Investigation found ex-Bóthar CEO paid himself €8,000 extra in 2018 and 2019
13th April 2021
The former chief executive of Bóthar awarded himself an extra €8,000-a-year without the approval of the international aid charity’s board, according to documents filed with the High Court.
An independent investigator found unsatisfactory financial controls exposed the charity to “risk of financial loss”.
A draft report by Damien Kealy, a director with financial services firm Smith & Williamson, criticised how business was conducted by the board and senior employees, highlighted several questionable transactions and identified a series of issues that warranted urgent attention.
The document was exhibited in proceedings in which the charity last week secured temporary orders freezing the assets of former CEO David Moloney amid claims he misappropriated €465,000. This money is alleged to include €192,000 supposedly paid to nuns in Tanzania but which they never received, and over €47,000 in personal expenses.
Bóthar has also alleged Mr Moloney tried to cover his tracks by deleting data, forging documents and obstructing investigations. The charity, which provides farm animals to families in developing countries, ceased fundraising after the matter became public.
In court yesterday, a barrister for Mr Moloney said he denied any wrongdoing. “He is very keen to cooperate with Bóthar in as far as he can to assist in finding out what has happened to these monies,” said Marguerite Bolger SC.
Mr Moloney, of Clino, Newport, Co Tipperary, was suspended last November and resigned from his €96,000-a-year job in February amid a series of investigations.
One of these was conducted by Mr Kealy, who was last year commissioned by Bóthar’s board to examine financial controls and governance.
He found a documented procedure for recruiting staff was in place but not implemented as a number of staff were recruited without the positions being openly advertised.
Mr Kealy recommended the “construct and operation” of the board be reviewed and that there be a skills audit and “trustee succession plan” in respect of serving board members to identify skill shortages.
The absence of a such a plan had become “a focal point” for concern among staff, he found, so much so that industrial action was threatened unless chairman Harry Lawlor stood down. Mr Lawlor did so temporarily last November, but remains chairman.
According to the Companies Registration Office, he has been a director of Bóthar since 1991. He claims the staff heave was orchestrated by Mr Moloney to deflect attention from inquiries into his conduct.
Under the charity’s procurement policy, contracts worth more than €25,000 needed to be approved by the board.
But Mr Kealy found some contracts were concluded without approval.
He also found Bóthar management paid claims for expenses where they were not authorised under Revenue guidance. Some travel expenses claims were paid without question, even though they had been overstated.
Mr Moloney was paid “servicing costs” in addition to mileage claims, without the board’s approval. He claimed €13,695 in mileage in 2018.
Mr Kealy also found a discrepancy of €5,000 between Mr Moloney’s contracted salary and the salary reported in financial statements.
According to an affidavit filed by Mr Lawlor, Mr Kealy’s draft report was issued last July. The board had a number of questions for Mr Kealy and this “clarification process” elicited further information.
This included that Mr Moloney awarded himself an additional payment of €8,000 in November of 2018 and 2019 as a “salary addition” without the board’s approval and that Bóthar’s travel policy had been misused by two employees.
Mr Lawlor described one of these as “a lifelong friend” recruited by Mr Moloney and the other as “a member of Mr Moloney’s family”. The Irish Independent asked Bóthar if the two still worked for the charity but got no response.
After Mr Moloney’s suspension on November 2 last, Bóthar hired IT specialist Edel Mee to do a forensic analysis of documents and emails generated by him.
According to an affidavit filed by Ms Mee, Mr Moloney deleted 98pc of his email inbox between November 2 and 6 by accessing the account from his home IP address.
She said he had been “very slow to produce passwords” for Bóthar’s email system and that deleted files and email data may have been lost if Bóthar had not engaged a specialist to secure it.
Ms Mee said she examined a receipt dated June 28, 2018, produced by Mr Moloney which purported to acknowledge the receipt by a Tanzanian-based nun of €27,552 from Bóthar. The file was actually created on July 18, 2018, by Mr Moloney, she said.
Bóthar alleges Mr Moloney misappropriated the money.
The High Court heard yesterday he had given undertakings not to delete data on devices and not to seek to draw down his €600,000 pension, which Bóthar has said it did not authorise payments into.
Mr Moloney asked over the weekend if Bóthar would enter mediation. But Frank Beatty SC, for the charity, said it rejected the request as it wanted a transparent process rather than a confidential one.
Mr Beatty said Bóthar would be exploring an alternative dispute resolution (ADR) process but was concerned, despite assurances, about the level of cooperation Mr Moloney would give. He said if progress was not made on ADR he would look for a hearing date.
The case was adjourned for a fortnight.