Extern Ireland, a charity assisting vulnerable people, used public funding for services to provide "emergency hardship loans" to staff members, which was used towards their children's college fees, car tax and NCT and baby equipment, a financial audit has found.
The internal HSE audit, dated January 21st, 2020, issued eight “high” ranked recommendations to the charity, which provides services to individuals facing a variety of difficulties such as homelessness, addiction, social exclusion and mental health problems.
The report found that Extern Ireland issued “emergency hardship loans” of up to €2,500 to staff in “exceptional circumstances”.
However, when the audit reviewed the charity’s listing for loans, it identified loans listed for which paperwork could not be found by Extern Ireland or for which it was unclear whether the loan had been paid.
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The listings indicated a loan of €3,000 in 2016, which was above the limit, but it was unclear whether this was actually paid out, the report found. The listing indicated five loans in 2016 totalling €8,900 and 10 loans in 2017 totalling €18,800.
Room decoration
“Reasons provided for loans included: baby equipment and room decoration, boiler replacement, college costs of children, car maintenance, car tax and NCT, and medical assessments and treatment,” the report said.
The auditors said this scheme meant “public funding for services was being used to provide financial assistance to employees”, which could “detrimentally impact other administrative duties”.
Extern Ireland is predominantly funded from various public sector bodies. In 2017, it received €5,931,636 from Tusla, the child and family agency, and €264,892 from the HSE.
The auditors advised the charity to “take the steps necessary” to cease the payment of hardship loans.
The auditors also highlighted a “lack of compliance” with national and local regulations on procurement for capital works, resulting in non-achievement of value for money.
It cited an example of when the charity paid an invoice of €40,600 relating to alterations to its office at Arran Court in Dublin in October 2016. However, the purchase order relating to the works indicated costs were estimated at €29,500.
Procurement process
The charity confirmed to the auditors that a procurement process was not undertaken on that occasion, and the builder was the same one used previously for another office.
A spokeswoman for Extern Ireland, a subsidiary of the Extern group, which is based in Northern Ireland, said it had "accepted and acknowledged the recommendations of the audit and has implemented all recommendations, including ceasing to offer staff hardship loans".
A spokeswoman for Tusla stated that it has a number of internal controls to ensure public funding is used for the purposes agreed.
“In this case, we have a comprehensive corrective action plan in place to ensure any deficits identified in the audit do not reoccur in the future,” the spokeswoman said.
“Where we don’t receive the necessary assurances, we do of course review the funding arrangements.”
