Report urges overhaul of credit unions

A new examination of the Irish League of Credit Unions is believed to reflect "huge alienation" among members of the movement. Distributed to 537 branches in recent days, the report by consultant Mr Phil Flynn is believed to contain a plan for considerable change in the movement.

It is thought the broad strategy embraces proposals to put control of movement back into the hands of its 2.6 million members.

The report will be discussed at the league's annual general meeting in Killarney, Co Kerry, this weekend. It is believed to disclose significant problems in the structure of the league, which is said to be antiquated, and in its communications and project management systems.

With more than €5.7 billion on deposit and a multimillion computer initiative abandoned, improved structures are seen as crucial to the movement's credibility.

It is thought that the report will say the movement's rapid growth and increased size demands a more modern structure.

The report is also thought to contain a number of detailed recommendations which might ultimately be put to members of the league. Given that the report was finalised only last week, it is not expected that a vote will be taken on new structures at the meeting next weekend.

Mr Flynn was hired after last year's annual meeting amid fears of a split. A motion of no-confidence in members of the league board was rejected at that meeting, from which the press was excluded. But in an indication of difficulties surfacing in the movement, delegates voted against accepting a report by a supervisory committee appointed to monitor the board's activities and report to the annual general meeting.

The report follows the collapse last year of a €34 million investment in a new computer system and the departure in January of the league's general secretary, Mr Tony Smyth.

On secondment from the Department of Finance, Mr Smyth left "by mutual agreement" with the board, a move which was notified to members days before Christmas.

The computer project was abandoned after it ran significantly over-budget. Estimates suggested the cost of the plan - known as ISIS - might run to €127 million, more than 3.5 times the original projection.

The report's recommendations in respect of the computer system are not known.

The league has accepted, however, that its structures and procedures let it down when the pressure was on.