The Peter McVerry Trust has confirmed it is in the process of repaying a €8.3 million tax debt to Revenue.
The regulator for housing bodies on Tuesday opened a statutory investigation into the trust, one of the largest providers of homeless services in the country, which is facing a financial crisis.
One pressure facing the charity is the bill for €8.3 million in taxes. A spokeswoman for the trust confirmed it availed of a Revenue scheme during the Covid-19 pandemic “to warehouse PAYE tax debts” between 2020 and last year.
“Peter McVerry Trust entered into a phased payment arrangement with Revenue commencing September 2022 and [has] met all payments as part of this arrangement to date,” she said.
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Concerns about the future solvency of the charity have been discussed at senior levels internally in recent days, according to one informed source. It has been experiencing cash flow problems in recent months, which it first disclosed to the Department of Housing and other funders and regulators in July.
After the concerns were raised, the Dublin Region Homeless Executive (DRHE), the charity’s main funder, commissioned auditor PwC to conduct a financial and governance examination of the charity.
An unpublished initial draft report, completed earlier this month, raised serious concerns about the charity’s ability to meet its day-to-day running costs due to the financial difficulties.
It is understood that Francis Doherty, the charity’s chief executive, wrote to the trust’s board last week raising concern about the depletion of the charity’s available cash and its financial position.
The letter suggested that new independent directors be appointed to the board during the turbulent period, sources said. The letter, which was copied to Minister for Housing Darragh O’Brien, is currently under review by the Department of Housing and DRHE officials.
DRHE, which co-ordinates and funds homeless services across the four Dublin local authorities, said it had not received any requests for emergency funding from the trust.
“Our priority is the continuity of services provided by PMVT to persons experiencing homelessness in the Dublin region,” it said.
[ Regulator appoints inspectors to investigate Peter McVerry TrustOpens in new window ]
It said its own review of the trust, which includes the continuing PwC inquiry, “has not yet reached its conclusion”. A final report is expected to be issued by PwC in the coming weeks.
Department officials have been briefed on the financial difficulties facing the trust in recent days. One source said any request for a bailout or extra funding from the trust would likely be made to the DRHE in the first instance.
Internally it is understood that the trust has been exploring various emergency financial measures to address its cash flow problems.
Speaking on Wednesday, Fr Peter McVerry put the financial problems down to the fact the charity had “overstretched” in recent years. It was “working through the cash flow pressures” with its funders, which he said might take a number of months.
Fr McVerry, a campaigner for the homeless who set up the charity in 1983, is not involved in the day-to-day operations of the trust, but remains the secretary of its board.
The priest played down any concerns relating to the warehoused Revenue debts: “Like many other firms during Covid we postponed our Revenue payments, which was perfectly legitimate…There is no issue there, we are paying it off”.
The Approved Housing Bodies Regulatory Authority (AHBRA), which regulates not-for-profit housing bodies, on Tuesday said it had “determined that a statutory investigation is required having identified concerns in relation to the organisation”, which it was notified of in July.
In a statement, the trust said the investigation was “an important part of transparency and accountability” for the organisation.
The charity, which provides homeless accommodation to more than 2,000 people each night, has expanded significantly in recent years. Its latest annual report stated it had income of €53 million in 2021, €38 million of which came from State funding.
Earlier this year the trust’s long-time chief executive Pat Doyle stepped down, with the director of housing and communications, Mr Doherty, taking over as chief executive in June.
