Thursday, December 16, 2010
Failures by Irish Red Cross Tipperary Branch over a number of years "a serious governance issue for the IRC" according to internal report
In addition to the oral debate involving the above three senior politicians numerous others had put down written questions on the Irish Red Cross which were replied in writing by the Minister (all available on the Oireachtas Debates website, 15th December 2010). The Minister unfortunately gave his standard 'non-answers' to these questions. The following are the politicians who had questions down for answer while the last two (7 and 8) made reference to Noel Wardick's dismissal in the Seanad (Senate, Upper House of Irish Parliament) during debates on Whistleblowing legislation:
1. Ciaran Lynch, Labour
2. Liz Mc Manus, Labour
3. Joe Costello, Labour
4. Brian O' Shea, Labour
5. Jim O' Keefe, Fine Gael
6. Kathleen Lynch, Labour
7. Senator David Norris, Independent
8. Senator Ronan Mullen, Independent
The purpose of this article is to formally respond to the Irish Red Cross internal investigation report into the Tipperary Branch:
The Irish Red Cross has now carried out an internal investigation into its Tipperary Branch following relentless pressure from the media, Dail Eireann (Ireland’s national parliament) and this Blog. For over two and a half years the Irish Red Cross steadfastly refused to investigate the discovery of an undeclared bank account within the Tipperary Branch containing €162,000, collected from the general public for victims of the 2004 Asian Tsunami. In the end, however, the Society had no option but to investigate following a barrage of continual and ever louder criticism. Irish Red Cross refused to carry out an independent investigation and instead opted for an internal one carried out by three members of its current governance structures. Despite serious weaknesses and fundamental flaws the report contains some damning findings not least of which is the total failure of certain officers of the Irish Red Cross Tipperary Branch, including Mr. Tony Lawlor, current organisational Vice Chairman, to adhere to Irish Red Cross financial and accounting rules and procedures. The full Irish Red Cross internal investigation report can be found on-line at:
Below is this Blog’s formal response to that report:
A response to the Irish Red Cross Internal Investigation Report into the Tsunami Tipperary Bank Account
The Irish Red Cross has appointed an independent accounting firm to investigate how €162,000 of donations to victims of the Asian Tsunami went untouched for over three years in a Tipperary bank account-saying it has “nothing to hide”-5th September 2010, Sunday Independent
The Irish Red Cross, which has been dogged in recent months by high turnover of senior staff, allegations of improper governance, financial mismanagement and operating in a “toxic” culture, has abandoned its independent inquiry into how €162,000 in donations languished in a Tipperary bank account controlled by a former acting Chairman (Tony Lawlor) for three years-10th October 2010, Sunday Independent
This trawl (of Bank of Ireland accounts in the name of IRC) led to the uncovering of 49 unreported accounts amounting to €214,000 of which the Tipperary account of €162,960 was the most significant. Also of concern was that the IRC HQ did not receive any of the required returns from the Tipperary branch in 2005 and 2006 while the 2007 returns were not submitted until November 2008 even then they were incomplete i.e no bank statements or reconciliation. This is a clear breach of IRC rules and should have resulted in the branch being issued with a final warning, and if matters remained unresolved being closed down. A further concern was that when the 2007 return was submitted by the Tipperary Branch there was no mention of the Tsunami account, the existence of which was formally discovered by the IRC HQ in April 2008 when the Bank of Ireland report on all accounts held in the name of the IRC was examined in IRC HQ-Internal Irish Red Cross report, December 2010
Mr. Tony Lawlor remains Chairperson of the Tipperary Branch and Vice Chairman of the Irish Red Cross nationally.
This blog has had the opportunity to read and review the internal Irish Red Cross report into the Tsunami Tipperary Bank Account and feels it is necessary and in the public interest to formally respond on record to correct a number of worrying and serious inaccuracies as well as omissions.
A number of the report’s findings are, however, a welcome and highly uncharacteristic admission of deep rooted failings and inadequacies. The release of a press statement openly admitting these failings is unprecedented in the Irish Red Cross which is normally characterised by secrecy, deceit, lack of transparency and an entrenched reluctance to communicate openly. So despite significant shortcomings in the internal report, a number of the findings are important and help shed light on a highly dysfunctional organisation. The report’s authors should be commended for some very strong statements made in the report and the new Irish Red Cross Chairman is to be acknowledged for making the report available to the media and general public.
It is noted that the investigation was an internal one and not independent. Much criticism has been levied at the Irish Red Cross over its decision to cancel a previously announced independent investigation and instead opt for an internal one. The result of this decision is obvious. The report is seriously compromised in a number of aspects but most importantly it fails to allocate blame to those blatantly and obviously responsible for failing to declare the Tipperary Bank account to head office. If those responsible for their unacceptable actions are not held to account and seen to be held to account then the value of the report will be greatly diminished. This blog would take the view that the findings of the report warrant the immediate resignation, from all positions within the Irish Red Cross, of the Tipperary Branch officers involved.
This formal response will go through the Internal Report section by section and respond where necessary. As follows:
The report says “Interviews were conducted with Declan O’ Sullivan, Anna Marie O’ Carroll, Tony Lawlor, Eileen Keane, Des Kavanagh, Ted Noonan, John Roycroft and Bernadette Lawlor Lennon”.
The fact that the team of investigators failed to interview Noel Wardick, former Head of the International Department, means the report is fundamentally compromised as by any standard he must be considered a key participant. From reading the report and the numerous inaccuracies it is obvious that Noel Wardick’s input was not included and as a result the investigation team have misunderstood a number of important aspects of the Irish Red Cross and how decisions were and are taken. Did the investigation team have access to critically important correspondence issued over the years by Noel Wardick? No investigation could have been completed properly or accurately without access and review of these files.
The internal investigators also failed to interview Carmel Dunne, the Irish Red Cross Secretary General until mid 2007. The internal investigators failed to interview Jennifer Bulbulia, Central Council member and Honorary Secretary during the Tsunami who resigned in mid 2009, citing one of the reasons the failure by the organisation to investigate the Tipperary bank account. In addition the internal investigators failed to interview David Andrews, Chairman of the Irish Red Cross from 1999 to 2009. The decision not to interview Andrews, Dunne, Bulbulia and Wardick is inexplicable. The report is severely compromised as a result.
It is also critically important to note that the three internal investigators and authors of the internal report faced serious conflicts of interest because of the following:
1. Liam O’Dwyer and Michael Halligan were members of Central Council and the Irish Red Cross Finance Working Group at the time of the Tsunami in 2005.
2. Liam O’Dwyer, Michael Halligan and Angela Coen are all currently members of Irish Red Cross governance structures.
3. Angela Coen has at least one family member on the Irish Red Cross Training Working Group. Tony Lawlor (one of the subjects of the investigation) is also a member of the Training Working Group.
The report says “...a decision was made by the IRC Executive Committee that the money collected by the IRC (for the Tsunami) would be spent over a period of five years”
The decision to develop a five year plan and spend the money over a five year period was taken by the former Head of the International Department, Noel Wardick. This decision was approved by the then Secretary General. This blog is not aware whether or not this decision was ever discussed with the Executive Committee.
Following the recruitment of Noel Wardick to Irish Red Cross in October 2005 it was obvious from the outset that the Irish Red Cross was struggling to manage and get to grips with the scale of the donations it had received, €32 million, and how and what to spend it on. This was no different to every other aid organisation across the globe who were responding to the tsunami. When Noel Wardick first joined there was massive pressure coming via the Executive ‘to spend and to spend quickly’. At the level of the Executive there was a fundamental dearth of knowledge and understanding around operating and implementing direct country operations overseas and the complexities and challenges of working in such environments. The Secretary General at the time, Carmel Dunne, was particularly supportive during these initial months and as such much progress was made. The priority in those first months after Wardick’s recruitment was to build the capacity of the International Department in Dublin and equally importantly the capacity of IRC overseas teams to ensure the Society could guarantee the effective use of the public’s money. What is most disappointing about the Irish Red Cross internal report is its attempts to link the weaknesses and lack of capacity in the head office finance department during the years 2005-2010 with the unacceptable failure by officers of the Tipperary Branch to declare and submit the €162,000 collected for the Tsunami. The weaknesses in the head office finance department had absolutely nothing to do with the Tipperary Bank Account situation. IRC has very clear procedures and policies in this regard and these procedures were in existence and known to all branches in 2005. All blame for the undeclared Tipperary Bank account rests 100% with those officers in Tipperary who knew about the money and failed to declare it. No blame for this can be attributed to any staff member as it was not their responsibility to report branch accounts. Equally importantly if staff did not know of the existence of accounts because the information was withheld from them they could not be expected to do anything about it. On this critical aspect, blaming the finance department, the investigators have erred significantly. It was very obvious, however, from October 2005 that the Irish Red Cross had a fundamental lack of capacity within its head office finance department. This point was made abundantly clear over a five year period and requests for change and improvement were constantly made. Many improvements have been made to the finance department but it is still significantly short of capacity and experience. The decisions not to recruit additional finance staff to support a massive international disaster response operation and a growing complexity in the organisation's activities was a serious mistake and one presumably made by the Executive Committee. They must be held accountable for this grave error in judgement. Nevertheless it must again be pointed out that even if the Irish Red Cross had sufficient capacity in its head office finance department the Tipperary bank account situation would still have arisen simply because if head office does not know bank accounts exist then they cannot do anything about them. The internal investigators have made a big error in trying to explain that the failure by Tipperary branch officers to declare the Tsunami bank account was because of a weak and short staffed finance department in Dublin. Nothing could be further from the truth. Yes the finance department was weak and short staffed but this in no way contributed to or can explain the failure by Tipperary branch officers to carry out their duties and declare and submit the money to Dublin until it was discovered during a secret internal audit nearly four years later.It is important that the internal investigators are made aware of the very robust financial accounting procedures and systems implemented by the International Department in all its overseas operations. For example in Indonesia and Sri Lanka the International Department recruited expatriate finance controllers to oversee all financial and administrative matters relating to each country. The respective finance controllers then established a finance and administration department within the country operation which was then staffed with numerous skilled national staff. As an example the Irish Red Cross national finance officer in Sri Lanka (who reported to the expat Finance Controller) was a qualified accountant. The Irish Red Cross finance department in Indonesia was bigger and more resourced than the finance department in Dublin. The reason the International Department had a highly skilled and properly resourced finance and administration department in all its overseas operations is because the Executive Committee was not involved in such decision making. In 2005 the Irish Red Cross finance department had no Finance manual or guidelines for its overseas operations and little apparent interest in developing one. During 2008/09 the International Department unilaterally decided, with Secretary General approval, to take on the development of a finance policy in this regard and a comprehensive one was researched and finalised.
The refusal to properly staff the head office finance department and other head office departments was done consciously by members of the Executive Committee, in the view of this Blog, to ensure they maintained total and micro control over the workings of the Society. None of these weaknesses can, however, be used to explain away the failure by the Tipperary branch officers to carry out their duties and declare the Tsunami bank account.
The internal report states “The concerns identified by both the auditors and the consultants were compounded by human resource issues arising in the IRC HQ. On top of which the sudden departure of the then Secretary General in mid 2007 left a leadership gap in the organisation. In any consideration of the matters which later emerged this context is important since it shows a picture of an organisation operating in an outdated manner with poor systems and under resourced and demotivated staff”
The last sentence in the quote above is accurate and to be welcomed. It recognises that the Irish Red Cross was and still is a highly dysfunctional organisation controlled by a handful of people on the Executive Committee. Ms Dunne’s ‘sudden departure’ was all to do with her desire to reform the organisation and smash the power bases of the ruling elite on Executive. For this she was rewarded with a ‘sudden departure’. Once again while the internal investigators have identified a range of human resource and staff morale problems none of these were responsible in any shape or form for the failure of Tipperary branch officers to declare the tsunami bank account to head office as they were fully obliged to do. It is very disconcerting that the internal investigators seem to be attempting to put the decision not to declare the Tipperary account down to a range of other problems that existed within the Irish Red Cross at the time. These problems did exist and they were serious but they in no way explain the Tipperary back account situation. It is very simple. The Tipperary Branch has an appalling record over a number of years of not reporting its accounts to head office. It is the considered view of this Blog that the Tipperary branch has been afforded protection against sanction because the Chairman of the Tipperary Branch also serves as the Vice Chairman of the national Executive Committee. There is an unacceptable conflict of interest here. The people who are clearly breaking the organisation’s rules and procedures are also the same people who not only determine those rules and procedures but are responsible for issuing sanctions if and where those rules and procedures are broken. It is because of this unacceptable conflict of interest and concentration of power that certain individuals have always felt themselves above the ‘rules of the organisation’. It is the view of the Blog that branch officers should not be permitted to sit on the national Executive Committee. Just as County Councillors must resign when elected to the Dail branch officers should also resign when elected to Executive.
One of the primary reasons the Tipperary situation arose is because certain individuals felt they could operate with impunity. Unfortunately they did operate with impunity and continue to operate with impunity. They believed they were untouchable and accountable to no-one. The Tipperary saga has nothing to do with short staffing or lack of resources in headquarters. It happened because certain people flagrantly breached the organisation’s rules and were never held to account. The reason they were not held accountable is because they were the very same people who decide who is accountable and who is not.
The internal report says “The account remained open with the monies collected intact until the 23rd of September 2008 when the monies now totalling €162,960 were transferred to the IRC HQ Tsunami account”.
It is important to note that the above money was not ‘willingly’ transferred to Dublin in the truest sense of that word. The Tipperary Branch had no option but to transfer the money because a secret internal audit had discovered it and effectively the Branch was ‘forced’ to return the money.
The internal report says “There is no evidence of any movements in this account during 2005, 2006, 2007 and 2008 apart from the full transfer to the IRC and a €1,000 and a separately a €100 withdrawal and subsequent the return of same due to a misunderstanding between the bank and the Branch”
When exactly did the return of the above monies take place? Did the return of these monies take place AFTER the bank account was discovered by head office? This is not addressed in the internal report and it is a serious failing not to do so. The report also fails to address what it means by a “misunderstanding between the bank and the branch”. What exactly is the nature of this misunderstanding? Was any official of the Tipperary bank in question interviewed to ascertain their opinion on this misunderstanding? The fact of the matter is €1,000 and €100 was withdrawn from the Tsunami account. No money should ever have been withdrawn from this account as no-one apart from the International Department, with the authority of the Secretary General (and approval of Executive), has the authority to decide how public appeal money is spent. Certainly no branch officer has permission to make such decisions. Why this money was taken out of this bank account and what was it spent on before being returned is not addressed in the report. In the absence of any explanations by the investigation team serious questions must arise over this matter and further investigation is clearly required.
The internal report says “In this context it was decided at Branch level, to leave the money in the designated deposit account and transfer it as and when IRC HQ needed it”.
This statement is entirely reflective of the extreme arrogance and attitude of certain members involved in this case and their belief that they operate with impunity. First and foremost no-one in the International Department had any knowledge whatsoever of the existence of €162,000 in a Tipperary bank account designated for Tsunami projects. The former Head of the International Department at the time, Noel Wardick, was first informed by the then Secretary General, John Roycroft, by way of a phone call, sometime in September/October 2008, over six months after the account was first discovered in April 2008. As such the International Department would never have been in a position to ask the Tipperary branch to release the money ‘when it was needed’ as the International Department never knew of its existence. Secondly no branch officer has any authority whatsoever to retain monies collected for an overseas appeal. This point must be reiterated very strongly. No Irish Red Cross branch has any authority to retain monies collected for an overseas appeal. Every single Irish Red Cross branch is obligated to send every penny of money collected for an overseas appeal to Irish Red Cross HQ in Dublin as soon as is reasonably possible after the money is collected. As Head of the International Department it was then Noel Wardick’s responsibility, in conjunction with the Secretary General, to decide on how monies collected for an overseas would be spent and over what time frames. Individual branches have no hand, act or part in such decisions. It is absolutely NOT a matter for any branch officer to ‘decide’ when they will release money to the International Department. It is simply not within their authority to make such decisions. Decisions to do so therefore represent a clear abuse of power.
The internal report stated “Both the Branch Chairperson and the PRO indicated that they had no concerns about this since the account was an IRC designated deposit account not for use locally. They did acknowledge that for the money to remain untransferred for 3.5 was excessive...”
Did the internal investigators ask the Tipperary branch officers involved how long they would have kept the Tsunami money undeclared had the account not been discovered by the secret internal audit and what would have happened to the money had they not been forced to return the money to HQ? It is entirely a matter of conjecture of course as to how long the Tipperary branch would have kept this account secret but any sense given by the internal report that the money was willingly returned after 3.5 years is incorrect. The Branch had no option but to transfer the money to Dublin.
The failure of the Tipperary branch to transfer the money to Dublin was problematic for the International Department as its plans and priorities are determined based on the budget available to it. In late 2008 the International Department was already well on its way towards planning its exit strategies from direct operations in Sri Lanka and Indonesia. The announcement that the Department suddenly had an additional €162,000 meant it had to readjust all its budgets and expenditure plans. Branch officers in Tipperary including the national Vice Chairman would NOT have any detailed understanding or knowledge of overseas day to day operations and/or priorities and are not professionally qualified in the area of development and humanitarian programming. It is for this reason they have no input into day to day decision making on such matters. Their belief that they do is a prime example of their hubris.
In July 2010 the Tipperary Branch Chairman and national Vice Chairman, Tony Lawlor, did an interview with the Tipperary Nationalist newspaper where he stated categorically that the Tsunami Tipperary money had been spent. He also told the newspaper the money involved was €150,000. Upon reading this article Noel Wardick wrote a formal memo to the Acting Secretary General, Declan O’Sullivan, stating categorically that the money had NOT been spent and would not be spent until possibly late 2011 (this email was quoted liberally in the media following its leaking to the Sunday Times). The fact of the money being unspent has now been borne out in the internal report. The Wardick memo, according to the Sunday Times, also questioned why Mr. Lawlor was quoting a figure of €150,000 to the media when he knew full well the true figure was €162,000. There is no evidence from the internal report that the internal investigators raised this critical issue with Mr. Lawlor. Why is this and why did Mr. Lawlor give inaccurate information to the media? Within days of the Tipperary Nationalist interview the Irish Red Cross were forced to admit the amount involved was in fact €162,000 and that it had yet to be spent. This caused more damage to the reputation of the Irish Red Cross and no doubt confidence in the integrity of the Irish Red Cross was beginning to decline as a result of these conflicting statements and u-turns.
The internal report says “their explanation (Tipp branch) of the delay in the context of the five year plan for the expenditure of the monies is understandable....”
Had the internal investigators interviewed Carmel Dunne, former Secretary General until 2007 and Noel Wardick, former Head of International until late 2010, the above statement would likely not have been included. Officers in the Tipperary branch flagrantly broke the rules and policies of the Irish Red Cross. They failed to report or transfer money which they had no entitlement to retain for nearly four years. The Chairman of the Tipperary Branch broke, over a number of years, the very rules he as national Vice Chairman is responsible for overseeing and implementing nationally. It is not a matter for branch officers to decide when overseas money will be spent. It is a matter for the Head of the International Department in conjunction with the Secretary General (with final endorsement by Executive although Executive has no role in day to day decisions on such matters). The Tipperary branch had no authority to do what they did and as such the comment that “it was understandable” has no validity. In fact such statements implicitly endorse the unacceptable practice of blatantly and knowingly breaching organisational policy and procedure.
The internal report stated “The fact that no returns were submitted to IRC HQ by Tipperary branch for 2005 and 2006 is in our view a more serious governance issue for the IRC HQ than the late transfer of the Tsunami monies. This is compounded in our view by the fact that the submitted 2007 late returns from Tipperary branch did not feature the Tsunami account”
The above statement is very welcome. It was widely known within the Irish Red Cross that the Tipperary branch was a repeat offender in breaching organisation finance policy regarding branch accounts and submissions to head office. The matter was continually swept under the carpet and not dealt with for one reason and one reason only. The Chairman of the Tipperary branch is also the Vice Chairman of the whole Society and would be acknowledged as the ‘person who runs and controls the Irish Red Cross’. Such critically important findings as stated above must be acted upon and those responsible held accountable. Without concerted action being done and being seen to be done statements such as above will be consigned to meaningless words on paper.
In referencing a press release issued by head office concerning the Tipperary bank account the internal report says “While the press release did not identify whose error it was it did implicate the Tipperary Branch by using the phrase the “account remained there untouched". The statement could have been worded differently acknowledging the error on both sides but the reviewers feel given the publicity involved it was not an unfair press release”.
It is encouraging to see the internal report state “it was not an unfair press release”. It is, however, worrying in the extreme that the internal report would also say “acknowledging the error on both sides”. This is classic ‘internal report’ writing at its best..... compromise to keep everybody happy particularly those who are powerful, do not blame any individual, blame systems and procedures not people and hold no-one to account. The simple matter of fact in relation to this case is that there is NO error on BOTH sides. There is error on ONE side and ONE side only. A number of Tipperary branch officers took ‘the law into their own hands’ so to speak, flagrantly breached organisational policy and procedure and failed to transfer money to IRC HQ that they had no entitlement to hold until they were caught following a secret internal audit. Other weaknesses within the head office finance department contributed in no shape or form to this unilateral act by certain Tipperary branch officers.
This Blog understands that Tony Lawlor was/is the Chairman of the Tipperary Branch and his sister was the Treasurer of the Tipperary Branch. The internal report does not clarify whether a brother and sister were both signatories on the Tipperary Tsunami bank account. All good organisational practice should have very explicit policies preventing any number of ‘conflict of interest’ situations arising. One such policy is to avoid ‘blood relation’ conflicts of interest. In non family businesses and voluntary organisations it would be standard protocol not to allow blood relations be bank/cheque signatories on the same accounts. Does the Irish Red Cross have policies in this regard and if so were they adhered to?
The internal report falls very short in another key area. It provides no commentary on the total failure of those in charge in 2008, when the undeclared account was discovered, to formally investigate and report on the matter. Central Council, the supreme governing authority of the Irish Red Cross, was not informed at the time. Most Central Council members and many Executive Committee members first became aware of the matter following media reports in late 2009 and then from updates on the Blog. One of the reasons Jennifer Bulbulia, former Central Council member and Honorary Secretary of the Society, resigned was the organisations’ failure to have the Tipperary bank account investigated. It seems the internal report has demurred entirely from allocating blame to all those responsible for this sorry saga, first and foremost those who committed the wrongs (Tipperary branch officers) and secondly those who failed to investigate them. As such the report's credibility is dramatically reduced.
There are, however, a number of welcome recommendations in the internal report which need to be robustly acted upon. One statement in the Recommendations section however must be challenged and its goes to the heart of the internal report. That is the attempt to link certain weaknesses in the IRC head office finance and administration department (which were solely caused by the Executive Committee’s failure to allow various Secretaries General resource it) to the actions of certain Tipperary branch officers. This link is at best a serious error of judgement on the part of the internal investigators and at worst an attempt to protect certain Tipperary branch officers. The Tipperary branch officers involved in the tsunami account acted unilaterally, without permission, of their own volition and in blatant breach of organisational procedure which they were fully aware of. They must be held accountable for this. Head office staff or any weaknesses in head office played no hand, act or part in the decision taken by Tipperary branch officers to intentionally withhold public money collected for an overseas appeal and to not declare its existence to IRC HQ. In failing to explicitly acknowledge this the internal report, which is strong in parts, has been substantially compromised. This, unfortunately, is the nature of internal reports. It is the Blog’s belief that these serious shortcomings would not have occurred had independent investigators carried out the review.
This formal response to IRC's internal report will conclude by saying that despite the very obvious deficiencies of the report it has highlighted numerous unacceptable practices that many of us have campaigned long and hard for change on. Some of us have even been fired for trying to highlight these. The recognition of these practices as wrong is very welcome and the internal investigators should be commended for that. Had the Blog not existed, however, and had the media not got behind the campaign for reform of the Irish Red Cross one thing can be certain. No investigation, whether internal or independent, would ever have taken place. The next step now is accountability. All eyes will be on the Irish Red Cross to see how it responds. Let’s hope it meets the challenge bravely and courageously. Failure to do so will bring more reputational damage and confirm that real and genuine reform is not nor has it ever been on the agenda.
Sunday, December 12, 2010
Thursday, December 9, 2010
In addition to the Irish Times article Transparency International-Ireland, the world's leading anti corruption organisation, has issued an open letter to all central council members of the Irish Red Cross. The letter was issued December 9th via the Irish Red Cross Chairman. As it is an open letter it is now available on the Transparency International website:
The Blog author has been informed that the paper below has been posted to Central Council members. Individual envelopes with Central Council's names marked strictly private and confidential were apparently posted to 16 Merrion Square over eleven days ago. It has been reported that the paper was emailed to many Central Council members and is now widely in circulation. A request was made to the Blog author to post the paper on this Blog. Some edits have been made to the original paper. Please find the contents below:
A background paper on Irish Red Cross which outlines many of the major outstanding issues and possible questions to be put to the Executive Committee and the Acting Secretary General at the Central Council meeting of 11th December 2010.
One of the most important priorites going forward for the Irish Red Cross is for Central Council members to regain their authority as the supreme decision making authority of the Irish Red Cross, which is what they are. The Central Council is effectively the boss of the Executive and the Secretary General. The Central Council does not therefore have to ‘ask’ or ‘suggest’ what the Executive or Secretary General should do, might do etc. The Central Council has FULL power to INSTRUCT the Executive and Secretary General and has full authority to MAKE decisions and rules AT each and every Central Council meeting. Over the last twenty years two or three Executive members have completely usurped power from Central Council. This needs to be reversed immediately and the Executive and the Secretary General reminded that they report to and are instructed by Central Council and NOT the other way around.
Questions below, not necessarily in order of importance or priority:
1. The Cork Area recently voted a no confidence motion in the Acting Secretary General and two of his managers. What is happening in relation to this? Will there be a formal investigation into the matter? Perhaps if the Cork Area rep is present he/she could update Central Council members on the reasons for the no confidence motion and which two other managers were included and why. Have any other members on Central Council or Areas proposed votes of no confidence in any members of Executive or management?
2. There are rumours that some senior managers are receiving additional entitlements over and above their normal salary and pension. Could this situation be clarified and what is Irish RC policy on such matters? If it is true that such arrangements are in place what are they exactly, who made these decisions and why? And if so are the persons benefiting declaring them to the Revenue Commissioners and is Irish Red Cross declaring them as a Benefit-in-Kind payment to its employees and reporting to the Revenue accordingly.
3. A full and detailed report on the Irish Red Cross contract vis a vis the Shell Corrib Project is long overdue. Details on all expenses, costs, net profit, staffing levels and any taxation liabilities should be included in any such report as well as plans to replace the lost income once the contract expires.
4. The post for a new Secretary General was advertised in early October. Can we have an update on the recruitment process, the calibre of the candidates who applied (in general terms) and when can we expect the announcement of the appointment? Will it be before Christmas and when will the new Secretary General take up his/her role. As this maybe the last Central Council meeting for Declan O’Sullivan should this be noted in the minutes?
5. It has been widely reported in national media that the current Acting Secretary General was paid €160,000 in 2008 and €160,000 in 2009 for his services to the Irish Red Cross as a financial consultant. These are extraordinary amounts by any standard but exorbitant for a charity. It is to be noted that the Irish RC incurred substantial domestic deficits in both 2008 and 2009 so who authorised these payments and why were they allowed continue even when the organisations’ deficit went from bad to worse (over €300,000 in 2009)? Surely it would have been much cheaper and economical to hire an experienced qualified accountant who would not have commanded a salary anywhere near €160,000 per annum. Why was Declan O’Sullivan as a consultant retained continually for two years? Consultants are normally hired for specific short term projects. In 2010 it is understood the Acting Secretary General was again paid close to €160,000 if national media reports are correct. This brings his total pay, not including expenses or pension, to €480,000 in three years, nearly half a million Euro. How this was possibly authorised in such a dire economic climate and in a time when the organisation continued to run deficits remains a complete mystery? Even if Irish Red Cross was running surpluses surely these are outrageous payments to one individual. The fact that the advertisement for the new Secretary General has stated that the salary will be €95,000, a reduction of €65,000, is a damning admission that the current rate is excessive in the extreme.
6. Why did the organisation make the decision to sue Google International and UPC instead of attempting to address the long list of problems outlined in the Blog? The Irish RC engaged in an obsessive witch hunt which has cost and continues to cost the society tens of thousands of Euros in legal fees and caused much criticism in national media and on Ireland’s leading web discussion forums. There were also raised eyebrows by the International Red Cross in Geneva although their official position has been ‘that it is a matter for the Irish RC’. They nevertheless had to issue a global ‘advisory notice’ to all 186 national societies around the globe informing them of the Irish Red Cross action.
7. Apart from members and staff no one was reading the Blog or knew about the Blog until the decision to sue Google shot the Irish RC into the media spotlight. Google International is a major donor to the International Red Cross ($50,000 a month) as well as €10,000 worth of advertising to the Irish RC per annum. Why is the Irish RC continuing to sue Google International when we know the Blog author is Noel Wardick? This continuing legal action is causing embarrassment to the organisation especially given that it has stated it wishes to find out the names and IP addresses of every individual who has posted comments on the Blog. This is insanity as there are over 340 comments on the blog and Google has indicated they intend to fight this. It is also perfectly legal for people to post comments on a blog even if the Irish RC does not like what they say. So what exactly does Irish RC plan to do if, in the highly unlikely event they beat Google in a court case, they get the names and IP address of everyone who posted comments? Are they going to squander additional hundreds of thousands of Euros taking multiple legal actions against people who haven’t even broken a law?!
8. What is the total amount of legal fees incurred by the Irish RC in 2009 and 2010? Why is it that the Irish RC is nearly perpetually engaged in legal action of some sort over two decades? Where is the money coming from to pay these legal fees? Are we using tax payer money? Are we using public donations? If not what source of income are we using to cover these vast sums of money? Has any donor given us permission to spend their money in such a manner? The financial accounts declare that €115,000 has been set aside for legal fees in 2010. This is a massive amount in legal bills for a small charity like the Irish Red Cross. €115,000 could do extensive lifesaving work in Africa or in community services in Ireland, or mountain and lake rescue. This is a totally avoidable and unnecessary expense.
9. How much is David Curtain, Media Consultant, costing Irish RC? How much is Philip Carney, Human Resource/Industrial Relations Consultant costing? How much is Eugene Flynn, IT/Web Consultant costing? Curtain and Carney have been extremely busy in 2010 and have made huge sums of money on the back of Irish RC dysfunction. As with point 8 what income source is Irish RC using to pay these huge expenses? The public, tax payer and businesses are not giving us money to waste huge sums on consultants and legal bills. According to the accounts €27,000 was spent by the Fundraising Dept on ‘professional fees’ in the first nine months alone while the Communications Dept spent €37,700 on consultancy and media monitoring’ between January and September 2010. When legal fees, audit fees, consultancy fees for the first nine months of 2010 are added up the organisation has incurred approx €250,000 in fees. Include the Acting SG salary and the figure goes to €410,000. This is totally unsustainable for Irish Red Cross. This is the equivalent to an extra 10-12 full time staff on an average salary of €35,000.
10. Can the leadership comment on the absolutely torrid industrial relations environment that has prevailed at head office since late December 2009? The staff have taken the Acting SG to the Labour Relations Commission (LRC) twice and they also sought a hearing at the Labour Court. His ‘proposals’ for ‘reform’ were bitterly contested and were voted down by staff in June. This was not because staff are unreasonable, it was because the proposed changes were unnecessary, extremely poorly thought out and negotiations were destroyed by the deep mistrust that exists within the Society. No solution to these deep rooted problems appears any closer than this time twelve months ago. Anyone who talks to staff knows there is a very deep and intense anger, suspicion and frustration with the approach, manner and attitude of certain senior individuals.
11. A VERY important question: In September 2010 the Irish RC announced it was hiring an independent accounting firm to investigate the Tipperary bank account fiasco which has caused so much damage to the reputation of the Irish RC. The organisation intended to hire a firm of forensic accountants called Mazars. There was no selection process, no tendering and no advertisement for submissions. Four weeks later Irish RC announced they were cancelling the investigation and instead would conduct an internal review. This has led to very negative coverage in the national media and on web discussion forums. Fine Gael and Labour continue to demand an independent investigation. Fine Gael stated ‘an internal review simply wouldn’t be credible’. This whole episode has been a disgrace for the Irish RC.
12. Re the Tipperary bank account can the Vice Chairman explain why he failed to report the existence of the €162,000 tsunami money in the Tipperary branch end of year submissions to Dublin in 2005, 2006, and 2007? The money was discovered following a secret internal audit in 2008. Can the Vice Chairman explain what would have happened to that money if the internal audit had not discovered it? What were the plans for that money since for nearly four years it was not transferred to Dublin as it should have been done in 2005?
13. Does the Vice Chairman not feel that such a massive and unacceptable mistake, which betrayed the victims of the Tsunami who the money was intended for as well as the people of Tipperary who trusted the Irish RC with their donations, constitutes a resigning offence? Why did he not immediately step down from all his positions within the Irish RC? Why were neither Executive nor Central Council formally informed of this grave situation? Why did Central Council members have to find out about it in the media? Why was the matter swept under the carpet?
On 29th July 2010 the Vice Chairman was quoted in the Tipperary Nationalist as saying the missing money amounted to €150,000 and that it had now been spent on tsunami projects. Why did the Vice Chairman say this when 1. The amount of money was €162,000 and 2. The money had not yet been spent (Noel Wardick confirmed the money had not been spent). When the media found out the missing money was €162,000 the Irish RC had to admit that to be the case. Mr. Lawlor knew exactly how much was involved so why did he discuss an inaccurate and lower figure with the media?
14. Why did the Irish Red Cross not immediately launch a detailed and comprehensive investigation into the Tipperary bank account in 2008 and in the interim suspend Mr. Lawlor? The organisation was quick to suspend Noel Wardick while his situation was investigated. Now that an internal investigation is ongoing why has Mr. Lawlor not been suspended pending its outcome like Noel Wardick was? Are there different rules for Mr. Wardick and Mr. Lawlor? Who is making these decisions?
15. Will Noel Wardick be interviewed as part of the internal investigation into the Tipperary bank account? As the former Head of the International Department he is the only person who can confirm that his department had no idea about this money until late in 2008. He is also the only person who can confirm that while the money is now with the International Dept. it has not been spent and will not be spent until 2011. Mr. Wardick will also be able to confirm that he wrote to the then Secretary General, John Roycroft and Declan O’Sullivan, Finance Consultant, in late 2008, expressing his views on the matter and outlining the actions he felt would be appropriate.
16. Jennifer Bulbulia, a woman of the highest personal and professional integrity resigned her position on Executive (honorary secretary) and Central Council citing one of the reasons the failure to investigate the Tipperary bank account. The matter was eventually exposed in the media but despite the terrible damage the organisation’s inaction has done the Irish RC still refuses to independently investigate the circumstances.
17. Why has there been no governance reform of the Irish RC for over 20 years? Why is governance reform always ‘in process’ or ‘something we are working on’? But never any results? Governance reform within the Irish RC commenced in 1999 but eleven years later no concrete results have been achieved.
18. Why have certain members of Executive and Central Council served in their positions, in some cases, for up to 20 years? This is in clear violation of standard good governance practice and also in breach of International Red Cross guidelines on corporate governance. This longevity and refusal to step down by long serving members is the single biggest contributing factor to the deep crisis within the Irish RC. New legislation in the Dail is NOT required for people to step down and set a good example re governance and maximum terms of office. Why, for example, does Mr. Lawlor feel it appropriate that he remain Vice Chairman for twenty years? This is a very bad example. Would Mr. Lawlor not consider setting a good example by stepping down from his VC role, Executive position, Central Council seat and all committees he sits on and refrain from presenting himself for appointment to any of these posts for a minimum of 3 years? If not why not? Would others who have served over ten years not consider doing the same? This would allow an injection of new people and fresh ideas, something that is essential for an organisation’s survival and development. Central Council has the authority to determine maximum terms of office. It’s clearly stated in the rules of the Irish RC. Legislative change is not required. It’s a guise used by those determined to prevent any real reform.
19. Why was the Tom Finlay governance reform report not implemented in 2005/06? Why is the Downer report a much watered down version of the Tom Finlay report which will do nothing to reform the Irish RC but rather will preserve the status quo? Why was the Downer Governance Reform process conducted internally and not externally like the Tom Finlay report? Why is it that at least one member of the internal governance reform working group has served in office for twenty years? Can it reasonably be expected that such people will develop proposals to put themselves out of office?
20. Why does the Downer report not take into account previous years served on the Executive and Central Council when considering maximum terms of office and when one has to step down? It is very poor practice not to consider service to date when considering who must step down and who mustn’t. As an example if the Downer report goes through at least one individual, who has served for twenty years already, could serve for the next six years. He would then only have to step aside for one year and then he could serve for another six years. This would imply he would serve for 32 years out of 33!!! This is NOT governance reform. Also why is the time period one must step down for only one year when the Downer proposals are that a term of office is 3 years? It would be normal practice that individuals step down for a minimum of one full term and not one third of a term.
21. Why was there no General Assembly in 2007 and 2009 like there was supposed to be? Cost excuses are not acceptable. 2007 was in the middle of the Celtic Tiger. It is also not acceptable to cancel a key component of organisational democracy because of logistical or cost reasons. This is nonsense. It’s very simple and straightforward to organise and has been very successfully done before. The Irish RC has no compunction spending hundreds of thousands of Euros on consultants and legal fees but refuses to organise an all member conference for over five years. Is the real reason simply another attempt to silence debate and quash reform and democracy? It is a matter for Central Council to decide such matters and instruct the Executive to organise and not the other way around. If Central Council instructs Executive to organise a General Assembly in early 2011 then they must go ahead and do it. It’s that simple. Whether Executive like it or not. If Central Council so choose they could instruct the Executive to organise a General Assembly for February 2011, as an example.
22. The 2008 and 2009 audited financial accounts have clear written statements by the external auditors BDO that the Irish Red Cross has failed to record its property portfolio in its financial accounts and that this is wrong. The auditors state that the Irish RC is at variance with the Standard Practice of Accounting for Charities. This is unacceptable and so is the Irish RC response to questions on this ‘that we are working to rectify it’. The Irish RC has been saying this for more than 3 years, possibly longer. The accounts say Irish RC properties are insured for €7 million. This implies a massive property portfolio. Where are these properties? Who is using/living in them? Why is the Irish RC not receiving large rental income on a monthly basis? Is there rent being paid? Who is receiving it as there is no rental income in the accounts? Are we paying rates on these properties? Where are all the deeds for these properties? Are they held in head office? Why is there not a defined Property Management Strategy for the Irish Red Cross? Why were some of these properties not sold during the celtic tiger so the money could be invested back into the organisation? The Central Council should demand a full detailed list of all Irish Red Cross properties to be issued to each CC member within three days of the Central Council meeting. If the Irish RC has insured its properties for €7 million then the details of each and every property will be contained in the formal insurance document so there is no legitimate reason the Irish RC can continue to refuse to release this information to its supreme governing body. Serious questions must be asked why this information is being purposefully withheld from financial records, against standard accounting policy.
23. The Irish RC has a practice of allocating large amounts of money intended by the general public for overseas appeals to the domestic general fund. This is a fundamentally and morally wrong practice. Irish RC does this during an appeal because often a member of the public may not specifically mention the appeal when giving the money but presumes the Irish RC knows that is their intention because of the major overseas disaster that has taken place and in light of the major publicity campaign for the overseas appeal on radio, tv and in print being carried out by the Society. Any independent examination of the domestic general fund will reveal huge surges in income which coincide exactly with overseas disaster appeals. Over the years millions of Euros intended for emergency response overseas has been intentionally and deliberately diverted to the domestic general fund. This is a scandal waiting to explode in the face of the Irish RC. Who is responsible for this practice and what is going to be done to hold them accountable?
24. The Irish RC is reporting in its 2010 accounts that it is close to breaking even. This is because at least €600,000 intended for overseas appeals has been recorded to the general fund thereby massively inflating domestic income which is then used to offset domestic expenditure. If this figure was not included (and it should not be included) and properly sent overseas as intended by members of the public the organisation’s figures would show a large deficit, as happened in 2008 and 2009. Therefore the reality is clear: Irish Red Cross is again running a very big deficit and no amount of allocating overseas monies to domestic operations can hide this.
25. For the first nine months of 2010 the accounts show that the following departments are running large deficits: Head Office -€696,000, Services and First Aid -€303,000, Communications -€39,000
26. Transparency International, a highly respected global organisation, which monitors corruption and abuse of power, has called on the Irish RC to hold an independent investigation into the claims made by Noel Wardick and to have him reinstated immediately. Labour and Fine Gael have called for independent investigations into the Irish RC. Staff in 1999 went on RTE 1 with Charlie Bird and called for an independent investigation. What is the Executive afraid of? Why wont they hold independent investigations? Surely if they don’t we face another twenty years of turmoil and suspicion. We need an independent investigation so we can move forward with a clean sheet. Irish RC’s blanket refusal to launch any independent investigation makes us look very guilty and given all the revelations in the media, on Prime Time and on the blog surely there is enough evidence to warrant an independent investigation?
27. The performance by the Irish Red Cross Acting Secretary General on the Prime Time program of the 26th August 2010 must warrant serious questioning. The Irish RC spokesperson, Sheila Callan, put in a terrible performance and looked like a rabbit caught in head lights. The organisation was basically caught on national television misleading the public about the whereabouts of the Secretary General who refused to appear on the program, said he was away on holidays when in fact he was in Merrion Square. Prime Time caught him in his office in Merrion Square. This brought incredible shame and embarrassment on the organisation. The IRC spokesperson looked totally confused and extremely badly briefed. In the rush to make excuses after such a dire performance it was stated in formal memos that the Acting SG was given legal advice not to appear on the program due to Noel Wardick’s case. This is an illogical excuse that doesn’t hold water as Prime Time was not about NW’s case it was about the wider and deeper malaise within the organisation. The Acting SG could still have done an interview but made it clear he would not discuss anything about the NW case. This would be normal practice and would have been perfectly acceptable to RTE. Also if the Acting SG was advised by IRC solicitors not to go on RTE then why was it ok for Sheila Callan to go on?? If someone is paid €160,000 a year they should be prepared to represent the Irish RC on television. Why does the Irish RC not have a skilled, trained and professional spokesperson like all other charities? The Irish RC came across on Prime Time as dishonest, shady and incompetent and great damage was done to its reputation.
28. Noel Wardick spent five years trying to reform the organisation from within. The documents are there to prove this. The problems of negligence, incompetence, financial irregularities, bullying and harassment, cronyism, mismanagement, abuse of power, misuse of funds, and mis-governance run deep within the Irish RC. Wardick attempted in good faith to address all these. His criticisms were primarily levelled at the controlling members on Executive and since late 2009 at the Acting Secretary General. These are the very same people who investigated him and found him guilty and fired him. Is this not a fundamental breach of the first principle of natural justice: that one cannot act as judge, jury and executioner? The accused can never investigate the accuser! Why was NW not afforded a 3rd party appeal as he is entitled to under Irish RC policy? More importantly why was NW fired BEFORE his appeal was even heard, in clear violation of Irish RC policy? NW will now take an unfair dismissal case to the Employment Appeals Tribunal (EAT). This is a public hearing, formally recorded and documented for the public to review and at which journalists are allowed attend and report on. Surely all the breaches by the IRC of its own human resource policy will be very damaging for the Irish RC not to mention that the Society sacked a whistleblower who reported on serious financial irregularities in the organisation. How does the Executive respond to this and will NW’s case at the EAT not result in more damning publicity for the organisation? It may be 12 months before NW’s case is heard by the EAT so this time next year the organisation will once again face a highly public hearing where extensive details of its problems will be aired for all to hear and report on.
29. It is now standard good practice for organisations to have clearly defined whistleblowing policies and procedures in place so that staff and members can report wrongdoing in an organisation while at the same time remaining protected from retribution, threats and dismissal. Why does no such policy exist within the Irish RC?
30. Nothing that Noel Wardick has claimed is new. Long before NW became an employee the very same issues he raises were raised by many people before him. These claims have been made at regular intervals by staff and board members for twenty years. They all cant be wrong but they all faced the same fate, removal by the hierarchy, threats of legal action, and either sacked or chased out. A number involved formal legal actions. NW is just the latest in a long line to stand up to the long term self-serving leadership and make the same claims as many did before him. 20 years of negative media coverage, radio, print and TV, 20 years of parliamentary questions in Dail Eireann calling for reform and investigations and 20 years of industrial relations chaos must surely say to even the most blind that something is very seriously wrong at the Irish RC. The common denominator during these 20 years is that the same cabal of people have retained power and dominance and used it ruthlessly.
31. No real progress has been made in developing an overall organisational 5 year strategic plan in the last 12 months. Why is this? The current process was started by Carmel Dunne, then Secretary General, in 2006. It stalled after her sudden and unexpected departure in 2007. It started again in 2008 under John Roycroft, then Secretary General, but was again suspended after he left suddenly and unexpectedly in December 2009. Declan O’Sullivan, current Acting Secretary General, has made little progress on the issue and it’s not obvious if he did any work on it in the last year. The process is again stalled pending the recruitment of another Secretary General and will not recommence until 2011. So for the best part of six years the development of an organisational strategy has been ‘in process’. This is a sham if ever there was. In the five years Noel Wardick was the Head of the International Department he oversaw the successful completion of: 1. An International Department Strategy 2007-12, 2. An Africa Strategy 2009-14 3. The promotion of International Humanitarian Law (IHL) in the Irish Education System Strategy 2010-2016 and 4. Restoring Family Links Strategy 2010-16 (awaiting Executive Committee approval).
32. Who decided the Kessel Fund is restricted to ‘capital funding’? This is not something imposed by the Kessel Fund estate. Kessel Fund is unrestricted and can therefore be used for expenditures other than ambulance purchase. Central Council must make this clear to the Executive and the Acting SG.
33. How will the imminent change of government impact on the legislative reform process re Irish RC statutes? Will it be further delayed? It will certainly not be a priority of any incoming government. This is why the Central Council should use its full powers to immediately, on 11th December 2010, determine maximum terms of office for Executive Committee and Central Council members and instruct members with a defined length of service to step down.
34. What is the benefit in asking branches around the country to put the Acting SG as a signatory on their bank accounts when he will shortly be replaced?
35. The quarterly newsletter to all members was cancelled in 2010 and nothing has replaced it. The CC report says that an e-newsletter was sent to 15,000 donors and this will be done on a regular basis. Why is the organisation communicating regularly with donors but not at all with its own members?
36. It is December 2010 yet there is no sign of the 2009 Annual Report. Why is this? Why the lengthy delay? It’s nearly time to expect the 2010 Annual Report and yet the 2009 Annual Report is still not published!
37. Why is the near continual media coverage and extensive revelations of malpractice in the Irish Red Cross in print and on TV, the Blog and its contents and the dismissal of a senior manager not on the agenda of the 11th December Central Council meeting? How can the supreme governing body of the Irish RC not have this on the agenda for extensive and detailed discussion? This is a sure sign of an organisation that is completely delusional and in total denial.
38. Has the Acting SG received assurances from the Department of Defence that the Grant in Aid grant of €951,000 will not be reduced in 2011 and are contingency plans in place for a possible reduction?
39. Why are pension costs in 2010 zero? All permanent staff are in an employer pension scheme which presumably costs the Society money.
40. An analysis of the figures for the International Department from January to September 2010 would appear to indicate that by June 2011 the department will face a devastating and possibly fatal funding crisis. It will be unable to continue in its current form and may cease to exist altogether. Redundancies at home and overseas will be unavoidable. Why for the last number of years is funding being starved to the International Dept and who has made the decision to do this? Is the real agenda to dismantle the International Department just as other departments that have grown and developed in the past have been similarly neutered (Youth, Community Services, IHL, HIV-Aids, Refugees)? What plans are in place to prevent this scenario from materialising?