"Bad administration, bad governance, bad controls"-Irish Red Cross Secretary General, Donal Forde

Note: The link to the full transcript of the Public Accounts Committee hearing into the Irish Red Cross is at the bottom of this article.

Under sustained questioning from well briefed and well prepared members of the Irish parliament the Irish Red Cross Secretary General, Donal Forde, was forced to admit the Society had suffered from “bad administration, bad governance, bad controls”. His admission was given in evidence at the parliament’s Public Accounts Committee (PAC) Hearing into financial mismanagement and misgovernance at the Irish Red Cross on 19^th January 2012.

Similarly under pressure the Irish Red Cross Chairman, David O’ Callaghan, conceded the situation around the discovery of 49 undisclosed bank accounts and the involvement of the national Vice Chairman, Anthony (Tony) Lawlor, in the largest of the undisclosed accounts was “a mess”.

The Irish Red Cross admitted that despite the scale of the crisis and the errors and wrongs committed by certain board members “no disciplinary action” was taken.

Throughout the entire proceedings it was clear for all those watching to witness the look of disbelief, exasperation and incredulity on the faces of the PAC members as the Irish Red Cross struggled to provide acceptable and credible answers.

The 19^th January 2012 was a shameful day in the history of the Irish Red Cross. It was a new low for the Society to have its leaders provide a litany of untruths, inaccuracies and falsehoods on public record before the Irish Parliament.

It is the view of this Blog that those who issued these untruths should resign immediately before any further damage is done to the Society. Every attempt will be made to expose these untruths and falsehoods. They will not go unchallenged.

The position of the national Vice Chairman is completely untenable and it is clear from reading the transcripts of the PAC hearing that the Committee members feel the same. Mr Lawlor’s continued presence on the board and other committees of the Irish Red Cross continues to do irreparable damage to the Society’s image, credibility and reputation. Surely the Society will not re-appoint Mr. Lawlor for the 22^nd year in a row in May 2012. To do so will bring howls of derision down on the Society. The Blog has also called on numerous occasions for the resignation of the national Treasurer whose inactions make him fully complicit in the “mess” referred to by the Chairman, David O’ Callaghan.

The Irish Red Cross should use the occasion of the special Central Council meeting scheduled for 10th March 2012 to announce the permanent departure of the Vice Chairman and Treasurer.

The Irish Red Cross no doubt believed the PAC hearing on 19^th January 2012 would draw a line under the sand of recent controversies, mismanagement, misgovernance and financial irregularities. Because of the depth and extent of the untruths and misrepresentation of facts told at the hearing the Society has plunged itself into a whole new crisis. Not only does this risk entangling senior individuals from the previous leadership who have since resigned but it also embroils the new leadership.

Once again the crisis and reputational damage facing the Society is entirely self inflicted. If the values of integrity, honesty, openness, transparency, justice and courage prevailed all this could have been completely avoided. Unfortunately, that is not the Irish Red Cross way.

The Blog intends to go through in minute detail the transcripts from the hearing. It will formally respond to the Department of Defence and the Public Accounts Committee. In doing so the Blog will outline all untruths and falsehoods so that the truth is formally recorded and available to the public. It is essential the Irish Red Cross is held fully accountable for their actions. Every attempt will be made to do so.

The link to the full official transcript of the hearing is:

http://debates.oireachtas.ie/ACC/2012/01/19/00004.asp

Peace if possible, truth at all costs-Martin Luther King

Parliamentary Committee exposes financial and governance scandals at Irish Red Cross

NOTE: The Examiner newspaper carries an article in its 20th Jan 2012 edition concerning the admission in Parliament by the Irish Red Cross that its serving Vice Chairman, Tony Lawlor, was one of the signatories on an undisclosed bank account containing €160,000. The link to the article is:

http://www.irishexaminer.com/ireland/red-cross-admits-vice-chairman-was-signatory-on-undisclosed-bank-account-180840.html

NOTE 2: The Public Accounts Committee has published on public record the following letter from Noel Wardick to Irish Red Cross Chairman, David O' Callaghan:

http://www.oireachtas.ie/parliament/media/committees/pac/correspondence/2012-meeting241901/%5BPAC-R-237%5DCorrespondence-3.7.pdf

The Irish Red Cross was subjected to nearly three hours of vigorous and robust questioning by the Dail’s (Irish Parliament) All Party Public Accounts Committee (PAC) earlier today 19^th January 2012.

The well prepared members of the Committee (all elected representatives) exposed once again the scandalous goings-on at the Society over the last number of years. PAC members looked shocked, exasperated and disgusted with many of the responses from the Irish Red Cross Secretary General, Donal Forde and the Chairman, David O’ Callaghan.

This Blog has written at length about the misgovernance and financial irregularities at the Irish Red Cross. It was of the view it could no longer be shocked by the Society’s cover ups and deceit. How wrong the Blog was.

Today in Ireland’s national parliament the Irish Red Cross told clear and blatant untruths to elected public representatives. In time and once the full transcript is available this Blog will document in detail every single one of those untruths and seek that those responsible are fully held to account for their actions.

This disgusting debacle must stop and these individuals must not be permitted any longer to make a mockery of the Irish public, of elected representatives, of genuine Irish Red Cross volunteers and staff and of our national parliament.

It is high time for the International Red Cross in Geneva (both ICRC and IFRC) to come off the sidelines and prevent any further damage to and deterioration of the credibility of the Red Cross in Ireland. The Red Cross emblem and everything it stands for is being trampled into the ground by individuals prepared to deceive and misrepresent at the highest levels. Geneva, its time to wake up and do your job: protect the Red Cross emblem before irreparable damage is done.

The 19th January 2012, a day of infamy for the Irish Red Cross.

RTE (Ireland’s national broadcaster) has carried the below news article on the Irish Red Cross performance:

Irish Red Cross did not disclose bank accounts

Updated: 12:42, Thursday, 19 January 2012

The Irish Red Cross, under questioning at The Public Accounts Committee, has said that one of the two signatories on a previously undisclosed bank account was Vice Chairman of the Society nationally.

The Irish Red Cross, under questioning at The Public Accounts Committee, has said that one of the two signatories on a previously undisclosed bank account, valued at €160,000, was Vice Chairman of the Society nationally

He still remains the Vice Chairman.

Representatives of the charitable organisation, have confirmed that when the Head of Finance was made aware of this account and 48 other undisclosed accounts (to the value of €200,000 in total), he did not disclose the accounts to the Board of the Society.

The sitting Chairman of the Public Accounts Committee, Kieran O'Donnell, said it seemed extraordinary that the Head of Finance did not disclose such accounts to the Board.

Eoghan Murphy, member of the Public Accounts Committe, questioned why someone would continue in position of governance in the Society for 27 years considering there are serious questions raised, particularly by the Minister of Defence, in relation to poor governance in the Irish Red Cross.

Deputy Murphy said this "flies in the face of good governance".

His assertion was challenged by Donal Forde, newly appointed Secretary General of the Irish Red Cross, claiming that the Society has completely overhauled its system of governance, and all the branches of the society will be audited for 2011.

He added that an investigation was carried out by the society and there was no malevolence found, and no misappropriation of money, but it was clear there was poor governance. He confirmed there was no disciplinary action taken.

Mr. David O'Callaghan, The Chairman of the Irish Red Cross, admitted "there was a mess", and there was bad governance. But he added this was a restricted account, no cent was moved or was missing.

He added that an investigation was put in train and changes have been made in relation to codes of conduct, auditing and governance in the Irish Red Cross.

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

Irish Red Cross ends 2011 back in media spotlight for all the wrong reasons

The Irish Red Cross concluded 2011 just as it had started it, in the national media for all the wrong reasons.

On the 25th December 2011 the Sunday Independent, Ireland’s largest selling newspaper, in its Christmas Day edition carried a large and detailed article on the ongoing financial irregularities and misgovernance at the Society. The article demonstrated the extent of the financial inadequacies as well as reporting on Minister Alan Shatter’s displeasure at the long board service of a number of Irish Red Cross members.

In his end of year report to the Central Council the Irish Red Cross Chairman, David O’Callaghan, attempted to blame everybody including politicians, former staff, current and former members and volunteers as well as the media for the woes of the Society. This staggering display of delusion would appear to have been rewarded by the Sunday Independent with another well written article outlining the litany of problems the Society has encountered in recent years. The Sunday Independent informed its readers it has a copy of the Central Council report which it quoted from extensively.

Following the Sunday Independent article perhaps the Chairman and Board members within Irish Red Cross will desist from blaming others on the Society’s dysfunction and perhaps concentrate on dealing with and removing those who are responsible. Shooting the messenger never achieves anything.

The full transcript of the Sunday Independent article is transcribed below or alternatively can be read by clicking on the following link:

http://www.independent.ie/national-news/red-cross-needs-year-to-shake-off-bad-press-2973022.html

In addition to the above article the Irish Red Cross, in a statement to the Irish Independent for an article on falling donations to charities on 29th December 2011, was reported as saying that “fundraising was on a par with last year (2010)”. This statement was issued to the media by Irish Red Cross spokesperson Rebecca Thorn.

In his report to the Central Council issued in early December, Chairman David O’ Callaghan stated the following “All of our revenue lines are reducing and we must anticipate that this trend will continue for the next number of years....Our fundraising income has reduced considerably. As at the 31st October 2011, our gross income is €800k-compared to €1.48m at the same time last year....The revenue streams that have been particularly impacted this year are committed giving, legacies and tax rebates for donations...Our income is reducing significantly and these trends look likely to continue for the short to medium term”.

It would seem clear that one message has been given to the Irish Red Cross board and an entirely different and contradictory message given to the Irish public and media. The question must therefore be asked why did the Irish Red Cross spokesperson issue a statement to the media stating that funding in 2011 was on a par with 2010 despite the Chairman clearly stating that funding has declined significantly during 2011. Whoever authorised this apparently misleading statement to the media needs to explain their actions and be held to account immediately. A corrected statement confirming a significant decline in funding needs to be issued to the media to counter the original misrepresentation.

In addition, how the same Irish Red Cross spokesperson could say that the response to the Dublin Floods was “a big response” only she will know. With only €30,000 raised it must rank as one of the most poorly responded to national appeals ever launched by the Irish Red Cross.

The Irish Independent article can be read on the following link where it will be seen that other charities interviewed had no hesitation in admitting funding had declined during 2011:

http://www.independent.ie/national-news/charities-feel-pinch-after-15pc-decline-in-donations-2975367.html

While we can only hope that during 2012 there will be real accountability within the Irish Red Cross as well as the necessary personnel change at Central Council and Executive Committee level the well known French proverb unfortunately springs to mind plus ca change, plus c’est la meme chose

The full Sunday Independent article of 25th December 2011 is below:

Red Cross 'needs year to shake off bad press'

Charity beefs up its governance practices after financial failings

By DANIEL McCONNELL Chief Reporter
Sunday December 25 2011

THE chairman of the embattled Irish Red Cross, which was dogged by financial and governance failings last year, has said it will be at least another year before it can be fully cleansed of "negative press".

In a detailed half yearly report to the charity's central council seen by the Sunday Independent, David O'Callaghan said that 2011 saw a sizeable drop in the number of negative stories about the ongoing "turmoil" at the Irish Red Cross.

Mr O'Callaghan said that a small number of current and former volunteers, as well as former staff members, had been conducting a "campaign against the society", which he described as "deeply unhelpful".

"The ongoing campaign against the society by former staff, supported by a number of current and former volunteers, is deeply unhelpful. Certain sections of politics and the media remain cynical towards the IRC. It will be another year at least before clear light and distance is put between the society and the negative press of 2010," he wrote.

Mr O'Callaghan's report detailed a host of new financial and governance practices which have been introduced since reports of a lack of proper financial control first emerged in early 2010.
"The first challenge was the requirement to strengthen our governance and supervisory processes at every level to a standard that meets best practice for the charity sector. This is the only way in which we will conclusively put the turmoil of recent years behind us," he said.

Given significant drops in its revenue, from €1.48m in October, 2010, to €800,000 this year, Mr O'Callaghan detailed a cost reduction programme across the society, but also highlighted that many deficiencies in the handling of monies within the society remained.

He said that while compliance on financial returns from local branches had improved substantially since 2010, "we still have a lot of work to do".

"Some of the issues that have arisen are: lack of supporting information; expenses not vouched correctly; lodgements and cheque books not sequentially numbered; no quarterly returns; no receipt books used; branch committee forms not completed and aged debtors outstanding with head office."

All area secretaries and treasurers around the country have been sent a list of issues that remain outstanding and which Mr O'Callaghan said must be dealt with if the Irish Red Cross is to demonstrate its commitment to high standards and to establish the Irish Red Cross as a best practice organisation.

As a result of consistent weaknesses in documentation from local branches, Mr O'Callaghan said the organisation's financial officer is calling local treasurers on a daily basis to ensure full compliance.

"The financial control environment has changed for us all. We must meet higher and more demanding standards, and branch and area officers must respond appropriately," he added.

The Irish Red Cross was heavily criticised back in the summer by Justice Minister Alan Shatter, who has statutory responsibility for the society, and appoints its chairman and members of its board.

In July, it emerged that Mr Shatter had written to the Irish Red Cross stating that he opposed long board service and had requested the Irish Red Cross to expeditiously address this problem.

The minister clearly stated in Dail Eireann on June 29, 2011, that he is opposed to any board member serving in the same position for more than six years and in a leadership role for a cumulative period of more than 12 years.
- DANIEL McCONNELL Chief Reporter

Transparency International calls for independent investigation into Irish Red Cross

On the 9th December 2011 Transparency International (Ireland), the highly reputable global organisation that fights corruption and abuse of power, wrote an open letter to the Minister for Justice, Defence and Equality, Mr. Alan Shatter, calling on the Irish Red Cross to commission an independent investigation into reports of weak financial management and governance at the Society.

Previously Transparency International wrote to the Irish Red Cross but their request for an independent investigation fell on deaf ears. It is of course a damning indictment on the Irish Red Cross that an organisation as credible and highly respected as Transparency International deems it appropriate to call for an independent investigation into the Society’s affairs.

It remains to be seen if Minister Shatter responds in any meaningful way to the call by Transparency International. Certain individuals (past and present) at the Irish Red Cross have much to hide and much to fear from an independent investigation. At a minimum it is likely its board members would come in for severe criticism. It is also a possibility that any independent investigation would result in the Garda Fraud Bureau of Investigation being asked to assist although any such call would be a matter for the independent investigation.

The question is whether the Minister has the stomach for an investigation as it would undoubtedly involve scrutiny of his own Department. It can be assumed with near certainty, given their record of indifference and inaction and therefore complicity, that senior civil servants in the Department of Defence would not be keen to see any independent investigation take place.

The full transcript of the Transparency International letter is transcribed below and can also be seen on the Transparency International Ireland website on the link:

http://www.transparency.ie/news_events/ti-ireland-open-letter-minister-alan-shatter-irish-red-cross

Mr Alan Shatter T.D.
Minister for Justice, Equality and Defence
Department of Justice and Equality
94 St Stephen’s Green
Dublin 2

9 December 2011

Dear Minister Shatter,

I write on the occasion of UN Anti-Corruption Day to firstly congratulate the Irish Government on the ratification of the UN Convention against Corruption this year. We are convinced that this important legal instrument will help Ireland meet its commitments to reaching and maintaining international standards of good governance and are happy to offer whatever help your department should require in reviewing its implementation.

As you are aware, Article 33 of the Convention recognises the important role of good faith reporting in protecting the public interest.

I should therefore also use this opportunity to draw your attention to the continued concerns of Transparency International Ireland (TI Ireland) over the failure of the Irish Red Cross Society (IRC) to commission an independent investigation into reports of weak financial management and governance at the Society made by Mr Noel Wardick, former Head of the IRC’s International Department.

Mr Wardick was dismissed on the grounds of gross misconduct on 10 November 2010 for having publicly commented on the governance of the IRC. He is still unemployed and unable to gain employment pending his appeal for unfair dismissal to the Employment Appeals Tribunal.

On 9 December 2010, TI Ireland wrote to the Central Council of the IRC encouraging them to commission an independent investigation into Mr Wardick’s claims. In spite of the Comptroller and Auditor General’s critical report into poor financial management of state funding at the IRC, no independent investigation has taken place into Mr Wardick’s public statements on the management of public donations and governance at the charity.

We believe that the IRC’s refusal to commission an independent investigation into his claims will serve as a great disincentive to anyone wishing to report financial irregularities or the risk of wrongdoing in the charity sector. We would therefore ask you to press upon the IRC the importance of an independent investigation into Mr Wardick’s reports. Such a measure would not only help seek a fair resolution to all the parties in this case, but also serve the public interest.

Yours sincerely,

John Devitt
Chief Executive

On a Separate Matter:

1. It appears the issue of the very poor 2011 Floods Appeal was not properly discussed at the recent Central Council meeting on 10th December 2011. For those not familiar with the situation an unwise decision was taken after the highly localised but severe flooding that took place primarily in Dublin in November to launch a nationwide appeal. The appeal involved radio and newspaper advertisements and as such significant costs would likely have been incurred. The appeal raised a gross amount of circa €30,000, extremely small for a national appeal. When the costs of the appeal advertisements are deducted the net amount would have been very much less. To put €30,000 in context in 2009 when vast areas of the country were flooded over €1 million was raised. It is highly unusual for the Irish Red Cross to launch a costly national appeal for a localised emergency that received no more than a day or two of national media coverage. Those experienced in such matters, had they been available, would have advised against a national appeal as the response permitted from raising smalls sums of money leaves many affected families disappointed and frustrated. Unfortunately for the Society many saw the appeal for what it was, namely a public relations exercise that had little real substance to it. Hopefully some valuable lessons have been learned by senior Irish Red Cross management who made the questionable call to launch a national appeal.

2. The decision, if confirmed, to suspend the purchases of all ambulances in 2012 and to ask branches to cover costs directly related to their branches that were previously covered by head office is welcome and long overdue. In recent years the Irish Red Cross head office has incurred some sizeable and costly annual operating deficits and these have severely impacted the Society’s ability to grow and develop. Much of this was due to head office being forced to incur massive costs covering branch expenses and outlays related to purchasing new ambulances. Millions of Euros reside in bank accounts across the country which belongs to local branches yet head office is obliged to pay many branch direct costs, a clearly unsustainable policy and one that has cost the organisation many hundreds of thousands of Euros in recent years. It could easily be argued that the pressure to close the worsening head office operating deficits led to the decision in 2010 to allocate over €600,000 donated by the public and intended for Haiti into the domestic fund. By doing so the 2010 annual accounts showed a near breakeven point for the Society. The reality, however, was that a huge deficit had been incurred. Earthquake victims in Haiti paid the price on this occasion.

3. In relation to ambulances no new purchases should take place until such time as a full scale assessment and performance audit is carried out on the 140 or so vehicles that operate under the name of the Irish Red Cross. Such a performance audit with recommendations should be carried out by independent fleet management specialists and not by internal Red Cross staff, volunteers or board members. A comprehensive fleet management and accountability system needs to be implemented. All future ambulance purchases post the suspension should only be made after a comprehensive cost/benefit analysis and should be based on a real need and an ability to efficiently and effectively address that need. Ambulances as status symbols and a means to influence, reward and control must have no future in the Irish Red Cross.

4. It is hoped that the suspension of ambulance purchases will ensure the Irish Red Cross no longer drains valuable resources and energy away from other critically important humanitarian programs carried out domestically by the Irish Red Cross such as the ever growing and expanding Youth Program, the highly impressive Restoring Family Links Program, the HIV/AIDS Program, the Community Services Program including therapeutic hand care etc and the highly innovative and pioneering Prisons Health Care Program. It is essential these programs are properly resourced and invested in. While they are no more important than first aid and ambulances equally they are no less important.

Will Irish Red Cross issue formal apology to families who donated properties?

For over twenty years the national media in Ireland has reported on the financial irregularities, misuse of resources and poor governance at the Irish Red Cross. During this time, and particularly in recent years, there has been a number of shocking revelations. One of the more significant of these has been the discovery that the Irish Red Cross has an extensive property portfolio that it has failed to declare in its financial statements, in breach of Standard Accounting Practice for Charities. The Irish Red Cross estimated in 2010 that the value of these properties was in the region of €7 million. While presumably the value has declined substantially over the last year or two due to the recession the omission of assets worth millions of Euro from the Society accounts is a matter of utmost public concern.

What is important to note re the undeclared properties is that the Irish Red Cross has been fully aware for nearly twenty years that it was in blatant breach of accounting and financial protocol by purposefully and consciously omitting valuable assets from its financial statements. The current external auditors of the Irish Red Cross, BDO, have highlighted the matter every year since 2000. As a result of its actions the Irish Red Cross has wilfully misrepresented its financial accounts to the Irish Government, its members and volunteers, its staff and to the Irish public every year for nearly two decades.

The location of these properties, the use to which they are put (if any), their state of repair, who is responsible for them, their rental income if any and who donated them has been kept a closely guarded secret by a tight inner circle of individuals. The information has been kept from the highest governing authority of the Society, the governing Central Council. Many on the closed and secretive Executive Committee have little knowledge or detail on the property portfolio. The question must therefore be asked, and answered by way of an independent investigation, why this is so.

If any such independent investigation deems it appropriate, the Garda Bureau of Fraud Investigation could be asked to assist.

The failure of governance, senior financial management and fiduciary oversight at the Irish Red Cross has allowed this situation arise and continue for years. As with the litany of other scandals at the Society no-one has been held accountable. Because the charity sector in Ireland is so poorly regulated the Irish Red Cross has been permitted to breach proper accounting procedure year on year without any person ever being prosecuted or held to account for doing so.

For those not familiar with the correct accounting procedure for the treatment of donated assets such as properties to the Society the property must be professionally valued and the amount recorded as INCOME in the financial statements. The value of the donation must also be recorded as an ASSET on the balance sheet. For every property donated to the Irish Red Cross the Society failed to do this. As such the annual accounts massively misreported the income of the Society and under reported the value of its assets by millions and millions of Euros.

In understanding the nature of this scandal it is very important to realise that these unrecorded and unaccounted for properties were, in the main and possibly in entirety, donated to the Irish Red Cross by members of the public following the death of the property’s owner. As Irish people will know only too well one’s home is usually by far the most valuable asset a person accrues in their lifetime. For any Irish person or family to donate a property to a charity is a hugely generous and selfless act.

These properties were donated by the families for use by the Irish Red Cross in its pursuit, as per its mandate, of humanitarian activities and to be used in the best interests of the Society and its intended beneficiaries. The fact that the Irish Red Cross repeatedly failed to keep track of these properties, has mislaid title deeds and ownership documents, failed to record the properties in the Society’s accounts, has left a number of properties idle and vacant and has been unable to explain how or what the properties are used for is a shocking betrayal of public trust. It represents a scandalous misuse of assets worth millions of Euros.

If even one family donated cash of say €100,000 to the Irish Red Cross and the money was not recorded in the accounts and the money was difficult to locate or track down or its use not readily identifiable it is likely the Gardai would be immediately be called in. Or at least that is what would happen in a well functioning organisation. Failure to record and keep track of extremely valuable property donations is no different than failing to record and keep track of cash donations.

As a direct result of the Dail’s (Ireland’s Parliament) Public Accounts Committee Hearing on the 13th October 2011 into allegations of financial irregularities at the Irish Red Cross and following the inclusion of the Society (Chapter 32) in the Comptroller and Auditor General’s Annual Report the Department of Defence was forced to admit for the first time that the Irish Red Cross has at least 18 properties around Ireland that it has failed to record or properly account for. The Department did not state whether 18 was the totality of the missing properties. The Department did state that for ten of these properties it would take at least another 6-12 months “to re-construct documents of title for 10 of these”. This is a shocking indictment of incompetence and negligence at the Society.

Readers may be interested to know that the Society was instructed to deal with the property problem as far back as 1992. To-date not one person has been held to account for this spectacular failure of governance and management. It can only be hoped that the Dail’s Public Accounts Committee follow-on Hearing into the Irish Red Cross scheduled for 2012 will shed some further light on this distasteful affair.

In the meantime nothing short of a full scale public apology to the families of bereaved loved ones and kind benefactors who donated properties is immediately required of the Irish Red Cross.

In addition to the public apology the Irish Red Cross needs to be seen to hold those responsible to account and it needs to state on public record that such misuse of resources and financial irregularity will never occur again. It will also be critically important that the Irish Red Cross state categorically (assuming it can do so with conviction) that no criminal offence or activities took place in relation to the properties. This apology, given the scale of the betrayal of trust, should be issued by way of large public advertisements in the main national newspapers (Irish Times, Irish Independent and Sunday Independent) as well as on TV and radio. It is also an absolute necessity that all families who donated properties are individually contacted and the situation and future plans explained in detail to them.

On the 10th December 2011 the Central Council of the Irish Red Cross will meet. It can only be assumed that the Central Council report issued to members in advance of the meeting has an extensive and detailed report on the Dail Public Accounts Committee’s ongoing investigation into the Irish Red Cross. One also assumes that the upcoming Public Accounts Committee hearing into the Irish Red Cross in 2012 will be discussed and debated at length. It is a matter for the Central Council to decide how this matter should be handled and as such they need to direct the Secretary General and Executive Committee accordingly.

The inclusion of a full chapter on financial mismanagement at the Irish Red Cross in the Government’s Comptroller and Auditor General’s Annual Report will also presumably be high on the agenda.

In the event that the Central Council report omits the fact that the Irish Red Cross is under investigation by the Dail’s most powerful and influential cross party Committee it will prove beyond doubt that nothing has changed and that the Irish Red Cross remains as closed, secretive and misgoverned as ever. It will also demonstrate once again that information is purposely held from the highest deliberative authority of the Society.

Given the staggering incompetence and deceit shown over PropertyGate this Blog calls on Central Council members to instruct the Secretary General to initiate an independent investigation into the affair. In the meantime the Central Council should reassert its ultimate authority and demand a full list of all Irish Red Cross properties, their location, their current use, their current physical state and who has day to day responsibility for each one. These assets are worth millions of Euro and the supreme governing authority of the Society (the Central Council) needs to demand and insist on full disclosure.

Consideration should be given to the establishment of a special Property Sub-Committee of the Central Council to interact with any independent investigation. Members of this sub-committee would, as part of their terms of reference, visit and physically inspect every single Irish Red Cross property. It would be much more preferable if such a sub-committee was made up of non-Executive Committee members in order to avoid any conflict of interest. Any independent investigation would then liaise with this sub-committee, the Department of Defence and if necessary the Garda Fraud Bureau. Perhaps a representative from the International Committee of the Red Cross (ICRC) could also sit on either the CC Property Sub-Committee or the Independent Committee.

Time will tell whether the Irish Red Cross has the moral courage to apologise to all those donor families it has failed so badly. The history and culture at the top of the Irish Red Cross tells us no such apology will ever be forthcoming. There are those who tell us things are changing at the Society and changing for the better. Perhaps these individuals would be better advised to desist from their empty propaganda and spin. Instead proof via actions and substance that the Irish Red Cross has changed would be far more desirable. Hold people to account, demand resignations, enforce them if not forthcoming and issue a public apology. Then perhaps we might believe.

True remorse is never just a regret over consequence, it is a regret over motive-Mignon McLaughlin

Call in Ireland's parliament for Irish Red Cross Vice Chairman and Treasurer to step down

Not for the first time in recent months there has been another call in Ireland’s parliament, Dail Eireann, for the Irish Red Cross national Vice Chairman, Anthony (Tony) Lawlor, to step down from his post after serving a staggering 21 years in the position. In addition to calls for Mr. Lawlor to step down an additional call was made for the Irish Red Cross Treasurer, Mr. Ted Noonan, to also consider stepping down. Mr. Noonan has been a member of the Executive Committee for ten years and the Treasurer for the past three years. He has been at the helm as Treasurer throughout recent controversies at the Society.

In suggesting both Mr. Lawlor and Mr. Noonan step down, Deputy Finian McGrath stated on the 9th November 2011

“To ask the Minister for Defence his views that the time is now appropriate for the Vice Chairman and Treasurer of the Irish Red Cross to step down from their positions in order to allow for a more reasonable turnover of personnel at leadership positions within the Irish Red Cross”.

In addition Deputy McGrath stated:

“To ask the Minister for Defence if following his letter to the Chairman of the Irish Red Cross of 16th July 2011 (should have read 16th May) regarding corporate governance issues the Society has now considered a more comprehensive reform of its corporate governance arrangements; his views on the fact that the current vice chairman of the IRC is still serving in that position for the 21st year in a row, that the current Treasurer in that position for ten years in a row and both on the Executive Committee for 21 and 10 years respectively; his further views on whether this arrangement is in line with best practice corporate governance guidelines; and if he will make a statement on the matter”

On the issue of governance and the misgovernance at the Irish Red Cross Deputy McGrath had a third question for the Minister:

“To ask the Minister for Defence if consideration has been given to incorporating term-limits and retrospection of service for members of the Irish Red Cross executive committee in the amendments to the Irish Red Cross Order 1939; when he expects to bring forward the draft legislation on the Red Cross to Cabinet for approval; and if he will make a statement on the matter”

Deputy Finian McGrath is a senior, well respected and influential politician in Ireland’s parliament. His interventions in the Irish Red Cross crisis are both important and welcome. In calling for the resignation of the Society’s Vice Chairman and its Treasurer Deputy McGrath is targeting the heart of the deep rooted problems and dysfunction that exists. Internally within the Irish Red Cross there is a great fear and reluctance to tackle the core issues that have brought humiliation, shame and disgrace on the Society. Such fear and reluctance is often typical of dysfunctional governance structures where group think and a herd mentality become accepted practice. When this becomes ingrained, as it has within the Irish Red Cross, only decisive external intervention will resolve the problems.

Minister Alan Shatter has taken a much more robust approach to the Irish Red Cross than any of his predecessors who remained completely indifferent during their tenures in office, the consequences of which we are paying for today. Minister’s Shatter’s letter of 16th May 2011 to the Irish Red Cross Chairman, which was subsequently kept from Central Council members until revealed on this Blog, made it very clear he wished to see long serving board members depart the board of the Irish Red Cross. The Irish Red Cross rejected the Minister’s suggestion and reappointed the Vice Chairman and Treasurer. It remains to be seen if the Minister penalises the Irish Red Cross for its insistence in persisting with appalling governance practices by reducing the annual government grant to the Society in 2012.

In typical Irish Red Cross fashion the date and agenda of the upcoming Central Council meeting are being kept a closely guarded secret. Such secrecy is reflective of the fear and paranoia of the Society’s leadership. With an extremely weak and complient Central Council the ruling elite and the controlling cabal continually get away with treating fellow board members in this dismissive manner.

It can only be hoped that at the November/December Central Council meeting that Central Council members will find their independence and courage and finally demand the resignations and removal of the Vice Chairman and the Treasurer. It is humiliating and embarrassing for the Society that such courage is left to those external to the Society. Until such time as the Vice Chairman is held to account for his actions and the Treasurer for his inactions and both removed from all Irish Red Cross governance structures the Society will suffer indefinitely.

No amount of tinkering at the edges of reform and producing endless written policies will compensate for the damage done by not holding people responsible for wrongdoing and negligence to account.

The link to the Parliamentary Questions of the 9th November 2011 and the Minister’s replies is:

http://www.kildarestreet.com/wrans/?id=2011-11-09.904.0

The parliamentary question put down on the awarding of an Irish Red Cross IT/Web Design contract to a UK company was not answered and appears to have been withdrawn.

All persons ought to endeavour to follow what is right, and not what is established-Aristotle