Audit finds Rehab used State funds for PR, lobbying

Department gave €5m on basis it be used ‘for charitable purposes only’

An audit carried out by the Department of Justice found that Rehab used €700,000 in public funding provided under the charitable lotteries scheme on communications, marketing and hospitality costs linked to lobbying activity.

This funding was provided on the basis it be used for charitable activities only and not for administrative purposes, according to the audit report.

Rehab has strongly disputed the findings and said the audit reports demonstrated a “serious and material misunderstanding” of the charity lottery compensation fund.

Last month, Minister for Justice Alan Shatter cited the findings of the audit when he highlighted low profit margins in Rehab lotteries.

The full details of the audit have only now come to light and reveal wider concerns among auditors over a "lack of clarity" on where public funding was being spent.

'Administrative costs'
"It is internal audit's opinion that some of the costs outlined in the details above are administrative costs and are not in line with the condition that the grant cannot be used for administrative purposes," the audit report states. The report focuses on how €5.6 million in State funding provided to the organisation by the Department of Justice in 2010 was used.

Lotteries fund
This money was part of a Charitable Lotteries Fund, established in 1997 by the government to provide additional money to private charitable lotteries whose products were in direct competition with the National Lottery.

The Department of Justice audit report said Rehab had received almost €26 million in funding under this scheme in the five years between 2007 and 2011.

It found that in 2010:

Just under €3 million was spent on building and property repairs.

Almost €2 million went on information technology and office costs.

Almost €700,000 was spent on advocacy, communications, professional fees and “hospitality associated with advocacy and lobbying”.

Rehab’s expenditure on advocacy and promotions included professional fees to pay for its magazine, annual report, lease costs of staff vehicles and subscriptions to public relations organisations.