'Top-up' pay audit shows democratic deficit

  • Niall Hunter, Editor

If you want to get a pretty accurate snapshot of much that it wrong with our health service, look no further than the HSE's audit of the compliance or otherwise by hospitals and other voluntary health agencies with State rules for senior management remuneration.

The audit, which has emerged amid the justifiable public furore about unauthorised 'top-up' pay for many of those running our impoverished health service, was completed in March of this year and is now available in all its dubious glory on the Oireachtas website.

It's a seventy-page plus saga that resembles a detective story - in this case the sleuth is the Department of Health/HSE and the hidden quarry is public accountability for how our money is spent, the latter a concept with which some health agencies appear to have only a nodding acquaintance.

The report details how the HSE played a game of ping-pong with hospital and other health agencies between 2011 and this year trying to get answers to some relatively simple questions- how much are you paying your senior staff and do you pay your them 'top-up' money? What is this extra pay for? Are payments in line with Government pay policy and if not why not? Are you paying top-ups from private sources and if so which sources?

The audit shows that on three separate occasions in 2011 the HSE, through its local offices, and following requests from the Department of Health, sought clarity from voluntary health agencies on their pay policy for senior managers and whether they adhered to this pay policy for health officials. The response was less than satisfactory.

By the time the audit was completed in the spring of this year, there had been a further slow drip of information from these agencies through the HSE, but, as the audit document rather diplomatically puts it: - "issues were identified in relation to the quality, timeliness and responsiveness of HSE HR to DOH requests for information."

The report shows that it took some time for the HSE to get anything like a clear picture of the top-up pay situation from the agencies it funded. And we still don't have the full picture.

In fact, in February of this year, the Director of HR at the HSE told the HSE official conducting the audit that there were still outstanding and incomplete responses on top-up pay dating back to three separate requests from the HSE for information on payments in voluntary agencies, requested through the HSE local HR offices back in 2011, which still needed to be followed up.

The term 'blood from a stone' comes to mind when one notes the responses, or lack of them, from the health agencies.

One gets the distinct impression that some of these organisations, funded by public money- taxpayers' money in addition to money from 'private sources' which is also essentially public money, do not believe that they should be fully accountable for how this money is disbursed.

It is a misnomer for any agency to call money it derives from non-HSE funds as 'private income'. Whether these funds come from a rich businessman's donation, money put in a collection box, rental income, or a hospital sweetshop, it is public money going to a public body and how it is spent must be accounted for.

The Department of Health and HSE are not blameless in this matter either. Many of these payments predate 2005, before the setting up of the HSE, and seem to have developed in an ad-hoc and unaccounted for manner through what can be best be described as 'local customs and traditions'.

You could try to be generous to some of the offending health agencies and say that due to lack of clear State policy before 2005, they did not know they were breaching any rules, on the basis perhaps that what you don't know won't hurt you.

But this is perhaps giving them too great a benefit of the doubt. In any case, the unauthorised payments continued even after the health authorities started querying them.

Consistently over the years, the Department of Health, the HSE and its predecessors failed to keep tabs on senior health management pay in the voluntary sector, despite making noises about properly regulating pay practices.

This laissez-faire attitude spawned a free-for all (well, nearly all at the top of the management tree anyway) and has led to a situation where we now have much public concern and confusion about how voluntary health agencies use their funds, whether from tax revenue or private funding sources.

An unfortunate by-product of the scandal is that many well-deserving medical charities are now having to assure the public that the money it generously donates to them is not going to pay extra cash to already well-paid top health officials.

However, we still don't know what exactly were the private funds used by some institutions to top up their senior managers' pay, so the public is understandably concerned. Unfortunately in one case to date, the Central Remedial Clinic, it has been confirmed that fundraising income was in fact used for substantial top-ups and pension payments.

And we are still getting get the slow drip-feed of information and less than the complete picture. Health Minister James Reilly confirmed at the weekend that 24 agencies, and maybe more to come, are breaching public pay policy when it comes to remunerating their senior managers.

But again we still do fully know who got what in every agency, the rationale behind many payments, where some of the payments came from and why agencies saw fit to breach official pay policy.

And these are perfectly reasonable questions not just to ask of Holles Street Hospital, on which there has been a lot of focus in the current debate, but of a wide range of voluntary health agencies.

HSE Chief Tony O'Brien is appearing before the Dail Public Accounts Committee this week to try to clarify matters, but it may be some time before all our questions will be answered.

And let's put paid to the notions being touted in some quarters that this is a 'media storm in a teacup' ; 'if you pay peanuts you get monkeys' etc.

This is a controversy that goes to the heart of what is wrong with the health service and it cannot be simply glossed over as a populist media creation.

The fact is that the State, in the form of the health authorities, who are acting on behalf of us, the public, which funds these institutions, does not have the final say in governing these organisations, which seem to operate to all intents and purposes like private fiefdoms.

This is an abject failure of health agency and State governance of public funds.

This lack of accountability has worrying implications, not just for financial management, but for other issues like quality and safety.

To put it bluntly, in the absence of adequate accountability, risk management and controls, how much does the Department of Health and HSE really know what goes on behind closed doors in publicly funded hospitals and other health agencies?

Here we must insert the obligatory caveat about the general good quality of healthcare in Ireland and the high standards of most people who work in run health agencies.

Yet these bland assurances are essentially beside the point - they will no longer serve as a panacea to reassure the public in the absence of proper State oversight of health agencies.

And yes, health staff at all levels have, like vast swathes of private workers, already suffered major pay cuts. But the fact that those at the top of the staff pyramid have taken some pain along with everyone else cannot be used to justify unauthorised top-up pay.

The key issue here is that health policy and health service regulation has been based on a hope and wing and a prayer for far too long. The top-up pay scandal is the latest fall-out from this relaxed attitude to accountability.

The behaviour of some of these health institutions in terms of accountability is the antithesis of how such organisations should function in a modern democracy.

Some highlights (or lowlights) from the audit include:

* There was a lack of clarity as to the level of authority available to each agency to pay allowances without seeking approval from DOH/HSE'. A list of allowances and other payments from HSE funding at an annual cost of €3.24 million is then detailed. Some of these, such as maternity hospital Masters' and clinical director allowances, have been authorised under public pay policy, whiole others, such as health/permanent health insurance payment and company secretary payments, car allowances, have not.

* The audit queries why on-call payments were made to non-clinical staff and points out that some agencies funded private pensions from the public purse.

* Top-up pay listed includes 'allowances-no title given' in 17 agencies; health insurance paid for, in breach of pay guidelines, in 16 organisations; motor allowances, in breach of pay policy, in seven centres; 29 agencies contributing to staff private pensions.

* 'Externally-funded' allowances totalling €912,400 a year are described. Five of these allowances are listed for the Rotunda Hospital and four for Holles Street Hospital.

* Some allowance paid by agencies are not contained in sanctioned public sector pay scales.

* There is a wide variation in levels of basic pay for health agency CEOs.

* The report calls for a clear and unambiguous policy and guidance on providing additional pay to senior managers from private sources.

* It states that a framework exists which clearly sets out that health agencies must adhere to public pay policy and should not pay in excess of approved rates.

The report recommends the regularisation of pay for senior health managers. This would be welcome but is a bit like shutting the stable door as the horse disappears over the horizon.

One has to wonder exactly how many millions in unauthorised allowances and top-ups from HSE and other hospital income sources have been paid out over the past 10 years or more.

Already we are hearing of likely legal difficulties in trying  to recoup any unauthorised payments.

The top-up pay controversy is an issue that has its roots in inefficient governance, poor financial management and institutionalised profligacy at the highest level, all of which are frequent fault lines running through our beloved dysfunctional health service.

And finally, a riposte to those (and there are quite a few) who would query the media's and the safety body HIQA's right to investigate what happens in our health service.

The HSE top-up pay review, on its first page, cites media investigations by the Irish Times and the Sunday Business Post, as well as the HIQA probe into Tallaght Hospitals, as catalysts for its investigation of the top-up pay controversy.

If it wasn't for the media, HIQA and some brave whistle-blowers, we would have no health scandals, as they would probably never be revealed.

Surprisingly, some parts of our democracy actually do work.

Holles St Master says all her pay authorised

Hospital pay scandal - who governs?





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