Funding to inner-city development body stopped after auditor's findings

A DEVELOPMENT organisation which allocates funds to disadvantaged communities in Dublin’s inner city has had its Government funding stopped after “serious issues” with its administration of funds were uncovered by an audit.

The audit by State funding agency Pobal found several staff of the Dublin Inner City Partnership (DICP) were being paid “top-ups” in excess of their maximum salaries permitted by Pobal.

A report of an audit review from December 2009, seen by The Irish Times, found that salary top-ups ranging from about €5,000 to just under €10,000 were paid to three senior staff of the organisation in 2008. In the nine months to September 2009, top-ups ranging from just under €3,700 to almost €7,000 were paid.

The report found that the DICP programme of activities, the organisation’s annual budget, did not disclose the full salaries paid to staff. It also found errors in its expenditure returns; payments which were not supported by adequate documents; travel and subsistence payments where the purpose of the journeys was not always recorded; a director not registered with the Companies Registration Office; and an absence of contracts for two staff.

Pobal initially carried out an audit of the funding it supplied to DICP in March 2008. It carried out an audit review in December 2009, and subsequently sent an audit report to DICP director David Connolly and independent chairwoman Prof Joyce O’Connor.

In the December report, Pobal states that in 2008 three staff salaries were in excess of the maximum allowable. The manager of DICP was paid €120,175, which was €9,552 above what was approved by Pobal; the financial administrator was paid €78,288, a €5,144 difference from the approved salary; and a regeneration officer was paid €78,310, which was €5,184 above the maximum sanctioned by Pobal.

When Pobal conducted its audit review in December, the returns for the nine-month period up to September 30th, 2009, showed the manager had been paid a total of €101,518, an excess of €6,968. The financial administrator and the regeneration officer both had been paid €65,952, an excess of €3,742.

The salaries were funded through Pobal’s Local Development Social Inclusion Programme (LDSIP). The report found the full salary paid to LDSIP-funded staff was not disclosed in the Programme of Activities for 2008 or 2009. Instead, DICP recorded the maximum salary amounts payable and “did not mention the top-ups”.

The December report also found an enterprise and employment co-ordinator, funded through Fás, was placed on a salary scale “exceeding the maximum of Fás funding available for the post”. The 2008 salary was €80,353, while Fás funding for the position was €68,377.

In its conclusion, the report said it was “completely unacceptable” that DICP continued to pay salaries in excess of the agreed scales.

In a statement to The Irish Times, Pobal said the March 2008 audit "raised serious issues on the administration of public funds". It said that following the audit a series of recommendations was made to DICP to resolve these issues, and that DICP subsequently reported that it had implemented these recommendations.

However, following the December 2009 audit review, the actions had not been completed “contrary to the information supplied to Pobal”, the statement said. No further contracts will be offered to DICP after May 31st, meaning that no further funding will be given to DICP to administer.

The DICP board, which usually includes three members of Dublin City Council – Lord Mayor Emer Costello, Independent Mannix Flynn, and Sinn Féin councillor Críona Ní Dhálaigh – was made aware of the situation at a board meeting on March 9th last. Mr Flynn resigned from the board.

It is understood that Prof O’Connor has also resigned, but when contacted yesterday she said she had no comment to make. Mr Connolly said he was not in a position to comment last night.

Mr Flynn said he wanted a full investigation conducted into all transactions between DICP and the organisations they were funding.

“There needs to be a complete reconfiguration of the way these funds are rolled out so that communities are not held hostage by these middle men,” he said.

Ms Costello, who was appointed to the board last January, said she was “completely alarmed” by the Pobal report, and had not previously been aware of the issues raised. It was “unforgivable” that problems had been flagged by Pobal in 2008 and not dealt with, she said.

She said she would be attending a DICP board meeting tomorrow and said she felt she would be letting down the communities who received funding if she resigned at the present time. “My primary concern is for the large number of groups DICP supports. Local organisations and community groups must not be made to suffer.”

Ms Ní Dhálaigh said it was vital to community groups that DICP remains as an entity, and if questions needed to be answered they would be.

THE DUBLIN INNER CITY PARTNERSHIP: ITS ROLE

The Dublin Inner City Partnership (DICP) was one of 12 development companies set up in 1991 under the Programme for Economic and Social Progress (PESP).

It was established to fund community groups and projects in areas of acute disadvantage.

It focused efforts on particular groups including long-term unemployed, socially and economically disadvantaged women, young people at risk, Travellers, people with disabilities, the homeless, ethnic minorities, lone parents, ex-prisoners and households on low incomes.

It has funded a large number of community organisations such as Inner City Organisations Network (ICON), the North West Inner City Women's Network, the South West Inner City Network, O'Devaney Garden's Development Forum and a number of Community Development Programmes. It ran Local Employment Services, provided assistance to community creches and provided training and workshops for community workers and childcare providers.

Funding for DICP was principally supplied by the Department of Community, Rural and Gaeltacht Affairs and was allocated by Pobal.

Accounts for 2008 show that DICP received €2,609,688 in funding. Pobal funding accounted for €1,428,363. Funding from Fás was €1,129,019. Dublin City Council gave €17,000. Local Drugs Task Force funding of €26,215 and sundry funding of €9,269 was also received.

Its independent chairwoman, Prof Joyce O'Connor, former president of the National College of Ireland, resigned after almost 10 years in the position.

POBAL: ITS ROLE

Pobal administers funds on behalf of the Government. The programmes used to fund DICP were the Local Development Social Inclusion Programme, the Millennium Partnership Fund and the Immigration Integration Fund.

Pobal has a remit to manage Government funds in a transparent and prudent manner, to provide guidance and support on organisational management and governance, and to conduct independent audits of beneficiaries based on risk analysis.

It audited DICP in March 2008 and made recommendations for reforms that needed to be made. It conducted an audit review in December 2009 and found the changes had not been made as agreed. The board of Pobal met on April 1st last and decided no further contracts should be offered to DICP as of May 31st. This means no further Government funding will be allocated to DICP.

In a statement, Pobal said it now intends to enter into direct funding agreements with the community groups and organisations previously funded through DICP in the inner city so that services to communities will be maintained.