Aid charity Goal records €31m deficit following fraud probe
Irish international aid charity Goal recorded a €31.6m deficit last year after experiencing funding difficulties when an investigation was launched into allegations of fraud.
As a result Goal said it was forced to dip into its cash reserves to continue aid programmes in Sudan and South Sudan.
However, the charity insists it has now ridden out the crisis, with donors now fully committed to funding its programmes after internal controls and anti-fraud measures were improved.
Goal’s annual report for 2016, published today, revealed expenditure was €194.6m, while its income was just €162.97m after “one of the most challenging years” in its 40-year history.
The charity’s general manager, Celine Fitzgerald, told Independent.ie the scale of the deficit was “unusual”.
“There is no doubt that the events of the last year have contributed to the scale of the deficit that we are showing this year,” she said.
“That is because some of our donors who used to pay us up front are paying in instalments. Some are paying in arrears, so you have a change in the payment methods.”
Ms Fitzgerald said the charity had to take “a bit of a punt” on whether international donors would eventually come through, but felt it had made “the right decision” in using cash reserves to keep aid programmes in operation.
“We could be criticised for running down our reserves, but I would argue the right thing to do was to use the money on our programmes and keep those programmes going,” she said.
“If we had closed those programmes it is very hard to get back into some of the countries we are in. Places like Sudan and South Sudan. If you left those countries the likelihood of getting back in and re-establishing your programme is very slim.”
Despite these problems, the charity’s auditors have given it a clean bill of health in the annual report. This is in stark contrast to a warning in the previous year’s financial statements that there was “material uncertainty” over the charity’s future.
“I think we have had a good year despite everything. I think we are back on our feet,” said Ms Fitzgerald.
Goal’s difficulties began in April 2016 when it emerged the Office of the Inspector General (OIG) in the US was investigating allegations of bid-rigging by suppliers of Goal and other humanitarian organisations in Turkey and Syria.
US funding was suspended for certain parts of Goal’s aid programme in Syria, while Irish Aid also suspended around €7m in funding.
The suspensions were subsequently lifted, but the investigation led to a period of uncertainty for Goal, which shed 25 staff and held exploratory talks with Oxfam about a possible merger. The merger did not go ahead.
Two Turkish-based Goal staff were fired after the probe was launched, while a number of senior staff also departed Goal. While some had a connection to the issues in Syria, others left for unconnected reasons.
Former chief executive Barry Andrews was the highest profile departure. Independent.ie is aware there is absolutely no suggestion he was involved in any wrongdoing.
It subsequently transpired some other former staff had been involved in a company providing services to the NGO sector in Syria while continuing to work for Goal.
Ms Fitzgerald said Goal had freely acknowledged there was “a conflict of interest that wasn’t handled well”.
But she said it did not amount to criminal activity.
She said measures had been put in place to avoid conflicts of interest recurring in the organisation.
It has also established a counter fraud and investigation unit.
The unfolding humanitarian crisis in Syria in recent years had seen the organisation grow too quickly and it had been forced to re-evaluate its structures in the wake of the OIG investigation.
“The governance and infrastructure required to handle the level of growth lagged behind the growth,” said Ms Fitzgerald.
She said the charity had undergone a period of consolidation and had positioned itself to grow back “slowly and steadily”.