Irish Red Cross must get 'house in order'

Fri, May 18, 2012, 01:00

THE IRISH Red Cross must address governance and financial control issues if it is to regain its reputation, which has become “tarnished” in recent years, the chairman of the Oireachtas public accounts committee has said.

“The Irish Red Cross is going through a major change programme, and it may shortly be in a position to put some of its turbulent history behind it. In moving on, it needs to address corporate governance and financial control issues,” John McGuinness said.

Speaking at the launch of a report by the committee into the Irish Red Cross yesterday, Mr McGuinness said it was “entirely wrong” that €163,000 in funding collected by the society in 2005 for the tsunami in Asia should have been retained in a branch account of the Red Cross in Tipperary until it was discovered in 2008.

It was a sign of the “disarray” in the organisation at that time that this was treated as an administrative issue and not brought to the attention of the charity’s board until late 2009, he said.

He added that the committee had received assurances that such a situation could not arise again.

The Irish Red Cross receives more than €800,000 in State funding per year: “While there was no issue of these monies not being used for the purposes it was intended for, it is important that the Irish Red Cross demonstrate that it has fully its house in order,” Mr McGuinness said.

In a statement, the Irish Red Cross Society said the recommendations had already been implemented as part of a programme for change under way for the past 18 months to overhaul financial management practices at local and national level.

“Strong governance is at the heart of our strategy and plans for the future. We are pressing ahead with our agenda for change and working to rejuvenate and revitalise the society in every facet of its activity,” said David O’Callaghan, chairman of the Irish Red Cross.

Responding to the report, Minister for Defence Alan Shatter said the committee’s deliberations had “helped to clear the air in relation to a number of serious allegations that were made concerning the administration of the society.

“The Irish Red Cross has made excellent progress in relation to revising its corporate governance arrangements and I am pleased to see that it has already introduced a raft of changes.”

Among the report’s key recommendations was that the Department of Defence should verify the implementation of the change programme and insist that ongoing public funding of the society was conditional on the implementation of this programme of change.

It also recommends the review of the legislation underpinning the Irish Red Cross should include an examination of whether a provision can be made that would permit, in the public interest, the intervention of the Minister for Defence in the running of the Irish Red Cross where exceptional circumstances arose.

Furthermore, it says the Irish Red Cross must undertake regular audits of all its branches in order to enhance financial control.

And it recommends members of the executive board should serve no longer than six years.