Charity agrees to pay €125,000 of a €500,000 debt it owes State over the next 4 years

A charity working with vulnerable adolescents has agreed to pay €125,000 of a €500,000 debt it owes the State over the next four years, after civil servants rejected a proposed 50-year repayment plan.

Don Bosco Care runs six residential homes for 31 adolescents in Dublin, and receives funding from Tusla, the child and family agency.

The debt relates to the salary of Brian Hogan, who was chief executive of the charity from 2013 to 2018, on a temporary transfer from Oberstown detention centre. The secondment agreement stated the charity would receive invoices from Oberstown or the Department of Children for payments to cover his public sector salary.

In a letter dated July 19th, 2018, chairman of the charity’s board Tony McPoland wrote to then minister for children Katherine Zappone, stating “no invoices were ever received,” despite repeated queries.

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The charity then mistakenly believed it was not responsible for paying the salary. However, near the end of Mr Hogan’s contract, Oberstown indicated it would be issuing a bill for his salary for the five years, amounting to more than €500,000.

In the letter to Ms Zappone, the charity said the mix-up was “the most serious crisis” it had ever faced.

If it had to recognise the liability on its accounts it would be deemed insolvent, and the charity would be forced to shut. The charity proposed to repay €10,000 a year for 50 years to cover the debt.

In a letter on October 2nd, 2018, department secretary general Fergal Lynch, said this proposal could not be accepted, and the charity should “fully explore all options” to repay the public funds.

Correspondence between the charity and the department over the debt was released to The Irish Times under the Freedom of Information (FoI) act.

In a January 30th, 2019 email, Mr McPoland asked the debt be written off in full given Oberstown “did not miss the money” while paying Mr Hogan’s salary as Don Bosco chief executive.

Mr Lynch said it was not possible to write off the debt, and asked the charity for a “realistic repayment” plan, suggesting €50,000 a year for 10 years.

Mr McPoland told the department in December 2019 the charity was “not in a financial position” to repay €50,000 a year.

He said Oberstown and the department “should take their share of responsibility for their inaction” on the matter, and each write off a third of the debt.

In response, the department said it could not write off any of the debt, and it was “inconceivable” that the charity “would not have expected to have been requested to repay these costs”.

Mr McPoland told the department in February 2020 that this was a “hugely disappointing response.” He said the charity would be able to pay €25,000 for the next five years from its fundraising income.

Last March the charity’s board considered selling some assets to help pay the debt, including its head office on Clontarf Road, but decided against this.

The charity and the department finally agreed to a repayment plan on December 10th, 2020, with €25,000 to be paid a year for five years, at which point the arrangement would be reviewed.

The contract states the remaining funds will fall due at the end of 2024, unless a further repayment plan for the rest of the debt is agreed.

In a statement, the charity said “as an affordable payment schedule has now been agreed insolvency is no longer a risk”.

“While our services and the quality of care we provide will not be affected...a significant sum of money such as this will have some impact on the charity,” it said.