Oireachtas Joint and Select Committees
Thursday, 20 November 2025
Public Accounts Committee
Exceptional Funding of the Peter McVerry Trust: Discussion
2:00 am
John Brady (Wicklow, Sinn Fein)
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You are all very welcome to today's meeting. The committee will today examine matters relating to the Peter McVerry Trust. This is part of the committee's examination of the 2023 accounts of the Department of Housing, Local Government and Heritage, whose representatives attended in June 2025. The Peter McVerry Trust is an approved housing body that provides homeless services in the State. The trust receives significant State funds, and in November 2023 required exceptional State funding of €15 million. This was subject to a chapter by the Comptroller and Auditor General, which is one of the bases for the committee’s examination today.
We have scheduled three public sessions. In session one, we meet with Mr. Francis Doherty, the former CEO of the Peter McVerry Trust. In session two, at 11 a.m., we will engage with the Charities Regulator and the Approved Housing Bodies Regulatory Authority. In session three, at 2 p.m., we will engage with the Peter McVerry Trust. I welcome Mr. Francis Doherty, former chief executive officer of the Peter McVerry Trust. Ms Colette Drinan, secretary and director of audit from the Office of the Comptroller and Auditor General, will also be in attendance throughout each of today’s sessions.
Before we proceed, I have a few housekeeping matters to go through. Members are reminded of the provisions in Standing Order 226 that the committee shall refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government, or the merits of the objectives of such policies. Members are also reminded of the long-standing parliamentary practice that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. I remind members of the constitutional requirement that in order to participate in public meetings, members must be physically present within the confines of the Leinster House complex. Members of the committee attending remotely must do so from within the precincts of Leinster House.
I also wish to explain some limitations to parliamentary privilege and the practice of the Houses as regards references that may be made to other persons in evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected, pursuant to both the Constitution and statute, by absolute privilege. This means that they have an absolute defence against any defamation action for anything they say at the meeting. However, they are expected not to abuse this privilege, and it is my duty as Cathaoirleach to ensure this privilege is not abused. Therefore, if statements are potentially defamatory in relation to an identifiable person or entity, witnesses will be directed to discontinue their remarks. It is imperative that they comply with any such direction.
Witnesses are also reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable, or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue your remarks. It is imperative that they comply with any such direction.
I call Mr. Doherty to give the opening statement. Mr. Doherty, as set out in the letter of invitation, will have five minutes to make his opening statement.
Mr. Francis Doherty:
I thank the committee for the invitation to meet its members today. I was the CEO of the Peter McVerry Trust, PMVT, from 1 June to 13 October 2023. Prior to becoming CEO, I had worked at the trust for a decade, initially in junior and mid-level communications roles before becoming director of housing development and communications in December 2020.
On the face of it, the trust was a hugely successful and innovative organisation. It had 1,000 properties, it ran services in the areas of homelessness, addiction, ex-prisoners, children’s care, schools, education, housing and housing first, asylum seekers and Ukrainian supports. It had an annual budget of just over €60 million; it supported over 2,000 people every night. The trust played a crucial role in addressing some of the most challenging issues in our society. This important work was delivered by over 700 staff. I want to take a moment to recognise what a privilege it was to work with so many talented and committed colleagues. These were people focused on doing their best every day in what were often very challenging circumstances. For many of us, the trust was more than a job. We were deeply committed to the trust’s purpose and proud to work in the name of its founder, Fr. Peter McVerry.
We worked for a charity that appeared to be in good stead. The trust was under the financial oversight of, and audited annually by, its numerous statutory funders. These included the Dublin Region Homeless Executive, DRHE, the HSE, Tusla and many local authorities. The trust was also regulated by two statutory regulators: the Charities Regulator and, since 2021, the Approved Housing Bodies Regulatory Authority, AHBRA. The board of the PMVT made annual returns to the Charities Regulator. Each year, the statutory returns stated the trust was compliant with all aspects of the charity governance code. AHBRA, in its pilot assessment programme in March 2023, indicated the trust was deemed "compliant with improvements" in the areas of governance, finance, asset management and tenancy engagement.
As incoming CEO, I was invited to observe the trust’s annual general meeting on the 11 May 2023. I was advised by the board that "the organisation could not be handed over to you in better financial health", and it was noted that the outgoing CEO had secured 18 years of "clean audits". It is important to note that, for his entire 18 years, finances were the remit of the long-term CEO, as agreed by the board, without segregation of duties or devolution of budget responsibilities to directors of service. The board was comprised of a chair who had worked closely with the Department of Jobs, Enterprise and Innovation on drafting the Companies Act 2014 and who chaired, and continues to chair, the Irish Blood Transfusion Service, IBTS, the statutory body with responsibility for the national blood supply, as well as senior executives at VHI and FBD, a former DRHE employee, senior legal professionals and a hugely successful entrepreneur.
It became clear within weeks that the board’s representation of the charity’s financial state could not have been further from the truth. The finances and financial systems were in such a poor state that with each passing day it became clear that it was verging on total collapse. On the day I became CEO, I would later learn, the charity’s trade creditors were owed more than €9.6 million, an additional €6 million was owed to Revenue and almost €2 million was owed to the banks, while the organisation had just €437,000 across all of its bank accounts. The organisation had zero cash reserves and €125 in a sinking fund. All restricted fundraising and grant income for specific purpose use had been spent when there should have been more than €5 million in restricted bank accounts on the back of purpose-specific donations.
The charity was haemorrhaging cash after a decade of securing new homeless services by bidding substantially less than the actual costs to run the services, meaning that pretty much every service the trust provided was running a substantial deficit, apart perhaps from Tusla- and IPAS-related work. The scale of the financial chaos I inherited is illustrated by the fact that even with the involvement of the Department of housing, DRHE, PwC, Crowe Ireland, a new board, new external auditors and additional finance staff, it has been over two years and the finances are still not fully understood or resolved.
This was more than bad financial management. It was also an oversight and governance failure that brought the charity to the brink of collapse, exposing the 2,000 people in the trust’s care to a very real risk of services closing. Yet it seems those with legal responsibility for ensuring the appropriate use of the charity’s resources have been able to avoid any accountability. How is it that the board of a charity with a budget of €61 million had never seen or asked to see a cash flow projection? How could anyone take confidence from a board that stated it had no idea of a revenue warehousing debt of €8.3 million when the liability was referenced in the 2020, 2021 and 2022 accounts? How does a board remain credible when in mid-August 2023, weeks after the finance and governance failings had been laid bare to the board, it wrote to the Charities Regulator stating the charity was fully compliant with the charity governance code? Clearly, this was not the case.
Why did the Charities Regulator not use its powers to appoint independent trustees to help to protect the services, service users and staff? If not then, perhaps the Charities Regulator might have intervened directly when the regulator was provided with a copy of a letter from the trust’s chairperson, on behalf of the trustees, explicitly prohibiting me as CEO from communicating freely and transparently with stakeholders, including the regulatory bodies. Perhaps the Charities Regulator might have acted following the publication of the restated accounts for 2022, published in November 2023, that incorrectly stated the charity had €47.3 million in "unrestricted reserves". As committee members will know, unrestricted reserves are funds that the charity’s trustees can use at their discretion to further any of the charity’s purposes. This was obviously not the situation and should, at the very least, have raised another red flag about the board’s financial competency.
The extraordinary efforts that my team and I made to keep the trust operational across the summer of 2023 were parallelled by a board that seemed to transition from ignorance to self-preservation. Long-standing small-scale creditors turned up at our offices desperate to be paid to keep their own businesses afloat.
The chair of the board wrote to me with specific directions on who should be paid first, and it was not the agencies who provided the staff we relied upon to keep our services running or the contractors working to rectify fire safety issues that are being covered, but two companies recently engaged to provide legal and PR advice to help the board navigate the crisis. The board of the trust prioritised self-interest over the best interests of the charity, put staff and service users at risk and made my and my staff's efforts to act in the charity's best interest so much more challenging. I am in no doubt that were it not for the course of action and decisions I made over those days and months, the Peter McVerry Trust would have collapsed, with disastrous consequences for 2,000 people who relied on the organisation for support, the 700 people it employed and their families, and the huge number of creditors.
Finally, I formally acknowledge the support of my wife, my daughters, parents, family, friends and colleagues through all of this, as well as the many people who contacted me with messages of support following my resignation from the Peter McVerry Trust in October 2023.
John Brady (Wicklow, Sinn Fein)
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I thank Mr. Doherty. I note we are due to finish this session at approximately 10.45 a.m. I ask members to work with me in terms of the time allocations and try to stay within the times allocated. I also note the committee is here today to discuss the exceptional funding of the Peter McVerry Trust from the Department of Housing, Local Government and Heritage. While it is important to understand the details of how the situation arose as to why the funding was required and what oversight was undertaken by the Department and other bodies, as stated in my earlier notice, it is important that witnesses and members do not make any allegations against any third parties as they are not present and in a position to respond. We will now open the floor to members and today, the lead speaker is Deputy McAuliffe, who has nine and a half minutes in this session. All others members will have six and a half minutes. I call Deputy McAuliffe.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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I thank Mr. Doherty for being with us today. It is not an easy thing to come before an Oireachtas committee. His willingness to do so is very much appreciated. I join him in acknowledging the huge work of Peter McVerry, a constituent of mine and somebody I know has done tremendous work, but also the many people within the trust who I imagine have lived with this shadow over the work they do. There should be no shadow; they do incredible work.
The reason we are here is because of a €15 million bailout, effectively, to an organisation that Mr. Doherty found himself appointed to take control of from 1 June. He had worked there for a number of decades and I imagine he was incredibly hopeful about the time he could serve as CEO. However, on 29 May last, he found himself in a public park, having just returned from annual leave. He was there with the outgoing CEO and he had concerns regarding a number of payments. Can he tell the committee about those?
Mr. Francis Doherty:
I thank the Deputy. The payments he is referencing relate to money originally received by the Peter McVerry Trust from the Capuchin Day Centre through a multimillion donation agreement worth €4.7 million. Those funds were received by the organisation in October 2022. They were for specified or restricted use for the purchase of properties related to homeless services or housing for homeless individuals. While I was on leave, I was copied on an email from a member of the finance team at the Peter McVerry Trust, showing the level of funds available across all the different bank accounts. This came on the day after payroll had been met for the organisation. The organisation's payroll is €2.4 million. There was a monthly contribution to Revenue of €1.1 million. Before we paid a creditor, it cost €3.6 million just to run the organisation each month. That email showed that one of the bank accounts, which was for social housing projects, had been emptied of more than €2 million. It also showed the Capuchin donation account was effectively at zero. There might have been a few hundred euro in it.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Was it clear to Mr. Doherty then, or is it clear to him now, where that money had gone?
Mr. Francis Doherty:
At the time it was not clear. It prompted me to ask a finance employee for copies of the Capuchin donation account - the ledger. That ledger showed that money had been transferred out on 16 December to a related entity that the Peter McVerry Trust had taken over, the Assisi charity - the Assisi CLG. Once I realised that was where the money went, I asked the same finance employee for a copy of the ledger for Assisi CLG. It showed up immediately, having received that money, that Assisi transferred the funds to two entities, Rubycon and New Directions.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Had Rubycon carried out work for Assisi?
Mr. Francis Doherty:
No, it had not. Part of my remit in housing development was to look at the redevelopment of the main Assisi property on the Navan Road for long-term housing and a new head office for the organisation. I was familiar with it. I visited it with architects. There were feasibility studies. I knew that-----
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Can Mr. Doherty clarify what that payment amounted to?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Let me get to those two payments. The €1 million was taken from a restricted account with the Peter McVerry Trust, transferred to Assisi and, subsequently on the same day, transferred to Rubycon for work that Assisi had not incurred. Why was that money transferred to Assisi?
Mr. Francis Doherty:
The explanation that I was given by my predecessor on the day the Deputy originally referred to was that it was for prepayment against works that were going to be done. The picture then shifted to it being actually in order to help that contractor deal with cash flow pressures that had built up, because the trust had substantial liabilities to it at that point.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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The trust had liabilities, rather than Assisi.
Mr. Francis Doherty:
Yes, exactly. It was then advised that the works had been completed to that value. It was a moot point, effectively. I challenged that and said I did not feel there was any great value in the works undertaken at Assisi. I then arranged to meet my predecessor and the contractor at the site subsequently.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Let me return to that. The second payment was a payment of €350,000 to a private company called New Directions. Will Mr. Doherty tell me about his understanding of that?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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The outgoing CEO of the Peter McVerry Trust was taking up a new employment with New Directions and this payment was made from the Peter McVerry Trust to a non-charitable private company called New Directions.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Why would anyone in the Peter McVerry Trust, the board or anybody else, approve a payment of that nature to a non-charitable company?
Mr. Francis Doherty:
The fact is that nobody knew about it. It was done at the instruction of the then CEO in December 2022. During the conversation I had with him on that date in late May, a couple of days before I became CEO, he originally explained that it was related to an understanding by New Directions that it was to benefit in some way from the Capuchin donation to the Peter McVerry Trust for works on its properties. However, by the end of the conversation, it had shifted to my predecessor saying that the funds were actually to make sure that New Directions had sufficient funds to pay his salary for the coming years while it applied for charitable status.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Again, that is not in the interest of the Peter McVerry Trust or the people who donated to the Peter McVerry Trust.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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My colleagues will follow up with the financial controls that would allow that sort of arrangement to be put in place. There are so many aspects of the evidence we have in front of us and so many different properties. The Kerdiffstown House property is the one that I thought in some ways summed up some of what was going on. Kerdiffstown House was a historic period property in Kildare. Is that correct?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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It had previously been owned by the Society of St. Vincent de Paul. Is that correct?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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The amount of money spent on Kerdiffstown House seems exceptional. There were improvements to the driveway. Is that correct?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Was money spent on a lift, not a first lift but a second lift for the property?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Why would a lift shaft be constructed at the side of a property?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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It turned out that those works were not in compliance with planning.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Of all the different improvements to the property - and it is an historic property - the one I was least expecting was a peacock enclosure.
Mr. Francis Doherty:
Kerdiffstown House became almost a symbol of the things that were going wrong and maybe of a sense of loss of control. The service was losing €1 million per year. It had a maintenance budget under its service level agreements, SLAs, with the local authorities for €100,000 to €125,000, or roughly €1,000 per person per year. However, when my deputy and I came into office, we got access to invoices and we could see there were payments to construct a peacock enclosure at the front of the property for two peacocks and for the widening of the driveway for €300,000 and €6,000 to €7,000 was being spent-----
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Can I ask a daft question? Why in God's name would anyone donate money to the Peter McVerry Trust? Why would anyone in the trust think it was permissible or of good value to the service users to have a peacock enclosure, albeit on an historic property?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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The other common theme is the conflicts of interest that arose. I asked about Rubycon Developments and others may ask about other conflicts. There appears to be a conflict of interest with regard to Rubycon. Will Mr. Doherty give us his understanding of it?
Mr. Francis Doherty:
The conflict of interest that existed was that the auditor for 17 years of the Peter McVerry Trust was the brother of the principal or owner of Rubycon, which became the trust's main maintenance contractor and was paid several million euro for maintenance works over several years. There was also a conflict of interest in that the long-term auditor and his brother sold properties to the Peter McVerry Trust in 2018. Those properties did not comply with building regulations at the time. There was no Part V agreement. There were substantial defects but the then CEO agreed to buy them in 2018 with the trust's money for €975,000 and later paid Rubycon more than €300,000 of the trust's funds to remedy defects which it was responsible for fixing in the first place.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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In many ways, the peacocks were the least of Mr. Doherty's worries.
John Brady (Wicklow, Sinn Fein)
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Will members and the witness try to refrain from making any allegations against any outside parties, including contractors, who are not here to defend themselves? I ask them to be conscious not to name any contractors.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I thank Mr. Doherty for being here and for his opening statement. On a personal level, he worked at the trust for a decade before taking up the role. What were his expectations on taking up the role about the state of affairs of the organisation?
Séamus McGrath (Cork South-Central, Fianna Fail)
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Did Mr. Doherty believe that at the time?
Mr. Francis Doherty:
I did not have any significant reason not to believe it. On paper, there was a competent, experienced board which had just got a compliance rating from AHBRA, a few weeks earlier. There were cash flow pressures, but much of that was down to debtors and many of those debtors were State agencies so there was an expectation that as the number of debtors reduced, the cash flow pressures would ease.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Were there any misgivings among employees at the time? Was there a culture of concern or doubt in the organisation?
Mr. Francis Doherty:
There was a culture of a lack of transparency. Staff did not have insight and transparency or access to the finances. For example, I ran the communications team. I set up the communications department in the Peter McVerry Trust. Any time I asked for a budget for the year, what my spend would be and what we could do, it was done on a case-by-case basis and I would have to approach the CEO. I was never given a budget.
Séamus McGrath (Cork South-Central, Fianna Fail)
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In his opening statement, Mr. Doherty described it as very centralised, with control at the centre in the CEO's office. There was no delegation of decision-making.
Séamus McGrath (Cork South-Central, Fianna Fail)
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It became apparent quite quickly after Mr. Doherty took up the role of CEO. He described the organisation as being near total collapse. How did he highlight, flag and report that to outside agencies at that time?
Mr. Francis Doherty:
I had initial conversations pretty much immediately with the main funder, which is the Dublin Region Homeless Executive, and its director. I spoke regularly to staff in the Department of housing who were aware of the issue of some cash flow pressure related to historic capital assistance scheme funded projects for homeless services. I was proactive and transparent in getting the message out early to the main funders and statutory regulatory bodies that an issue had been identified, and that was recognised by both DRHE and the Department in their correspondence to the trust and its trustees. It all came to a head in and around the first and second weeks of July when the true state of creditors could finally be established and, within days, the two regulators were informed.
Séamus McGrath (Cork South-Central, Fianna Fail)
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At any stage during Mr. Doherty's short tenure as CEO, did he feel they were matters An Garda Síochána should be investigating?
Séamus McGrath (Cork South-Central, Fianna Fail)
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Mr. Doherty also described the very expansive culture of trying to grow the organisation beyond sustainable means and so on. What was the motivation behind that?
Mr. Francis Doherty:
The original motivation was to follow what Fr. McVerry set out, in that if you see a problem, you respond to it. However, to my mind, in later years that morphed into an unhealthy competition that seemed to be running between the organisation and other providers in the sector, which had a detrimental impact on the sector and services because the pricing of the services provided by the trust made it very difficult for other organisations to provide services.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Without getting into any individual, was there a sense of ego about the expansion? Was it about being the biggest and best?
Séamus McGrath (Cork South-Central, Fianna Fail)
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There was an ego-driven motivation.
Was there a severance package for the CEO who was in place for 18 years?
Séamus McGrath (Cork South-Central, Fianna Fail)
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Mr. Doherty is not aware of one. How would Mr. Doherty describe the procurement processes of the trust?
Mr. Francis Doherty:
The procurement processes were effectively non-existent for large sections of the organisation. In the report AHBRA concluded, it made reference to preferred suppliers. Those preferred suppliers were contractors selected by the long-term CEO and the long-term deputy CEO. Staff were instructed to use them for maintenance and repairs in front-line services.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Mr. Doherty used the word "instructed". It was a case of being instructed to use particular suppliers.
Séamus McGrath (Cork South-Central, Fianna Fail)
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That direction came from the top layer of management.
Mr. Francis Doherty:
Yes, exactly. When I became director of housing development, we had established a framework for architect-led design teams. I then went on to establish a framework through eTenders for contractors' capital expenditure work on homeless services.
We set up a panel for valuers in the Munster region. There was a journey that housing development was on. We would regularly use e-tenders. We would procure contractors for capital works that way-----
Séamus McGrath (Cork South-Central, Fianna Fail)
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I apologise, but I am just caught for time. There were zero procurement processes and multiple suggestions of conflicts of interest, for example, within the organisation. Were zero registers of interest or normal governance practices for procurement in place?
Séamus McGrath (Cork South-Central, Fianna Fail)
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I have one final question. Mr. Doherty mentioned at one point his major surprise when the financial picture emerged and there were creditors queueing up that decisions were taken to prioritise the payment to legal and PR services, for example. Will Mr. Doherty give us the scale of what those payments were to PR services at the time?
Mr. Francis Doherty:
As far as I know, the bill for PR services at that time was relatively small. The legal services would have been more expensive. The contractors we were seeking to prioritise were people who were providing agency staff. In the timeline I provided to the committee were examples of agency staff being withdrawn at the eleventh hour and at least five services in one weekend at risk of immediate closure because I did not have the authority to pay the contractor. There was a risk of fuel cards being withdrawn, staff having to pay for fuel out of their own pockets in order to keep the show on the road. Those were the types of creditor that needed to be paid but were not.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I thank Mr. Doherty for his honesty and transparency here this morning.
John Brady (Wicklow, Sinn Fein)
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I know there are a lot of questions members have to try to get through but I remind them to confine themselves to the allocated time to be fair to the other witnesses due to come in later and because it will be a long day. Our next questioner is Deputy Geoghegan.
James Geoghegan (Dublin Bay South, Fine Gael)
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Before the clock starts, as the Cathaoirleach mentioned all the witnesses who are coming today, we also invited the former CEO of the Peter McVerry Trust, Pat Doyle, and he wrote to us to indicate that, since 2023, the board had told him not to speak about the Peter McVerry Trust. He also said that he had no comment on the Comptroller and Auditor General report. It seems those are the reasons he has decided not to attend today. I wish to clarify that for the record.
John Brady (Wicklow, Sinn Fein)
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We will be dealing with correspondence we got from the former chief executive officer at next week's meeting.
James Geoghegan (Dublin Bay South, Fine Gael)
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I thank Mr. Doherty. I think what he is doing and what he did was a real act of courage and bravery. It cannot have been easy. It is not many people in a position like his who would have done what he did. Normally, when we question people here they are the Accounting Officers. We are here to cross-examine them and to hold them accountable for what they did. However, in this unique circumstance, Mr. Doherty deserves a lot of credit because what he has done cannot have been easy on him or his family.
I wish to deal with his testimony and be absolutely clear. His testimony is that the Capuchin Day Centre fund restricted donation, which was €1.5 million. Is that correct?
James Geoghegan (Dublin Bay South, Fine Gael)
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Is it correct to say that €1 million of that was transferred to a contractor that Mr. Doherty has named as Rubycon and that contractor was owned by the auditor's brother?
James Geoghegan (Dublin Bay South, Fine Gael)
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Then €350,000 was transferred to New Directions, which is the company where the former CEO, Pat Doyle, intended to work. Is that right?
James Geoghegan (Dublin Bay South, Fine Gael)
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Mr. Doherty mentioned something there about the explanation Mr. Doyle had given to him in respect of that particular donation. Will Mr. Doherty reiterate that and expand on it a little?
Mr. Francis Doherty:
Yes. When I met the former CEO in late May, the explanation varied. On an earlier draft application for funding to the Capuchin Day Centre, he had included a reference to funding for New Directions and buildings that New Directions had use of or wanted to acquire for the use of its services. That was the initial explanation. My reaction to that was that I did not really accept that this was a valid reason for the organisation to then forgo that money because we did not have the agreement as an organisation to do what he was saying. As the conversation progressed, my recollection is that he advised that, in actual fact, the money was being made available in order that that organisation would have funds to pay his salary when he moved there.
James Geoghegan (Dublin Bay South, Fine Gael)
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Mr. Doherty also mentioned that the contractor owned by the auditor's brother had been paid in the millions in terms of maintenance over the years. He may have seen that the new chairperson of the Peter McVerry Trust, Tony O'Brien, indicated that the former chairperson of the trust has made a complaint about the auditor to the regulatory body. Does Mr. Doherty know anything about that?
Mr. Francis Doherty:
No. It was not done, certainly when I was there, up until 13 October. There were actions that my deputy and I took. We wrote to the trustees and the chair of the Peter McVerry Trust on 18 September 2023, where we asked them to take specific actions and to review the actions of former auditors and former staff. The response we got was that it was not something the trustees were willing to look at or take on at that point. I am not sure at what time it was referred to any third party.
James Geoghegan (Dublin Bay South, Fine Gael)
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Am I correct in saying that it was the former auditor's responsibility to maintain the list of property assets that the Peter McVerry Trust owned?
Mr. Francis Doherty:
Actually, the board had approved a policy where it was the responsibility of the deputy CEO. The deputy CEO would tell one of the regulators - I think it was AHBRA - that they had no idea that they were responsible for that as part of that policy. In effect, the external auditor of the Peter McVerry Trust prepared the management accounts for the CEO on a monthly basis, prepared the limited financial reports that went to the board, and also had control of the fixed asset register even after resigning as auditor of the organisation.
James Geoghegan (Dublin Bay South, Fine Gael)
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During the short time Mr. Doherty was CEO, did he ever know what assets the Peter McVerry Trust owned? Did he ever have oversight or visibility of the full portfolio of properties? It seems that, according to the remarks by the current chair, the trust still does not know, in some respects, all of the assets it owns. Certainly, the valuations are completely off.
Mr. Francis Doherty:
I would see it as two different strands. The capital assistance scheme or long-term leases were supported and funded by local authorities and the Department of housing. The housing development team would have led on those and we would have very comprehensive records of those over the years. It is very easy to reconcile those because they are all public records as well. The issue was that the board had approved a policy where the CEO could sign any lease on any property for any value without the board's oversight or involvement. That was a policy agreed by the board for the long-term CEO. The issue was that nobody had any direct record of what leases had, over the course of 18 years, been signed or entered into and whether those leases had actually gone through the normal course of engaging independent solicitors to look at and agree the conditions and terms of the lease agreements. On the one side, you had a very well-run, State-funded programme of capital development, long-term leasing, delivery for housing first and homeless families. On the other side, you had a very ad hoc arrangement where leases were being signed by the CEO. Some leases were for properties of up to €2 million a year for 20 years, where the funding from the Peter McVerry Trust was only guaranteed for 12 months under the SLA by the statutory funders.
James Geoghegan (Dublin Bay South, Fine Gael)
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I have just one final question. Mr. Doherty mentioned the impact that the underbidding had for the sector generally. Was this anything other than a pyramid scheme? Basically, what was happening - or at least, as it appears to me, having read the documentation supplied - was that the Peter McVerry Trust underbid for contracts and then funded those contracts by the subsequent contracts it underbid for. Then when the music stopped, it had no money. It was basically a bust entity. If it were not for Mr. Doherty arriving and identifying all of these things, God knows where the place would have been.
Is that a fair contention?
Mr. Francis Doherty:
Yes, it is a fair contention. To contextualise the extent of that, the Peter McVerry Trust received in the region of €35 million to €36 million from donors over the course of 2018 to 2022 for social housing projects. Those were ring-fenced, specific-use donations from religious orders, other sources and donors. By the end of 2022, the organisation owed €8.3 million to Revenue. Its trade creditor liabilities had tripled over the course of a year. As a result, this huge amount of money that should have been going into capital investment and social housing was actually pulled into operations to mask the long-term strategy, as the Deputy has just outlined. The consequences of that were that the staff on the front line had to do extraordinary things in order to make things run professionally and smoothly, which, to their credit, they did. However, it seems that every quarter the organisation was agreeing to open a new service when it did not have enough staff to run the services it was already operating. When I came in, the first thing I said to the DRHE was that we needed to reduce, by at least one third, the number of homeless beds we provided because of the risk to staff and service users. This was because of the level and vacancy and the fact we could not justify the money we were receiving because it was not actually going into the services it was paying for.
John Brady (Wicklow, Sinn Fein)
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Our next questioner is Deputy Bennett.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I thank Mr. Doherty for coming in. Earlier, he stated Mr. Doherty that the trust appeared to be in good stead despite being under financial oversight of and being audited by numerous statutory bodies. Was the Department involved in those audits?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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The Department gave the trust €15 million in the form of a bailout.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Was that audited by anybody?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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It is my understanding that letters were sent from the DRHE to the Minister at the time requesting that there be some kind of oversight regarding underpricing of houses being purchased and the fact that the trust was submitting information to the effect that it had the money. Could Mr. Doherty explain how that worked and what the Peter McVerry Trust did in that regard?
Mr. Francis Doherty:
In agreeing to take on properties from homeless services, my predecessor's strategy seemed to be that it was important to just secure the opportunity, grow the number of beds the organisation was providing, get the properties in and find a way thereafter to fund the purchases. If there was no money available from the trust's unrestricted funds, then it was a case of going back to the local authorities, the DRHE or the Department of housing and saying, "We did this. We have delivered the beds and now we need extra money because it cost us more than we told you at the start." That is how it happened on numerous occasions over several years. I had been trying to tidy up a number of those with the support of officials in the Department of housing before becoming CEO. There is some reference in the C and AG's report to the effect that this seemed to be part of the process of the bailout, but that was a separate thing happening at the time anyway in respect of homeless services, the buildings being bought and the fact the trust kept going back to ask for additional money.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I find it odd to think Ministers in the Department did not think it strange that the Peter McVerry Trust could get properties at such a reduced cost. I do not understand how that happened and how the contracts it was bidding for were coming in under price when compared with what other housing bodies could get them for. Am I correct in that estimation?
Mr. Francis Doherty:
The original query the Deputy had was around the review of properties and costs. Properties were being bought at a validated open market rate but the cost of the works was being substantially underestimated because proper due diligence was not being done. If you take on a social housing project, there would be a technical team and handle professional services involved. This almost seemed to be a rough estimate and those involved knowing that they could always go back and ask for more at a later date.
The issue around the underbidding was really a matter for how the funders reviewed it, but it definitely did stand out. There have been numerous publications and research in respect of certain contracts, such as those relating to housing first, where it has been demonstrated that in order to deliver the service at the level agreed, it would have cost the trust at least €1 million more than it was getting from the DRHE for that service in Dublin alone.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Was Mr. Doherty aware that the matter was brought to the attention of the Ministers in the Department at that time?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Did Mr. Doherty ever notice that Ministers were highly involved in relationships or anything? Did he ever see that there was a relationship between Ministers and the CEO who was there prior to him?
Mr. Francis Doherty:
Because I had a communications role, I would have been aware that the long-term CEO prided himself on developing relations with the Minister of the day. It was key to him that he saw himself as being an unwavering support to the Minister of the day. For me, in my communications role, there was a very difficult line to walk in ensuring that the organisation remained impartial and that its integrity was retained, because, obviously, our founder, Fr. Peter McVerry, is a very independent, outspoken advocate. I was trying to marry that with an approach that seemed to be an extension of supporting whatever the Government policy of the day was without any scrutiny.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I find it hard to accept a Minister did not send auditors in. Given that the money was being provided by the Department, it is strange that auditors from the Department were never sent in. I presume it is the case that when money is given by the Department to various statutory bodies and other organisations, there is oversight in respect of that money and that there are rules and guidelines that apply. It is my understanding that there were guidelines put in place and that the Minister had requested that he would have the power to nominate two members of the board of the Peter McVerry Trust. Was that ever done? Did the Minister ever nominate two people to serve on the board of the Peter McVerry Trust in order to ensure that there was oversight of the €15 million given in the bailout? Did that ever happen?
Mr. Francis Doherty:
While I was at the Peter McVerry Trust, it did not happen. That term was agreed after I left. In September 2023, I attempted to put independent people onto the board of the Peter McVerry Trust who were not associated with or related to the previous role holder, but that was rejected. The ability to appoint people to the board was available to multiple agencies at the time, but nobody took up that opportunity.
The Deputy also referred to the issue around oversight and State funding going into the organisation. As I alluded to in my opening statement, there were multiple entities carrying out audits - Tusla, HSE, the DRHE and local authorities - and coming into the organisation at different points.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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It was my understanding that the auditor in place in the Peter McVerry Trust also did the books there.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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For 17 years, the person who did the books of the Peter McVerry Trust also audited its activities. It is no wonder there was no external oversight.
The Comptroller and Auditor General was never involved in auditing the books of the Peter McVerry Trust. I find it very hard to understand why the Department never authorised the auditing of the books of the Peter McVerry Trust by the Comptroller and Auditor General.
I thank Mr. Doherty very much.
Eoghan Kenny (Cork North-Central, Labour)
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I thank Mr. Doherty for coming in and the service he has given to the State. When did he begin working with the Peter McVerry Trust?
Eoghan Kenny (Cork North-Central, Labour)
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When Mr. Doherty was in the communications office in 2012, did he ever question anything in relation to financial management, the senior management team or the former CEO?
Eoghan Kenny (Cork North-Central, Labour)
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In any press release or anything like that, did Mr. Doherty ever believe what was happening was not right?
Eoghan Kenny (Cork North-Central, Labour)
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Was Mr. Doherty surprised when the former CEO decided to step down?
Eoghan Kenny (Cork North-Central, Labour)
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Did Mr. Doherty immediately decide he wanted to be the next CEO?
Eoghan Kenny (Cork North-Central, Labour)
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So, on 11 May, when Mr. Doherty attended his first AGM on having been asked to do so, the board advised him that the Peter McVerry Trust could not have been handed over in better financial health. Did he believe it was true at the time?
Eoghan Kenny (Cork North-Central, Labour)
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When Mr. Doherty found the Capuchin donation account, which should have contained €4 million, to be empty, what did he do?
Mr. Francis Doherty:
The initial action was to try to find out what had happened, where the money had gone and what it had been spent on. I knew the agreement related to a certain number of properties that the trust had agreed to purchase, but none of those had actually been purchased. My immediate focus was trying to find out where the money had gone. When I understood the money had gone to Assisi House, it was a case of tracking it down and recovering it. Ultimately, €350,000 was recovered. There was information used to identify that €1 million had not been spent. That was reported to the chair of the organisation.
Eoghan Kenny (Cork North-Central, Labour)
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What was her response to that?
Eoghan Kenny (Cork North-Central, Labour)
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Did she share that information with the other trustees?
Eoghan Kenny (Cork North-Central, Labour)
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Mr. Doherty believed it had been shared.
Eoghan Kenny (Cork North-Central, Labour)
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When Mr. Doherty went on annual leave and returned to find Mr. Doyle waiting for him at his office, what was his initial reaction?
John Brady (Wicklow, Sinn Fein)
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The Deputy should try to refrain from using names. It was the former CEO.
Eoghan Kenny (Cork North-Central, Labour)
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What was the initial response? Did Mr. Doherty ask him what he was doing there?
Eoghan Kenny (Cork North-Central, Labour)
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In that conversation in the park, Mr. Doherty found out the money had been sent to New Directions. I am referring to the payment of the new employee. He learned that it had been given back within seven days. Did Mr. Doherty not believe it appropriate at that stage to report the conversation he had had to An Garda Síochána?
Eoghan Kenny (Cork North-Central, Labour)
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Did Mr. Doherty ever advise the board that it was his firm belief that, on the basis of the conversation he had had, there was no compliance in the financial governance of Peter McVerry Trust and that he believed, in his capacity as CEO, that the information should be provided to the Garda?
Eoghan Kenny (Cork North-Central, Labour)
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I thank Mr. Doherty. Did he know on 30 May and 31 May that the former CEO had applied for a loan and credit facility?
Eoghan Kenny (Cork North-Central, Labour)
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Did Mr. Doherty advise the new chair immediately that it was within an hour and a half of the former CEO finishing his term that he had applied?
Eoghan Kenny (Cork North-Central, Labour)
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This was late at night.
Eoghan Kenny (Cork North-Central, Labour)
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What was the chair’s reaction to that? Obviously, Mr. Doherty’s was pure shock. Was the chair aware of it?
Eoghan Kenny (Cork North-Central, Labour)
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Was she aware before 30 May that he was going to be applying for the loan?
Eoghan Kenny (Cork North-Central, Labour)
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So, it was paying him for two additional months even though Mr. Doherty was the CEO.
Eoghan Kenny (Cork North-Central, Labour)
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Does Mr. Doherty know what his salary was?
Eoghan Kenny (Cork North-Central, Labour)
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So, he was paid for two months and did no work.
Eoghan Kenny (Cork North-Central, Labour)
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When Mr. Doherty met the Minister for housing, did he outline any of the concerns he had over the conversations he had had with either the former CEO or the chair?
Eoghan Kenny (Cork North-Central, Labour)
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Did Mr. Doherty say he might have met the former CEO in a park and was told about the situation?
Eoghan Kenny (Cork North-Central, Labour)
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Does Mr. Doherty not believe it was necessary to make the Minister aware immediately?
John Brady (Wicklow, Sinn Fein)
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I am sorry but, in fairness, the Deputy is out of time.
Eoghan Kenny (Cork North-Central, Labour)
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I thank Mr. Doherty.
Catherine Ardagh (Dublin South Central, Fianna Fail)
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I thank Mr. Doherty for attending. Many people from many organisations across the State appear before our committee and we learn about significant overexpenditure, but no one ever says "Stop". Mr. Doherty was in the CEO’s role for some time and is clearly the person who called "Stop". That is to be commended. I am sure it has been very difficult for Mr. Doherty and his family. If you are in secure employment for ten years, calling "Stop" means that life changes considerably for you. It must have been difficult.
That said, I want to ask Mr. Doherty a few questions. He says he was previously director of housing development and communications. Did he have a role still in housing development or was it just about communications in relation to housing development?
Catherine Ardagh (Dublin South Central, Fianna Fail)
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Deputy Geoghegan correctly pointed out that the financial arrangement looked like a pyramid scheme. I am referring to the constant underbidding for projects to ensure there would be cash flow for projects. Did Mr. Doherty have hand, act or part in that underbidding?
Mr. Francis Doherty:
No. I had never been involved and I had never seen a funding application that was submitted by Peter McVerry Trust for any service it provided. The first time I had seen the SLA, with the Dublin Region Homeless Executive was shortly before I resigned as CEO, when it sent the draft SLA for 2023.
Catherine Ardagh (Dublin South Central, Fianna Fail)
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This might seem like a funny question, but what skills did they believe Mr. Doherty had to be CEO? How did Mr. Doherty come on board as the CEO?
Mr. Francis Doherty:
The direction I hoped to take the organisation in was to move away from what was effectively keeping people in emergency accommodation for very significant periods of time, which was not value for money for the State and was not delivering good outcomes for the individuals. It was to focus on delivery of housing over homeless services.
Catherine Ardagh (Dublin South Central, Fianna Fail)
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I am more asking whether there was a job advertisement or was Mr. Doherty approached?
Catherine Ardagh (Dublin South Central, Fianna Fail)
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Okay. I was just wondering if they had approached Mr. Doherty to take on the role or if there were internal discussions with Mr. Doherty about him becoming the next CEO.
Catherine Ardagh (Dublin South Central, Fianna Fail)
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Did that encouragement come on board a good few months before or was it-----
Mr. Francis Doherty:
It was probably the month before the public advertisement was put out. My predecessor had announced to certain staff in late 2022 that he was resigning. The rest of us did not find out until the new year in 2023, and then a media statement was put out nationally in January 2023.
Catherine Ardagh (Dublin South Central, Fianna Fail)
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Who was on the interviewing committee? Was the former CEO on the interview committee?
Catherine Ardagh (Dublin South Central, Fianna Fail)
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Mr. Doherty said it was only after he took up the role that he got a small amount of insight into the finances at an AGM where it was incorrectly stated that the organisation could not be handed over to Mr. Doherty in better financial health. It obviously became apparent that was not the case. Was there any other sort of due diligence that Mr. Doherty was allowed to look in on just to assess the financial and governance health of the organisation before he took up the role or was that not on the table at all for him?
Mr. Francis Doherty:
No, it was not on the table at all. There was no handover and there was no access to information. In fact, as I reference in the timeline document provided to the committee, my predecessor took a period of leave immediately after the AGM and when he did so he emailed me and other staff, including the finance team, to remind me that I did not have any control or insight into the finances until I became CEO on 1 June.
Catherine Ardagh (Dublin South Central, Fianna Fail)
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Obviously there were the matters that came up, including the transfer to New Directions - bizarre; applying for an €8 million loan - bizarre; and the situation relating to the auditor's brother. There seems to have been so much governance and financial irregularity that we are probably only scratching the surface today.
I have a final question. What was Mr. Doherty's formal step in alerting the powers that be, such as AHBRA, the Charities Regulator and An Garda Síochána? How did it all come to light from Mr. Doherty's end? What actions did he take?
Mr. Francis Doherty:
The question of the organisation's financial future really came to a head at the beginning of July when the trade creditors were established to be over €8 million, the debtors were substantially reduced and the bank had said there was no chance of any significant loan and if it was to come, it would be later in the year. I advised the chair and called the emergency board meeting on 11 July. I prepared the briefing, which I asked the chair to share, in relation to all the matters that we discussed over my first few weeks. I put that down in writing and asked for it to be shared to the rest of the board, which it was not. At that meeting on 11 July I reminded the trustees that it is the organisation's responsibility to notify regulatory bodies of these matters. I was advised at that meeting by the chair that it was a matter for me as CEO to decide whether to do that or not, so I did it within a couple of days. There was a delay because the letters were reviewed by our solicitors at the time. On 14 July both regulators were updated by letter to advise that there were abnormal cash flow pressures and abnormal trade creditor liabilities. I wish to reference that a previous iteration of this committee was told that letter did not contain that information by the Charities Regulator. In fact it did contain that.
Catherine Ardagh (Dublin South Central, Fianna Fail)
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Okay. And tell me-----
John Brady (Wicklow, Sinn Fein)
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I am sorry, Deputy Ardagh, but we are way over time there.
Aidan Farrelly (Kildare North, Social Democrats)
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I thank Mr. Doherty for being here. Before I begin my questions I must mention the founder, ultimately, and the thousands of people who have used or would have used the services. The founder has had his name absolutely dragged through the dirt in what has unfolded in recent years. I have no reason to doubt any of Mr. Doherty's contribution. If a fraction of his contribution is accurate, what we have here is a scandal that is generational in terms of mis-expenditure. I want to take the opportunity to thank Mr. Doherty for that contribution this morning.
Mr. Doherty said the senior management team never met prior to him becoming CEO. Was Mr. Doherty senior management before he became CEO?
Mr. Francis Doherty:
In December 2020, during Covid, I became director of housing development and communications. There were two factors in this. There were very few in-person meetings due to Covid and there was the fact that the leadership team of the CEO and deputy CEO had, in effect, decanted to Kerdiffstown House, which was the mid-east regional office for the organisation. The rest of us were in Dublin city centre.
Aidan Farrelly (Kildare North, Social Democrats)
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Mr. Doherty was the director of communications and housing development. Was there a director of finance?
Mr. Francis Doherty:
There was never a director of finance prior to April 2023. When I became CEO and sat down with the then director of finance he advised that he had not actually been able to look at anything up until I had become CEO. He had been sort of left reading himself into the role for five or six weeks. So, there was a head of finance-----
Aidan Farrelly (Kildare North, Social Democrats)
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There was a head of finance.
Aidan Farrelly (Kildare North, Social Democrats)
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What would their role have been?
Aidan Farrelly (Kildare North, Social Democrats)
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There was a finance team, along with a head of finance, throughout this.
Aidan Farrelly (Kildare North, Social Democrats)
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In theory there were controls, checks and balances in place structurally for an organisation to have access.
Aidan Farrelly (Kildare North, Social Democrats)
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To be explicitly clear, there was a head of finance and a finance team.
Aidan Farrelly (Kildare North, Social Democrats)
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How many bank accounts were operational in the trust when Mr. Doherty became CEO?
Aidan Farrelly (Kildare North, Social Democrats)
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Was there ten at maximum?
Aidan Farrelly (Kildare North, Social Democrats)
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Who had access to those bank accounts when Mr. Doherty became CEO? Mr. Doherty would have had access or authorisation-----
Aidan Farrelly (Kildare North, Social Democrats)
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We are now painting a picture where, at least in theory again, others would have had access throughout the years to see what was happening. Is that fair to say?
Aidan Farrelly (Kildare North, Social Democrats)
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I appreciated the correspondence sent by Mr. Doherty before coming here. It was really informative. I did not see any mention of an audit and risk committee or meetings of an audit and risk committee. Was there such an institution in place in the trust when Mr. Doherty was there?
Mr. Francis Doherty:
Yes. The organisation had a long-standing audit and risk committee. In fact, the former chair of the organisation was a member of the audit and risk committee before she became chair. What was really clear and what I was trying to address when I was recommending an independent people and skills audit of the board of the Peter McVerry Trust when I was CEO was that there were no chartered accountants on these commitments. There were people with business experience and legal experience, but nobody with actually qualified financial experience.
Aidan Farrelly (Kildare North, Social Democrats)
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So, that committee did not meet during Mr. Doherty's tenure as CEO.
Aidan Farrelly (Kildare North, Social Democrats)
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What about prior to Mr. Doherty's time as CEO?
Aidan Farrelly (Kildare North, Social Democrats)
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Does Mr. Doherty reckon it was a procedural more than an active committee?
Aidan Farrelly (Kildare North, Social Democrats)
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The then chair of the board announced the news of Mr. Doherty becoming CEO, saying that she was confident that Mr. Doherty would lead the trust with integrity and vision and that he had the skill set, capacity and vision to ensure that the organisation continued to deliver for the most vulnerable in Ireland. Hearing those words, can Mr. Doherty describe his relationship with the board through his tenure as CEO?
Mr. Francis Doherty:
When I became CEO on 1 June, I had already arranged to meet the chair because I wanted to kick off with a positive relationship. I asked the board to scrutinise me and my team. I advised that I was going to bring more senior management to the board meetings, and that I would not be presenting the finance reports, which would be done by the director of finance who had just been hired.
I was hopeful and expectant that when I revealed things that I found over the course of my time as CEO, the board would understand that we needed to address these and that certain things had to be done, including contacting the regulators and being transparent, and that there was only one way through this for the organisation.
I really felt, from probably mid-August onwards, that there was a change in the board's position to me and my colleagues and that it took a more protectionist view of activities. That was, to my mind, misaligned with the interests of the trust and service users.
Aidan Farrelly (Kildare North, Social Democrats)
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We have spoken a little about conflicts of interest. What was Mr. Doherty's relationship with the head of logistics who it has been reported was not only fairly significant, since the head of anything in a trust of that size is a significant employee, but was also a tenant of the service and had procured contracts for service delivery? What is Mr. Doherty's understanding of that situation? Was the employment and recruitment process similar for that position? How was that spoken about around the water cooler with other heads of departments?
Mr. Francis Doherty:
I had very limited interaction with the individual because they were based in Kerdiffstown. They would not have been a frequent visitor or needed to interact with the head office in Dublin. I was advised by a senior HR official that they had learned of the person's appointment having returned from holidays. There was no advertisement or indication that a role like that needed to be created in the organisation. Everything about that situation was learned after the fact, including the property that was acquired and contracts that were entered into. That individual resigned shortly after I became CEO because when things were being revealed, I tried to ascertain whether rent was actually being paid to the organisation for the property. As part of that, I interacted with the individual and asked if they could confirm that, and they did. That was my limited interaction with them.
Aidan Farrelly (Kildare North, Social Democrats)
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The media reported that the auditor who was responsible for auditing the accounts of the trust over the significant period of time we are talking about here was the same entity that bought the unit and then transferred ownership to the trust on the same day. Can Mr. Doherty substantiate that? Is that correct, as far as he can tell?
Grace Boland (Dublin Fingal West, Fine Gael)
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I thank Mr. Doherty for coming before this committee and highlighting these issues. I can only imagine the absolute panic he must have experienced when he came into the role. He had been working for a charity that was trying to help the most vulnerable in our society and, on the other side, there were no cash flow reports, literally millions washing around, arms-length transactions not occurring, no proper governance, a board that did not seem to understand what was actually happening, and the purchase of stately homes. It must have been astounding for Mr. Doherty to even try to unpick what had happened. I really cannot imagine the panic that he experienced when he was appointed. I thank him for highlighting these issues to us.
In the short time that I have, I want to clarify a few things. Was Rubycon the largest creditor of the trust?
Grace Boland (Dublin Fingal West, Fine Gael)
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Regarding the relationship with Rubycon, is Mr. Doherty satisfied that the trust actually received the services it was paying for?
Mr. Francis Doherty:
When I became CEO, we tried to review invoices from that contractor and pretty much every contractor just to validate that what we were being charged for was actually being delivered. The sense from people that were closer to the works that were being done in the services was that there was a question at one point about whether there was a concern about inflation on those invoices. Lots of people in the organisation would feel extremely sorry for that individual because of their nature. They went to great extremes at different times to help the service's front-line staff, but at the end of the day received huge sums of money for work and there was a conflict that neither party declared. There were also issues with Kerdiffstown House. When I became CEO, I had to evict people from that company from outbuildings when one of the heads of service called me and asked if I was aware that there were staff from that contractor living on site, and stuff like that.
Grace Boland (Dublin Fingal West, Fine Gael)
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What was happening on site at this stately home? What was it actually being used for?
Mr. Francis Doherty:
Kerdiffstown House was purchased under the capital assistance scheme for supported temporary accommodation. It was a combined site for the Dublin region and Kildare. There were effectively two sides to this building, which was previously used by the Society of St. Vincent de Paul for respite holidays for families. That was the reason it was bought. The stately home part of it could not be used for homeless services. It was not appropriate. It is a protected structure. It was then reused as offices, originally for the then CEO and deputy CEO, and later for other staff. The issue was that the appropriateness of that building and site should never have been supported. It was rural, had no proper transport links and was located on the edge of a very small village with no services or amenities. The contract that the Deputy referred to, by the individual who was employed and housed by the organisation, was to bus people to and from that location to locations in Kildare and Dublin to get the Luas, because it was so far removed.
Grace Boland (Dublin Fingal West, Fine Gael)
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To be clear, there were no homeless services for homeless people actually provided on site. It was purely for offices.
Mr. Francis Doherty:
No, there was accommodation for about 130 individuals from Dublin and Kildare, but that was a service that was managed and had a budget. That budget was undercosted, as I alluded to earlier. The organisation was losing €1 million a year on the site and the vast majority of that money related to driveways, the cutting of grass and other things-----
Grace Boland (Dublin Fingal West, Fine Gael)
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Like a vanity project?
Grace Boland (Dublin Fingal West, Fine Gael)
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I know the 2023 accounts have only been recently published but I wonder if Mr. Doherty has had a chance to review them. I know it is acknowledged that not everything may necessarily be in there and recorded, but if he has had a chance to review them, what is his sense of them?
Does he think they are starting to accurately reflect what was happening in the trust or does he think there is a way to go on what we are going to uncover?
Mr. Francis Doherty:
The accounts show that there was a huge job for people coming in to try to make sense of it all. They are starting to build everything from scratch. It was like trying to underpin a skyscraper that was on fire with 3,000 people in it while people are turning up and tapping you on the shoulder for money. There are quite significant qualifications on the financial statements and that is no surprise. There is information in there that is not - as I would see it - accurate. There are omissions as well. There is basic information that probably should or might need correcting. For the board that is there at the minute, it has been further hamstrung in the fact that they have only recently been appointed. What needed to happen was that a new or substantially new board was needed immediately after these issues came to light. When I was CEO, I was having to deal with people who were continuing to brief the former CEO, asking that they could be recused from any conversations in relation to the former CEO because they were so close personally to that individual and asking me to bring that individual back to help clean up the mess that existed. If the organisation had been encouraged, forced or made appoint new trustees much earlier, then the accounts would have been in a better shape.
Grace Boland (Dublin Fingal West, Fine Gael)
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Where does Mr. Doherty feel that the blame lies for that? There are so many regulators and auditors between the DRHE, the HSE, Tusla, the local authorities, the actual auditors, the Approved Housing Bodies Regulatory Authority, AHBRA, and the Charities Regulator. It is almost falling between too many stools.
Mr. Francis Doherty:
You could say that. The most obvious one is the Charities Regulator because it has done it in the past for other organisations. I was CEO and five weeks in the role, I wrote to the Charities Regulator and said we have financial pressures that are outside anything the organisation has experienced in 39 years. I gave it a plan to say that I need to generate €15.1 million in six months. I got an email back that said, "Thanks for that. I know you will keep in touch." There were multiple times over the course of my time there and the months after where a clean sweep of the organisation's board would have resulted in a much improved and quicker process. I want the organisation to succeed. There are incredibly good people there. Peter has done amazing work. There is a massive crisis in homelessness in this country. The Peter McVerry Trust has always led on the solutions. It was hamstrung by the fact that the people who were there missed it, then went into self-protection mode, further damaged the organisation and the people there now who are trying to make sense of it have been restricted in solving the issues. That is to the detriment to the organisation and its service users.
John Brady (Wicklow, Sinn Fein)
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I have a number of questions. Like the previous speakers, I welcome and thank Mr. Doherty for engaging with the committee, coming in before it and providing it with what can only be described as a comprehensive briefing prior to our engagement here. I also thank Mr. Doherty for the work he has done in the organisation under difficult circumstances.
To pick up on a number of points that have been raised previously, in relation to the €8 million loan application Mr. Doherty became aware of that was made by the previous CEO, Mr. Doherty made a suggestion that it was made one and a half hours before he was due to step down. What happened with that loan application subsequent to Mr. Doherty's appointment as CEO? Was that application withdrawn, rejected or what ultimately became of that?
Mr. Francis Doherty:
Ultimately, it became clear that the organisation would not be able to meet any stress test or credit committee requirements. Over the course of June, the bank had come back to the director of finance in the organisation and asked for some documents. We did give them those. In the first week of July, I spoke to the bank directly and it had no impression that the €8 million had ever been on the table for the organisation and we would be lucky to get a couple of million sometime in October or November. That is when everything blew up around the creditors and financial-----
John Brady (Wicklow, Sinn Fein)
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Was Mr. Doherty ever made aware what the purpose of that loan was or what it was intended for?
John Brady (Wicklow, Sinn Fein)
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To keep the head above water. In relation to Mr. Doherty's role prior to taking on the position of CEO, he was the director of housing and communications. He already referred to some of the difficulties in his role as communications officer. There has been phenomenal work done by Fr. Peter McVerry. He is outspoken on the failures, difficulties and challenges facing homelessness and the rising figures. Mr. Doherty tried to circle that square as such. I do not want to put words in his mouth but he spoke about a strong relationship or a good relationship between the former CEO, the Department and Ministers. Am I correct in saying that?
John Brady (Wicklow, Sinn Fein)
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In Mr. Doherty's position, he spoke of some challenges. At any time, did he feel or was it deemed that he may have overstepped the mark by saying something or doing something whereby others may have deemed that he overstepped his role as communications officer?
Mr. Francis Doherty:
In relation to the stakeholders from the previous question, I got support from the then Minister, officials from the Department and some of the other State agencies. I particularly acknowledge that Tusla was proactive in supporting the organisation at the time. The only stakeholder that I was dealing with that sought to curb or reduce my ability to communicate was the board that I reported to. It took exception at different stages to my interviews and communications with AHBRA when I suggested that a new board was needed. My recollection and from the minutes of that board meeting on 11 July-----
John Brady (Wicklow, Sinn Fein)
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Was he ever reprimanded by the board?
Mr. Francis Doherty:
The board sought to reprimand me on 29 September 2023 when it asked for a meeting. At the start of the meeting, it told me that it was the board's position that it wanted to reprimand me but had decided not to formally do so. For the purpose of the rest of the meeting, it surely felt like I was being reprimanded. Thereafter, the letter issued to say that I could in effect not talk to any stakeholder about the financial situation of the organisation. I was to return and focus on the day-to-day operations of the organisation, which were incredibly difficult to do without talking about finances because we were unable to get creditors or suppliers to deliver services without paying them. It felt like a condition that was deliberately put in place so I would breach it at some point or other and be removed.
John Brady (Wicklow, Sinn Fein)
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On the funding model that had been used in Mr. Doherty's time in the organisation - I know he was not directly involved in that - a number of previous speakers have referred to underbidding, etc. Was the deficit funding model a done thing across the sector or was that driven by the Department? Was this just the sector itself that was using that particular model of underbidding or the deficit funding model?
Mr. Francis Doherty:
In my view, the trust led the way on that problematic model. There has been reference perhaps in the housing committee previously that there was evidence of other contracts being substantially below the actual cost to deliver those services. The trust took it to an industrial scale nationally.
The fundraising team, which did an incredible job of raising €9 million or €10 million each year across a huge number of events involving many important donors and small donors across the country, could not keep pace with it. That meant the shortfall was growing year on year.
John Brady (Wicklow, Sinn Fein)
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Mr. Doherty made reference to the chair of the board writing to him with specific directions on who should be paid first and that it should not be the agencies which provided the staff being relied on to keep the critical services running or the contractors working to rectify fire safety issues. That is quite concerning. Mr. Doherty might just inform the committee about fire safety. Obviously, there were 2,000 service users across 1,000 units. When I hear the words “fire safety”, it sets off alarm bells, to say the least. What action was taken in terms of paying those contractors to ensure that critical work was allowed to continue and be completed?
Mr. Francis Doherty:
I will give the committee one example. The long-term CEO had entered into a contract to rent a building on St. Stephen’s Green. The cost of the lease was around €2 million per year for 20 years. It was a full commercial repair and insure lease, which was unusual for the organisation to take on. The leadership team at that time arranged for approximately 100 to 120 individuals to take up occupation of that building. A number of changes were made to the structure as a result. These invalidated the fire certificate to such an extent that Dublin Fire Brigade wanted to shut the property down. This became apparent because my deputy at the time was given a handover by the previous deputy to flag that these issues existed. It was an extreme point where the fire brigade was saying the building needed to be shut down.
The issue in this regard was obviously twofold. There was the safety of the staff and service users. There was also a financial risk if the service was closed, because the DHRE would stop paying to cover the rent for the building, and the trust was on the hook for €2 million a year for 20 years. We arranged with the consultants preparing the audit of the building and the technical works required to eventually manage not to clear their payments but to make some payments in order that they could prepare and give us reports they were withholding because they did not get paid. The issue then became that the works identified in that one single service came to nearly €900,000.
John Brady (Wicklow, Sinn Fein)
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Is that the former hotel that was there?
John Brady (Wicklow, Sinn Fein)
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As far as Mr. Doherty is aware, it is not compliant with fire safety regulations.
John Brady (Wicklow, Sinn Fein)
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I thank Mr. Doherty. That concludes our engagement with him this morning. I thank him for appearing today and for the evidence he provided.
John Brady (Wicklow, Sinn Fein)
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We will commence our second session. I welcome the representatives of the Charities Regulator: Ms Madeleine Delaney, chief executive, and Ms Rachel Rodgers, director of legal affairs and registration. I also welcome representatives of the Approved Housing Bodies Regulatory Authority: Mr. Fergal O'Leary, chief executive, and Ms Antonia Smyth, head of regulatory oversight and communications. As noted earlier, from the Office of the Comptroller and Auditor General, we welcome Ms Colette Drinan, secretary and director of audit.
Members were advised of their duties in relation to any remarks made and I would like to outline the privilege notice to the witnesses. I wish to explain some limitations to parliamentary privilege and the practice of the Houses regarding references witnesses may make to other persons in their evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected, pursuant to both the Constitution and statute, by absolute privilege. This means that they have an absolute defence against any defamation action for anything they say at the meeting. However, they are expected not to abuse this privilege. It is my duty as Cathaoirleach to ensure that this privilege is not abused. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative they comply with any such direction.
Witnesses are also reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable, or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative they comply with any such direction.
I will now ask Ms Delaney to give her opening statement on behalf of the Charities Regulator. As set out in the letter of invitation, she has five minutes to make her opening statement.
Ms Madeleine Delaney:
Gabhaim buíochas leis an gCathaoirleach and the Deputies for the invitation.
The Charities Regulator was established 11 years ago. There are currently 11 members of the board who are appointed by the Minister for Rural and Community Development and the Gaeltacht. We have 49 full-time members of staff. There are about 11,500 charities in Ireland. It is a diverse sector ranging from very small, volunteer-only charities to large-scale operations with significant numbers of employees. They are supported by hundreds of thousands of volunteers across Ireland, including those who take up the role of charity trustee. Additionally, our latest report on the social and economic impact of the sector estimated that there were 281,250 people employed in charities, equivalent to almost one in eight workers. The overall financial impact of the charity sector was estimated at €32.1 billion in 2022. There are 76,000 charity trustees. These are the volunteers legally responsible for the management and administration of a charity. Last week, we issued new guidance on being a trustee for existing trustees or those considering becoming a trustee, explaining their role and key responsibilities.
The guiding function of the Charities Regulator is to increase public trust and confidence in the administration and management of charities. Charities can come under the remit of several regulators and public bodies depending on the services they provide. The role of the Charities Regulator is grounded solely in the Charities Acts, in particular the Charities Act 2009. Our statutory functions include maintaining a register of charities and promoting high standards of governance and accountability in charities. We also deal with applications by charities under the Charities Acts 1961 and 1973 for services and assistance such as approving cy-près schemes, appointing new trustees and authorising the sale of charity property in circumstances where the governing document of the charity does not otherwise provide for this. These services are provided free of charge and are an alternative to applying to the High Court.
Access to information is a key component in public trust and confidence and the register of charities provides important basic information on individual charities. Once registered, charities are required to keep their information on the register up to date and to submit an annual report which provides details of finances and activities undertaken in the previous 12 months. We actively promote checking the register to help people make informed decisions before making a donation.
The year 2024 saw a 43% rise in the use of charity records on the register.
We provide extensive guidance on our website to assist charity trustees to fulfil their duties and implement good standards of governance. If issues or concerns arise with a charity, we take a proportionate approach. We engage extensively on a one-to-one basis with charities and charity trustees to resolve governance and compliance-related matters. Most engagements with charities are concluded on a voluntary basis. For example, in 2024, we received 493 new concerns. However, during that same year, we issued only nine statutory directions to provide information or to produce documentation by way of statutory request. In certain circumstances, we may appoint inspectors to investigate and report on the affairs of the charity, for example, where information and documentation to establish relevant facts are not available or forthcoming, co-operation and engagement by the charity trustees is lacking, the matter involves a complex scenario with multiple issues.
In the case of the Peter McVerry Trust, the Charities Regulator appointed inspectors on 12 October 2023 to carry out a focused investigation into governance and finance-related matters at the charity in line with our specific statutory functions. This followed a short exchange of correspondence between the Charities Regulator and the charity during August and September 2023 following receipt of an email from the charity in July 2023 advising of cash flow issues.
Prior to and during the investigation, the Charities Regulator liaised closely with the Approved Housing Bodies Regulatory Authority, which was engaging with the charity related to its activities as an approved housing body. These form part of a range of activities and services that the charity carries out to advance its stated charitable purpose. We have a memorandum of understanding in place with the Approved Housing Bodies Regulatory Authority that allows us to co-operate and share information for the purpose of informing our respective functions efficiently and effectively.
The inspectors' report was published on our website on 14 October 2024. The report details several findings that pointed to failures in charity trustee oversight and in the management and administration of the charity and its charitable assets. In their report, the inspectors highlighted instances of a lack of adequate and appropriate financial controls with which the charity's board could exercise control over the affairs of the charity. The inspectors also identified a failure to adhere to donor intention in how restricted funds were used.
Further findings relate to the process by which the charity took over other charities and whether the board considered whether the charitable purpose of the charities being taken over aligned with the charity's own charitable purpose. Many of the findings of the inspectors are captured in the report published by AHBRA following the conclusion of its investigation in December 2024. The Charities Regulator is continuing to follow up with the charity for assurances that the matters raised in the inspectors' report are properly addressed. As AHBRA is engaging extensively with the charity on these and other matters, we are not duplicating its work.
In respect of the C and AG's report into the Peter McVerry Trust, there is a specific action that fundraising will be receipted appropriately and in accordance with the requirements of the Charities Regulator. This appears to a reference to our guidance on fundraising from the public. Since the inspectors' report was published, one of the major issues we engaged with the charity's trustees on are its internal financial controls, which should include income from fundraising, as well as other sources of income and the management of restricted funds.
I am happy to take questions and to be as helpful as possible to the committee.
John Brady (Wicklow, Sinn Fein)
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I invite Mr. O'Leary to make an opening statement on behalf of AHBRA. As set out in the letter of invitation, he has five minutes to make his opening statement.
Mr. Fergal O'Leary:
I thank the committee for the invitation to attend. We welcome the opportunity to discuss AHBRA's role and our ongoing work in relation to the Peter McVerry Trust. I should note at the outset that AHBRA has a number of ongoing regulatory processes that limit what we can say in certain areas, but we will share as much information as we possibly can.
Serious concerns about the trust emerged in July 2023. We began a statutory investigation in October of that year, carried out by inspectors appointed under the housing Act 2019. In December 2024, we published their report. The investigation focused on the trust's control systems and decision-making between January 2022 and August 2023. It was directed at organisational practices, not at the conduct of any individual.
The inspectors found serious and systemic failings in governance, financial management, internal controls and the handling of conflicts of interest. The internal checks and balances were not working. There was poor cash flow management, limited board challenge, weak financial reporting and a lack of understanding of its liabilities. These weaknesses directly contributed to the trust's liquidity crisis and the need for exceptional State funding. The C and AG report and this committee's earlier discussions highlighted that capital funding had been used to cover day-to-day costs and that significant liabilities had built up. Our inspectors confirmed that weak internal controls and poor financial oversight allowed this to happen.
To protect tenants and to bring the organisation into compliance as quickly as possible, we began a monitoring process to oversee the completion of clear, time-bound remedial actions. In February of this year, Crowe Ireland was appointed as independent experts to support this process. In July, to drive progress, we issued a determination of non-compliance requiring high-priority reforms across governance, finance, property and tenancy management. This included the publication of the 2023 accounts, completion of the asset and liability register, and implementation of new rent collection policies. In September, AHBRA issued a statutory direction to underpin ongoing regulatory oversight, reinforce existing co-operation at board level and require prompt notification of significant events.
The trust has co-operated and progress has been made, particularly in recent months. The 2023 accounts are now complete, additional senior capacity has been added and new stronger financial controls are in place. Overall, however, progress has been slower than required and AHBRA continues to monitor as the trust now strategically reviews its organisational model and ensures its systems and staffing match the organisation's scale. If material non-compliance persists, further escalation, including cancellation of registration, remains possible.
The weaknesses identified in the trust occurred before AHBRA's regulatory framework and data systems were fully operational. Since then, we have developed a comprehensive risk-based regulatory model. Through monitoring, formal assessments, notifiable event reporting and strengthened collaboration with other regulators, funders and local authorities, we now have far better visibility across the sector and can intervene much earlier when issues arise.
An aligned approach between all oversight bodies is critical both to the sector as a whole and in responding to the issues in the trust. We continue to work closely with the Department of housing, the Dublin Region Homeless Executive and the Charities Regulator. This joined-up approach across oversight bodies helps identify and manage risks early, protecting tenants and public investment.
AHBRA is the independent regulator for approved housing bodies established under the Housing (Regulation of Approved Housing Bodies) Act 2019. Our role is to protect tenants, safeguard public investment and ensure that AHBs are well-governed, financially sound and delivering quality homes.
At the end of 2024, there were 438 registered AHBs managing nearly 68,000 homes with a combined income of €1.95 billion, €9.8 billion in assets and €8.6 billion in liabilities. The nine largest AHBs, including the trust, manage about 73% of all homes. Around a third of AHBs in the sector plan to expand in the next three years. As the sector grows in scale and complexity, our oversight is deepening to match.
In conclusion, the issues at the Peter McVerry Trust were serious and regrettable, diverting attention from the organisation's vital work with vulnerable people. They do, however, underline the need for strong governance, sound financial management and the importance of ensuring that the organisation's social mission is matched by the capacity and capability required to deliver it. The AHB sector remains a vital part of Ireland's housing system. Our role is to set standards, provide independent oversight and to intervene, where necessary, to protect tenants and public investment. That remains our focus.
I thank the Chair and members. I am happy to take any questions they may have.
John Brady (Wicklow, Sinn Fein)
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I thank Mr. O'Leary for that. We are due to finish this session at approximately 1 p.m. I ask members to work with me in terms of the time and to try and stay within the allocated times. We are here to discuss the funding of the trust and the Charities Regulator's report of 2024 is relevant to that.
Is the Charities Regulator happy to discuss that report with us today?
John Brady (Wicklow, Sinn Fein)
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Okay. Is AHBRA, which has also reported on the issues, happy to discuss its report?
John Brady (Wicklow, Sinn Fein)
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I will now open the floor to members. Again, the first speaker is Deputy McAuliffe who has 15 minutes.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Have the witnesses also reviewed the 2023 accounts of the Peter McVerry Trust?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Did Mr. O'Leary hear the evidence given to the committee this morning by the former CEO, Mr. Doherty?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Will Ms Delaney answer those two questions?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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What we heard this morning will shake the confidence of many people in two sectors which the witnesses' organisations have responsibility for regulating, namely, approved housing bodies and separately, charities. The reports both organisations carried out are incredibly thorough but I want to bring them back to when they first became aware of the issues. I will start with Ms Delaney because I think the engagement during the summer was extensive. There was a lot of correspondence back and forth between the Charities Regulator, the Peter McVerry Trust and its board between July and September. When was the Charities Regulator first made aware and how?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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The former CEO - I will use the phrase "CEO 2" because there was CEO 1 as well - so Mr. Doherty who was here with us, said to the committee that he felt that had the Charities Regulator stepped in earlier, some of the issues could have been resolved more quickly. In hindsight, and I accept it is difficult to apply, does Ms Delaney agree with that statement?
Ms Madeleine Delaney:
No, I do not but it does throw light on the need to explain the role of the Charities Regulator and our powers and functions. We were made aware of the issue. I can open the letter in full to the committee if it so wishes. Essentially, it explained there were some cash flow issues, that a plan was in place and that the trust expected it to be resolved fairly soon.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Ms Delaney said "some cash flow issues". Mr. Doherty has said in correspondence to us that he described them as "abnormal cash flow issues". Is there disagreement between the two parties?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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At the Committee of Public Accounts meeting on 17 October, that is how it was described. It was described as not as significant as what we heard this morning.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Did Ms Delaney believe at that point that the viability or liquidity of the organisation was at risk?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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I am particularly concerned about the service users in that moment. If cash flow became an issue, there could be a situation of an immediate closure, which would result in people not being able to avail of services. Surely cash flow issues outside the normal parameters would have flagged something from the regulator's perspective. It is not concerned with service delivery because it has a different remit but it would be concerned about the charitable donations, which might have been applied to the organisation.
Ms Madeleine Delaney:
Absolutely, and we would always be concerned about the services, first and foremost, and also the assets. As part of that initial engagement and the information we received, it was made clear to us that the trust had already approached its funder and I believe Mr. Doherty confirmed that this morning. It had received advance funding from its funder and it had been in touch with the funder about that funding for a long time. As a regulator-----
Paul McAuliffe (Dublin North-West, Fianna Fail)
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The trust also notified the Charities Regulator that it had notified Mr. O'Leary's organisation.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Did Mr. O'Leary share the concern I outlined earlier about service delivery and so on?
Mr. Fergal O'Leary:
We are concerned with everything an AHB does. This is a really important point about what was told to us and what we subsequently did. From our inspector's report, it is clear that fairly significant issues were identified in March. It was July before we were notified about those. Then-----
Paul McAuliffe (Dublin North-West, Fianna Fail)
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That is March of 2023.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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What leads Mr. O'Leary to say that?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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This was in advance of the first CEO leaving the organisation and the new CEO taking over.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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The new CEO took over on 1 June.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Those documents were available to and approved by the board.
Mr. Fergal O'Leary:
They were approved by the board and they showed a problem was occurring and percolating in the organisation but what did not happen for a number of months and what we would expect is that we would expect to be informed, perhaps straight after the board meeting, if the trust was having those issues. When we were told about the issues in June, I believe the situation was characterised as short-term cash flow issues that could be resolved by the sale of an unencumbered asset. Then, when charity donations would go up towards the end of the year, the organisation would be on a sounder financial footing. We queried that assumption. The answers we received based on that did not give us the required comfort.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Was AHBRA's correspondence with Mr. Doherty or the board?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Did both parties provide the same assurance?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Will Mr. O'Leary elaborate on that?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Perhaps in general terms. Mr. O'Leary said they did not both provide the same assurance regarding the sale of assets.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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In an AHB, assets are part of the turnover of the body but they also underpin the value of an AHB. The sale of assets would also concern AHBRA.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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That is what the word "unencumbered" means.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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They are not encumbered by capital assistance scheme, CAS, funding, a bank loan and so forth. Does Mr. O'Leary believe some of the assets that were identified by the board in the summer of 2023, which it alluded to as solving the problem, were encumbered rather than unencumbered assets?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Mr. O'Leary said "missing". Did AHBRA believe the board did not have a critical understanding of the risks it was taking at the time?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Why does Mr. O'Leary think that was the case?
Mr. Fergal O'Leary:
I will not give an opinion. I will rely on evidence. It is clearly the case that the board's oversight of the executive and the organisation was lacking. Was the board being given the right information by the executive? That could equally be the case. However, we regulate 431 AHBs and when we assess them through monitoring, notifiable events or our assessment programme, what we are looking for is recording in the minutes over a period that the board is asking the right questions and that the executive is giving the right-----
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Mr. O'Leary is talking about financial capacity and financial controls being in place. Does Mr. O'Leary believe capacity was an issue on the board?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Anybody looking at the evidence could not come to a different conclusion.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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We have talked about encumbered and unencumbered assets from the AHB's perspective. I want to talk about restricted and unrestricted funding from the regulator's perspective. It is obviously incredibly serious when a large entity, individual donor, or somebody giving a small amount of money on the street gives it to an organisation such as the Peter McVerry Trust. They must have trust that it is being used for the correct purposes. The evidence we heard this morning with regard to the emptying of restricted funds was breathtaking. I will mention the two payments that were referenced. One was the payment of over €1 million to Rubycon for works on a property. The other was the payment of €350,000 to an entity called New Directions, which seemed only to provide a new direction for the former CEO and not anybody else. Did the regulator have concerns about those payments? When did it become aware of them?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Those payments were a clear breach of the restriction on those donations. Is that correct? The regulator has a legal definition of "restricted donation". Is that correct?
Ms Madeleine Delaney:
We talk about fulfilling donor intention. It is a bit like restricted funding. Essentially, the money must be used for the purpose for which it was given. That is obviously a fundamental part of a charity trustee's duty. It would appear from what was found by the inspectors, both ours and those from AHBRA, that the controls were not in place to ensure that would happen. Even if there were controls, they were being circumvented. Perhaps questioning, and an awareness to question or ask about these things, was lacking.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Both organisations are regulators and are not the people responsible for making these decisions. I fully accept that. However, I have served on many voluntary boards. Sometimes there is not the foundation or capacity, despite the best of intentions by volunteers who sit on boards. What has happened here is a complete failure of governance. Am I correct, from a charity's perspective?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Why did the regulator not seek to replace the trustees earlier?
Ms Madeleine Delaney:
Because we were aware that they had already engaged with their funder and had funding and support to keep the services going, and because the trustees, regardless of what had gone on before, were remaining in place and dealing with the issues, there was no basis for us to go in and perhaps further compound matters by seeking to get orders from a court.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Mr. Doherty outlined that there were close personal connections between the trustees and the CEO. With a CEO of 18 years' standing, you imagine that is inevitable to some degree. Was that a concern for the regulator when it considered not replacing the trustees?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Surely where the trustees have been there for a period, the CEO has been there for a period and significant concerns have been raised, it came into the consideration of the regulator that the trustees might have that sort of dominance or close connection with somebody who had left the organisation. There were then questions over the financial arrangements under that previous term.
Ms Madeleine Delaney:
I think from what the Deputy is saying, and from what can happen in this dominant behaviour, there is an over-reliance on somebody who has been there for a long time. I fully accept what the Deputy is saying about the burden that is on charity trustees. They are the ones who are in control and need to ask the questions.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Let me be clear that my question is to the regulator. Given everything Ms Delaney has said in the past 60 seconds, is that not all the more reason why the trustees should have been replaced immediately?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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These were circumstances where the regulator was informed of some of the arrangements. Perhaps all of that detail did not come about until later, but-----
Paul McAuliffe (Dublin North-West, Fianna Fail)
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The regulator never withdrew the capacity of the Peter McVerry Trust to raise charitable funds.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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It has done that with other organisations.
Ms Madeleine Delaney:
Perhaps I could explain the statutory framework. In terms of removing trustees or getting control of assets, we can apply to the High Court. We cannot do it ourselves. There are specific circumstances in which we can do it. We would have needed all the information on foot of the inspector's report to do that before we could consider whether there was mismanagement or misconduct to go in and do that.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Just one last-----
Paul McAuliffe (Dublin North-West, Fianna Fail)
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At the housing committee, I thought Mr. O'Leary gave a very cautious assessment of the current financial situation of the Peter McVerry Trust. Does he believe the Peter McVerry Trust is a going concern at this point?
Mr. Fergal O'Leary:
I do believe it is. What we have seen over the past couple of months is a lot of progress, but it has a long way to go. I think I said that at the housing committee. There has now been board renewal, which, to the Deputy's question, is a necessary part of this. In addition to very long lists of things, hundreds of them, that need to be resolved in respect of either current or historical issues, we are now working with the trust as it strategically reviews its organisation. Before we give the trust a clean bill of health, we want to see that it has the capability and capacity at both board and executive levels to allow them to go back to focus. I will give the Deputy a direct answer to his question. I do think there is hope here and I think the trust can continue, but we need the progress that has been made to continue.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Does Ms Delaney believe that in respect of charitable donations that are currently being raised, there is sufficient protection for the people who are donating money at this moment?
John Brady (Wicklow, Sinn Fein)
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I ask Ms Delaney to respond briefly, if possible.
Ms Madeleine Delaney:
There is, based on the paperwork we have seen but it is all about the implementation of that. I think they have been continuing to deliver services. I must say that for the staff on the ground and the new trustees. They have done that while trying to overcome these difficulties. I have the initial email we got, if it is of ease to anybody, given there might be some misunderstanding about the information that was provided to us in July 2023. It is a short email.
John Brady (Wicklow, Sinn Fein)
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Perhaps that could be circulated.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I thank the witnesses for being here. I know they probably only caught some of the earlier session but it is fair to say that it was quite staggering in some of the revelations about how the organisation was run, the total lack of governance, the centralised decision-making and the fact there were no proper control measures and zero procurement processes in place. People would be tempted to say, "If only we had regulators", but we had two regulators. Do the witnesses consider their role a big failure in respect of this organisation? Should they have uncovered some of these practices at an earlier date?
Séamus McGrath (Cork South-Central, Fianna Fail)
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It was established in 2022.
Mr. Fergal O'Leary:
There are a couple of things here around the pilot assessment and work we had done in the organisation. It is true to say that in July 2023, we were only getting up and running in terms of our assessment programme and annual monitoring programme. To give this committee and the public comfort, everything we have done since that time has been to ensure we have proper intelligence on the current 431 AHBs.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I need to be very specific because time is against me. A pilot assessment that AHBRA carried out in March 2023 stated there was compliance and improvements in the areas of governance, finance and asset management. That was in March 2023.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Does Mr. O'Leary regret that report now?
Mr. Fergal O'Leary:
I will tell the Deputy what I regret in that regard, but will say first that the purpose of that pilot assessment programme, and it is in the name, was to test AHBRA's internal assumptions and procedures, to gather feedback and refine our approach before rolling out a full assessment programme. I have a regret, which is that we should not have given an outcome to the 15 AHBs that participated in that programme.
It was not helpful to us and it was not helpful to them but at the time we felt for their work on it we should give them something in return. In hindsight that was a mistake.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Mr. O'Leary is very much relying on the fact that ABHRA was a new organisation and not fully up and running in terms of the role it is now fulfilling. Is it now fully up and running?
Mr. Fergal O'Leary:
Yes, we are. What I would also say is that this whole thing about how the issues came to light and what happened reflects several matters. One is the move away from voluntary regulation. The latter, as the committee knows, started in 2013. It was fine and helped the good AHBs to prepare for statutory regulation, but it is clear that it was not sufficient. It also reflects that we do not now just rely on information that is given to us; we test it.
Séamus McGrath (Cork South-Central, Fianna Fail)
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What level of interaction is there between the two regulators before us on a weekly or monthly basis? Will Mr. O'Leary give us a sense of how they co-operate as organisations which have similar roles? They are different but similar.
Séamus McGrath (Cork South-Central, Fianna Fail)
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How often are the two organisations in contact with each other?
Séamus McGrath (Cork South-Central, Fianna Fail)
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Is Mr. O'Leary in a position to allow the general public to be confident that there is not another Peter McVerry Trust out there that will require millions of euro in a bailout from the State?
Mr. Fergal O'Leary:
Any good regulator will not give a guarantee, but what we, as good regulators, can give is an assurance that the probability is far reduced from what it would have been in July 2023. I am confident that we have a very good picture of what is happening with the 431 AHBs across the country. We continue to refine our processes and to drill deeper. We have plans next year for the large AHBs and getting more information from them. In the context of Deputy McGrath's exact question regarding this not occurring again, that is our focus and what our work leads us to do.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I will now turn to the Charities Regulator. The board wrote to the regulator in 2023 stating that it was compliant with the charity governance code. Did the Charities Regulator accept this at the time?
Séamus McGrath (Cork South-Central, Fianna Fail)
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What did the regulator do? What flowed from that decision not to accept what was stated?
Séamus McGrath (Cork South-Central, Fianna Fail)
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One of the Charities Regulator's goals as an organisation is to build public trust that there is compliance in administration and management. Would Ms Delaney agree it failed in its role in this regard?
Ms Madeleine Delaney:
We are still educating the sector. We are still learning. As Deputy McAuliffe said, many trustees on boards do not have the capacity or understanding. Certainly, our focus has turned to providing more information and supports to them. Our system of regulation is quite different from that of AHBRA. In many respects it is still in that voluntary sphere. A lot of our functions are about promoting, encouraging and supporting good standards of governance and control by trustees but a lot of our powers are different. Other than the power of appointing inspectors, there is a big gap in between. We have to work with them on a voluntary basis.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Unlike the approved housing bodies regulator, the Charities Regulator has been in place for a long time. It was fully up and running and established. Ms Delaney said earlier the Charities Regulator is assessing the 2023 accounts. Would it have carried out a good assessment of accounts for the years 2021 and 2022 for the Peter McVerry Trust?
Séamus McGrath (Cork South-Central, Fianna Fail)
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Is that not a major problem?
Ms Madeleine Delaney:
We have 49 staff. We have a number of functions to carry out, as I referenced in my opening statement. We receive a lot of concerns every year that we have to deal with. We have, over our first ten years, been very driven in dealing with the issues and concerns that are raised with us, and lot of people do-----
Séamus McGrath (Cork South-Central, Fianna Fail)
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I will ask a clear question. Does the Charities Regulator have enough resources to fulfil its mission as an organisation?
Ms Madeleine Delaney:
We have resources that are sufficient for our programme of work right now. These resources have been increasing incrementally. We plan, with a revised regulatory approach and strategy and a new way of risk rating concerns that come into us, to allocate more time to proactive work, whereby rather than just looking at and rating a concern that comes in we will look independently at charities and carry out a risk assessment of them to see are there any flags that would mean we would go in and look at them. We do not have a role in terms of auditing them.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I understand that.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Ms Delaney stated that the Charities Regulator is carefully checking the 2023 accounts, and I appreciate that is on foot of everything that has emerged. The point I am making is on the accounts prior to that. It is all very fine that things have emerged to put a focus on it, but is the role of the regulator not to prevent organisations getting into this position?
Ms Madeleine Delaney:
Our role is to promote standards of good governance. The system is predicated on charity trustees, who do have considerable responsibilities, and our volunteers to fulfil their duties. This means they need to understand what they have to do and try to do it. I would like everybody to remember that this is one of a huge number of charities-----
Séamus McGrath (Cork South-Central, Fianna Fail)
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I understand that.
Ms Madeleine Delaney:
-----and many of them do it very successfully but we have more work to do. Funders and charity trustees need to understand as well that charities need to be supported. They are feeling the burden of compliance not only with regulators, and they are not getting the funding to help them get the supports for that.
Séamus McGrath (Cork South-Central, Fianna Fail)
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When Ms Delaney looks back, were there red flags that the regulator should have picked up?
Séamus McGrath (Cork South-Central, Fianna Fail)
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Ms Delaney does not think there were any mistakes made by her organisation in relation to the regulation of the Peter McVerry Trust.
Ms Madeleine Delaney:
With the resources that we had and in light of the work we were doing in dealing with the issues that were actually raised with us, I have to state that nothing was raised in respect of this organisation in connection with this matter before the email of July 2023. We took immediate action then.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Is it not the case the Charities Regulator should not be relying on that information coming to it? Should it not be looking for issues of concern in these organisations, instead of waiting for somebody to tell it there is an issue?
Séamus McGrath (Cork South-Central, Fianna Fail)
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We do not have the power to go in and audit an organisation on a routine basis and check its activities against standards as ABHRA does. Typically, we need to see that there is some issue before we go in. As I have said, we do have lots of issues raised with us. Our plan is absolutely to try to redress the balance and do more proactive work, whereby we will use whatever information is available to us to risk rate other charities in their own right without having concerns raised with us.
Séamus McGrath (Cork South-Central, Fianna Fail)
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My next question is similar to the one I asked Mr. O'Leary. It is Ms Delaney's goal that there would be public trust. How much confidence can she give the public that there is not another charitable organisation out there that will require millions of euro in a bailout from the State?
Ms Madeleine Delaney:
I cannot, which is what Mr. O'Leary said. I do know one of the reasons we are having this conversation , and why we publish our report, is in order that people can see what has gone wrong rather than sticking the boot in or causing pain for people. It is in order that trustees reading the report will read, understand and follow our guidance on what it is they need they to do to exercise control over their organisations. I would say the same about funders. We rely on funders. Where there are significant funders of charities they are people with written agreements. They have access to information. We rely on them fulfilling their obligations in that regard as well.
James Geoghegan (Dublin Bay South, Fine Gael)
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Mr. Doherty made a very clear allegation that €350,000, which was a donation from the Capuchin Day Centre and which was for a specific purpose, was transferred to another charity called New Directions.
John Brady (Wicklow, Sinn Fein)
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Deputy Geoghegan, we try not to name third parties.
James Geoghegan (Dublin Bay South, Fine Gael)
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It is all out in the public domain in any event. That is the charity for which Mr. Pat Doyle, the former CEO, ended up working. The allegation that Mr. Doherty made just a moment ago was that the moneys transferred were to fund his salary. Has that allegation been investigated by either of the bodies before us?
James Geoghegan (Dublin Bay South, Fine Gael)
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It was just made a moment ago here in this room.
James Geoghegan (Dublin Bay South, Fine Gael)
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But Ms Delaney was aware of the €350,000 payment to this organisation, New Directions. I thought Ms Delaney answered that she was aware of that.
John Brady (Wicklow, Sinn Fein)
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Again, Deputy Geoghegan, we try not to name third parties.
James Geoghegan (Dublin Bay South, Fine Gael)
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What about Mr. O'Leary?
Mr. Fergal O'Leary:
I do not think it is referenced in ours but, like I said earlier, we have a long list of things that we are still working with the trust on to either file away and put in the past or else to get answers on. I do not think that is one of them but certainly we can add that to the list.
James Geoghegan (Dublin Bay South, Fine Gael)
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Mr. O'Leary said at the outset that he heard Mr. Doherty's testimony.
James Geoghegan (Dublin Bay South, Fine Gael)
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Is this the first time Ms Delaney has heard the allegation being made, that the €350,000 was transferred for that purpose?
James Geoghegan (Dublin Bay South, Fine Gael)
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It is the first time Ms Delaney have heard that allegation being made.
James Geoghegan (Dublin Bay South, Fine Gael)
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But not what the purpose was.
James Geoghegan (Dublin Bay South, Fine Gael)
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Was Ms Delaney aware that Mr. Doyle ended up working for that, or intended to work for that company, New Directions?
James Geoghegan (Dublin Bay South, Fine Gael)
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What are the responsibilities in terms of following up that payment? Is New Directions a charity? What is it? Do the witnesses know?
James Geoghegan (Dublin Bay South, Fine Gael)
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They are not an AHB. Are they a charity?
James Geoghegan (Dublin Bay South, Fine Gael)
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So they have not been examined. We will go back to the Peter McVerry Trust. What did it have to do about that €350,000? Did the Peter McVerry Trust have to get that money back, or what happened?
James Geoghegan (Dublin Bay South, Fine Gael)
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Is it correct that Ms Delaney has statutory powers in relation to that as a regulator? If she identifies that moneys have been transferred erroneously, as she puts it, she has powers to ensure that the charity would make good on returning those moneys.
James Geoghegan (Dublin Bay South, Fine Gael)
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In terms of the powers that Ms Delaney exercised as a charity regulator, it seems that she exercised practically all of her sanctioning available powers by having an inspector, but she did not go to the full step of seeking to remove trustees. Is it correct that this power is available to her?
James Geoghegan (Dublin Bay South, Fine Gael)
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That is something that the Charities Regulator has done previously in respect of other charities.
James Geoghegan (Dublin Bay South, Fine Gael)
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Again, that is all in the public domain. Ms Delaney is talking about the inner city homelessness charity.
James Geoghegan (Dublin Bay South, Fine Gael)
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Is it correct that the charity was liquidated?
James Geoghegan (Dublin Bay South, Fine Gael)
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Was that liquidation taken on the application of the Charities Regulator?
James Geoghegan (Dublin Bay South, Fine Gael)
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I am not dealing with the obviously serious issues that arose in that charity. What is the difference in terms of the finance issues in respect of Inner City Helping Homeless versus the Peter McVerry Trust?
Ms Madeleine Delaney:
There were no financial issues in Inner City Helping Homeless. It was simply that all of the trustees resigned and they were not able to replace all the trustees. Hence my answer earlier about the importance of keeping trustees there to try to work through the issues. Solicitors for one trustee who was remaining had indicated that they were going to apply to the High Court themselves to appoint and inspector and then ultimately wind it down. They were serving vulnerable service users as well. In order to preserve those services and keep it going, we though applying for a provisional liquidator to step in on an emergency basis and then a liquidator in the long term to transfer the services and the assets to another charity was the most orderly way to go about it.
James Geoghegan (Dublin Bay South, Fine Gael)
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In respect of either of the investigations and the powers or obligations that are afforded to both entities, were referrals made individually or sanctions made in respect of the issues that they investigated? If so, what were those referrals and what were those sanctions,in respect of the Peter McVerry Trust?
James Geoghegan (Dublin Bay South, Fine Gael)
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What is the threshold that has to be met for either entity to refer matters to An Garda Síochána?
James Geoghegan (Dublin Bay South, Fine Gael)
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In this instance, what was the wrongdoing that the AHBRA came across that caused it to refer the matter to An Garda Síochána?
Mr. Fergal O'Leary:
In this particular case, we were contacted. When we published the inspector's report, we very deliberately publicised its contents and issues that may be of interest to others. We did get contacted on foot of that by An Garda Síochána. I think this is in the public domain as well. We gave them a copy of the report and we offered to discuss anything that they would like to discuss further.
James Geoghegan (Dublin Bay South, Fine Gael)
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In terms of the actual wrongdoing----
James Geoghegan (Dublin Bay South, Fine Gael)
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Mr. O'Leary explained earlier that the threshold for referring to An Garda Síochána was where he identified criminal wrongdoing.
Mr. Fergal O'Leary:
No. What I would be clear on here is that when we conduct an investigation, we know that it can impact on various State bodies. What we did was we publicised it as much as we could to put it into the hands of anybody who would need it. In this particular case, there was not a specific thing that we saw that made us take a proactive step to give it to a particular party.
James Geoghegan (Dublin Bay South, Fine Gael)
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However, the AHBRA did refer it to An Garda Síochána.
James Geoghegan (Dublin Bay South, Fine Gael)
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I am glad Mr. O'Leary made it, but he did not make it when I asked the question. Just to be very clear, did he positively refer the report to An Garda Síochána, or did An Garda Síochána contact him for material for him to refer to them?
James Geoghegan (Dublin Bay South, Fine Gael)
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And in Ms Delaney's instance, is her situation different from the AHBRA?
Ms Madeleine Delaney:
Because the inspectors had underlying documentation on which they based their report, although the report is very detailed, they believed that there were a number of transactions that were questionable and that may have indicated a theft or a fraud. They provided that information to An Garda Síochána.
James Geoghegan (Dublin Bay South, Fine Gael)
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When Ms Delaney says "the inspectors", these are inspectors that the Charities Regulator has appointed.
James Geoghegan (Dublin Bay South, Fine Gael)
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They independently in their appraisal made these findings.
I put it to Mr. Doherty in respect of the underbidding that was going on throughout that it was akin to a pyramid scheme. He accepted that contention. Is that a contention that Mr. O'Leary accepts?
Mr. Fergal O'Leary:
I would not offer a view. I think that side of their work is outside of the AHB bit that we regulate. What I can say is, however you characterise it, it is clear that the board and executive were not managing the affairs well, either in the short or long term. That is an example of it. Something that is relevant to our role is the CAS funding and the way it was reviewed by the board. As outlined in our inspector's report, the testimony subsequently was absolutely shocking from our point of view. It may be all the same issue here that we are talking about in different parts of the organisation.
James Geoghegan (Dublin Bay South, Fine Gael)
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I thank the witnesses.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I welcome all our witnesses and thank them for coming in. I just wanted to confirm with Mr. O'Leary that the AHBRA was established in 2021.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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What did AHBRA do in 2021?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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What systems are they?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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How does AHBRA monitor?
Mr. Fergal O'Leary:
We monitor 431 AHBs. They are required to fill in a form, depending on their size, every year and send that to us. We then test the information in that form against peers and their previous returns to basically look for red flags. That is the monitoring programme.
If I may, because it is an important point, a lot of the work in 2021 was about developing the standards we now use. We have four standards which AHBs are responsible for compliance with. That was a difficult task because it is such a diverse group of AHBs that they needed to be done in a particular way so that everybody could be compliant, to go back to some of the questions earlier about small AHBs and the difficulties they can have. That is what we were doing. The time was well spent, I can promise the Deputy that.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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How is AHBRA funded, is it through the Government or the Department?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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How much is that funding yearly?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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AHBRA will spend €3.6 million, and in year one there was no regulation.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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In relation to the housing bodies AHBRA regulates or watches, the Peter McVerry Trust's housing assets on the fixed asset register were not accurate.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Is AHBRA responsible for that register?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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The register for the Peter McVerry Trust, but AHBRA's records for the Peter McVerry Trust recorded so many houses as being under the trust.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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It is not accurate. When does AHBRA intend to resolve that?
Mr. Fergal O'Leary:
To be clear, the responsibility is on PMVT to have an accurate account of the 2,000 or so properties it does have. Again, going back to July 2023 when we started to look into this, we asked for a copy of the fixed asset register to compare it with the information we had previously received and, straight off the bat, it was not what it should have been. We have spent an enormous amount of time this year still working with the trust to try to get it to have a proper fixed asset register because everything flows from that. Its assets-----
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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What has AHBRA done to ensure that happens? Just to go back, the funding is €3.6 million per year.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Daily contact with whom?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Will Mr. O'Leary tell me about that board? Has the Minister appointed two people to that board? Does Mr. O'Leary know if he has put two people on the board?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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That was part of the approval of the bailout, that this was supposed to happen, that two people were to be put on the board by the Minister.
Mr. Fergal O'Leary:
It was part of the conditions. If I may go back to earlier questions around removal of trustees, when our inspector's report laid bare the problems with the trust, when we published it in December, we sat down with the then chairperson and current CEO and asked them what assurance they could give us that the board and the executive could manage this organisation. We had some detailed, constructive conversations there and it became very clear there would be significant board turnover and that started in February of this year. Now we have a totally new board there. Under our governance standards, what they are required to do shortly is to review their own operation and provide us with assurance they are capable of running the organisation.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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What is Mr. O'Leary's estimation of that? Is the board capable?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Do you think hope will work?
Mr. Fergal O'Leary:
I am coming to it, Deputy, if you might. What we need to see is evidence. Where we are at the moment, I will be very clear, is I do believe this board is capable of fully restoring the organisation but that is an opinion and what I need to see now over time is progress and evidence and part of that evidence will be a review of its own operations and capability, on which the board is working with us at the moment.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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From 2021, has Mr. O'Leary seen any evidence?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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From 2021, when Mr. O'Leary's organisation was established, has he seen any evidence?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Of it actually happening. That he has confidence in the board.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I asked Mr. O'Leary a minute ago if he has confidence, or will he have confidence, and he said he has hope. I believe that, from 2021 until 2025, he has had four years, multiplied by €3.6 million of funding, to instil hope and confidence, so I am wondering if he has confidence now?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Real progress. For me, to be paid from 2021 until 2025 and to sit here and say to me that you have hope is not good enough. More needs to be done to ensure this does not happen again in any other AHB. In relation to-----
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I just want to move on because my time is running out. In relation to procurement and AHBs, does AHBRA set procurement guidelines in place for all AHBs?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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What did AHBRA do about it?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I want to know what AHBRA is going to do about it. It is okay to look at these things but AHBRA needs to actually do something about it to make sure it does not happen again. What has AHBRA done when it found procurement guidelines were not followed?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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What was that again?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Daily interaction with the organisation. That is not what I want. What have you done above the organisation that ensures this does not happen? We have to set down guidelines and make sure approved housing bodies never do this again.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Over the course of four years.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Over the course of four years, what has AHBRA been doing to ensure people follow procurement guidelines?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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There are no penalties if they do not follow procurement.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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They are not doing the right things because they have not even got the right board members on. They are supposed to have two board members recommended from the Minister's Department, selected by the Minister. That has not happened, so the guidelines, regulations or the C and AG's recommendations have not been followed. They have not been followed.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I am not because I am asking Mr. O'Leary about the board. He said he takes his guidance now from the board but the board is not-----
Mr. Fergal O'Leary:
No, we do not take our guidance from the board. What we do is, we are very clear in terms of what the expectations of our standards are. We have seen the board in recent months put the in right policies and procedures.
It is starting to put the right people in the right places that will allow it to be compliant.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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To me, that board should not be recognised. It does not have the recommendation in there that it is supposed to have two people recommended by the Minister. That has not happened.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Just run it by me again. The Department is paying the AHBRA-----
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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-----€3.6 million yearly to regulate.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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That is okay. They are all my questions.
John Brady (Wicklow, Sinn Fein)
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The Department will be in later so the Deputy will have an opportunity to ask that question again.
Eoghan Kenny (Cork North-Central, Labour)
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I welcome the witnesses. From the questions that have been ongoing from my colleagues, it seems to be the case that the witnesses’ organisations have to be told about issues as opposed to ongoing monitoring. I see Mr. O'Leary is shaking his head. I completely disagree with him on this because this had to be brought to his attention by a new CEO. This had to be brought to his attention. Ongoing monitoring was failing. There is no point in him shaking his head at this because shaking of the head is of no comfort to the people who have to bail out the Peter McVerry Trust because of the lack of ongoing monitoring. That is a fact. Who was in charge of the inspection for both the AHBRA and the Charities Regulator? Were they internal staff members?
Eoghan Kenny (Cork North-Central, Labour)
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Why are those inspectors not here today?
Eoghan Kenny (Cork North-Central, Labour)
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Both organisations had one internal inspector each. Why are they not here?
Eoghan Kenny (Cork North-Central, Labour)
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They are staff members of the organisations. They are paid by the State. Why are they not here?
Eoghan Kenny (Cork North-Central, Labour)
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Did Mr. O’Leary and Ms Delaney not ask them to come with them here today? I have questions relating to the inspectors’ reports that the witnesses are more than likely unable to answer because they relate to specifics of those reports. Why are they not here?
Eoghan Kenny (Cork North-Central, Labour)
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When did Mr. O’Leary and Ms Delaney start in their relevant roles?
Eoghan Kenny (Cork North-Central, Labour)
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Did they both work previously in the same organisations?
Eoghan Kenny (Cork North-Central, Labour)
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Did Ms Delaney have a role? Did she have any communication with the former CEO, say, CEO 1?
Eoghan Kenny (Cork North-Central, Labour)
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Ms Delaney never spoke to him.
Eoghan Kenny (Cork North-Central, Labour)
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What was the Charities Regulator’s response to CEO 2's original letter in July 2023? Does Ms Delaney have an actual response to that?
Eoghan Kenny (Cork North-Central, Labour)
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I ask the same question of Mr. O'Leary.
Mr. Fergal O'Leary:
On foot of the initial notification, there was a meeting with the chair and the CEO. I believe there was another meeting a couple of days later. As I said earlier, we asked for information. That did not give us the necessary assurance that everything was fine. That is why we undertook to conduct an investigation.
Eoghan Kenny (Cork North-Central, Labour)
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AHBRA has said it had concerns in March 2023. My colleague, Deputy McGrath, asked whether Mr. O’Leary regrets that statement now. How does he not regret that?
Eoghan Kenny (Cork North-Central, Labour)
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This goes back to the monitoring. Why did AHBRA have to be made aware of the issue, as opposed to it monitoring the issue?
Eoghan Kenny (Cork North-Central, Labour)
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Was the monitoring system in place for July 2023?
Eoghan Kenny (Cork North-Central, Labour)
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Did AHBRA have any data at all in March 2023 relating to the Peter McVerry Trust?
Eoghan Kenny (Cork North-Central, Labour)
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Nothing struck it to say-----
Mr. Fergal O'Leary:
That is exactly the point, Deputy. Everything that we got suggested everything was fine. To respond to what I am sure the Deputy is thinking, it is not good enough for us to rely on that. We do not rely just on information that is given but it does take time for those things to be set up and put in place.
Eoghan Kenny (Cork North-Central, Labour)
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What are the specific circumstances in relation to getting rid of trustees? Ms Delaney said she could not.
Eoghan Kenny (Cork North-Central, Labour)
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Was that not necessary?
Eoghan Kenny (Cork North-Central, Labour)
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Did Mr. O’Leary or Ms Delaney ever ask CEO 1 to attend any meetings?
Eoghan Kenny (Cork North-Central, Labour)
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Did they ever believe it was necessary before the inspection started to both meet with CEO 1?
Eoghan Kenny (Cork North-Central, Labour)
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In relation to what Deputy Geoghegan spoke about, am I correct in saying that the Garda approached AHBRA for the reports?
Eoghan Kenny (Cork North-Central, Labour)
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Was AHBRA, at any stage, going to bring the reports to An Garda Síochána, or was it waiting on it?
Eoghan Kenny (Cork North-Central, Labour)
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When did An Garda Síochána approach AHBRA?
Eoghan Kenny (Cork North-Central, Labour)
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This is what the inspectors-----
Eoghan Kenny (Cork North-Central, Labour)
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In advance of that, was AHBRA going to bring it the attention of An Garda Síochána?
Eoghan Kenny (Cork North-Central, Labour)
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For example, say if An Garda Síochána did not approach AHBRA, would AHBRA have brought it to the attention of An Garda Síochána?
Eoghan Kenny (Cork North-Central, Labour)
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Would you have brought it to the attention of An Garda Síochána?
Eoghan Kenny (Cork North-Central, Labour)
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Under what circumstances?
Eoghan Kenny (Cork North-Central, Labour)
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So there were no specifics within it.
Eoghan Kenny (Cork North-Central, Labour)
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No specifics at all.
Mr. Fergal O'Leary:
That is important. If you see the report, there is nothing specific in it that would warrant that but, like I said earlier, we wanted to make sure that anyone with an interest in this area had access to that report. Then, if they wanted to follow up with us afterwards, we were available.
Eoghan Kenny (Cork North-Central, Labour)
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On the date AHBRA wrote to the chair and CEO to say that inspectors were appointed, the chair, on the same day, released a press statement to say that there was no evidence of financial irregularities. Did Mr. O'Leary see that?
Eoghan Kenny (Cork North-Central, Labour)
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Did Mr. O’Leary not wonder what she was doing there? Did you not say that to yourselves? Did you not go back to the chair and ask why press statements are being released when we have appointed-----
Eoghan Kenny (Cork North-Central, Labour)
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Mr. O’Leary said to Deputy Bennett that he has hope. It is one of the most disgraceful comments I have ever heard. Mr. O'Leary has "hope" in relation to this. There has been a €15 million bailout from the Irish people for the Peter McVerry Trust. They are sitting here listening to Mr. O'Leary say that he has hope in relation to ongoing monitoring and the correct governance being put in place. How do we know, in six months' time, that we will not have to bail it out again?
Eoghan Kenny (Cork North-Central, Labour)
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Mr. O'Leary has faith in the current board. When does hope finish? What evidence does the board have to provide Mr. O'Leary?
Eoghan Kenny (Cork North-Central, Labour)
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When will Mr. O'Leary have full confidence? What does the board have to prove to Mr. O'Leary for him to have full confidence?
Eoghan Kenny (Cork North-Central, Labour)
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When will the next assessment take place?
Eoghan Kenny (Cork North-Central, Labour)
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When will we have more of that information?
Eoghan Kenny (Cork North-Central, Labour)
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We will be waiting another year before we know whether or not we have full confidence in the board of the Peter McVerry Trust.
Mr. Fergal O'Leary:
We are making progress. Things have stabilised. To be fair to both the executive and current board of the trust, they have done a remarkable job to maintain their services while putting in place better policies and procedures. We are now looking at the culture of the organisation changing-----
Eoghan Kenny (Cork North-Central, Labour)
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Since AHBRA has been established, are there any other Peter McVerry Trusts out there?
Eoghan Kenny (Cork North-Central, Labour)
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There definitely is not.
Eoghan Kenny (Cork North-Central, Labour)
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Mr. O'Leary has seen no serious irregularities with any other organisation.
Mr. Fergal O'Leary:
We carry out assessments and we publish the outcomes of our assessments on our website. They can be compliant, non-compliant and working towards compliance or non-compliant and statutory action is required. We currently have a number of AHBs, around ten, that are in a fairly extensive monitoring programme with us. We have identified issues that need to be addressed and we have seen AHBs over the past couple of years come into that process and come out of it fine on the other side. The assurance I can give is that there is nothing on the scale or level of PMVT that we have seen over the years. Our report outlined a litany of failures across the organisation. We have not seen that elsewhere.
Aidan Farrelly (Kildare North, Social Democrats)
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I thank the witnesses for being here today. This is to the Charities Regulator and AHBRA. To go back to the trust, we have gone through it in significant detail already. There have been damning findings from the inspectors. There were systemic failings of governance, oversight and expenditure. With respect, it is fair to say that both the Charities Regulatory Authority, CRA, and AHBRA are significant parts of that oversight and governance structure. What we have before us is a failure of catastrophic proportions. Mr O'Leary said the litany of mistakes was something he had never seen before. According to the contribution from the former CEO, Mr. Doherty, this morning, he came to understand the financial picture quite comprehensively in a matter of days or weeks. Why would it take 14 months for the inspectors to publish a report on this?
Mr. Fergal O'Leary:
I will answer first. One could have taken a high level view very quickly but, as the report may be relied upon in the High Court if subsequent actions were taken by AHBRA, it needed to be thorough and go through a huge amount of documentation. Some 25 people were interviewed for it. That took time.
Aidan Farrelly (Kildare North, Social Democrats)
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It took 14 months.
Aidan Farrelly (Kildare North, Social Democrats)
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Were those inspectors working on other reports or projects at that time or were they dedicated solely to this?
Aidan Farrelly (Kildare North, Social Democrats)
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How many other projects?
Ms Madeleine Delaney:
The director of compliance was one of the inspectors. He has a huge case load. We received 493 concerns last year. There is a lot of other ongoing work. To go to the Deputy's point about what the CEO may have known or not known, when you look back at the documentation that was provided to us around that time - which was the best guess that anyone could have made on the financial position - that actually was not the financial position, as the report demonstrates. Even the fact the auditors have taken so long to work through everything to prepare the financial statements demonstrates how complicated things were. It was the lack of underlying documentation which was hugely problematic for everybody in this scenario.
Aidan Farrelly (Kildare North, Social Democrats)
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I asked Mr. Doherty this morning how many bank accounts were associated with the trust. He said there were potentially nine or ten. Is is par for the course, from Mr. O'Leary's understanding of other AHBs, that there would be multiple bank accounts?
Aidan Farrelly (Kildare North, Social Democrats)
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That is normal practice.
Mr. Fergal O'Leary:
I would not say it is normal practice but it can happen. We look at why there are separate bank accounts and what scrutiny is placed on payments in and out of those. The number of accounts is not an issue; it is about how they are used. To add to a previous answer, there were a lot of delays in getting information from the trust over those 14 months, which did not help.
Aidan Farrelly (Kildare North, Social Democrats)
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That concerns me. We are hearing that the CRA has the powers to install trustees but did not opt to do that because there was co-operation and a commitment. Now, we are hearing there were delays.
Ms Madeleine Delaney:
In terms of what our inspectors have reported back, there was not a lack of co-operation. The staff who were assisting the board of trustees did not have the ability or capacity to find the information and the documentation or the answers, such was the state of disarray of the books and records. It was not a lack of co-operation, as I understand it. I am not defending anybody. They were doing their day-to-day work in terms of delivering the services, which is what they were employed to do. They struggled with trying to meet the requirements of the inspectors to try to put in place the standards we were demanding of them and all of that. I do not want to characterise them as not being co-operative.
Aidan Farrelly (Kildare North, Social Democrats)
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Based on my research, I put it to both witnesses that the trust clearly got special treatment here. Both bodies had the potential to exercise further powers and chose not to. Now, we are in a position where we are moving forward and we are hopeful. I completely understand where the witnesses are coming from with that hope and optimism. That is fine but the CRA has deregistered 38 charities because they filed late accounts. Why is this trust still a registered charity?
Ms Madeleine Delaney:
The ones that we de-registered had never filed any accounts at all. All of them are inactive or untraceable. That is the reason we removed them. In terms of other organisations, we give them time to file accounts. That is what we did in this circumstance. I am sure the trust will acknowledge when the committee is talking to it that I had written to them a number of times in recent months and indicated I would be taking enforcement action, which would have involved potentially removing it from the register.
Aidan Farrelly (Kildare North, Social Democrats)
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Off the top of her head, does Ms Delaney know how many times she wrote to the trust about that enforcement?
Aidan Farrelly (Kildare North, Social Democrats)
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It got three warnings since the summer.
Aidan Farrelly (Kildare North, Social Democrats)
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I am making assertions today but it is it arguable the trust is simply too big to fail? Nearly 5,000 people use this service. There are 700 staff. As regards the governance flaws within an organisation like this, we are all members of boards of much smaller organisations and if there were these flaws, we would be gone. Is it simply a case that this organisation was too big to fail and we tried the optimistic route instead? With the evolution of AHBRA and that working relationship between both bodies, has the trust completely fallen between the regulatory cracks at a particular time?
Mr. Fergal O'Leary:
No. In terms of our powers, the consideration here is whether cancellation would make this better. Would it bring this entity, whatever it looks like, into compliance quicker. That is still a power we can use. In terms of whether it is too big to fail, the AHB is not.
The State-funded assets could be moved out. It is not an easy thing to do but they could be moved out to another organisation. The timeline of what we have seen over 2025, since we published the inspector's report, is that the organisation is willing to improve. Critically - and this is what I am relying on here - it is giving us evidence all of the time that it is improving and moving in the right direction. I also want to be clear to this committee, and I have said it in the housing one, that we are not there yet. It is going to take more time because it needs to review its whole organisation remodel. This new board needs to be afforded the opportunity to do that - and it is doing it.
Aidan Farrelly (Kildare North, Social Democrats)
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Ultimately, was it waiting on the 2023 accounts, the enforcement piece that the witnesses were threatening?
Aidan Farrelly (Kildare North, Social Democrats)
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If I can just circulate back to the trustees, what are the thresholds in which you can go to the High Court to seek-----
Aidan Farrelly (Kildare North, Social Democrats)
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Surely to God the trust has broken that threshold time and again. The reports are that the board instructed the CEO, Mr. Doherty, to stop talking to the Charities Regulator.
Ms Madeleine Delaney:
On that point, that is not something Mr. Doherty raised with the Charities Regulator. I believe he was asked about it with the inspectors but at no point did he come with that. It is not something that I was looking at. Again, one would have look behind that from the Charities Regulator perspective because the charity trustees are the ones under the Act who are charged with the responsibility for everything. We typically try to engage with them. We sometimes do it via the CEO but we want to make sure the trustees are engaged with us because sometimes it is by our engagement with them that trustees realise everything is not as it should be.
Regarding Deputy Farrelly's question, we look at risk and resolution. A big factor here is that there was a significant funder who had already come on board to provide supports and advance money so that the services could be delivered. There were trustees who were continuing but with a commitment for new trustees to come on board. I do not think we should overlook the fact that we now have a board of trustees and a chair, some of whom will be before the committee this afternoon, who have volunteered to come forward to try to save this organisation and get it back on track. That is very significant because they have, I presume, done some due diligence and feel they can have an effect and get it back on track. We would have perhaps struggled, if we had gone into court, to find trustees to take on that. We are looking for the resolution. We do not put the charity itself first. Ultimately, we want charity trustees to succeed but if they cannot we are very much concerned with the services, the beneficiaries and the assets, and that is where our focus is. There was no immediate danger to these and intervention was taking place. That is why we did not apply at that time and we have not applied now. However, like Mr. O'Leary, we have it under review and we need to see what the future of this organisation is like. What happened here is what happens with charities. They drift from their core purpose. This is an organisation that was providing emergency supports to a very vulnerable cohort of people and it was an exemplar at that. Then, through dire need, it drifted and moved into the housing first area, which was a completely new area. People may not have stopped, taken stock and questioned if the organisation had the capacity, the structure and the wherewithal to deliver on this - even taking the funding out of it - and so it ran into difficulty over those two years and mistakes were certainly made. The question is can it get back to delivering on its core purpose. That is what it is trying to do. It has trustees there who have signed up to do it. There is a range of expertise. They have shown they are putting things in place but it will only be when we see those in operation. Everybody will be watching very closely to see whether they have an effect and if it will be sustainable into the future. If not, we will take steps between us to make sure the services and the assets are secured.
Catherine Ardagh (Dublin South Central, Fianna Fail)
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I note that some email correspondence has been circulated to us and that it is incomplete. The financial plan is not attached. The draft minutes of the board are obviously not attached. We listened very carefully to Mr. Doherty's direct evidence earlier. He would state that these letters were a red flag. The subject line was "notification of cash-flow issue". I am reading them now and can see this in the first paragraph. Mr. Doherty is quite a level type guy. He is not inflammatory in any way. My reading of this would be a red flag. I presume AHBRA and the Charities Regulator are taking a different stance on that?
Ms Madeleine Delaney:
No, we absolutely saw it as a red flag which is why we asked for the follow-up information. What I was saying was that looking at the letter in the whole it talks about the trust having already engaged with funders and having their immediate support to get the trust through the cash-flow difficulties. Therefore, there was no immediate urgency requiring us to go into the High Court on an injunction basis.
Catherine Ardagh (Dublin South Central, Fianna Fail)
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He does state the reference within the plan to asset disposal also being likely to take on a lower value. Perhaps action should have been taken earlier on foot of this letter. To clarify, both Ms Delaney and Mr. O'Leary were not in their current positions at that time. They are trying to piece together information from their predecessors. Is that correct? The witnesses were not directly involved.
Catherine Ardagh (Dublin South Central, Fianna Fail)
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No, I mean personally. Is Mr. O'Leary piecing together information from his predecessor or is it direct information he has?
Mr. Fergal O'Leary:
Correct. There is continuity in all aspects of this investigation. As the Deputy is alluding to, when we got that correspondence, that certainly raised the flag with us and then we took action as soon as we could. There are a number of processes we need to go through. Also - and I will be honest about this - an investigation is a last resort. That is why there was a number of meetings, information was sought but ultimately the decision was to have that investigation, and then that takes time.
Catherine Ardagh (Dublin South Central, Fianna Fail)
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I note both of the organisations' investigations start in or around October. In their direct evidence, the witnesses say they are in touch once a week with each other. Was there a concerted decision by the two organisations to decide to start their investigations in October?
Ms Madeleine Delaney:
I would say it was coincidental. What gave rise to that in part was that we each received the notification from the charity at the time therefore the flag was raised at the same time. From the perspective of the Charities Regulator, we went through the process of obtaining the information to decide what we needed to do and it took about a month to get the information from the trust. Then a recommendation goes in and the appointment is made but there was no arrangement about the timing of the appointment.
Catherine Ardagh (Dublin South Central, Fianna Fail)
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We heard that the investigations took over a year. Many times, if, say, there is an investigation into an employee, the employee would be suspended pending the outcome of the investigation. For the purposes of a charity, the only suspension that could be done is to apply to the High Court to have the trustees removed. From what we are learning, it would seem that bar was reached. With the benefit of hindsight, does the regulator regret not going to the High Court to have the trustees removed at the beginning of the process, in or around October 2023 or before 2024?
Ms Madeleine Delaney:
No, because the absence of a specific wrongdoing we would always look to the trustees to be part of the resolution, unless it is inappropriate. One time we did go to the High Court was because the trustees had all stepped down. I would not regret not going to the High Court at that time. It may have only compounded what was already an extremely precarious situation.
Catherine Ardagh (Dublin South Central, Fianna Fail)
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Does Ms Delaney have any regrets about keeping the trust's status as a charity or is she happy the regulator did not take charitable status from the organisation?
Ms Madeleine Delaney:
I was getting very unhappy in the last few months because I really wanted to see the 2023 financial statements. Now we see them, they are the most comprehensive set of statements and notes that I have ever seen and they will take a lot of digesting. To me, they were always going to signal that the trust itself had got to the bottom of everything that went on, insofar as it could.
It was laying it all out there and drawing a line in the sand, and that is very important to the ultimate resolution, particularly with these new trustees having come on board and the additional staffing they are getting as well. That is a very important aspect of it. I asked earlier whether the organisation ever reflected on whether it had the capacity or the appropriate structure for taking on the work it was doing. That was possibly a contributory factor, and those are things that we see it addressing now.
Catherine Ardagh (Dublin South Central, Fianna Fail)
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I do not mean to be rude but I wish to go back to both of yoour reports. Did the payments to the Rubycon company that was owned by the auditor's brother, the payment to New Directions come to light and also the-----
John Brady (Wicklow, Sinn Fein)
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I ask the Deputy to refrain from making reference to or identifying third parties who are not here to-----
Catherine Ardagh (Dublin South Central, Fianna Fail)
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I apologise. There is an allegation that it was owned by a connected person. That was alleged. Did those three irregularities come to light in your reports?
Catherine Ardagh (Dublin South Central, Fianna Fail)
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Is Ms Delaney referring to the Rubycon and New Directions payments?
Mr. Fergal O'Leary:
We are aware the transactions were not specifically mentioned in our inspector's report but we were aware that the trust and a review done by the trust had uncovered those payments. Part of what we continue to work with the trust on is if payments are made for things that have not been paid for, those things obviously need to be resolved.
Catherine Ardagh (Dublin South Central, Fianna Fail)
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At what stage of your report and the Charities Regulator's report did these irregularities come to light? Did that not bring an immediate referral to the gardaí and application to the High Court to remove trustees?
Ms Madeleine Delaney:
As far as I am aware from our inspector’s report, there is nothing in relation to the trustees and the related payments. They involve other parties. The information has been provided to An Garda Síochána. I think the Charities Regulator's report was the first published. The gardaí made immediate contact and the inspectors provided the information.
Catherine Ardagh (Dublin South Central, Fianna Fail)
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Would your own investigators not have interim reports back when some serious mismanagement is occurring within charities to ensure that mismanagement does not continue?
Catherine Ardagh (Dublin South Central, Fianna Fail)
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I thank the witnesses.
John Brady (Wicklow, Sinn Fein)
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I thank Deputy Ardagh. I have a number of questions for Ms Delaney and the Charities Regulator. In the preceding 12 months, before everything came to light, what kind of engagement did the Charities Regulator have with the trust?
Ms Madeleine Delaney:
Normally, we would not expect to have any particular one-to-one engagement with the charity, unless there was an issue. It would make submissions and filings through its customer portal with us. It would file an annual report and that would really be the extent of it. In this particular circumstance of the trust, as it happened, a concern was raised with us about a completely separate matter. It was an operational matter - a particular instance.
John Brady (Wicklow, Sinn Fein)
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When was that complaint lodged?
Ms Madeleine Delaney:
That was at the beginning of 2023. We were engaging with the trust on that particular matter. It was health and safety related. It was just an incident and we wanted to check that. Again, we are not the Health and Safety Authority or the HSE. We just wanted to check it had appropriate policies and procedures and that they were being implemented, and that the board had been made aware of the incident.
John Brady (Wicklow, Sinn Fein)
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-----with the outcome and that there was no necessity for you to get in touch with health and safety or anything.
John Brady (Wicklow, Sinn Fein)
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Is Ms Delaney satisfied that any issues identified or brought to her attention have been addressed?
John Brady (Wicklow, Sinn Fein)
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In relation to Mr. O'Leary, we know the body initiated the pilot scheme back in March. He made reference to 15 other organisations as part of that. How were those 15 organisations, which included the trust, selected?
John Brady (Wicklow, Sinn Fein)
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Mr. O’Leary made reference to some of the criteria or issues that were being looked at, such as governance, across all of those bodies. I ask him to make reference to those again.
John Brady (Wicklow, Sinn Fein)
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Mr. O’Leary made reference to committees, meetings, etc. Was it part of the process that minutes from meetings were requested and scrutinised?
John Brady (Wicklow, Sinn Fein)
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I am talking about that point in March when the Charities Regulator went in – not Mr. O’Leary personally, obviously - as part of that pilot scheme assessment.
John Brady (Wicklow, Sinn Fein)
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Reference was made earlier on to the audit and risk committee, where issues were first flagged and identified around that same time in March. That is contained in the minutes.
John Brady (Wicklow, Sinn Fein)
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Absolutely. There was reference in some of the minutes around that time to those issues. I am asking, as part of the pilot assessment, whether minutes, such as those, were requested.
John Brady (Wicklow, Sinn Fein)
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Mr. O’Leary made reference to it earlier in his contribution, stating he thinks it was a mistake retrospectively to give a clear bill to those 15 organisations.
John Brady (Wicklow, Sinn Fein)
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Someone made reference to procurement rules not being adhered to over a considerable length of time. That is established now. Reference was also made to the Dublin housing first. The trust strayed into that area and some of the difficulties started to emerge from that point. There has been considerable concern about deficit funding and the undercutting and underbidding. The estimated cost of delivering the Dublin housing first scheme in 2019 was €16.4 million. Peter McVerry ended up securing the contract for €6.3 million, which was less than 40% of what the overall cost was going to be. Was that picked up by anyone? This was in 2019. I think Ms Delaney made reference to the housing first model.
Is that something the Charities Regulator would look at in terms of funding?
Ms Madeleine Delaney:
No, we look at whether it has sufficient funding and how is it spending it in terms of its own internal process and how it decides what financial model to put in place and put forward. I was referring to it in retrospect, looking at it to say the trust had moved into another space, which is completely different. I am not sure it was necessarily a strategic, considered decision about how it would go about doing that.
John Brady (Wicklow, Sinn Fein)
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Regarding the AHBRA's remit, the funding models deficit and the procurement that was in operation preceded the AHBRA's establishment, but would they been a cause of concern? Is that something the organisation was aware of? If so, what particular focus was given to it?
Mr. Fergal O'Leary:
Our focus is on AHB assets, for example, properties under the capital assistance scheme, CAS, the capital advance leasing facility, CALF, and those different funding schemes. It is important to say there has been a lot of work in the past year or so in that area to make sure that the oversight we do is matched with the funders. There is then the engagement and collaboration that we have with the Dublin Region Homeless Executive. There is therefore an overall picture of the AHB's capability to manage its affairs.
Things are better there now. However, to go back to a point that was made about the trust moving into an area, I am not sure that it was deliberately an AHB. With other AHBs of its size, they spent the previous three or four years before regulation came in preparing for it and putting in place the necessary policies and procedures. Unfortunately, in this case, it is clear there was just a focus on the social mission and the infrastructure in the organisation was not there at all. That then manifested itself in deficiencies under our standards, in the need for the bailout and the lack of due diligence around procurement in housing first.
John Brady (Wicklow, Sinn Fein)
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Earlier on, some quite concerning evidence was given in terms of compliance with regulations, including fire safety regulations. What role has the AHBRA in overseeing or ensuring that AHBs across the board are compliant with building regulations?
Mr. Fergal O'Leary:
We have a property standard. Over the past couple of months, we have been working with the trust on improvement in the way it manages its assets. As I have said a number of times, we still do not have a full fixed asset register that we can rely upon. That is critical to all of the matters that need to be done for each of those buildings to make sure that the tenants, if they have them, are safe. There are also issues such as voids and unencumbered assets. We are still working with the trust on that. However, there has been a lot of improvement over the past couple of months in terms of its policies and procedures. In regard to recording tendencies with the Residential Tenancies Board, RTB, that is something we have been focusing on with the trust. We are seeing improvements there over the past while, but I will keep saying this - there is still a ways to go in terms of being compliant.
John Brady (Wicklow, Sinn Fein)
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Full compliance across the board is non-negotiable. Evidence was given that one property had been secured by the trust - a former hotel - where critical fire safety works had been identified but had not been carried out up until last year at least. That premises is still being used to provide homeless accommodation. Is Mr. O'Leary aware of that particular instance?
Mr. Fergal O'Leary:
We are aware of a significant number of issues. This goes back to the need to start with a fixed asset register. We then can plan stock maintenance and what that will cost. These are the types of thing that the board needs to see. Unfortunately, particularly in relation to CAS properties, that was not the case. I am confident we are moving towards that being the case now, though.
John Brady (Wicklow, Sinn Fein)
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Is Mr. O'Leary comfortable that some very vulnerable people are in properties that do not have full fire safety regulation compliance? Is that something that his body would be comfortable with?
Mr. Fergal O'Leary:
No, I certainly would not be comfortable with anybody being in that situation. We are aware of issues, including issues that have been worked on. Importantly, capacity has been put in to address issues that are there. That is the type of evidence we have seen over the past couple of months.
John Brady (Wicklow, Sinn Fein)
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I have some concluding comments. In regard to enforcement powers being used twice over the recent past, can Mr. O'Leary go into specifics on why those two cases of enforcement powers-----
Mr. Fergal O'Leary:
We felt it appropriate as a regulator to keep all of our options open. To underpin any potential future action, we thought it prudent to issue a determination of non-compliance in July. In September, we issued a statutory declaration. Those are steps in the road if we were ultimately to cancel the AHB's registration. We are not in that position now. We do not want to be in that position. However, it paves the road for future work in that regard, if we need to do it.
John Brady (Wicklow, Sinn Fein)
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There were a number of mentions of hope. I do not think anyone wants to see any organisation that provides such important care for some of the most vulnerable people in our State cancelled. However, we are here to look at public finances in order to ensure that they are spent correctly with the proper oversight in place. In terms of percentages, how far off are we from achieving that position of hope to ensure that the trust is fully compliant? What are one or two examples of the AHBRA's major concerns of non-compliance?
Mr. Fergal O'Leary:
I will clarify my remark in terms of hope. Hope is the optimism that we as an organisation have that this can be resolved amicably. What the regulator demands is evidence that things are improving. That is the situation. Over the past couple of months, we have seen significant improvements made in policies and procedures and in the capacity of the executive and of the board. To address the Cathaoirleach's question, we need the fixed asset register because that underpins a whole host of further actions. What I am also looking for from the trust - the current chair is very open in his desire to engage with us on this - is what it believes the organisation will look like in future so that it can provide the assurance to this committee, the general public, the regulators and all of the funders that it has fully scaled up. As the Cathaoirleach will appreciate, structural change is going to take time. For the past couple of months, we have been focused on stabilisation and making sure things are not getting worse and are getting better. That is the case, but we have a way to go.
Grace Boland (Dublin Fingal West, Fine Gael)
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I had to speak in the Dáil, so apologies for missing the last half an hour.
I have a few questions to ask. The Peter McVerry Trust had the same accountant and auditor until 2021. I assume it reported that to the Charities Regulator as part of the voluntary code. Should that not have raised a red flag in the Charities Regulator? How many other charities have the same accountant and auditor?
Grace Boland (Dublin Fingal West, Fine Gael)
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In smaller charities?
Grace Boland (Dublin Fingal West, Fine Gael)
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This is not a small charity. This is a charity with millions of euro.
Grace Boland (Dublin Fingal West, Fine Gael)
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I would also expect the regulator to red flag something like that.
Ms Madeleine Delaney:
It does not have to be a red flag. It was in this instance. That is part of what we spoke about, namely, public procurement, value for money, doing things at arm's length, all the basic requirements of trustees exercising oversight and control over the organisation. That was part of the failing here.
Grace Boland (Dublin Fingal West, Fine Gael)
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As both a lawyer and as a trustee for a very small charity, that is a red flag in a charity the size of the Peter McVerry Trust, a charity that is getting tens of millions of euro in taxpayers' money as well as donations.
You would not expect the auditor and accountant to be the same in a company with a revenue of that amount. Why would it be allowed in a charity? I hear what Ms Delaney says about the responsibility of the trustees, but if the regulator is not flagging charities over a certain level with the same auditor and accountant, it is still doing something wrong.
Ms Madeleine Delaney:
I agree with the Deputy in terms of looking at issues proactively and looking at charities in isolation. I am not sure if she was here when I was answering the previous question, when I said we have not done proactive supervision up until now. We are going to start risk-rating charities in their own right, separate from receiving any concern. Who their auditor is, is not something that they would be reporting on or that we would be looking at.
Grace Boland (Dublin Fingal West, Fine Gael)
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What is the point of making the voluntary code return if the Charities Regulator is not looking at and red flagging some of the things that are contained in those returns? First, does the Charities Regulator need to revisit this? Second, should charities that are in receipt of funds or that have revenue over a certain amount have a statutory code? Why is there only a voluntary code? We are talking about tens of millions here. On the one side, we have a charity that is supposed to be helping the most vulnerable people in society and, on the other side, it seems to be used for a slush fund. It is outrageous. If it was not for Mr. Doherty, I do not think any of us would ever know about this.
Grace Boland (Dublin Fingal West, Fine Gael)
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What is the value of it if no one is looking at it?
Ms Madeleine Delaney:
Actually, the code has proved to be a very valuable resource and tool for a lot of charities across the country. Deputy Boland has been involved in charities and I have been involved in them before I took up this role. It is voluntary. We are trying to encourage people to say it is not about compliance with the code, it is about living through the code. We plan to do more work on it next year to make it more accessible for people so that they understand, but it is voluntary. We can only encourage and ask people to adopt it as a tool to work with. It is not a form of compliance. It is a tool that they should be working with. We would have expected that the charity trustees of the Peter McVerry Trust, who were declaring compliance with it, would have actually been aware of its contents and meeting its requirements. I do not think it is unreasonable to say that we would rely on that assurance and on the face of it in most cases, unless there is something to suggest the opposite.
Grace Boland (Dublin Fingal West, Fine Gael)
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This leads me back to the fact that if the Charities Regulator is relying on what the charities and trustees are telling it and if, as we have seen here, there is a complete and utter failure of governance and compliance with normal financial regularity, this could absolutely happen again. The Charities Regulator is failing its mandate to instil public confidence and trust in the charity sector. This hugely undermines the charity sector and, unfortunately, Ms Delaney's testimony today contributes to that undermining of confidence.
Ms Madeleine Delaney:
We can only act within the statutory remit that we have. While we do have the mandate to increase public trust and confidence, we are one party in the various moving parts in the charity sector. We do not go in. We do not have the resources or the legislative mandate to go in and run charities. We can only give them the guidance and then we follow up with them to try to make sure they are doing it. As I said, most charity and charity trustees work very hard on their rates of compliance with standards of governance, so, thankfully, this is not a widespread issue. We were dealing with a very big, very complex, very high-profile organisation in this case. I am happy to say that, contrary to what we might all feel listening to all of this again and how awful it is, our research of the public shows that confidence remains steady and actually these-----
Grace Boland (Dublin Fingal West, Fine Gael)
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Confidence remains steady in the Peter McVerry Trust, which Mr. O'Leary and the AHBRA have to engage with on a daily basis. It is actually staggering.
Grace Boland (Dublin Fingal West, Fine Gael)
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What Department does Ms Delaney engage with or liaise with in terms of changing the legislative remit of the Charities Regulator?
Grace Boland (Dublin Fingal West, Fine Gael)
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I thank Ms Delaney. I find it unusual and strange that the Charities Regulator decided that the investigation that it did warranted reference to An Garda Síochána, but that the review done by Mr. O'Leary did not warrant reference to An Garda Síochána. Was there something missing in Mr. O'Leary's review?
Grace Boland (Dublin Fingal West, Fine Gael)
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They are completely absent in terms of financial regulation, processing and where the money was going. Both Ms Delaney and Mr. O'Leary admitted they still do not even know where the €350,000 was going and what its purpose was, which, to my mind, means both of the reports are lacking and not comprehensive.
Grace Boland (Dublin Fingal West, Fine Gael)
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It is useful but is it comprehensive? Is Mr. O'Leary satisfied that it is comprehensive?
Mr. Fergal O'Leary:
It is comprehensive in terms of giving us a roadmap for the trust to be compliant. We have used the findings of the report to improve the governance of the organisation and improve procurement rules, the way conflicts of interest are handled and the way the board constructs itself.
Grace Boland (Dublin Fingal West, Fine Gael)
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When Mr. O'Leary says "improve procurement rules", is he telling me he is satisfied that the procurement processes now in place are appropriate for an organisation of this nature? I do not want to hear "improve"; I want to hear "fully appropriate".
Mr. Fergal O'Leary:
What we are looking for is that the right policies and the right financial policies and procedures are in place. Now what we are looking for over a period of time is for the organisation to live those and to prove to us that this is the way that it does its business, as opposed to the way that it was done before.
Grace Boland (Dublin Fingal West, Fine Gael)
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Has any referral been made to the Corporate Enforcement Authority by either Ms Delaney or Mr. O'Leary?
Grace Boland (Dublin Fingal West, Fine Gael)
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Is Mr. O'Leary saying the powers are lacking?
Grace Boland (Dublin Fingal West, Fine Gael)
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Did Mr. O'Leary send it to the Corporate Enforcement Authority?
Grace Boland (Dublin Fingal West, Fine Gael)
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Then he did not send it to anyone who might be interested in the report.
Grace Boland (Dublin Fingal West, Fine Gael)
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Has Ms Delaney made a report to the Corporate Enforcement Authority?
Grace Boland (Dublin Fingal West, Fine Gael)
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Is that not one of the things the Charities Regulator should be doing, namely, highlighting the serious issues with the trustees to the Corporate Enforcement Authority? Should it not be liaising with another State body in this regard? No one has suffered any consequences. There were serious governance issues and a failure to act by the trustees of this company and all the witnesses seem to be acting independently and without any progression to take serious action in relation to it. There have to be consequences for what has happened here.
Grace Boland (Dublin Fingal West, Fine Gael)
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Ms Delaney referred the matter to An Garda Síochána, so why did she not refer it to the Corporate Enforcement Authority?
Grace Boland (Dublin Fingal West, Fine Gael)
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Does Ms Delaney not think those same documents should have been referred to the Corporate Enforcement Authority?
Grace Boland (Dublin Fingal West, Fine Gael)
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Ms Delaney should go back and consider whether they should also be referred to the Corporate Enforcement Authority. I do not think she should need me to tell her that. My time is up.
Ms Madeleine Delaney:
I am sorry; I have just received a clarification about one of the transactions asked about earlier. I think it is important to tell the committee that the €350,000 transaction referenced this morning by the former CEO as being for the purpose of paying a previous CEO was actually refunded to the trust. That is contained in the report at page 13.
Grace Boland (Dublin Fingal West, Fine Gael)
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We are aware it was refunded, but it does not seem to be in your report and Ms Delaney does not seem to understand the fact-----
Grace Boland (Dublin Fingal West, Fine Gael)
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Why did the Charities Regulator not know what the purpose of it was for? If we could ascertain that from speaking to Mr. Doherty, I do not understand why the Charities Regulator investigators were-----
Grace Boland (Dublin Fingal West, Fine Gael)
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Has the Charities Regulator made any contact with him?
John Brady (Wicklow, Sinn Fein)
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Just to say, Deputy Boland, there was an allegation made earlier. We should be conscious of that. It is not our remit to establish fact in those matters. I call Deputy Geoghegan.
James Geoghegan (Dublin Bay South, Fine Gael)
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To be fair, because the reply was in relation to a question I asked, I wish to clarify a point, since this has obviously been looked up by the Charities Regulator. In the report where it has been identified that a refund has been made, was the refund made on foot of the inspector carrying out the report and identifying this transaction or what were the circumstances that led to the refund being made?
James Geoghegan (Dublin Bay South, Fine Gael)
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It was before the Charities Regulator was notified by the charity of the issues.
James Geoghegan (Dublin Bay South, Fine Gael)
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I thank Ms Delaney.
John Brady (Wicklow, Sinn Fein)
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I thank Deputy Geoghegan. That concludes our engagement in session two. I thank the representatives from the Charities Regulator and the Approved Housing Bodies Regulatory Authority for attending.
John Brady (Wicklow, Sinn Fein)
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We will now begin session 3. The committee will engage with representatives from the Peter McVerry Trust. I welcome Mr. Tony O'Brien, chairperson, Mr. Niall Mulligan, chief executive officer, Ms Martina Duggan, director of corporate services, and Mr. Ger Mullen, director of finance. Officials from the Department of Housing, Local Government and Heritage are also attending today in a representative capacity. We are joined by Mr. David Kelly, assistant secretary general, homelessness, rental and social inclusion division; Ms Rosemary Tobin, principal officer, homelessness policy funding and delivery; Mr. Brendan White, principal officer, social housing delivery; Ms Jennifer Peyton, assistant principal officer, social housing delivery; and Mr. Liam Murray, assistant principal officer, approved housing body policy and regulation. As noted earlier, we are also joined by Ms Colette Drinan, secretary and director of audit from the Office of the Comptroller and Auditor General.
Members of the committee were advised of their duties in relation to any remarks made and I would like to outline the privilege notice for the witnesses. I wish to explain some limitations to parliamentary privilege and the practice of the Houses regarding references witnesses may make to other persons in their evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected, pursuant to both the Constitution and statute, by absolute privilege. This means that they have an absolute defence against any defamation action for anything they say at the meeting. However, they are expected not to abuse this privilege. It is my duty as Cathaoirleach to ensure that this privilege is not abused. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative they comply with any such direction.
Witnesses are also reminded of the long-standing parliamentary practice that they should not criticise or make charges against a person or entity by name or in such a way as to make him, her or it identifiable, or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative they comply with any such direction.
I now invite Mr. O'Brien to make his opening statement. As set out in the letter of invitation, he has five minutes.
Mr. Tony O'Brien:
I thank the Cathaoirleach. I wish members a good afternoon. I thank them for the opportunity to make a very brief statement.
At the outset, I want to acknowledge the concerns that were expressed here about our decision not to appear on 19 June last. It was a decision we did not make lightly, but we do fully appreciate and regret the frustration this caused the committee at that time. I also want to thank the committee and its secretariat for the courtesy shown in arranging for today's appearance.
On behalf of the Peter McVerry Trust, I am pleased also to have finally been able to present the 2023 financial statements. I appreciate the committee's patience as we undertook the detailed and in-depth audit. The trust acknowledges without reservation that the issues uncovered in 2023 represented a fundamental breakdown in financial oversight and governance. These failures have had significant implications for public confidence, regulatory compliance and the stewardship of public funds. In publishing the 2023 financial statements, we are providing a detailed account of what happened in that period. This in itself represents an important milestone for the organisation. Members will have noted the current leadership of the trust, and our new external auditors have pulled no punches.
The trust got into financial difficulties due to its practice of underbidding in competitive tenders and taking on projects and services that were not fully funded. These decisions resulted in a growing and unsustainable deficit in its income and expenditure. This was compounded by poor accounting policies and practice. The opening balances for 2023 had to be restated due to material findings during the audit. The major items are listed in note 23. There were two major issues, one of which was depreciation. We had to apply depreciation to the housing stock from the date of purchase, resulting in an impact of over €9 million. When the fixed asset register was corrected to accurately record the assets, the impact was almost €26 million.
Members will also have noted that of the €15 million in exceptional Government funding agreed in November 2023, only €3.9 million is reflected in the 2023 accounts as that was the part of these funds received by the end of that year. The remaining funds followed in subsequent accounting periods. The trust is progressing the asset transfer process agreed with the Department of housing as part of the €15 million loan facility, and we remain committed to paying the full value of that facility through the transfer of unencumbered assets to local authorities.
We are also actively working to meet the conditions set out by both the AHBRA and the Charities Regulatory Authority. This includes a detailed compliance plan with clear milestones and timelines, which we are implementing in close consultation with both bodies. We are committed to building a financially sound, transparent and accountable organisation that can deliver its mission with integrity. Part of that will include a policy of full cost recovery for services provided to the public sector. We welcome the scrutiny of this committee and are prepared to answer members' questions.
John Brady (Wicklow, Sinn Fein)
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I thank Mr. O'Brien. We are due to finish this session at approximately 4 o'clock, so I ask members to try to stay within the allocated times to ensure we have a smooth and efficient engagement. We will now open the floor to members. Deputy McAuliffe has 15 minutes to start off. All other members will have ten minutes on conclusion of that.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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I thank the witnesses for being here today. I said at the very outset this morning and I should repeat with them present that I acknowledge the huge amount of work that was done initially by Peter himself. I have seen the work he has done and also the work that is and has been carried out by the trust over the last number of years by many people across all the services it provides. I acknowledge the huge shadow that has hung over that really good work. It is important to say that from the outset.
I also want to summarise what was said in the previous session with the regulators. There was an acknowledgement of the work the new board and many of the new people involved are doing to try to ensure that those services continue to be provided. Some of us would say, and I might do so myself, that in many ways, the trust was too big to fail for the system. It could not allow a situation where the trust would collapse because of the range of services it provides. Without the efforts of many of the witnesses, that would not be possible. I acknowledge all of that.
The last nice thing I will say is that at the housing committee, Mr. O'Brien did acknowledge that the trust would come before the Committee of Public Accounts as soon as the accounts were published. Again, I appreciate that. Mr. O'Brien also said that he expected robust financial questioning at the Committee of Public Accounts that he might not have got at the housing committee, so I will step straight into that mode. I have sat on the Committee of Public Accounts for nearly six years. What we heard this morning from CEO No. 2, Mr. Doherty, really was breathtaking. I will give Mr. O'Brien an opportunity to respond to what was said this morning. Did he see the testimony that was given?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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The issues that happened at Kerdiffstown House seem to be symbolic of what else was happening and, certainly, with the payments that were made out of restricted funds, does Mr. O'Brien accept that there was a complete collapse of normal governance and operation in the Peter McVerry Trust in 2023 and in the previous years?
Mr. Tony O'Brien:
First of all, I thank the Deputy for the nice remarks earlier, which are appreciated. Yes, we do accept that what might be regarded as normative governance practice and normative financial management practise, and in particular the respect for the distinction between restricted and unrestricted funds, clearly did break down. That broke down in a context whereby, as I mentioned in the opening statement, the trust was becoming increasingly unsustainable from a financial point of view, and the confluence of those two things are what created what we would generally refer to as the crisis that emerged in 2023.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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The trust has published the financial accounts, and they do reference a €1.5 million advance - that is the word that is used in the note - to Assisi House, but they do not specifically mention the €350,000 figure, which we heard this morning was paid to a private entity, not to a non-charitable entity.
Why was the decision made not to reflect that €350,000 payment?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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It was a significant transaction, though, to take place in the year.
Mr. Tony O'Brien:
It was, but it was in and out within the one year so it had a non-impact on the financial statements. What I should say, however, in relation to this, because it may not have been made clear earlier, is that the other entity - the intended recipient, and the entity that returned the funds - was in my view harmless in this process and not part of the problem. Given that I believe they were named earlier-----
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Mr. O'Brien mentioned two entities there. Will he clarify this?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Sorry, that is what I wanted to clarify.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Is Mr. O'Brien aware if they had entered into an agreement with CEO 2 to provide employment to him?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Therefore, did that result in the speedy return of those funds?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Okay, that is useful information. In the 2023 accounts, the overstating is incredibly significant. The trust was carrying an amount of fixed assets which was overstated by €34 million, income recognised was overstated by €489,000, reserves brought forward were overstated by €21 million, trade and other debtors were overstated by €75,000, creditors including CAS were overstated by €13 million and expenditure recognised had been overstated by €489,000. The most alarming figure that I came across in all of it was that there was €125 left in the sinking fund for an entity that had hundreds of properties across the city. Currently, what is the balance of the sinking fund?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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How was that gathered?
Mr. Niall Mulligan:
It was primarily through the recoupment of funds that had been spent by the trust in relation to a variety of developments that did not progress but had incurred costs. It was agreed with the Department. It was actually the interim consultant to the CEO's office who negotiated an agreement with the Department that we could recoup those funds. That is primarily how-----
Paul McAuliffe (Dublin North-West, Fianna Fail)
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They ultimately came from the Department for developments which were not completed. Is that correct?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Was this €1.5 million included in the overall €15 million bailout or is that additional funding?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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I hear what Mr. Mulligan is saying, that it is recoupment of costs, but if the trust had been fully operational, it would have completed those projects.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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They were not completed. The Department paid the trust for the work it did on the uncompleted portion of those projects.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Okay. Was this additional money above the €15 million?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Yes, I appreciate that. They transferred the money to Assisi. Can we have an update on where that stands?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Okay, I appreciate the difficulty of that. Perhaps Mr. O'Brien might explain the answer he has just given. Will he explain that further, rather than commenting on Assisi, just so we have a full understanding of where things are at?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Is the matter with An Garda Síochána at present?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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I ask Mr. O'Brien to inform the committee of the nature of a section 19 disclosure.
Mr. Tony O'Brien:
It relates to an invoicing matter, which is, as I have kind of indicated, related to Assisi House. Corporate bodies are obliged to make a disclosure to An Garda Síochána where they form a reasonable opinion that an obligation exists to make such a referral. That does not in itself amount to a direct conclusion that a crime has been committed, but it does amount to-----
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Just that it was referred to An Garda Síochána.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Was Mr. O'Brien of the view that this was necessary?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Was Mr. O'Brien of this view as a result of AHBRA's report or on the basis of the trust's records?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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I do not want to jeopardise any matter that might be referred to An Garda Síochána and while we might be frustrated with that, I appreciate Mr. O'Brien filling us in.
I want to turn to the board and to the governance. How many members are on the board at the moment?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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How many of those were members of the board in 2022 or 2023?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Okay, there is one remaining member.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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They would have been sort of a late entrant. The board would have had a number of subcommittees in 2022 and 2023 and has similar subcommittees now, or have they changed?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Is there a property subcommittee?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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I imagine the property subcommittee would have been tasked with assisting in updating the asset register, which was significantly misleading. I think that is the only way to put it.
Mr. Tony O'Brien:
Yes, I would not say we updated it. What we actually did was start it again. I think I have mentioned elsewhere that we could not place reliance on the opening working papers, and consequently we went back to absolute basics. A lot of work was done by our solicitors on records in terms of going back to original conveyancing files and original transactions. I think I have said publicly that there were some instances of properties not included on the list and there were other instances of the same property appearing multiple times. It did not constitute an acceptable basis to go forward as an asset register, so we started from scratch.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Just for clarity, is the remaining board member, if we want to use that phrase, a member of the property committee?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Okay. I suppose there might be some questions about whether somebody who was a member of the property committee in 2023 should remain as a member of the property committee now. As he was a very late attendee, a newcomer to that committee, does Mr. O'Brien have confidence in the person completing that work?
Mr. Tony O'Brien:
Yes. To be fair, when I was appointed, that individual came to me and offered to step aside. I took the view that there is both value in that person's innate skills and value in having some form of institutional memory, given that the people who now form the senior management team in the corporate sense and the board are essentially all new.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Does Mr. O'Brien believe there are any outstanding conflicts of interest between that person and the individuals we discussed this morning and the former holders of offices in the trust?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Okay, that is useful.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Yes, of course. I accept that and I do not cast any aspersions on them. There is a difficulty, though, with people declaring conflicts of interest within the trust. It has not been as obvious as it should have been.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Do any staff members of the Peter McVerry Trust currently lease properties to the trust?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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No employees are benefiting financially from leasing properties to the trust itself.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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How is a conflict of interest of that nature or a conflict of interest at board level now dealt with?
Mr. Niall Mulligan:
There are probably a couple of levels to that answer. In terms of senior management team meetings and board meetings, declaring conflicts of interest with anything that is on the agenda is number one at top of the agenda. We also have a conflict of interest register and we are all expected to complete a conflict of interest form if there is anything we believe to be a conflict of interest from a staff perspective.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Is there board-only time at those meetings?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Okay, some of those questions are basic enough that we should not have to ask, but I will ask them. In regard to contractors who might have been owed money, and that was mentioned this morning, are the witnesses aware of any current contractors who remain unpaid for work they believe they carried out for the trust?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Of what value?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Okay, and they believe that money is owed to them.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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Is that reflected in the accounts?
Paul McAuliffe (Dublin North-West, Fianna Fail)
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The provision has been apportioned.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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I have a final question in regard to Kerdiffstown House. As I said, it was sort of symbolic. It certainly seemed that there were works done on a period property that were excessive and not in compliance with planning. Then there was this bizarre scenario where peacocks were purchased to wander around the grounds, I do not know for what reason. Are there currently peacocks in Kerdiffstown House? Will the witnesses tell me the details of how much that is costing the trust?
Mr. Niall Mulligan:
I can answer that. I did meet the peacocks when I first started my work. No, there are no peacocks left and nor are there any other animals left at Kerdiffstown House. There were a number of different animals there. There was no good reason for them to be there so we brought that to a close, which was more difficult than you would anticipate in terms of animals, but there are not any left in Kerdiffstown House.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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We are giggling in the room, but it is farcical that it became something that was important to the trust or that €6,000 per year would be spent on manicuring the lawn and the other things.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I echo the comments of Deputy McAuliffe at the outset. I thank everyone here from the Peter McVerry Trust for the roles they are undertaking which, we have no doubt, are extremely challenging, so we appreciate that. I thank the Department representatives for being here as well.
The 2023 accounts were a long time coming and, understandably, there were a lot of difficulties there. The auditor was not able to give a clear opinion on those accounts for a number of reasons. What is the value of the accounts, given there is not an opinion there from the auditor?
Mr. Tony O'Brien:
I think they are extremely valuable for a number of reasons. I will come to the qualifications and the disclaimer. In order to establish a baseline from which we could go forward, given that the 2022 accounts did not represent that baseline, it was necessary to reconstruct and restate using all of the available resources and the input of external auditors, who are new. This is their first audit. In order to begin to come back into compliance, both with CRA and AHBRA, and with our obligations for companies registration, it was absolutely necessary we produce a set of accounts for 2023. There is huge value in that.
In regard to the qualifications, to put it a different way, in order to get to a point where we did not have qualifications, we could have invested an inordinate amount of money and time that was not available to us to chase down every lead. Given how late they are already and our promise we made to be here today, we took a view as a board that it was necessary, with the consent of the auditors, to pull the shutters down on that work.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I am sorry to interrupt, but to be fair, Mr. O'Brien gave it his best shot in terms of compiling the financial position as it was in-----
Séamus McGrath (Cork South-Central, Fianna Fail)
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Okay, I am just trying to get some more questions in, so apologies for interrupting. Specifically on the accounts, can I probe the depreciation of the housing stock to the tune of over €9 million? Will the witnesses explain that to us because we are at a time of a rising market during the last number of years in the property sector so how was there such a scale of depreciation? Clearly, those properties were significantly overvalued in terms of the books.
Mr. Ger Mullen:
The depreciation policy is, we depreciate the assets every year, and for properties it is 2%. The policy does not state that we revalue all our properties every year to market value. We will look it if there are possible impairments but we do not revalue to market value every year. It would be a huge task and a very expensive task. The policy we have-----
Séamus McGrath (Cork South-Central, Fianna Fail)
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Would Mr. Mullen not just go with the property index that is available publicly? Property prices have increased by 4% per annum, so would the witnesses not just go with something like that? It seems the figures are not reflecting the reality. I know the witnesses are picking up the pieces here but I just want to probe the depreciation figure as it seems to be very significant at a time when-----
Séamus McGrath (Cork South-Central, Fianna Fail)
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That figure of €9 million is separate to the fixed asset register adjustment of €25 million, is it?
Séamus McGrath (Cork South-Central, Fianna Fail)
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So it is in addition, effectively, to the €25 million adjustment. Is Mr. O'Brien confident now the asset register is fully in order at this time?
Mr. Tony O'Brien:
We are confident it is in order but recognising we will shortly commence the 2024 audit and, as soon as that is completed, the 2025 audit. We expect to do further, more fundamental valuations with the time available to us to do that. An asset register is a dynamic thing. It is a statement of the position at the end of 2023. It is a good statement but there would have been additions, deductions, further depreciation and the opportunity to do market valuations, so we expect to see that change accordingly for the-----
Séamus McGrath (Cork South-Central, Fianna Fail)
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Are we confident the register captures all assets?
Séamus McGrath (Cork South-Central, Fianna Fail)
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There are no assets that are not on the register. We have full accountability now in terms of assets.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Turning to the debt with Revenue, that was an agreement of a 60-month schedule of payment. Where are we with that? What is the status of that? How much remains owed to Revenue in terms of that figure of over-----
Mr. Niall Mulligan:
Mr. Mullen and I can answer that. We met Revenue last week or the week before so there has been a lot of interaction with Revenue over the year and Revenue is finally in a position to meet with us. We discussed a number of issues and Revenue is due to come back to us with a formal letter in relation to the next steps on different matters.
In regard to the warehousing of debt, I will ask Mr. Mullen to deal with that.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Outstanding?
Séamus McGrath (Cork South-Central, Fianna Fail)
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Will Mr. Mullen clarify what the interest penalties were on that?
Séamus McGrath (Cork South-Central, Fianna Fail)
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It was €1.3 million.
Séamus McGrath (Cork South-Central, Fianna Fail)
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It is part of that package. There were no additional penalties as such other than what was part of the warehousing scheme? Okay.
Séamus McGrath (Cork South-Central, Fianna Fail)
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In terms of current viability or sustainability, what would Mr. O'Brien say about the health of the organisation right now?
Mr. Tony O'Brien:
We have reached the view, as we are required to do as part of the audit, that we can have a going-concern position. The basis for that is a 12-months forward cash flow forecast. The Deputy will be aware that as for any organisation in receipt of public funds, public funds are renewed annually, so we do not yet know our budget for 2026. We clearly need to maintain the registration with AHBRA and the CRA. Subject to those things, notwithstanding that we have debt warehousing to be dealt with along with the normal things every organisation deals with, we are currently of the view that the trust is a going concern.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Does Mr. O’Brien foresee any further need for a loan facility from the State or anything?
Séamus McGrath (Cork South-Central, Fianna Fail)
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On that point, when Mr. O’Brien was before the housing committee, I raised the issue of fundraising.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I presume the ability to raise funds beyond public funding has fallen off a cliff.
Mr. Tony O'Brien:
In 2022, the trust raised €15 million, and in 2023, as a result of the things that emerged, not unreasonably, that fell to €5 million. The trust produced a deficit of €11 million that year. Some €10 million of that could have been avoided had fundraising been sustained and public confidence been maintained. I am not sure what the current year’s figure is.
Séamus McGrath (Cork South-Central, Fianna Fail)
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So, the organisation went from a fundraising high of €15 million in 2022 to potentially €2 million-----
Séamus McGrath (Cork South-Central, Fianna Fail)
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Could Mr. Mulligan briefly help us to understand? With that assault on the organisation’s financial income, how is it coping?
Mr. Niall Mulligan:
There are probably two aspects to that. The work that has been occurring over the last 18 months around cost containment and cost management has made a significant difference to the internal cost management of the organisation. The other piece is our negotiation with our respective statutory funders around full-cost recovery on our various services. Overall, that has been met quite positively by our funders.
Séamus McGrath (Cork South-Central, Fianna Fail)
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Mention was made earlier of disputes with suppliers and providers. The big one had an associated figure of up to €2 million. What is the total amount in dispute at present, involving all potential suppliers?
Séamus McGrath (Cork South-Central, Fianna Fail)
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So, there is a small number of individual entities, and one of them is taking up the lion’s share.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I thank Mr. Mulligan.
May I turn to the Department very quickly? The appointment of directors to the board was part and parcel of the arrangement, but it has not happened. Could we have an explanation for that?
Mr. David Kelly:
To clarify, the trust had an obligation to accept nominations from the Minister. The key concern in that regard was to ensure the board was addressing the governance issues identified and meeting the conditions attached to the exceptional funding provided. Initially, the board was waiting on the outcome of the regulatory investigations. From our work with the oversight group and the trust, it was clear that the board was bringing in new expertise, and that continued to be the case under the new chair. We can see the calibre of the people brought onto the board. They are significant people with significant experience. That said, the Department is reserving its position on the nominations. There are nine positions filled and there are two-----
Séamus McGrath (Cork South-Central, Fianna Fail)
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At this point in time, I understand where Mr. Kelly is coming from, but it is now a number of years later. Why did that not happen sooner, or almost immediately after the loan facility of €50 million was required?
Séamus McGrath (Cork South-Central, Fianna Fail)
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I am caught for time but that might be picked up on further. I thank the witnesses.
John Brady (Wicklow, Sinn Fein)
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Before calling our next questioner, I want to clarify a remark. During session 2, Deputy Boland asked the chief executive of the Charities Regulator whether she had referred the inspector’s report to the CEA. After the conclusion of the session, the CEO corrected her response and confirmed it had shared the report with the CEA.
Our next speaker is Deputy Geoghegan.
James Geoghegan (Dublin Bay South, Fine Gael)
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I thank all the witnesses. When they were being questioned about their fundraising, my overwhelming feeling listening to the responses was sadness over the Peter McVerry Trust going from a position in which it was generating €15million, with people doing all sorts of amazing things to support a person - let us be honest, most of the general public trust his mission and what he continues to try to achieve - to one of anger whereby the trust of donors who gave up to €15million has been reduced to the point where the figure projected for next year is only €500,000. The witnesses are all here carrying the can, for which I give them a lot of credit, and trying to put some shape on the delivery of housing first services, which we know are exceptionally effective in dealing with long-term homelessness. However, in many respects we are here to look back at what has taken place. In this regard, I want to return to the €350,000 transaction. I want to put to the witnesses precisely what Mr. Doherty said in his testimony. In respect of the €350,000 and the former CEO Mr. Pat Doyle, he said, “As the conversation progressed, my recollection is that he [the former CEO] advised that, in actual fact, the money was being made available”-----
John Brady (Wicklow, Sinn Fein)
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We need to be extremely careful about repeating allegations and naming third parties who are not here to defend against them.
James Geoghegan (Dublin Bay South, Fine Gael)
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I am referring only to what is on the record of the committee.
John Brady (Wicklow, Sinn Fein)
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Yes, but I am referring to repeating those allegations.
James Geoghegan (Dublin Bay South, Fine Gael)
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I acknowledge that. I am just referring to what Mr. Doherty said. He said:
As the conversation progressed, my recollection is that he advised that, in actual fact, the money was being made available in order that that organisation would have funds to pay his salary when he moved there.
That sounds like the “Father Ted” episode with the line “That money was just resting in my account”. Mr. O’Brien said the moneys were returned very quickly. They would not have been returned but for Mr. Doherty’s intervention. The Charities Regulator clarified that it is stated in the inspector’s report that the moneys were returned in advance of the regulator and AHBRA getting involved. Is that the end of the matter? I find quite frightening the allegation that moneys donated by the Capuchin Day Centre for an explicit purpose were somehow transferred out of the bank account and put into the bank account of another entity, which, as Mr. O’Brien has acknowledged, is an innocent party in all this and appears not to know anything. I acknowledge that this is a bit of a “Dúirt bean liom go ndúirt bean léi” situation, but what can Mr. O’Brien say in relation to all of this?
Mr. Tony O'Brien:
What I can say is that CEO 2, acting in his capacity as CEO 2, identified the problem and resolved it. The money had left the Peter McVerry Trust in an inappropriate way under the authority of CEO 1. Acting as CEO at the time, CEO 2 sought the money and received it back. We are not in a position to do very much more beyond that. I understand the implication of the Deputy’s question, but once the funds were returned there was no permanent loss to the trust. Neither was there an accounting impact on the trust. Those in place at the time decided to close the matter there, and I am not going to reopen it.
James Geoghegan (Dublin Bay South, Fine Gael)
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I thank Mr. O’Brien for his response on that.
I want to go back to the general financial situation and how the trust was operating. There was, as acknowledged by Mr. O’Brien at the last housing committee meeting he attended, underbidding for services and following up by continuously underbidding. To me, this looked akin to a pyramid scheme. I put that contention to Mr. Doherty and he sort of agreed with it. I put it to the AHBRA. How far removed was this from a pyramid scheme whereby the organisation basically kept rolling over and the music stopped when the money for the subsequent services was no longer provided? Is that a fair characterisation?
Mr. Tony O'Brien:
I think I have used the term “Ponzi” rather than “pyramid” because there is no direct selling involved and all that stuff you associate with pyramid schemes.
However, the Deputy's analysis is essentially correct. That went on - it was fine in the sense that it was sustainable, even if it was all wrong - during a period when there was very substantial growth. A sufficient amount of money in unrestricted funds was coming in via donations so that things could be covered. Eventually, it reached the point where the cash flow constraints on the organisation meant that could not happen. In those circumstances a completely incorrect decision was made to dip into restricted funds, such as the Capuchin funds, in order to cover the cracks. It was an inevitable crash as a result of the practices that had developed. It may have taken longer to crash if the impact of Covid on fundraising, etc., had not occurred but eventually it was always going to crash. It was a disaster in the making.
I think the underbidding and underpricing of stuff became part of a cultural process designed to respond very quickly to need, but also to grow the organisation in an unstrategic way. That is why one of the things we are focused on is not continuing to be the provider of some of the services that were developed at that time. Instead, we are arranging their transfer to other appropriate charitable and approved housing bodies.
James Geoghegan (Dublin Bay South, Fine Gael)
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There is only so many times we can say how alarming all of this is. If it had happened in any other walk of life - in a private sector company or a situation like that where it did not have a State entity to bail it out - there would have been very serious consequences for lots of people involved. Is there any sense of consequence in respect of what has taken place in the past? Can Mr. O'Brien see any consequence that could be discernible to the public? If I switch from my sad hat to my angry hat, where is the accountability? Where has that gone?
Mr. Tony O'Brien:
As I mentioned earlier, there could be some very significant accountability arising from the matters that are covered by the section 19 disclosure. That is a matter that others will determine. It is beyond the remit of the present board to do those things. I understand why the Deputy is both sad and angry about these things. I have not been involved with the trust prior to this year but had I been so, and I believe there are probably members present today who fundraised for the trust in the past, it would be a matter of extreme sadness. That having been said, I believe we are capable of continuing the work we have done to put the trust onto a sound footing. The publication of these accounts has been a clearing of the decks, as it were, which enables us to go forward in a very forward-looking way. I hope that in time we will be able to regain the trust of the public and re-enter the space where people are willing to give charitably to the Peter McVerry Trust because the core mission has never changed. Peter's own zeal for his work has never changed. The services reflect that mission. They have continued throughout this period, thankfully, and continue today.
James Geoghegan (Dublin Bay South, Fine Gael)
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In terms of public trust, people need to see at a bare minimum that there is good governance, that there is financial management, that the trust has no more deficits and that it is on a clean balance sheet, etc. Even at a basic level, people need to know what the trust's property portfolio is and what properties it does and does not own. Am I right in saying that at this moment in time Mr. O'Brien does not necessarily know all of the properties that the trust owns? I understand the trust was carrying out a sampling exercise in respect of that.
Mr. Tony O'Brien:
The sampling is in relation to valuations but we are clear that the property register is complete. The set of accounts that the committee received this week reflects an asset register in terms of properties and leasehold properties, etc., that has been reconstructed from the ground up. Therefore, it captures the totality of the property portfolio in all the different categories. The sampling is a process that we will complete, during the 2024 and 2025 audits, around fair market valuation. This is a cyclical thing that ought to be done regularly. It had not been done in the past and so we are on the journey of completing that. The Deputy was asking some questions related to that process.
James Geoghegan (Dublin Bay South, Fine Gael)
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Is Mr. O'Brien aware of how much vacancy exists in the portfolio that the trust owns?
James Geoghegan (Dublin Bay South, Fine Gael)
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What does that look like in terms of potential units, let us say, where clients of homeless services could be put in there?
James Geoghegan (Dublin Bay South, Fine Gael)
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Sorry, will Mr. Mulligan say that again?
James Geoghegan (Dublin Bay South, Fine Gael)
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No. I am asking in terms of vacancies. I think Mr. Mulligan gave a vacancy rate and a figure. In terms of the trust's portfolio, how many more people could it house if they were not vacant? That is my question. I am seeking to put it on a numbers basis.
James Geoghegan (Dublin Bay South, Fine Gael)
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I thank Mr. Mulligan.
John Brady (Wicklow, Sinn Fein)
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I thank Deputy Geoghegan. The next questioner is Deputy Byrne.
Joanna Byrne (Louth, Sinn Fein)
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Like my colleagues, I thank everybody from the trust who has come here today. I appreciate they are in a difficult position as the public face of a very damaging regime that may have been there before them. It is to be commended that they are here with us today.
In recent months, many of us have been shocked to hear the disclosures about the Peter McVerry Trust. It is probably fair to say that we did not think we could be more shocked. However, that is what has happened as the day has gone on and as more answers have been forthcoming during this morning's session and again this afternoon. The witnesses' transparency has to be commended. As we sit here and listen to this, it beggars belief that much of it actually happened. It is fair to say that the Department probably adopted a hands-off approach with the trust until it imploded and came to the brink of collapse. My first question has to be directed towards the Department. How, in the name of God, did it let things get so bad? That might be directed at Mr. Kelly.
Mr. David Kelly:
The first thing to note is that the Department does not fund any services directly. Services such as those provided by the trust are procured by local authorities. Homeless services are organised on a regional basis with nine lead authorities. Those lead authorities prepare a services plan for the region and they would procure-----
Joanna Byrne (Louth, Sinn Fein)
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I am sorry. With great respect, I have to stop Mr. Kelly there. I appreciate that the Department does not fund the services. The trust has been transparent that it got into financial difficulties due to its practice of underbidding in competitive tenders which the Department funded. The Department let that happen time and time again when it was obvious in the small circle of homeless providers that the McVerry trust was significantly underbidding for tenders in a way that the other homeless service providers could not match. Surely to God it was glaringly obvious that something was amiss here. How did the Department not see that?
Mr. David Kelly:
The situation that has arisen over the last couple of years since then probably was not as obvious to us at the time. In terms of public procurement, there is obviously an onus on local authorities to get the best value for the State from public money. There is frequently a procurement process where local authorities will seek bids from different organisations, public or private, to provide a service. It has come to light - I have to say I do not think it was as apparent at the time - that significant levels of fundraised moneys were being used on top of State funding. The second thing - the trust could probably comment on this - is that there was probably a deficiency in the budgeting. I think there was not full clarity in the trust in relation to the actual cost of some of the services that were being provided. That is one of the issues that came forward in the regulator's reports. The culture of budgeting and financial management just was not there. There were a number of issues here. Since those issues were identified - the first time the financial issues were brought to the Department's attention was in July 2023 - the Department has been very hands-on. We have met with the trust very regularly and we have established an oversight group. I would say we have had very extensive and positive engagement with the trust in that time.
Joanna Byrne (Louth, Sinn Fein)
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Was anybody in the Department or in the office of the then Minister, Deputy Darragh O'Brien, aware of the deliberate underbidding for tenders and the deficit funding model on the part of the Peter McVerry Trust?
Mr. David Kelly:
I do not think it was never characterised as deliberate underbidding. To my knowledge, it was not characterised in that way. I suppose the issues and the reasons for some of the difficulties have become apparent over time but I do not think it would have been characterised in that way at the time.
Joanna Byrne (Louth, Sinn Fein)
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Okay, I will rephrase it. Was anybody in the Department or in the office of the then Minister, Deputy Darragh O'Brien, aware of underbidding? I will remove the word "deliberate". If there was a huge gap between what the other four homeless services providers were submitting and what the Peter McVerry Trust was submitting - it was winning time and time again - was anybody aware of that in the Department or in the Minister's office?
Mr. David Kelly:
As I said earlier, we would not have been involved in those procurement processes. If a local authority ran a process and four organisations put in bids, we would not have been involved in looking at the various people who put in bids. When a local authority put in their service plan, we would be told what service would be provided, who is providing it and at what cost. We would have no visibility of what other organisations had proposed to deliver those services and at what cost.
Joanna Byrne (Louth, Sinn Fein)
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Did anybody raise concerns at any stage with the Department or the Minister's office that something was amiss here?
Joanna Byrne (Louth, Sinn Fein)
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I can tell Mr. Kelly that they did. The four other homeless service providers wrote to the Minister twice to raise their concerns that something was amiss regarding how these tenders-----
Ms Rosemary Tobin:
The CEOs of the non-governmental organisations, NGOs, had written in to the Department raising concerns about funding in general and the need to look at the funding model to ensure that the funding model was delivering the full cost recovery of homeless services. We have been working with the NGOs since then. That has been since 2022 or 2023.
In terms of raising a concern specifically about housing first, I do not have recollection of that. My colleague Ms Peyton is nodding. I want to double-check that with her.
Joanna Byrne (Louth, Sinn Fein)
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I appreciate that. I thank Ms Peyton for clarifying that. What actions occurred after that? Did nobody at that point put their hands up? Did the Minister at that point not say that something is wrong here?
Ms Rosemary Tobin:
When this came up with the Oireachtas joint committee when the DRHE was with us, the housing first tender was very much the DRHE's process, what was said on that day was that the tender was allowing for a reliance on fundraising. They were allowing the bidders to say, "We are going to take this much of your money to deliver the service, and we are also going to rely on fundraising."
Joanna Byrne (Louth, Sinn Fein)
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For clarity, the Department was happy to continue funding NGOs or whoever were the service providers knowing that they were reliant on huge amounts of fundraising to be able to deliver the service that the Department was supposedly funding. It is black and white. The officials can grey this up all they want, but it is black and white.
Joanna Byrne (Louth, Sinn Fein)
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I am not talking about the review; I am talking about at the time. I really believe that there was no oversight and governance from the Department or from the then Minister for housing. The Department played a huge role in letting this get to the point that it got to. Does Mr. Kelly accept that?
Mr. David Kelly:
Local authorities are independent organisations. They have responsibility for their own procurement. What we have done is we looked at a review to take into account the concerns raised by the sector and to look at the funding model. One of the issues we have looked at following the CCMA review, which we worked closely with the local authorities on, is that we would move to fully funding services. It is responding to the issues that the Deputy has raised in relation to the potential risk of relying on fundraising income.
I am sorry; I did not mean to mislead the Deputy. I was not aware of that specific correspondence but I am aware that the AHBs and the homeless NGOs have been looking towards a greater contribution towards overhead costs. Typically, this is the finance cost, fundraising and communications. One of the things that has come out of the CCMA review is that the Department will provide a 10% contribution towards an overhead cost on top of the direct service delivery. That is towards supporting the AHBs to function, meet their governance requirements and ensure they meet all regulatory standards as well.
Joanna Byrne (Louth, Sinn Fein)
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It is good to hear that lessons have been learnt. It is unfortunate it took such a valuable service to the most vulnerable people in our society to potentially implode and be at risk for those lessons to be learnt. We are talking about accountability. I am sorry; I do not see any accountability and I do not see any consequences for those who I feel played a huge role in this.
Joanna Byrne (Louth, Sinn Fein)
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I am out of time. Mr. Kelly's lack of answers when he was given the opportunity gave the answers that were needed.
In relation to the bailout and the assets that were to be transferred back to the State, can the trust confirm if any of these assets that are agreed to go back to the State were never bought with State money in the first place? How were they acquired? Were they acquired through fundraising or charities' money? How were they acquired in the first place?
Eoghan Kenny (Cork North-Central, Labour)
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I thank the members of the board, CEO, chief financial officer and the director of corporate services of the Peter McVerry Trust. This is not an easy thing for them to do. I appreciate the fact that they are cleaning up the mess of a lot of other people's own making. I thank the officials from the Department of housing for appearing before the committee. I was struck by some of the comments this morning on the governance and ongoing failure of finances within the trust. Deputy McAuliffe has been on the committee for six years and he said that coming across some of the situations that unfolded was quite stark.
A number of my questions will relate to current issues and as well as looking backwards. The witnesses may not be able to answer those questions and that is totally fine. I understand that. What role is the board or the new CEO taking in the An Garda Síochána investigation?
Eoghan Kenny (Cork North-Central, Labour)
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That is brilliant. How often does the senior management team meet?
Eoghan Kenny (Cork North-Central, Labour)
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How many members are on the senior management team?
Eoghan Kenny (Cork North-Central, Labour)
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No, there is no need. There are three of members here today.
Eoghan Kenny (Cork North-Central, Labour)
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Does Mr. Mulligan believe the working relationship between the senior management team down to ordinary employees is effective? Previously, what I would have thought anyway in previous regimes perhaps, there seemed to be an extremely centralised operation system based on what the CEO thought himself.
Eoghan Kenny (Cork North-Central, Labour)
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That is very good. That approach should have been ongoing in the Peter McVerry Trust for a long time, and it obviously was not. What relationship do the witnesses have with the Charities Regulator and the head of the AHBRA? When do they speak to each other?
Mr. Tony O'Brien:
The great preponderance of our compliance this year lie in the AHBRA space. Consequently, I am in communication with the CEO of AHBRA not quite, but almost on a weekly basis. The last time I sat down with the CEO was the week before last. I was in telephone contact with the CEO last week. I met him on his way out of here today.
Eoghan Kenny (Cork North-Central, Labour)
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Did he give Mr. O'Brien any tips? When did Mr. O'Brien take up his position?
Eoghan Kenny (Cork North-Central, Labour)
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Was the previous chair still there at the time?
Eoghan Kenny (Cork North-Central, Labour)
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Did Mr. O'Brien meet her in relation to the handing over process?
Eoghan Kenny (Cork North-Central, Labour)
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What was in the handover pack?
Eoghan Kenny (Cork North-Central, Labour)
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When did Mr. Mulligan take up his role?
Eoghan Kenny (Cork North-Central, Labour)
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Was the same chair still in-----
Eoghan Kenny (Cork North-Central, Labour)
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What was Mr. Mulligan's relationship with the chair like?
Eoghan Kenny (Cork North-Central, Labour)
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At that stage, did the chair fully understand that the financial position of the Peter McVerry Trust was not positive?
Mr. Tony O'Brien:
The former chair and the former board have been discussed today. In 2023, having previously been advised by the external auditors of an original set of accounts for 2022, which were then revised and which we have revised again, they got a pretty big shock when they realised how far away from the truth those accounts actually were. If they had been acting purely out of self-interest, they would have just walked out the door. We acknowledge in our directors' report that they sought to address the issues they were confronted with and stayed long enough to see an appropriate transition to a new board, which was important because had they-----
Eoghan Kenny (Cork North-Central, Labour)
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Who appointed the new board?
Mr. Tony O'Brien:
The old board appointed the first couple of members of the new board and then those first few members then appointed the rest, which included me. All of these appointments were made with Boardmatch. I led a process with Boardmatch to recruit the additional four. Obviously, the board-----
Eoghan Kenny (Cork North-Central, Labour)
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Did Mr. O'Brien ever have a role within the Peter McVerry Trust before this?
Eoghan Kenny (Cork North-Central, Labour)
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Is he still on the board?
Eoghan Kenny (Cork North-Central, Labour)
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I have a question for the Department. Deputy McGrath brought up the fact that two board members were meant to be appointed to the board by the Minister. At the time, that was Deputy Darragh O'Brien. Why did that not happen? Mr. Kelly has spoken about his great trust in the new nine. To be totally honest, I do not want to hear about that. I just want to know why two were not appointed by the Minister when provision in that regard was made in the recommendations.
Eoghan Kenny (Cork North-Central, Labour)
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That report was issue in November or December 2024. We are a year on from that and there are still no appointees from the Minister. We have had a change in Minister since but there have been no appointments to the board. Why is that?
Eoghan Kenny (Cork North-Central, Labour)
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Has the Minister nominated anyone?
Eoghan Kenny (Cork North-Central, Labour)
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Mr. Kelly will appreciate that was a condition. We are a year on now and the Minister is still considering it. How much longer does he need to consider it?
Mr. David Kelly:
The last thing I would mention on the regulatory process is the review being undertaken by specialist consultants. We have been working with AHBRA, which has appointed people to do a review of governance. That is due to be completed fairly shortly. The Department is anxious to see if there are any gaps in the board's expertise. As I mentioned earlier, we have been very satisfied that the board has worked hard.
Eoghan Kenny (Cork North-Central, Labour)
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I know nothing about the new board. All I can see is that positive things are happening. It is more than likely that I have full trust in the board. However, the Minister is supposed to appoint two people to the board and has not done so.
Eoghan Kenny (Cork North-Central, Labour)
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Would the trust take on two appointees from the Minister if he did his due diligence and appointed the two people.
Eoghan Kenny (Cork North-Central, Labour)
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Why has that not happened?
Eoghan Kenny (Cork North-Central, Labour)
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Has Mr. Kelly spoken to the Minister about this?
Eoghan Kenny (Cork North-Central, Labour)
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I am sure the Minister will have briefed Mr. Kelly before he came in here. What did he say about these appointees to the board?
Eoghan Kenny (Cork North-Central, Labour)
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Is the Minister aware Mr. Kelly is here?
Eoghan Kenny (Cork North-Central, Labour)
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When was the last time Mr. Kelly spoke to the Minister about appointing two members to the board?
John Brady (Wicklow, Sinn Fein)
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That is probably a question for the Minister. The committee will write to the Secretary General-----
Eoghan Kenny (Cork North-Central, Labour)
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I was just about to say it is a question I could ask the Minister directly. Within the accounts and financial statements for 2023, there is absolutely no mention of receiving funding for the Cork office, even though services were provided in Cork city and county by the Peter McVerry Trust. There is no reference to funding for the Cork office in the financial statements.
Eoghan Kenny (Cork North-Central, Labour)
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I am sorry. Good man. We will bring him down to Cork, no bother.
Eoghan Kenny (Cork North-Central, Labour)
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My understanding is that services were provided in Cork city and county. However, here is nothing within the financial statements in relation to funding being made available to that office, so I am wondering how those services were provided.
Eoghan Kenny (Cork North-Central, Labour)
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I would appreciate that.
Eoghan Kenny (Cork North-Central, Labour)
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Members of staff have raised issues regarding fire safety compliance in the buildings they are working in. Are the witnesses aware of that?
Eoghan Kenny (Cork North-Central, Labour)
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Are there concerns in relation to particular buildings?
Eoghan Kenny (Cork North-Central, Labour)
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I genuinely wish the witnesses the best of luck.
Grace Boland (Dublin Fingal West, Fine Gael)
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I thank the witnesses very much for coming today. Like my colleagues, I very much appreciate them stepping up and taking on a leadership role in the trust, which is supposed to provide services to the most vulnerable in our society. Has there been any increase or decrease in the services provided to clients over the past couple of years as a result of this fiasco?
Mr. Niall Mulligan:
There have been some closures of services. I have a list of them, although I do not have it in front of me. From memory, there are a couple of family hubs that we either closed down or did not retender for. We were also involved in providing accommodation for Ukrainian families and there was a departmental decision to withdraw that.
Grace Boland (Dublin Fingal West, Fine Gael)
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Is Mr. Mulligan satisfied that the focus of the trust and a substantial amount of the funding received is being directed at supporting clients?
Grace Boland (Dublin Fingal West, Fine Gael)
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It is important to say that.
Grace Boland (Dublin Fingal West, Fine Gael)
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I thank Mr. O'Brien for clarifying the matter. It is important to say that. Are the witnesses satisfied with the trust's current organisational structure? Is it fit for purpose? Are people's salaries appropriate? Are the procurement processes appropriate? Is there adequate oversight of payments?
Mr. Tony O'Brien:
I can give absolute assurance in relation to those matters. Two or three years ago, there actually was not a procurement department within the trust. Now, however, everything is actively procured. There is significant utilisation of Office of Government Procurement frameworks and so on. As to whether the structures are absolutely right, one of the things we are actively examining strategically and in consultation with AHBRA is whether we have the right internal arrangements between our approved housing body activities and our other activities. We are closely examining whether we should follow the example of some other charities in the sector in having a specific governance arrangement for our approved housing body activities. We probably should, but we need to appraise the options and manage the risks associated with any change. That is a live discussion with the regulator.
Grace Boland (Dublin Fingal West, Fine Gael)
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Are the witnesses satisfied that the trust is now getting the support it needs from the various different funders, the regulators and the Department?
Mr. Tony O'Brien:
I think it is fair to say that since this came to light in 2023, the trust has had considerable support from all its funders. "Support" would not be quite the right word to use in relation to regulators because that is not their function, but they have shown diligence, where appropriate understanding, and given space for improvement to be made. Regarding the Department, the €15 million that has often been referred to as a bailout was a critical loan, which meant the bulk of the services continued in a situation where the Department will effectively receive that €15 million back.
Grace Boland (Dublin Fingal West, Fine Gael)
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Mr. O'Brien is confident about that.
Mr. Tony O'Brien:
I am absolutely confident it will get the money back, because we have identified properties and there is a process for transfer and so on. As a former public servant in a different domain, if I were to review that objectively, I would said it was a singularly effective intervention in a difficult situation which has achieved its objectives.
Grace Boland (Dublin Fingal West, Fine Gael)
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Following on from what Mr. O'Brien said, it is clear the €15 million was essential in making sure services continued. However, we have just spent a whole day hearing about irregularities and inappropriate corporate governance in the trust. It seems as though the €15 million, although I fully accept it was necessary to keep the trust open, did not go through the proper approval channels. It did not go through the Department of public expenditure. Will Mr. Kelly tell us why?
Grace Boland (Dublin Fingal West, Fine Gael)
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What about prior approval?
Mr. David Kelly:
There would have been discussions with the Department of public expenditure in advance of the memorandum going to the Government. Any memorandum going to the Government requires the approval of the Minister for public expenditure, which it got. That €15 million was not paid until a decision of the Government was obtained, which included the whole Cabinet, obviously.
Grace Boland (Dublin Fingal West, Fine Gael)
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Mr. Kelly is satisfied that things were done appropriately.
Grace Boland (Dublin Fingal West, Fine Gael)
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This was in July 2023.
Mr. David Kelly:
Yes. At the time, the issues were projected to us as a cash flow issue. However, over time it became apparent and things escalated quite quickly. The Department advised the trust that it needed to notify the two regulators. DRHE undertook procurement to bring in governance experts to try to intervene in these issues as quickly as possible. Between then and the Government decision being made, the situation escalated quite quickly. It then became apparent that without the funding, the services would not be provided. This intervention was never about protecting an organisation. It was about protecting people in receipt of services. That was the Minister's and the Government's main concern in this.
Grace Boland (Dublin Fingal West, Fine Gael)
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I appreciate that.
Does the regulator, AHBRA, have the powers it needs? How can we be certain that the more than 400 AHBs currently have the appropriate regulatory oversight? I have to confess that I did not quite get that from our session with the Charities Regulator and AHBRA. It may be that further legislation or powers are required or resources are required. Can the Department give us confidence that AHBRA has the powers and resources it needs to make sure we can be satisfied and have confidence in the AHBs, which are doing important work in providing social housing?
Mr. David Kelly:
I might bring my colleague in. Mr. Murray has worked on the area. However, AHBRA played an important role in undertaking this investigation. It has been in existence for, I think, four years. This is probably the first major investigation it has undertaken and there will be lessons for the Department and AHBRA in that. Arising from those lessons, the Department will consider any strengthening of the legislation. A review of that legislation is already under way so the Department will be anxious to ensure AHBRA has all the tools and resources necessary. The AHBs are critical to the delivery of social and affordable housing, so the strength of the regulatory regime is important and will be given absolute priority in terms of regulation and legislation.
Mr. Liam Murray:
I work directly with the regulator and that side of the house. The legislation provides for a review of itself after five years, which is ongoing at the moment. That review is going to look at powers of intervention and enforcement of the regulator across the board and even at what its role should be within the sector.
Grace Boland (Dublin Fingal West, Fine Gael)
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Do we have a timeline for that review?
Mr. Liam Murray:
Yes, the legislation was enacted five years ago in February. The review is ongoing at the moment. We hope to go out to wider stakeholder consultation shortly, so not only will the Department be looking at it but we will also go to the regulator and the sector itself in the coming weeks.
Grace Boland (Dublin Fingal West, Fine Gael)
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What is the ballpark timeline for when we might see some outcomes?
Mr. Liam Murray:
I do not want to give a ballpark timeline directly, but in the coming weeks we will go to stakeholder engagement and I expect the report will be available in the middle of next year at the latest, with recommendations to the Minister that may lead to legislative changes, if needs be.
Grace Boland (Dublin Fingal West, Fine Gael)
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It is important that lessons are learned from this process. We absolutely have to make sure these services continue, but the organisations have to be using the money given to them by the taxpayer and people who with the best will in the world want to do their best for people who are in very difficult situations. We have to make sure the money is being spent appropriately.
Regarding funding, we know there are issues with the financial statements for 2023, for obvious reasons. I assume we are not anywhere near being able to complete financial statements for 2024. How has the Department satisfied itself that the grant funding is being used appropriately?
Mr. David Kelly:
One of the things that happened last year was that the C and AG undertook a review of the €15 million and a number of recommendations were made. Any recommendations made by the C and AG are taken very seriously by the Department, so we have worked to strengthen our funding arrangements. We have done a number of things on the funding protocols that are in place and the strength of them. We have implemented those changes. We have undertaken a review of our funding arrangements. It is colloquially known as section 10 funding. It is funding provided under section 10 of the Housing Act 1988, which is made available to local authorities. We are looking at strengthening the procedures that are in place between the Department and the local authorities and, second, between the local authorities and their funders. It is very substantial work.
Grace Boland (Dublin Fingal West, Fine Gael)
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Is that moving with a sense of urgency?
Aidan Farrelly (Kildare North, Social Democrats)
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I share the sentiments offered by everyone today and thank the witnesses for taking the time to be here. I wish them considered good luck into the future in their endeavours in the trust.
I will pick up on a comment Mr. Kelly has just made. He said the Department was first made aware of financial issues in the trust in July 2023. In the C and AG's chapter on this issue, he states the Department was made aware of financial irregularities in late 2022 and that it instructed DRHE to conduct an internal review. Am I misinterpreting that?
Mr. David Kelly:
The issue was that there was an overrun on a capital project. DRHE worked with the trust and there was an intention to put a procurement expert into the trust. I might let my colleague Mr. White come in to clarify anything if he needs to because he worked on it. The view of the Department at the time was that an overrun on a capital project would not have been a signal that an organisation was in financial crisis.
Aidan Farrelly (Kildare North, Social Democrats)
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It is not a red flag.
Aidan Farrelly (Kildare North, Social Democrats)
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The Department has said that local authorities and the DRHE are responsible for governance and oversight, yet, as Mr. Kelly mentioned, the Minister was out championing his housing plan. The Department will lay claim to success when things are going well, but when there are issues of governance and oversight, the buck of responsibility seems to be passed off to everyone but the Department. When this was considered a red flag - not in hindsight but at the time - was that not the time to tell the Charities Regulator that there was potentially a problem and ask it to investigate, three years ago?
Mr. David Kelly:
With regard to the Department's position, as I mentioned earlier, the first time the financial difficulties were signalled to us was in July 2023. They were characterised as a cash flow issue. At that time the Department advised the trust that it needed to notify the regulators. On foot of that, the trust notified the Charities Regulatory Authority and the Approved Housing Bodies Regulatory Authority, AHBRA, as these were notifiable events under the regulatory codes. At that stage, through the Dublin Region Homeless Executive, DRHE, we provided funding to support governance expertise to go into the trust: there was a procurement process to put in governance expertise to support the trust. PricewaterhouseCoopers went in there and through that work identified the extent of it. In this way we identified the very significant going concern issues which required the emergency funding. I do not think it would be fair to say that the Department is hands off on this. We were quite involved-----
Aidan Farrelly (Kildare North, Social Democrats)
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I am using Mr. Kelly's words. I did not say "hands off". Mr. Kelly said that it was the responsibility of the local authorities.
Aidan Farrelly (Kildare North, Social Democrats)
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Yes. I did not say the Department was "hands off". Mr. Kelly intimated that.
Aidan Farrelly (Kildare North, Social Democrats)
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With regard to the trust itself, I made the assertion earlier in our second session that it appeared to me that the trust had grown too big to fail. While AHBRA was establishing itself, what appears to have happened was that the trust had fallen between the regulatory cracks between AHBRA establishing itself as a regulator and, potentially, the Charities Regulatory Authority stepping away from its duties. I know there was going to be a shared agreement in place there but it is very clearly the case that both regulators were not in a position to address this with the significance it required.
I am going to ask a couple of questions just to follow up on where things are at right now, if I can. The former CEO number 2, Mr. Doherty, said this morning that in his time there were nine or ten bank accounts operational in the trust at that time. What is the case today? How many bank accounts are operational for the trust at this moment?
Aidan Farrelly (Kildare North, Social Democrats)
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Who has access to those accounts?
Aidan Farrelly (Kildare North, Social Democrats)
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Does anyone from the board have access to the bank accounts?
Aidan Farrelly (Kildare North, Social Democrats)
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Would that potentially be somebody else from the board?
Aidan Farrelly (Kildare North, Social Democrats)
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How many tax numbers are associated with the organisation?
Aidan Farrelly (Kildare North, Social Democrats)
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Tax registration numbers. How many numbers are there aligned with the organisation?
Aidan Farrelly (Kildare North, Social Democrats)
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What would they be?
Mr. Ger Mullen:
Again, if we have subsidiaries where we took over certain bodies and charities and we are running them, we would be responsible for those but they would have their own boards and set-up. We are in the process of completely understanding and closing down as much as we have, or making sure that they are properly-----
Aidan Farrelly (Kildare North, Social Democrats)
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Perhaps at some point Mr. Mullen would forward on details of how many bank accounts are operational, who has access, how many tax numbers there are, and what they relate to, if that is possible for the board.
In terms of the policy, is it the policy of the trust to have a reserve in place? It is reported in some of the correspondence I have read that there should be a reserve account in place. Is that correct?
Aidan Farrelly (Kildare North, Social Democrats)
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How much is in the reserve account right now?
Mr. Ger Mullen:
We have a sinking fund account, which is €1.5 million in that account. We have to be careful of language because cash is not the same as a reserve. The reserve could be bigger than that, but the cash itself is being used in a different way. It is one of the processes where I want to make sure that our policies and what we are doing is crystal clear, not to finance people but to people who read our accounts and understand that where the money is is separate from where the reserve is.
Aidan Farrelly (Kildare North, Social Democrats)
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I would appreciate the follow up on what is included in that reserve account.
There was a media report, over the time when a lot of these issues arose, about tenants of the trust who were also staff of the trust and who were also contractors of the trust. Has Mr. Mullen or the board investigated that? Is it still the case now where there are tenancies of the trust who are current or former staff members?
Mr. Niall Mulligan:
There is one key issue that we are still dealing with. This was highlighted in the regulator reports and it would have been in the media. It was in relation to an individual who had a contract with the trust and at some point was also an employee of the trust and also became a tenant of a property but a tenant who did not qualify under social housing. That person is no longer an employee of the trust. We no longer have a contract with that person. Under condition No. 6 of the 32 conditions we have to apply for permission to sell properties. We do have permission from the Minister to sell that property and now we just need to take the next step in relation to how we progress that. It has been quite a complicated piece-----
Aidan Farrelly (Kildare North, Social Democrats)
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I can only imagine.
Aidan Farrelly (Kildare North, Social Democrats)
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Is it the trust's intention to sell?
Aidan Farrelly (Kildare North, Social Democrats)
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Are the witnesses aware of any reports of complaints from contractors of the trust who were asked to undertake work on behalf of personal employees at their own personal homes and paid for by the trust?
Aidan Farrelly (Kildare North, Social Democrats)
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Mr. Mulligan or the board are not aware of any situation where the contractor who was working and hired to work on trust properties was also asked to do work in other people's properties that were not-----
Aidan Farrelly (Kildare North, Social Democrats)
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This is not an opinion but it is just a question. Has the board considered rebranding? I cannot even imagine how difficult it has been for the founder, for the staff and for the people who have used the service. Has the board discussed a vision for the future and what that might look like? Does that include, potentially, a rebranding of the service?
Mr. Tony O'Brien:
It is a very fair question. What I would say is that you would not contemplate answering the question until you had aired everything that needed to be aired. In the process of today, with the 2023 accounts and some of the information we put into the public domain, if we had contemplated rebranding and had rebranded then, we would have just damaged that brand beyond recognition. So, it is not something we have actively considered. I do have to say, however, that Peter McVerry, whose name is above the door, is an embodiment of the mission of the organisation, so any such consideration would be very careful consideration. The notion of rebranding is way too premature because had we rebranded last week, we would have just damaged that brand. It is a bit like the way some bodies have been rebranded just before they have gone into a crisis and it was a waste of time. It is something we will contemplate as part of a forward-looking strategic review, which we have just initiated, but it is not something that any decision has been made about. It would be a very serious decision to move away from Peter's name given that everything that is done in the organisation is essentially inspired by and is a continuation of his life's work.
Aidan Farrelly (Kildare North, Social Democrats)
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I thank the witnesses and I offer my best wishes to Mr. O'Brien and the board in the future.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I thank everybody for coming in today. I am looking at the questioning that has been going on today. Mr. O'Brien is the chairperson of the board, is that correct?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Mr. Mulligan is the CEO. Why is Mr. O'Brien answering most of the questions? It is just as a matter of interest. I am just wondering. Would the CEO not answer the questions? Why would the board member answer most of the questions?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Would that normally have happened in past times whenever the Peter McVerry Trust came into the C and AG? Would the CEO or the board have answered the questions?
John Brady (Wicklow, Sinn Fein)
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It has never been here before.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Is that because Mr. O'Brien is more experienced?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Again, regarding oversight, I had to run up to the floor of the Dáil to make a speech so I might have missed this part, but I understand a number of assets of the trust were transferred to the State. Is that correct?
Mr. Niall Mulligan:
There are a couple of different transfer conditions, such as condition 7 or condition 17, which sit with the Department in terms of responsibility. We are working very closely with the capital subgroup of the oversight group on those transfers. Condition 7 is in respect of the repayment of the €15 million loan and condition 17 relates to the developments which had begun but with which we were not able to progress and so they were transferred over to local authorities and our other AHBs.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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The transfers are in lieu of the €15 million that was used to bailout-----
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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They will be taken all off the asset register.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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How is the asset register at present? Is it up to date?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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So, the organisation has started again.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I am also interested in housing first. It is a key service for homelessness and 50% of it has still not been awarded. The Peter McVerry Trust is still running 50%, is that correct? It is still running 50% of homelessness services. Even though we have all these issues, that is still happening. Is that correct?
Mr. Niall Mulligan:
On the context around housing first, the tenders came up near September 2024 and we as an organisation decided not to tender for any of those lots because we did not meet the qualification criteria. The tender went on. It was split into four different lots and not to go into the history of it but we are still at a stage where lots 2, 3 and 4 have been successfully offered to other organisations. However, there is a process by which they still are being transferred. While that process is going on, we are still holding the service.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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The organisation is still running services for homelessness, even though there has been no oversight of this organisation for how many years?
Mr. Niall Mulligan:
On the service provision by Peter McVerry Trust, there has been no criticism of the services and no criticism of the way in which we run those services. There has been no criticism of the staff and that has to be absolutely clear. The criticism sits very much with the governance and financial management of the organisation.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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There would be criticism of the staff when you look at the CEO and what went on under his management skills.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Who is auditing the money coming in and out of those accounts in relation to that service?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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There is no oversight. Sometimes they do payments every three months or something to ensure it is actually-----
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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That is happening at present.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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When the other two organisations were in - the Charities Regulator and the housing regulator - I brought up that there is no oversight of the county councils for the funding they are given. At the end of the day, it is probably all coming from central government and equates to more than 50%. Through the Department, and Mr. Kelly might answer this, why is the C and AG not regulating the books if more than 50% is going between the councils and the Government's Central Fund? There is more than 50% of funding going out to Peter McVerry Trust.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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The Department and the local authorities. As it is all people's money, more than 50% in funding is being given to the Peter McVerry Trust. Should that not be overlooked or audited by the C and AG?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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A combination of the Department and local authorities equates to 50% funding. Why are county councils not audited by the C and AG? Could Ms Drinan come in on that?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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There is a system there as well.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Mr. Kelly mentioned local authorities are audited by whom?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Did the Local Government Audit Service not pick up on the Peter McVerry Trust when it was auditing all the county council accounts?
Mr. David Kelly:
The Local Government Audit Service would have had sight of the money or contracts the Dublin local authorities had with the Peter McVerry Trust. However, it would not have had access to the trust's accounts. They are matters for the board, which comes through in the two regulators' reports. If you look at the investigation reports, that identifies the governance failings in terms of financial management as being at board level in the trust.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Yes, it was at board level but for me, I was a councillor for 12 years and when funding is generally given out, you are issued stipulations in place. Were those stipulations followed by the Peter McVerry Trust at the time?
Mr. Tony O'Brien:
At the time, the trust would have submitted its audited accounts, which have now been restated twice. They were audited - or should have been audited - in accordance with normal standards by a person regulated by one of the audit bodies. It is clear the work done was not up to the right standard.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I want to get down to the nitty gritty. Whose fault is that? Who would have been holding it to account? Was it the local authority?
Mr. Tony O'Brien:
My predecessor made a professional standards complaint to the relevant body that auditor belongs to. This is an issue that exists throughout the system. Individual organisations place reliance on external auditors, boards place reliance on that and they produce those audited accounts, which generally are what is required for external oversight. They are an important part of the bulwark. In this particular case, it was a flawed part of the bulwark.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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For me, it was not carrying out a very good job of oversight if it did not see this coming.
I want to come back to Mr. Kelly regarding the Department. When was he first notified the Peter McVerry Trust was running a deficit funding model in relation to its houses?
Mr. David Kelly:
We were notified in July 2023. The trust wrote to the DRHE and the Department notifying them of what it characterised as cash flow issues at the time. The Department advised the organisation it needed to notify the AHBRA and the Charities Regulator, due to these being notifiable events.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Did the Department receive any letters in 2020 from the other housing bodies or homeless services that this was happening with the Peter McVerry Trust?
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I am sorry. I might have been on the floor of the Dáil.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I was on the floor of the Dáil at that time.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Mr. Kelly was just made aware of it. I have a letter from 2020, which was actually a response from Mr. Kelly. I have his signature on it. He responded, so he is actually-----
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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He was not aware of it.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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All the homeless housing bodies actually wrote to Mr. Kelly saying that the Peter McVerry Trust was running a deficit model, and it said that it could build houses at a cheaper price.
Mr. David Kelly:
I mentioned this earlier, so I am sorry for repeating myself. I cannot remember if the Deputy was here for this part. When local authorities are tendering for a service, there has to be some account for expenditure money and some process by which contracts are awarded. Local authorities will run a procurement process. There was never any policy that there should be a deficit model. One of the learnings from this has to be to ensure that services in the future are fully funded and that they are not augmented by fundraising and subject to the volatility of that. Therefore, the State going forward will fully fund services. The housing first model was a new concept. It has been introduced over the last few years. When a local authority was running a procurement process, there was not that historical data to try to benchmark how much it should cost for these. I would say it probably was not quite as apparent. However, over the last couple of years since then, it has become apparent that the model put forward was not sustainable due to the reliance on fundraising, but there was also probably a deficit in the budgeting in terms of the estimation of the actual costs involved.
On the other thing I mentioned, when a local authority runs a procurement process, we will become aware of the person awarded that contract. The local authority will need to put a service proposal into the Department to say it is proposing to deliver a service, this is the cost and this is the person who will deliver it. We would not have any visibility in relation to how much other service providers had tendered for it. It is becoming clearer now, but it was not clear at the time.
Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I thank Mr. Kelly. I will come back in on the next round of questioning.
John Brady (Wicklow, Sinn Fein)
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I am not sure whether time will permit another round of questions.
I have a few concluding questions to the Department in the first instance. To follow on from the deficit funding, it has now been established, not just over the course of our hearings today, but previous to these, that the crux of the issue was the underfunding of the delivery of homeless provision and the underbidding, which was alluded to by the Charities Regulator, in relation to the Dublin housing first tender. That tender had an estimated cost of €16.4 million. There was an underbid of 60% by the trust to deliver that service; the trust came in at €6.3 million. There was €10 million in the difference. Mr. Kelly said that maybe there were roles for the Department and other bodies in that, but how did an issue as blatant and obvious as that not set off alarm bells? Mr. Kelly gave some of the rationale, but did it not set off alarm bells when an estimated delivery cost was provided and what actually came in as the tender was an underbid of 60%? Did that not set off any alarm bells?
Mr. David Kelly:
We never had any policy of underfunding, as it was characterised. As the Cathaoirleach mentioned, local authorities will put out a tender for services and organisations will respond with a suggested cost. The local authority will engage in the procurement process and be satisfied that the organisation has the capacity and expertise and that value for money is being provided. One of the things that has come through in the regulatory reports is the responsibility of boards to ensure that the services are being adequately budgeted and that there is sufficient oversight in terms of the procurement process.
John Brady (Wicklow, Sinn Fein)
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There is, but I will go back to the letters that came in in 2020. Mr. Kelly is saying he has no recollection of those, but two letters did come in from the four other homeless providers in the Dublin region, written by the CEOs, expressing concern about the funding model and the difficulties there. That was on foot of the Dublin housing first project. There was a request for reviews. There were concerns there. There were different pieces of correspondence. It was highlighted as far back as 2020 that there were serious difficulties in terms of the funding model. That was the starting point in terms of the failures at departmental level to pick up on what was going wrong.
I will make another point. Mr. Kelly mentioned that there was-----
Mr. David Kelly:
There are two separate issues. There is the underbidding issue and then there is the overall funding model. We have done fairly extensive work in terms of that overall funding model. I mentioned some of it earlier. There would have been concerns. I am fully aware that there were broader concerns in the NGO sector in relation to the funding model, and extensive work has been done through the CCMA and our own review. Therefore, change has already been implemented in terms of fully funding services. That is in place now, moving towards an increased overhead payment to cover the other services the AHBs need to do in terms of finance, communications and ensuring they can meet regulatory compliance. A lot of that stuff is in relation to broader funding concerns, and I fully accept that. Colleagues and I sat down with the homeless NGOs on that recently. We had a discussion on progress two weeks ago. I am fully aware that this is an issue, but I would separate that from the idea of underbidding.
John Brady (Wicklow, Sinn Fein)
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Okay. In relation to procurement, Mr. Kelly mentioned that there was an intention from the Department to put someone in to help with the procurement processes. There were chronic failures within the trust at the time around procurement and a multitude of areas. Did it ever actually come to fruition that someone was put in at that stage?
John Brady (Wicklow, Sinn Fein)
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In relation to the trust, I will echo the comments from some of the previous Deputies. I commend the witnesses on the work they are doing at the moment, but also the front-line staff within the service who have ultimately come through a very difficult couple of years. I commend them for their ongoing commitment, work and dedication to providing the service to some of the most vulnerable people in the State. I wish to put that on the record.
I believe it was Deputy McAuliffe who raised the issue of Kerdiffstown House and how it probably symbolised the failures within the trust at the time. There was a reference to peacocks and other animals that were there as well, and reference was made to a farm. It may be insignificant in the greater scheme of things, but Mr. Mulligan might elaborate a little bit for the committee's sake.
Mr. Niall Mulligan:
They are no longer there, just to confirm that. There were peacocks, pigs, ducks and chickens. On a serious note, there is therapeutic benefit in animals being involved with people who have suffered trauma or who are experiencing trauma. We see that a lot. There is a rationale behind it. It is not just somebody's fancy. Having said that, I do not know whether the Cathaoirleach has been out to Kerdiffstown House, but there is a lot of land there, so I can understand that. Within the context of Kerdiffstown House, however, it was really not used like that, so it did not make any sense to have it.
John Brady (Wicklow, Sinn Fein)
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I will go back to the two board members where the Minister has a function in terms of appointing them. Mr. Kelly outlined the current situation, which is that there are two vacancies on the board at this point. From the perspective of the board having those two vacancies, does Mr. O'Brien think it is critical that they are filled by the Department and the Minister in the first instance? If there is no intention by the Minister to fill those, I am sure Mr. O'Brien, as chair of the board, would like to see those two vacancies filled.
He might outline if he thinks there are any deficiencies or weaknesses within the board that those two additional members could remedy.
Mr. Tony O'Brien:
We are very lucky with the quality of individuals who were prepared to join the board during the course of the last year, myself excluded; it is not for me to make comment on myself. We now have a position where we have eight members of a board who have joined within the last year. We have gone through four of those within the last six or eight weeks. When you are renewing a board, you want to do so at a certain pace. I will be honest, in that it does suit me at the present time to have scope for two additional board members and also to phase and rotate. Having inducted the board members, we are looking at the potential skill gaps. I mentioned earlier that one of the things we would be examining strategically was the specific governance of the approved housing body part. I can well imagine that we may wish to have someone with more experience in their career, perhaps, in that space beforehand. When that arises, I will certainly engage with the Department about whether the Minister would wish to appoint such a person or whether we should proceed to do so. It would not be the intention that they would be left vacant interminably.
John Brady (Wicklow, Sinn Fein)
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Just in terms of the transfer of assets to the State, our guests have provided some level of detail on where that process is. I am not sure as to whether a number of units were specified as due. I think there was a figure of about 50 or 54. For the record, we might just----
Mr. Niall Mulligan:
I think that is correct. Mr. White from the Department can correct me. There is a tranche that are transferring directly over to Dublin City Council; I think that is 27. The rest would be across a number of different local authorities across the country. We are fairly well advanced but as members can appreciate, it is quite a big undertaking just in terms of the legalities side of it and so on.
John Brady (Wicklow, Sinn Fein)
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The trust might furnish us a note on the allocation. Mr. Mulligan mentioned 27 to Dublin City Council. Maybe we could have the figures for the other local authorities, without giving the specific detail on the units. I just want the breakdown and the intention.
Mr. Brendan White:
There are 54 properties that have been identified that are unencumbered, with 31 of them being in Dublin city. Of those 31, 28 are actually in the process of being transferred. It is a slow process because of titles and so on. There are 36 altogether that are in the process at the moment, with a total value of €9,000,465. We are two thirds of the way into it on that. I have a table here and we can get it to the committee to make up the 54. It is 31 and then nine, and then threes, two and ones.
John Brady (Wicklow, Sinn Fein)
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In the testimony of our first witness this morning, Mr. Doherty, he spoke about difficulties in terms of contractors being paid and outstanding payments. He made specific reference to fire safety issues and some challenges there. At least one property was identified and there were issues there in terms of consultants being appointed. Mr. Doherty then made a statement that the work at one property - I think it was a former hotel on St. Stephen's Green - had been identified as costing €900,000 to bring that property up to the necessary fire safety standards. He made reference to concerns from Dublin fire authorities about non-compliance with the legislation. He stated that, as far as he was aware, up until late 2024, that work was still outstanding and the property had not been brought up to the necessary fire safety standards. Have our guests any clarity on that? Is it accurate testimony?
Mr. Niall Mulligan:
It sounds accurate. I am assuming that is our emergency accommodation at St. Stephen's Green. There are a couple of issues. There is some internal work that needs to be undertaken, but there is also an issue with accessing a fire exit at the back that went into the car park of the Department of Foreign Affairs and Trade. That is not going to be an option going forward. We are currently doing work. We have a proposal in to undertake the work. We are in negotiations at the moment with the Department on the cost associated with that. He is accurate in relation to that particular property.
John Brady (Wicklow, Sinn Fein)
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The work has not been undertaken but there is a process there.
John Brady (Wicklow, Sinn Fein)
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Are that premises still occupied?
John Brady (Wicklow, Sinn Fein)
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For me, that is very serious in terms of fire safety.
Mr. Tony O'Brien:
Just to be clear, one of the critical issues here is the long-term sustainability of the current emergency exit route, which is being facilitated for now but is not a long-term sustainable solution. Part of the works are to provide an alternative fire exit route so that one can be closed off. That is not the only issue but it is the big issue to do with fire exits. There is currently an appropriate fire exit.
John Brady (Wicklow, Sinn Fein)
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There is a proposal in with the Department to provide the funding for that. Where is that at? It is very serious if it is in breach of fire safety.
John Brady (Wicklow, Sinn Fein)
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What is the occupancy currently? I know it was reduced.
John Brady (Wicklow, Sinn Fein)
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I have a final question about vacancy. We heard some of the figures earlier for units and percentages, with just over 6% vacancy rates. I do not want to misquote but I think it was said that that would provide accommodation for about 61 persons. Does that include the former Latchford's hotel on Baggot Street or what is the current status of that premises?
John Brady (Wicklow, Sinn Fein)
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That is not captured in those vacancies.
Mr. Brendan White:
That is one of what we call the condition 17 properties, which is a total of 19 properties. These are sites or properties purchased by the Peter McVerry Trust with State funding but never advanced, so they did not advance to their purpose. Those 19 are being transferred either to local authorities or to AHBs to take them on and develop them as sites.
In respect of the site on Baggot Street, there is a negotiation going on with Dublin City Council for them to understand what they would do with that site if they were to take it back.
John Brady (Wicklow, Sinn Fein)
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I think it was acquired for €6.24 million or something like that.
John Brady (Wicklow, Sinn Fein)
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That is captured in condition 17.
John Brady (Wicklow, Sinn Fein)
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The Department might be able to provide a note to the committee in terms of other properties that are included in that. It is fairly considerable for one property and the fact that it is still lying unused to this day, four or five years after it was acquired, is a concern.
John Brady (Wicklow, Sinn Fein)
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The Department might provide a list to the committee in relation to those.
John Brady (Wicklow, Sinn Fein)
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That concludes the questions from myself. I thank all of our guests from the trust for coming in today. I wish them well. It is essential for the people who depend on the service that things work. It is not because you are too large to fall. I think you are too important to fall, given the nature of the critical work that goes on there. I wish you well in your endeavours.
I hope this meeting goes some way to restoring the trust and faith of the public, not just in the Peter McVerry Trust but in all the phenomenal work that goes on right across the board by the voluntary sector. Fundraising activities have taken a hit across the board because of what went on within the trust. I hope this engagement goes some of the way to reassuring people the trust is in safe hands. There is still a lot of work to be done; no one is denying that. I wish the witnesses well. From a departmental perspective, I am sure there will be additional and ongoing questions to the trust. I expect there will be some follow-up engagement on a multitude of issues.
Paul McAuliffe (Dublin North-West, Fianna Fail)
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If I have members' support, I propose that we go into private session for a few minutes to consider today's engagement and discuss what is happening next week. Otherwise, we will have to wait until next Thursday to have that discussion.
John Brady (Wicklow, Sinn Fein)
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Is that agreed? Agreed. That concludes today's engagement. I thank the representatives of the Peter McVerry Trust for attending. I also thank the representatives from the Department of Housing, Local Government and Heritage and the Office of the Comptroller and Auditor General for their attendance. Is it agreed that the clerk will seek any follow-up information and carry out any agreed actions arising from the meeting? Agreed. The committee will next meet on Thursday, 27 November for an engagement with the Office of Public Works.