The Department of Housing has changed its policy to fully fund homelessness services, after it became “apparent” that organisations like the Peter McVerry Trust (PMVT) were using money fund-raised from the public to supplement State services.
The Public Accounts Committee (PAC) heard on Thursday that a review carried out in the wake of a financial crisis at PMVT, one of the biggest providers of frontline homelessness services, found that it was using donations to cover the cost of delivering Government tenders.
The PAC is now requesting for the third time that the PMVT appear before it to answer questions publicly about its €15 million State bailout.
Sinn Féin TD John Brady, chair of the PAC, expressed “dissatisfaction and anger” towards the housing charity which has twice refused to appear before the committee.
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Officials from the Department of Housing appeared before TDs on Thursday, to answer questions about emergency funding that it had provided to the PMVT.
The Department is currently carrying out a review of how it provides and governs Section 10 funding. This relates to public money that goes from the Department to local authorities, who then use the funding to provide homelessness services through NGOs (non-governmental organisations) such as PMVT.
Joanna Byrne, the Sinn Féin TD, asked the Department if it had “questions to answer” about its funding model, which she suggested may have “created the context” for a financial crisis at PMVT.
Under a deficit funding model used by the State, organisations like PMVT would be given the majority, but not the entire cost, of a tender for State homelessness services like Housing First. The same model meant that NGOs could underbid for contracts.
David Kelly, an assistant secretary at the Department of Housing, told the committee that the gap in this funding was being filled by public donations.
“It did become apparent that some NGOs were including fundraising income in tender costs,” Mr Kelly said.
The Department has now decided to “change that procedure so that the State would fully fund all services”.
“It became very apparent that the PMVT were not – whether it’s through underbidding or not realising the full cost of the service – being reimbursed for the actual cost. And that’s probably one of the issues.”
In a letter to the PAC this week, PMVT declined for the second time to appear before the public spending watchdog.
“There’s a real level of dissatisfaction and anger here by members, and I include myself in that,” said Mr Brady.
He added that he was also aware of attempts over the last year by the Oireachtas housing committee to invite PMVT to appear before it. Mr Brady said the charity had received “huge” sums of public funding and “there needs to be accountability”.
“I propose that we write immediately to PMVT imploring them to come in at the earliest opportunity,” he said.
Mr Brady said the PAC will be seeking guidance from the Oireachtas standing orders committee to see what options it had to expand its remit and bring PMVT before it.
He also used the same meeting to question Department of Housing officials about an IT system for the Residential Tenancies Board that ran €5.2 million over budget.
Mr Brady said that the system, which was designed as a new online tenancy registration system, had originally been budgeted to cost €3.3 million but ended up costing €8.5 million. Graham Doyle, secretary general at the Department of Housing, said the issue “goes back a number of years”.
The system first came into effect in 2021, but there were issues identified with it the following year which required additional spend.
The PAC was told by Mr Kelly that the RTB “wants to make sure that the IT systems are fit for purpose, for the public, both tenants and landlords.”
