Disability services provider received cash advance from HSE last year as it faced €5m budget shortfall

One of the State’s largest providers of disability services was in a “stark” financial position at the end of last year, facing a budget shortfall of more than €5 million, according to minutes of board meetings.

Stewarts Care, a voluntary provider of residential care for people with intellectual disabilities, required a significant cash acceleration from the Health Service Executive (HSE) to pay staff wages in December.

Minutes of a November 23rd, 2022, board meeting show the provider was in daily talks with the HSE about the “immediate need” for an advance on funding, in order to meet payroll and statutory creditor obligations in December.

The board heard how the financial situation heading into the end of the year was “stark”, as the organisation was running an expected €5.3 million over budget for the year.

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Directors were told the provider’s overdraft facility was “not sufficient to allow payment of wages in December 2022″ without help from the HSE.

[ Waiting lists, burned out staff, no accountability: New HSE chief faces big challenges ]

“The situation is stark but we remain confident that the HSE will be forthcoming in assisting us to meet our obligations,” the minutes noted.

Some €4 million of the overrun was down to inflation pressures and unfunded costs associated with Covid-19.

A national pay agreement to give staff a 3 per cent pay increase had been an “additional unforeseen and unbudgeted cost” amounting to €1.65 million, the minutes stated.

Brendan O’Connor, Stewarts Care chief executive, wrote to the HSE on October 3rd to warn the provider would have to cut services if “adequate funding” was not forthcoming.

A board meeting later that month heard that it was “disappointing” that the HSE had not funded pandemic payments that it had instructed Stewarts to make. Board members also expressed frustration that funding had not been provided by the HSE, ahead of new pay agreements, according to minutes of the November 23rd meeting.

Paul Geoghegan, Stewarts Care director of finance, told directors if the €5 million cash acceleration was not received from the HSE, the board would have to take steps to “protect the company” as it could not “trade recklessly”.

“The board noted its disappointment that the organisation is left in the same financial cycle again,” the minutes stated.

[ Charities face staffing crisis as inflation starts to bite ]

Minutes of the provider’s board minutes were released to The Irish Times following a Freedom of Information (FoI) Act request.

A spokesman for Stewarts Care said the HSE had confirmed “significant additional funding” that had addressed the “majority, if not all, of the shortfall identified at the end of 2022″.

The provider was “continuing to engage with the HSE” over additional costs such as caused by inflation and the Covid-19 recognition payments to staff, he said.

Stewarts Care “consistently review the levels of funding required to provide safe services” in partnership with the HSE, the spokesman said.

A spokesman for the HSE said Stewarts Care and other disability services providers had been impacted by extra costs due to Covid-19 and inflation last year.

“Funding was accelerated to the organisation to ensure it had access to adequate cash funding to meet its liabilities as they fell due,” he said.

The Government had confirmed increased funding to providers to help cover inflation, he said. “The HSE is also allocating additional supplementary funding to address other costs including Covid-19-related costs,” the spokesman added.