Ruby Walsh: Imagine if a hospital 'borrowed' €350,000 from a charitable fund
In A Was Week Told By Governance Earlier The Ihrb's Report Financial Mazars Us Wild Released 2022 Harry Murphy/sportsfile This The Photo West
On the US election and Melbourne Cup day, the IHRB released the Mazars report surrounding issues of “grave financial concern,” which were highlighted by current CEO Darragh O’Loughlin in June 2023.
It cost some €80,000 to prepare and basically told us that the IHRB's financial governance was the Wild West in early 2022.
There is no other way of simplifying how an establishment entrusted to regulate the sport and guard the funds of the majority of horse racing charities could act as it did and think it was okay.
Darragh O’Loughlin effectively became a whistle-blower on the regime that preceded him. Not an easy thing to do, but he did it.
Could you imagine the uproar if one of our hospitals 'borrowed' €350,000 from one of its charitable funds to run its business?
Replacing it is not the point; it’s the fact that money ring-fenced in a non-taxable designated charity, given by people to help those who would need it, was taken to run a business. However short-term the loan was, that's just wrong.
That happened with the IHRB, which faced cash flow pressures in January 2022 and decided to fill the hole with money borrowed from the Jockeys Emergency Fund. This is the body responsible for the integrity of the sport.
As a former rider, the JEF was the only fund you never wanted to be a beneficiary of because it meant you were totally and completely incapacitated. Harsh, but that fund is essential, and the IHRB’s lack of financial governance practices befitting the responsibility of running such a fund has placed it in a position where the charity regulator could intervene.
This Mazars report concludes that former CFO Donal O’Shea, who resigned this year after 12 months on paid leave, initiated the instruction to move €350,000 from the JEF to the IHRB accounts and that a finance manager was the second signatory.
Therefore, we are led to believe that only one person was aware of the financial state of an organisation that had approved a massive €384,870 retirement package for the then CEO Denis Egan.
The one person we know who knew the IHRB’s financial status, as he was CFO, had the authority to then move €350,000 in January of 2022 from a charitable fund without the approval of the charity's board, which the report does not connect to the retirement settlement but was used for cash flow at the time. The money was repaid to the JEF in April.
The report also highlighted that public funds were transferred from HRI to the IHRB some seven months later, totalling €242,990, linked to the former CEO, Denis Egan’s retirement package.
The Turf Club and INHS committee had footed the bill for the other €141,880. His total package was €384,870 - a golden handshake and a half - but no one can find written approval of HRI’s agreement to fund it even though they made a payment of €242,990 relating to the retirement of the former IHRB CEO.
It's somewhat baffling because it looks like HRI paid a share but didn’t officially know it was paying for it; if that’s possible — which one would have to doubt as five IHRB directors implied HRI did know. Still, HRI has no formal or written approval for the retirement settlement. You said, I said, and he said.
Still, it also means HRI has no written disapproval of the settlement either, so perhaps, as no one at the IHRB knew of its financial state, no one at HRI knew Denis Egan had even negotiated a settlement package. That’s even a bit far-fetched for me.
But whatever you look at in terms of how both parties settled or handled this situation, however frustrating it is to read about the lack of compliance surrounding financial affairs, the most worrying outcome from this report is the recommendations because they only recommend basic compliance guidelines.
Mazars did mention the lack of segregation between the IHRB's statutory function and that of charities and benevolent funds. Staff at the IHRB, or before that at the old Turf Club, have always carried out administrative work for these charities, their time being the Turf Club/ IHRB gift to the funds.
That work has always been appreciated, but everything moves on, and corporate governance surrounding charities has become arduous.
The time has come for the IHRB’s primary responsibility to be focused on regulating the sport. Administering charitable functions should be left to philanthropic associations whose sole focus is improving the lives of those who need help and ensuring they get it when required.
One assumes the IHRB and the members of the Turf Club will take a proactive view because proving they are serious about their actions to the charity’s regulator is the most essential fallout from this case.