Charity wrongly paid over €84,000 to CEO’s parents

A charity where payments in excess of €84,000 were made to the chief executive’s parents contrary to explicit instructions of Revenue has been given 21 days to come up with a plan to get its affairs in order, writes Catherine Shanahan.

Between January 2014 and June 2015, Barbara Flynn, CEO of Ataxia Ireland, failed to inform the charity’s other trustees of the payments to the two founding trustees — her parents.

The charity’s questionable financial practices are outlined in a report by the Charities Regulator who appointed inspectors last November to investigate its affairs after concerns were raised.

John Farrelly
John Farrelly

Among the damning findings are:

  • Ms Flynn’s parents were paid €84,009 between January 2008 and April 2016, even though Revenue had told the charity that trustees should carry out their duties without payment, other than reasonable out-of-pocket expenses;

  • Ms Flynn’s parents did not disclose to the wider management committee that served between January 2014 and mid-2015 details of any payments they received;
  • Failure to disclose the payments inhibited the ability of anyone examining the financial statements — including funders or members of the charity at the AGM — to have any knowledge of the payments.

Inspectors concluded there was a “fundamental weakness in the financial management and control of the charity between 2014 and mid-June between July 2010 and October 2016”.

Further evidence was the fact that the charity paid Ms Flynn’s employee pension contribution, totalling around €38,500, rather than deducting these payments from her salary, for more than six years.

The regulator received the inspectors’ report this week and wrote to the trustees informing them of the need to overhaul the charity, including determining if the money paid to Ms Flynn’s parents is recoverable and putting in place an arrangement with Ms Flynn to recover the overpayment of employee pension contributions.

Charities Regulator John Farrelly said if they are not satisfied with the response, they can apply to the High Court to ensure the charity is protected.

The report has been furnished to Revenue and the regulator has also met with the HSE “as primary funders of Ataxia Ireland CLG” to get assurances that services are maintained, “while required actions are being addressed”.

Ivan Cooper, director of public policy at The Wheel, an umbrella body for voluntary and charitable organisations, said trustees of a charity should not be paid for their work — “it is a voluntary role”.

“Trustees should also be aware that conflicts of interest might arise where relatives serve on boards that control significant funds,” he said.

Friedreichs Ataxia is a genetic and progressive disorder of the central nervous system which usually manifests in children between the ages of six and 16. General symptoms are clumsiness, difficulties with balance, lack of co-ordination and, in time, a slurring of speech.

This story first appeared in the Irish Examiner

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