The investigation by the Charities Regulator found a lack of adequate and appropriate financial controls with which the board could exercise control over the affairs of the housing charity.
Among many concerns, it also found a failure to adhere to “donor intention” in how restricted funds were used.
Charities Regulator chief executive Madeleine Delaney said: “Charity trustees must also make sure systems and processes are in place to ensure they get the information they need to oversee all the charity’s activities.
“This allows them to make fully informed decisions about the charity’s governance, finances and other significant matters. The report highlights the detrimental impact on a charity when this does not happen, which can have implications for public trust and confidence in the wider charity sector.
“Charity trustees have a duty to make sure that donations, funds or grants given for a specific charitable purpose are used for that purpose alone, and are used appropriately and responsibly.”
In one instance, the charity was found to have used €1m in funding it had received from a religious order to pay its creditors even though the order had donated money for a specific purpose with the funds meant to be restricted for this use.
It also found “material inaccuracies” in the recording of the assets of the charity and inadequate management accounts which did not report the level of debtors, creditors or debt financing.
Furthermore, the inspectors found no evidence of active management of conflicts of interest and that competitive tendering procedures for services and contracts to ensure value for money were not implemented or adhered to.
The Peter McVerry Trust appointed a new chief executive earlier this year, as Niall Mulligan took the reins after the previous CEO Francis Doherty resigned in October after just over four months in the position. File photo
The report said: “The inspectors identified numerous instances of inappropriate transfers and co-mingling of funds between restricted and unrestricted funds, as well as the unauthorised use of restricted funds for operational purposes.
“This demonstrates a lack of financial oversight and consideration of donor intentions by the Board as to how restricted funds ought to have been utilised.”
The Charities Regulator said it will follow up with the board for assurances that the matters raised by the inspectors are properly addressed.
Last year, the Government agreed to give a bailout worth €15m to the charity as it faced serious cashflow problems, on the condition of reform in the organisation.
The Charities Regulator and the Approved Housing Bodies Regulatory Authority both appointed inspectors to carry out separate investigations into financial and governance matters at the trust.
The Peter McVerry Trust appointed a new chief executive earlier this year, as Niall Mulligan took the reins after the previous CEO Francis Doherty resigned in October after just over four months in the position. The charity has been asked for comment.