Rehab confirms it is investigating alleged fraud as it awaits €500k of €2m Govt bail-out

Rehab confirms it is investigating alleged fraud as it awaits €500k of €2m Govt bail-out

Rehab has confirmed that an alleged fraud is under investigation at one of its wholly-owned subsidiaries.

A note attached to Rehab’s 2018 annual accounts states that the company concluded a preliminary investigation in 2019, which identified the alleged instance of fraud.

It said the matter has now been "disclosed to the relevant authorities".

A spokeswoman for the organisation said the alleged fraud came to its attention as a result of a protected disclosure made at a subsidiary.

They said: “As the matter is subject to an investigation at this time, no further comment can be made.”

The charity, which provides services for more than 20,000 adults and children, last year received a Government bail-out in order to deal with escalating costs across a number of areas. The accounts show that the bail-out occurred after Rehab recorded a loss of €2.79m in 2018.

The Rehab spokeswoman said €1.5m has already been received from Government and “we anticipate receiving a final €500,000 imminently”.

The spokeswoman also confirmed that the re-branding of Rehab has been paused due to the organisation’s financial circumstances.

In 2018, Rehab awarded a €30,000 to €40,000 contract for re-branding to be carried out as the group’s name “is no longer fit for purpose”.

The renaming of the organisation was to draw a line under the fall out from the controversy in which the company was mired in 2014 that culminated in the resignation of its chief executive, Angela Kerins, and a new board being appointed five months later.

The Rehab spokeswoman said the re-branding project is now at an advanced stage with much of the project work completed.

However, she said: “It was deemed prudent to put the project on hold whilst we worked to restore the financial sustainability of the organisation. The Board of Rehab will decide in due course when this project will recommence.”

The accounts show that six of Rehab’s former top earners shared €720,491 in redundancy in 2018. The redundancy payments resulted in the pay of one individual in the bracket of €230,000 to €240,000 with two earning between €190,000 to €200,000 in 2018.

A note attached to the accounts states that the annual savings to Rehab from the redundancies total €489,000.

Without the redundancy payments included, the numbers earning over €100,000 at Rehab in 2018 total 10 with the highest earner in the €140,000 to €150,000 bracket.

CEO, Mo Flynn received a salary of €140,000. Three other staff members receive remuneration between €130,000 and €140,000; three between €110,000 and €120,000 and three between €100,000 and €110,000.

The spokeswoman for Rehab said that since 2014, Rehab Group has introduced a range of cost reduction measures “in line with our Board of Directors’ mission to transform the organisation”.

She said: “This involved very significant pay cuts for continuing Senior Leadership Team (SLT) members, which saw an average base salary reduction of almost 20% and termination of any bonus arrangements."

At the end of 2018, Rehab employed 3,069 and staff costs came to €96.8m.

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