THE ALMOST seven-hour questioning of Rehab board members at the Public Accounts Committee yesterday ended in frustration.
It was “absolutely deplorable”, said PAC chairperson John McGuinness TD, that former CEOs Frank Flannery and Angela Kerins made their excuses and didn’t turn up to answer the committee’s questions about how Rehab handled its operations.
He thanked those who did turn up – Rehab Group board chairperson Brian Kerr, finance director Keith Poole, chair of the remuneration committee Declan Doyle and fellow members Hugh Governey and Liam Hogan – but many of the PAC’s questions were left hanging in the air as the members couldn’t or wouldn’t answer them.
The revelations that were made built up a picture of an organisation trying to get to grips with miscommunication, a vacuum of information and institutional inertia.
The board members present yesterday expressed hope that an internal review by Dr Eddie Molloy would provide a way out of the mess. Here are some of the issues they will need to tackle – or have said that they are:
1. Private mindset, public money
There were legal letters flying in from Angela Kerins and Frank Flannery to Rehab and PAC this week. PAC chairperson John McGuinness decided to file Flannery’s complaint of a ‘leak’ by PAC to RTÉ of a separate legal letter he sent to the committee under “nonsense“.
The letters Kerins and Flannery sent to Rehab on Wednesday evening were more serious. They prohibited the Rehab Group from revealing any further details of their financial agreements with Rehab.
The legal issue, says Rehab, is that payments to employees and contractors are subject to privacy because they are not paid from public funds.
However, Deputy Sean Fleming estimated that the Rehab Group’s activities in Ireland are actually funded to the tune of 81 per cent by the taxpayer alone.
Rehab finance director Keith Poole said:
Absolutely, your figures are correct.
That, Fleming said, means the Rehab Group is essentially a semi-State body and should be subject to similar scrutiny.
2. We still don’t know where public money went
The underlying question of how the money provided by the HSE and other State funders filters down in Rehab remains unanswered.
Mary Lou McDonald, TD, wanted to know what the breakdown of the “pot” of funding the Rehab Group receives. “We don’t have that to hand,” was the resounding answer.
The issue of who benefits from what part of the Rehab Group’s revenue and funding structure means that issues like this coffin business controversy takes on a very significant hue.
3. The board of the Rehab Group needs a shake-up
It was suggested by the members of the group yesterday that one of the “urgent” items being examined by Dr Molloy in his internal review is the make-up of the Rehab Group board.
Chairperson Brian Kerr noted plaintively yesterday that he had been on the board for 32 years. Each member said they took collective responsibility for the erosion in public trust in Rehab.
“It’s a time for radical, urgent change,” they said.
It is clear that Dr Molloy will be recommending changes to the board – and also in how nominations to the board are made in the first place.
4. Deciding who gets paid what in Rehab is a mess
We heard that the salary bill for seven out of eight of the highest-paid employees of Rehab was just under €1m last year. (You can add an extra few hundred thousand euro on that, considering earlier revelations about Angela Kerins’s salary – she is the top person in this list, and the only one of the eight who is not happy to have her exact remuneration revealed).
Bonuses of between €6,000 and €14,200 were paid to several on the executive level. Only Keith Poole and the director of Human Resources refused to take theirs.
While the board members present yesterday said that this was for working “exceptionally hard”, they were utterly unable to elaborate on how the pay scale for the rest of the 3,000 rank-and-file employees of Rehab in Ireland is structured.
When asked what the hourly rate for one of their home help workers were, none of the five members present could answer.
5. The Rehab Group hasn’t yet implemented SORP
SORP is the Statement of Recommended Practice for charities. It is seen as best practice for ethical and transparent handling of revenue in and out of registered charities’ accounts. There is a nice explanation of it here on the Carmichael Centre’s guide for voluntary groups.
It emerged yesterday that this will not be in place for last year’s accounts at Rehab – it will only be implemented for 2014.
6. It WAS possible to be a director and still on an earner with the organisation
Declan Doyle, chair of the remuneration committee, told the PAC yesterday that it is no longer possible for this to happen.
But what did happen was that Frank Flannery, pictured below, who stepped down as CEO in 2006, earned €409,000 in consultancy and lobbying fees with the Rehab Group from 2007 until 2013. When he became a director of the group in 2011, he stopped claiming through Rehab in Ireland and instead invoices were sent to a subsidiary of Rehab in the UK.
7. Some people had their defined pension schemes ‘topped up’
While refusing to elaborate on whether this happened with Angela Kerins when she made her recent exit as CEO, finance director Keith Poole said that it was the case that Rehab had paid sums into some employees’ pension scheme.
The defined pensions scheme is “almost wound up”, and Poole, to be fair, pointed out that employees of Rehab are not public servants and therefore do not have the same security and pay scale as public servants.
Other benefits open to Rehab execs included company cars and expenses accounts. The expenses had to be vouched but details on those extent of those expenses are not yet forthcoming.
8. There are lots of things Rehab execs just don’t know
Fans of the HBO series Game of Thrones could be forgiven for thinking of character Jon Snow while listening to some of the testimony from the Rehab witnesses yesterday. Here are some things they didn’t know:
Rehab chairperson Brian Kerr said yesterday of Angela Kerins and Frank Flannery at the PAC: “I would like to see them here.”
It’s not over yet.
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