Mr. Keith Poole:

In this opening presentation I would like to pick up some of the issues that have come up since and prior to the previous meeting of the committee, particularly details of the funding that Rehab receives from the State, information regarding the Rehab Group's structure and details in relation to the statement of recommended practice for accounting and reporting by charities, commonly known as SORP, as well as our plans in this regard. I will also cover some other matters of importance to the committee.

To give the committee a full picture of the funds that Rehab receives from various Government agencies, we are circulating a schedule showing all income received from Government agencies or Departments in the past two years. In 2013, Rehab received €95 million in total. In addition to income received from services provided on behalf of the Health Service Executive and SOLAS and moneys from the Department of Justice and Equality, which amounted to €89 million, other income amounted to €5.9 million in 2013. The two most significant items included in this income were capital grants received from the Department of the Environment, Community and Local Government under the capital assistance scheme for the provision of housing for people with disabilities and funding received under the wage subsidy scheme, known as the WSS, from the Department of Social Protection. The wage subsidy scheme is a financial subsidy available to all non-public sector employers, be they in the private or not-for-profit sector, to support them to employ people with disabilities who may have a reduced level of productivity as a result of their particular disability. We currently claim this subsidy for just over 170 of our employees.

For completeness, we have shown the various allowances we receive for our clients and administer on behalf of our funders. These are not included in our income as they are effectively money in, money out. We have provided the committee with a set of Rehab's consolidated financial statements for the year ended 31 December 2012, and I will endeavour to answer any questions members may have on these today.

As Mr. Kerr indicated, the Rehab Group is a company limited by guarantee which holds a CHY number granted by the Revenue Commissioners. It is an independent charity which has to ensure its financial sustainability to continue to support the people who use its services. We acknowledge and recognise that our services are funded by the taxpayer and that brings with it both privileges and responsibilities. However, unlike other charitable organisations in our sector, referred to as section 38 organisations, our staff do not enjoy the same security of tenure or pension benefits as colleagues in the public sector. If, for some reason, we lose a contract or service provided to a State body, as we sit here today, Rehab is responsible for any closure costs, for example, lease terminations or redundancies of staff who would not be protected under TUPE legislation.

Rehab's primary objective is set out in its memorandum of association. In simple terms, there are three types of activity that Rehab undertakes both here and abroad. We provide training, education and employment services aimed at getting people into a job or progressing to further education. We provide various types of health and social care services that promote independent living and choice for our clients and their families. We also provide employment opportunities for disabled and disadvantaged people through social enterprises. To achieve this, our legal structure comprises three different types of trading subsidiaries. These are subsidiaries that undertake charitable activities; subsidiaries that undertake activities for furtherance of the group's objectives; and subsidiaries that undertake activities for generating funds. Some of our subsidiaries that undertake activities for the furtherance of the group's objectives also generate funds.

There are a number of subsidiary companies in our structure that are either holding companies or are dormant for all intents and purposes but we strive to ensure that we dissolve entities that are no longer required.

Currently, the group contains 31 legal entities; a copy of the structure of the group has been handed to the clerk. The top entity is the company, the Rehab Group. Of the 31 entities in the group, 15 are registered in Ireland, 15 in the UK and one in Saudi Arabia. Fourteen are charities which are either registered with the relevant body in the UK, through the Office of the Scottish Charities Regulator or the Charities Commission for England and Wales, or hold a CHY number here in Ireland. As soon as the new charity regulator commences her work, we will register all our Irish entities, which hold CHY numbers, as charities under the Charities Act 2009.

Rehab has now committed to adopting the statement of recommended practice, SORP, for accounting and reporting by charities. Practically, this will require some significant changes in how we prepare our financial statements and we have committed to doing this for the year ended 31 December 2014. The implementation of SORP will lead to a number of changes to Rehab's reporting both in financial terms and what we must include in our annual reports. It is important to emphasise it is not just a financial reporting standard. SORP prescribes the principles and essential elements to be included in our annual report which accompany our accounts. The annual report and the accounts, taken together, will provide a picture of what we have achieved, our outputs as well as the difference we have made - our impacts. It will also include relevant information about our subsidiaries and governance structures. It will enhance the relevance and comparability and improve people's understanding of the information presented in our accounts and in the annual report. Most importantly, it will give all our stakeholders, be they funders, service users, donors, staff, financial supporters and others, a high level of accountability and transparency. Over time, it will improve the quality of financial reporting by all Rehab entities. It will also detail the methodology employed in the allocation of shared service costs. As our 2013 accounts are almost finished and the majority of the audit work has been completed by our auditors, PricewaterhouseCoopers, it would not be possible to implement SORP for 2013.

SORP will also require us to continue to publish remuneration of all staff in excess of €65,000 in bands of €10,000. This is work that we have already begun. As others have said, we have already published details of all salaries paid to employees of the Rehab Group and its Irish divisions over €65,000, in bands of €10,000. This approach is a requirement under law for charities in the UK and is followed by a number of charities here in Ireland and recommended by umbrella bodies such as The Wheel and the Irish Charities Tax Reform Group, ICTRG, as best practice.

We understand the frustration of some Deputies who have stated that the disclosure using the SORP method for charities does not go far enough and who wish us to individually name all relevant postholders. Prior to attendance at the last meeting of the Committee of Public Accounts, the Rehab Group discussed the matter with both our legal advisers and the Data Commissioner. Both have advised us that we cannot disclose salary details in a way that would make individuals identifiable except for the express purpose for which permission has been obtained from the individuals concerned.

It is not possible to give that information to the committee because we do not have the permission of all relevant staff who receive in excess of €65,000, but the group's commitment to transparency is, I believe, real, and by committing to implement SORP, as soon as practically possible, we will automatically do so into the future.

There has been some coverage of payments to Rehab Group directors in the media. We recognise that this is a matter of concern for members of the committee and members of the public. By way of clarification, I can confirm that no remuneration has ever been paid to a director of the Rehab Group board in respect of their roles as directors. In addition, no fees are paid to directors of subsidiary boards for their roles as directors. In recent years, certain directors or their firms were paid by Rehab for the provision of services. These included quantity surveying, publications and editing.

In addition, Mr. Frank Flannery was paid professional fees for consultancy services, including lobbying, for the group and subsidiary companies. These fees were disclosed in the group's annual accounts from 2011, as Mr. Flannery was a director of the group. He commenced working as a consultant on his retirement as CEO in 2006. The annual payments to Mr. Flannery for his consultancy services have been given to the clerk.

Rehab is committed to effecting significant change in how the organisation is governed and structured. We have learned painful lessons. It is imperative that we act on these lessons. It is also imperative that the group adopts best practice to clearly demonstrate the value for money for services we provide to the State and we have a determination to do so. This determination is underpinned by the review, already mentioned, to be undertaken by Dr. Eddie Molloy. This will lead, inevitably, to significant change and will enhance performance in how Rehab is governed.