Mid West, Labour)
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Will the Department keep the committee informed of developments and respond in writing to the questions raised today?
Kieran O'Donnell (Limerick City, Fine Gael)
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I thank the witnesses for attending the committee.
On 19 November, Mr. John McPhillips, human resources director of St. Vincent’s University Hospital, wrote to Mr. Barry O’Brien, stating:
Having reviewed our files again, I can confirm St. Vincent’s is complying with the above circulars, based on our interpretation of same and subject to the issue highlighted in the next paragraph. Having regard to previous exchanges, please note we have since become aware of one case of an employee in one of our service departments where a small after-hours availability allowance is in place which was approved locally. This dates back more than a decade and we have now written to you separately on this matter.The circulars referred to are HSE circulars Nos. 016/2013 and 011/2013. Does Dr. McLoughlin believe St. Vincent’s is in compliance with these circulars?
Kieran O'Donnell (Limerick City, Fine Gael)
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No. Does Dr. McLoughlin believe the hospital is compliant?
Dr. Ambrose McLoughlin:
There is an internal audit investigation involving the HSE which is not complete. Accordingly, I cannot draw a conclusion of the type the Deputy is inviting me to draw. All I can say is that I look forward to the hospital’s full compliance.
Kieran O'Donnell (Limerick City, Fine Gael)
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Does Mr. O'Brien believe St. Vincent’s hospital is in compliance with these circulars?
Mr. Barry O'Brien:
I do not because the hospital made the statement that it is paying three managers from a private fund. One of the circulars I issued was on pay policy, stating that no payments could be made from any other source and that they must be consistent with the consolidated public sector salary scales. I do not view the hospital as being complaint at this time.
Kieran O'Donnell (Limerick City, Fine Gael)
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Does Ms Lawler, manager of the HSE national human resources directorate, have an update on the position of St. Vincent’s hospital?
Ms Paula Lawler:
I have been speaking with the chief executive officer of the hospital, Mr. Nicholas Jermyn, and my colleague, the regional director of performance and integration. A meeting was held yesterday with the management of St. Vincent’s hospital and our regional director of performance and integration with regard to the ongoing process of reaching compliance with each agency. Following that meeting, St. Vincent’s issued a letter to the regional director stating that it was compliant, based on its interpretation of pay policy and legal advice received, but that it is fully committed to engaging with the HSE to agree a position in light of yesterday’s discussions. I will make this letter available to the committee.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Was that the end of correspondence with St. Vincent’s?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Is he aware of the Minister’s comments this morning and of the committee’s concerns?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Has Ms Lawler made it clear to him that it is she who decides whether the hospital is compliant, not him?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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What does that mean? Will Ms Lawler meet the hospital today?
Ms Paula Lawler:
My understanding from yesterday’s meeting is that the HSE put its position on compliance with public pay policy and St. Vincent’s hospital also put its position. It committed to engage in a process that would result in compliance.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Was the issue of the extra salaries addressed, or is the hospital holding firm on not giving us the information?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The question is about making the information available to the HSE and the Committee of Public Accounts.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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What does that mean? If it is fully engaged, it would give us the three figures we want.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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We will return to this before the end of the meeting.
Kieran O'Donnell (Limerick City, Fine Gael)
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St. Vincent’s hospital has replied not once but twice. To leave out the information once could be deemed careless; to do it twice could be deemed unfortunate. I do not believe this is good enough. Does Mr. O’Brien believe the hospital is in compliance with public sector pay guidelines, based on what he has just heard from Ms Lawler?
Kieran O'Donnell (Limerick City, Fine Gael)
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Is that “Yes” or “No”?
12:25 pm
Kieran O'Donnell (Limerick City, Fine Gael)
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What will the HSE do about it? We have letters going back over a month and a half. It is like ping pong, we are getting into the middle of it and I want the game to stop. A section 38 organisation is publicly coming out and issuing a rebuke to the HSE, saying "get lost". The HSE is funding the CRC with taxpayers' money.
Kieran O'Donnell (Limerick City, Fine Gael)
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What is the HSE going to do about it?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Allow Mr. O'Brien to answer.
Kieran O'Donnell (Limerick City, Fine Gael)
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He should not be dictating-----
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Hold on.
Kieran O'Donnell (Limerick City, Fine Gael)
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I had a quick look at Ms Smith's internal audit report. Page 8 refers to 12 section 38 organisations, to the tune of €902,472, paying externally funded salaries and allowances. Those agencies include St. Vincent's University Hospital, COPE Foundation, CRC, St. Michael's House, the Coombe Women and Infants University Hospital, the Mater hospital, the National Maternity Hospital, Our Lady's Children's Hospital, the Sisters of Charity of Jesus and Mary and the South Infirmary Victoria University Hospital. When Ms Smith carried out her audit was St. Vincent's Hospital in compliance with public sector pay guidelines? I want the general and specific details.
Dr. Geraldine Smith:
St. Vincent's clarified the amounts paid under the consolidated pay scales but also stated very clearly that three senior managers were in receipt of additional salaries not paid from public funds. When we queried the specifics of that, such as the amounts and to whom they were paid, St. Vincent's said because they were not paid from public funds it was not appropriate to disclose that detail. St. Vincent's has answered the questions on public funds.
Kieran O'Donnell (Limerick City, Fine Gael)
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Does Ms Smith believe St. Vincent's is not in compliance with the two circulars?
Dr. Geraldine Smith:
I refer back to the service level agreement, SLA, which is very clear. Section 3.2(c)(v) states that section 38 organisations that are funded from the public purse shall not pay salaries in excess of consolidated pay scales. There has been much speculation in the media and St. Vincent's Hospital has confirmed that it pays salaries other than from public funds. If we marry that with its obligation under the service level arrangement-----
Kieran O'Donnell (Limerick City, Fine Gael)
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It is not.
Kieran O'Donnell (Limerick City, Fine Gael)
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On the compliance statements, the section 38 organisations are being asked to make comments by today.
Kieran O'Donnell (Limerick City, Fine Gael)
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How many of the section 38 organisations have come back? They are not required to give written confirmation until the end of January. I would have thought the HSE would seek written confirmation before the start of the new year. Why did it not? This has been going on for a significant period of time. Why is confirmation stretching out into 2014?
Mr. Barry O'Brien:
I was present at both meetings we had with the chairpersons of section 38 agencies. A couple of very important points were made. Many of those in the disability sector and at the lower level of funding made the point that the level of assurance being required would be new to many board members. It was pointed out that all of these people are doing this on a voluntary basis and meet maybe six times per year. They felt it was unreasonable of us to request a reply before Christmas. We set a deadline of 31 January 2014 while some agencies sought for it to be much later in the year. Some of the chairpersons felt it would require two board meetings to give an absolute position, one to introduce the document and discuss it in detail and one to give it some consideration and make a formal decision. We will seek full compliance by 31 January 2014.
Kieran O'Donnell (Limerick City, Fine Gael)
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Typically when would these section 38 organisations receive their funding for 2014?
Kieran O'Donnell (Limerick City, Fine Gael)
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When would the SLAs be typically signed?
Kieran O'Donnell (Limerick City, Fine Gael)
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Why would they not be signed before the beginning of the year?
Mr. Barry O'Brien:
First, the health service plan was announced yesterday. Second, with the new directorate we have moved to operating on a divisional basis, so divisional service plans will not be available until mid-January and at that stage we will engage with the agencies. By the first quarter, service-----
Kieran O'Donnell (Limerick City, Fine Gael)
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We requested information of the CRC board when it came before us, particularly in the area of CRC Medical Devices and how that was funded. We are conscious about the reputation of the great work the CRC does. What type of structures are in place and when will we have that information?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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We asked about that information at the last meeting and were told we would have it within days. I presume Mr. Cregan will make it available to us immediately or as quick as he can and that this will not go into a long period of time. I do not want that to be the answer. I want the information to come promptly from him. Mr. O'Brien might convey that. That is the best we can do.
Kieran O'Donnell (Limerick City, Fine Gael)
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The charity sector does phenomenal work. People are out there today fundraising for various charities up and down the country, many on a voluntary basis. We had the CRC before us last week. In St. Vincent's Hospital there are three people involved. St. Vincent's employs a significant number of people doing fantastic work on the ground. It is grossly unacceptable, unnecessary and unfounded that, once again, a small number of people are casting a cloud over the entire sector. I ask St. Vincent's Hospital to communicate with our committee before the end of our deliberations, come forth with the information as requested and play its part in an open and transparent system. People are entitled to be paid a fair salary for the work they do, but when the majority of an organisation's funding comes from public sources, the taxpayer and the people who use their services, it should provide the information requested. It should play its part in a fully transparent and open system so that public hospitals, which do phenomenal work, and the charity sector can get on with their business in an open way.
I put it to Mr. O'Brien that this has taken too long. It has dragged on into the Christmas period which, in my view, was unnecessary. The internal report is eight or nine months old at this stage. A resolution of this matter needs to be found quickly. Can Mr. O'Brien give that assurance today?
12:35 pm
Mr. Barry O'Brien:
The Deputy will be aware from our three previous appearances before the committee on this matter that there has been no lack of commitment on the part of the HSE to obtain all the information requested by the Committee of Public Accounts. The level of avoidance in terms of providing that information has been frustrating and is evident, as stated by Dr. Smith, from the replies given in the context of preparation of the report. In the case of St. Vincent's the response was that it would not provide the information because it related to private funds. These are the challenges facing the HSE.
I concur with the Deputy that 99.9% of public servants are being paid as per their scales, are making their contributions through pay cuts, levies and everything else required under Government policy. There is a responsibility on organisations in receipt of funds to make full disclosures.
Kieran O'Donnell (Limerick City, Fine Gael)
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I have a final question for Dr. Smith. From my reading of the internal audit report 12 organisations are paying externally funded salaries and allowances above the Government pay guidelines. The total number of allowance being paid is 47. However, some managers could be receiving double payments.
Kieran O'Donnell (Limerick City, Fine Gael)
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What is the total number of managers involved in the 12 organisations concerned.
Kieran O'Donnell (Limerick City, Fine Gael)
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Okay. In regard to the 47 allowances, how many individuals are involved?
Kieran O'Donnell (Limerick City, Fine Gael)
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There are 34 people involved.
Kieran O'Donnell (Limerick City, Fine Gael)
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I know that. How many of the 34 people involved receive more than one payment?
Kieran O'Donnell (Limerick City, Fine Gael)
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What is the total number of people employed in all of the section 38 agencies?
Kieran O'Donnell (Limerick City, Fine Gael)
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So 34 of the 35,000 people are in receipt of allowances. This matter needs to be resolved. While as I have stated previously people are entitled to be paid for the work they do, if that pay breaches Government pay guidelines the issue must be addressed. With due respect to the HSE, we should not be discussing this matter today. It should have been sorted a long time ago.
Mr. Barry O'Brien:
We issued the pay policy in September, at which time we clearly stated that any organisation at variance from the policy should take immediate steps to address the situation. Since the last meeting at which we appeared, we have received only one further business case. All of the organisations have the wherewithal within the policy to make business cases. Responsibility lies with the agencies at variance with pay policy to ensure that they follow the policy clearly.
Simon Harris (Wicklow, Fine Gael)
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As this meeting will not conclude any time soon as there is a great deal more to be discussed I propose that we take a brief sos.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Okay. We will suspend for 15 minutes if that is okay with Deputy McDonald who is the next speaker.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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That is fine. I am sure the witnesses would like to draw a breath.
12:40 pm
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Deputy McDonald was in possession.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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The figure we have used in the committee and publicly in respect of State funding to section 38 organisations is €1.6 billion. I understand that is for salaries, and that the actual figure is €2.44 billion.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I thank the witness for that clarification.
There appears to be a pattern here. At our last meeting we saw correspondence from the Central Remedial Clinic which was dismissive of the HSE. I would characterise some of the correspondence as aggressive. Ms Laverne McGuinness accurately described one letter as being told to get lost. Today we have correspondence from St. Vincent's Hospital which, although perhaps more cautiously worded, amounts to the same message. Before we get into the particulars regarding St. Vincent's Hospital, I put it to Dr. McLoughlin and Mr. O'Brien that despite the fact that this saga has been ongoing for many years, quietly perhaps but more recently in the full gaze of the media, with all of the attendant damage that has been done to very important service organisations, we really have not made progress in terms of setting things right.
By that I mean bringing these non-compliant organisations into line with public sector pay policy and recouping those amounts that have been paid in excess of the sanctioned level of salary. What I want to put to both gentlemen is that it seems to me that the system has been a toothless tiger in dealing with this issue, despite circulars, meetings and volumes of correspondence. I would like to hear their reaction to that. The Financial Emergency Measures in the Public Interest Act allows for a process of recouping moneys in excess of the sanctioned salary levels. What consideration has been given to using that legislation in these particular cases? Perhaps Dr. McLoughlin will start.
12:45 pm
Dr. Ambrose McLoughlin:
I would draw the Chairman's and the Deputy's attention to the circular 112/13. I think the most important development is that we now have a policy that sets out unambiguously and removes any doubts in respect of these matters. The HSE has done very well with its intensive process following the audit and I want to assure the Deputy that, depending on the outcome of the investigation - we have to apply fair process here, each individual is entitled to a fair hearing and each of the cases will have to be dealt with on their merits - the HSE will make appropriate decisions and some of them may want to submit business cases to justify their position. There is a range of options open, including recoupment, as the Deputy correctly said. I am not ruling anything out or in. I want to assure the Deputy that as far as I, as Secretary General, am concerned, I will give it my very best effort to ensure these matters are dealt with very quickly and promptly.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Will Dr. McLoughlin confirm to the committee when that circular, to which he referred, was issued?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay. Dr. McLoughlin said that gives unambiguous direction.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Is he, therefore, saying there was an ambiguity prior to that?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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That is not what I asked Dr. McLoughlin. He said this circular makes the position unambiguously clear from September of this year. I can only take from that there was an ambiguity and a lack of clarity prior to that. Would that be true?
Dr. Ambrose McLoughlin:
All I can say to the Deputy is that when I examined the internal audit report, which my Department received, I discussed the matter at the highest levels and the Minister and I believed it was necessary to provide that clarity and certainty. I draw the Deputy's attention to page 56 of the internal audit report which stated in the audit opinion that there is a lack of clarity as to the level of authority available to each agency to pay allowances without seeking approval from the HSE and Department of Health. It is significant to note the previous circular letter on that matter was under circular 10/71, so I believe we acted properly and swiftly to deal with the issues once they were brought to our attention.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Can I, by way of response, draw Dr. McLoughlin's attention to page 7 of the same audit document? Under 1.4, remuneration rates, it states that in instances whereby senior management salary levels differ from consolidated salary scales, agencies stated that verbal Department of Health approval had been sought and obtained. It also states that, however, these discussions or agreements were not documented on Department of Health files.
Dr. Ambrose McLoughlin:
All I can say to that is that I have not been able to establish that there is any substances behind that claim. In one case, my Department did an exhaustive trawl. I think there was one case where there was one special allowance made available to a CEO of a particular hospital. To the best of my recollection, there was nothing in the file that would suggest there were any, if you like, nods or winks, if that is what the Deputy is referring to. I would be clear that the normal practice I would have experienced throughout my time in the health service would have been that a formal letter would have issued to the Department of Health and that it would have been responded to within a reasonable time by the Department of Health following consultation with the Department of Finance or the Department of Public Expenditure and Reform as may be the case.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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The assertion to which I refer is in a section of this report which is entitled "Key Audit Findings" so, therefore, those who carried out this audit obviously gave some level of merit to that claim. It is not surprising that records were not found in the Department of Health because it is stated very clearly that those discussions or agreements were not documented in Department of Health files. There is no surprise there. I put it to Dr. McLoughlin that in addition to an ambiguity or a lack of clarity on the issue of breaching public sector pay ceilings, it appears from my reading of this audit report over which the HSE and, presumably, the Department of Health stand, there was precisely that type of culture to use Dr. McLoughlin's words of nods or winks or, at the very least, informal discussions and sanction of local arrangements. That is my reading of this report.
Dr. Ambrose McLoughlin:
I wish to make it clear that is one of the reasons we presented the policy of 27 September to deal with any issues of that nature. What I want to be clear about is that I could find no evidence in the Department of Health of what was suggested in the internal audit report. It would not have been the practice for the officials of the Department to engage in informal or unofficial approvals. That would not have been what I would have understood from my officials. I asked senior officials in the Department of Health about that.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Yet we have it here under key findings that there was an assertion that happened.
Ms Frances Spillane:
We did a comprehensive trawl of our files for Ms Smith when she was carrying out the internal audit and what we found was that very careful consideration was given to any requests for special allowances and that a small number of allowances were approved from time to time. Other allowances were not approved. I have worked in the Department since 1980 and I would have to say that was never the culture. All civil servants would be very conscious of compliance with Government pay policy. It is up to whatever organisations concerned to substantiate those claims.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I thank Ms Spillane for that. Let me make it clear that I am not questioning her integrity as a public servant nor that of any other individual. I want her to be clear that is not where this line of questioning is going. However, this audit took some time to prepare. I have no doubt great trouble and care was taken to validate data and information and to present it in this format. A finding of it is, as I have stated, that where there were breaches in terms of salary scales, verbal - therefore, not on files - Department of Health approval had been sought and obtained and the audit very faithfully records that there is no record of that in the Department. I am making this point for the following reason. When one views this in the round, we know that certainly in 2008 and 2009, there is an awareness within the system of these breaches. We then have toing and froing and different levels of correspondence. We are now in 2013 going into 2014 and the matter remains unresolved. That suggests two things to me. First, whether real or imagined, there was and perhaps still is - we will address this - an ambiguity in the mind of some of these organisations in regard to pay ceilings and adherence to them. Second, it also points up for me - I think it is confirmed in the audit - that there was a level of informal discussion, contact and sanction on these matters.
That is what I see when I look at this in the round.
12:55 pm
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Is this the document from 27 September 2013?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I appreciate that, yes.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Certainly.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Certainly and that is the position as and from three months ago and no doubt, that is what the Department will seek to achieve going forward. I am not questioning that. We are now looking back on arrangements that were struck, payments that were made and contracts that were signed in the past. I am suggesting to Dr. McLoughlin, as is validated in the audited report, that there was ambiguity for whatever reason - whether that ambiguity was contrived or not is another kettle of fish. There was also a degree of knowledge within the system that these practices were occurring and there was a level of discussion about and approval of those payments.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I would encourage them to do so. The audit does not specify examples. I should emphasise that in one of its key findings on remuneration rates it refers to instances where "senior management salary rates differed" and to agencies. The fact that the report refers to instances and agencies in the plural suggests that more than one agency reported this particular experience. I am inclined, on balance, to take the audit finding as it reads. I have no reason to suppose that the finding is inaccurate and I suspect Dr. McLoughlin has no reason to suppose that either. The report very clearly signals that there were verbal arrangements, clearance and a bit of the nod-and-wink, perhaps, regarding the payments of these additional salaries.
Dr. Ambrose McLoughlin:
As I say, on the basis of factual information before me as Secretary General, I find that the Department of Health acted properly and correctly. We are dealing with these matters prospectively in the context of the circular of 27 September. I invite any agency to come forward and bring whatever evidence it has, verbal or otherwise, and present it to the HSE and the Department and I will have that examined to ensure fairness in all of our dealings on these matters.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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It is worth stating for the record that it is very clear from the report that it was Department of Health approval. I do not know if that indicates that these arrangements or discussions happened prior to the establishment of the HSE. I am not sure if that is the case but perhaps Mr. O'Brien would like to comment on that.
Mr. Barry O'Brien:
The pay policy, as recently issued, clearly sets out everybody's responsibility. It is important to state that section 38 agencies are individual employers who offer employment contracts. Clearly the policy places responsibility on section 38 agencies, under point 12 of the section entitled "Action Required", to "provide written confirmation to the HSE" that remuneration payable is in accordance with the Department of Health consolidated scales; that non-Exchequer sources of funding are not used to exceed approved rates of remuneration; that the payment of unsanctioned payments has ceased; and that the recoupment of any overpayments will be pursued as expeditiously as possible.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Can I ask Mr. O'Brien, for the purposes of clarity, what document he is quoting from?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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For the information of this committee, what is the date of issue of that document?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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It is the same circular letter to which Dr. McLoughlin referred. Is that correct?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Does Mr. O'Brien understand that my question refers to events, actions and oversight - or the lack of it - prior to September 2013?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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We can come to the policy later. I am asking Mr. O'Brien to step back in time because these controversies and breaches occurred well before 27 September 2013. The circular letter of that date and the work we are doing now represent remedial action to clean up the mess. The mess occurred prior to September 2013.
Mr. Barry O'Brien:
Yes, but the audit clearly identifies the fact that prior to the establishment of the HSE in 2005, many of the section 38 agencies did business directly with the Department. Since the HSE was established, it has been pursuing a policy of standardising pay and remuneration policies across the section 38 organisations.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Is Mr. O'Brien saying that whatever about the Department of Health, which he does not represent, as far as the HSE is concerned, there were no understandings on the side, no nod-and-wink arrangements or informal sanctioning of any of these breaches?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Where is that conclusion?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Perhaps we could finish with this point first. I am sorry to cut across Ms. Spillane.
Mr. Barry O'Brien:
In the audit opinion on page 10 there is an overarching comment to the effect that the audit has identified that, prior to 2005, terms and conditions of employment for staff were not fully standardised across the health system but that since the establishment of the HSE, the policy has been to move to standardise terms and conditions. Most of the non-standard allowances identified as part of the audit were commenced prior to 2005 and have remained in place since then.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay. That is the audit report.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Mr. O'Brien's position is that whatever informal conversations or sanctions that may have come for these breaches through the Department of Health on whatever date, at no stage did the HSE informally sanction local arrangements and breaches of this type.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay, not to his knowledge.
I now wish to turn our attention to correspondence given to us during the break. The correspondence is between Mr. David Walsh, Regional Director of Performance and Integration in the HSE, Dublin-Mid-Leinster, who is based in County Kildare, and Mr. Nicholas C. Jermyn, group chief executive of St. Vincent's Healthcare Group Limited. The correspondence is in response to the meeting which Mr. O'Brien indicated had occurred. Mr. Walsh's letter refers to a meeting on 18 December regarding compliance with health sector pay policy. He wishes to confirm that St. Vincent's is compliant with this pay policy based on its interpretation of same and legal advice received. I am presuming and hoping that in the circular issued on 27 September 2013, to which both gentlemen have referred, the guidelines set down are absolutely watertight, that there is now no ambiguity whatsoever and that both the Department of Health and the HSE have not just their own insights into this matter but have received legal advice and legal assurances to that effect.
Will Mr. O'Brien respond to that in the first instance?
1:05 pm
Mr. Barry O'Brien:
As I have said the pay policy is Government pay policy approved by our colleagues in the Department of Public Expenditure and Reform and issued by the Department of Health. Under point No. 12 of actions required it states:
What Mr. Jermyn has advised Mr. Walsh is, "I wish to confirm that SVUH is compliant with this pay policy based on our interpretation of same and legal advice received."
Section 38 providers should provide written confirmation to the HSE that:-
remuneration payable is in accordance with the Department of Health consolidated salary scales; non-Exchequer sources of funding are not used to exceed approved rates of remuneration; the payment of all unsanctioned payments has ceased and the recoupment of any overpayments will be pursued as expeditiously as possible.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Precisely.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Am I correct in stating that this dates from 27 September 2013?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay. However, the position prior to that was not as crystal clear as that?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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It is clearly their view that it was not and it is also absolutely clear that these people have gone to the trouble - unsurprisingly - to take legal advice on the matter concerned. May I again put the question. I am presuming that the HSE through your office or the office of the other Mr. O'Brien, equally have legal advice on this issue?
Mr. Barry O'Brien:
Let me set out my view. Earlier Dr. Geraldine Smith in reply to a question drew specific reference to a point in the service level arrangement which deals with compliance with consolidated pay. I do not know who signed that document on behalf of St. Vincent's Hospital, but we have had those service level arrangements in place since 2009, but I presume somebody in authority did. By signing that document that person is signing to confirm that St. Vincent's Hospital is in compliance with the consolidated salary scales.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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That is fair enough. I presume the HSE and Mr. O'Brien, if he is the appropriate person in the HSE, given the current controversy with St. Vincent's, and bearing in mind their previous letters of 29 October and 19 November 2013, this did not happen overnight, telling him where to go, that given the service level agreement, given the fact that these people have "lawyered up" on the issue, that the HSE or the Department of Health, perhaps, have also received legal advice on the sureness of Mr. O'Brien's position in pursuing this matter with St. Vincent's. Am I right or wrong in thinking that?
Dr. Ambrose McLoughlin:
It is a matter for Government policy. We have clearly issued a policy directive and everybody is obliged to comply with Government policy. There is a substantial legal basis for Government issuing policy in these matters and it has done that.
I do not want to detain the meeting but it is crystal clear that the representatives from St. Vincent's Hospital must come in and meet the HSE and deal with the issues on a face-to-face basis. They should resolve all of the questions that are outstanding. That has been made clear by the Minister for Health and, as Secretary General of the Department of Health, I am making that clear.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I appreciate that but can Dr. McLoughlin understand the concern that I have, namely, that collectively the system has singularly failed to resolve this matter. The evidence of that is that we are sitting in this committee room again dealing with these issues. The reality is, and the witnesses have conceded the point, that whatever about what was said in September 2013, prior to that date there was an ambiguity or a lack of clarity on these matters, which has now been taken out of the equation.
The latest shot across the bow of the HSE is coming from St. Vincent's which has indicated that it is their view in line with legal advice they have received, that they are in fact compliant. I imagine that advice might stem from the previous ambiguity. I am surmising that might be the case. I understand the strength and standing of Government policy in this area but I am asking a fairly straightforward question and I am looking for an assurance from the HSE and the Department of Health that either or both have in turn sought and are in receipt of sound legal advice that they can pursue this matter with these people.
Dr. Ambrose McLoughlin:
I can answer the question. Depending on the resolution of the matter with the HSE, I am satisfied the Department of Health will have the authority from a policy perspective to deal with the issues that are outstanding on the basis of the circular letter of 27 September 2013. In fairness to St. Vincent's and to all the parties concerned, I would urge them to comply in full with the request of the HSE, meet it and seek to deal with the issues in a structured and systematic way. We are at this point simply seeking engagement through the HSE, through a process that we have signed off on.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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In fairness to everybody concerned and to the general public watching this absolutely shambolic episode which is a very dangerous episode for very good organisations, that is not a very good answer. We find ourselves post the audit, post hearings, post the public controversy in a position in which we are still on an information seeking exercise and relying on the goodwill and the decision of organisations such as St. Vincent's or the CRC as to whether they will co-operate, the extent to which they will co-operate and these are bodies in receipt of very substantial public moneys. That is not a good place for anybody to be. It is an indictment of the Department, of the HSE and of the lack of management and oversight of these bodies historically.
Mr. Barry O'Brien:
With the permission of the Chair, I will respond to Deputy McDonald. I do not accept there was ambiguity on the part of the HSE. First, when one looks at the service level arrangement we had in place, the specific reference to a signed statement of compliance with Government public policy and when one now looks at the case of St. Vincent's Hospital who in spite of being issued with a new policy, repeating the fact that in their view they are fully compliant. Nothing has changed in their view since the issuing of the pay policy. What we are saying is that when one is working in a complex situation in providing health care, with agencies operating under sections 38 and or 39, there is a certain level of corporate responsibility and trust that one must take when people sign their names to a service level agreement, giving an absolute assurance that they are in compliance with Government policy. It is clear that is what has happened. It was not until the audit that it was discovered, when we received confirmation in 2012 that three of their senior managers were in receipt of payment from a different source.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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The audit would suggest that perhaps if not in those particular instances but in others, there was some form of informal sanction given for those payments.
We have correspondence from St. Vincent's Hospital dated 29 October and 19 November addressed to Mr. Barry O'Brien. Am I correct to presume that Mr. O'Brien responded to these letters?
Mr. Barry O'Brien:
Yes, but the way I responded to the letter of 19 November 2013 was by way of a meeting last Thursday in which the chair and other representatives of St. Vincent's were present. We followed up directly with the regional directors of performance and yesterday's meeting with Mr. Walsh.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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We will take this one step at a time. Mr. O'Brien received quite a lengthy letter on 29 October 2013?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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He then received a further letter on 19 November to which he did not reply. I am trying to establish the facts.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Do we have sight of that letter?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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That would have added to the completeness of the information. Mr. O'Brien then received a further letter from Mr. John McPhillips, director of HR dated 19 November 2013. Did Mr. O'Brien respond to him on that occasion?
1:15 pm
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Did human resources write back on that occasion?
Mr. Barry O'Brien:
We would have corresponded. That would have been a standard reply with regard to whether the hospital viewed itself as being in compliance. We would have had ongoing correspondence and we would have set in place the decision to meet with all the chairs and deal with it in that way.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I would like to have seen correspondence from Mr. O'Brien to St. Vincent's hospital quoting, as is done here, the circular of September 2013 and the provisions in the service level agreement. I assume the correspondence of 5 November did precisely that.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Mr. O'Brien is referring to a different letter. Is that not the case?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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It would be useful if we could see a copy of that letter. In any event, it remains the view of St. Vincent's hospital that it is compliant. The hospital concedes, however, that it is paying three senior managers above the agreed ceiling. Mr. O'Brien stated that representatives of the hospital were present at the meeting in December. Was that on 12 December?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Who attended the meeting?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Is that Mr. Nicholas Jermyn?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Who is the chairman?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Who was the second person in attendance?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Mr. McPhillips is the person who has been in correspondence with the Health Service Executive. Were these issues raised by Mr. O'Brien at the meeting?
Mr. Barry O'Brien:
No. It was not a one-to-one meeting but a meeting between the director general and other senior managers and the group. The purpose of the meeting was to set out the director general's overall approach, which required, first, full compliance with pay policy and, second, the sign-off of the annual compliance statement. The group was advised that there would be direct follow-up meetings on the issue of pay compliance. As we were meeting St. Vincent's hospital this week, we deemed it to be one of the agencies that were not in compliance.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay.
Dr. Ambrose McLoughlin:
I have no evidence whatever of any impropriety on the part of the Department of Health in respect of these matters. As to any suggestion of informal sanction, there is no such thing as informal sanction. A matter is either sanctioned or it is not sanctioned. We are dealing with public money, and either there is a piece of paper or there is not. What I have said - I want Deputy McDonald to understand this - is that I would be very happy to receive evidence to the contrary. If it is available, it should be sent to me immediately and I will interrogate it. I wish to make absolutely clear that there was an agency in place prior to the Health Service Executive, namely, the Eastern Regional Health Authority, which, to the best of my recollection, operated from 1 January 2000 and would have dealt directly with the voluntary sector. I have had an exhaustive trawl carried out in my Department and I can find no evidence of informal arrangements. In fairness to public servants who have served the State, I need to make this point on the record.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Dr. Geraldine Smith will be in a position to identify which of the agencies made the assertion. That might assist us in getting clarification on the matter.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Was that correspondence passed on to the Department of Health?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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That is right.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I ask that those agencies be identified individually by name-----
Mary Lou McDonald (Dublin Central, Sinn Fein)
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-----that the information be passed without hesitation or delay to the Department of Health and that the Department seek clarification on these matters before reverting to the committee to set the issue at rest.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I ask that the relevant correspondence be circulated to the committee.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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When did Dr. McLoughlin first have sight of the internal audit report?
Dr. Ambrose McLoughlin:
I believe it was in May 2012. I wrote, as chairman, to the HSE about it on 21 May. It was, therefore, probably the week before that.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Section 38 of the internal audit report on agencies' remuneration was issued on 15 March 2013.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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That is the HIQA report.
Dr. Ambrose McLoughlin:
-----and subsequently received the internal audit report of the HSE in March or April 2013.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Did the key finding of the report not jump out at Dr. McLoughlin when he read it? I refer to Department of Health approval being sought and obtained informally.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I understand that. However, on this particular issue - trying to unravel what happened and why it happened is obviously a serious matter - did that finding not jump out at Dr. McLoughlin?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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As part of that assessment, did Dr. McLoughlin not seek from Dr. Smith the names of the agencies in question?
Dr. Ambrose McLoughlin:
I need to be clear here. We did a trawl of all the files and documents for Dr. Smith and we supplied them to her. The agencies in question have alleged to Dr. Smith that there was some informality in arrangements with the Department of Health. I cannot deal with informality; I can only deal with fact. I have checked the records of the Department of Health and I can find no evidence.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I have just asked Dr. Smith this question. Was Dr. McLoughlin aware of the identities of the agencies that were making these claims?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Is that not a little odd?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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With all due respect, this is a factual report. It is an internal audit.
Dr. Ambrose McLoughlin:
Yes; the internal auditor reported and we followed through on the report. I have made it clear to the committee that I am quite happy to receive any documentation or evidence that sustains that position. I have checked in the Department of Health and I cannot find any evidence that would sustain that position.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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For the purposes of the committee, I find it troubling that there is more than an inference in this regard but a report that agencies have made this claim. Incidentally, let me be absolutely clear that there should be no tolerance shown or quarter given to any agencies that brazenly breach public sector pay guidelines and policy. It must be galling for public servants on modest salaries to observe all of this. It is certainly very troubling for people who rely on the services of hospitals and facilities such as the CRC.
My concern, however, is that the guidelines or lack thereof, the absence of clarity and the position whereby the system stood off this issue for a considerable period may go some way towards explaining why we had correspondence such as that which we saw last week from the CRC, why we have the almost farcical position of letters landing on our desks in the middle of an Oireachtas committee hearing and why we are waiting for word from St. Vincent's Hospital. The whole issue is off the wall. Those are my concerns.
Viewing this in the round, and without giving any succour to people who are thumbing their noses at the system while taking taxpayers' money, the concern must be that a very poor system was in place in respect of regulation and there may have been a level of informality and informal sanction, although I take Dr. McLoughlin's point that this does not amount to sanction. We need these matters cleared up if we are to do what we all aim to achieve, namely, rebuild public confidence in these key organisations. Does Dr. McLoughlin share my view?
Dr. Ambrose McLoughlin:
I would be happy to receive any formal documentation from Dr. Smith or anybody else in respect of these matters.
I will examine them with due diligence and I will ensure that you receive a report on it. As the Secretary General, I have to deal with fact. I cannot deal with hearsay because one cannot run a Department of Health or a health service on the basis of hearsay. One can only deal with it on the basis of factual evidence that is before one. I am very confident, as I said in my opening address, about the process that is being put in place by the HSE. When that process is concluded I look forward to receiving the report, which I will discuss with my officials and with the Minister concerned, and whatever remedial action is necessary will be taken.
1:25 pm
Mary Lou McDonald (Dublin Central, Sinn Fein)
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And I take Dr. McLoughlin's assurances. I would not ask him to operate on the basis of hearsay. I was not offering hearsay. I was quoting from a HSE internal audit report.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Yes.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I am sure Dr. Smith has indicated that she will pass on the names of those agencies.
I raised the issue of the FEMPI legislation and the recoupment mechanism. What consideration, if any, has been given to that in the case of the section 38 agencies?
Ms Oonagh Buckley:
I might intercede; otherwise, I sit here as an adornment. Perhaps it is worth clarifying what the FEMPI recoupment legislation permits and does not permit. First, FEMPI stands for "financial emergency measures in the public interest". The FEMPI legislation contains an anti-avoidance provision to prevent, once the pay cuts of 2010 and the most recent pay cuts of 2013 were implemented, employers from restoring the reduced pay rates in various ways. There are measures included in the legislation which contain very strong provisions to the effect that if an employer, in an effort to avoid the FEMPI measures, seeks to increase the pay rate that has been reduced, that money is held in trust by the employee and must be returned by him or her. Ultimately, if that process does not work the State can withhold some of the grant money that is paid to that individual public service body. It is, however, specific to the pay cuts made under the FEMPI legislation; it is not specific to other overpayments of wages. There is a general rule around overpayment of wages and recoupment of overpayments, whether made in error or whatever, and those are the normal rules that must apply. It is not a practical proposition to try to apply the FEMPI legislation, which is specific to its purpose of an anti-avoidance measure, in this case. There is a general rule around the recoupment of salary overpayments that applies. Under the Payment of Wages Acts, overpayments of salaries can be recouped in the normal course. There is no public service pay legislation or anything of that nature that provides similar provisions to the FEMPI legislation specifically. The measures provided for in the Financial Emergency Measures in the Public Interest (No. 2) Act 2009 as carried through in subsequent legislation are very specific to dealing with preventing avoidance of those measures. It was probably a slight misunderstanding within the internal audit report that suggested that it might be possible to use those measures to deal with the overpayments.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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That is a very useful clarification. Therefore, we can surmise from that that there is no legislative basis upon which the overpayments, the breaches or those sums paid to this very small number of individuals can be recouped.
Ms Oonagh Buckley:
There is no specific legislation that one could point to that would provide in the case of an overpayment that money is held in trust and must be returned. There is general payment of wages legislation that permits the recoupment but there is not anything that requires its recoupment, so to speak. Under general public financial provisions, overpayments of any public funds tend to have to be recouped.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Which leads us back to the difficulty that the overpayments and the breaches were financed from private funds.
Seán Fleming (Laois-Offaly, Fianna Fail)
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I thank the witnesses for appearing before the committee. I have a few specific questions. In March 2013, nine months ago, the internal audit report was produced, which dealt with the 44 organisations. I am aware that the witnesses have various letters in respect of compliance, warning letters, suggestions and meetings which have taken place in the meantime but, from the HSE perspective, how many of the 44 organisations are compliant? One of the letters issued stated that if the HSE did hear from an organisation it would assume the organisation was compliant. The letter stated that a failure to provide a reply by 28 October 2013 would be considered an unqualified confirmation of compliance with the circular. In the absence of a reply I would not have assumed compliance. Regardless of what the 44 organisations think, and regardless of how many statements have been received stating compliance, how many has the HSE verified as being compliant?
Mr. Barry O'Brien:
Our position is that the agency confirmed compliance and no issue was identified by the audit in respect of eight of those agencies. We did take that additional step in respect of the five that initially did not reply. In the interests of absolute certainty we looked for a formal response from them and did not take a non-reply as being a statement of compliance. All of the agencies have replied in that regard.
Seán Fleming (Laois-Offaly, Fianna Fail)
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Of the 44 organisations identified nine months ago, how many has the HSE verified as being compliant? I am not talking about letters from the organisations stating that they believe they are compliant. It is a great audit report, as I said the last day. When we get a good report the issue is how well it is followed through. This is nine months afterwards. Of the 44 organisations, how many can the HSE verify as being fully compliant?
Seán Fleming (Laois-Offaly, Fianna Fail)
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So Mr. O'Brien is saying after nine months that in a report into 44 organisations the HSE can verify that eight are compliant. At the rate of one per month, do we have to wait 32 months to get to the end of the 44 organisations?
Seán Fleming (Laois-Offaly, Fianna Fail)
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That has been the progress to date.
Mr. Barry O'Brien:
No. What we are saying clearly is that eight have been identified as being compliant, 12 have self-declared non-compliance, and 22 have written to the HSE stating they are compliant.
Seán Fleming (Laois-Offaly, Fianna Fail)
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How many?
Seán Fleming (Laois-Offaly, Fianna Fail)
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St. Vincent's Hospital is a classic example.
Seán Fleming (Laois-Offaly, Fianna Fail)
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After nine months, eight organisations have been identified as being compliant. We are not even 20% of the way to verifying compliance in respect of 48. I will not go back to the report in respect of the timescale, when certain things were to be verified in different months and at different dates. I am aware the report came into the public arena a couple of weeks ago. Between March and that time - I believe it was November - circulars and letters were issued. Since it landed at this committee, the HSE may have done it for a good reason - maybe to strengthen its hand - but it seems to have strengthened its hand in some way, because it is now in the public arena. There appears to have been a remarkable step-up in gear in the past month in terms of meetings and dates of meetings.
I think Mr. O'Brien has told us they have until the end of January 2014 to fully verify this.
1:35 pm
Seán Fleming (Laois-Offaly, Fianna Fail)
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In terms of compliance.
Seán Fleming (Laois-Offaly, Fianna Fail)
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Is that a different issue?
Seán Fleming (Laois-Offaly, Fianna Fail)
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What is the deadline as of today, 19 December? What is the deadline for the other 32 organisations to confirm compliance and for the HSE to meet them in order to be satisfied in that regard? What is the timescale involved?
Seán Fleming (Laois-Offaly, Fianna Fail)
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The remaining 32 which have stated they are compliant but about which the HSE is not sure-----
Seán Fleming (Laois-Offaly, Fianna Fail)
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What is the HSE's timescale to get to the end of the 44 organisations? By what date will it be able to state it has verified that all 44 organisations are compliant? The taxpayer needs to know this. In ten minutes the CEO of the HSE will give a briefing on the HSE's service plan in the audio-visual room. However, the taxpayer needs to know today whether the HSE will have done this by the end of March or within 12 months?
Seán Fleming (Laois-Offaly, Fianna Fail)
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Does the HSE have a timescale?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The smart answer is 12 months.
Seán Fleming (Laois-Offaly, Fianna Fail)
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The end of March-----
Mr. Barry O'Brien:
It is actually fair to say one of the points raised by all of the section 38 bodies at our meeting last Thursday was that if they were to have their audited accounts for 2012 signed off on in the first quarter, it would create an additional expense and cost them more than it would if they were to have them later in the year.
Seán Fleming (Laois-Offaly, Fianna Fail)
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The HSE should tell them that is nonsense. It costs the same to carry out an audit in March as it does in July. The cost does not go up.
Mr. Barry O'Brien:
I am not disagreeing with the Deputy, but I have to reiterate that the HSE wishes the matter to be resolved as a matter of urgency. We have put in place the assurance statement, plus a requirement, and require the accounts for 2013 to be completed and signed off on by the boards at the earliest possible time.
Seán Fleming (Laois-Offaly, Fianna Fail)
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Mr. O'Brien is now talking about the compliance statement to be produced with the annual audited accounts. There are two processes involved and Mr. O'Brien is merging the two. One involves the internal audit report; then, as Mr. O'Brien said, there is the broader compliance issue.
Seán Fleming (Laois-Offaly, Fianna Fail)
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When will the HSE receive reports indicating this has been fully implemented?
Seán Fleming (Laois-Offaly, Fianna Fail)
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The Revised Estimates for 2014 were published yesterday and in due course the Oireachtas will vote to give the HSE €13 billion. In the first instance, the responsibility is on the Accounting Officer for the HSE - I am not sure whether it is Dr. McLoughlin or Mr. O'Brien - to ensure the money is spent in compliance with regulations. In the second instance, the onus is on section 38 organisations contracted to do this work. Primary responsibility is on the HSE which is answerable for moneys voted by the Oireachtas. Have the audited accounts for 2012 been completed for all 44 organisations?
Seán Fleming (Laois-Offaly, Fianna Fail)
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Mr. O'Brien is moving on. I am a little frustrated because he is moving on and saying the HSE wants the 2013 audited accounts to be completed by the end of the first quarter of 2014. We are in the week before Christmas and I suspect it is possible some of the organisations have not yet completed their audited reports for 2012. I do not get the purpose in having externally audited reports. I accept that it is important compliance statements accompany them. However, the issue we are here to talk about is the internal audit report on the top-up payments which is a separate issue from the audited accounts and compliance statement. As Mr. O'Brien said, it is a broader issue. On the narrow issue of the internal audit report, we are nine months on and the HSE can only verify that eight bodies are in compliance and that more than 80% have been not undertaken. When Mr. O'Brien was here two weeks ago, he said he would meet all of the non-compliant organisations by Christmas.
Seán Fleming (Laois-Offaly, Fianna Fail)
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Yes, but Mr. O'Brien told me 32 had not been verified and that they would be met in the new year. It is slipping.
Seán Fleming (Laois-Offaly, Fianna Fail)
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It is a very tight timescale.
Mr. Barry O'Brien:
There is an onus and a direct responsibility on all section 38 bodies to be compliant. We are only funding the section 38 bodies as per what we call the approved salary scales. The Chairman has made the point that we have a problem which has been well set out again today with people who are using alternative streams of funding to pay additional remuneration outside approved salary scales.
Seán Fleming (Laois-Offaly, Fianna Fail)
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Mr. O'Brien has just told us about the circular issued on 27 September which talked about one person-one salary. The Taoiseach reiterated it verbatim in the House that people could not receive top-ups on their salaries. If one has a contract with a section 38 institution, one is a public servant. Is that correct?
Seán Fleming (Laois-Offaly, Fianna Fail)
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The Taoiseach has stated in the Dáil - he quoted the circular - that there cannot be top-up payments. There is no ambiguity about this.
Seán Fleming (Laois-Offaly, Fianna Fail)
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Could we ask representatives of the HSE to come on the first Thursday in February with an absolute assurance that it will have verified that all 44 organisations are compliant? Do Mr. O'Brien understand from where we are coming? That will be ten months from the date of the internal audit report. How long will it take to verify this specific aspect of the internal audit report? Is it too much to ask for a timescale?
Mr. Barry O'Brien:
We should have a direct response from each of the section 38 organisations on full compliance with all of the matters set out in the annual assurance statement, which includes the rate of remuneration. It should be a clear statement that everybody is being paid as per Government pay policy.
Seán Fleming (Laois-Offaly, Fianna Fail)
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When will that be?
Seán Fleming (Laois-Offaly, Fianna Fail)
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Okay.
Seán Fleming (Laois-Offaly, Fianna Fail)
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The meetings in January of the boards will be about compliance, which is the broader issue, as Mr. O'Brien said. However, I am trying to narrow it down to the specifics of the internal audit report. I am afraid - the public is rightly afraid - that we will eventually walk away and will be here in February talking about broad compliance statements. In the meantime we will not have verified the specifics of the internal audit report. I want to bring Mr. O'Brien back to where all of this started rather than losing the central point of the audit report in terms of the broader issue.
Mr. Barry O'Brien:
My expectation is that between now and 31 January 2014 any section 38 organisation which wishes to make a business case to retain an allowance currently being paid will do so within that period. Following this, I will be able to advise the committee that there are a number of business cases to be dealt with or that every other organisation is fully compliant with pay policy.
Seán Fleming (Laois-Offaly, Fianna Fail)
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They will have had from last March to the end of next January to put forward a business case to justify a top-up payment.
Seán Fleming (Laois-Offaly, Fianna Fail)
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They will have had October, November, December and January - four months - in which to make a business case for the top-up payments. How many months will it take the HSE to verify and adjudicate on the matter? Who will determine who is right? The bodies will have their view and the HSE will have its view. Who will make the call?
1:45 pm
Seán Fleming (Laois-Offaly, Fianna Fail)
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If business cases are to be made by the end of January and have to go to the Department of Health and the Department of Public Expenditure and Reform, it looks like it will be next summer before we get to the end of the report.
I have a general question on which the deputation might advise the committee. Let us suppose someone was in the employment of the State, a public servant, and retired and moved on to be chief executive of one of the section 38 bodies, for example, the Central Remedial Clinic. Is there a rule about the maximum pay a person can receive following retirement when he takes up another remunerated position? What is the standard rule? I imagine every public servant knows it.
Ms Oonagh Buckley:
Given that the Deputy asked about the public service generally, I will address the question. Section 52 of the Public Service Pensions (Single Scheme and Other Provisions) Act 2012 was commenced on 1 November 2012. It provides that where a pension is payable by a public service body to a public service pensioner and the pensioner is appointed to a position in respect of which remuneration is paid by a public service body, during this time, no more of the pension shall be paid than so much as, with that remuneration, equals the pensionable remuneration which the pensioner would have received if once again working in the position in which he or she originally served in the public service. That is the pension abatement rule which is now public service-wide.
Seán Fleming (Laois-Offaly, Fianna Fail)
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Were any of the people in section 44 organisations required to be subject to public service pension abatement in the period under review?
Seán Fleming (Laois-Offaly, Fianna Fail)
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I am referring to section 44 bodies. The HSE officials probably know the answer.
Seán Fleming (Laois-Offaly, Fianna Fail)
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Is the HSE aware whether any of them was a public servant before?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Mr. Conlan is an example. He complied with the regulations, as far as I am aware.
Seán Fleming (Laois-Offaly, Fianna Fail)
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He complied with the pension abatement rule. Is that correct?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Yes; the Mater Misericordiae University Hospital told us that.
Simon Harris (Wicklow, Fine Gael)
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I thank everyone for being here. I will start with St. Vincent’s University Hospital because it is clear to me that all is not well. I will begin with Ms Buckley. It seems from the latest tranche of letter writing by our new pen pal that there is an effort to try to divide and conquer Departments. This may be a sign of things to come in how we will deal with this issue at St. Vincent’s University Hospital. Ms Buckley has before her the letter of 18 December from Mr. Nicholas C. Jermyn. He states in the fourth paragraph that Ms Buckley's boss, the Secretary General of the Department of Public Expenditure and Reform, stated the one person, one salary rule related to public sector salaries. Will Ms Buckley let me know if the Department of Public Expenditure and Reform is ad idem with the Department of Health and the HSE in its interpretation of the one person, one salary rule?
Ms Oonagh Buckley:
We are very much ad idem with the Department of Health. To clarify, we have advised the Department on the composition of its statement on pay policy with respect to section 38 agencies. There was a certain amount of tick-tacking between us in August this year to try to ensure the statement would be issued as soon as possible after the internal audit report was formally presented and made available to the Department.
I hope the Chairman will forgive me. I had a copy of the letter referred to in this letter sent to my mobile phone and, therefore, I have been able to read it, illegally, I imagine. It is now on the system.
The reference to the letter sent to the committee by Mr. Watt is a reference to the modification of the one person, one salary standing rule, which has been in position since the early 1970s. The modification was to the effect that public servants appointed to State boards in any capacity could no longer receive fees for service.
Ms Oonagh Buckley:
It appears, with respect to my Secretary General and this illustrious committee, that the letter which is a statement of fact cannot in any way override Government policy dating from the 1970s and, more particularly, represents a firm statement of the Government policy issued by the parent Department via the HSE to each of these agencies. That statement which was prepared in consultation with the Department is very clear in restating the basic principle, that is, if a person is a public servant, he or she cannot receive additional moneys from any source in respect of that employment.
Simon Harris (Wicklow, Fine Gael)
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That is a very helpful and comprehensive statement from Ms Buckley and I believe that is the answer to Mr. Jermyn, if he is watching. In preparing his statement Mr. Jermyn might take into consideration the clear view of the Department of Public Expenditure and Reform.
I will return to the HSE. I am looking at the list it sent us of the additional remuneration payments made from private, that is, non-HSE funds. The St. Vincent's Healthcare Group is the only section 38 organisation that has refused to provide any information on the additional remuneration payments made. Is this correct, or am I missing something?
Simon Harris (Wicklow, Fine Gael)
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The group is on its own in its interpretation.
Dr. Geraldine Smith:
It is on its own in that sense and in that it did not give us any information on the private elements, whereas some other agencies certainly gave us information on those elements. Some organisations may not have given us that information, but the St. Vincent's Healthcare Group is the only organisation which told us point blank that it would not be telling us about the private elements, full stop.
Simon Harris (Wicklow, Fine Gael)
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How much public funding was given to the St. Vincent's Healthcare Group this year?
Simon Harris (Wicklow, Fine Gael)
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I will keep going. I have a question for Mr. O'Brien on the service level agreement. It seems clear that when a person signs a service level agreement, he or she is signing up to be in compliance with public sector pay policy. Can we check who signed service level agreements? Does Mr. O'Brien know who signed them? Would it have been the chief executive? Who would normally sign them?
Simon Harris (Wicklow, Fine Gael)
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Therefore, it would be usual for the St Vincent's Healthcare Group service level agreement to be signed by Mr. Jermyn. Is that correct?
Simon Harris (Wicklow, Fine Gael)
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Has Mr. O'Brien seen the St Vincent's Healthcare Group accounts for 2011?
Simon Harris (Wicklow, Fine Gael)
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Has anyone seen them?
Simon Harris (Wicklow, Fine Gael)
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Does the HSE know when they were lodged with the Companies Registration Office?
Simon Harris (Wicklow, Fine Gael)
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I will tell the deputation. They were due to be lodged on 30 September 2012 because 30 September is the filing date for the St Vincent's Healthcare Group. The accounts for the year ended 31 December 2011 were only lodged with the Companies Registration Office in November this year. I believe they were signed by the board on 30 September, but they were not lodged at that stage. Therefore, they were 13 or 14 months late. According to my inquiries to the Companies Registration Office, the 2012 accounts have still not been lodged and are now overdue also. Furthermore, the Companies Registration Office has either fined or is in the process of fining the St Vincent's Healthcare Group. Will the deputation respond on how the HSE views an organisation that receives - we are awaiting the specific figures-----
Simon Harris (Wicklow, Fine Gael)
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Some €202 million in taxpayers' money was received, yet the organisation does not bother its barney to comply with basic rules in terms of filing deadlines. Was the HSE aware of this and does it have concerns in that respect?
Simon Harris (Wicklow, Fine Gael)
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The Chairman knows and we all know from our constituency work and our communities of the great lengths small businesses and companies go to in order to comply with various company law requirements and to file their returns on time. I have not looked back any further, but we have an organisation that received €202 million in taxpayers' money in 2012 which did not did not bother to produce reports on time for the years 2011 and 2012 and which is now being fined by the Companies Registration Office. When Mr. Jermyn is writing a statement on behalf of the St. Vincent's Healthcare Group, he might address that issue.
There is another issue relating to corporate governance in the St. Vincent's Healthcare Group. Mr. O'Brien was in the room with us last week when we had the then CRC representatives before the committee. Members of the committee, me included, were highly critical, as were Mr. O'Brien and Ms McGuinness, of the crossover of directors between the Friends of the CRC group and the CRC board. There was a view - I am trying to summarise what happened at the meeting - that there was a lack of safeguards since there were directors of a fundraising organisation who were also directors of the overall corporate board.
St. Vincent's has a Friends of St. Vincent's group as well, called the St. Vincent's Foundation. It has four directors, Professor Noel Whelan, Mr. Nicholas C. Jermyn, who is also the CEO, Mr. Stewart Harrington and Professor Michael Keane. St. Vincent's Healthcare Group also has a board, which comprises the same four gentlemen.
The CRC issue was an interesting media story. Many of the names were well-known public figures. Deputy Ross referred to some political involvement and so on. We have to be very careful that we apply the same level of standards to all organisations and all those operating under section 38 and that we do not single out one or two. Is it your view, as it was last week in respect of the CRC, that there should not be a complete cross-over between the fund-raising arm and the board of any section 38 organisation?
1:55 pm
Mr. Barry O'Brien:
The draft document annual assurance statement, the compliance statement, which we issue to each chair of the section 38 organisations, referred to best practice governance with regard to the composition of boards, the appointment of directors to the boards and to the absence of conflict with committees that the boards might establish.
Simon Harris (Wicklow, Fine Gael)
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I welcome what I regard as the improvements in the governance standards and the new documents that the HSE has put together. When I put this point to St. Vincent's last week it responded with a media statement to the effect that this was a reasonable question and one that it would consider. I ask it to strongly consider it for the reasons that Mr. O’Brien has correctly given, to ensure that the public can have absolute confidence in the robustness of fund-raising structures for charitable organisations.
I want to move on to page 6 of the 2011 accounts of St. Vincent’s Healthcare Group. I do not know whether the witnesses have a copy of them.
Simon Harris (Wicklow, Fine Gael)
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How did you get those?
Simon Harris (Wicklow, Fine Gael)
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It might provide them to the Companies Registration Office.
Simon Harris (Wicklow, Fine Gael)
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Does that mean they have been lodged with the Companies Registration Office?
Simon Harris (Wicklow, Fine Gael)
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Correct.
Simon Harris (Wicklow, Fine Gael)
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I am talking about the St. Vincent’s Healthcare Group accounts.
Simon Harris (Wicklow, Fine Gael)
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The point stands that my most recent inquiry established that it had not submitted the 2012 accounts to the Companies Registration Office. I will talk Dr. Smith through this. Page 6 of the healthcare group’s accounts contains a report from the independent auditors, PricewaterhouseCoopers. This seems to be a confusing and complex area. Somebody might guide me on it. There is an adverse opinion on the financial statements. St. Vincent’s has publicly explained why this adverse opinion arose. I would like to address it with you, Dr. Smith.
It states that as more fully explained in note 20 to the financial statements, the financial statements do not include pension costs, pension liabilities and pension assets of those staff who are members of the voluntary hospital superannuation scheme as required by financial reporting standard 17, retirement benefits. In the auditor's opinion, because of the significance of the matter described and the basis for the adverse opinion paragraph, the financial statements do not give a true and fair view in accordance with generally accepted accounting practice in Ireland of the state of the group’s and the parent company’s affairs as of 31 December 2011 and of the group’s loss and cash flows for the year then ended. It concludes that because of the potential impact of the matter described and the basis for the adverse opinion paragraph, they were unable to form an opinion as to whether the net assets of the parent company as stated in the company balance sheet after taking account of this matter are more than half of the amount of its so-called share capital.
When I see an adverse opinion in group accounts that have been filed significantly late it raises a red flag. Could you please give me your opinion of it?
Simon Harris (Wicklow, Fine Gael)
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That is okay.
Dr. Geraldine Smith:
Any auditors auditing financial statements are auditing against generally accepted accounting principles as issued by the Financial Reporting Council. They also audit to international auditing standards. The Financial Reporting Council has issued what is known as a financial regulation on how a company accounts for retirement benefits. This is all in the interests of disclosure and transparency and sets out that the organisation must detail instances of the pension fund and liabilities in the future. The idea is that an organisation recognises its charge each year for those people who will become pensioners. St. Vincent’s and many section 38 agencies, as we saw earlier today, are members of State sector pension schemes which are, to put it in very general language, pay-as-you-go. There is no fund. The accounts of those organisations do not identify the charge for the year for the employees because it is funded on a pay-as-you-go-basis. We had that discussion with the Mater. It is quite a technical issue. I would not read anything into it in respect of St. Vincent’s because that appears in various accounts and auditors will flag it up.
Simon Harris (Wicklow, Fine Gael)
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That is interesting because I want to be careful here. We had a detailed discussion with the Mater hospital earlier which was very useful. I do not want anybody to be worried about their pension. I fully understand that it is effectively underwritten by the taxpayer. I do not know whether you can shed any light on my query. I took St. Vincent’s at its word that this adverse opinion was nothing to be worried about, that it does not have to include the pension issue in its accounts, which is fine. However, when I studied some other section 38 organisations, such as Beaumont Hospital and the Mater they did not have adverse opinions.
From a taxpayer’s point of view, the auditor says that these accounts do not provide a true and fair view. Those are pretty much the words. I understand the technical reason for the opinion but presumably Beaumont and the Mater – please do correct me if I am wrong – would have a similar exemption. I am not sure how their directors managed to produce accounts on time with no adverse opinion.
Dr. Geraldine Smith:
One of the things that you will see in those accounts, to judge by the few I have read, from Stewarts, St. James’s and the Mater, is that they set out in the body of the account the fact that it is pay-as-you-go, etc. They are very transparent in that instance.
You are concerned about the audit certificate. It might just be a case of auditors differing. The important issue is that the account identifies that they are non-compliant and that they are funding the pension scheme on a pay-as-you-go basis.
Simon Harris (Wicklow, Fine Gael)
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Could the directors of St. Vincent’s address this issue in the body of their accounts to ensure that they do not have an adverse opinion because other organisations do not have one?
Mr. Seamus McCarthy:
I would like to come in here because I signed the audit certificate for Beaumont. We do not flag it up as adverse opinion but we do say in the opinion that in compliance with the accounting standards for voluntary hospitals, the Beaumont hospital board accounts for the costs of superannuation entitlements only as they become payable. This accounting basis does not comply with financial reporting standard 17 which requires such costs to be recognised in the year the entitlements are earned. Except for the accounting treatment of the board’s superannuation costs and liabilities the financial statements give a true and fair view in accordance with generally accepted accounting practice in Ireland of the state of Beaumont hospital board’s affairs at 31 December 2012 and of its income and expenditure for 2012. It is different phrasing. The same kind of point is being made by the auditors of St. Vincent’s.
Simon Harris (Wicklow, Fine Gael)
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That is good because we are talking about €202 million of taxpayers’ money and when I see an adverse opinion saying accounts do not give a true and fair view, I respectfully suggest that the board of St. Vincent’s could learn from best practice in other section 38 organisations which have dealt with this in a more transparent way.
Dr. Geraldine Smith:
I would like to come in here because in the accounts for St. Vincent’s University Hospital, which the HSE funds, note 17 in the 2012 account does set out clearly the issue of retirement benefits. The directors who sign the accounts disclose that this is how this organisation deals with its pension issue.
It is the audit search which draws attention to the fact that - as the auditors see it - they are not complying with FRS 17 retirement benefits.
2:05 pm
Simon Harris (Wicklow, Fine Gael)
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I thank Dr. Smith for outlining the position. On page 15 of the health care group accounts that directors' remuneration for services as directors in the years 2011 and 2010 were nil, while the respective amounts for other services in those years were €554,377 and €626,656. Again, I understand St. Vincent's has made public comment on this matter. It would, however, be useful if it were to respond to the committee directly in respect of it. The public statement made by the hospital indicates that the figures in question, in addition to including the public salaries of clinicians, also contemplate the public and private pay of Mr. Jermyn. We are trying to work out what level of top-up was paid by St. Vincent's and I am of the view that this is to be found in the amounts to which I refer. I ask, therefore, that - in the interests of being helpful - the St. Vincent's Healthcare Group try to provide a breakdown of these figures when responding to the committee.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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We will forward a transcript of proceedings to the group in the interests of ensuring that the information the Deputy is seeking will be provided.
Simon Harris (Wicklow, Fine Gael)
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For what does the HSE pay Mr. Nicholas C. Jermyn? What is his publicly-sanctioned salary and what is his job description?
Simon Harris (Wicklow, Fine Gael)
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Is the position of CEO full-time in nature?
Mr. Barry O'Brien:
The CEO of the hospital, as opposed to the group CEO, would be full time. It is a matter for St. Vincent's to clarify for the Deputy whether the group CEO's is a full-time position. Prior to the most recent pay reductions the salary was €145,959. That has now dropped to a little over €136,300. I am not sure of the exact amount.
Simon Harris (Wicklow, Fine Gael)
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That is fine. Mr. O'Brien referred to something being a matter for St. Vincent's to clarify.
Simon Harris (Wicklow, Fine Gael)
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Okay. So St. Vincent's has a little graph on its website which refers to the group board of directors, the group executive, the group chief executive, the CEO of the university hospital, the CEO of the private hospital and the hospital manager of St. Michael's. Is the HSE paying the salary of the CEO of the university hospital?
Simon Harris (Wicklow, Fine Gael)
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Is that person Nicholas Jermyn?
Simon Harris (Wicklow, Fine Gael)
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According to the letters he is sending to the committee, Mr. Jermyn is also the group chief executive.
Simon Harris (Wicklow, Fine Gael)
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Let us return to basics. The HSE is paying an individual approximately €136,300 to be the full-time chief executive officer of St. Vincent's University Hospital.
Mr. Barry O'Brien:
For the record and in respect of an inquiry we made on 19 June 2012, the chairman of the board made it clear - and the group CEO stated - that "Further to Mr. Jermyn's e-mail and correspondence below, Nicky has asked me to clarify that the table included in item 1 of his letter dated 18 June addressed to Mr. O'Brien should read "CEO" and not "group CEO" as indicated". This appears to indicate that the correct version of the salary at that time was €145,959 and now with the post-July adjusted figure it has gone downwards. That is the hospital informing us what the salary is for.
Simon Harris (Wicklow, Fine Gael)
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I know it has been a long day and I have no wish to be pedantic but, from the taxpayer's point of view, the HSE and the State are funding an individual to be CEO of St. Vincent's University Hospital. Whomever the relevant individuals want to pay to run the private hospital is their own business because that is a separate post. However, the St. Vincent's Healthcare Group's corporate governance and management structures and correspondence we have received from it indicate that there is a group chief executive and that this is the same person. Is it appropriate that a full-time public servant is double-jobbing? In Mr. O'Brien's opinion, is that individual double-jobbing? Let us make it hypothetical. If one were the chief executive of St. Vincent's University Hospital and one were also the chief executive of a group which, according to its accounts, also includes the private hospital, then one would be doing two jobs.
Simon Harris (Wicklow, Fine Gael)
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It is not a terribly complicated question. I understand the restrictions on Mr. O'Brien, who is not, after all, responsible for running St. Vincent's University Hospital. However, the State is funding that institution. In the simplest terms, I am seeking to discover whether the post of chief executive of the university hospital is a full-time one that is paid for by the taxpayer. If the answer is in the affirmative, then is the person who holds that position doing another job - namely, that of group chief executive - by means of which he also has responsibility for the private hospital? If the same individual has responsibility for a group which includes both the private and public hospitals, then will our guests indicate who is looking out for the interests of the taxpayer and the public health service? That is a question which Mr. Jermyn might answer.
My final question is for Dr. Smith and it relates to two other issues. On the previous occasion we discussed the National Maternity Hospital. A very helpful graph, which defines people's public and private salaries, has been produced. On this graph, private salaries are also subdivided into different boxes. One of the boxes refers to an externally-funded allowance, while the other refers to an externally-funded salary. What is the difference?
Dr. Geraldine Smith:
Those are the designations on which the agencies came back to me. I had asked them, as part of the audit, to provide details on remuneration allowances, pensions, travel, board fees, etc. I requested that they identify them into those particular boxes. Whatever people came back with, that is what is reported here.
Simon Harris (Wicklow, Fine Gael)
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Could one person define private income as an allowance while another might identify it as a salary?
Simon Harris (Wicklow, Fine Gael)
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Does Dr. Smith have any further information regarding the Master of the National Maternity Hospital's €45,000 externally-funded allowance? To what does that money relate?
Simon Harris (Wicklow, Fine Gael)
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I thank Dr. Smith.
Dr. Geraldine Smith:
I should point out that the Master of the National Maternity Hospital was in contact with the HSE following the relevant meeting and met the director general on the day after that meeting took place. The director general asked the master to provide substantiating documentation, which I was to review. Following several communications between then and 6 December, the master had not provided that information. We had sought details of any agreement between the trust and the hospital - details of payslips or bank transfers from the trust to the hospital - but these were not forthcoming. We were very specific in respect of the type of documentation we were seeking. In addition, I sought four years' worth of documentation in order to substantiate the trend and I specifically requested that the information should relate not only to the master but also to those other members of staff who have been identified.
Simon Harris (Wicklow, Fine Gael)
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As of now, Dr. Smith has not received any documentation.
Simon Harris (Wicklow, Fine Gael)
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That is obviously a matter which the committee will be obliged to pursue.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Yes.
Mr. Barry O'Brien:
Earlier, Deputy McDonald referred to a very important letter, namely, that of 5 November, which was sent by me. We are now circulating copies of that letter, which unequivocally sets out - in some detail - what we required St. Vincent's to make available prior to 19 November. As indicated earlier in the meeting, that information has not been supplied to us.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I just want to check-----
Shane Ross (Dublin South, Independent)
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I may be obliged to leave, so would it be acceptable for me to intervene at this point?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The Deputy may proceed.
Shane Ross (Dublin South, Independent)
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I will be brief. If, however, the Chairman wishes to go first, he should by all means do so.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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It is dangerous to leave the final five minutes of proceedings to the Deputy.
Shane Ross (Dublin South, Independent)
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There is no danger at all. When did the Department of Health and the HSE begin to realise the position with regard to these top-ups?
Did the Department state there were concerns there in 2005?
2:15 pm
Dr. Ambrose McLoughlin:
In relation to my own involvement, I became aware of these following the HIQA report on Tallaght in May 2012. Within a few days of receiving it - it was either the 17th or the 21st and I can provide the detail to the committee - I wrote to Cathal Magee, the then chief executive, about these matters requesting an investigation. I did, of course, consult the Minister. As chair of the HSE board through the period until the report was finalised, I received regular reports at the HSE board on the progress.
Shane Ross (Dublin South, Independent)
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What about before Dr. McLoughlin? When was the Department of Health aware of this?
Shane Ross (Dublin South, Independent)
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When?
Ms Frances Spillane:
It would have been - certainly, from looking at our files, I mentioned that we provided information to Ms Smith for the audit - for example, there is a PQ in September 1996 that refers to payments from private funds.
Shane Ross (Dublin South, Independent)
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That is fine.
Shane Ross (Dublin South, Independent)
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What about the HSE? When was it aware?
Mr. Barry O'Brien:
We would have received correspondence, as I set out earlier, in February-March 2011, raising the entirety of issues emerging in section 38 organisations. There would have been correspondence previous to that but quite specific to individual cases on pension payments with regards to a section 38 agency which would have sought approval to pay a pension based on a salary which was not consistent with the consolidated payscales for the post. That matter would have been submitted to the Department and then to DPER, and DPER has said that to the committee in a letter. In the general sense, it was in that period in 2011, when we were asked to seek and engage directly with all section 38 organisations that we would have pursued the matter.
Shane Ross (Dublin South, Independent)
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What about the fact that the CRC case dates from 2009 when Mr. Peelo met the HSE?
Mr. Barry O'Brien:
Last week Ms Laverne McGuinness set out quite clearly, and gave detailed correspondence which I have not got with me here today, that, following an interaction and identifying the pay rates for the then CEO, she set out quite formally the requirements needed - what corrective action were they proposing.
Shane Ross (Dublin South, Independent)
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That is not what I am saying. I am saying the HSE had knowledge of these practices going on in 2009.
Shane Ross (Dublin South, Independent)
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Therefore, the HSE knew in 2009 that top-ups of that sort were going on.
Shane Ross (Dublin South, Independent)
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Did the HSE not know of any others? Did it think this was an isolated case?
Mr. Barry O'Brien:
All I can say to Deputy Ross is the internal audit did a thorough review of all of the files, both internally in the HSE and requested files from the Department, so the audit clearly sets out what was established. Anything that came to our attention, we sought to deal with it expeditiously, and I think Ms McGuinness set that out quite clearly.
Shane Ross (Dublin South, Independent)
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Mr. O'Brien sees my point. He says the HSE did not really know about this until 2011, but in 2009 the HSE held a high-level meeting with the CRC, the CRC came out with its hands up and stated it was paying these staff top-ups, the HSE said "stop it",-----
Shane Ross (Dublin South, Independent)
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-----and they did not take any notice of the HSE.
Shane Ross (Dublin South, Independent)
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The HSE knew in 2009 it was happening.
Shane Ross (Dublin South, Independent)
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Did it never occur to Mr. O'Brien that it was happening anywhere else?
Shane Ross (Dublin South, Independent)
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I am incredulous at Mr. O'Brien talking about it as an isolated case given the then Department of Health and Children expressed concerns about it in 2005, the example of some concern in 1996 and the statistics we have now. It was an epidemic breaking out. This was not an isolated case. It was an epidemic. If the HSE did not know, it should have known.
It is all very well for Dr. McLoughlin to state that it is not in the Department's files. Civil servants and everybody else are careful about what they keep in their files and it is what they know outside of their files which is important. It is difficult to believe that the HSE and the Department of Health did not know that this type of activity was very common at that time. Certainly, the evidence is there for 2009, and Mr. O'Brien put it forward to 2011. It seems from what we have got since that the HSE ought to have known this was happening. These were hospitals in the HSE's care. In 2009, when it found out about the CRC, did the HSE investigate anybody else immediately? Did it send out a questionnaire? Did the HSE do anything about it?
Shane Ross (Dublin South, Independent)
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Why not? Was it that the HSE thought they were the only ones at it?
Shane Ross (Dublin South, Independent)
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Yes.
Mr. Barry O'Brien:
I would say, if one looks at what the audit has established and what I have said already, of the numbers absolutely - do your calculations - it stakes up that 99.9% of all public servants are fully compliant with pay policy. To say that we had an epidemic, the epidemic was confined to a very small group of people who, now it has emerged, were using various forms of funding, not always from the public purse, to supplement pay.
Shane Ross (Dublin South, Independent)
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Presumably, the boards of all these hospitals, clinics and whatever else must have known about it. There must have been hundreds of staff within the health service who knew about this. What worries me is that the HSE and the Department of Health seemed to be the only ones who did not know about it.
Mr. Barry O'Brien:
Clearly, the audit report has shown that at a point in time we carried out a forensic detailed examination and the audit report's findings are quite clear to all of us, but I had no knowledge - I was a senior manager at the time in the HSE in 2009 - of anybody in any other areas being paid top-ups.
Shane Ross (Dublin South, Independent)
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That is incredible. It must have been widely known within those hospitals and other organisations where it was happening, and the only ones who did not know it were the Department of Health and the HSE. When the HSE found out about the CRC, did the HSE tell the Department of Health about it?
Shane Ross (Dublin South, Independent)
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Does Ms Spillane know whether the Department of Health was told about the CRC in 2009?
Ms Frances Spillane:
I am sorry, I would have to check what we received. I know we received a summary from the HSE in 2011 and I do not think the CRC was highlighted in that report. I can check it, though.
Shane Ross (Dublin South, Independent)
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It would be useful.
Could Mr. O'Brien tell me about the chain of command? When this happens, and when the HSE discovered what it discovered, does the HSE tell the Department of Health? Who does the HSE inform?
Shane Ross (Dublin South, Independent)
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I am sorry, I know that. Does the HSE tell the Department of Health when there is a breach of Government policy? For instance, when those guidelines were being breached, did the HSE tell the Department?
Shane Ross (Dublin South, Independent)
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I know that.
Shane Ross (Dublin South, Independent)
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I know that, but did the HSE tell the Department before then because it did come across one?
Shane Ross (Dublin South, Independent)
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The Department was told the CRC was in compliance?
Ms Frances Spillane:
In compliance, yes. That was the return that was received by the HSE from the CRC.
Kieran O'Donnell (Limerick City, Fine Gael)
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What date was that?
Shane Ross (Dublin South, Independent)
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The HSE must have known at that stage that the CRC was not in compliance because it had held that meeting with Mr. Des Peelo. That cannot be. The HSE knew the CRC was not in compliance in 2009.
2:25 pm
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I would point to the letter of 2009, which I raised again last week. Mr. Des Peelo of the Central Remedial Clinic wrote to Ms McGuinness at the HSE in 2009.
Shane Ross (Dublin South, Independent)
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Yes.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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He set out his understanding of the meeting that was held, and the CRC apparently worked on that understanding thereafter. The next letter from the HSE to the CRC was in 2012, so the HSE was absolutely aware of what was going on in the CRC in 2009. It was aware of what was going on back to 1996 and the parliamentary question. While we are dealing here with the CRC, St. Vincent's and the other organisations, which total 44, it is clear beyond doubt that the health boards - or the Department of Health at that time because that is who they were dealing with - the HSE thereafter, and the Department of Health knew exactly what was going on.
Shane Ross (Dublin South, Independent)
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This is the point.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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If it was going on in the CRC, it was going on elsewhere. The question I had last week for Mr. Brazel was that all of this was known in the Department of Health. It was known; let us call a spade a spade. It was absolutely clear, so let us stop dancing around it. The Department of Health and the HSE knew about it, so did the Department of Public Expenditure and Reform, previously the Department of Finance, know about it? Will Ms Buckley admit that she knew about it?
Ms Oonagh Buckley:
We have given the Chairman the results of a survey of our files. Mr. Brazel and I have had responsibility for the supervision of pay policy within the health sector from the Department of Finance's and the Department of Public Expenditure and Reform's perspective since 2009. I can assure the Chairman that, aside from those instances about which we have written to the committee, neither Mr. Brazel nor I had any awareness that there was such an extensive range of top-up payments.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I am sorry but I have to interrupt Ms Buckley. I am not directing this question to her or to Mr. Brazel. I am asking about the Department. The Comptroller and Auditor General audits the HSE generally and did so before concerning other health organisations. What is his opinion of this? We spoke earlier about other auditors writing their notes on different audit reports. Did Mr. McCarthy come across any information that would lead us to confirm that the Department of Health and the rest of the people in these organisations knew about all these top-ups, or at least some of them?
Mr. Seamus McCarthy:
As I have said to the committee on previous occasions, we are responsible for the audit of five of the section 38 entities. We carry out that audit and one of the issues we will look at concerning the section 38 entities is the approval of pay levels for senior managers. There was an occasion when a section 38 entity came to our attention. It was in the course of the 2007 audit of St. Luke's Hospital. Our general concern would be that if an additional payment is being made, it should have ministerial sanction. We do not determine that the amount is not payable. We would recommend to the agency that if it cannot produce a sanction to us, then it must seek a sanction for it and act accordingly. As regards St. Luke's Hospital in 2007, we picked up on that. We wrote to the St. Luke's management and asked them to pursue it with the Minister. We checked the following year that that had been done, but there was no reply on file at that stage. A reply came and we saw that the following year. It indicated that sanction would not be forthcoming for that particular payment. We then wrote to the Department of Finance at the time drawing its attention to it. There was a concern that somebody had full-time employment but there was either a secondary appointment or they were essentially being paid a top-up. We got a reply from the Department of Public Expenditure and Reform, which coincided with a lot of work beginning on that around 2011.
More generally, within the section 38 entities we audit, as I indicated at the last meeting, we have issued audit queries concerning three of five audits for 2012. I will say one thing, which is slightly different. In most of the cases, where significant payments are being made, we have identified that payments are being made by another body rather than by another public sector body. In the case of St. James's Hospital, payments are being made by Trinity for another set of activities by the individuals concerned. That also happens in another hospital. In Beaumont Hospital there are small payments. Depending on how this plays out and the answers that we get from the hospitals, I may report further on that.
Shane Ross (Dublin South, Independent)
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May I ask a follow-up question, because I have to go? It seems obvious to me that knowledge of this was widespread and that we have been led on a wild goose chase about this by the Department and the HSE. I accept that the files might support their case, but files do not tell the full story. Can Dr. McLoughlin tell me if the Minister was informed and kept up to date with what was happening here?
Shane Ross (Dublin South, Independent)
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I know that Dr. McLoughlin only came in in 2012. Was the Minister kept up to date on these top-ups before that?
Dr. Ambrose McLoughlin:
I want to be clear about this, Chairman. A Department of State can only deal with fact. It cannot deal with supposition or hearsay. There is a letter from Mr. Seán McGrath, the national director of human resources, to Mr. Michael Scanlon, which I am quite happy to circulate to the committee. It clearly deals with adherence to consolidated health sector salary scales. We have to deal with fact. I want to be clear also because comments were made by the Deputy. I want to assure the charitable organisations, and the people who are collecting money for them across this State, that the Minister, myself and the HSE's director general are determined to give them the best guarantee possible by following through on these investigations. I want to be clear, however, that there is no evidence that anything other than a very small number of people are non-compliant. It is important for us to reiterate the fact that 99.9% of public servants are compliant with public sector pay guidelines.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I have to interrupt Dr. McLoughlin. There are 44 agencies, eight of which are compliant. Twelve are non-compliant and 22 say that in their view they are compliant, but Dr. McLoughlin questioned that. There are two others somewhere in the mix, to make up the sum total, but whether they are compliant I do not know. That is a significant number of non-compliant organisations. I understand the assurance Dr. McLoughlin is giving the public as regards the charities, but it is clear to me that down through the years everyone in the system knew what was going on or what was emerging, yet no one dealt with it. The CRC correspondence clearly demonstrates that. If the CRC and other organisations are wrong or not compliant, I have to deal with the current entities. The HSE simply was not compliant. It did not do its job and did not follow up the €2.2 billion of taxpayers' money that is going to these 44 agencies. It is just outrageous that that would have happened. The CRC decided that it was going to question this and the Department entered into correspondence on it.
It would seem there was no willingness on the part of the HSE or the Department of Health to do this. Dr. Ambrose McLoughlin defends the current Minister and current departmental officials. That is not why he is here. He is here because of what happened from 1996 onwards. I know neither Dr. Ambrose McLoughlin nor Mr. Barry O’Brien were in their current positions then but we have to account for it. We have to put in place a system that will account for the taxpayers’ money.
From the time this matter with the Central Remedial Clinic, CRC, was highlighted in 2009, nothing was done until now. There may have been a bit of activity but no action was taken to bring these agencies into line. Now, we are faced with the consequences because there are surely contractual arrangements thrown into the mix. Everyone in the system involved in this is wrong. They did not deal with it or sort it out. They did not examine the audits as they should have. Instead, they allowed the agencies more or less tell them what to do.
The next big question relates to agencies under section 39. It is shocking that the Department of Finance did not know what was going on in these organisations. There should have been some sort of paper trail which would have allowed all these issues to be corrected. If there are governance issues with the CRC and St. Vincent’s, then there are certainly governance issues with the HSE and the Department of Health.
Was any submission on the 2009 charities legislation made by the Department of Health to the Department of Justice and Equality? Was there any call that there should be a regulator for the sector?
2:35 pm
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Okay. Regarding the establishment of hospital trusts, is the west-northwest trust the pilot model?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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To which agency are they accountable when it comes to their audits?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Accordingly, they fall under the committee’s remit. Was the post for chief executive officer of the west-northwest hospital group advertised?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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There was no interview process, however.
Dr. Ambrose McLoughlin:
There were certain circumstances in respect of that hospital group that had arisen which required an appointment of a chief executive officer to deal with those issues immediately. A person was sourced to do that by the HSE.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Was Dr. Ambrose McLoughlin appointed after an interview?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Was Mr. Tony O’Brien’s appointment the same?
Dr. Ambrose McLoughlin:
Mr. Tony O’Brien was appointed directly by the Minister as is provided for in the legislation establishing the directorate. In the case of new organisations, it tends to be the case that the Minister has the prerogative to make the first appointment and, thereafter, they go through the Public Appointments Service.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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How will the board of directors for the hospital group in question be appointed?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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How was it appointed?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Are they HSE employees?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Is Dr. Ambrose McLoughlin satisfied that public pay, procurement and promotion policies are being followed there?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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We know that. We have seen what people think of Mr. O’Brien’s letters. Many of them have not responded to them. Is that hospital group compliant with all HSE circulars?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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That is not the question. For years, non-compliance in the section 38 agencies was not brought to Mr. O’Brien’s attention. Is Mr. O’Brien happy with the governance in this hospital group? Are procurement policies for IT and so forth followed to the letter?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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At the last meeting, I asked about the use of hotels by the hospital group but no one knew about it. Are hotels used to accommodate staff or one member of staff of the group? Will Mr. O’Brien check that for me as well?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The reason I raised this is because, unfortunately, Mr. O’Brien used the phrase a nod and a wink regarding section 38 agencies. There is still a lot of nodding and winking going on.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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This poor governance went on right across different Departments and agencies. People want that culture to be changed. I am not referring to individuals but that the culture needs to be changed.
Ms Frances Spillane:
I would like to clarify my earlier reference, in response to Deputy Ross, to the parliamentary question in 1996. That referred to private sources of funding. The position was that it was seen as a matter for those bodies at that time. It was not about taxpayers’ money but income from private sources.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Will Ms Frances Spillane give a copy of it to the committee?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Has St. Vincent’s come back on its compliance issues yet?
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I am waiting for the response and I would like to see it today. The committee will be here again tomorrow to consider this response. I thank the witnesses for attending the committee. I appreciate it has been a long day but they have been very helpful. I hope we will not see Mr. Barry O’Brien again before Christmas.
John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I wish the delegations a Happy Christmas and thank them for their co-operation. I also thank the press and the members.