The High Court has appointed liquidators to Rush Credit Union following an application by the Central Bank on foot of investigations into the organisation, which had revealed significant misappropriation of funds.
The Resolution Report as well as an affidavit by the Central Bank’s Head of Resolution for Credit Institutions Patrick Casey - published in redacted form by the Central Bank - detail a number of governance, financial and internal control failures identified in Rush.
The deficiencies uncovered cover control of bank and cash, lending practices, as well as the day-to-day running of the credit union.
Rush’s August management accounts show liabilities exceeded total assets by €1.2m, with alleged misappropriation of €800,000 bringing this figure to €2m.
The credit union spent €220,860 on 15 car draws between November 2012 and April of this year, however, in its report the Central Bank said Grant Thornton has been “unable to locate details winners of previous car draws”.
The published documents also show the cost-to-income ratio rose from 57% to 93% between 2011 and 2015, while the total income fell from €2m to €1.39m in same period.
In its report, the Central Bank said it was "wholly inappropriate" to use public money for the credit union’s "significant lapses in corporate governance, internal controls or misappropriation".
It added that Rush Credit Union members "have no understanding" of the weak governance and management controls that are the "root causes of its problems".
The documents also note that “at present the only person in a senior management role at Rush Credit Union is a temporary consultant".
Central Bank publishes redacted affidavit after Rush Credit Union liquidators confirmed by High Court:regulatory capital minus 8.7% pic.twitter.com/ExYh0oWTy7— seanwhelanRTE (@seanwhelanRTE) November 21, 2016
The Central Bank said certain records about loans and deposits at Rush have been redacted “for the protection of depositors", while details of a whistleblower have also been redacted to protect their identity.
Despite recommendations for Rush to enhance its governance, the Central Bank said: “The Board and management failed to address these very significant recurring issues and as a consequence, this led to a severely compromised financial position, and ultimately the failure of the credit union.”
Provisional liquidators had been previously appointed to Rush Credit Union on 2 November.
Since the appointment of the provisional liquidators, the Central Bank has issued compensation payments through the Deposit Guarantee Scheme to around 9,700 members of Rush.
The total compensation paid to date amounts to €22.3m, representing 98% of deposits covered by the Scheme.
Members received their payments from 11 November of this year.