News

Irish charity wrongly paid €84k to CEO's parents who were ex trustees

Barbara Flynn
Barbara Flynn

An investigation into a charity for people with a serious brain condition has found it wrongly made payments of €84,009 to two former trustees.

The investigation was carried out by the Charities Regulator into the charity Ataxia Ireland.

The irregularities were first reported by Independent.ie in September of last year

The report found the chief executive Barbara Flynn did not inform the charity’s other trustees between January 2014 and June 2015 of the existence of the payments.

The payments were made to two founding trustees who were the chief executive’s parents.

Ataxia is a term for a group of disorders that affect co-ordination balance and speech.

The report also found there was a fundamental weakness in the financial management and control of the charity between 2014 and mid-June 2015.

Evidence of this was the fact that the charity paid the employee pension contributions of €38,500 of the chief executive and another staff member-totalling approximately €900- rather than deducting these payments from their salaries.

This began in July 2010 and was not identified until October 2016

The Charities Regulator John Farrelly  has written to the trustees requiring the implementation of a series of corrective actions, identified by the inspectors following their investigation.

The Charities Regulator appointed two inspectors in November 2016 to investigate the affairs of the charity following concerns it received.

The charity trustees have been given 21 days to respond to the Charities Regulator following the publication of the inspectors’ report today. “We have written to the charity trustees to instruct them that we require an action plan which addresses the inspectors’ recommendations,” said Mr Farrelly.

“If we are not satisfied with the response from the charity trustees we reserve the right to intervene under section 74 of the Charities Act 2009 to ensure the charity is protected.”

Section 74 provides the Charities Regulator with the power to apply to the High Court for a range of measures to protect a charity.

Among the findings and conclusions of the inspectors’ report were:

* The two founding trustees did not disclose to the wider management committee that served between January 2014 and mid-2015 details of any payments they received;

* The two founding trustees and the CEO, given her knowledge of the payments and her position within the charity, potentially undermined the management committee’s obligations to consider the disclosure of such payments within the financial statements;

* The absence of the disclosure of the payments to the former founding trustees within the financial statements inhibited the ability of any potential users of the financial statements (including funders or members of the charity at the AGM) to have any knowledge of the existence of any actual payments to trustees or to understand the nature or value of them;

* The charity did not fully operate in accordance with governance best practice in a number of key areas.

The regulator wants the charity trustees  to determine if the payments made to the two founding former trustees are recoverable;

• Develop, document and implement suitable procedures for the recruitment of senior roles

• Implement more formal monitoring and reporting arrangements in respect of the role of the CEO;

• Agree and implement a formal arrangement with the CEO to recover the overpayment of employee pension contributions.

A spokesperson for the charity was not available today.

Eilish O'Regan and Cathal McMahon