Irish Parliament continues its investigation into financial mismanagement & poor corporate governance at Irish Red Cross

On the 19th January 2012 the Dail (Irish Parliament) will reconvene its investigation into financial mismanagement and poor corporate governance at the Irish Red Cross. The investigation is being carried out by the parliament’s Public Accounts Committee (PAC), the most senior of the Dail’s all-party committees.

The Hearing on the 19th, at which the Irish Red Cross has been requested to attend to account for its actions, must represent one of the lowest points in the Irish Red Cross’s already highly chequered history. The Society’s record on integrity, openness, competence, accountability, transparency, professionalism, financial management and corporate governance has been widely questioned for over twenty years. The Dail’s investigation on 19th January 2012 represents the culmination of this appalling 20 year history of lies, deceit and cover up.

The Public Accounts Committee will take up its investigation where it left off from the Hearing of 13th October 2011. At this the Secretary General of the Department of Defence (which has statutory responsibility for the Irish Red Cross) was robustly questioned by PAC members (all elected representatives). The Secretary General struggled to answers questions in a satisfactory manner. His weak performance and difficulty in answering questions led the PAC Committee to determine that another hearing was required where the Irish Red Cross leadership would be asked to explain their actions and to account for their behaviour.

It will be interesting to see who represents the Irish Red Cross at the hearing on the 19th. Presumably it will be the Chairman, David O’ Callaghan and Secretary General, Donal Forde.

Readers should note that the hearing is held in public and can be viewed live on line by visiting the Oireacthas website (and then clicking on one of the Committee Rooms until the room with the PAC hearing appears). The Hearing is scheduled for 10.00 am on 19th January:

http://www.oireachtas.ie/ViewDoc.asp?fn=/documents/livewebcast/Web-Live.htm&CatID=83&m=o

The 19th January 2012 represents an important opportunity for the Irish Red Cross to finally and once and for all tell the truth and nothing but the truth. The Irish Red Cross should note that a half truth is in fact a full lie. This Blog does not expect the Irish Red Cross to tell the full truth and nothing but the truth but nevertheless it hopes it will. Telling the truth is the right thing to do. The Irish Red Cross has a very poor record of doing the right thing, in particular when it comes to accountability, financial management, integrity and corporate governance. The 19th January 2012 is a chance therefore to break with the past. Will Irish Red Cross take it? Highly doubtful. The Blog will of course be happy to be proven wrong on this.

On the 19th January 2012 the Irish Red Cross should at a minimum and on public record:

1. Announce an immediate independent investigation into the use of possibly millions of Euros intended for overseas disaster appeals but instead used for domestic expenditure and projects. It is appropriate to announce this just as the 2nd anniversary of the Haiti Earthquake has passed. As this Blog has reported many times the Irish Red Cross allocated over €600,000 intended for Haiti to its domestic accounts in 2010. A similar practice has existed at the Society for over 20 years. This unethical morally reprehensible betrayal of the Irish public is deserving of an independent investigation.
2. Following 1 above the Irish Red Cross should commit to returning all monies used inappropriately domestically back to the various overseas appeals the money was originally taken from. The Blog accepts that this would likely have to be done over a number of years as millions of Euros may be involved. As a first step and as a gesture of genuine intent the €600,000 taken from the Haiti appeal should be immediately returned. A failure by the Irish Red Cross to announce points 1 and 2 will confirm to all and sundry that the Society is prepared to lie and deceive and to do so at the highest levels of Irish public oversight. It will be a shocking indictment on not only the Irish Red Cross but on the Red Cross globally.
3. Announce the immediate resignation of the Vice Chairman and Treasurer in the interests of best practice, good governance and as a statement of clear intent that henceforth people in the Irish Red Cross regardless of their privileged board positions will be held accountable for their actions and inactions. If the Irish Red Cross cannot give cast iron assurances that both the Vice Chairman and Treasurer will resign immediately (or as a compromise step down at the end of their current terms in April 2012) and never again serve on the Executive Committee, Central Committee or any other committee or body of the Irish Red Cross then it will be confirmed for all to see that their statements on governance reform and commitments to good practice are meaningless.
4. Confirm that a 3 year mandatory break in board service will apply to both the Central Council and the Executive Committee after a maximum of 6 years service (2 terms of three years). Under the proposed new Irish Red Cross Constitution members can serve for life on Central Council. It must be absolutely compulsory to step down after 6 years. Under the proposed Constitution a member who has served 6 years on the Executive Committee only has to step down if another person is nominated for the post. If no-one is nominated then the incumbent does not have to step down. Those familiar with the Irish Red Cross will know too well that this will result in people being strongly discouraged from putting their names forward so as to ensure certain long serving members can remain on well past 6 years.
5. Confirm that the proposed Constitution will be amended to ensure cumulative service (past service) is taken into account when calculating if a member has served on the Central Council/Executive Committee in excess of 6 years. As it currently stands service to date is not taken into account. Only future service is to be considered in the calculations. Should Irish Red Cross announce this proposed amendment then any current Central Council or Executive Committee member who has already served for more than six years should step down in April 2012. The current situation whereby the Society refuses to take into account service to-date makes a mockery of its statements that it is committed to governance reform and best practice. The Irish Red Cross continues to ignore Minister Shatter’s wishes in this regard.
6. Issue a public apology to those families who donated property to the Irish Red Cross over the last number of decades and for which the Irish Red Cross never accounted for or recorded in its financial statements and balance sheet and for which the Irish Red Cross lost track of titles and deeds. The failure of the Irish Red Cross, in breach of financial practice, to properly record, account and utilise these assets is a testament to the abject incompetence of its governance over decades. The families who donated these high value assets deserve a public apology and a clear statement outlining how the Society intends rectifying the situation.
7. Explain to the PAC and the Irish public how it is that the Irish Red Cross, in its 72 year history, has failed to ever carry out a full organisational wide external audit. This is in flagrant breach of its own ‘Rules of the Society’ which mandates that a full organisational wide audit take place every six months. In 72 years a full external audit has never occured. An external audit only takes place of the head office in Merrion Square, Dublin. This external audit has never included the branches, areas or regions and as such millions and millions of Euros have remained unaudited for seven decades. The Irish Red Cross must announce that the 2011 finances will be subject to a full organisation wide external audit and that the audit will not be restricted to just the head office. It must state that the branches, areas and regions will be subjected to an extensive external audit and that this will happen every year henceforth. It is incomprehensible how an organisation in receipt of government and public funding to the tune of millions of Euros over decades has never been externally audited. The consequences of this are obvious for all to see.

The Blog has no doubt many more issues could be added to the list above but if the 7 points are addressed as outlined real progress will have been made in transforming the Irish Red Cross. The Irish Red Cross will say alot of the 'right' things on January 19th...committed to reform, change taking place, mistakes made in the past, lots of new policies, progress being made etc etc but to determine if there is any substance to their statements it is necessary to scratch the surface and look at the above 7 issues. If the Irish Red Cross is not prepared to implement the 7 points as outlined then we will know nothing has changed. The Society will have confirmed that they have no intention of holding individuals to account and no desire to part with the despicable governance culture that has brought disgrace and shame on the organisation. By mid-day on January 19th 2012 we will know one way or the other.

You can fool some of the people all of the time, and all of the people some of the time, but you cannot fool all the people all the time-Abraham Lincoln