The Government is set to reduce the exchequer allocation to health service safety watchdog Hiqa to recoup overpayments it is accused of making to senior directors in the organisation over recent years.

The Irish Times understands that over recent months there was a stand-off between Hiqa, the Department of Health and the Department of Public Expenditure and Reform over the appropriate salary rates to apply to directors in the agency.

Hiqa insisted it had received official approval to pay the amounts it has been paying to its directors.

Official documents maintain the directors concerned would not agree to any voluntary regrading of their position to a lower level or to any attempt to make them return some of the money paid in salaries.

Legal challenge

The chairman of Hiqa, Brian McEnery, told the former minister for health

James Reilly

in a letter that any move to recover payments or to regrade the directors concerned without their consent would expose the organisation and the State to legal challenge.

Hiqa contended that it had received official approval as far back as 2007 to appoint its directors on the salary scale of assistant secretaries in the Civil Service.

Different rate

The Department of Health and the Department of Public Expenditure and Reform has said the sanction provided by the

Department of Finance

stipulated that the salary for Hiqa directors should be set at a different rate, just below the pay level for the grade of HSE director level III and the maximum of the assistant secretary scale.

The Department of Health told this newspaper it could not specify the differences involved. It said the differential in the remuneration of the directors was being calculated as part of the estimates process for next year.

The most recent financial accounts published by Hiqa for 2012 maintained directors in the organisation were receiving salaries of between €134,000 and €153,000. These rates would have been reduced under the Haddington Road deal last year.

It is understood that the issue of the appropriate pay rate for directors in Hiqa arose in the context of plans to establish a new post of chief inspector of social services last year.

In his letter to the former Minister, Mr McEnery said: “The authority believes that it has contracted with directors of the authority – both those appointed and contracted in 2007 and in 2012, based on the approvals that it has received and considers that all individuals concerned have been and are being properly remunerated in accordance with their contractual terms of employment.

Not Hiqa’s ‘error’

“Therefore, any perceived error in these approvals in the view of the Department of Public Expenditure and Reform is not of the authority’s or of the individuals’ making.”

Mr McEnery said when he had spoken to the directors on the issue they had stated categorically that “they will not consent to any attempts to carry out what the Department of Public Expenditure and Reform has requested and to so would be a breach of the contractual agreement that the authority has entered into with them”.

Future changes

In statements, the Department of Health and the Department of Public Expenditure and Reform indicated that the existing directors would be permitted to keep their current salaries but the situation would be reviewed for future appointments.

“Based on legal advice and because the level and scale is a specific term in their respective contracts, this cannot be changed but . . . as these posts fall to be filled again, the grade and remuneration will be examined to ensure a consistent approach.

“To ensure the exchequer was not at any loss, any overpayment due to the regrading is to be recouped from the Hiqa allocation.”