The country’s largest housing charity also bought a house from its own head of IT for €170,000 in another undisclosed property deal that was not declared as a related-party transaction, something that is required by governance and transparency rules.
Both the undeclared house purchase and the scale of the wasted rental payments were not uncovered during last year’s investigations by the Charities Regulator and the Approved Housing Bodies Regulatory Authority (AHBRA). These regulatory probes have cost the taxpayer more than €400,000.
Today’s revelations come as the Peter McVerry Trust (PMVT) seeks to move on from recent scandals involving conflicts of interest, poor financial controls and millions in misspent funds.
It will also fuel fears that the Government has failed to properly regulate the country’s Approved Housing Bodies (AHBs).
With more than 400 AHBs in the sector, controlling as much as €10billion in assets, the chair of the Dáil spending watchdog this weekend 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 €15m, with no guarantee the charity will survive.
Recent investigations by inspectors from the Charities Regulator and the Housing Regulator were aimed at disclosing all financial breaches, allowing PMVT to move on with a clean sheet.
According to the Charities Regulator, its investigation was ‘carried out 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.
As recently as two weeks ago, amid extraordinary Public Accounts Committee (PAC) revelations of expenditure on a Peacock enclosure and an unauthorised lift for then CEO Doyle, PMVT refiled new accounts for 2022 and 2023 to take account of the regulators’ findings.
These re-filed accounts contain various related-party transactions that had not been previously disclosed as required by transparency rules.
However, our investigation confirms the inspectors missed glaring examples of poor governance during their inquiries, raising questions about what else may have been missed.
One money-wasting deal the inspectors failed to get to the bottom of involves the rental of a Limerick property that was uninhabitable.
In this instance, the charity ended up paying €2,500 a month in rent from July 2017 to March 2023 for a property no one could be housed in. A total of €172,000 was wasted throughout 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 inspectors’ report, PMVT was originally going to buy this property itself, but decided not to when the soon-to-be owner approached Mr Doyle, saying he wanted to invest in housing. Mr Doyle suggested this individual could buy the property, renovate it and then PMVT could rent it.
The report confirms the then-owner of the Limerick property also has other properties in Dublin that he rents to PMVT.
However, the Charity Regulator’s report does not reveal the property was derelict and unsuitable for housing when PMVT rented it.
Planning files confirm the property was uninhabitable when PMVT agreed a 20-year lease in July 2017. Planning permission to make it suitable for human habitation was not made until April 2022 – more than five years after PMVT commenced paying rent.
A letter compiled on behalf of the owner by the architect states: ‘The site has been in a state of disrepair and vacant for a number of years – the existing flat roofs are currently leaking and in bad condition with damp spots internally in several locations.
‘Internally, the condition of the walls and floor is very bad with some minor fire damage in a section, mould in other areas with damp spots throughout – there is a need of a full refreshment to make this building occupiable.’
Despite the unlivable condition of the building, PMVT inexplicably agreed to rent it.
It is likely these funds, rather than going to house those in need, helped the owner to 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, according to the report, PMVT agreed to take a loan which was channelled 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. There was no signed agreement and the money was paid into a separate charity to the McVerry Trust.
The cost of this loan, which the inspectors were unable to establish by the time they published their report, remains unknown.
The charity this week confirmed more than five years of rent had been paid on the Limerick building.
It said in a statement: ‘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.’
A further transaction missed by inspectors involves a house in Athy, Co. Kildare that was purchased for €170,000 from long-term charity employee and head of IT Mark Durham and his wife Sandra in 2022, who live within 800 meters of the then-charity CEO Pat Doyle.
The three-bed property was later registered to PMVT on the land registry folio in January 2023. But the purchase, which was funded via Kildare County Council, has never been declared by PMVT as a related party transaction.
Mr Durham, who always acted appropriately during the sale, confirmed he had sold the house to his employer.
‘That should have been [declared] because that went to the housing development people,’ he said when asked about PMVT’s failure to declare the deal as a related party transaction.
‘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 said the deal was problematic as PMVT was 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 – we did nearly a favour, because I could have sold for much more because of the length of time it took to sell it. It went into the next bloody year and I could have got another five of six thousand more, but we wouldn’t do that,’ he said.
Asked if he was a friend of Mr Doyle, he said: ‘I know him from years ago. That’s about it. We would have known him for years – school and things like that – but he was my boss’s boss.’
He said he declared the sale to Revenue and paid Capital Gains Tax of €7,639, and that he had originally bought the Athy property for €140,000 in 2004.
Asked about the charity’s failure to declare the deal, he said: ‘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 had been ‘executed in a compliant manner’.
The charity admitted: ‘This purchase was not recorded as a related-party transaction, as it should have been, in the 2022 financial statements, and this omission forms part of historical weaknesses in accounting standards in PMVT.’
They added that the property was acquired ‘for a family experiencing homelessness,’ and has been used for this purpose since 2022.
Asked about its 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.’