The salary increase of more than €80,000 for the top civil servant in the Department of Health, Robert Watt, was dealt with "informally" and lacked transparency and accountability, according to a draft report on the issue by a cross-party group of TDs and Senators.
The Oireachtas Finance Committee has been examining the appointment of Mr Watt to the position in April on a salary of €292,000 - considerably higher than the salary of €211,000 he was paid in his previous role as secretary general in the Department of Public Expenditure and Reform.
Mr Watt agreed to waive the higher rate until the economy begins to recovery.
The committee is due to publish its final report on the issue next week.
A draft version, seen by RTÉ News, says the way the appointment was handled "damaged public trust and eroded confidence in the system of public administration".
It is particularly critical of Mr Watt's initial appointment to the job, on an interim basis. That process, it says, was done in an "ad hoc" manner "following discussions among a small number of senior officials and members of the Government".
It says this was a "very poor way to conduct business" and is likely to "create knock-on demands for increased salaries, despite protestations that the Department of Health is unique and the circumstances that arose were one off in nature".
The report says: "No robust evaluations were carried out and there was no benchmarking against similar roles so it cannot be maintained that this case will not lead to demands for future pay rises on an ad hoc basis."
In its conclusions, the draft report states that "the committee is unclear as to why the standard procedure of transferring an existing secretary general on the same terms and conditions did not apply".
It makes a number of recommendations which it says are aimed at ensuring a similar situation does not arise again.
It recommends that interim appointments "should not be sanctioned in the absence of clear and objective criteria which ensure the subsequent process is fair to all involved."
It also says that a formal role of Head of the Civil Service should be created "to ensure adequate oversight of Secretaries General and so that disciplinary matters can be dealt with, should they arise".