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Charity wrongly paid €84k to two former trustees, who were parents of the CEO

The Charities Regulator carried out the investigation into the charity Ataxia Ireland.

File photo
File photo
Image: Marcel Derweduwen

AN INVESTIGATION INTO a charity for people with a disorder of the nervous system has discovered it wrongly paid a total of €84,009 to two former trustees, who were parents of the CEO.

The Charities Regulator carried out the investigation into the charity Ataxia Ireland.

The investigation found that payments to two former trustees – totalling €84,009 between January 2008 and April 2016 – were “contrary to the Revenue’s stated position” that officers, directors and trustees of a charity should carry out their duties without payment.

It was discovered that the two former trustees were the parents of Ataxia Ireland’s CEO Barbara Flynn.

The report stated that the “only payment that is acceptable is the repayment of out of pocket expenses to officers, directors and trustees”.

Ataxia Ireland was founded in 1980 to help people with Friedreich’s Ataxia, a genetic and progressive disorder of the central nervous system.

The Charities Regulator appointed two inspectors in November 2016 to investigate the charity following concerns it received.

The regulator has written to the trustees of Ataxia Ireland requiring the implementation of a series of corrective actions, identified by the inspectors following their investigation.

The charity trustees have been given 21 days to respond following the publication of the inspectors’ report today.

The Charities Regulator CEO John Farrelly said:

We have written to the charity trustees to instruct them that we require an action plan which addresses the inspectors’ recommendations.
If we are not satisfied with the response from the charity trustees we reserve the right to intervene under section 74 of the Charities Act 2009 to ensure the charity is protected.

The inspectors found that the CEO of Ataxia Ireland didn’t tell the charity’s other trustees about these payments made between January 2014 and June 2015 or that they were in conflict with the Revenue’s stated position.

The two founding trustees didn’t tell the wider management committee that worked for Ataxia Ireland between January 2015 and mid-2015 about the payments they received.

Pension contributions

The report found that there was a fundamental weakness in the financial management and control of the charity between 2014 and mid-June 2015.

The charity had paid the employee pension contributions of the CEO (totalling around €38,500) and another staff member (totalling around €900) rather than deducting these payments from their salaries.

This began in July 2010 and hadn’t been identified until October 2016.

Recommendations

The inspectors have recommended that the Charities Regulator obtains undertakings from the charity trustees to implement a detailed action plan to address the deficiencies.

The recommendations also state that the charity trustees must determine whether the payments made to the two founding former trustees are recoverable.

The charity must also implement a formal arrangement with the CEO to recover the overpayment of employee pension contributions.

The Charities Regulator has also met with the HSE, a primary funder of the charity, to “get assurances that services provided to Ataxia Ireland’s service users are maintained, while required actions are being addressed”.

Ataxia Ireland told TheJournal.ie that it was not in a position to make a statement on the report today.

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