The report provided to the public spending overseer revealed that the Peter McVerry Trust, a charity dedicated to practicing homelessness care, is seeking complete State financial backing for its services, despite a previously offered government relief fund of €15 million intended to alleviate the charity’s financial crisis. It was also found by the Comptroller & Auditor General that an interim charity head was compensated €1,000 per day from the budget of the Housing Department before the appointment of a new chief executive in April of last year.
Historically, the charity’s funding model had been based on a 70-30 ratio, with 70% of its finances coming from the State and the remaining 30% from fundraising efforts. However, its present budget request to the Comptroller & Auditor General highlights a shift towards total cost recovery from State resources. The charity remains in discussions over its 2024 budget with the State.
Over the period from 2019 to 2022, the charity received slightly over €140 million in funds from the State, however serious financial difficulties arose for them last year. The sum provided by the Dublin Region Homeless Executive in November of last year outstood the amount agreed by the Housing Department by over €3 million, despite the department having approved a €2 million drawdown from the trust’s 2024 budget in advance.
The charity, originally set up by Jesuit priest Peter McVerry, is currently undergoing separate probes for alleged serious governance failings, conducted by the Charities Regulator and the Approved Housing Bodies Regulatory Authority.
Problems like staff turnover and count, cost-reduction strategies, along with updates on cash-flow, budget and data on its fixed asset register, were raised but not fully responded to by the trust last June in response to the department’s inquiry. In July, additional information was supplied and the trust pledged to address the remaining “outstanding items”.
The trust’s own rationalisation review in February exposed “a number of significant liabilities” overlooked by the department, including Revenue debt, loan agreements, contingent liabilities and creditor debt to suppliers.
A stern evaluation of the government’s rescue plan from last November revealed the mounting monetary burdens generated by the instability in the trust. The C&AG revealed that the state department’s expenditure, including “professional fees”, had already surpassed €1.56 million, in addition to the initial €15 million bailout.
This further expenditure covered €1.42 million for PwC accountancy firm who were allocated €878,000 to independently probe the Peter McVerry Trust and another €541,000 to offer auxiliary services. An expenditure of €128,000 was incurred for the tenure of an acting chief executive and management consulting services within the trust.
Upon the departure of the prior chief executive from the charity in October, after a mere five-month tenure, the department proposed a past county council chief executive to offer temporary assistance in a short-term role.
Starting from 16th October 2023, the trust engaged the suggested candidate at a €1,000 per day rate, a cost which was later reimbursed via Dublin City Council and ultimately by the department.
PwC’s initial review of the trust discovered a “cash fall of €4 million” during the eight-month period leading up to September 2023. During this period, the national auditor stated that PwC could not provide adequate assurances that the issues leading to the cash fall had been remedied.
Despite imposing 32 conditions on the bailout, the auditor found 19 of these conditions lacked “clear metrics for validation”, making it challenging to confirm the trust’s compliance.
The auditor also highlighted that the department’s estimated cessation costs related to undeveloped trust projects were around €1 million. The trust, however, puts these termination costs marginally higher at €1.5 million, a decrease from an initial estimate of €2 million, which presumed full cost recovery.