DR RHONA, HER €40K... AND A VERY DAMNING HSE AUDIT
÷ Report says payment ‘in breach of policy’ ÷ Warning of ‘potential conflicts of interest’ ÷ Concerns raised over lack of documents ÷But Dr Mahony rejects ALL the criticisms
A DAMNING HSE audit has concluded that a €40,000 top-up to National Maternity Hospital Master Rhona Mahony’s salary violated public pay policy. The financial practices at Holles Street are lambasted in the scathing 115-page report that confirms four senior executives received salary top-ups in violation of public pay regulations. The wide-ranging HSE audit rejects the explanation Dr Mahony repeatedly gave when defending the payment.
After the top-up payments were scrutinised during a 2013 Oireachtas Public Accounts Committee hearing, Dr Mahony insisted the payment made to her, and her predecessors as Masters of Holles Street, came from fees
from its Semi-Private Clinic. She insisted it did not represent a top-up on her €235,000 public salary. However, the HSE audit has not accepted this claim, concluding instead that the additional payment made to Dr Mahony, in 2012, was a form of ‘salary’.
The audit points to three pieces of documentation that Holles Street itself provided, in which it refers to the payment as ‘salary’.
The report states that, in the opinion of the Internal Audit section, the payment – which was processed through the hospital’s payroll department – was not in fact ‘fee income’ from patients at the Semi-Private Clinic, as Holles Street had claimed.
The audit adds that ‘documentary evidence’ shows the payment was described in a variety of documents, including minutes, invoices and debtor listings, as ‘salary’. And the auditors also say NMH’s own board minutes describe the payment as ‘a “contractual arrangement” between the hospital and individuals’.
The report also questions why earnings from the Semi-Private Clinic would have been made by the hospital through its payroll, and not simply paid directly by the clinic to Dr Mahony. The audit asks why the payment was made through the NMH payroll if it was not classified as a payment of salary. Holles Street says this was done for tax reasons, but that the practice has since changed.
Furthermore, the authors of the report say the progress of the audit was impaired by difficulties obtaining key documents from NMH.
It details how NMH bosses failed to hand over documentation requested. The HSE also met continuous delays in obtaining clarification to queries it raised, the report states.
‘The scope of the audit was limited due, inter-alia, to restricted access to documentation, the provision of incomplete, partial documentation and the non-provision of documentation by NMH,’ it said. ‘In some instances NMH provided access to copy documentation and in other cases access was provided only to photocopies of extracts from documents or lines produced from spreadsheets or photocopies of specific cheque stubs.’
The audit separately examined the relationship between the hospital and its neighbouring Semi-Private Clinic, which is run by senior NMH staff including Dr Mahony. It raised concerns that a potential conflict of interest existed between the taxpayerfunded hospital and the privatelyrun clinic. The report cites a number of examples, saying there were ‘many close linkages and blurred boundaries between the NMH and Semi-Private Clinic’.
The following potential conflicts were identified:
The Master, who is also an NMH governor and a member of the NMH’s executive management team, is a member of the Semi-Private Clinic’s board;
Two other NMH governors are members of the Semi-Private Clinic’s board; ÷NMH nurses, who are public servants, are assigned to work part-time in the Semi-Private Clinic. Pay costs are reimbursed.
NMH processes salary and non-payments on behalf of the Semi-Private Clinic.
A lack of documentation from NMH to the Semi-Private Clinic seeking recoupment for other payroll and other costs paid by NMH on its behalf.
The audit describes as concerning the ‘undocumented arrangement’ in which the HSE provides ‘financial, administrative, staffing, organisational and managerial services’ to the Semi-Private Clinic – which is owned, directed and managed by NMH senior staff ’.
However, the key findings of the audit have almost all been rejected or denied by the hospital. A spokesperson said the audit does not identify precise incidents where conflicts of interest may or may have occurred and defended the relationship between the two facilities.
They said: ‘Despite over 3.5 years in preparation, the HSE internal audit has not identified any actual conflict of interest in relation to the interaction of these entities with the NMH.
‘There are clinical cross-directorships between entities because of clinical governance requirements and not financial considerations. This is the appropriate way to run the hospital.’
Meanwhile, the source of top-up payments made to three other senior NMH executives has still not been disclosed.
Defending the payments, NMH said the money paid to the three came from ‘privately generated sources’. However, the auditors were not satisfied with this and said no evidence was provided to substantiate the claim.
The report contains a raft of recommendations including: ÷Any shared services provided by a HSE-funded hospital to a third party should be governed by a memorandum of understanding approved by the boards. ÷HSE-funded hospitals should not provide financial, administrative and management services to private entities owned, directed, controlled and/or managed by staff of the publicly funded hospital. ÷Staff of HSE-funded hospitals should not be involved in transactions with the private entities. ÷A board of a HSE hospital should approve additional senior management remuneration in the first instance.
Two others on clinic’s board