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Rehab confirms alleged fraud at subsidiary is under investigation

The organisation last year received a Government bailout.

Image: Mark Stedman/Photocall Ireland

THE LARGEST EMPLOYER of people with disabilities in the country, Rehab, has confirmed that an alleged instance of fraud is under investigation at one of its subsidiaries.

A note attached to Rehab’s 2018 annual accounts states that the company concluded a preliminary investigation in 2019, which identified an alleged instance of fraud at one of its wholly-owned subsidiaries.

The note reads: “The matter has now been disclosed to the relevant authorities.”

A spokeswoman for the organisation today said that the alleged fraud came to its attention as a result of a protected disclosure.

She added: “As the matter is subject to an investigation at this time, no further comment can be made.”

Loss

The organisation last year received a Government bailout in order to deal with escalating costs across a number of areas, and the accounts show that the bailout occurred after Rehab recorded a loss of €2.79 million in 2018.

The Rehab spokeswoman said that already €1.5 million has been received from the Government and “we anticipate receiving a final €500,000 imminently”. 

The spokeswoman also confirmed that the rebranding of Rehab has been paused due to the organisation’s financial circumstances.

In 2018, Rebab awarded a €30,000 to €40,000 contract for rebranding to be carried out as the group’s name “is no longer fit for purpose”.

The renaming of the organisation was to draw a line under the fallout from the controversy that the company was mired in in 2014 that culminated in the resignation of its chief executive, Angela Kerins, and a new board being appointed five months later.

Rebrand

The Rehab spokeswoman stated the rebranding project is now at an advanced stage, with much of the project work completed. 

However, she added: “It was deemed prudent to put the project on hold whilst we worked to restore the financial sustainability of the organisation. The board of Rehab will decide in due course when this project will recommence.”

The accounts show that six of Rehab’s former top earners shared €720,491 in redundancy in 2018.

The redundancy payments resulted in the pay of one individual in the bracket of €230,000 to €240,000 with two others earning between €190,000 to €200,000 in 2018.

A note attached to the accounts states that the annual savings to Rehab from the redundancies total €489,000.

Without the redundancy payments included, the numbers earning over €100,000 at Rehab in 2018 total 10, with the highest earner in the €140,000 to €150,000 bracket.

CEO Mo Flynn received a salary of €140,000. Three other staff members receive remuneration between €130,000 and €140,000; three between €110,000 and €120,000 and three between €100,000 and €110,000.

The spokeswoman for Rehab stated that since 2014, Rehab Group has introduced a range of cost reduction measures “in line with our Board of Directors’ mission to transform the organisation”. 

The accounts show that in 2018, Rehab’s total income came to €140.7m, which included a grant from the HSE of €73.8m, and the organisation’s total expenditure came to €143.6m.

At the end of 2018, Rehab employed 3,069 and staff costs came to €96.8m.

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Gordon Deegan

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