A €350,000 transfer of funds between the Jockeys’ Emergency Fund (JEF) and the Irish Horseracing Regulatory Board in early 2022 breached the Charities Act according to an independent report. The transfer of funds was reversed three months afterwards.
The Forvis Mazars audit firm was commissioned to investigate the matter in August of last year following the IHRB chief executive Darragh O’Loughlin’s dramatic “bombshell” revelation of a “grave” financial matter he had uncovered just before appearing in front of the Dáil’s Public Accounts Committee in June of 2023.
It emerged then that the IHRB’s chief financial officer Donal O’Shea had been put on a period of voluntary leave which lasted until last summer when it was confirmed he had resigned.
Both the IHRB and Horse Racing Ireland commissioned the Mazars report which examined six years of IHRB financial records, including the early retirement in 2021 of the regulatory body’s former chief executive under a voluntary redundancy scheme.
Denis Egan got a termination payment of €384,879, more than €140,000 extra than the maximum payment outlined under the scheme. Four months later the IHRB took €350,000 from the JEF to make up “urgent cashflow pressures” in a context where monthly HRI funding hadn’t been received, before then being put back.
The Mazars report states the controversial transfer of money from the JEF, one of a number of charities administered by the IHRB, was not in compliance with the 2009 Charities Act requirement to use the JEF funds for charitable purposes only.
It says: “The former CFO initiated the instruction to make this transfer, and we understand this was motivated by urgent cashflow pressures in order to pay monthly salaries in the context where monthly HRI funding had not yet been received, and having to pay significant voluntary and compulsory redundancy payments at that month end.”
The report adds: “Specific approval for the transfer was also not sought from or given by the JEF Trustees or the IHRB Board, although we consider that the IHRB Board and executive should have foreseen potential cashflow challenges arising on foot of making redundancy and retirement payments in the absence of corresponding funding being received.”
It says neither the former CFO or the IHRB’s finance manager reported the transfer to the IHRB board, its CEO, or the JEF’s trustees.
The report found that the IHRB approved the payment to Egan but that interviews with the current and former chief executives of HRI established how racing’s ruling body hadn’t formally approved the payment. One of the report’s recommendations is that when public funds from HRI are used by IHRB for redundancy payments it should get “written approval” from HRI.
O’Loughlin said it was reassuring the review identified no additional transactions in breach of financial governance requirements other than that which prompted the initial concern, and there was no evidence of misappropriation for personal gain.
He commented: “The IHRB is clear that the incident that gave rise to the Forvis Mazars review absolutely should not have happened.
“Since we commissioned this review, we have taken significant actions to improve our financial governance procedures and internal controls, and we have publicly reported on this work to the Oireachtas Public Accounts Committee.
“We will continue to address the issues highlighted in the review and further strengthen the organisation and are on target to have fully implemented the recommendations by the end of the year.”
IHRB representatives are due to appear in front of the Oireachtas Joint Committee on Agriculture, Food & Marine on Wednesday evening.
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