The Saint John of God order has denied that its community services division hid from the HSE a payment of €1.64m to 14 executives in late 2013.
The charity told RTÉ News that consultants advised it that the managers concerned should increase their pension contributions but that the order risked becoming liable for the pensions if it did not make the controversial payments.
The order's provincial Brother Donatus Forkan and group chief executive John Pepper told RTÉ News the money was provided by the order from rental income it collected.
The payments seem to have been in contravention of a Department of Health circular issued three months before the payments were made instructing the organisation, and other section 38 charities, to cease supplementing the remuneration of employees from non-exchequer sources.
Director with St John of God Services Clare Dempsey said the payments were made "in the belief that from there on in, they became compliant with public pay policy.
"It was a discharge of a pension risk and this payment from the order’s own resources discharged that liability."
Minister for Health Simon Harris said appropriate sanctions will be imposed upon the charity if any regulations have been breached in relation to undisclosed top-up payments.
He said he was very disappointed about what he had been reading in relation to the matter, adding that it seemed there had been "efforts to conceal additional payments from the HSE".
The minister said that such practices were not acceptable and that an explanation was necessary.
Mr Harris said: "You can put all the structures you want in place and it's very important you do but when someone signs on the dotted line to say 'I am in compliance with all the rules', there does actually have to be an element of presuming that they're actually signing and intending to fulfill what they’re signing up to".
Meanwhile, St John of God Services has welcomed the HSE's announcement that it is investigating the payments.
