When Tony O’Brien became chairman of the Peter McVerry Trust six months ago, the charity had been mired in controversy for more than a year. The homeless and housing body is still grappling with the fallout from a deep crisis but O’Brien insists it has a future.
“If I felt that the trust was damaged beyond repair – and that the best thing to do was to find a new vehicle for all the services – then that’s what I would have advocated for,” says O’Brien, a former director-general of the Health Service Executive.
“But I actually think that’s not the case and I think the trust is salvaged already and we’re on a journey to renewal and rehabilitation.”
Still, the road to recovery is long. A €15 million rescue package from the Minister for Housing in late 2023 had kept the trust afloat. But that led to a series of damning reports from housing and charity regulators and the State’s public spending watchdog, raising serious concern about misgovernance, loose financial controls and lax board oversight. The reverberations continue.
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The trust, established in 1983 by Jesuit priest Fr Peter McVerry, provides housing for 1,900 and prevention, addiction and homelessness services for 12,000. Questions over its operations, therefore, have serious implications for many people, large numbers of them highly vulnerable.
Not only had the trust almost run out of money before the government intervention, a series of disclosures raised anxiety about potential conflicts of interest, certain charitable bequests not being used for their intended purpose, flawed financial accounts and vacant property assets not being used in the middle of a housing crisis.
A criminal investigation is underway after trust solicitors made a confidential disclosure to gardaí “in relation to invoices issued by a contractor”.
Clear the decks
O’Brien joined the trust as it came under the control of a new board. Its belated 2023 financial report is part of the effort to clear the decks, the aim being to restore the trust’s battered reputation and put it on a sound footing for the future. The financial deficit in 2023 was €11.36 million, a “significant” amount, as the accounts state.
“My number one objective was for work of the trust to continue,” O’Brien says in an interview, hours before the new board was due to sign off the accounts that set out a huge writedown in the value of trust properties.
“If I had reached a conclusion that that was better done without the trust itself then that would have been my number one priority. But I think there’s an absolute basis for the trust to continue. I think there’s something special about the way the soldiers, as it were, do their work.”
Still, it has still been a torrid period for the charity and its founder. Fr McVerry stood down from the board in June after a lifetime of work for the underprivileged, having earlier resigned a separate post as charity secretary. He continues to work for the trust but is no longer involved in governance.
Fr McVerry’s passion for his work is “absolutely undimmed”, O’Brien adds, noting how the new directors in the trust have a “great deal of respect for Peter’s life’s work” and legacy. “We have to protect that legacy and rebuild public confidence in the trust and that’s why we’re here.”
But was the founder let down by the problems that festered within the charity? “I think it’s a personal tragedy for him, what happened, and I think he’d probably say that himself,” O’Brien replies.
“He started out doing very simple things to help people who were in very difficult circumstances. And as he saw increased demand he sought to create an organisation that was capable of continuing that work at a scale that he personally couldn’t. And what has subsequently happened certainly was never part of his plan or his expectations. I feel desperately sad that that’s happened.”
The overdue 2023 accounts will go to the Approved Housing Bodies Regulatory Authority, the Charities Regulator and the Dáil Public Accounts Committee. O’Brien is due before the committee on Thursday, an engagement arising from the huge volumes of public money that flowed into the charity.
State funding
The trust received €164.3 million in State funding between 2018 and 2022 and €72.6 million in donations. The organisation is now almost wholly reliant on public money because its ability to raise charitable donations was crushed in the crisis.
So far this year, the trust has received €48.14 million from the Government and State bodies. That imposes political demands for accountability from the trust.
The net €22 million property writedown comes after regulators found the charity claimed title over some assets it did not own and double-counted “multiple” properties. (The total sum written down was in the order of €23 million, but the net figure reflects the impact of other accounting adjustments.)
The overall change includes some €9 million in accumulated charges not previously taken for depreciation but which should have been, reflecting the reduction in the value of fixed assets such as buildings through use or age.
The trust has also acknowledged that the value of its property was overstated by €14 million. “The asset register just wasn’t right and some properties were not in it,” O’Brien says. “Some were in it twice, and that kind of stuff, so it was not an effective system for the maintaining of an asset register and in the course of this year we’ve had to construct that from the ground up, literally going back to original transaction files and all of that good stuff.”
O’Brien says the trust looked at its properties on a sample basis in recent months, with more of those assets to be examined for the 2024 and 2025 accounts. The bottom line is the 2023 accounts come with heavy qualifications from auditors Azets. He readily accepts this is “not a good thing” but says there was no alternative.
“We’re on a journey to having a clean audit for 2025 but there’s no way, given what happened in 2023, there would be anything other than a qualified audit and we’ve got nothing to hide in that respect.”
All of this comes despite the trust’s 2022 accounts being restated on a previous occasion in 2023.
O’Brien attributes some of the financial problems to the practice of “enthusiastic underbidding” to carry out services for State bodies, which he likens to a form of “below-cost selling”. This meant it was “accepting what looked like fistfuls of money from the State to do various things but those things were costing more than the money that was coming in”.
“That was where the thing turned,” he says. “Prior to that there was enough money sloshing around, for want of a better phrase, that the organisation could cope with that.”
This changed during and after Covid. The scale of donations used to subsidise such activities also diminished.
“Subsequently, around the middle 2023… it became apparent that the organisation was headed towards a financial crunch. But at that time, they had a closing balance sheet at the close of 2022 that looked very healthy, so people weren’t as concerned about that as they otherwise might have been. And that in a nutshell is how the organisation got into a position where it needed a €15 million bailout.”
