St John of God charity demands €32m from HSE as religious order halts own donations

Group stopped funding its own main charity after secret top-up payments to bosses were revealed

THE St John of God group permanently slashed funding to its main intellectual disability charity after it was caught flouting HSE pay rules to secretly top up bosses’ salaries, the Irish Mail on Sunday has learned.

And since these controversial top-ups were exposed in 2016, the group’s main charity – St John of God Community Services (SJOGCS) – has built up a substantial €32m deficit that it now wants the State to help pay for.

If the group had not ceased funding SJOGCS in this way, the size of the current deficit would likely be massively reduced – possibly by as much as €20m.

The €32m deficit has remained at the core of continuing tensions and ongoing negotiations between the HSE and St John of God for years.

On two occasions, in 2020 and again last week, these talks broke down as St John of God threatened to walk away from the publicly funded services that the HSE pays it to provide to 8,000 intellectually disabled clients.

On each occasion, St John of God criticised the HSE for failing to fund the deficit.

In a letter last week to staff, Clare Dempsey, the CEO of SJOGCS, said HSE proposals ‘fell significantly short of what is required to address the accumulated deficit’.

She added the amount the HSE was prepared to pay was not enough to ‘provide adequate funding to ensure the ongoing financial and operational sustainability of St John of God Community Services’.

However, a MoS analysis of the finances of the St John of God group and its fundraising operation shows the €5m-€6m donated by the public each year is no longer being channelled to SJOGCS, as was the case up to 2016.

Instead, the group is leaving the HSE – which now provides more than €200m annually – to fund services provided by SJOGCS.

This apparent change of policy coincides with revelations in this newspaper in 2016 of secret top-ups worth millions paid to bosses at St John of God.

In 2014, the St John of God group contributed more than €6m to SJOGCS. It granted €10m to the disability charity in 2015, and another €5m in 2016.

However, the St John of God group all but halted this funding after the HSE investigated the topup revelations and accused the group’s leaders of ‘multiple examples of lack of candour’.

The HSE’s audit into the scandal also stated that the issues involved raised ‘fundamental issues of trust between SJOG and the HSE’.

In the years since this criticism, the St John of God group’s cash funding to SJOGCS has plummeted, even though its fundraising efforts and donation income remain strong.

In 2017, for example, the group contributed just €73,000, while the HSE paid more than €145m.

The same year, the group raised €4.2m from its fundraising arm but kept this for its other activities, which include education for the intellectually disabled, a housing charity, a private hospital and operations in Malawi and the UK.

This pattern has continued to this day, with over €20m raised from the public since 2017 and less than €300,000 provided to SJOGCS.

At the same time, the St John of God group earns millions from money the HSE pays SJOGCS.

For example, SJOGCS pays the group’s profitmaking, private

‘Multiple examples of lack of candour’

hospital in Stillorgan in the region of €6m-€7m annually for providing in-patient beds and other services.

In a further boost to St John of God finances, the hospital pays annual rent of nearly back to the order for the use of its main building on the Stillorgan site.

In recent years, the order has also begun to earn interest on a €500,000 loan it has provided to the private hospital.

In 2018 the order, currently

headed by Provincial Donatus Forkan, also transferred a property portfolio worth over €61m into a new company called the St John of God Hospitaller Services Group – for a nominal sum of €20.

Led by a mix of lay and religious members, the group’s mission is to ensure ‘the continuation of the mission and work previously carried out by the brothers of the St John of God order’.

The new group holds all the order’s previous charities as subsidiaries, including SJOGCS, which is by far the most significant element of the operation.

The most recent filed accounts for the charity confirm SJOGCS operated with no internal auditor for a period in 2022 and 2023.

‘Due to staff changes the position of internal audit was vacant for much of 2022. However, there has been a new appointment in June 2023,’ the accounts read.

During this time, taxpayer funds in the hundreds of millions were provided to the charity by the HSE.

The accounts also cite the inadequacy of having one person in the post of internal auditor.

‘A singular post for Internal Audit falls far short of the requirements for the completion of a comprehensive programme of Internal Audit,’ a note within the accounts reads.

The accounts also reveal an audit has ‘identified inconsistency and lack of standardisation’ in the way SJOGCS dealt with accruals.

In accounting, accruals refers to money spent or earned which has not yet been recorded in financial statements. Any inaccuracy in how these funds are dealt with can alter the bottom line for any organisation – especially one that spends and receives hundreds of millions annually.

This issue was first flagged in the 2021 accounts; 2022 accounts refer to an action plan being prepared.

A Government legacy of chronic

underfunding of the Section 38 charities that provide vital services to the HSE is also unresolved.

The consequences of this legacy were addressed in confidential HSE memos, published by the MoS in collaboration with HSE whistleblower Shane Corr last year.

These show the HSE has been warning the Government since at least 2018 that the entire disability sector is ‘facing systematic breakdown’ with many Section 38 entities ‘technically trading recklessly’.

In response to queries from the MoS, a spokesman for SJOGCS has said the charity’s deficit was linked to austerity cuts, HSE underfunding and the ‘requirement to deliver services in accordance with legislation, regulation and national standards’.

‘It is not sustainable or appropriate for funding to be continually sought from alternative sources in order to fill financial gaps arising

from the historic underfunding,’ the spokesman said.

They added that no money from fundraising by the St John of God group is donated to the religious order, with all funds going to charitable works now overseen by the Hospitaller Services Group.

Addressing the temporary lack of an internal auditor, the spokesman said the position had been left ‘vacant for a number of months prior to being filled’ when the previous occupant was promoted.

Asked about the accruals issue, the spokesman said internal audit had ‘identified areas for improvement’. These had been reviewed and adjustments had been made which ‘did not impact negatively on HSE funding’.

The spokesman also said any payments from SJOGCS to the St John of God Hospital were ‘HSEagreed and fully transparent’.

‘Entire sector is facing systematic breakdown’