A €3 MILLION loan from the fundraising arm of a charity that was used to pay pension top-ups to senior staff will be written off.
Friends and Supporters of the Central Remedial Clinic (F&S) have agreed to a write-off of a €3m loan it paid to the Central Remedial Clinic (CRC) in 2012 in order to fund the charity’s pension liabilities.
The CRC was the focus of controversy in 2013 when it emerged that donations paid to the charity were being used to fund pension top-ups for certain staff.
In a statement released yesterday following an RTÉ News report, the clinic stated that it did not have the means to repay the loan:
As a charity the CRC does not have the means to repay a loan to Friends and Supporters Ltd and cannot undo the actions of previous years, leaving no alternative but to make this request.”
Controversy
The CRC was the focus of a series of Public Accounts Committee hearings in 2014.
During the hearings, it emerged that charitable donations were being used to fund the pension of former CEO Paul Kiely, who retired in 2013.
An Interim Administrator was appointed by the HSE (who are the principal state-funders to the CRC) and their 2014 report mentioned the existence of the €3 million loan.
The report also revealed that Kiely was paid a €741,025 pension upon leaving the organisation.
In a 2014 letter from the Director General of the HSE to the Chairman of the PAC, it was stated that part of the loan was to ensure that Kiely’s retirement benefits wouldn’t be less than if he had remained as CEO at the charity until November 2016.
“It appears the payments to Mr Kiely could have not been made by the CRC without funds received from the Friends and Supporters of CRC,” the letter reads.
Wind down
The Interim Administrator’s report recommended that the F&S fundraising wing be wound up as soon as possible, as it had only existed to “maximise the HSE funding of CRC services”.
The report states that if the HSE had been aware of the amount of funds the charity had available, it would have reduced the amount of money it was giving to the organisation.
In its statement, the CRC said that all remaining assets (€13m) of F&S are due to be transferred to the CRC this year, and that all money received by the fundraising wing since September 2014 has gone directly to support the delivery of services.
The long-term pension liability of the CRC is €9.2m, and the charity says that none of this will be paid by funds under control of the directors:
The Directors of the CRC… intend that no funds under their control will be spent in relation to pension liabilities, and indeed that funds received from public and private support should be used to further the well-being and health of people with disabilities.”
The CRC received over €16m in State funding last year, with the majority coming from the HSE.
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