Audit finds large number of corporate governance failures in Temple Bar Cultural Trust
Report makes 60 recommendations to improve trust corporate governance, including full compliance with Companies Acts
Meeting House Square, Temple Bar: the market is one of many events managed by the Temple Bar Cultural Trust. An audit by Dublin City Council of the trust’s corporate governance found a large number of irregularities and flaws. Photograph: Joe St Leger
An audit by Dublin City Council of corporate governance in Temple Bar Cultural Trust has found a large number of “control weaknesses and/or regulatory violations [that] represent unacceptable exposure and risk” to the company.
The report finds that board minutes and papers were “not available” to show that loans of €2 million and overdraft facilities of €500,000 provided by Ulster Bank for the rainscreen in Meeting House Square were approved by the board.
Referring to “certified extracts” from minutes of board meetings provided to Ulster Bank, the report recommends that minutes “should record all major decisions” and that declarations should not be made to third parties relating to “company minutes that do not exist”.
It also found the trust’s strategy/business plan for 2010 and 2011 was not approved by the board, financial procedures were not in place and the same external auditors had been acting for over 10 years “in contravention of good corporate governance”.
At a board meeting of the trust yesterday, one of the directors said the findings were so serious that the report should be referred to the Garda Fraud Squad. Others were reluctant to take that step at this stage.
The report by the council’s internal audit unit – requested by Dublin city manager John Tierney, the trust’s sole shareholder – says company credit cards were used in 2011 for personal expenditure of €2,550, repaid later through salary deductions. “Company credit cards expenditure was €49,714 for 2011 (for four credit card holders). The majority of the credit card expenditure sampled did not have appropriate receipts or documentation to verify the business requirement for the expenditure.”
‘Personal legal expense’
In September 2011, the trust paid a “personal legal expense” of €907 incurred by then chief executive Dermot McLaughlin, now on secondment to act as programme director of Derry UK City of Culture; it was repaid between July and September 2012.
In its “repeated references” to the trust’s chief executive, the report makes clear all of these refer to Mr McLaughlin, rather than the current interim chief executive, Dublin City Council arts officer Ray Yeates, who has been in charge of the organisation since November.
It shows that Mr McLaughlin’s salary was €103,730 in 2011, when the trust’s total income was €1,824,319 – mainly derived from rentals from cultural buildings in Temple Bar.
It notes that bridging finance of €1.32 million was needed for the square’s rainscreen until a Fáilte Ireland grant came through. Initially, the council’s internal audit unit was going to review this project, but then it was told a Fáilte Ireland audit was under way. The report makes 60 recommendations to improve trust corporate governance, including full compliance with the Companies Acts.
Mr McLaughlin could not be contacted on Tuesday or yesterday to respond. However, the board said the recommendations of what it described as a “detailed and rigorous” report had “already been implemented or are well in hand”.