John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I welcome the witnesses. Last night we received two letters, one from a solicitor representing Ms Angela Kerins and one from a solicitor representing Mr. Frank Flannery. I can understand why Ms Kerins is not attending today as it is due to ill health, and we wish her a speedy recovery, but the committee takes issue with the other comments in her letter. We have issued a reply to her through our legal advisers. Following the hearing today and depending on the information we receive, we might decide to invite Ms Kerins again to a further hearing of this committee.

I and the members of the committee considered Mr. Flannery's letter last night and we have issued a response to it. The issues raised by him in the letter are simply not accurate, in my opinion. These are issues that must be dealt with by the committee and we believe Mr. Flannery and Ms Kerins have a contribution to make to our investigation. There is no doubt about that. The letter refers to the fact that Mr. Flannery did not receive a letter directly regarding our last hearing, but it was made perfectly clear to the Rehab Group, in writing and through the clerk to the committee, that we expected Mr. Flannery to attend our last hearing. It did not help our consideration of these matters that Mr. Flannery was apparently in the House on the day. As I have said publicly, he may not have been invited but I am still not sure whether he was actually invited, as requested through this committee and through Ms Kerins. We do not know the answer to that.

The other issues raised in the letter from Mr. Flannery relate to correspondence that this committee received. We take our role very seriously and that correspondence, under legislation, had to be referred to the Garda. There was no option for the committee but to refer it to the Garda. That is where the matter stands. It was the only option we had and it was done out of respect for the legislation and the law. It was no reflection on Mr. Flannery and nobody here has a personal agenda against him. The committee wishes to put it on record that we reject all of what has been said in the letter from Mr. Flannery.

Our intention is to pursue the spending of public money. This is taxpayers' money and is not our money or the witnesses' money. Out of respect to the committee and the Oireachtas, and in light of the fact that Rehab has received substantial funding from public funds over the years, we expected full co-operation from Ms Kerins and Mr. Flannery. I find it unacceptable and beyond common sense that they take this approach.
The clerk to the committee has brought an e-mail from Mr. Dore to my attention. I will make a copy available once I have read it into the record. It is addressed to the clerk and states:

Shortly before 5pm this evening you received a letter from my client.
This letter was sent to you by email and it was hand delivered. This letter was marked "strictly confidential".
Despite this, within the hour, extracts / quotations from this letter appeared on the RTE website.
This could only have happened because this strictly confidential letter addressed to you was leaked to RTE. This is shocking and requires an immediate explanation.
Please confirm whether or not you leaked this strictly confidential letter to RTE and if so on what possible basis you did this.
If you did not leak it please identify who did.
Please let me hear from you as a matter of urgency.
Yours faithfully
Robert Dore

Mr Brian Kerr:

I thank the Chairman. I am joined today by my colleagues, Mr. Declan Doyle, chairman of the remuneration committee, Mr. Hugh Governey and Mr. Liam Hogan, Rehab Group board members and members of the remuneration committee, and Mr. Keith Poole, director of finance and company secretary. Members will note that neither Ms Angela Kerins nor Mr. Frank Flannery is in attendance today. We wrote to both to determine if they would attend. Both Ms Kerins and Mr. Flannery have confirmed that they are not in a position to attend. Unfortunately, we cannot compel them to attend. With permission, I will make an initial statement and then ask my colleagues, Mr. Declan Doyle and Mr. Keith Poole, to make specific statements that will address issues raised at, and since, the committee's meeting on 27 February.

In recent weeks, the board of the Rehab Group has been reflecting on the difficult period that the organisation has been through in recent months. The stark fact is that the reputation of Rehab has been seriously damaged. We recognise that our response as a board to recent political and public demands for information has been inadequate, in particular because of the legal constraints that the board is under in disclosing information about the terms and conditions of some senior people. In part, this is because the business and governance structure of the Rehab Group was not adequate to manage a challenging and changing situation. In addition, we recognise that, as a board, we have not exercised strict and appropriate oversight of certain issues that have come to public attention in recent weeks.

The board's priority is to initiate a programme of transformation and change that will allow us to candidly confront the issues before us and to rebuild the reputation, staff morale and effectiveness of the organisation. Importantly, this programme of change must strive to recover the confidence and trust of the people who use our services, our staff, the people of Ireland who fund us, including the Government, and other stakeholders, not least our colleagues in the charity sector who have suffered because of the fallout over the current controversy.

As a matter of urgency, we are committed to making whatever changes are necessary, including changes to the board, to ensure the organisation can have the full confidence of those who use our services and those who fund us. This journey will not be completed overnight but the board believes that, if we set the right strategic direction and remain committed to that path, success can be achieved and a new dawn will emerge for Rehab. A critical part of the recovery strategy is that we initiate a root and branch review and an urgent transformation of how Rehab is governed and conducts its affairs. In simple terms, this means asking an external expert of repute and integrity to advise us on how best to address the following questions. What changes do we need to initiate in order to renew the board, and the way it works, so that we have the right skill set and the right procedures for providing the quality of oversight required in an organisation of our size and complexity, operating in the charity sector? How best can we increase the degree of transparency about what we do and, for example, how people are paid across the organisation, so that we not only meet but exceed reasonable expectations and regulatory requirements? Does the current structure of the group support the long-term mission of Rehab in a rapidly changing regulatory environment? How can the board function so that it supports and upholds the core values and principles of Rehab? We have engaged Dr. Eddie Molloy to conduct and lead us in this review and transformation programme. The process will include engagement with staff to ensure their concerns are addressed in the unfolding reforms.

On behalf of the other board members here, I wish to address our non-attendance at this committee on 27 February. Following initial correspondence from the committee, it was decided that Ms Kerins, Ms Kelly, Ms Keane and Mr. McGuire were the people best placed to deal with the agenda items listed by the committee and they set about preparing accordingly. As a result of miscommunication and misunderstanding within Rehab, the team coming before the Committee of Public Accounts was not changed following the e-mail of 20 February from the Committee of Public Accounts.

We accept this was an error on Rehab's part and we regret any offence felt by the committee arising from our non-attendance.

Before handing over to my colleagues, I would like to address some questions which have arisen about the election of the board. The Rehab board is a company limited by guarantee, with 12 volunteer board members. Members are elected for three years and can serve three terms. The chairman is elected on an annual basis and can serve a maximum of six terms. The board recognises that it has been remiss on renewing the board membership, that this is a priority area, and it has asked Dr. Molloy to assist us with refreshing the board as soon as possible. As I mentioned earlier, one of the key issues on which Dr. Molloy has been asked to advise us relates to the changes we need to initiate in order to renew the board and the way it works so that we have the right skill set and the procedure for providing the quality of oversight required in an organisation of the size and complexity of Rehab operating in the charity sector.

I will ask Mr. Declan Doyle, chairman of the remuneration committee, to speak on that committee's work.

Mr. Declan Doyle:

I wish to be associated with the remarks of Mr. Brian Kerr on our non-attendance at the meeting of 27 February 2014. I too regret if offence was caused to the members of the Committee of Public Accounts. Let me reiterate his comments on our commitment to providing responses that are as fulsome as possible within the law.
I will focus on issues relating to the remuneration of the chief executive and the Rehab Group senior management team in my role as chairman of the remuneration committee of the Rehab Group board.
I note from the queries that were raised at the Committee of Public Account that members are interested in understanding how the remuneration committee works. The committee's duties focus on ensuring the ongoing appropriateness and relevance of the remuneration of the chief executive and the senior management team. The committee comprises at least four members of the non-executive board of the group. We report annually to the board on our activities. Our meetings can be attended by the chief executive and external advisers, as appropriate but not as a matter of course. I must stress that no individual can be involved or was involved in any decisions as to his or her own remuneration.
The committee commissions reports or surveys to help it fulfil its obligations as required. Out duties include specifically determining and agreeing with the board the broad policy for the remuneration of the chief executive and senior management team. In undertaking that duty, we take account of a range of factors, including the need to be competitive in the marketplace. The objective of the policy is to ensure that members of the senior management team are provided with appropriate incentives to encourage enhanced performance and are in a fair and responsible manner rewarded for their individual contributions to the success of the group. Within this agreed pay policy, the committee specifically determined the total remuneration package of the chief executive, including bonuses where appropriate. It also determined the salary range for the senior management team. It approves the design of performance related pay schemes for the chief executive and senior management team and determines the policy for and scope of pension arrangements for senior executives. The committee agrees the policy for authorising claims for expenses from the chief executive and chairperson and non-executive directors. Under its terms of reference, the committee may review its own performance, constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any change it considers necessary to the board for approval.
Following the events of recent months, the members of the remuneration committee have requested that a review of the work of the committee be undertaken by Dr. Molloy as part of the broader review of governance and structures to be undertaken by him. In Mr. Kerr's presentation, he referred to the rights of individual employees to confidentiality in relation to his or her remuneration and conditions of employment. In the course of this controversy surrounding Rehab in recent months, we found it quite difficult to balance these legal rights with the requests from the Committee of Public Accounts for details of salaries, pensions and bonuses of certain individuals. The board is under legal constraints regarding disclosure of information about the terms and conditions of employees, given the legal right to confidentiality enjoyed by these individuals. This is not a circle we can square easily.
The right to confidentiality in respect of sensitive personal information is a right that is enshrined in data protection legislation passed by the Oireachtas following legislation passed at European level. However, it is important to state that in the interest of transparency we are committed to disclosing as much detail as we can to the Committee of Public Accounts. In order to meet this commitment, we have undertaken a number of steps to ensure we are as transparent as possible within the law. On 17 February, the board of the Rehab Group disclosed details of the remuneration of our former chief executive following her decision to waive her rights voluntarily to confidentiality in relation to the details of her terms and conditions of her remuneration. In the past week we have taken additional steps in an attempt to secure permission for further disclosures to the Committee of Public Accounts. We wrote to the former CEO and formally requested that she provide us with clear indication of the information she permits us to communicate on the details of her remuneration as chief executive up to and including the date of her cessation of employment, as well as her pension provision. In legal correspondence received from our former chief executive last night, her lawyers specifically prohibited us from any disclosures in relation to her pay and her terms and conditions of employment. She also expressly withdrew any waiver she had previously given. I would like to quote from the letter we received from her solicitors, Eames Solicitors:

Please note that any disclosure in relation to our client's pay and/or terms and conditions of employment by the Rehab Group, subsidiaries, employees, servants, agents or advisers is strictly prohibited. In this regard and in light of the previous disclosure by Rehab Group and recent commentary in particular by the Public Accounts Committee, our client now expressly withdraws any waiver she may have previously given in good faith as such details could be disclosed in limited circumstances. Our client is entitled to her confidentiality rights and to the protection of her personal private and professional information and correspondence at law and under the data protection Acts, no such disclosure is permitted. In that regard no permission is given to the Rehab Group and/or subsidiaries or its employees, servants, agents or advisers to discuss, disclose or comment in any way on these matters, including without limitation information on our client 's terms and conditions of employment or any cessation of same to the Public Accounts Committee or any such body. Any breach of this obligation under the data protection Acts or at law will result in legal action to protect the interest of our client against the bodies and persons responsible and this letter will be adduced in evidence of those circumstances.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is a copy of that letter available?

Mr. Declan Doyle:

I am afraid it is privileged. The legal advice from our lawyers is that this is privileged information.

In relation to Mr. Flannery, we also wrote to him on Thursday, 3 April 2014, and formally requested that he indicate the detail that he will give us permission to communicate to this committee in respect of his remuneration as chief executive of the Rehab Group as well as pension provisions. In correspondence received from Mr. Flannery he stated, and again I quote, that he "was unable to assent to the disclosure of any personal informational in relation to his remuneration or pension entitlements".

As Mr. Kerr stated earlier, the board's approach to this hearing has been to meet the requests of the PAC wherever possible. However, in this instance, meeting the requests of the committee would involve Rehab breaching the law as it relates to the former chief executive and Mr. Flannery, something that members will understand we cannot do.

Let me turn to the recent issue of salary disclosure for senior executives within the Rehab Group and its companies. The remuneration committee sets the salaries of Rehab Group's senior management team only, that is, the eight posts that presently form the group management team. One of these posts is now vacant and has been for the past three weeks. The committee does not have role in any posts outside that circle. In line with the approach to the former chief executives to ask for permission to publish salary details, the Rehab Group has asked the seven senior executives who comprise the senior management team for their permission. These individuals have taken the step of waiving their rights under data protection and personally given us permission to communicate details of their remuneration and their post to the PAC. This information has been provided to the clerk and it will be circulated to all members.

It is important to highlight the very broad and significant role that each of these individuals holds in the Rehab Group. All have international responsibilities across the organisation and have operational responsibility for our training, health, social care, rehabilitation, employment and education service as well as for our central services. These services are areas such as human resources, finance, IT, communications, policy and service compliance, health and safety and procurement.

Four other managers outside the remit of the remuneration committee are in receipt of salaries greater than €100,000. Given that they are outside our remit, we have not asked them to waive their rights.

In publishing these salaries, we hope this disclosure will be taken in the spirit in which it is given. The individuals in question have given permission for this information to be made public in the interests of greater transparency. As members will be aware, many individuals within the group have been subject to undue professional and personal attention in recent weeks. We ask that the privacy rights of these individuals are not further impacted by virtue of this voluntary disclosure.

Rehab has already submitted to the committee details of all salaries of more than €65,000 paid to employees of the group in its Irish divisions. The information is provided in bands of €10,000, which is line with best practice for charities' reporting or SORP. Members are probably aware of this term, which Mr. Poole will address shortly.

I take this opportunity to provide the committee with additional information in respect of the report provided to the Rehab Group board by Towers Watson entitled, the 2014 Remuneration Review of the Rehab CEO and Senior Management Team. The salaries of the executive team members of the Rehab Group are set by the remuneration committee of the Rehab Group, which commissions independent reports on salary levels in general Irish industry to advise it in carrying out its work. As part of this process, the responsibility of each post is individually and independently assessed internally and externally. In developing a policy for setting remuneration, the board has traditionally looked to the market median, which is basically the middle of the general pay market or the point at which 50% of wages will be higher and 50% lower, to guide decision-making on pay levels and individual pay positioning. Independent reviews of the posts within the executive team take place regularly, most recently by Towers Watson in 2014.

I confirm that the report provided to the committee on 11 March is the full report produced by Towers Watson and provided to the board on 17 February. It provides details of information provided to the group board to inform it in relation to decisions made by the remuneration committee charged with oversight in this area. Many members of the committee have sought additional information in relation to this report. It is usual in organisations that use a remuneration committee for the board to receive a report without any specific personal data in it and that this level of detail and personal data is restricted to the remuneration committee. A more detailed working document, containing personal data, presented by Towers Watson for use by the remuneration committee was used to inform the development of the final report. We have sought the permission of Towers Watson to disclose this discussion document to the committee and, until this morning, it had given us permission to do so, with a certain level of information redacted. In the light of Ms Kerins's recent letter to us, which Towers Watson has seen, the company is not prepared to include in the report certain information which is in the public domain and of which all members are well aware. In the report the committee will receive from Towers Watson, which is the full report, all information relating to the chief executive has been redacted, even though, as I say, this information is already in the public domain.

Members of the committee have raised the issue of Rehab's pay policy and philosophy. Many years ago, the Rehab Group took the decision to benchmark senior salaries, that is, those of the senior management team and chief executive, against commercial industry norms prevalent in general industry in Ireland. This decision was taken to reflect the size, scale and diverse activities of the organisation and its international reach.

In line with the sentiment referred to in Mr. Kerr's statement, the remuneration committee accepts that we have not given adequate attention to comparisons with organisations in the charity and not-for-profit sectors. The Rehab Group is a large organisation which provides a vast range of excellent services to thousands of people and operates in a number of different industries. We employ more than 3,500 staff, and this number is constantly growing. The organisation has consistently maintained employment growth in the biggest recession this country has seen. However, we have asked Dr. Molloy, in his review, to consider how we can align ourselves more closely with the charity and not-for-profit sector.

I reiterate Mr. Kerr's statement that by engaging Dr. Molloy to lead a review and transformation project in relation to the governance arrangements in Rehab, we believe we have taken an important step. The review will challenge us to confront candidly the issues before us, rebuild our reputation and staff morale and enhance the effectiveness of the organisation. I will hand over to Mr. Keith Poole who will provide further insights into the financial management of the Rehab Group.

Mr. Keith Poole:

In this opening presentation I would like to pick up some of the issues that have come up since and prior to the previous meeting of the committee, particularly details of the funding that Rehab receives from the State, information regarding the Rehab Group's structure and details in relation to the statement of recommended practice for accounting and reporting by charities, commonly known as SORP, as well as our plans in this regard. I will also cover some other matters of importance to the committee.

To give the committee a full picture of the funds that Rehab receives from various Government agencies, we are circulating a schedule showing all income received from Government agencies or Departments in the past two years. In 2013, Rehab received €95 million in total. In addition to income received from services provided on behalf of the Health Service Executive and SOLAS and moneys from the Department of Justice and Equality, which amounted to €89 million, other income amounted to €5.9 million in 2013. The two most significant items included in this income were capital grants received from the Department of the Environment, Community and Local Government under the capital assistance scheme for the provision of housing for people with disabilities and funding received under the wage subsidy scheme, known as the WSS, from the Department of Social Protection. The wage subsidy scheme is a financial subsidy available to all non-public sector employers, be they in the private or not-for-profit sector, to support them to employ people with disabilities who may have a reduced level of productivity as a result of their particular disability. We currently claim this subsidy for just over 170 of our employees.

For completeness, we have shown the various allowances we receive for our clients and administer on behalf of our funders. These are not included in our income as they are effectively money in, money out. We have provided the committee with a set of Rehab's consolidated financial statements for the year ended 31 December 2012, and I will endeavour to answer any questions members may have on these today.

As Mr. Kerr indicated, the Rehab Group is a company limited by guarantee which holds a CHY number granted by the Revenue Commissioners. It is an independent charity which has to ensure its financial sustainability to continue to support the people who use its services. We acknowledge and recognise that our services are funded by the taxpayer and that brings with it both privileges and responsibilities. However, unlike other charitable organisations in our sector, referred to as section 38 organisations, our staff do not enjoy the same security of tenure or pension benefits as colleagues in the public sector. If, for some reason, we lose a contract or service provided to a State body, as we sit here today, Rehab is responsible for any closure costs, for example, lease terminations or redundancies of staff who would not be protected under TUPE legislation.

Rehab's primary objective is set out in its memorandum of association. In simple terms, there are three types of activity that Rehab undertakes both here and abroad. We provide training, education and employment services aimed at getting people into a job or progressing to further education. We provide various types of health and social care services that promote independent living and choice for our clients and their families. We also provide employment opportunities for disabled and disadvantaged people through social enterprises. To achieve this, our legal structure comprises three different types of trading subsidiaries. These are subsidiaries that undertake charitable activities; subsidiaries that undertake activities for furtherance of the group's objectives; and subsidiaries that undertake activities for generating funds. Some of our subsidiaries that undertake activities for the furtherance of the group's objectives also generate funds.

There are a number of subsidiary companies in our structure that are either holding companies or are dormant for all intents and purposes but we strive to ensure that we dissolve entities that are no longer required.

Currently, the group contains 31 legal entities; a copy of the structure of the group has been handed to the clerk. The top entity is the company, the Rehab Group. Of the 31 entities in the group, 15 are registered in Ireland, 15 in the UK and one in Saudi Arabia. Fourteen are charities which are either registered with the relevant body in the UK, through the Office of the Scottish Charities Regulator or the Charities Commission for England and Wales, or hold a CHY number here in Ireland. As soon as the new charity regulator commences her work, we will register all our Irish entities, which hold CHY numbers, as charities under the Charities Act 2009.

Rehab has now committed to adopting the statement of recommended practice, SORP, for accounting and reporting by charities. Practically, this will require some significant changes in how we prepare our financial statements and we have committed to doing this for the year ended 31 December 2014. The implementation of SORP will lead to a number of changes to Rehab's reporting both in financial terms and what we must include in our annual reports. It is important to emphasise it is not just a financial reporting standard. SORP prescribes the principles and essential elements to be included in our annual report which accompany our accounts. The annual report and the accounts, taken together, will provide a picture of what we have achieved, our outputs as well as the difference we have made - our impacts. It will also include relevant information about our subsidiaries and governance structures. It will enhance the relevance and comparability and improve people's understanding of the information presented in our accounts and in the annual report. Most importantly, it will give all our stakeholders, be they funders, service users, donors, staff, financial supporters and others, a high level of accountability and transparency. Over time, it will improve the quality of financial reporting by all Rehab entities. It will also detail the methodology employed in the allocation of shared service costs. As our 2013 accounts are almost finished and the majority of the audit work has been completed by our auditors, PricewaterhouseCoopers, it would not be possible to implement SORP for 2013.

SORP will also require us to continue to publish remuneration of all staff in excess of €65,000 in bands of €10,000. This is work that we have already begun. As others have said, we have already published details of all salaries paid to employees of the Rehab Group and its Irish divisions over €65,000, in bands of €10,000. This approach is a requirement under law for charities in the UK and is followed by a number of charities here in Ireland and recommended by umbrella bodies such as The Wheel and the Irish Charities Tax Reform Group, ICTRG, as best practice.

We understand the frustration of some Deputies who have stated that the disclosure using the SORP method for charities does not go far enough and who wish us to individually name all relevant postholders. Prior to attendance at the last meeting of the Committee of Public Accounts, the Rehab Group discussed the matter with both our legal advisers and the Data Commissioner. Both have advised us that we cannot disclose salary details in a way that would make individuals identifiable except for the express purpose for which permission has been obtained from the individuals concerned.

It is not possible to give that information to the committee because we do not have the permission of all relevant staff who receive in excess of €65,000, but the group's commitment to transparency is, I believe, real, and by committing to implement SORP, as soon as practically possible, we will automatically do so into the future.

There has been some coverage of payments to Rehab Group directors in the media. We recognise that this is a matter of concern for members of the committee and members of the public. By way of clarification, I can confirm that no remuneration has ever been paid to a director of the Rehab Group board in respect of their roles as directors. In addition, no fees are paid to directors of subsidiary boards for their roles as directors. In recent years, certain directors or their firms were paid by Rehab for the provision of services. These included quantity surveying, publications and editing.

In addition, Mr. Frank Flannery was paid professional fees for consultancy services, including lobbying, for the group and subsidiary companies. These fees were disclosed in the group's annual accounts from 2011, as Mr. Flannery was a director of the group. He commenced working as a consultant on his retirement as CEO in 2006. The annual payments to Mr. Flannery for his consultancy services have been given to the clerk.

Rehab is committed to effecting significant change in how the organisation is governed and structured. We have learned painful lessons. It is imperative that we act on these lessons. It is also imperative that the group adopts best practice to clearly demonstrate the value for money for services we provide to the State and we have a determination to do so. This determination is underpinned by the review, already mentioned, to be undertaken by Dr. Eddie Molloy. This will lead, inevitably, to significant change and will enhance performance in how Rehab is governed.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I thank Mr. Poole. Can each of those statements and the associated documents be published?

Mr. Keith Poole:

Yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is that agreed? Agreed.

Seán Fleming (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

On a point of clarification on that particular issue, I refer to Mr. Declan Doyle in an effort to be of assistance to him. He read a letter which he said had legal privilege and that he could not distribute it. By reading it here in front of the cameras, it can be distributed by all the media channels today. I wonder if he has inadvertently waived that privilege by reading it on to the public record for transmission.

Mr. Declan Doyle:

I am not a lawyer.

Seán Fleming (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I am saying this to advise Mr. Doyle. I am concerned that there is a contradiction between saying the document has legal privilege and, on the other hand, reading it out to the committee.

Mr. Declan Doyle:

The advice I received was that I could read it out but I could not distribute it.

Seán Fleming (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Okay, I just wanted to clarify that point.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

So it is now to be published.

Seán Fleming (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Once one reads it into the record-----

Mr. Declan Doyle:

I have read it into the record so it is published.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It is now published.

Mr. Declan Doyle:

It is a section of the letter.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It is published.

Mr. Declan Doyle:

I understand, Chairman.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Did Mr. Doyle receive a similar letter from Mr. Flannery's solicitor?

Mr. Declan Doyle:

The quote which I gave the committee was a quote from his letter, in response to our letter about the level of information we could reveal, which is in my statement.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

That is fine. I call Deputy Kieran O'Donnell.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank the witnesses for appearing before the Committee of Public Accounts today. It is regrettable and extremely unfortunate that neither Ms Kerins nor Mr. Flannery sought to appear before the committee. The message must go out loud and clear that no one person or two people are bigger than any one organisation. I ask the witnesses how they feel about the fact that neither Ms Kerins or Mr. Flannery has sought to defy the committee in terms of the damage it is doing to the organisation and the entire charities sector? How does Mr. Kerr feel about them not appearing?

Mr. Brian Kerr:

It is unfortunate but there is nothing we can do about it. We have tried and that is all we can do.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Does Mr. Kerr feel let down?

Mr. Brian Kerr:

I think it would be better if they could have seen a way to appear.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How many years has Mr. Kerr been a director of the Rehab Group?

Mr. Brian Kerr:

Thirty-two years, unfortunately.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How long has Mr. Kerr been chair of the Rehab Group?

Mr. Brian Kerr:

Five years.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

For how long has Mr. Kerr been a director of Rehab Lotteries company?

Mr. Brian Kerr:

Many years.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How many years is Mr. Doyle in the Rehab Group?

Mr. Declan Doyle:

Twenty-six years.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

And on Rehab Enterprises?

Mr. Declan Doyle:

About seven years in Rehab Enterprises but I am not entirely sure. I need to check that.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How long is Mr. Governey on the Rehab Group and the Rehab Enterprises?

Mr. Hugh Governey:

Six years approximately.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

And in Rehab Enterprises?

Mr. Hugh Governey:

Four years approximately.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How long has Mr. Hogan been on the board of the Rehab Group?

Mr. Liam Hogan:

Fifteen years.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

And how long has he been on the audit committee?

Mr. Liam Hogan:

Approximately eight years.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

And how long with Care Trust Limited?

Mr. Liam Hogan:

Five years.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How long has Mr. Poole been with the Rehab Group?

Mr. Keith Poole:

I am not a director of the Rehab Group, but I have been employed with it since 1996.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How long has Mr. Poole been company secretary with the group?

Mr. Keith Poole:

Since 2007.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How long has Mr. Poole been a director of Rehab Enterprises, Rehab Care, the National Learning Network, Rehab Lotteries and Care Trust Limited?

Mr. Keith Poole:

I do not have the specific answer to that, but a large number of years.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Therefore, he is familiar with their proceedings over many years.

Mr. Keith Poole:

Yes.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Our role here is to look at the probity of how public money is spent, and Rehab has provided us with a large amount of information which we are trying to assimilate quickly. I would have liked to have received this information yesterday or earlier. The information provides figures regarding the number of grants received in terms of overall income and expenditure from the State. In terms of subsidies paid to staff, is that figure included in the overall turnover?

Mr. Keith Poole:

The wage subsidy scheme, WSS, money is included. If the Deputy looks at the information I have provided, he will see I have highlighted the income and expenditure items and the items that go through our balance sheet.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Am I correct in saying, therefore, that, overall, the group received €92.572 million from the State and that the overall turnover of the Rehab Group is approximately €183 million?

Mr. Keith Poole:

Yes.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Therefore, approximately 52% of the overall turnover of the Rehab Group comes from the State.

Mr. Keith Poole:

Yes.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

That information is not in the public domain. There it is believed to be less than 50%. Based on the fact it is over 50%, the Rehab Group should fall under the remit of the Comptroller and Auditor General. Is that correct?

Mr. Seamus McCarthy:

I do not think that is an automatic provision.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Is it the practice?

Mr. Seamus McCarthy:

Certainly, in the case of many organisations that get more than 50%, it is a general guideline, but it also depends on the nature of the business. Therefore, semi-State bodies that receive more than 50% would come within the remit of the Comptroller and Auditor General.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The message needs to go out that, in total, capital grants of €92 million of State resources went into Rehab. If we add in capital grants of just under €3 million, almost €96 million of State resources went to the Rehab Group, an amount that is in excess of 50% of the organisation's turnover. Does Mr. Poole agree with that?

Mr. Keith Poole:

Yes.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

That information is not in the public domain, but it changes the complexion enormously in terms of the issues that arise. I welcome that the seven staff members of Rehab here have waived their right in terms of disclosure of the level of their salaries. The director of finance, Mr. Poole, receives a salary of €152,667; director of health and social care, €150,000; director of training and employment and education, €174,000; director of human resources, €141,552; director of fund-raising lotteries, €130,000; director of policy and service compliance, €104,000; and director of public affairs, communications and IT, €130,000. I welcome this and believe Ms Kerins should have done likewise.

Am I correct in saying that Mr. Poole is a chartered accountant by training?

Mr. Keith Poole:

Yes, that is correct.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What I find interesting is that Ms Kerins appears to have been a director of every company within the Rehab Group. Not only was she a director, she appears to have been the chairperson of those companies. She was chairman of the boards of the National Learning Network, Rehab Care and Rehab Enterprises. The one company of which she is not a director is the Rehab Group.

Mr. Keith Poole:

That is correct.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Mr. Poole, as a chartered accountant, is familiar with company law. Is it correct that one is required, under company law, to disclose the director's remuneration in the statutory accounts?

Mr. Keith Poole:

That is correct.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Is it not ironic that Ms Kerins is paid by the Rehab Group via management charges coming up from various companies, yet Rehab Group is the only company within the group of which she is not a director? How did this come about?

Mr. Keith Poole:

The same situation applies to myself. The reason is that, because the Rehab Group is my employer, I cannot be a director of the group. It is because it holds a CHY number and, as an employee, we cannot be directors.

With regard to funding, we have distributed a summary of all the funds that come up. The Rehab Group is the top entity in the structure. It receives shared services income from State-funded companies within our group. Other funds come into the Rehab Group also, for example, from the Care Trust. In 2012, which is the year for which we have provided the accounts, we would have transferred more than €1 million from our UK operations into the top entity. In common with many groups, a pool of money comes into the centre, and this pays for central services and the top level salaries.

In terms of what we charge, the schedules have been provided regarding what we charge into the entities that deliver State services. Historically, we have not charged senior management salaries into those entities.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Whose salaries among top management, of the seven directors, including Ms Kerins, are paid from the Rehab Group, the parent company?

Mr. Keith Poole:

There are two whose salaries, or an element of them, are recharged into the services, those of the director of training and the director of health and social care. The percentages are provided.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Is that a management charge?

Mr. Keith Poole:

Yes. The salaries of the rest of us are not.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How are the other directors paid? What is the source of that income?

Mr. Keith Poole:

The source is the pool of the moneys I already outlined.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Can the witness explain that pool?

Mr. Keith Poole:

The pool consists of moneys that come across from the United Kingdom, the Care Trust, and any other moneys that come into the centre, the top entity.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What comes into the top entity? Will Mr. Poole take us through the sources of income? What is the name of the holding company?

Mr. Keith Poole:

It is the Rehab Group.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What is the income of the Rehab Group? How much income does it take in per year? People see the Rehab Group as a consolidated group, but can Mr. Poole break down the turnover of that company per year and where that money comes from?

Mr. Keith Poole:

The charitable lotteries fund is included in our turnover, but I will not include it because it is allocated to specific items.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Is any of the charitable lotteries fund allocated towards salaries?

Mr. Keith Poole:

No, absolutely not. The amount of money that comes in is just under €12 million.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Where does that money come from?

Mr. Keith Poole:

It is shown in the figures the Deputy has in front of him. It comes from the shared services money.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What is the total figure there?

Mr. Keith Poole:

The total for 2012 was €4.7 million.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Is that basically the management charge?

Mr. Keith Poole:

Yes. Approximately €1.2 million comes from the UK.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

From where in the UK?

Mr. Keith Poole:

From our training company in the UK.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Where does the balance of the moneys come from?

Mr. Keith Poole:

It comes in from rental income and from the Care Trust.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How much comes from the Care Trust.

Mr. Keith Poole:

In the year in question, the amount was €1.5 million.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

And what was the rental income?

Mr. Keith Poole:

Approximately €1.5 million.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We are still short. This amounts to €8.9 million, so we are short approximately €3.1 million.

Mr. Keith Poole:

That is roughly the amount from the charitable lotteries fund, which I do not include because it is specifically allocated.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How is that allocated?

Mr. Keith Poole:

When we do the annual return for the charitable lotteries fund, we state to what specifically it is being allocated. The Deputy has seen the returns. It is primarily capital expenditure and it also goes against a few other items. To satisfy the Department of Justice and Equality, we must show it in our accounts as cash received, so we show it in our turnover.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What is the total figure for salary payments from that parent company?

Mr. Keith Poole:

I do not have that to hand, but I can get it for the Deputy.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

But Mr. Poole has the accounts in front of him.

Mr. Keith Poole:

Yes, but I do not have the individual companies-----

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

But Mr. Poole would have been aware, coming in here, that this is an issue we would have been discussing.

Mr. Keith Poole:

Yes. I can get that.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How quickly?

Mr. Keith Poole:

I can get it in about ten minutes.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

That is fine. Out of that company, which salaries are paid? Is Mr. Poole's salary as director of finance paid?

Mr. Keith Poole:

Yes, absolutely.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What about the director of health and social care?

Mr. Keith Poole:

Yes. The seven people on the list in front of the Deputy are all paid from that company. The other people are support staff. There are about 65 to 70 people on it.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Ms Kerins is paid from that company as well.

Mr. Keith Poole:

Yes, absolutely.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Her letter to the committee, which is now public, stated that, in response to a question from Deputy Ross towards the end of the previous session about a reduction in her salary in 2013, she inadvertently gave the answer "No". What would be the make-up of a salary for a CEO in the organisation?

Mr. Declan Boyle:

They get a basic salary and a defined contribution pension of 6% at the moment. If they have a car, they might have a car allowance or a company car. They would also receive vouched expenses.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The defined benefit pension scheme was finished in March.

Mr. Keith Poole:

We took the decision to finish in December 2012.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

When was it wound up?

Mr. Keith Poole:

It takes quite a considerable time to wind up the defined benefit pension scheme, but it is almost wound up. Members have received the majority of their transfer values.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Was there a shortfall in the defined benefit?

Mr. Keith Poole:

Yes, there was.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How much was that?

Mr. Keith Poole:

Under the minimum funding standard, it was originally around 70%, so there was a 30% deficit.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What was the value?

Mr. Keith Poole:

It was €35 million.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How was that funded?

Mr. Keith Poole:

Unfortunately, the members had to take a lot of the pain on that one. In 2012, the decision was taken that we could no longer sponsor the scheme so it had to be wound up. Following long negotiations with the trustees and their independent advisers, an arrangement was put in place whereby other money will be put into the active and deferred members' pot over a number of years, and then it was closed. It looks like it will end up at around 80% to 81% funded.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What is the anticipated shortfall then?

Mr. Keith Poole:

The shortfall will be on individual people but it will be-----

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Will anyone who is working at that time have a combination of pensions?

Mr. Keith Poole:

The defined benefit pension scheme is gone.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Did Ms Kerins qualify under the defined benefit scheme or the defined contribution scheme?

Mr. Keith Poole:

Ms Kerins was the same as everyone else, so her pension was transferred to the defined contribution scheme. In a defined contribution scheme, there is just an amount of money that is there.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Did she hold the value based on the defined benefit scheme at the time? Was she able to transfer the value of the defined benefit scheme to the pension she has now received?

Mr. Keith Poole:

All I can say is that in common with everyone else, her transfer value was transferred to a defined contribution scheme.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

When the defined benefit scheme was being wound up, was there any question that a contribution could be made towards the shortfall out of funds received by the Rehab Group?

Mr. Keith Poole:

The arrangement that was reached with the trustees has a number of years to work its way through.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How many years?

Mr. Keith Poole:

I think it is six years.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What is the approximate total value over those six years?

Mr. Keith Poole:

It is approximately €6 million.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How will that be funded?

Mr. Keith Poole:

That will be funded from all the subsidiary companies where the employees reside.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I wish to move on. We have just been provided with documentation in respect of Laragh Consulting. Am I correct in saying that the total value over the seven years is €409,744?

Mr. Keith Poole:

If it is added up, yes, that is correct.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We were led to believe that Laragh Consulting was not trading as a company. Was Mr. Poole aware of that?

Mr. Keith Poole:

I became aware of that, yes.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Did that change the way payments were made?

Mr. Keith Poole:

Absolutely.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What happened?

Mr. Keith Poole:

I was preparing the financial statements in January 2013. There must be a related party disclosure, so these have to be disclosed. I checked the company Laragh Consulting on the CRO website and discovered that it had been struck off. Therefore, it does not exist. I brought this to the attention of the chief executive, and she asked me to speak to Mr. Flannery, which I did. I told him that this company could not issue invoices any more because it does not exist, so following on from that date, he invoiced under his own name, Frank Flannery. I advised him that the fact these payments were made to Laragh Consulting would be disclosed in our accounts as soon as they were filed, and he assured me the matter was in hand and he was getting sorted, but that was not my business, to be honest about it.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What was not Mr. Poole's business?

Mr. Keith Poole:

That the matter was in hand and was getting sorted out.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What was getting sorted out?

Mr. Keith Poole:

Putting the company back on the register.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Is it back on the register now?

Mr. Keith Poole:

Not to my knowledge. I have not checked in a number of weeks.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

If we look at the payments over the years, there was an average of about €58,000. There was €40,000 in 2007, €69,000 in 2008, €44,000 in 2009, €60,000 in 2010, €51,000 in 2011, €66,000 in 2012 and then €80,000 in 2013. What were these payments for?

Mr. Keith Poole:

I did not commission the work. Ms Kerins did so, apparently.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Would something like that have had to go to the board?

Mr. Keith Poole:

Not when it started, because he was just a consultant being employed.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

If we look at the invoices, it was a direct discussion between Ms Kerins and Mr. Flannery on this particular work that was done.

Mr. Keith Poole:

Yes.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Looking at the invoices, what was the purpose of it?

Mr. Keith Poole:

It seems to have been for international representation for the organisation. It seems to have been for lobbying or representing the organisation on certain issues, particularly the charitable lotteries fund, and then assisting with other items in some of the subsidiary companies.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

There have been reports that conferences were attended through various European and global disability organisations. Would these have come across Mr. Poole's desk as financial controller?

Mr. Keith Poole:

In what way?

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In terms of approving the cost to attend these conferences.

Mr. Keith Poole:

The cost of the conference probably did not come across my desk.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We are talking about costs of €12,000 to €16,000. Does that ring a bell?

Mr. Keith Poole:

Does Deputy O'Donnell mean the fees that are paid to those organisations?

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes.

Mr. Keith Poole:

I apologise. I did not understand the question. I would have seen those costs over the years. I do not approve every invoice. If the chief executive or another colleague approves an invoice, it gets processed.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Could an invoice be agreed without it going before the financial controller?

Mr. Keith Poole:

With a €188 million of turnover, the answer is "Yes".

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

At what level?

Mr. Keith Poole:

I do not have the delegated authority at the moment, but it would be roughly €50,000.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Any cheque that is written to a value below €50,000-----

Mr. Keith Poole:

They are not done by cheque. We do not pay by cheque anymore.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It is academic how they are done, but is Mr. Poole saying that-----

Mr. Keith Poole:

All payments will be approved by a financial controller, so there are more than me in the organisation.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Do they report to Mr. Poole?

Mr. Keith Poole:

Yes, they do.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Are there financial controllers in each company?

Mr. Keith Poole:

Absolutely.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What is their limit?

Mr. Keith Poole:

I cannot say off the top of my head.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Would it be €50,000?

Mr. Keith Poole:

Yes, I would say so.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

At what level would the financial controller have to approve a payment?

Mr. Keith Poole:

I do not have that information to hand.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Did the CEO have the authority to approve any payments unilaterally?

Mr. Keith Poole:

Yes, she would approve invoices unilaterally and the payments would be seen by two people once they were made. One would see a list of all the payments being made-----

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I accept that but if an invoice came in for an amount below €50,000, or any level, could the CEO unilaterally approve that payment?

Mr. Keith Poole:

She could approve an invoice.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Could Mr. Poole override that payment?

Mr. Keith Poole:

Yes, if I had a difficulty with it. If I saw the listing of the payments and saw something very unusual and did not recognise it, I would question it, yes, absolutely.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Has Mr. Poole questioned them over the years?

Mr. Keith Poole:

I have questioned nothing in respect of Ms Kerins but yes, I would have, of course.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Ms Kerins had that authority.

Mr. Keith Poole:

Yes.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Mr. Kerr said the response of the Rehab board "to recent political and public demands for information has been inadequate ... we have not exercised strict and appropriate oversight of certain issues". Does Mr. Poole believe now, looking back, that the corporate governance structures within Rehab were lax?

Mr. Keith Poole:

I would not say we were lax in respect of looking at spend, absolutely not. Hindsight is a great thing. In respect of these invoices to which the Deputy refers, Frank was a director and that should have gone through the board. I agree absolutely. I do not, however, accept we are lax in any way in regard to monitoring our spend.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I will move on to Rehab’s foray into the coffin business and Complete Eco Solutions. Rehab has provided a lot of documentation and minutes of meetings and so forth. Mr. Poole would have been aware of this. How did this arise? What is the background to it? Was Mr. Hogan involved in it too?

Mr. Keith Poole:

No it was a Mr. Horgan.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Is that a typo?

Mr. Keith Poole:

No. It is correct. Mr. Horgan and Mr. Hogan.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

No I mean in the-----

Mr. Keith Poole:

In the audit committee? Yes, absolutely. I apologise.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

There is a good deal of confusion in this area. Once again we are trying to ensure public funds were not put at risk. Could Mr. Poole give us a brief overview of it? Mr. Hogan might also tell us about his overview.

It appears that Ms Kerins’ family was involved and Mr. Flannery was a director. Will the witnesses tell me how it arose and how Rehab decided not to pursue it. They have provided a fairly detailed note on it. Has Mr. Poole come back to us with the figures on the balance of the income for the main company? Has he been able to locate that information?

Mr. Keith Poole:

Not yet, but I will.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Perhaps Mr. Hogan will give us an overview. It arose at the audit committee where Ms Kerins stated that her family was involved. Was that the first occasion on which Mr. Hogan became aware of that?

Mr. Liam Hogan:

On a point of clarity, there is a Mr. Horgan involved in this and a Mr. Hogan.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The witness is Mr Hogan, on the audit committee.

Mr. Liam Hogan:

I am Mr. Hogan. I was chairman of the audit committee at that time and still am. It was brought to my attention and there is a copy of a board minute here, dated 25 March 2010. Does the Deputy have a copy of that?

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes.

Mr. Liam Hogan:

That is when it arose. There is a heading, Current Priority Issues. The main issues facing the audit committee are under this heading. The Deputy can see this was the only one discussed at that time because it was the top issue. The detail is there about the coffins and the involvement of Ms Kerins’ family, her brother and her husband. The Deputy can see the discussion that went on and the internal auditors involved. This was professionally done.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I appreciate that but I asked a straightforward question. Was this the first occasion on which Mr. Hogan became aware that members of Ms Kerins’ family were involved?

Mr. Liam Hogan:

Yes.

Mr. Keith Poole:

She declared her interest to the main board in November 2009. The Deputy asked me for some context and I wanted to give that to the committee. The particular business in Kilkenny – I do not know if the Chairman is familiar with our location in Kilkenny – lost €146,000 in 2007. In 2008 it lost €165,000. In 2009 it lost €346,000. This is in our social enterprise. In 2009 it had 29 employees, 17 of whom were people with a disability. The issue was to try to replace income.

I was not personally involved in sourcing coffins or anything to do with coffins, there was a priority to try to do something to save these jobs in Kilkenny. That was the issue that drove this. With the 20:20 vision of hindsight, one would not have done what we did but we were desperate to get something into that centre that would generate some money. That is when the coffin idea emerged.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Why did Rehab not do the coffin idea directly? Why did it go through Complete Eco Solutions?

Mr. Keith Poole:

I cannot answer that question because I genuinely was not involved.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Who made that decision?

Mr. Hugh Governey:

My name is Hugh Governey and I am now the chairman of Rehab Enterprises. I was on the board at that time. I refer to the letter we wrote to Ms Maguire in response to the committee’s letter of 4 March. Item No. 10 in that letter deals with the involvement with Complete Eco Solutions.

Complete Eco Solutions was a company based in China, apparently. Its name is not in any way connected with coffins. It is a company in which Ms Kerins's brother was an active director and shareholder. This opportunity came from one of our employee directors at the time within Rehab Enterprises to import coffins from China. The connection was made through Ms Kerins's brother.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Did that go through Ms Kerins?

Mr. Hugh Governey:

Yes, it went through Ms Kerins. From the outset, when the executive asked Ms Kerins if she would have any objection to Rehab asking for help from her brother, who had significant business interests in China, she agreed on the basis that the matter was brought to the Rehab group board for approval and that was duly done.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What was the first connection made with Ms Kerins's brother in Complete Eco Solutions? How did it first arise?

Mr. Hugh Governey:

To be perfectly honest, I do not know.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

That is the key. It is like writing a book and forgetting about chapter one and moving on to chapter four. It does not work that way. The board must have been aware of the connection when it considered this. Did it come from Ms Kerins?

Mr. Hugh Governey:

I do not recall that it came from Ms Kerins. It came through Ms Kerins.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Were any public funds put at risk?

Mr. Keith Poole:

No, it was all in the company, Rehab Enterprises. To put it in context, the money that was lost on this project because it did not work - let us be honest, it did not fly - was of the order of €80,000.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I direct this question to Mr. Kerr and probably to Mr. Poole. Has all that has happened in terms of the damage that has been done to the charities sector, much of which is related to people not coming forward to deal with the issues at hand, impacted on the fund-raising activities of the Rehab Group?

Mr. Keith Poole:

I can take that question. Yes, of course it has, particularly in our joint venture with The Care Trust, which is the CRC. Therefore, to a certain extent, it is a double whammy. I know staff are taking a lot of heat at the front, and we all are personally. There was a photograph of my house in a Sunday newspaper. I never thought I would see that day.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How does Mr. Poole feel personally about it?

Mr. Keith Poole:

I feel-----

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Does Mr. Poole feel any level of responsibility?

Mr. Keith Poole:

I am a senior manager in the organisation and I do. I have always been quite happy to disclose my salary - €152,664. I have been in the organisation a very long time. It is my career, if you like. Sometimes I feel angry and sometimes I feel disappointed. I have only met the man on two occasions but I have been hugely impressed by Mr. Molloy. From the messages he is giving, he does not seem to be a man who will just write a report and throw it on a desk or anything like that. I believe, and it is my fervent wish, that Rehab will change, and I think that is what we have to be allowed do. That is how I feel.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Were Ms Kerins and Mr. Flannery asked to step down and fired or did they do it of their own accord? What view did the board take?

Mr. Brian Kerr:

Of their own accord.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Did the board see it as being in any way necessary with regard to the difficulties arising in terms of the public view? The Rehab Group has fantastic workers. It provides a fantastic service on the ground. In such cases, it often involves one or two people, and that is what has happened here, who probably have done great work over the years. Did the board not feel it necessary to bring in Ms Kerins as CEO? It seems circumstantial. She effectively finished up her job a couple of days before this hearing.

Mr. Brian Kerr:

I can tell the Deputy that she was under such stress and strain that she was very ill. I saw it with my own eyes.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I hope she recovers.

Mr. Brian Kerr:

The stress has been absolutely total on her and on her family. It is just terrible.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In terms of what has happened, in that it is contradictory, how does Mr. Kerr believe the board did not act to exercise "strict and appropriate oversight of certain issues"? How does that relate to the statement he just made?

Mr. Brian Kerr:

Time marches on and, from time to time, things change. One could see a strain in Angela and-----

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What does Mr. Kerr mean by the statement that "we have not exercised strict and appropriate oversight of certain issues"?

Mr. Brian Kerr:

The board could have been more diligent in its performance in that way.

Mr. Declan Doyle:

May I come in on that? There are four specific issues on which we think we did not exercise sufficient oversight. With the benefit of hindsight, with regard to the coffins business, and the Deputy can ask more questions about that, we should, perhaps, have been more alert to the potential for a conflict.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

With due respect, Mr. Doyle, that is an understatement.

Mr. Declan Doyle:

May I carry on? The second issue is in respect of directors receiving fees while acting as directors. This was published in the annual accounts. It was public knowledge. It should not have happened. We have taken a decision already that this will not happen ever again. In respect of the duration that a number of us have been on the board, 26 years is a long time. That is not for want of trying at times to move on and allow change, but I have been requested by the chairman to stay on-----

Mr. Brian Kerr:

And by me.

Mr. Declan Doyle:

-----and by Brian. We lost a number of board members in recent years due to deaths, and we have a number of new board members coming on. We should have been more diligent. We should have been better on that. In terms of the remuneration committee, clearly, with the benefit of hindsight, we should have paid more attention to the charity and not-for-profit sector rather than focusing exclusively, as we did, on a general industrial benchmark.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How did the remuneration committee allow a bonus payment to be paid to a number of the directors in 2012 when, clearly, from a functioning viewpoint, the turnover was down across various categories in the companies in the Rehab Group? A cut in salaries was introduced across the spectrum for ordinary staff members. How did the remuneration committee allow that in 2012?

Mr. Declan Doyle:

These staff members - the GMT the Deputy has described - had done exceptionally good work within an international remit in difficult circumstances, and I think they were only paid those bonuses because they had achieved them and they had delivered exceptional service against predetermined key performance indicators, specific objective-----

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What about all the other people working in Rehab who were taking pay cuts in 2010?

Mr. Declan Doyle:

Those GMT people also took pay cuts.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

They got a bonus in 2012.

Mr. Declan Doyle:

They got a bonus but they deserved it because they worked exceptionally hard.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I think Mr. Doyle is slightly delusional about that given the current environment. My final question is when was Ms Kerins, the CEO, last paid a bonus.

Mr. Declan Doyle:

I think the Deputy understands that I am not at liberty to discuss anything about Ms Kerins, her terms and conditions, or anything like that.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

A great pity. It does the organisation-----

Mr. Declan Doyle:

But the Deputy understands that.

Kieran O'Donnell (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I do, but it does Rehab no service, nor does it do any service to the public, who provide funds towards Rehab, the service users or the staff. It is not a good day for Rehab. It is extremely important that Ms Kerins and Mr. Flannery take the opportunity to clarify these points before our committee in the interests of Rehab and the wider charity sector.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Can I clarify a question Deputy O'Donnell asked in regard to Laragh Consulting and the payments? Mr. Poole might go down through the years for me. He said that Laragh Consulting was not a company that was operating. It was not registered.

Mr. Keith Poole:

It had been dissolved.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

What about 2007?

Mr. Keith Poole:

I checked in January 2013. That is the first time I checked it, so I do not know the history of Laragh Consulting.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

No, but Mr. Poole has the history of payments here.

Mr. Keith Poole:

I do, yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

In 2007, you made a payment of €40,000-----

Mr. Keith Poole:

Yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

-----to Laragh Consulting.

Mr. Keith Poole:

Yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Was that correct? Has Mr. Poole checked back on that?

Mr. Keith Poole:

In other words, did the company exist at that time?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Yes.

Mr. Keith Poole:

I have not checked back, but my point was why did it come across-----

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Let me finish on this. Mr. Poole did not know that in 2007. In 2008, did you know?

Mr. Keith Poole:

No.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

In 2009?

Mr. Keith Poole:

No.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

In 2010?

Mr. Keith Poole:

No.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

In 2011?

Mr. Keith Poole:

No.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

In 2012?

Mr. Keith Poole:

No.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

In 2013, you found out.

Mr. Keith Poole:

January 2013, yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Why, in 2013, was that the largest amount that was paid to Laragh Consulting?

Mr. Keith Poole:

That was the people who were signing invoices.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Sorry?

Mr. Keith Poole:

That was the people who commissioned the work. I did not commission the work, so I cannot answer that.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Who commissioned the work in each of those years?

Mr. Keith Poole:

Ms Kerins and two former colleagues.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Who were the two former colleagues?

Mr. Keith Poole:

One was Mr. Andrew Conlan-Trant, who has left the organisation. He was a director of training in the United Kingdom. There was also the director of Rehab Enterprises.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Who was that?

Mr. Keith Poole:

Mr. Seamus Clancy.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Can Mr. Poole identify for us the heading under which the work-----

Mr. Keith Poole:

I have already done that as best I can in my replies to Deputy O'Donnell.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I know you have, but I am asking you now-----

Mr. Keith Poole:

Sorry.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

-----for clarity in relation to all those years. What was the specific piece of work in 2007? I know you answered Deputy O'Donnell on this but it was general.

Mr. Keith Poole:

Yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

What I want to find out is what that work was in each of those years.

Mr. Keith Poole:

Yes. I have not got that to hand today. I have not gone back through every year.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Okay.

Mr. Keith Poole:

I have gone back through a couple of years and had a look at the general headings on the invoices.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I know he does not have it to hand but Mr. Poole might just give the committee the general headings on the invoice for each of those years, in order that members get a sense of what work was being undertaken in the context of that consultancy for that year.

Mr. Keith Poole:

Okay, as best I can.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Yes. For how many years has Mr. Poole been there?

Mr. Keith Poole:

Since 1996.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

As best he can for the years he was there, which include 2007 and onwards.

Mr. Keith Poole:

I appreciate that.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

What?

Mr. Keith Poole:

Yes, I understand that.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

In respect of 2011, I refer to note 26 in the accounts. It states here that Frank Flannery is a director of Laragh Consulting.

Mr. Keith Poole:

Correct.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It states that he received €11,000.

Mr. Keith Poole:

Yes, because what is disclosed is since the date of appointment as a director.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

That is, what is disclosed at that point.

Mr. Keith Poole:

Yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

So prior to that is where the balance is.

Mr. Keith Poole:

Exactly.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

As for the approximately €1 million Rehab received from the United Kingdom, where is that in Rehab's accounts?

Mr. Keith Poole:

It is not, in that it comes across in consolidation. It is a transfer from one company to another within the group so-----

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Was this a sum of €1.2 million?

Mr. Keith Poole:

Yes, I think that was the figure.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

How does the group in the United Kingdom describe this amount?

Mr. Keith Poole:

It is gift aid, effectively.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It is a gift.

Mr. Keith Poole:

Yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The group in the United Kingdom describe it as a gift, it enters Rehab's accounts but is not shown specifically in those accounts.

Mr. Keith Poole:

No, because the top entity does not have a separate set of accounts. Effectively, it is in the consolidation.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Okay. In the context of the other entities under the top one, how much do they give in? What is the charge each year? Is it in excess of €1 million for each of these entities?

Mr. Keith Poole:

Sorry, does the Chairman mean the ones that are not in Ireland?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

No, the ones that are in Ireland and that appear under Rehab's-----

Mr. Keith Poole:

The Chair has that information there.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It is €4.2 million from each one of them.

Mr. Keith Poole:

No, that is combined.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I know it is combined but from-----

Mr. Keith Poole:

They are listed there.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Yes, Rehab is in receipt of these and they would be in receipt from the Central Fund.

Mr. Keith Poole:

Absolutely, yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Consequently, one will find money from the Central Fund in each of the headings here.

Mr. Keith Poole:

Yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The National Learning Network and all of those receive taxpayers' money.

Mr. Keith Poole:

Yes, for shared services provided.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

They receive taxpayers' money.

Mr. Keith Poole:

Absolutely, yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

And then out of each of these entities, which receive taxpayers' money, a sum is paid in management fees to the Rehab Group-----

Mr. Keith Poole:

Yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

----- totalling €4.2 million.

Mr. Keith Poole:

Yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Therefore, would Mr. Poole agree there is a content of ----- or how would he describe that money? Is it not taxpayers' money?

Mr. Keith Poole:

It absolutely is taxpayers' money.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Taxpayers' money goes into the entity that pays out all these salaries.

Mr. Keith Poole:

Yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Including Ms Kerins.

Mr. Keith Poole:

Yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

That is a fact.

Mr. Keith Poole:

Yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Lastly, on the coffins issue, while I will come back to this again I seek clarification for the present. Complete Eco Solutions brought in the coffins. Who within Rehab was responsible for that whole enterprise?

Mr. Keith Poole:

At the time, it was a man named Mr. Horgan.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

To where did Mr. Horgan then go? To whom did he report directly?

Mr. Keith Poole:

Ms Kerins.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

He reported directly to Ms Kerins.

Mr. Keith Poole:

Yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

His duty in part was the coffins.

Mr. Keith Poole:

No, his duty was the whole of Rehab Enterprises.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Yes but within that, he had a duty to do with the coffins.

Mr. Keith Poole:

Yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

What happened to Mr. Horgan?

Mr. Keith Poole:

He left the organisation.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Was there a question that he questioned issues about the coffins?

Mr. Keith Poole:

No, not at the time when the transaction was happening.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Not at that time. Did he at any other time? Is it not a fact that Rehab was in negotiations with Mr. Horgan to leave and that Mr. Flannery acted with Mr. Horgan?

Mr. Keith Poole:

No, Mr. Flannery never acted with Mr. Horgan.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Okay. Did Mr. Horgan receive any payment from the organisation in settlement when he left?

Mr. Keith Poole:

I cannot reveal that. I am sorry, as I know the Chairman will get frustrated with me, but I cannot really reveal that.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I will not get frustrated with Mr. Poole at all. I said the public probably will become frustrated with him.

Mr. Keith Poole:

I understand that.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

What was Gandon Coffins?

Mr. Keith Poole:

I believe that was just the trade name that was used.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The remainder of the coffins then were sold.

Mr. Keith Poole:

Yes, they were.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

To whom?

Mr. Keith Poole:

I do not know the detail of that.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Did the purchaser pay Rehab for them?

Mr. Keith Poole:

Yes, €20,000 to the best of my knowledge.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

And they are gone.

Mr. Keith Poole:

Yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

As I have not seen them on sale around, I was wondering where they are.

Mr. Keith Poole:

I have no idea.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Mr. Poole should note I intend to come back to some of those questions.

Mr. Keith Poole:

Absolutely.

Mr. Hugh Governey:

On Complete Eco Solutions, as far as I am aware and as a director at the time, while I do not have perfect recall, the record shows that an executive director, who I expect was Mr. Horgan, came to Ms Kerins with the idea of importing coffins from China. As Mr. Poole already has described, the business in Kilkenny was really struggling at the time and we were doing everything we could reasonably do to keep the business going and keep both the able and the disabled people in employment. I do not know from where the idea came but as far as we are concerned, he approached Ms Kerins, possibly because he knew she had a brother in China. The proposition was put forward about ascertaining whether this could work as a venture for Rehab Enterprises, in which case the coffins would be assembled in Kilkenny. As Mr. Hogan has already alluded and as the Chairman is aware of from the documentation, at all stages Ms Kerins declared her family's interest in the business to do with this particular transaction.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I understand that. However, it also is a fact that when these coffins came in, apparently those who worked for Rehab - and who would have been paid some money from the State - were working on these coffins as part of this Gandon Coffins enterprise. Is that not correct?

Mr. Keith Poole:

Yes, it is a wage subsidy scheme, absolutely.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Those employees were being paid from the wage subsidy scheme with taxpayers' money to deal with these coffins. I seek clarification from someone in Rehab in respect of a point. On 16 February 2011, in an edition of Industrial Relations News, there was commentary with regard to an individual who was claiming rights and who subsequently received some settlement from Rehab. I seek information on that issue and I ask Rehab to check it out for me please and to let me know.

Mr. Keith Poole:

Of course, yes.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

The gentleman present are all welcome and I thank them for their attendance. While it has been stated previously, I reiterate the members' disappointment that neither Mr. Flannery nor Ms Kerins is joining this meeting. The committee very much hopes this can be put to rights and members will see them sometime soon.

I will stick with the coffins if I may and with the permission of Mr. Kerr, I will address this question to Mr. Hogan because from reading the minutes, I understand he might be best placed to deal with the issue. According to the minutes in front of members, on 23 November 2009 Mr. Horgan approached the board and told it there had been discussions with the company with a view to the importation of coffins in order to sell them in Ireland. Ms Kerins made a disclosure at this stage that members of her family, namely, her brother - it is in the minutes in the plural, as "brothers" but it is actually "brother" - and husband have an involvement with this business. This is the note members have to hand, which was signed by Mr. Poole, the company secretary. I ask Mr. Hogan whether Complete Eco Solutions was the company in question with which discussions had been had and to which Ms Kerins was referring?

Mr. Liam Hogan:

The background to this is I am not a director in Rehab Enterprises and so it was handed up to the audit committee. That is what the audit committee then discussed, because the matter came before it.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Can I get clarification from someone who was on the board that Complete Eco Solutions was the company in question with which the discussions had been had and in respect of which Ms Kerins made her disclosure on 29 November 2009?

Mr. Brian Kerr:

Yes, that is correct.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

All right. There is a difficulty with that because Complete Eco Solutions was not formed as a company until 7 December 2009.

If I could have the gentlemen's attention, the actual sequence is that the matter was raised at the board, there was a discussion with persons unspecified here, Ms Kerins made the revelation of a family interest, and the company, according to public records, was formed on Monday, 7 December 2009, approximately two weeks later. Can anyone explain this please?

Mr. Liam Hogan:

I was not aware of that. It is not in the minutes here.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

It certainly is not. Can any board member explain it? I ask Mr. Kerr.

Mr. Brian Kerr:

I cannot explain that.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Is it not odd that Ms Kerins would make a disclosure in respect of a company - I presume it is Complete Eco Solutions, which is the importation body with which Rehab was engaging - that had not yet been formed? I find that bizarre.

Mr. Liam Hogan:

Can the Deputy confirm from which source she is getting her information?

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

It is from the company's records, which are publicly available.

Mr. Liam Hogan:

I am taking my information from the extracts of the audit committee meeting.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

My first port of call is this document, a certified extract of a board meeting of the Rehab Group of 23 November 2009, which the witnesses distributed to us this morning. We have no explanation for that situation. Is that the case?

Mr. Declan Doyle:

Unless that was not the company that was mentioned. I cannot recall the precise details. Can Mr. Kerr?

Mr. Brian Kerr:

Not really. Ms Kerins's brother was a trader in China. As I understood it at the time, the company was exporting solar panels from China and it was to be used as a vehicle for the importation to Ireland of the knocked down coffins.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I understand all of that. According to the minutes, however, Ms Kerins advised the board that certain members of her family held shares in the company with which Mr. Horgan had been dealing.

Mr. Brian Kerr:

That is correct. I was under the impression that it was a company at the time.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

That is what the minutes reflect.

Mr. Brian Kerr:

Yes.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Yet at that point Complete Eco Systems did not exist.

Mr. Brian Kerr:

I was not aware of that,-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Now Mr. Kerr is.

Mr. Brian Kerr:

-----but if the Deputy says so, I accept what she says.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

It is not on my say so - it is a matter of public record.

Mr. Brian Kerr:

Absolutely.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Either the board was misled, which is a possibility, or Mr. Horgan had been dealing and in communication with another company in which Ms Kerins's family - her brother and her husband - had dealings in respect of coffins. She is not here, so we cannot answer that question. When she is here, presumably she will answer that question.

We have an extract from Rehab's audit committee meeting of 8 February 2010. We have moved on a couple of months. Mr. Hogan explained to the meeting that Ms Kerins had introduced the project, but had withdrawn herself from commercial discussions. However, we have been told today that it was not Ms Kerins who introduced the project. Mr. Hogan's colleague, Mr. Poole, indicated that it was one of the employee directors who devised the notion and went to Ms Kerins with it. Is that a more correct account of how this came to be?

Mr. Liam Hogan:

I am reading from the extracts of the minutes of the audit committee meeting of 8 February 2010.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Yes.

Mr. Liam Hogan:

I do not have complete recollection of what happened, so I am working off the minutes. The decisions I made were based on information that I had at the time. I was concerned about whether the disclosure of interests would be a problem if it entered the public domain. I thought that I dealt with it very well. I had the internal auditor in there.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

In February 2010, Complete Eco Solutions was established and three months old. Ms Kerins had almost pre-emptively set out her family involvement in it. However, there is no mention in the minutes of a disclosure of Mr. Flannery's interest in the company.

Mr. Liam Hogan:

No.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Does Mr. Hogan consider this to be an important fact of which Rehab should have been made aware?

Mr. Liam Hogan:

Of course. Ms Kerins was the chief executive. I understood the point of this meeting to be that the chief executive was under suspicion over something that should have been disclosed. What Mr. Flannery was doing with the company was secondary, as I saw the issue. That is why I brought this information to the committee.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Was Mr. Flannery on the board of directors of any of Rehab's subsidiary companies in 2009 or 2010?

Mr. Declan Doyle:

He was certainly not on the group board, if that is what the Deputy is asking.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I appreciate that, but what of the subsidiary boards?

Mr. Keith Poole:

He was.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

From memory, which boards?

Mr. Keith Poole:

From recollection, Rehab Lotteries, one of our organisations in the UK called the Chaseley Trust and Momentum, which is in Scotland.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I thank Mr. Poole. Given the fact that he occupied directorships on Rehab's subsidiaries, we can take it that Rehab ought to have been informed of his interest in Complete Eco Solutions.

Mr. Liam Hogan:

I agree.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Mr. Hogan is aware that the company had three directors - Mr. Flannery, Ms Kerins's brother and her husband. Sin é.

Mr. Liam Hogan:

Yes, but I focused on Ms Kerins as the chief executive.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I appreciate that from the minutes, but I put it to Mr. Hogan that his information was incomplete and that he was unaware of Mr. Flannery's interest in the company. Is that correct?

Mr. Liam Hogan:

Yes.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

We will move on to a note Rehab has supplied on a board meeting held on 25 March 2010, a month later. It tells us that Ms Kerins stepped out of the meeting. By this point, an order had been placed, the first shipment was due and a website was to be set up. Mr. Poole asked whether the supplier was approached to reduce prices in light of the changed market conditions, etc. To complete the timeline, when did the first shipment arrive?

Mr. Keith Poole:

I believe it was shortly thereafter, but I cannot give an exact date.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Was there a second shipment?

Mr. Keith Poole:

I do not believe there was, but I cannot be 100% certain.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Were the total moneys paid over to Complete Eco Solutions for that shipment €70,000?

Mr. Keith Poole:

Yes.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Somewhere in that region.

Mr. Keith Poole:

Yes. That sounds right.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Is that the only money that was paid to Complete Eco Solutions?

Mr. Keith Poole:

Yes, I believe so.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Was there a controversy among Mr. Poole's financial controllers over the paying out of that money to Complete Eco Solutions?

Mr. Keith Poole:

One of my financial controllers was asked to sign a cheque. He called me and asked whether it was in order.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Did he refuse to sign the cheque?

Mr. Keith Poole:

Yes, until he spoke to me.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

On what basis was he refusing to sign the cheque?

Mr. Keith Poole:

He recognised that there was a connected party.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

If Mr. Poole does not mind, I will surmise why that gentleman refused to sign the cheque. Instead of importing materials directly, Rehab chose to use a third party. It looks like a company, namely, Complete Eco Solutions, was formed for that express purpose. Those who had ownership of and an interest in that company were closely related to the then CEO and another was a director of some of Rehab's subsidiaries and its former CEO. Given the run of events, that is what it looks like to me. I will surmise that the financial controller in question suspected or was at least uncomfortable with that scenario.

The organisation's own minutes reflect the fact that there was the potential for reputational damage to Rehab, given the close connections of the CEO with this enterprise. Do the witnesses, and Mr. Kerr as chairman in particular, now accept that it was, to say the very least, ill advised for the board of Rehab or any of its committees to have given consent to this transaction and operation?

Mr. Brian Kerr:

I accept that.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I may come back to that but I shall move on because I am conscious of the time constraints. Mr. Poole confirmed in his opening statement that no remuneration was ever paid to a director of the Rehab Group board in respect of his or her duties. I ask him to clarify what he meant when he went on to say that in recent years, certain directors or their firms were paid by Rehab for the provision of professional services, including quantity surveying, publications and editing. Leaving Mr. Flannery aside for one moment, I ask Mr. Poole to tell me who those directors were, the total value of the fees paid to them and the time line involved, if possible.

Mr. Keith Poole:

I will have to refer to my file for a second. I can tell the Deputy, with regard to the directors in question, that one was a firm called KMCS-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

What is it?

Mr. Keith Poole:

It is a quantity surveying firm in Rathgar. Mr. Keogh, a former Rehab director, was a partner in that firm but he absolutely stood aside from any work with Rehab. We just used his firm which did a lot of big projects at that time. They did a lot of significant building-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

He was a director at the time of the awarding of that contract.

Mr. Keith Poole:

Yes he was a director of the Rehab Group.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Okay. Who else?

Mr. Keith Poole:

Mr. Gene Lambert, a director of Rehab, was involved in a publication called Insight, an attachment to The Irish Timeswhich is published on a quarterly basis.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I am familiar with that title.

Mr. Keith Poole:

He was an adviser on editorial content and so forth.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Anyone else?

Mr. Keith Poole:

No.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Just those two gentlemen. Does Mr. Poole have the figures for the value-----

Mr. Keith Poole:

I will get them.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Fine. We have the detail of Mr. Flannery's payments. While Mr. Poole is seeking out those figures, I wish to draw the attention of the other witnesses to Rehab's memorandum and articles of association and specifically, to clause 4. I do not know if the witnesses have this document with them but I will read out the relevant section because it makes for interesting reading. Clause 4 states that "no member of the company's board, group of directors or governing body, by whatever title called, shall be appointed to any salaried office of the company". That goes to Mr. Poole's explanation of why he is not on the group board. It goes on to say that no remuneration or other benefit, in money or money's worth, shall be given by the company to any member of the board, to the directors or the governing body. It makes it clear that the practice is that directors serve in a voluntary capacity. It goes on to say that an exception can be made in terms of members of the group board of directors but only where that member holds not more than a 1% part of the capital of the company in question. In other words, it is allowable, according to Rehab's memorandum and articles of association, but only when the threshold of involvement of the board member is very low.

Perhaps Mr. Poole will tell me, or can I surmise that in the case where payments were made to members of the board of directors, their interests in the companies concerned exceeded that very modest threshold? Would I be correct in saying that?

Mr. Keith Poole:

Regarding payments made to Mr. Lambert - I have the figures here - in 2013, the sum was €8,000, in 2012 it was €12,000 and in 2011 it was €5,000. Those sums were paid to him, in his own name so Deputy McDonald is absolutely correct.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

In terms of KMCS?

Mr. Keith Poole:

I am not familiar with the partnership arrangement but yes, technically ---

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

It would be in excess of the threshold?

Mr. Keith Poole:

Yes but those amounts were genuinely for quantity survey services provided by that firm.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Just so we are clear, I am not questioning the genuine need for the service or the delivery of that service. I am not casting any aspersions in that regard. What I am pointing to here is that the individuals concerned were directors of the group and I am asking, to cut to the chase, did Rehab break its own rules?

Mr. Declan Doyle:

Mr. Poole might agree that there was a little bit of ambiguity because the articles of association, at clause 37.1, state that a member of the group board of directors who is in any way, whether directly or indirectly, interested in a contract or arrangement or proposed contract or arrangement with the company "shall declare the nature of his or her interest at a meeting of the group board of directors" at which the question of entering into the contract or arrangement is first taken into consideration. This implies, although it is not explicit, that they could be there. That said, Deputy McDonald is right. Quite clearly, no director should be in receipt of fees in respect of any other activity. However, the aforementioned clause did introduce an element of ambiguity and perhaps-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Without getting into a clause by clause debate on the issue, I would not share that analysis. I would put it to Mr. Doyle that Rehab was in breach of its own rules in awarding work to members of the group board. More astonishingly then, when it comes to Mr. Flannery - and I hope he does not get overly exercised at the mention of his name - we discover that Rehab consistently made payments to Laragh Consulting, even though it was dissolved in 2009. Mr. Poole said that he only discovered that this was the case in January 2013. What prompted him to go and check at that stage?

Mr. Keith Poole:

I was doing the disclosure note for the accounts and ---

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Did Mr. Poole not do a disclosure note for previous accounts?

Mr. Keith Poole:

I did but to be honest, the amount that was being disclosed in 2011 was smaller, so-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

In 2011 it was €51,000 and in 2012 it was €66,000.

Mr. Keith Poole:

No, in 2011, it was-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Of course, in 2011, it was €11,000. Pardon me. In 2012 it was €66,000.

Mr. Keith Poole:

Yes, and I was doing the 2012 accounts and the disclosure note and decided to check it.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

So the 2013 payment was made to Mr. Frank Flannery directly.

Mr. Keith Poole:

Yes, everything from that date in January was-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

According to Ms Kerins's correspondence, Mr. Flannery took on this work on request. He was not lobbying for the work but took it on because he was asked to do so by Angela Kerins. Is that what happened?

Mr. Keith Poole:

If she says so, yes.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I am sure that all of the witnesses would appreciate that this was not at all appropriate, not least because Laragh Consulting was a busted flush by 2009. Am I right?

Mr. Brian Kerr:

It would appear so.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

It does not appear so. It was so.

Mr. Brian Kerr:

It would appear so.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

No, it is not a matter of appearances.

Mr. Brian Kerr:

I am not arguing-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

It was dissolved in 2009. That is a statement of fact.

Mr. Brian Kerr:

We were not aware of that fact at the time.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Would Mr. Kerr not categorise that lack of awareness as lax? That was lax, was it not?

Mr. Brian Kerr:

Very definitely.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

The company was not doing its due diligence or its homework.

Mr. Brian Kerr:

Yes, I would agree. That would seem to be the case.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

What did the auditors say when Rehab discovered that this company had been dissolved since 2009? How was that news broken to the auditors?

Mr. Keith Poole:

It was disclosed. The auditors did not have any reaction because the disclosed payment was made to the entity.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

On the issue of lobbying, it has come to my attention thatirelandfirst.ie, was set up in January 2011. It is a lobby group composed of the great and good of Irish society and is concerned with political reform. Rehab registered the domain nameirelandfirst.ie. Were the witnesses aware of that? It is a matter of public record that the person who registered the name on behalf of Rehab was a Mr. Robert Younger. Does that ring a bell?

Mr. Brian Kerr:

I am not aware of that.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Are any of the delegates aware of it?

Mr. Keith Poole:

Mr. Robert Younger is an IT manager in Rehab.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Was Mr. Poole aware that he is the person who registered the domain name irelandfirst.ieon behalf of the Rehab Group?

Mr. Keith Poole:

I was not aware.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Was the board aware of it?

Mr. Brian Kerr:

I never heard about it.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

However, it did happen. I am not casting any aspersions on the motivations of those associated with irelandfirst.ie; I am sure they are entirely honourable. However, is it appropriate for the Rehab Group name to be associated with that group and its IT manager, Mr. Younger, to be taking the time and trouble to register the domain name?

Mr. Brian Kerr:

It would be nice if the board knew about it.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I put it to Mr. Kerr that the board absolutely should have known about it. I am conscious that I might be introducing new information of which the witnesses clearly were not aware. I am asking them to investigate this matter and give a report to the committee as to how it came to be.

Mr. Brian Kerr:

We certainly will do so.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

On the issue of pay, I was glad to hear Mr. Doyle say that it would be good practice in respect of benchmarking pay rates for Rehab's senior executives to look to his own sector rather than private industry.

Mr. Declan Doyle:

I was making an observation about the benefit of hindsight. To put the situation at Rehab in context, over the years we have moved from being a very small organisation to quite a large one. Initially, Rehab ran sheltered workshops, which was a largely commercial endeavour in the sense that one had to go out and sell one's services to commercial industry. We have always seen ourselves as a commercial not-for-profit organisation rather than a pure charity, even though we were always involved in a huge range of charity activities. I can remember doing pub quizzes and church gate collections in Limerick and all the kind of stuff that is associated with the local committee. Nevertheless, the general industrial benchmark was, in our view, appropriate for an organisation which had a growth mandate, was seeking generally to internationalise its business and had unique services which we felt we could offer outside Ireland. It seemed to me at the time a very sensible way to go and, therefore, we did not look to our sector. Of course, we should have done so.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I hope the message has been received and understood that the world outside of Rehab does not believe that is the way to go.

Mr. Declan Doyle:

That message is received. The world has changed, we have changed and it is not the way to go. We will be looking at the issue very carefully.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Does Mr. Doyle regard public sector pay standards and norms to be an appropriate benchmark for Rehab's senior management?

Mr. Declan Doyle:

We would have to look at the public sector as well as at charities similar in size and scale to Rehab in the United Kingdom and wherever else we can find them in terms of setting an appropriate level of remuneration for the senior management team and the new CEO.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I am sure Mr. Doyle is aware that other charitable organisations look to their own charitable sector and to the public sector in setting pay rates. That would be considered good practice.

Mr. Declan Doyle:

I understand that.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

In regard to the pension regime within Rehab, what is the qualifying age for an employee to draw down his or her pension?

Mr. Brian Kerr:

It is 65 years of age at the present time.

Mr. Keith Poole:

To clarify, in a defined contribution scheme, one can retire from age 50 onwards.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Does that currently apply to Rehab's scheme?

Mr. Keith Poole:

Yes.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

One can retire at 50, but can one draw down one's pension at that age?

Mr. Keith Poole:

An employee who leaves our employment can draw down his or her pension.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Am I right in assuming that CEOs or any other person, on leaving Rehab's employment, draw down their pension?

Mr. Keith Poole:

Yes.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Was that the case when it was a defined benefit scheme?

Mr. Keith Poole:

Members of a defined benefit scheme can seek early retirement with the permission of the trustees.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Does Rehab have an early retirement programme?

Mr. Keith Poole:

Not really.

Mary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

There is no early retirement scheme?

Mr. Keith Poole: