John of God paid millions of euro in secret top-ups to its senior staff
Audit confirms Irish Mail on Sunday exposés
THE John of God charity was making secret salary top-ups of tens of thousands of euro to senior staff, a HSE audit has found.
The revelations about the charity, which receives hundreds of millions from the taxpayer, came in a series of exposés by our sister paper, the Irish Mail on Sunday.
The MoS revealed last year that the charity had made millions of euros in secret payments to managers, in an apparent attempt to circumvent strict HSE guidelines on how much State-funded health agencies can pay.
And yesterday a HSE investigation prompted by those revelations found that 14 senior staff had benefited from the secret top-ups, some of which were worth up to €107,000 per annum.
The audit’s author, Dr Geraldine Smith, said the clandestine arrangement dated back 30 years, at the charity which provides services to over 8,000 children and adults with intellectual disabilities and mental health problems.
A St John of God spokesman insisted yesterday that the order had been ‘acting in good faith’ and claimed it did not try to mislead Dr Smith’s investigation. However, she said she did not accept the Catholic charity’s claims.
She told RTÉ’s News At One yesterday: ‘The findings of this audit are quite shocking and I think they would be shocking to the public. Essentially, the audit identified significant payments of additional salary to 14 senior managers within St John of God’s and those additional payments ranged from €23,000 per annum up to €107,000 per annum. The audit identified that these payments actually went back as far as 1986, when St John of God’s, at least at that stage, put in a process of dual contracts for senior managers.’
‘Essentially, what the order shows is a complete lack of candour and I have been quite explicit in stating that throughout the report,’ she added.
‘Their were many, many opportunities for St John of God to declare this (the private payments) to the HSE and it only came about because there was a whistleblower, who in June 2016, notified the Mail on Sunday.’
Dr Smith also revealed how the charity rejected an opportunity from the HSE to come clean four years ago. In November 2013 the St John of God group’s CEO, John Pepper, signed a document claiming the organisation was in full compliance of public sector guidelines. The HSE had asked all State-funded health agencies, known as Section 38 agencies, to disclose all private payments to staff seven months earlier.
Dr Smith said: ‘In March 2013, the HSE internal audit carried a review of Section 38 agencies and the additional payments they were paying then. And that audit was also quite shocking in the extent of private payments being paid to senior managers of publicsector organisations or healthfunded bodies. It was a very valid and strong attempt to actually deal with the issue, and key to this was that the organisations had to declare to the HSE the extent of these overpayments.‘
When asked if St John of God was ‘straight’ with the HSE request, she replied; ‘In a word, no.’ Last July, the MoS revealed that four of the 14 St John of God executives who had benefited from secret salary payments included Mr Pepper, finance director Annamarie McGill, regional director Clare Dempsey and procurement director Jane McEvoy. The HSE was never informed of these payments.
On foot of the revelations, Dr Smith has found evidence of secret payments totalling €6.24million, which included pension top-ups to four senior managers worth €3.586 million. She also found the four received salary hikes worth €277,152 in total, while private salary payments to 14 senior staff amounted to €528,755.
In 2013, when the HSE began cracking down on the practice, St John of God appears to have arranged secret top-ups for staff.
As a result, Mr Pepper, whose pay had been €256,665, received €649,371 to compensate for the reduction of his salary by €107,000. The payment was intended to compensate him for the loss of salary he would face until his retirement. Mr Pepper has been on sick leave since late last year.
Dr Smith found 139 instances where the charity failed to comply with public-sector pay policy.
She said the payments were made when the Vatican instructed St John of God to deal with any outstanding liabilities after it became directly accountable to Rome in 2012. ‘The Vatican wanted to be sure that no liability transferred to the new organisation,’ her draft report stated.
Last night, a St John of God spokesman accepted Dr Smith’s preliminary findings made for grim reading and apologised ‘unreservedly’ for distress they have caused people in its care.
He said: ‘We do acknowledge, based on the draft review, that the HSE will take a very critical view of the payments to managers in 2013 and other non-compliances with public pay policy.
‘While we accept that is the view of the HSE and fully appreciate at a time of austerity, the negative perceptions arising out of such payments, we reiterate the payments were made in good faith following independent professional advice to discharge a possible future pension liability.
‘We do not believe that we have deliberately misled the HSE at any point.’
‘It shows a complete lack of candour’ ‘Shocking to the public’
THE revelations of unsanctioned salary and pension top-ups at St John of God have shocked many. It is critical that the public has full confidence in the transparency and probity of our charity sector.
We should note, though, that these revelations came to light only because of the brilliant investigative work of our sister paper, The Irish Mail on Sunday. Such public interest journalism is expensive, and the work that goes into it often unglamorous – but we must all support it. It does the State a great service.