Mr. Brian Conlan:

I thank the Chairman. I would like to apologise that elements of my opening statement were in the media this morning but it had nothing to do with me.

This is my statement. Chairman, Deputies, ladies and gentlemen, I thank the PAC for this opportunity to make a statement regarding recent events at the CRC and my role in those events. My primary intention today is to give a full account to the committee pertaining to my role and knowledge of the CRC and to provide any information I can to assist the committee in its work. First, I want to say that I recognise the importance of the committee's work in this regard on several levels, not least in its role of flushing out the ambiguities that exist around how public moneys, no matter where they are sourced, are used by section 38 agencies. Everything should be clear and transparent to all stakeholders in charities but in terms of the CRC, that has not been clear or transparent enough prior to the committee undertaking its work.

Given the public access to this committee through the media and without seeking to justify for a moment the apportionment of moneys, which is not my aim, I respectfully ask that everyone with an interest in the continuation of the CRC's good work take into consideration a few facts. First, the importance and excellence of the CRC's service to its clients is not being questioned and that vital work depends on public support. Second, the percentage of the overall CRC budget that is under scrutiny with regard to additional salary payments is less than 1%. Third, the practice of paying allowances is being phased out. The salary for the office of chief executive has been pegged back to the HSE pay scale for the first time ever. This will give the next chief executive of the CRC a strong base from which to address the five remaining allowances. Fourth, a new board and chief executive will be able to start with a clean slate, with greater transparency and will be able to seek the public's continued vital support for its work. Finally, in this regard, I wish to address the public perception that has developed that charitable donations were siphoned off specifically to pay salary allowances. That was never my understanding of how funds were managed. The CRC pools all of its revenue from many sources each year into one fund and applies them jointly to the central overheads which include some salary allowances. Of course, all moneys received by the CRC are public moneys of one form or another and there is no support for salary payments in excess of HSE pay scales. The idea that there was a transfer of moneys from public donations directly to into the salaries of a number of executives is inaccurate in itself.

The second point I want to address relates to my appearance at this committee. When I was first asked to appear on 11 December 2013, I was not in a position to be an effective witness. I had just returned from my honeymoon in the United States, where I was for three weeks and where I first learned of the questions being asked. As the committee can appreciate, I was highly stressed by all that had transpired, particularly by the tone and volume of the media coverage. I had just tendered my resignation from the CRC and because of this, I was told that I had no access to my files in the CRC. In addition, prior to the PAC meeting that week, my home was besieged for days by journalists, forcing my wife and I to leave for several days in order to maintain some level of privacy. I did not have the time or the resources to prepare adequately for such an appearance and to be an effective witness. When these circumstances changed, I was happy to accept the invitation and I want to assure the PAC that no disrespect was intended by my failure to attend.

A number of issues have arisen which I would like to address, the first being the manner of my appointment. I was not responsible for my own appointment; nor was I responsible for setting the salary I was offered. When the position of CEO became available in the CRC in April 2013, having worked as CEO in the matter for eight years until December 2012 and having also served on the board of the CRC for eight years, I felt very qualified to apply. I inquired of the then chairman whether, as a member of the board, I could apply as an internal candidate. When he indicated that I could, I formally removed myself from any involvement in the discussion on the recruitment process and formally applied for the position to Amrop Strategis, the external consultancy appointed to manage the process. Please note that I would have done this regardless of whether the search was taking place on an internal or external basis. I then attended an interview co-ordinated by Amrop Strategis and three members of the CRC board and was subsequently offered the position with a salary of €125,000. I found out later that there were three other internal candidates interviewed for the position.

On my appointment, I became aware of the HSE issues with the salary my position had been awarded and I set about establishing a salary scale for the job. The salary was 48% lower than that of my predecessor and approximately €15,000 higher than that of the line managers who report to the CEO's office. A salary range was eventually agreed with the HSE of group 1 chief executives on a scale of €82,000 to €98,000. My own salary was reduced to reflect this. As the salary awarded had been greater than the HSE-approved figure, I have since returned any excess. When I took over as CEO of the CRC, five members of the senior staff were on salaries in excess of the HSE-approved levels and were in receipt of what are now called top-up payments. While I totally understand the confusion that these payments have caused in the public domain, I would like to provide some context for their payment. Top-up payments or allowances were ordinarily used when the amount received from the HSE would not cover the full cost of a salary. They were also used in consideration of people taking on extra duties and responsibilities. In respect of the CRC, it is my understanding that these payments were made with the full knowledge of the HSE, arising from discussions between the executive and the chair of the board in 2009. It was also agreed with the HSE that this practice would be phased out and that all salaries would become compliant over time.

In July 2013 when I took up the position of CEO, allowances in the CRC amounted to a total of approximately €125,000 annually. I was not happy with this and resolved to end the practice as soon as practicable. As some of the recipients were coming close to retirement, I decided to do this on a phased basis. I firmly believed that with time and a pragmatic approach from all involved, this matter could be resolved. I also instructed that all future recruitment would be done in a HSE-compliant fashion.

Questions have also been raised in this chamber and in the media about the sale of CRC Medical Devices which I would like to address. CRC Medical Devices was set up in 2007 with the intention of raising extra moneys to support and develop CRC activities. A loan of €550,000 from the Friends and Supporters of the Central Remedial Clinic Limited was approved for this venture. The business was importing and customising wheelchairs for individual users and was moderately successful initially. However, due to the decline in the economy and the resulting pressure on prices and margins, the company struggled in subsequent years. By December 2012 the accumulated losses were €462,000. On being appointed CEO of the CRC, my first priority was to sort this matter out. I set about exploring options, including closing the business or selling it. I decided on the latter and three companies expressed an interest in purchasing the business. One of these companies, MMS Medical Limited, signed the sale agreement to procure the goodwill, assets and stock last November for approximately €410,000, which could rise to €510,000, which will, over time, be paid back to the Friends and Supporters of the Central Remedial Clinic Limited. This agreement also had the added advantage of protecting the jobs of the employees of CRC Medical Devices. While I fully recognise that it does not fully cover the full cost of the investment, I believe it is the best deal that we could have completed, given the time scale and the losses being incurred.

I have worked in medical administration for over 20 years. During that time I was CEO in the Mater Hospital for eight years, Deputy CEO for five years and finance director for seven years. During my time in the Mater I was responsible for 3,000 staff and budgets ranging from €200 million to €250 million per annum. I also played a significant role in the new Mater Hospital development programme, a €300 million project which was brought in on time and on budget. I was intrinsically involved with the medical specialists in bringing in the lung transplant programme to the Mater Hospital. I have served on many boards in a voluntary capacity. I have always acted in a professional and honest way. Recent events and the way they have been reported have upset me greatly, not just the way in which my reputation was sullied without basis, but also the way in which the whole CRC organisation has been cast under a shadow.

I am well aware of the great work it does every day. I am saddened by the effect these events are having on its ability to raise much-needed funds for the good work it does. As I said at the outset, I was in the US when these events began to unfold. Due to the scale and nature of the coverage and commentary on the matter, I felt the CRC was being damaged and wholesale change was needed at the top of the organisation so that the public can engage with and trust it again. It was for that reason that I felt the appropriate thing for me to do was to tender my resignation, thereby giving the CRC a chance to win back the public's trust, which is so vital to its ability to raise funds and secure its annual operations and future enhancements.

As regards non-compliance on salaries, I have played a part in establishing a precedent whereby the remuneration of chief executives of the CRC will be set in compliance with the HSE for the first time in the history of the CRC. In time, this will be a key factor in securing the adjustment of the remaining salaries that exceed the pay scales. This should position the CRC to be in full compliance with the HSE. It should form the basis for full transparency to all of the CRC's stakeholders in the future. I hope these adjustments and changes will allow people to see their way to continuing their much-needed support for an organisation that has made a telling contribution to its clients, their families and the wider community since its establishment in 1960. That concludes my statement. I thank the committee for its forbearance.