THE directors of scandal-hit Limerick-based charity Bóthar insist that the charity “has turned a corner” as new accounts show the cost to the charity of the identified alleged fraud and related legal and other costs now totals €1.3million.
That is according to figures contained in new 2022 accounts filed by Bóthar CLG, which state that the cost of connected legal and other costs following the alleged fraud totalled €103,415 for the 12 months to the end of June 2022.
A note attached to the accounts states that the €103,415 spend pertained to legal and other costs relating to governance costs incurred in order “to ensure that the charity has sufficient controls and governance processes in place”.
The directors’ report states that “as a board, we are confident that the robust financial control regime which has been put in place guarantees that no financial irregularities of a material nature will have occurred in the year ended June 30th 2022”.
The €103,415 spend for 2022 followed a combined €1.2m bill from the alleged fraud and connected legal costs over the prior four year period.
The €103,415 exceptional cost contributed to losses of €711,311 at Bóthar last year as its income plummeted from €2.17m in 2021 to €478,056 last year – a drop of 78 per cent.
The chief factor in the sharp drop in income was donations decreasing from €1.49m to €284,681.
The directors state that the “further deficit” for 2022 was due to Bóthar being “unable to lobby for grant funding or corporation donations during the year”.
The loss of €711,311 for 2022 followed a surplus of €93,873 for 2021.
The charity’s cash funds declined from €723,702 to €639,056 during the year and the directors state that “the company have upheld a strong cash position in the period, supported by the sale of an investment property” in Dublin.
The directors state that the profits from the sale of the property totalled €560,000.
In a reference to the alleged fraud scandal, the directors state that “there is strong evidence that the outcome of recent years has had an effect on the company and its day to day operations and financial position”.
They add that “the board continue to campaign to the public and donors that Bóthar has turned a corner and made all the adjustments necessary to ensure continued full transparency on activities and finance”.
The report states that “the aim of the directors has been to regain public confidence and to continue to carry out the company’s mission”.
The alleged fraud first came to public attention through High Court proceedings brought by Bóthar in 2021.
The directors state that the charity has endured “a significant crisis” and today Bóthar is “in many ways a renewed organisation with vastly different ways of operating and with more positive change to come”.
In their report, the directors state that, in 2023, the company entered into an agreement to dispose of its Limerick premises which resulted in an uplift in cash resources.
The newly filed accounts, only approved by directors on November 1, state that “as the company have reduced their expenses by a substantial level in recent years, it is the board’s intention to utilise the cash resources towards further marketing campaigns and funding projects to spread more information on the company’s work and with continued active fund-raising, further secure the future of the cause”.
They state “our intention is to bolster current income levels through active fundraising, with a priority on publishing clean accounts and clear communications”.
They also state that “the complete change in leadership at board and CEO level has overseen the embedding of a robust set of financial controls and strong governance across the charity”.
Bóthar’s activities include aiding poor farmers in developing nations through donations of livestock and, in relation to the company’s going concern status, the board believes that the company has sufficient liquidity to continue operations and that it is appropriate to prepare the accounts on a going concern basis.
They add however that the matters outlined in the note indicate the existence of a material uncertainty which may cast significant doubt over the company’s ability to continue as a going concern.
The charity’s total funds last year halved from €1.384m to €673,127.
The alleged misappropriation of funds at the charity first came to public attention in 2021 through Bóthar taking High Court injunction proceedings against its former CEO, David Moloney.
Alleged irregularities first came to light in Bóthar during the 2019 financial year from an anonymous whistleblower concerning inappropriate travel expenses.
In the High Court, David Moloney, who resigned as CEO in February 2021, said he and the former chief executive, the late Peter Ireton, misappropriated hundreds of thousands of euro in cash
Mr Ireton, one of the founders of Bóthar, died in his home in April 2021. He had denied any impropriety.
In their report, the directors confirm that a criminal investigation by Gardaí continues into a formal complaint into historical practices at the company.