Board Rotation and Government
Members of the IRC Executive are elected by 47 members of the Central Council, the Irish Red Cross’ highest governing body. In turn the members of the Central Council are elected by the volunteer membership of the Society as representatives of their area.
In the new constitution drafted by the Society and approved by the joint Statutes Commission of the International Red Cross and Red Crescent Movement in Geneva, a mandatory break of one full term after two terms of service on the Executive Board has been introduced. (Letter of Confirmation from Geneva available)
This is in compliance with standards set by the International Movement and in compliance with best practice as stipulated by the Dochas Code of Corporate Governance for Irish Development NGOs.
Additionally this new Constitution puts strong emphasis on recruiting the appropriate external expertise to complement the internal representation at the Board table. The chairman can nominate two external individuals directly to the Board and at least four externals to the Central Council from which other Board members are elected.
Additionally the Minister for Defence nominates a further four to the Central Council, and we have offered to furnish him within the next month or so with a profile of relevant skills and expertise that would complement the existing Board experience.
Why is this not applied retrospectively?
That is a decision for our Central Council members, two thirds of whom are representatives of the volunteer membership in their areas. We have not inserted a retrospective clause in the constitution because our central council members have the power as it stands to not return any of the incumbent board members at the next election if they choose to do so.
The Irish Red Cross is a democratic organisation. Democracy may have its flaws but one must respect the democratic process.
Tipperary Bank Account 2005-2008
On his appointment in late 2010 the Chairman, Mr David J O’Callaghan, reviewed the resources available to him and tasked a subcommittee of three people to investigate the circumstances surrounding the account in question. He felt that the standing and integrity of the investigation team spoke for itself. (Bios available ).
It is also common practice for a suitably qualified sub-group of the Board to investigate such a matter. It was felt that such a sub-group could investigate the matter more quickly and at less cost than appointing an external agency.
The report was published in 2010 and is freely available online.
The Society has gone publicly on record to say how much it regrets the failings in financial oversight and governance that allowed this situation to arise. While deeply regretting the breach of donor trust caused, the Society is keen to stress that no money was misappropriated in any way and all funds did reach the intended beneficiaries.
It is also important to stress that an extensive suite of financial procedures and controls have since been put in place to guarantee that a situation such as that involving the Tipperary account could never be repeated.
Haiti
It is alleged that €600k was diverted from the Haiti appeal. This allegation is completely without foundation.
€3,138,861 was raised for relief in Haiti and every cent was subsequently allocated for that purpose – these numbers are reflected and recorded in our financial statements and in those of the International Red Cross.
Unrestricted Donations
Donations to any charity are broadly either restricted or unrestricted. Restricted is where the donor clearly specifies the cause they wish their donations applied to. The Irish Red Cross has a strict policy of allocating any donation to where the donor specifies it should go.
The Irish Red Cross makes every effort to ascertain the donor’s wishes. Reply slips are enclosed in appeal letters; website donations entail choosing the specific appeal from a drop down menu; the donor is asked directly on the phone; newspaper adverts are marked with a specific appeal code.
A small number of charity donors do not specify where they wish their donation to go. This can be for a variety of reasons. Many are happy for their donation to be used as the charity sees fit while some simply forget to indicate their preferred cause.
The Society will never presume a donor’s intentions. We regularly have a number of appeals running at any one time that may have inspired such a gift, and like all charities receive unrestricted donations throughout the year. To second guess a donor’s wishes is against all best practice in the sector and would create a complete lack of transparency for any Charity.
The Irish Red Cross is dedicated to the provision of Emergency and Humanitarian Relief both at home and abroad through its network of volunteers both nationally and internationally. Unrestricted donations are applied for the purpose of this mission
The Irish Red Cross Income Policy is available on our website.
This is consistent with best practice in the Charity Sector here in Ireland, conforms to the requirements set out in the Statement of Guiding Principles of Fundraising, the voluntary code for charities, and is in line with best practice in other national Societies of the International Red Cross.
Following this agreed code of best Fundraising Practice in the Statement of Guiding Principles for Fundraising means that the Irish Red Cross is compliant with the Charities Act 2009, enacted on 28 February 2011.
Society Financial Accounts
There have been allegations that there are irregularities in the Society’s financial accounts.
Head Office accounts are published every year and appropriately confirmed as a true and fair view by independent Auditors BDO. There are no irregularities.
More recent focus has been on preparing the Society for the requirements of the Charities Act and the requirement to consolidate our Branch Accounts into the annual statements
This work started in 2007 and is a challenging journey for a volunteer organisation. However steady progress has been made every year and this year will see the production of consolidated accounts for 2011 which will be audited by our External Auditors
The following outlines the progress that has been made year-on year
• 2008 68% of branches returned accounts to Head Office. Some of these were reviewed by local audit firms
• 2009 100% of branches submitted accounts to Head Office. 41% of these were reviewed by local Audit firms and the majority of the others were reviewed by the IRC Finance team.
• 2010 100% of branches again submitted accounts to Head Office , 27% were reviewed by local Audit firms and all the others were reviewed by the IRC Finance Team.
• 2011 All branches are submitting accounts, which will again be subject to review either by local Audit firms or by the Finance team at the IRC. These accounts will now be consolidated with the IRC Head Office accounts to produce fully consolidated accounts for 2011,--and which will be audited by independent External Auditors, and subsequently published.
These measures, together with the many steps that have been taken to reinforce our internal financial controls and supervisory and audit processes will now ensure that the Society meets best practice standards for the Charity sector.
Property Portfolio
This has arisen as an issue only because of a disclosure note that the Board included in the Accounts for the past 3 years-stating that their property files and records were incomplete and that this might have implications for the proper reflection of their property assets in the Accounts
The reason for this? Burglary, loss of some records and time and difficulty of reconstituting files. Work should have been undertaken more urgently but that work is now complete
The Society has an ownership interest in 17 properties at end 2011—16 purchased at various times over the past 70 years and one donated to us in 2001. Full files on each of these are now available and appropriate ownership records and documentation secured in all but three cases---these too will be complete in a matter of weeks. Some of these properties were purchased by the IRC Head Office and are recorded in our IRC Head Office published accounts.
These properties are used by the Society for its various events and activities and they have an insured value of circa €4 million.
Now that this work is complete, we can confirm that the property assets of the Society that feature in the IRC Head Office accounts are properly recorded .The requirement under General Accounting principles is to carry these properties at their cost or acquisition value and that is what has been done--properly and transparently so.