Yes, thank you, Chairman. I joined the board of the CRC in 2007. My work on the board is completely voluntary. I receive no remuneration at all. Neither would I seek remuneration. That is the same right across the board. Our work is totally voluntary.
In 2007 a meeting was arranged with the HSE. I attended the meeting on 25 June, along with Des Peelo. The issue being discussed was the salaries of executives of the CRC.
At that time I think what had happened was that the HSE had fixed a particular figure that it considered appropriate remuneration for the executives or people working in the sector. Mr. Peelo, in particular, pointed out that we had a number of executives, I think about nine in total at the time, who had legacy contracts with us - I suppose is the best way of describing them. We were bound by these contracts. We are a private company and we are subject to those such agreements. We explained our particular problem to the members of the HSE at that meeting. Arising from that, I understood when we left the meeting that the HSE acknowledged our position and understood the difficulty we had and that it would have to be worked out. Some of those executives were due to retire within a shortish period thereafter and some others are still there. We explained at the committee meeting that as each of those positions came to be filled they would be filled in accordance with the appropriate HSE rate, which was obviously less than what was being paid to those executives at that time, that we would work that through and that the natural effluxion of time would probably resolve a number of those issues. My understanding was that this was acceptable to the HSE when we left that meeting. At that time, while we had told the HSE the company's position, nevertheless we had to get the agreement of our board for this to be done. We pointed out that we would have to make up the shortfall on these particular salaries. The HSE, to my understanding, agreed with that position. Subsequent to that, we had a board meeting. The board does not meet every month because it is a voluntary board and we meet as an overseeing board. We met, I think, in or around November subsequent to that. Des Peelo wrote a letter which was discussed by the board before it was sent to the HSE. I have a copy here which I will read if the committee does not have the letter. On 17 November 2009 Des Peelo wrote:
Ms Laverne McGuinness
National Director
Primary, Community and Continuing Care
Health Services Executive
Room 138
Dr. Steeven's Hospital
Dublin 8
Remuneration of Senior Staff at the Central Remedial Clinic
Dear Laverne,
Thank you for your letter 7 Jul '09 and I also refer to our meeting on 25 June '09. [That is the meeting to which I referred].
Apologies for the delay in response. The Governors' meeting re approving the response set out below did not in fact take place until 9 Nov. '09. On behalf of the Governors I now confirm the following outcome to the HSE:
1. We greatly appreciate the involvement of the HSE with the CRC. We have had a long and good relationship with the HSE and its predecessors. [That was my experience up to then].
2. We undertake that the CRC, as a voluntary organisation, will itself fund the excess of salaries concerned as identified by the HSE with effect from 1 Jan. '10. [That is what happened subsequently].
3. As and when the management post concerned fall to be replaced through retirement or resignation, the salary of the incoming replacement will be discussed and agreed with the HSE.
We have been very fortunate in the high calibre of management within the CRC over the years and it has always been important to us to be able to attract and hold talented and committed management.
Kind regards,
Yours sincerely
Des Peelo
Chairman
Central Remedial Clinic.
That letter was sent by us. I heard nothing about this until more recently when the issue became a public matter. I started to doubt myself as to whether in fact we had reached this agreement. I looked to see what was my best recollection, bearing in mind that this was four years ago. I saw in the HSE's own internal report, which the committee has, at page 47, a reference to "One non-acute agency informed internal audit". I will read it to the meeting. When I read it it was on all fours of my understanding of the agreement that we reached with the HSE at that meeting on 25 June 2009:
One non-acute agency informed internal audit that
Senior Management Remuneration was the subject of a comprehensive review in 2009, involving the Chairman and other Board Members of the [agency], along with HSE ND-ISD, HSE NDOF and HSE HR manager. At that time, it was agreed by the Board of Governors [we are described as a board of governors] that --- a lesser amount be charged to the HSE, and --- the balance, for employment contractual reasons, would be directly funded by [the agency], the employer. [...] It was also agreed that when the posts concerned fall to be replaced through retirement or resignation the salary of the incoming replacements will be discussed and agreed with the HSE. This agreement took effect from 1st January 2009 and continues to this day. The only change that has affected the agreed rates since then has been the salary reduction imposed on 1st January 2010.
That concurs with my memory of what we discussed at that meeting with the HSE.
