Red Cross denies financial allegations

 

THE IRISH Red Cross Society has rejected claims of financial irregularities and says it has made great strides to improve how it is run.

Senior officials told the Dáil public accounts committee yesterday specific allegations made against the charity were untrue and without foundation.

Chairman David O’Callaghan expressed disappointment the allegations had been made. These included a claim that money was diverted from the Haiti appeal of two years ago to other uses, a claim that the society was misrepresenting its assets or that there were irregularities in its accounts.

He acknowledged that “for a time” the Red Cross did not keep pace with standards of best practice in relation to governance and oversight. However, it had recognised this weakness and huge strides had been made in developing the society’s governance and supervisory framework.

These included a reform of its constitution, the introduction of codes of conduct, the establishment of an audit committee and a framework for control and oversight of branch finances.

Officials of the Red Cross were called to answer questions after committee members last year discussed allegations concerning corporate governance, including one that some €160,000 collected for those affected by a tsunami in Asia remained for a number of years in a bank account in Tipperary.

Chief executive Donal Forde explained that the society did not have the resources to deal with the huge volume of funds raised in the tsunami appeal. However, he insisted no additional resources had been provided for the finance department. At the time, each Red Cross branch set up its own account and the money it raised was held locally. An administrative failing had occurred but very different processes applied today.

Mr O’Callaghan agreed it was “a mess” and the matter should have been spotted earlier.

Mr Forde pointed out that there was no allegation of misappropriation of money against the society. “This was more in the space of bad administration, bad governance, bad controls.” Both men took up their posts in the last year, after the period from which the allegations date.

The society plans to reform its executive committee to limit board members to two three-year terms. They must then go off the board for three years before being eligible to serve again.

Members of the committee criticised the failure to make this provision retrospective. Fine Gael’s Eoghan Harris pointed out that one member had been on the executive committee for 21 years already. He asked whether it was wise to allow a person to spend 27 years on a board.

The meeting heard that the Red Cross spent €140,000 on legal fees in the year it took legal action against an internet service provider to force it to reveal the name of a blogger who was critical of the organisation. That person was dismissed and is taking an employment case against the society.

Earlier, Labour TD Anne Ferris said serious questions had to be answered in relation to Goal in the light of an audit carried out.

Ms Ferris said she had concerns about the board of the agency, the kidnapping two years ago of two Goal staff in Sudan and the fact that documents had not been made available to the auditors. Goal had received €14 million in State support from the taxpayer, she pointed out.

The committee agreed to write to secretary general of the Department of Foreign Affairs David Cooney to ask if he was satisfied this had been spent correctly.