Charity paid €1.6m to bosses ‘to end liability’

The €1.64m paid by a leading special needs charity to 14 senior managers, without the knowledge of the HSE, were outstanding pension liabilities and other contractual obligations.

Management at St John of God’s, which operates intellectual disability and mental health services in counties Louth, Meath, Cavan, Dublin, and Kerry, said 70% of the pay-out was to discharge pension liabilities, while the remainder was to discharge other contractual liabilities to employees.

The payments, described in the sector as “buy-out of pay” arrangements, ranged from €50,000 to €250,000 and were made in 2013.

Thirteen of the 14 employees were governed by Section 38 rules, which state that such a charity’s pay structure is bound by public policy in the area; their pension entitlements must be commensurate with the public sector.

St John of God’s, which receives around €131m from the HSE, had signed a service level agreement that it would not “subsidise” or “pay” any amount above the public sector salary scales.

Group CEO John Pepper strongly defended the one-off payments, saying they “were under no obligation to inform the HSE of the arrangements” but welcomed the review announced by the HSE.

The order’s Provincial, Br Donatus Forkan said the charity wants to be “open and transparent” about the payments which “were all above board” and made on the recommendations of their auditors, PWC.

He said: “The payments were made out of rental income that the Order owned.”

Mr Pepper said they paid the 14 staff “to forestall any risk of future liabilities”.

Fianna Fáil TD Marc McSharry called on the HSE to publish all audits of its Section 38 charities while Ivan Cooper, advocacy director of the Wheel, a charities umbrella body, told RTÉ there was no such thing as “private funds in a charity”.

“We need to move away from a culture that some funds are in some way private — all funds used should be accounted for so there’s transparency in how they are expended,” he said.

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