Prime Time reporter Paul Murphy has reported extensively on financial issues at the Peter McVerry Trust, one of Ireland's largest housing charities.
On Thursday, the issue came before the Public Accounts Committee, providing new insights into how the charity has operated, and how it is trying to change its structures.
The week started brightly for the embattled Peter McVerry Trust. After delaying for over a year, the homelessness charity on Tuesday finally published its accounts for 2023.
Media interest in the accounts focused largely on technical matters - revisions to the charity's fixed-asset register and a €23 million write-down in the recorded value of its properties. Ex-HSE chief Tony O’Brien, who has been the chair of the McVerry Trust since May, referred to the publication of the accounts as a "clearing of the decks".
But testimony on Thursday by former McVerry Trust CEO Francis Doherty before the Dáil Public Accounts Committee (PAC) reminded us once again of the troubling issues that caused the charity’s fundraising income to plunge from a whopping €15m in 2022 to a projected €500,000 next year. Those issues have little to do with the quality of the fixed-asset register or how the charity valued its property holdings.
Mr Doherty took over the reins at the charity in June 2023, replacing Pat Doyle who retired as CEO after 18 years at the helm. Mr Doyle was a dominant figure at the charity; he told the Charities Regulator that, aside from being CEO, he was also effectively the charity’s Chief Financial Officer.
His successor, Mr Doherty, told the PAC about significant breaches of trust at the charity before he took over. For example, millions of euro of donor money given for specific purposes – such as the purchase of named properties to house homeless people - was diverted for day-to-day operations, including payments to the Revenue Commissioners.
Mr Doherty also described some unusual goings-on at the charity. Soon after he took over, he "had to evict staff" of a contractor who "had been living on site" at a McVerry Trust property at Kerdiffstown House in Kildare.
The PAC also heard that the charity spent €300,000 on a driveway at the same property and also paid for an enclosure for two peacocks there. The peacocks, named Bert and Ernie, replaced two others who escaped before the enclosure was built.
But one transaction loomed large at the PAC meeting; an as-yet-unexplained transfer of €350,000 of McVerry Trust funds to a private entity that did not provide any services to the charity. That transfer (via a subsidiary charity of McVerry Trust) was instructed by Mr Doyle when he was CEO.
Mr Doyle had briefly served as a director of the entity which received the money. And, as previously reported by Prime Time, he had said he was going to work there after he left his job at the McVerry Trust. But why was the €350,000 paid?
Mr Doherty told the PAC that Mr Doyle, gave different explanations, including that he wanted to ensure that the private entity was "in sufficient funds" so it could pay his salary.
Prime Time has reported extensively on the McVerry Trust’s financial issues in recent years. Mr Doyle declined repeated invitations to do an interview, he also declined to respond to a request to explain the reason for the €350,000 payment. In a letter to the PAC, he said that he had been asked by the Board not to comment on the charity.
Tony O’Brien later told Prime Time that while he was unaware of any such demand from the previous PMVT Board, Mr Doyle "didn’t seek any view from the Board regarding his attendance [at the PAC] and at this stage he is in any event a private citizen entitled to go to.. the PAC should he wish to do so."
The charity’s newly published 2023 accounts include no specific mention of the €350,000 payment, which was repaid in 2023, after Mr Doherty queried it.
McVerry Trust Chairperson Tony O’Brien said that the €350,000 wasn’t mentioned in the accounts because "it had no impact on the overall financial performance" of the charity. "It was in and out within the one year, so it had a non-impact on the financial statements," he said.
However, an internal McVerry Trust document seen by Prime Time contradicts this. It states that the €350,000 transfer was made on December 16, 2022. The sum was returned in mid-2023.
The charity’s financial year is the same as a calendar year, therefore the transaction should have impacted two sets of accounts.
Asked to clarify the apparent contradiction, on Friday Mr O’Brien said that the €350,000 was part of a larger sum transferred from the McVerry Trust (to a PMVT subsidiary charity) and recorded as an impairment.
He said that that impairment was recorded as having being reduced by €350,000 in the 2023 accounts after the €350,000 was repaid. The original transaction was not detailed in the 2022 accounts.
Asked earlier at the PAC by Fine Gael TD James Geoghegan, "Is it the end of the [€350,000] matter," Mr O’Brien replied, "Once the funds were returned there was no permanent loss to the Trust."
He added that "those people at the time who were in place decided to close the matter… and I am not going to reopen it."
Mr Doherty resigned in October 2023 after fewer than five months in the job. He later said his resignation was sparked after the Board wrote, instructing him not to "issue any communications, correspondence or commentary to any regulator or other stakeholder without prior sign-off and approval from the Board."
The letter from the board added, "exceptions to this are communications in relation to ordinary course operations matters." Mr Doherty previously described the instruction as a "gagging order" that made his position "untenable."
While the cloud of past poor governance still hangs over the charity, the McVerry Trust reiterated its financial and governance progress. Eight of the nine directors on the current Board were appointed in the last year.
The charity has also ceased its practice of what Tony O’Brien described at the PAC as "underbidding and underpricing" to secure contracts from public bodies. That practice, which he referred to as "ponzi," led to an "inevitable crash" in the charity’s finances, he said.
Also, the charity now has a procurement department and follows "proper procedures," Mr O’Brien told the PAC.It has also worked to eliminate conflicts of interest, which "historically, the Trust was rife with," Mr O’Brien said.
Prime Time had previously highlighted one such conflict. At one stage, one man was simultaneously the head of logistics for the McVerry Trust; part-owner of a company which had a contract to provide transport services to the Trust; and was also a tenant at a house owned by the charity even though he didn’t qualify for housing under the charity’s criteria.
In addition, the charity awarded the transport contract – worth €1.25m over seven years - without offering it for public tender, in breach of public tendering regulations.
On Thursday, the PAC was told that the man in question no longer works with the Trust and his company no longer provides transport services to the charity. The PAC was also told that the McVerry Trust intends to sell the house which he rented from the charity.
Another striking conflict of interest at the McVerry Trust was that the largest supplier of maintenance services until 2023 was Rubycon, a company owned by a brother of the charity’s auditor and accountant, Donal Ryan.
Neither Rubycon nor Mr Ryan work with the charity anymore. In fact, Rubycon is suing the McVerry Trust over what it claims is around €2m in monies owed for work carried out.
Prime Time is aware of several other creditors, mainly smaller businesses, who claim they are owed money by the charity. The main obstacle to suppliers getting paid relates a lack of paperwork, such as purchase orders, to support their claims. There was no purchase-order system at the charity until late 2023 and written quotations were often not requested from established suppliers.
There was much sympathy at the Public Accounts Committee for Tony O’Brien and the new Board who were left "carrying the can," in the words of one PAC member, for the governance or oversight failures of others.
Fergal O’Leary, chief executive the Approved Housing Bodies Regulatory Authority (AHBRA) which regulates the McVerry Trust, told the committee that he had "hope" for the charity.
He said AHBRA had seen "a lot of progress," but that there was "a long way to go." He said that cancellation of the charity’s registration "remains possible." He also said that the charity still doesn’t have a reliable fixed asset register.
In his testimony, Mr Doherty, told the PAC that, as incoming CEO in 2023, he was advised by the Board that "the organisation could not be handed over to you in better financial health."
That picture "could not have been further from the truth" he said. He described the charity’s finances and financial systems as "verging on total collapse."
On the day he became CEO, the charity, unbeknownst to the Board, had less than half a million euro in its bank account, while owing over €17m, including more than €9.6m to the charity’s trade creditors.
"The organisation had zero cash reserves, it had €125 in a sinking fund," said Mr Doherty, "all restricted fundraising and grant income for specific purpose use had been spent when there should have been more than €5 million in restricted bank accounts on the back of purpose-specific donations."
After Mr Doherty’s testimony, Sinn Féin TD Joanna Byrne said, "we didn’t think we could be more shocked… a lot of it beggars' belief."
Several members of the Public Accounts Committee bemoaned what they said was a lack of accountability for past failures that occurred at the charity.
Mr O’Brien, however, spoke about a charity in renewal, while still pursuing its mission of providing accommodation and other services to some of the most marginalised in society.
Charity founder Fr Peter McVerry, who recently stepped down after over 41 years on the board, is still involved with the charity. He has declined repeated requests from Prime Time to do an interview.
There was much sympathy for him at the Public Accounts Committee meeting because the charity he set up and which bears his name, has been tainted by governance failure.
"I cannot imagine how difficult it has been for [Fr McVerry]," said Social Democrats TD Aidan Farrelly.
Asked by Deputy Farrelly if the charity had considered rebranding, Mr O’Brien said it was not something that was being "actively considered" and is "way too premature."
He added, however, that "it is something that we will contemplate as part of a forward-looking strategic review which we have just initiated."
"It would be a very, very serious decision to move away from Peter’s name, given that everything that is done in the organisation is essentially inspired by and is a continuation of his life’s work."
