Fine Gael TD, Charlie Flanagan, has criticised the decision of homeless charity, the McVerry Trust, to refuse an invitation to appear before the Oireachtas housing Committee, saying it smacked “of being somewhat immune to due process”.
The Laois Offaly TD, who is the Fine Gael spokesperson on Foreign Affairs, European Affairs and Defence, also said the refusal by the charity was “not satisfactory”.
This is not satisfactory & smacks of being somewhat immune to due process. https://t.co/y2WiCTASD4
— Charlie Flanagan (@CharlieFlanagan) January 4, 2024
He was responding to a report in the Business Post which said that “representatives of the Peter McVerry Trust have claimed it would be “premature” to appear before politicians this month to face questions over recent financial troubles at the housing and homeless charity.”
The trust wrote to the Oireachtas committee on housing in recent days expressing concerns about appearing before TDs and Senators while two separate statutory investigations into the charity remain ongoing.
In a letter sent on Tuesday, the trust also said it could not discuss a recent €15 million government bailout with TDs because conditions set out by the department of housing as part of its emergency funding had not yet been met by the charity.
The correspondence was co-signed by Deirdre-Ann Barr, the chairperson of the charity’s board, and Father Peter McVerry, the trust’s founder.
The Oireachtas housing committee had sought a meeting with the Trust on January 19th to discuss the charity’s financial and governance issues.
The Trust was obliged to seek a State bailout last October when it emerged that it was facing a cash-flow crisis with creditor debts of about €6m and an incoming revenue bill of about €8m.
At the time the chief executive of the Trust, Francis Doherty, resigned saying that the financial issues which had arisen came following “repeated and long-standing governance failings”.
The government provided a €15 million emergency bailout to the charity last December and suggested that a restructuring of the organisation was being considered.
However, the charity told the housing committee this week that: “no proposal regarding a restructuring of PMVT has been prepared for the consideration of the board of directors of PMVT or its stakeholders, including most importantly its funders”.
In an analysis of the now-removed financial statements of the Trust for Gript Matt Treacy wrote that “it appears that much of the difficulties facing the Trust may be related to the large expansion in their property portfolio.”
As the section below indicates, their fixed assets expanded by more than €50 million between 2021 and 2022 alone.
Most of that expansion was the consequence of the addition of €53.2 million to the freehold property held by the Trust.
That was on top of another €32.4 million which was purchased in 2021. That left the Peter McVerry Trust in control of €180 million in assets, which compares to the €11.6 million which they had in 2014.
“The acquisition of property for that purpose was well intentioned, but serious questions need to be asked now about how the Trust has been run, and indeed whether its expansion from what was initially an almost entirely voluntary charity – to what is in effect now a large company – has helped to significantly ease the homelessness problem,” he wrote.
Apart from its property portfolio – some of which has now already been sold, and more of which is planned to be sold – the Trust’s mushrooming is indicated by the fact that in 2022 it employed 766 people. Their wages and salaries accounted for more than €30.5 million, and overall operational costs including “property running” amounted to €53.6 million.
That was 87% of its total income of €61.7 million of which €43,4 million came directly from state grants, including from Government departments, local authorities and the Dublin Regional Housing Executive (DHRE).
The DHRE has already assisted it in addressing some of its debts.
The extent of that debt, and the manner in which it came to be an insurmountable barrier to the Trust continuing as normal activities can be seen from the following. Creditors grew to €7.8 million from 2021 and €5.8 million is owed in PAYE and social welfare.