Financial Mismanagement and Governance Failures
The Peter McVerry Trust (PMVT), a prominent housing charity in Ireland, has come under intense scrutiny following revelations of significant financial mismanagement. An investigation has uncovered that the organization wasted €172,000 in funds for the homeless by renting a derelict and uninhabitable property for over five years. This incident highlights serious issues with governance and transparency within the charity.
In addition to the rental issue, PMVT was found to have purchased a house from its own head of IT for €170,000 in an undisclosed property deal that was not declared as a related-party transaction. Such transactions are typically required to be disclosed under governance and transparency rules. The failure to disclose this purchase raises concerns about the internal controls and ethical standards within the organization.
Despite previous investigations by the Charities Regulator and the Approved Housing Bodies Regulatory Authority (AHBRA), these critical issues were not identified. These regulatory probes have cost taxpayers over €400,000, further emphasizing the need for more rigorous oversight.
The ongoing scandals involving conflicts of interest, poor financial controls, and millions in misspent funds have placed the charity in a precarious position. The recent revelations have also fueled fears that the government may have failed to properly regulate the country’s Approved Housing Bodies (AHBs). With over 400 AHBs controlling up to €10 billion in assets, there is growing concern that similar scandals could occur in other organizations.
The chair of the Dáil spending watchdog expressed fears that “another Peter McVerry-style scandal may be lurking.” As a result of the mismanagement during the 18-year rule of former CEO Pat Doyle, taxpayers have so far had to bail out PMVT by €15 million, with no guarantee of the charity’s survival.
Recent investigations by inspectors from the Charities Regulator and the Housing Regulator aimed to disclose all financial breaches, allowing PMVT to move forward with a clean slate. However, the findings suggest that these inspections may have overlooked critical issues.
According to the Charities Regulator, its investigation was conducted by an internal forensic accountant and a senior forensic accountant from Deloitte at a cost of €212,185. The total cost of AHBRA’s statutory investigation was €197,015.25. Despite these efforts, the inspection missed glaring examples of poor governance, raising questions about what else might have been overlooked.
One such example involves the rental of a Limerick property that was uninhabitable. The charity paid €2,500 per month in rent from July 2017 to March 2023 for a property that was unsuitable for housing. A total of €172,000 was wasted over this 69-month period.
The property was later bought by PMVT for €250,000 in a controversial 2023 purchase that was examined by inspectors from the Charities Regulator. According to the report, PMVT was initially going to buy the property itself but decided against it when the soon-to-be owner approached Mr. Doyle, expressing a desire to invest in housing. Mr. Doyle suggested that the individual could buy the property, renovate it, and then PMVT could rent it.
Planning files confirm that the property was uninhabitable when PMVT agreed to a 20-year lease in July 2017. Planning permission to make it suitable for human habitation was not obtained until April 2022—more than five years after PMVT began paying rent.
A letter compiled on behalf of the owner by the architect stated: “The site has been in a state of disrepair and vacant for a number of years—there are leaks in the flat roofs, damp spots internally in several locations, and the condition of the walls and floors is very bad with some minor fire damage and mold.”
Despite the unlivable condition of the building, PMVT inexplicably agreed to rent it. It is likely that these funds helped the owner pay for the renovation of the property. According to the inspector’s report, the housing charity bought the property for €250,000 in March 2023. However, PMVT did not have the €250,000 at the time, as it was waiting for approved State funding.
Instead, PMVT agreed to take a loan through a trust firm business that the Limerick owner used to hold his property. This loan was not approved by the board or the audit committee, and there was no signed agreement. The money was paid into a separate charity to the McVerry Trust. The cost of this loan remains unknown.
The charity confirmed more than five years of rent had been paid on the Limerick building. In a statement, they said: “Our records show that Peter McVerry Trust entered a 20-year lease on a property in Limerick on the 1st July 2017 at a cost of €2,500 per month. It is unclear to the current board and senior management why the lease was undertaken by the former CEO.”
Another transaction missed by inspectors involves a house in Athy, Co. Kildare, purchased for €170,000 from long-term charity employee and head of IT Mark Durham and his wife Sandra in 2022. The three-bed property was later registered to PMVT on the land registry folio in January 2023. However, the purchase, which was funded via Kildare County Council, has never been declared as a related-party transaction.
Approached by the media, Mr. Durham confirmed he had sold the house to his employer. He stated that the deal should have been declared because it went to the housing development people. “That was all officially done. It went to Kildare County Council, they paid the money to our solicitor. Everything was properly done? I’m surprised, actually.”
Mr. Durham explained that the deal was problematic due to PMVT being overwhelmed and unable to process purchases promptly. “It was a nightmare, an absolute nightmare. It took us months and months, but I wasn’t going to complain because it was my company and it was a charity. Everyone’s overworked. There were too many properties, so they just couldn’t be processed on time.”
He added that he declared the sale to Revenue and paid Capital Gains Tax of €7,639. “I know they are tidying up a lot of things. Maybe they missed my one.”
In their statement, PMVT said the Athy purchase had been at market value and executed in a compliant manner. They admitted the purchase was not recorded as a related-party transaction in the 2022 financial statements and acknowledged the omission as part of historical weaknesses in accounting standards.
They added that the property was acquired “for a family experiencing homelessness” and has been used for this purpose since 2022.
Asked about the inspector’s failure to spot the deals disclosed today, a spokesperson for the Charities Regulator said: “The scope of the investigation was to review and identify, in a timely manner, the principal compliance and governance failures relating to charity law. The report makes it clear that the investigation ‘was not designed to identify all circumstances of noncompliance or other irregularity… that may exist’.”
AHBRA also defended its report. A spokesperson said: “It was not a forensic audit, and the Act does not require AHBRA to conduct property condition assessments, planning reviews, commercial valuations or detailed examinations of individual transactions.”