Credit cards used by the former chief executive and former finance chief at a HSE-funded charity for deaf people were used to pay for a €155 bottle of whiskey, gift vouchers, trips to a greyhound stadium and vouchers for a Michelin-starred restaurant.
A former financial officer for the Catholic Institute for Deaf People was also paid more than €83,000 in untaxed bonus payments into an account he himself designated as his own "private pension account".
The information is revealed in a HSE internal audit into the finances CIDP a voluntary, not-for-profit organisation providing enabling services to the deaf community. It provides HSE disability services at St Joseph’s Residence for Deaf Boys in Cabra, St Mary’s Residence for Deaf Girls in Cabra and St Joseph’s House for Adult Deaf and Deaf Blind People in Stillorgan.
The audit dated December 22nd, 2016 found there were also inadequate controls over credit cards and their use, that gifts were given to staff members, alcohol was purchased with meals and tips were paid.
There was also a “high level of dependency on consultants”, with over €400,000 paid out in 2015 alone.
The former head of finance received a total of €83,100, being €53,100 in additional salary and €30,000 in performance bonuses in relation to his role in the NDVSLC Ltd, the National Deaf Village Sports and Leisure Company Ltd.
Internal auditors said the finance head, who had “a significant amount of control” and was the highest paid member of staff, had an annual salary of €92,000 where the salary scale for his grade was €79,481.
A letter found by the auditors indicated his salary increased to €114,200 in 2013. He chose to take the increase as bonus payments, paid directly by CIDP into a bank account which he had designated as his private pension account.
The amounts were not processed through payroll, were not taxed or subject to statutory levies and, accordingly, did not appear on his P60, the auditors said. The auditors said they encountered “difficulties” in determining the extent of the head of finance’s remuneration package due to inadequate records and the fact that the bonuses and salary increases were paid directly into his personal pension account at his request and were called employer contributions.
The internal auditors said the categorisation of increases in salary as and bonus payments as employer pension contributions resulted in an understatement of the true remuneration level paid to the head of finance. His total salary in 2015, taking into account the bonus payments, was €154,380 and his remuneration between 2012 and 2015 amounted to €525,430.
Auditors found that the salaries of the now former chief executive and former chief operating officer/head of finance were both more than €12,000 in excess of normal pay scales for their grade.
The former CEO was paid an annual salary of €123,000, well in excess of the HSE management scale of €110,183 for that grade.
Two credit cards used by the former chief executive and former head of finance were examined and it was found they had total spending of €102,333.86 in 2014 and 2015, but that credit card statements were not checked, authorised or approved.
The credit card for the chief executive who resigned on September 30th 2015 was still in operation in March 2016 at the time of the audit. Auditors said expenditure on that card for the last two months of 2015 totalled €2,275.71 and was used “mainly to pay for items online”.
In October 2015, €1,639.60 expenditure was incurred on the former CEO’s credit card in relation to his departure from CIDP. The spending included a €199 watch bought in Field’s Jewellers, €155 for one bottle of Midleton whiskey and a meal in the 101 Talbot restaurant in Dublin for €1,285.60.
The auditors said there was “no evidence” of board approval for the transactions. In addition, credit card receipts were missing in respect of transactions on the credit cards of both the former CEO and head of finance.
From an examination of the former chief executive’s available receipts for 2014 and 2015, €381 was spent on tips and €1,222 was spent on alcohol. Some €1,080 was spent on gift vouchers for Chapter One, a Michelin starred restaurant.
The former chief executive said the Chapter One vouchers were for retiring board directors as a thank you for their six years of service. Two motor tax transactions for a total of €2,520 also appeared on the former CEO’s card but no backup documentation was available to support them.
The former finance head’s credit card showed three transactions for the Shelbourne greyhound track in November 2014, totalling €1,100. A receipt for a staff Christmas party included €500 for alcohol. The card used by the former head of finance was also used to buy tickets for the Bord Gais Energy Theatre totalling €6,662 in 2014 and 2015.
Credit card details along with the CVV code were given to staff members over the phone, the auditors found. But a list of the staff members using the cards assigned to the CEO and finance head was not available.
The audit also found CIDP had 56 mobile phones in December 2015, with a total bill of €1,340. Of these, 17 had not been used and it was unclear to whom many of the phones had been assigned.
Five phones had a note in the records as being assigned to ‘pool use’, two were recorded as ‘spare’, one was recorded under the name ‘Sunflower’ and another recorded as ‘Wild Chicks’, the auditors found. Another phone was assigned to a private consultancy firm run by the head of finance.
The internal auditors said the organisation “did not have regard to public sector pay policy” and the controls in its financial environment from 2012 to 2015 were “seriously deficient”.
The auditors recommended that CIDP should make a voluntary disclosre to the Revenue Commissioners in relation to the non-taxing of bonus payments. The organisation agreed to do so.
They also said all bonus payments made to the chief operating officer/head of finance should be examined and that it should seek to recoup any overpayments from the beneficiary. The CIDP said this would be pursued but it would require “past employee engagement” with the organisation.
The organisation was established as the Catholic Institute for the Deaf, a charitable institution, in 1845, and changed its name in 2007.
HSE funding to the organisation from 2012 to 2015 was over €17.8 million and accounts for nearly 90 per cent of its funding.
Chair of CIDP Geraldine Tallon, who joined in April 2016 with what she said was “a clear mandate to overhaul the governance arrangements” said she fully accepted the findings.
The audit period had covered a period of “significant change” within CIDP, as it facilitated a major re-development of its Cabra property.
“This audit highlights serious governance and financial control deficiencies in the organisation for the period under review. All of us in CIDP are bitterly disappointed by the findings but all issues identified have been addressed and will not recur,” Ms Tallon said.
It had given the highest priority to addressing the issues identified and had made many changes at all levels of the orgaisation.
Pay at top management level had been reduced and wide use of company credit cards and the purchase of gifts for those retiring from the organisation had ceased.
“In conjunction with our current chief executive, appointed at the end of 2015 – I am making a firm commitment to all our stakeholders and staff that the practices raised by the HSE do not form part of CIDP today and have no place in our future,” Ms Tallon said.