A new report on serious governance problems in the Peter McVerry Trust has drawn attention to a family link between a long-time board member of the homeless charity and a solicitors’ firm that received €1.67 million in legal fees from it in two years.
The findings by inspectors sent into the trust by the Approved Housing Bodies Regulatory Authority (AHBRA) follow heavy criticism of the charity in recent reports for the Charities Regulator and the Comptroller & Auditor General.
The charity, set up four decades ago by Jesuit priest Fr Peter McVerry, fell into a financial crisis in 2023, necessitating a €15 million Government bailout that to led intense regulatory scrutiny of its affairs.
Now AHBRA inspectors have expressed concern about lax board controls and a failure to declare or discuss potential conflicts of interest with certain advisers and suppliers.
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AHBRA chief executive Fergal O’Leary said the deficiencies set out in the report were “significant” breaches of regulatory standards.
“This report highlights serious failings in governance, financial management, and conflict of interest handling within the Peter McVerry Trust,” he said.
“While we acknowledge that the [trust] continued to deliver vital services during this period, noncompliance with regulatory standards is unacceptable.”
Despite the gravity of findings, Mr O’Leary said the regulator was not deploying enforcement powers “at this stage” but will monitor a reform process to ensure the trust meets its regulatory obligations.
“The deficiencies highlighted in the report are of significant concern and have the potential to diminish public and funder confidence,” said Mr O’Leary said.
Questions in the new report over a potential conflict of interest with legal advisers come after the charity’s former external auditor was found by Charities Regulator inspectors to have had a conflict of interest in dealings with the trust.
The AHBRA report, published on Tuesday, did not name the legal firm or any specific individuals.
However, Fr McVerry was readily identifiable in the report as “board member 3″ and former trust chief executive Pat Doyle was readily identifiable as “former CEO 1″.
Without identifying the firm, the AHBRA inspectors said a named solicitors’ firm was listed as the solicitor for all legal requirements for property purchase and leasing. Neither did the inspectors identify “board member 7″ who had a close family connection with the firm.
“At interview, the inspectors queried whether there was any connection between that firm and board member 7, as they had the same last name,” the report said.
“It was confirmed by board member 3 that ‘everybody knew’ they were brothers but that it was not seen as a conflict of interest.
“Board member 3 stated that they were aware of a connection between the legal firm representing the trust and board member 7 but this never stood out to them as a potential issue,” the report said.
“Board member 3 stated that when former CEO 1 commenced employment with the [approved housing body] in 2005, former CEO 1 requested permission to bring both the named solicitors’ firm and former external auditor on board with them. Board member 3 stated they were ‘quite happy’ to let Former CEO 1 ‘look after all that’,” the report added.
“When the board member concerned was queried about a possible conflict of interest with their brother conducting business with the AHB they responded that ‘I have taken advice on it and there is no conflict of interest from my role’.”
The inspectors said total payments to the solicitors’ firm amounted to €1.42 million in 2022 and €247,994 for the period under review in 2023.
“The inspectors found no evidence of a potential conflict of interest declaration or potential conflict discussion at board or subcommittee level in this regard.”
Among other conclusions, the AHBRA report said the charity failed to maintain “an adequate fixed asset register” and said inspectors “found no one within the [housing body] acknowledged responsibility for maintaining the fixed asset register”.
It went on to say the recording of land and freehold premises in the fixed asset register “was not accurate and could not be relied upon to provide a fully comprehensive record” of the fixed assets for recording in the balance sheet and financial statements.
“There was limited management of capital and creditor liabilities relating to land and premises and no evidence of a liabilities register,” the report said.
“The organisation did not have a documented capitalisation policy the absence of which, it appears, contributed to inappropriate entries noted on the fixed asset register,” it added.
“The board did not have appropriate oversight of the procurement and governance of capital acquisition and expenditure by the AHB and did not evaluate the impact of such expenditure on its cashflows.”
In a statement on Tuesday, the McVerry trust board said acknowledged “its overall responsibility” and deeply regrets what transpired as set out by the inspectors.
“It is also of particular regret that matters were kept from the Board by persons who should have acted otherwise,” the board said.
“As a result of intensive work since mid-2023, the operations of the trust are very different today. Financial oversight has been improved substantially.”
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