Red Cross 'deficiencies exposed'

 

The Irish Red Cross is to be asked to answer allegations that money collected for the relief of overseas disasters was retained in domestic accounts instead of being passed on to the countries involved.

The request from the Oireachtas Public Accounts Committee was agreed today after members were told audits at the Irish Red Cross had revealed a number of accounting and “corporate governance issues” dating back as far as 2006.

Secretary general of the Department of Defence Michael Howard told the committee that after a number of Red Cross inquiries into its systems and accounts, “a number of deficiencies were exposed”. Among these was the discovery of some 49 previously unreported regional accounts, one of which in Co Tipperary contained some €160,000.

Labour TD Michael McCarthy said it was his information the money had been collected from the public for relief of an Asian tsunami but had been retained in the account in Tipperary.

Mr McCarthy repeatedly asked Mr Howard when the Department of Defence had been made aware of complaints such as this, against the Red Cross, and what action the department had taken.

However, Mr Howard said despite the payment of a grant of €1 million per year by the Minister for Defence who also appoints the chairman and about one-third of the council of the Irish Red Cross, the society’s accounts and procedures were not subject to regulatory oversight either by the Minister or the Comptroller and Auditor General.

Committee chairman John McGuinness (FF) told Mr Howard the committee had complaints regarding the €160,000 but also of another €600,000 relating to a collection in February 2010 and he said the complainant had referred to “millions” of euro.

Mr Howard replied he could not be certain when the department was made aware of the complaint but he had been assured by the society that when people made a donation to the Red Cross normal International Red Cross best practice was followed. This would involve the society making a specific appeal for a particular disaster relief, and all donations received for that purpose would serve that purpose.

However, he said in times of specific appeals it was frequently the case that normal donations to the Irish Red Cross, outside the specific disaster relief appeal, would be received and this money was considered available to the council domestically.

While he acknowledged €160,000 remained in an account in Tipperary for some time, he said there was no suggestion whatsoever that any money had been misappropriated by anyone in the Irish Red Cross. He said it was also important to recognise the valuable work the society was doing. The society internationally was generally not responsible to governments, he said, adding the Irish Government appointees “do not form some sort of distant cohort that report back”. He said the Irish Red Cross had recognised corporate governance issues and that reforms were already under way.

However, Simon Harris (FG) asked what was the point of having a Government appointing a chairman and about one-third of the council of the Red Cross if they were not available to report on the uses of taxpayers’ money. He said although he respected the work of the Red Cross, it was the members’ job to monitor Government spending.

Eoghan Murphy TD (FG) asked if it was the case the vice chairman of the Irish Red Cross had held that position for 21 years while the treasurer had held the treasurer’s position for a decade. He was told by Mr Howard the duration of offices were among the changes to corporate governance currently being introduced.

Mr McGuinness said the committee would write to the Irish Red Cross to advise it of the questions raised and ask it to respond.