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Saturday 1 October 2016

Audit raised suspicions at charity that its treasurer allegedly paid €161k into his own bank accounts

Published 09/07/2016 | 02:30

The Carline Learning Centre in Balgaddy, Lucan Photo: Arthur Carron
The Carline Learning Centre in Balgaddy, Lucan Photo: Arthur Carron

As the saga surrounding Console unfolded this week, another deeply concerning controversy was brewing at another State-funded charity.

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Carline Learning Centre may not have been as well known as Console, but its services for disadvantaged teenagers in west Dublin are no less vital than those provided by the suicide bereavement charity.

Carline Learning Centre's Treasurer Greg Walsh (67), whom the charity alleges has misappropriated €161,000
Carline Learning Centre's Treasurer Greg Walsh (67), whom the charity alleges has misappropriated €161,000

It receives over €500,000 a year from the Department of Education, the HSE and others to help children aged 12 to 18 who find themselves in difficulty get back into mainstream education.

Its board includes several pillars of the community, including former school principals, a garda representative, legal and finance professionals and two nuns.

So it was something of a bombshell when lawyers for the charity alleged in the High Court on Wednesday that one board member, Greg Walsh (67), had misappropriated €161,000.

The charity alleged that he had engaged in "wrongful and deceitful conduct".

Mr Justice Paul Gilligan observed that what was being alleged amounted to "deceit, fraud and embezzlement".

Mr Walsh, a low-profile accountant with past links to Fine Gael and business addresses in Kimmage, Dublin, and Celbridge, Co Kildare, had been treasurer for a number of years and a director since May 2014.

The High Court heard that he was completely trusted to look after the charity's books and pay its bills. But it is alleged that in 2014 he began making a series of payments to himself, his business and to other companies, using the charity's chequebook.

Much of this money was supposed to have been paid to the Revenue Commissioners to cover PAYE and PRSI commitments.

Alarm bells first started ringing with the charity's external accountants when they completed an audit of accounts for 2014 last September.

A number of discrepancies were uncovered and concerns were communicated by email to the board.

However, the issue didn't come to the fore until May of this year, when the board sought a copy of the audited accounts.

The accountants advised the board these could not be signed off and met with its chairman, John McKernan.

Soon after, the charity requested that the accountants carry out a more thorough investigation of its payment history with Revenue between January 2013 and June of this year.

This involved retrieving cashed cheques from Permanent TSB.

When the process was completed last month, the accountancy firm compiled a report advising the charity that Mr Walsh had misappropriated €161,337 and had left it owing €72,309 to the Revenue.

The report outlined how the majority of cheque stubs detailed as payments to Revenue or where a stub was left blank had in fact been paid to Mr Walsh or his business, Walsh and Company.

Some of these cheques were subsequently paid to Revenue by Mr Walsh or his company, the report found.

One payment made to the Revenue came from the bank account of another company linked to Mr Walsh, which had no connection to the charity.

But huge gaps remained and the report found that €91,199 was owed by Mr Walsh to Carline for 2014, €30,604 for 2015 and €39,534 for half of 2016.

Sums still owed to the Revenue amounted to €34,282 for 2015 and €38,027 for this year.

According to an affidavit sworn by Mr McKernan, he met with Mr Walsh several times over the past two months to discuss the discrepancies.

He said Mr Walsh agreed on May 27 to furnish a detailed report, but all that arrived was a half-page letter on June 14.

In the letter, Mr Walsh claimed that he began the practice of paying Revenue through his client account in 2013 as there had been difficulty with Permanent TSB paying direct debits to Revenue.

He said in the letter that things worked well until he changed his client bank account in May 2014, but forgot to change the bank account listed with Revenue's online service.

Mr Walsh claimed that he did not become aware that payments had not gone to Revenue for some time and that he had updated the details and resubmitted the payments.

However, Mr McKernan's affidavit said this was not a credible explanation.

It described the letter as "a work of fiction, which was not in any way substantiated by paperwork and figures to hand".

Carline's chairman said that when he challenged Mr Walsh, the accountant claimed that he developed the practice of drawing down cheques from the charity and paying Revenue out of his own client account with the consent of the charity.

But this has been hotly disputed and Mr McKernan said such consent was never sought by Mr Walsh.

He said there were no circumstances under which the charity would have agreed to the practice due to the obvious risks involved.

Carline's barrister, Eamon Marray, told the court on Wednesday that the charity had genuine concerns that it wouldn't get satisfactory answers from Mr Walsh.

However, by the following day, Mr Walsh had given an undertaking that he would consent to orders sought by the charity, compelling him to return the money and explain what had happened to it. The charity says he has also voluntarily stepped aside from the board. A meeting between him and the charity's auditors is set to take place before the case returns to court next Thursday.

Mr Walsh told the Irish Independent that the meeting was taking place at his request, but declined, on legal advice, to comment further.

When asked if he was in a position to repay the funds allegedly misappropriated, Mr Walsh said: "I can't discuss anything. I am meeting the auditors and that is all I can say at the moment."

Irish Independent

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