An unpublished HSE review uncovered serious financial irregularities in a non-acute voluntary agency in receipt of State funds, irishhealth.com has learned.

The agency, which has not been named by the HSE, was paying its manager twice the appropriate pay rate, an unauthorised bonus and other non-compliant top-ups.

A HSE audit detailed in the financial control review report, seen by irishhealth.com, also uncovered other financial management issues in the agency concerned. These issues included irregularities relating to the use of credit cards, tax compliance, and procurement.

The audited agency was in receipt of €5 million in HSE funds. In the review report, completed last summer, the HSE says was acting on the findings from the audit.

The audit revealed that the total annual remuneration of the manager of the unnamed agency was €140,000 in 2011.

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 financial review report, released under FOI, states that this remuneration package was not in compliance with public sector remuneration policy in relation to the level of pay for the position (grade six equivalent). The basic pay rate quoted is twice the grade six HSE clerical/admin staff rate.

The pay package also breached the HSE prohibition on performance-related bonus schemes and the need for publicly-funded bodies to comply with tax obligations, the report says.

The travel allowance paid to the agency manager was unvouched and it was not clear whether it had been approved by the board of the agency, according to the HSE report.

The review report, which looks at the effectiveness of internal financial controls in the HSE, also says there was no evidence available in the audit of the agency board's approval of the pension schemes for the manager and staff.

The report also shows the audit uncovered other financial irregularities in the organisation.

These included:

* Inadequacies in the collecting and receipting of client contributions.

* HSE funding to the agency was not separately identifiable within its accounts.

* Payments were made in 2010 to the Office of the Sheriff in respect of €5,500 in overdue tax.

* Lack of evidence that goods and services had been properly tendered for and evaluated in line with HSE procurement policy.

* Consultancy transactions were entered into with the company of an agency board member with no evidence of formal disclosure of this to the board.

* Lack of adequate receipts and supporting documentation for transactions funded from petty cash.

* Issues with credit card transactions, with a significant proportion of these relating to hotels and restaurants, lack of supporting documentation/explanations for some of the card transactions, and lack of approval by the board chairman for the manager's credit card statements.

Other issues identified in the agency probe included delays in the submission of audited accounts to the HSE; a lack of documentary evidence or matters arising or issues raised by the agency's own external auditor during each annual audit and no evidence of the organisation's tax clearance status prior to the agency entering into a service level agreement with the HSE.

In a sample audit on a second unnamed voluntary agency detailed in the report , the HSE reported some positive findings.

However, it also found:

The service level agreement (SLA) with the HSE had no evidence of the tax clearance status of the agency and the SLA provided no evidence of items such as an ethics policy; insurance cover; governance process reviews or submitted budgets.

The audit also found that the agency's SLA provided no evidence that all relevant staff had been adequately Garda vetted, or that patient satisfaction surveys had been carried out.

It also found insufficient detail in the agency's audited accounts to facilitate the tracing of HSE funding in the accounts.

The HSE said plans had been put in place for the HSE to address the various issues raised in the audits and the improvements would be monitored.

The report on HSE internal financial controls was drawn up by the HSE's Finance Directorate and completed in May of last year, but it has not to date been published.

The document says larger non-acute agencies were also surveyed on 'a self-assessment basis' on their financial compliance as part of the HSE review.

This survey found that while there was generally a high level of compliance with the HSE's requirements, there were areas of concern, including the fact that the HSE did not have complete records of the assets held by voluntary agencies in this sector - it was recommended that these details be provided as part of service agreements.

The findings in the HSE report are likely to raise further concerns about financial management and governance  in a wide range of voluntary agencies that receive funding from the HSE - not just in relation to pay policy, but regarding overall financial controls and governance.

To date, the Dail PAC has concentrated its investigations largely on the remuneration policies of Section 38 voluntary hospitals and agencies such as the Central Remedial Clinic, with the focus now moving to remuneration in Section 39 non-acute agencies in receipt of HSE funding, such as Rehab.