CONSOLE-A DETAILED LOOK AT THE AUDIT

After two weeks of revelations about questionable financial dealings and governance at the suicide charity Console, the RTÉ Investigations Unit can reveal further details of an unpublished 229-page HSE Internal Audit conducted by the HSE into the charity.

It further expands an overall picture already revealed by RTÉ about extravagant spending of charity funds on salaries and perks such as foreign travel and high-powered cars.

Ranking of HSE Internal Audit Findings.

When HSE Internal Auditors encounter an issue which needs to be addressed, they rank it terms of its seriousness. This ranking can be high, medium or low.

The HSE Internal Audit Team  commented that because of the seriousness of the findings in this HSE Internal Audit Report all audit findings are ranked as HIGH.  A ranking of HIGH means there is “a significant risk of substantial financial loss, and/or of accounting error, and/or of major non-compliance with policies or regulations and requires immediate action.”

“Commencing the HSE Internal Audit and Difficulties Obtaining Information and Co-Operation

On the 17th April 2015 the HSE Internal Audit notified the CEO [Paul Kelly] of Console of the commencement of the audit on 27th April 2015. The CEO requested that the commencement date be postponed to 19th May and this was agreed by Internal Audit. The CEO informed Internal Audit that all the records were held at Console House, Ardpatrick Road, Navan Rd, Dublin 7. Internal Audit commenced the audit at Console House, Ardpatrick Road on Tuesday 19th May.

It soon became clear to the HSE Internal Audit team that this was a house where counselling sessions were carried out and it was not where the financial and administrative records were normally maintained and retained. Console staff based in Ardpatrick Road informed Internal Audit that Console’s CEO, administration office, records and administration staff were based in Celbridge, Co Kildare.

On 22nd May Internal Audit informed the CEO that because the administration function and records were not held at Ardpatrick Road the audit would take place at Console’s administration office in Celbridge, Kildare.”

“Difficulties Obtaining Information and Co-Operation

Internal Audit re-commenced the audit at Console’s administration office in Celbridge on Monday 25th May 2015.

On 28th May 2015 Internal Audit suspended the audit due to a lack of records and a lack of availability of Console staff.

The Internal Audit team notified the CEO that the audit was suspended until  8th June 2015 and requested that the information and personnel would be available at that date.

On the 2^nd June 2015, the Assistant National Director (AND) of Internal Audit rang Console to speak to the CEO regarding the suspension of the audit. The CEO was unavailable to take the call but he returned the call shortly thereafter. The AND informed the CEO that:

the audit had been suspended due to a lack of documentation and a lack of co-operation by Console.

In order for the audit to progress in an efficient manner it was essential that he, as CEO, ensure that all of the documentation and records would be available for the audit team on 8th June and also for the remainder of the audit and that he make available a knowledgeable staff member who has the ability and authority to deal with the audit team’s queries while on site.

The CEO provided assurances that:

He would ensure that all the records and documentation set out in Internal Audit’s email would be available in Console’s Celbridge Office on Monday 8th June and he would ensure that all the 2014 documentation, books and records currently held externally would be available at Console’s Celbridge offices on Monday 8th June.

When Internal Audit re-commenced the audit at the Celbridge premises on 8th June 2015, while there was still a significant lack of information, management co-operation appeared to have improved at that time.

The audit continued on-site until 18th June. During this time, significant difficulty was experienced by Internal Audit in obtaining information and consistent explanations from Console. From the outset it became clear that information would not be forthcoming.

As one example of this, Internal Audit asked the CEO for insurance details for people claiming travel and subsistence. The CEO stated that [Staff X] was responsible and he would have provided Internal Audit with ‘all that information’. 

Internal Audit spoke to [Staff X] and he stated that it wasn’t his area and that he thought the CEO was responsible. The HSE Internal Audit again asked the CEO for the information and the CEO stated that [Staff Z] would have the information.

Eventually the CEO informed Internal Audit that Console hadn’t been collecting or looking for insurance details but that the HR manager had now sent an email to all managers requesting details and asking them to ensure that Console was indemnified on their insurance claims.

This was to be the pattern of the audit of Console.

Another example relates to credit cards and documentation. As there was a lack of receipts and invoices provided to the HSE Internal Audit to support credit card expenditure for 2012 to 2015, Internal Audit requested all the receipts.  Subsequently an envelope containing loose, unchecked 2015 receipts inside was given to the HSE Internal Audit. Console did not provide receipts for 2012 – 2014. 

During the audit answers by the CEO to HSE Internal Audit’s queries were generally vague, changing and unsupported by documentation.  For example, different explanations were provided for credit card transactions. In relation to clothing purchased on credit cards, the audit identified credit card expenditure in clothing retailers (Moss Bros, Hugo Boss, Bershka etc.).

The only documentation to indicate the purpose of the expenditure were expense analysis sheets (sometimes written in pencil and sometimes not completed for all transactions) which were attached to the visa statements. Some explanations on the expense analysis sheets described the transactions as ‘clothing for poor families’, ‘clothing for poor homeless clients’, ‘London Centre expenses’ and ‘Centre Provisions/Canteen’.

No receipts or other supporting documentation were available for these transactions. Because there were no receipts to support this expenditure Internal Audit sought explanations from the CEO during the audit and these were provided by email dated 15th June. 

The CEO’s explanations differed from those stated on the expense analysis sheets. Console subsequently provided further different explanations for these transactions to Internal Audit as part of its management response to the findings of the draft HSE Internal Audit Report.  

For example, expenditure of €365.58 in Moss which was described as ‘Clothing for poor family’ on the expense analysis sheet, was described as ‘Console Fundraiser at the Kilburn Irish Club, London – Voucher for auction’ by the CEO on 15th July and as ‘Clothing purchased for UK Staff Member H in accordance with Console Clothing Policy’ in Console’s response to the draft report. “

Annual Accounts

The HSE Internal Audit also highlighted how Console supplied accounts to the HSE that were different to those supplied to the Companies Registration Office (CRO). The Investigations Unit report which first highlighted concerns in the governance of Console, revealed that the charity had six different sets of accounts for 2012, four of which were submitted to funding agencies and two to the CRO.

The HSE Internal Audit reveals yet another version of the 2012 accounts, which was sent by the charity to the HSE. So that makes seven different sets of accounts for the same year. All of the accounts submitted to funding agencies masked the fact that directors were being paid in breach of the regulations of the Revenue Commissioners.

The HSE auditors compared two sets of 2012 accounts submitted to the Companies Registration Office with the version submitted to the HSE and found some key changes,

“Table 8: Differences in Salaries disclosures in 2012 Annual Financial Statements

In relation to 2013 annual accounts for Console the version sent to the HSE did not mention a payment of €90,066 to CEO Paul Kelly in consultancy fees. The payment was stated in accounts sent to the CRO.

Console told the HSE audit team that the accounts were draft accounts and that “It has been the practice of [the HSE’s National Office for Suicide Prevention] to accept non-final accounts with applications for funding.”

The National Office for Suicide Prevention flatly contradicted this and told the HSE audit team that “The Grant Aid Agreements for Console clearly state the requirement for submission of Audited Accounts showing the funding provided by NOSP.

The HSE’s Internal Audit team commented that:

“The existence of three sets of Annual Financial Statements for 2012 and 2013 is a matter of concern.  Two   key disclosure items in the accounts of all organisations are employment costs and directors’ remuneration. For organisations in receipt of funding from the State these are particularly important disclosures.

For organisations which are also charities and also dependent on public donations, these disclosures are especially important. In Console’s case, the lack of transparency, clarity and consistency in the disclosure of salaries charges and, in particular, in the directors’ remuneration charges in both 2012 and 2013 is a matter   of the utmost concern.

The lack of openness with its funder, HSE NOSP, and in particular the provision of   2012 and 2013 AFS which did not make any references or disclosures to directors’ remunerations or consultancy fees paid to the CEO is a matter of serious concern. Essentially, financial data, purporting to be audited accounts, was provided by Console to HSE NOSP to account for the funds it received and to provide a basis for the grant allocation decision making process for the subsequent year.

As the HSE Internal Audit has shown, the accounts did not disclose the actuality of the situation.”

“In addition,” the Internal Audit stated, “as a charity, the payment of directors’ remuneration and CEO consultancy fees may have implications for Console’s charity status.

The HSE audit also found that Paul and Patricia Kelly were “in receipt of salary/consultancy payments, the provisions of cars, and credit cards which included significant amounts of cash withdrawals and personal type expenditure (including clothing, groceries, dining, entertainment, dental charges and pharmacy type purchases). Although the audited period was 2012 to 2014, it is likely that such payments and perquisites occurred between 2006 and 2011 also.”

In its response Console told the HSE Internal Audit that it “entirely rejected” any assertion that “Console deliberately submitted inaccurate information.” 

Despite the prohibition on paying directors the HSE Internal Audit found consultancy fees and salaries to Paul Kelly of €218,586 and to his wife Patricia of €67,149 in the period January 1, 2012 to December 31^st, 2014.

It also noted that Paul Kelly had the use of a 2009 Mercedes Benz CLS bought for €30,613 and his Patricia had the use of a 2010 Audi A5 bought for €57,057.

The HSE Internal Audit laid out the total expenditure;

Credit Card expenditure 2012 - 2014 by Paul Kelly, his wife Patricia and son Tim

Credit Card expenditure 2012 - 2014 by Paul Kelly, his wife Patricia and son Tim

The HSE Internal Audit found that Paul Kelly’s wife Patricia was also in receipt of an untaxed payment of €504.88 per week despite being described by Paul Kelly as a volunteer.

The audit team also received contradictory explanations for items of spending. Paul Kelly initially explained the Mercedes as a “shared staff vehicle” and that “there is no benefit in kind associated with use of the Mercedes.”

The HSE Internal Audit established that the car was being used by Paul Kelly. Likewise, the 2010 Audi Q5 bought at a cost to Console of €57,057, including finance was described by Paul Kelly to internal audit as ‘an old call out jeep used at the helpline office in’ a Console centre.

“Console’s external accountant and a member of Console’s staff informed HSE Internal Audit that the Audi Q5 was used by the CEO’s wife,” the audit noted.

Console however, maintained to the auditors that the cars were available for the use of staff.

The HSE Internal Audit also found widespread use of Console’s credit cards for ATM withdrawals.

2012 – 2014 Cash withdrawals from credit card Paul, Patricia and Tim Kelly

“The majority of cash withdrawals,” the HSE Internal Audit said “took place in 2013 (236). Of these 145 (62%) were on the CEO’s cards (including former Employee Y’s cards) and his wife’s cards. This equated to 6 withdrawals every two weeks overall (5 every two weeks on the CEO’s credit cards and 1 every 2 weeks on the CEO’s wife’s credit card).

Over the 3 years, the total number of cash withdrawals by the CEO and his wife (347 and 81 respectively) equated to an average of 3 cash withdrawals per week. The average value of cash withdrawn was €535 per week (€83,484 ÷156 weeks).”

Other non ATM transactions on the credit card in the name of an ex-employee but controlled by then CEO Paul Kelly “included 

•             147 cash withdrawals totaling €28,785.

•             2 payments for Dental work totaling €560.

•             4 payments to Fitzpatrick Master Butchers totaling €141.23.

•             An ATM withdrawal Abu Dhabi amounting to €203

•             An ATM withdrawal in Perth Australia amounting to €201.

•             3 purchases of Duty Free. 1 purchase in Dubai costing €79 and 2 purchases in Gatwick at a cost of €18.25 and €86.92 respectively. (Total duty free expenditure was €184).

•             Purchases of clothing in Topshop €114.70 and Best Menswear €299.80.  (Clothing purchases are discussed elsewhere in the HSE Internal Audit.)

•             2 ATM withdrawals in Playa De Las, Spain of €200 & €20.

•             A purchase at Pure Pharmacy, Dublin Airport for €33.55.”

Console told the HSE Internal Audit team that “All of the assertions  in respect of personal  spending are refuted and   will be challenged by Console.”

A sample of explanations for some of the spending is provided in the HSE Internal Audit.

The HSE Internal Audit states “In Internal Audit’s opinion because of the lack of supporting documentation for any of the transactions on this credit card, no assurance can be provided that there was adequate stewardship exercised by Console to satisfy itself and to prove to any third parties that the types of expenditure incurred on this credit card were business related and an appropriate use of public funds including donations.”

In response Console said “All purchases were legitimate and for Console purposes only and Console rejects IA’s conclusion that the   types of expenditure on this credit card were not business related. IA has reached this conclusion without producing a sufficient amount of information in substantiation.”

FOREIGN TRAVEL

The HSE Internal Audit notes that “Console incurred €71,460 on overseas trips between 2012 and 2014. Trips were made to European cities, Australia, New Zealand, Singapore and Dubai”.

The following are some details in the HSE Internal Audit:

The HSE Internal Audit contained these details of travel related expenditure:

“A top up of €1,000 was made to the CEO’s Visa account prior to a trip to Australia in December 2012.

52 instances in total of ATM withdrawals ranging in value from €13 to €486.

4 instances of Dubai Duty Free Expenditure in amounts of €10, €35, €37 and €79.

4 instances of Gatwick Duty Free Expenditure in amounts of €18, €87, €75 and €76.

Dublin Airport Loop expenditure of €47.

3 instances of Concert/Theatre Tickets purchased in the amounts of €15 €134 and €142.

A purchase in a Liquor Store in Australia totaled €57.

Foreign tours:

Singapore Zoo

Art Science Museum Singapore Cable Car Hong Kong

Maritime Museum

St Paul’s Cathedral Admission Prison Museum

Imperial War Museum”

Other spending on foreign travel included €32.58 spent at the Maritime Museum in Australia on 23rd  September 2012 and a cash advance of €166.39 on the same day drawn on a card with Paul Kelly’s name paid for from charity funds. A further €590.11 was spent in the Marino Bay Sands Singapore on 18th  September 2012. Another €704.41 was spent on the same card at the Hotel Icon Kowloon Hong  Kong on 16th  September 2012 and €1,402.99 was spent using a card with a Console employee’s name in the Blue SYD A TAJ Hotel in  Woolloomooloo, Sydney on 5th October 2012.

Spending on that trip which included in Singapore, Australia (Perth, Carmel, Syndey) New Zealand (Auckland), Hong Kong and London September/October 2012 totalled over €4,000.

Console responded that it “was invited and accepted the opportunity to present at International Suicide Prevention Conferences at the University of Auckland, New Zealand and in Rome. Console was also invited by the McKillop Foundation (under the auspices of the Sisters of St Joseph) to visit the Motherhouse in Australia to discuss the possibility of Console acquiring the rights from the Sisters to introduce their ‘Seasons for Growth‘ programmes for Children and Adolescents impacted or Bereaved through  Suicide. 

The HSE Internal Audit concluded that “The lack of documentation to account for how the cash advances abroad were utilised, coupled with the types of expenditure charged to Console’s credit cards while travelling (i.e. alcohol, duty free, sightseeing trips and tours) is a significant issue. The fact that Console considers all such expenditure as business related and is not willing to review such expenditure is a matter of concern.”

Console’s response stated that “All expenditure on travel was for Console purposes. IA’s comment that the travel was excessive must be viewed in context and the benefit that the organisation received from those trips over the period. It is not appropriate to arbitrarily decide that certain figure is excessive without providing a detailed basis for reaching that conclusion.”

SPENDING ON CLOTHING

The HSE Internal Audit includes at least 58 instances where clothing totaling €8,743 was purchased on Console’s Visa cards between 2012 and 2014. A variety of explanations were given for the purchases. This table shows a sample of those explanations.

In its response to the HSE Internal Audit Console stated that “Items of clothing for Console staff and volunteers came under the Console Clothing Allowance Policy.

Items of clothing were purchased for Console promotional work (for example: press photoshoots; external fundraising events); clothing vouchers [were] purchased for raffle prizes to raise substantial funds for the Console Service nationally and in the UK”.

Although Console claimed that its clothing policy dated from 2010, the HSE Internal Audit maintained that the document had been created the day that it was sent in August 2015.

“Redaction of Information on Copy Visa Statements and Non Provision of Original Statements

Console provided the HSE Internal Audit team with photocopies of Visa Statements for 2014. On examination of these photocopies, HSE Internal Audit noted that some words were redacted from the descriptions on the statements

The following is a list of 17 redacted descriptions on the credit card statements examined by the HSE Internal Audit.

The HSE Internal Audit commented that the delays in providing un-redacted Visa statements for audit purposes is a matter of concern.  “Console had to have been in receipt of original Visa statements in the first instance in order to make redactions on copies of the statements provided to HSE Internal Audit.    Redaction is a means of concealing information.”

Console responded by saying that “In Console's view, the implication by the HSE lnternal Audit that there has been some concealment spending does not stand up to scrutiny. Console did not redact the visa statements.”

“Console Help lines

Between 2012 and 2015 the number of help lines operated by Console decreased from six to two. According to the CEO the cost of running the two help lines in 2014 was €346,562, of which HSE provided €294,000 and Console provided €52,562.

The two operational help lines were:

Calls to both help lines are handled by one team and are staffed by 14 paid sessional counsellors who are paid on an hourly basis. Counsellors submit invoices for the hours worked and payment is made directly to them. The payments are not taxed.

The CEO stated that the 24/7 Suicide Helpline was available to those in suicidal crisis or distress, those with repeated or on-going attempts of suicide or self-harm, those at lower or moderate risk of suicide or self- harm, anyone bereaved by suicide and concerned third parties (families, friends, colleagues, community members, professionals) who may be seeking advice, support or guidance.”

The HSE Internal Audit commented that “Information was not provided to support the cost allocations”.

Console responded by saying: “With regard to internal audits comment that “information was not provided to support cost allocations” for the Console 24/7 Helpline, Console confirms that all support information was included in the general accounts paperwork provided to the internal audit for 2012/2013/2014.  No other information was requested by internal audit for the helpline. No HSE request has ever been made to Console management to allocate a specific helpline code in Console’s general ledger”.

The HSE Internal Audit Commented on Console’s Response as follows: Help Line Cost Information: The issue is not about “allocating a specific helpline code in Console’s general ledger”. The issue is that Console did not provide any supporting documentation during or after the audit to show how it determined these costs as being allocated to Help Line costs

Expense Claims

“Claims for expenses were filed haphazardly. This impacted on the HSE Internal Audit’s ability to undertake a review of expense claims.

From the HSE Internal Audit’s examination of claims the following issues arose:

Expense claims were not signed as approved.

Receipts were not always submitted and amounts were hand written on Console Compliment Slips. For example, one set of claims from 21st December 2011 – 20th July 2012 showed 4 Dunnes Stores Gift Vouchers were purchased costing €200 in total and 3 hand written amounts on a piece of a Console Complement Slip showed €9.20, €9.40 and €9.70.   This claim form which totaled €1,544.93, was not signed as authorised or approved.

Another claim for the same person from July – December 2012 showed €100 taken from a Laser card to purchase sterling, of which the petty cash sheet stated ‘Stg 22 left’, alcohol claimed was €82.65 and an Easons Gift Card was purchased for €20.

2012 expense claim for Employee J, written on a piece of paper stated ‘Approx Expenses 31st Jan and Approx Expenses 23rd January’ for bus fares, taxis and lunch, total amount was €86.50.

The HSE Internal Audit commented: All expense claims should be authorised and approved. Amounts hand written on slips of paper should never be accepted as proof of expenditure incurred. There should never be any self-written receipts in relation to expenditure. It is important to have invoices/receipts to verify all   expenditure.”

Console responded by saying: Console accepted the recommendations and they would be implemented in the first quarter of 2016.

IT Security

The HSE Internal Audit was informed that “Console’s 57 devices (laptops, computers and memory sticks) were not encrypted. These devices would contain sensitive and confidential information.

The following table shows the numbers of laptops, computers and memory sticks held by various Console locations in 2015.”

Table 45: Devices held by Console, by location in 2015

The HSE Internal Audit commented that “Failure to encrypt these devices increases the risk of unauthorised disclosure of personal data and breach of data protection legislation”.

Console responded by saying it accepted the recommendations and they would be implemented.

Current Account(s)

The Internal Audit was informed by Console that it had “two main bank accounts, one was in Dublin and the other account was in Galway. The CEO informed Internal Audit that he and his wife are the signatories to the accounts. During the audit Internal Audit sought evidence from Console to confirm the number of cheque signatories on its two current accounts. Console subsequently provided a copy of a mandate for one account effective from 14th July 2014 confirming three signatories, viz. the CEO, his wife and Director A.”

Internal Audit commented that: “It is unclear why Console needs two current accounts.”

Console responded by saying: “Console accepted the recommendations and will examine the requirement for two bank accounts”.

Garda Clearance

“In relation to Garda Clearance, the Internal Audit sought details of any Garda Clearance for the CEO, his wife and son.

There were however no Garda clearance forms for the CEO, his wife or son. The CEO stated that he would not need one as he was the CEO and Founder. He said his wife would not need one as she was a volunteer and was not an employee and that his son would not need Garda Clearance as he was not an employee of Console.”

Internal Audit commented that: “Console should ensure that there is a Garda Clearance on file for all persons who are associated with Console. There should be no exceptions to this.”

Console responded by saying it accepted the recommendations.

Governance

“Console was founded in 2002 by the CEO. The company Console Suicide Bereavement Counselling Ltd (hereinafter referred to as Console), was registered on 6th December 2006.  Its company registration number is 431245. The CEO was a director from 6th December 2006 to 2nd January 2013, while his wife has been a director and company secretary since 6th December 2006 to date. Other directors were Director B & Director C from 15th January 2009 to 19th March 2010, Director A from 27th January 2011 and Director F, Director E and Director D from 7th April 2014 to date. (Note: Director A and Director B are the same person. This person is related to the CEO).

Internal Audit identified differences in the resignation date of the CEO as director as contained in the minutes of the 2012 AGM and the data registered with the CRO as follows.  The minutes of the 2012 AGM held on 21st November 2013, record that: “The CEO informed the Board of his intention to resign as a Director of the Company”.  Election of Officers: “The CEO was resigned as a Director”.   The CRO directors’   data states that the CEO resigned as a director on 2nd January 2013. In addition, the CEO, as director, approved Console’s 2012 annual financial statements on 24th July 2013 and submitted to the CRO, and certified as correct, Console’s 2012 Annual Return (Form B1) up to 30th September 2013.  These actions were undertaken when he was not a director.

During the period 2012 to 2015 the size of the board ranged from three to five directors. The chairperson of the board was the CEO’s wife (November 2012) and the CEO was the Honorary Secretary (November 2012 to November 2013). Console’s corporate governance policy identifies the existence of six board subcommittee (Audit, Finance, Remuneration, Corporate Governance, Clinical and Fundraising). There is no evidence that these committees existed as minutes of these committees were not available to Internal Audit. The CEO confirmed to Internal Audit that no board sub-committees had been established during the period 2012 to 2014. He stated that the process of establishing sub-committees commenced in September 2014.

Evidence available to Internal Audit, and observation during the audit, indicated that the CEO fulfilled the role of day-to-day management and running of the organisation and carried out the majority of administration functions at the Celbridge Office including opening the post.  All cheque/donations received in the post were first received by the CEO and then given to a staff member for lodgment to the bank but were not recorded.”

Console told the HSE Internal Audit that “It is accepted, as asserted by Internal Audit, that on occasion, but not on a continuous basis, one member of staff may open the post.”

“Staff of Console informed Internal Audit that the CEO’s wife also carried out administrative functions in Console. The CEO informed Internal Audit that his wife was just a volunteer and was rarely there.  During the audit, the CEO’s wife was not present at any stage. The CEO emphasised several times that his wife was just a volunteer, would not need Garda clearance, and did not receive any money from the company for consultancy work. Internal Audit identified that, according to Console’s financial records, the CEO’s wife received weekly payments into her bank account until July 2014, drove a company car (an Audi Q5), had four company credit cards and a mobile phone (These issues are dealt with later on in this report) and was a cheque signatory.  As can be seen from the table below, and as noted earlier, the CEO’s wife has been a director and Company Secretary of Console since the company’s formation and was (and is) its chairman since at least November 2012.”

Table 2: Company Registration Office Data - Console Suicide Bereavement Counselling Limited Directors and Company Secretary

Internal Audit commented that “The CEO’s wife has a greater oversight and management role in Console than disclosed to Internal Audit.”

Console responded by saying “There was no attempt to conceal the extent of the CEO’s wife’s role in the   organisation. Upon reading the Draft Report, the CEO’s wife informed Console, that although she has immersed herself on    a voluntary basis for the betterment of the organisation from the very beginning, she is of the opinion that    her relationship with the CEO draws unnecessary focus and for that reason she has decided to resign from the Board and to cease working with Console in a voluntary capacity.”

Board and Committee Meetings

“At the commencement of the audit Internal Audit team sought the minutes of Board and Committee meetings for the period 2012 to 2015. Board minutes up to 19th October 2014 were provided.  These minutes indicated that the board of Console met every two months and the meetings dealt with mainly clinical issues. Finance and administration issues were rarely discussed. Minutes were signed & dated. The CEO confirmed to the HSE Internal Audit that:

The last Board meeting for 2014 was held on 19th October 2014

There were no Board sub-committees established during the period 2012 to 2014.

In September 2014 Console began the process of establishing subcommittees.

Disorganised documentation

Internal Audit noted that information was disorganised throughout Console. This disorganisation combined with management’s delays in answering questions and providing information made the audit of Console more difficult.

Segregation of Duties

Segregation of duties means having more than one person required to complete a task.  Segregation of duties is essential to ensure effective internal control because it reduces the risk of mistakes and helps prevent fraud by discouraging collusion. Duties which are typically segregated fall into four main categories: authorisation, custody, record keeping and reconciliation. It is ideal to arrange workloads to ensure that no one person handles more than one type of function. In Console two executive committee members/directors (the CEO and his wife) assumed full administrative responsibilities at the Celbridge Head Office and the duties were not spread across the team.”

“The following are examples of where segregation of duties was non-existent in Console Head   Office:

A person who requisitions the purchase of goods or services should not be the person who approves the purchase. In Console there were no Requisitions, Purchase Orders or Goods Receipts Notes available for inspection. There appeared to be no formal process for making purchases.

The person who approves the purchase of goods or services should not be the person who reconciles the financial reports. There was no evidence of formal approval of purchases.

The person who approves the purchase of goods or services should not be able to obtain custody of cheques. In Console the CEO generally signed cheques. The CEO informed Internal Audit that his wife was also a cheque signatory. During the audit Internal Audit sought evidence from Console to confirm the number of cheque signatories on its two current accounts. Console subsequently provided a copy of a mandate for one account effective from 14th July 2014 confirming three signatories, viz. the CEO, his wife and Director A.

These functions were all performed by the same person in Console Head Office i.e. the CEO. There were no procedures in place to segregate duties. The CEO also opened the post on his own and was unaware of the importance of having two people opening the post.”

In summary the HSE Internal Audit commented that at least two sets of eyes should have been required for any transaction in Console and no one person should have been able to initiate a transaction, record a transaction, reconcile balances, handle assets and review reports. In Console Head Office there was no procedure in place to prevent one person from doing all of this.

Console responded by saying “It is not accurate to state that “…two executive committee member/directors that assume full administrative responsibility and the duties were not spread across the team.” This statement simply does not withstand scrutiny, particularly given the fact that there are centres right around the country which necessarily require administration. The assertion by IA that functions relating to procedures for the purchasing of goods and or services; the reconciliation of financial report; and the custody of cheques are not fully accepted. IA state that ‘these functions were performed by the same person in Console i.e.: the CEO.” This is clearly not the case and it patently not possible on a day to day basis that the CEO could do all of this work himself”.

 [HSE Internal Audit COMMENT: The findings of this report are commenting only on the administrative practices at Console’s Celbridge office (its Head Office), not other Console offices. The report has been updated to clarify that the findings only refer to Console Head Office and not any other Console offices.]

Console continued: The administrative workload is shared within the organisation to the extent possible but a full review of the resources devoted to this function is now required. […] It is accepted that there could be more robust procedures in place to segregate duties and mitigate risk. This will be addressed arising from the decisions of the Board on 6 December 2015. Until January 2016, interim measures have been put in place to address this issue. These will be formalised (subject to amendment and Board approval) in Q1   2016.

Donations and Fundraising

“According to Console’s audited annual financial statements, Console received donations and income from fundraising of €819,429 and €175,051 (2011), €827,975 and €170,258 (2012) and €782,381 and €188,415 (2013). During the audit (April – August 2015) Console was unable to provide Internal Audit with figures for 2014 donations and fundraising income. Console subsequently provided the HSE Internal Audit with unaudited figures (but not any supporting records) for 2014 donations and fundraising income of   €1,087,434.

At Console Head Office, controls around receipting donations and fundraising were lax and non-existent.    One person, the CEO, opened all the post.   Console Head Office did not maintain a receipts book. There was no record listing receipts received on a daily basis. A thank you letter was sent to each person who donated money to Console. During the audit a Console employee, in the presence of the CEO, informed Internal Audit that Console’s practice (at Head Office) was to over-write letters of acknowledgement of receipt on the computer and no copies of these letters were held. Accordingly, there were no records on donations and fundraising receipts made available to Internal Audit during the audit and it was not possible during the audit to verify receipts of, or lodgements of, such monies.”

“During the audit Console provided Internal Audit with a file titled ‘Lodgements 2012 – 2015’. It was noted that all the records for 2013 and records for January to August 2014 were missing. The supporting documentation for lodgements varied greatly. Sometimes it was an amount written on an   envelope.

The HSE Internal Audit selected a sample of the available lodgements made by the Celbridge, Head Office and identified that lodgements were only recorded and listed at the end of each year on a spreadsheet.   Copies   of bank drafts and cheques received were stapled to a sheet of A4 paper and the lodgement number was written on a page with the date and amount. There were no signatures on any of the lodgement documents stating the amount lodged was accurate and correct.

Some lodgements indicated cash amounts were lodged. However, because Console Head Office did not maintain receipts or records of cash amounts it received and because there were no listings of daily cash receipts it is not possible to confirm if all cash donations received were lodged intact to Console’s bank account.”

Console responded by saying “it takes issue with IA’s assertion that controls around receipting donations and fundraising “were lax and on-existent”. IA states that a thank you letter was sent to each person who donated money to Console “but Console’s practice was to over-write letters of acknowledgement of receipt on the computer.  Accordingly, there were no records on donations and fundraising receipted.”

“This is incorrect. Copies of each and every acknowledgement letter to each donor are retained by Console.  By way of example, see attached […] letters pertaining to June 2015 (i.e. during the audit). Therefore, there is a paper trail against which lodgements can be referenced and verified.”

Lodgements

“Internal Audit also reviewed lodgements made to Console’s bank account by various Console locations. Console received photocopies of spreadsheets from each location onto which the location photocopied

lodgement slips to indicate the amount of the receipts lodged to Console’s bank accounts.  The spreadsheets did not indicate if the donations were cash or cheque, what centre had compiled the spreadsheet or who prepared or verified the totals. Internal Audit examined the recording of donations at Ardpatrick Road for November and December 2013 to verify that total receipts were lodged to the bank.  The spreadsheets, which were lists of donations/contributions from clients received at the centre, showed amounts of €275 in November and €1,300 in December which were transferred into Petty Cash Account.    One Petty Cash Voucher for €600 transferred to Petty Cash was for a Christmas Meal.”

Console responded by saying “it accepts that cases of donations migrating to petty cash without having been lodged first, was not appropriate though it should be noted that any implication of impropriety by Console management, staff or volunteers is entirely rejected. It is not, in Console’s view, necessarily inappropriate for a Christmas meal to     be provided to volunteers that have provided their services to the organisation throughout the year without any remuneration. The Imprest Petty Cash system has been adopted and implemented and, subject to change and Board approval, will be documented as part of the implementation of the Governance Code in January 2016.”

Console Counselling Ltd – A Private Company

“In September 2014 the CEO and his wife established a new private company, limited by shares, called Console Counselling Ltd (registration number 548872). According to the application to form the company, which was submitted to the CRO, the purpose of the company is “counselling, education and training.” The directors of the company are the CEO and his wife (using her maiden name).  Because it was proposed that the name “Console” be included in the name of the new company, the CEO’s wife, in her capacity as director of Console Suicide Bereavement Counselling Ltd wrote to the CRO to confirm that Console had no objection to the formation of Console Counselling Ltd. The application to the CRO to form the new company stated that the CEO’s wife did not have any other directorships.

Because of the similarity of the name of the new private company to the name of Console Suicide Bereavement Counselling Ltd (the charity), Internal Audit sought information on four occasions during the audit from the CEO about this new company and in particular the purpose of its establishment. On three of these occasions he stated that it was a private company, was not connected to Console, the purpose of the new company was to provide training, there had been no activity to date and it was ‘just a company’. “

On the fourth occasion, in an email dated 13th August the CEO stated:

“The purpose of forming Console Counselling Limited, an independent commercial limited company (with no association or legal connection to Console Suicide Bereavement [Counselling] Limited) is to establish a private fee paying hospital / clinic for people with addiction and other emotional and psychological problems. The planned venture will be based on a similar model to the ‘Beacon or the Priory Clinics’ and will be funded by shareholders and customers, like any other for profit business. This is not a charitable company.”

The HSE Internal Audit commented that:

“There are many areas of concern in this matter:

Similarity of the names of the two companies established and run by the same persons i.e. - Console Counselling Ltd (a private-for-profit company) and Console Suicide Bereavement Counselling Ltd (a charity).

Potential confusion among the donating public and funders - as the names of both companies are similar, a donating public which makes donations to “Console” will not be aware of the subtleties in the differences in the company names.

Potential perception that Console Counselling Ltd is a part of / a subsidiary of/ is connected with Console Suicide Bereavement Counselling Ltd.

Lack of transparency (#1) in the CEO’s wife writing to the CRO in her capacity as director of Console Suicide Bereavement Counselling Ltd to confirm that the directors of Console Suicide Bereavement Counselling Ltd had no objection to the formation of Console Counselling Ltd, a company of which she (using her maiden name) and her husband were designated directors.

Lack of transparency (#2) in the CEO’s wife declaration to the CRO (as part of the application to establish Console Counselling Ltd) that she did not have any other directorships when she was, at that time, director of 3 companies, one of which included Console Suicide Bereavement Counselling Ltd, and  as part of the application   to establish Console Counselling Ltd as a company she had attached a letter  to the CRO signed by her in her capacity as a director of Console Suicide Bereavement Counselling Ltd raising no objection to the establishment of Console Counselling  Ltd.

The complete inadequacy of controls in Console Suicide Bereavement Counselling Ltd (including a lack     of cash receipting and expenditure controls (as identified earlier in this report), coupled with the existence of this new private company under the control of the same personnel, heightens the potential risk that cash receipts for each company may not be properly separated, segregated, and controlled and that the expenditures may be intertwined.”

Console responded by saying: “The facts as set out in this section are correct […] They have accepted that there is a potential for the    general public to perceive both as being connected due to the similar names of the respective companies.   This was never the intention. Console was aware of the establishment of the company and did not take issue with its formation. However, it accepts the difficulties surrounding public perception that arise.

To avoid any concerns, the CEO has confirmed to Console that it is his intention to dissolve the company through the voluntary strike-off procedure as the company has not traded.”

Console Ireland and Console UK

On 2nd May 2012 “the directors of Console established a company in the UK called Console Suicide Prevention Ltd (hereafter referred to as Console UK). It is a private company limited by guarantee. It was registered with the UK Charity Commission on 29th July 2013. The directors of Console UK, who are also its trustees, are the CEO’s wife (also Company Secretary), UK Director A and the CEO’s son (also Director of Services who heads Console UK and whose reporting relationship is to the CEO of Console Suicide Bereavement Counselling Limited (hereafter referred to as Console Ireland for the purposes of this section), who is also a Director and Trustee of Console UK.

Internal Audit identified that the CEO’s son, was appointed as Director of Services for Console UK on 23rd July 2012. As Director of Services he is engaged on a permanent contract of employment at a salary of stg£31,308pa which is paid by Console Ireland at a rate of stg£600 per week directly to his bank account without deducting any payroll taxes. This salary is not reflected in Console UK’s accounts.

Internal Audit identified total payments in Console Ireland’s accounts during the years 2012 to 2014 relating to Console UK of €141,392. None of this expenditure is reflected in Console UK’s accounts.”

Console responded by saying: “Given the pace at which services in the UK evolved and the necessity to establish operations in that jurisdictions for the reasons outlined, it was decided that Console Ireland would fund the establishment of Console UK and that Console UK would repay an annual sum of €20,000 per year.

Console fully accepts that the funding of Console UK by Console Ireland was not treated adequately”