Pay and other financial irregularities in the running of a north Dublin home care provider in receipt of substantial HSE funding were discovered in an audit of the company, which has admitted that it suffered a 'breakdown of financial controls' around 2011-2012.

A random HSE audit in 2012 revealed 'significant issues' with the remuneration of the former manager of the agency, and other concerns in relation to financial management in the company.

The agency, Fingal Home Care, says it has now addressed financial control issues, has introduced new management and control systems, and it is now back on a stable footing.

The company provides a range of homecare services for over 700 clients in north Dublin to assist people to remain in their own homes and is a preferred provider of homecare for the HSE.

The directors of Fingal Home Care, in a recently-filed financial statement, say they took over the day-to-day running of the company when they became aware of financial management issues in 2011-12.

The HSE says its audit, carried out in 2012, found that the company, which receives €5 million a year in funding from the health executive, discovered 'significant issues' in relation to the remuneration package of the then manager of the agency, in addition to issues relating to taxation, credit card transactions and procurement.

Fingal Home Care's own audited accounts and financial statements for 2011 and 2012 state there had been a breakdown of financial controls within the company in this period. 

The company directors, in their latest financial statement, said they became aware in 2012 of a breakdown of financial controls within the company which had manifested themselves during 2011 and 2012.

In order to deal with this, they took immediate day-to-day control of the company from its management, 'arrested the problems and implemented a series of measures to restructure the company and restore it to good financial health'.

The directors say the company is now back on a stable footing, the jobs of over 300 carers have been preserved, and the relationship with the HSE, its main customer, had been restored.

A summary of the main findings of the HSE audit of Fingal Home Care shows that its manager's total remuneration package in 2011 was €140,000. This comprised a salary of €106,000, an untaxed travel allowance of €8,000, an employer pension contribution of €16,000 and a performance-related bonus of €10,000.

The HSE said this package was not in compliance with public sector pay policy in relation to the level of pay for the position (a grade VI post - the manager's salary was around twice this rate).

It said the company also breached the prohibition on performance-related bonuses in the public sector 'and the need for publicly-funded bodies to comply with tax obligations'.

The audit found the travel allowance paid to the manager was unvouched and it was not clear whether the board of the company had approved it. The company subsequently told the HSE it would ensure that all travel expenses would be vouched and in compliance with public sector rates from May 2012.

The HSE also found there was no evidence available of Fingal Home Care board's approval of the manager and staff pension schemes and there also inadequacies found in the collecting and receipting of client contributions.

In addition, the audit said there was a lack of evidence that all contracts for goods and services had been appropriately tendered and evaluated with HSE procurement policy.

Consultancy transactions were entered into with a board member's company but there was, according to the audit, no evidence of formal disclosure of this to the board or that proper procurement processes had been applied.

The audit also found anomalies with credit card transactions in Fingal Home Care. A significant number of these transactions related to hotels and restaurants, there was a lack of supporting documentation and explanations for some credit card transactions and there was a lack of approval by the chairman of the company board of the manager's credit card statements.

There was also a lack of adequate receipts and supporting documentation for transactions funded from petty cash. The audit also states that there was no evidence that the service provider's tax clearance status was confirmed by the HSE prior to entering unto a service level agreement.

The audit also found that HSE funding to the agency at the time was not separately identifiable in the company's accounts.

The main findings of the audit on the home care company were included in a report on financial controls in the HSE in general, recently released under FOI. The HSE has yet to release the full audit report on Fingal Home Care.

The company's auditors, in the 2011 and 2012 accounts, state that in common with many similar organisations, it derives some of its income from voluntary contributions (this source of income ceased in 2012), which cannot be fully controlled until they are entered into the accounting records.

The auditors state that there were no satisfactory auditing procedures at the company which they could adopt to satisfy them that all income had been received and recorded. "Accordingly, our examination relating to income was limited to the amounts recorded in the accounting records."

The 2012 accounts also state that Fingal Home Care has since invested in the development of new financial control systems and procedures, a financial IT system and an outsourced financial controller.

The directors have restructured the office and management side of the business, according to the accounts, and have continued to invest in staff training, recruitment and induction of new carers, HR systems and procedures.

The accounts show show that Fingal Home Care reported a loss of €114,616 in 2012.

The HSE says plans were put in place to address the issues raised in its audit and these were being monitored.

A spokesperson for Fingal Home Care declined to comment.