State bodies failed to seek approval for severance deals with former executives

Department of Public Expenditure defends its handling of payments, citing contract issues

State bodies failed to seek approval for severance deals with former executives

Robert Watt, Secretary General at the Department of Public Expenditure and Reform | File photo: RollingNews.ie

The chief executives of two state bodies were given severance payments without approval from the Department of Public Expenditure and Reform, it has emerged.

The payments - between 2011 and 2013 - were made despite a 2010 instruction from the department that it must approve such financial packages.

The Comptroller and Auditor General (C&AG) has reviewed dozens of public sector severance payments totalling €18 million, but the organisations involved have not been revealed.

Department Secretary General Robert Watt told the Dáil's Public Accounts Committee that it had no choice but to agree to the payments in the two cases with chief executives.

"These were contracts that were entered into in the late 1990s," he said. 

"When we were informed about the deal, when payments were being made, it was based on the contractual arrangements that people had been signed into, so there was no leeway for the state."

Rules have since been tightened to ensure contracts are approved in advance, Mr Watt added. 

The PAC also heard that the Central Bank has paid around €500,000 in retention payments to 29 staff in order to keep them in their jobs.

The bank says the payments were warranted as the staff were needed to finish two major projects of critical importance.

The committee was told that the Central Bank paid out €73,000 to one individual it hired who never took up employment.

The C&AG has criticised the bank for failing to document legal advice in cases.

Central Bank COO Gerry Quinn said: "The individual claimed they were not fully made aware or made aware in sufficient time of all the different elements associated with the terms and conditions of the Central Bank.

"There was clearly a deficiency within our process in relation to the offering of the job."