Minister for Housing Darragh O’Brien has been warned that the financial and governance crisis engulfing the Peter McVerry Trust could have a “contagion effect” and impact public trust in other housing charities.
The Charities Regulator appointed inspectors on Thursday to conduct a full investigation into the homelessness charity.
The trust is now facing two statutory investigations, with the Approved Housing Bodies Regulatory Authority (AHBRA), a watchdog for non-profit housing bodies, announcing its own inquiry late last month.
The trust has been grappling with a major financial crisis due to serious cash flow issues and significant debts.
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Francis Doherty, chief executive of the trust since this June, tendered his resignation on Wednesday, claiming the charity’s board had made his position “untenable”.
In his resignation letter to board chair Deirdre-Ann Barr, Mr Doherty raised concerns about the “potential mismanagement” of donations at the homelessness charity, as well as “repeated and long-standing governance failings”.
Commenting on the developments, Mr O’Brien said he was keeping a “very close eye” on the matter. He said he believed officials had not yet “gotten to the bottom of the situation” facing the charity, but its services would be protected.
Correspondence shows Mr O’Brien was warned in recent days that the controversy could impact the wider housing and homelessness charity sector.
In an October 5th letter, businessman David Hall, a close associate of Mr Doherty, told the Minister there had been a “lack of urgency” addressing the crisis.
“The non-payment of creditors of the McVerry Trust could have a contagion effect on other service providers. The delay in sorting this is unhelpful to all concerned,” he wrote.
In the letter, seen by The Irish Times, Mr Hall said he had “grave concern” for the wider sector as a result of what was happening at the trust. He said he had offered to come onto the board of the Peter McVerry Trust during the crisis, but his offer was not accepted and he later withdrew it.
Underfunding of homeless services by the State was, he wrote, putting pressure on providers to cover shortfalls with donations and had left the sector on a “knife edge”.
“The level of funding is below what it’s costing to provide these services. This is clear for anyone to see,” he said, adding that the State was “short changing” charities contracted to provide homeless services as a result.
Mr Hall runs a non-profit housing body which assists distressed mortgage holders remain in their homes as renters, iCare, with Mr Doherty sitting on its board.
The letter said “urgent unprecedented intervention” was required given the “critical” situation facing the trust. Mr Hall called for a wider review of the funding model for homeless services provided by charities.
Mr O’Brien said it was not for him to say whether he had confidence in the Peter McVerry Trust’s board, as independent investigations are underway.
In a statement, Helen Martin, chief executive of the Charities Regulator, said the watchdog had determined a statutory investigation of the trust was warranted. The regulator would “work closely” with AHBRA, “so that our activities are co-ordinated in so far as is consistent with our respective statutory functions”, she said.
A spokeswoman for the trust said it would work with the regulator’s inspectors “in the best interest of the service users and tenants”.
Meanwhile, Pat Doyle, the previous longtime chief executive of the Peter McVerry Trust, who stepped down earlier this year, has resigned from the Housing Commission, an expert group convened by the Government to report on housing policy.
“The Minister was informed of, and accepted, the resignation of Pat Doyle from the Housing Commission,” a spokeswoman for Mr O’Brien said.
