Concerns over IFA pay were raised 15 months ago

Serious concerns about IFA's corporate governance structures were raised nearly 15 months before its general secretary Pat Smith resigned last week, amid controversy over his pay.

The organisation's former chief economist Con Lucey, one of the most respected figures in the IFA, also flagged concerns about the group's remuneration policy before resigning as chairman of its audit committee in August 2014.

In his resignation letter, seen by The Irish Times, Mr Lucey said his main reason for resigning was the “unacceptable interference” of Mr Smith in the work of the committee.

Specifically, Mr Lucey raised concerns about the deferral of an audit committee meeting – at the direction of Mr Smith – which had sought to review IFA expenditure.

‘Reviewing transactions’

“The normal checking procedure involves reviewing transactions over a randomly chosen recent period,” Mr Lucey wrote.

“In my view, it would be a waste of the AC’s [audit committee] time and a charade if documentation were first to be sanitised before being considered by the AC,” he added.

In his letter, Mr Lucey also cited the condition that Mr Smith attend committee meetings, while not a member, as an “anomaly”.

In a second letter, sent after his resignation, Mr Lucey stated his decision to resign was not based on any findings of financial irregularity by the committee.

However, he made five recommendations aimed at improving financial oversight in the organisation.

They included reviewing “the level, timing and method of financial reporting” and overhauling internal financial controls to ensure that all expenditure is authorised.

The other recommendations refer to the IFA’s code of practice, its time limit on expenses and issues that may arise from upcoming changes to accountancy standards.

In the letter, addressed to current IFA president Eddie Downey, Mr Lucey said: "It is obvious that the association needs to maintain the confidence of the very large membership base, and needs to ensure that the association's work is not eroded by negative publicity."

Copies of both letters were forwarded to the IFA financial controller, deputy president, general secretary and the three-person audit committee, which also comprised current IFA treasurer Jer Bergin and former treasurer JJ Kavanagh.