His comments came as Public Accounts Committee member and Labour TD Robert Dowds, who once worked at the Central Remedial Clinic, made an emotional television appeal for Mr Kiely to hand the money back.
“I would say to Paul Kiely across the airwaves, give back the money now and help us to get out of the real hole that the CRC and charitable sector find themselves in,” he said on RTÉ.
Earlier Mr Reilly said people were rightly shocked and dismayed by the secret payment but he expressed his support for staff at the Central Remedial Clinic saying people should not lose faith in handing over charitable donations.
Mr Reilly did not rule out a suggestion by Fianna Fáil leader Micheál Martin that the State should take direct control of the CRC in order to protect services and restore public confidence in the facility.
Mr Martin said the revelations that the CRC board spent half of a year’s voluntary donations to personally enrich a colleague demonstrated “a catastrophic failure of basic moral judgment” and raised fundamental questions about the sustainability of the current governance model.
He said the Government should take direct control to make it clear to people that abuses being uncovered cannot be repeated.
He said otherwise there was a “grave risk” of an incremental decline in momentum behind CRC activities, and with morale being sapped from the staff the CRC could end up being “a rudderless type of organisation for a prolonged period of time.”
Tánaiste Eamon Gilmore said he was “shocked” by the revelations and expressed the Government’s determination to “weed out” the practices.
“We are determined to put an end to the practices of the past and these gilded arrangements that have no place in post-recession Ireland,” he said.