Staff and pay rises funded by €151m-a-year State aid …and still charity shuts it’s support for needy families
By Michael O’Farrell – Investigations Editor
SALARIES for staff and senior managers at the St John of God’s community services division rose by €7m – with 78 new employees retained – when the charity was facing a survival-threatening cash crisis, the latest figures reveal.
Details of the increased salary and recruitment activity come as St John of God Community Services Ltd announced this week that it will stop providing HSE-funded services to more than 8,000 people.
The announcement was made in a letter to the charity’s 3,000 staff on Wednesday by CEO of Community Services Clare Dempsey – who shared a salary bonanza of €4.1m to senior managers in 2018, according to newly published accounts.
Ms Dempsey was also among 14 senior managers who shared in a controversial, secret €2m top-up scheme in 2013. Her top-up amounted to more than €59,000.
The €4.1m represents a €110,000 increase on the year before.
A spokesman said it related to pay restoration, national wage agreements and new posts being filled.
The accounts also show a significant rise in senior staff costs, with those earning more than €60,000 jumping from 264 to 335, an increase of 71 staff or 27%.
A spokesman said these new employees were needed for new services being developed and improved governance and management structures.
Meanwhile, there was a fall in the numbers attending many services provided by the community services division, though attendances at outpatients rose significantly.
A spokesman said some reductions were in response to changes in models of service while a surge in demand for mental health services was responsible for the rise in outpatient numbers.
Employees on more than €200,000 also rose from three to seven while the highest paid employee received between €240,000 and €249,000. These are clinical directors and consultant staff.
Eleven senior employees at the community services division are paid as much, or more than, the €186,831 currently received by the Taoiseach – though these wages are in line with HSE pay scales.
At the other end of the scale, community services also had the services of 241 volunteers who give their time for free.
The latest accounts, which were significantly overdue, were belatedly approved by St John of God in July and have now been filed with the Company Registrations Office.
Announcing the charity’s decision to cease providing HSE services, Ms Dempsey said it ‘simply could not continue’ in the wake of a ‘funding crisis that has prevailed for over a decade’.
But according to the latest accounts, the HSE increased funding by €5.5m in 2017 and a further €11m in 2018, bringing the health executive’s annual allocation to more than €151m.
The HSE also provided emergency advances this year in the form of cash accelerations of €6.5m, €5.5m and €0.9m in March, April and July respectively.
A spokesman told the MoS that this funding was not enough and added that it is the ‘duty of the State to fully fund the provision of services for people with intellectual disability and mental illness’.
According to the accounts, the community services division expected to exhaust all of its HSE funds and its bank overdrafts by the end of this month – and needed another €21m to get to the end of the year.
Blaming the closure on the HSE’s failure to commit to further increased resources, Ms Dempsey said the St John of God Order had contributed €16m in recent years. She said the order did not have the resources to provide any further funding.
However, an analysis of its finances shows that they are more than healthy. On December 31, 2018 the order transferred property worth more than €61m into a new holding company called the St John of God Hospitaller Services Group.
This property portfolio was transferred for a nominal sum of €20.
The new holding company also receives donated income from the order’s fundraising company – The St John of God Foundation Ltd.
The foundation raised €5.8m in charitable fundraising in 2018 – and paid just under €4m of this to the order that year. The previous year the foundation raised €4.2m and paid most of it to the order.
As a result of these property assets and other income the new St John of God holding company states in its accounts that it has ‘adequate resources to continue in operational existence for the foreseeable future.’
That’s not something that can be said for the order’s HSE-funded community services division which St John of God is now walking away from.
The decision to exit community services follows a series of governance scandals that emerged through investigations by this newspaper, beginning in the summer of 2016.
Our investigations exposed the numerous governance failures including how senior managers – including Clare Dempsey – shared the secret top-up bonanza that the order had covered up and lied to the HSE about.
This controversy saw a number of top executives depart including CEO John Pepper, who had received a secret €2m top-up at a time when the charity was struggling financially and services were being cut.
Before that point, the order had actively channelled substantial amounts of its income into its community services division.
For example, it contributed €4m in 2015 and a further €5m in 2016.
However, in the wake of the scandals – and a damning HSE audit – relations appear to have soured considerably between the HSE and St John o fGod.
In particular the health executive has accused the order of a ‘lack of candour’ represented by years of non-disclosure.
The audit demanded that St John of God repay the funds spent on unauthorised top-ups – something that has not happened.
Last night, a spokesman said the order would repay the funds ‘when the HSE provides the full cost funding required to provide services as set out in the Service Arrangements’.
The audit criticism coincided with the order scaling back its contributions to the State-funded community services division. For example the order contributed just €73,000 in 2018 and €52,000 in 2017 despite the significant assets and funds it continues to control.
To put that in context, the community services division spent more than that on PR in this period.
Responding to the order’s decision to effectively halt funding since 2016 a spokesman said the issue was supposed to have been addressed within the context of a stalled ‘sustainability plan being developed with the HSE’. The spokesman added that the order had committed the proceeds of one property sale towards day services.
Meanwhile, the State-funded community services operation is paying millions to the order’s profit making, private hospital in Stillorgan.
The hospital is separate to the community services division and is not affected by the closure announcement. According to the hospital’s accounts, more than €6m annually from the HSE funds allocated to community services operation is then spent on ‘beds and related medical costs’ provided by the order’s hospital.
In a further boost to the St John of God finances, the hospital pays rent, amounting to €1.3m annually back to the order for the use of its main building on the order’s grounds in Stillorgan, southCo.Dublin
A spokesman last night acknowledged previous governance scandals, saying they were now ‘issues of the past.’
‘New governance structures are in place and the board is committed to the highest standards of corporate governance,’ the spokesman said.
‘The issue at hand is an issue of the systemic underfunding of services. This is a sector-wide issue,’ he added.
TIMELINE: FROM HSE REBUKE TO DISCONTINUED SERVICES
SEPTEMBER 2013 The HSE issues a circular banning publicly funded agencies like St John of God from topping up wages.
NOVEMBER 2013 14 senior managers are secretly paid additional salaries and top-ups at a cost of more than €2m. The payments are not disclosed in any public accounts or declared to the HSE.
2013-2016 In order to get its allocations from the HSE, St John of God signs inaccurate compliance statements saying the group is in compliance with HSE pay rules.
JULY 2016 With the help of a whistleblower, the Irish Mail on Sunday reveals the 2013 top-ups. The HSE launches an investigation.
JULY 2017 A scathing HSE audit accuses St John of God of a lack of candour and outlines many instances of poor financial governance and pay irregularities.
2017-2019 The HSE forces St John of God to improve governance structures. St John of God virtually ceases its own financial contributions to community services.
MARCH 2020 St John of God threatens to withdraw from providing services to the HSE if more funding is not provided.
SEPTEMBER 2020 St John of God serves notice that it will discontinue its HSE services ‘due to a protracted and unresolved systemic underfunding crisis that had undermined the organisation for over a decade.’
