The Irish Wheelchair Association (IWA) should no longer offer new employees private health insurance cover for their families after an audit found seven cases where spouses and children currently enjoy such benefits.
Medical insurance benefit for senior management cost more than €103,000 from 2012 to 2014, according to an audit of the charity’s accounts by the Health Service Executive.
An internal audit found there was ambiguity over the entitlement of VHI cover for dependent spouses and children due to a lack of a statement in existing employment contracts.
The charity should clearly state all of the benefits that are to be enjoyed by employee in their contracts, the auditor said. The health cover for some families of staff has existed for for more than 10 years.
The IWA, one of the largest and most prominent charities in the State, was also found not to be fully compliant with Health Service Executive pay scales because it had delayed the implementation of a pay cut under the Haddington Road agreement.
Staff at the association only took half of the pay cut, which was effective from July 1st, 2013, in February 2014, with the remainder to be applied from January 2015.
HSE audit
The findings are published in an internal HSE audit dated August 16th, 2016, which says the association should remunerate staff in line with Haddington Road or remove the note in its financial statements stating that staff were remunerated in line with HSE pay scales. The organisation accepted this.
The charity’s former chief executive, who was on secondment from the Department of Education, was paid a gross amount of €25,935 for the compensation of the pension-related deduction taken from her pay as a result of the Financial Emergency Measures in the Public Interest (Fempi) legislation.*
According to the audit report, this was effectively a pay increase for the chief executive and an increase in the IWA’s costs. It was told it should seek advice from the department in relation to this matter and that the compensation paid to the chief executive should be recouped.
There was a risk that there were too many car allowances and fuel cards at too high a cost to the organisation, the audit also found.
IWA has four company cars assigned to four executives and a further 12 executives are in receipt of car allowances, worth a total of more than €100,000 in each of three years audited.
The association, a so-called section 39 organisation under the Health Act, had income of €52.3 million in 2014, of which €39.4 million came from the HSE.
Reputational risk
The internal auditors recommended that the accounts of the association’s 32 branches and 26 sports clubs be consolidated into the IWA accounts. Lack of direct control over the branches and sports clubs posed a “reputational risk” as they used the IWA’s name and signage and operated under its bylaws.
Auditors also told the IWA that all non-business related expenditure by the board, in particular on alcohol and gratuities, should not be expensed to the organisation. A sample of 12 board expenses for the month of December over three years found that €2,280 was spent on overnight accommodation, €1,715 on the board dinner and €1,131 on beverages, including alcohol.
Expenditure on one credit card included flowers (€1,266.66), gifts (€1,387, of which €1,207 was for board members), €604 on hotels and €149.50 on alcohol. Receipts were not available for expenditure of €1,365 in restaurants and €1,894 in hotels.
The auditors said there was “no business purpose” to this expenditure, that it increased the risk of reputational damage and took funds away from the IWA’s core activities. The association accepted the recommendation but did not accept that it was given a high ranking in importance by the auditors.
The association provides services to people with limited mobility throughout the country and has 20,000 members and 2,300 staff.
* This article was amended on July 14th to clarify that the audit was in relation to the former chief executive of the charity