An all-island youth work charity has been told it must repay more than €680,000 in public funding it was found to have been “ineligible” to receive, following an investigation by Northern Ireland’s department for the economy.
Late last year, the NI department opened an investigation into a project run by Extern, suspending funding to the charity while it examined concerns around finances and governance.
The investigation centred on funding to the charity’s Extern Works project in Co Antrim, which provides training and support to help groups such as ex-prisoners, refugees and homeless people find work.
Following the inquiry the department deemed the charity had been paid more than €680,000 (£601,879) in public funding that it had been “ineligible” to receive.
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Extern, which provides support services to thousands of the State’s most at-risk children, was previously involved in a controversy over a failure to inform Tusla about a case where a staff member sexually abused a vulnerable teenager using the charity’s services.
Danny McQuillan, then Extern chief executive, told Tusla and the Department of Children in January that the NI department’s investigation was related to “issues of governance, poor administration and inexperience” rather than fraud.
Pat Smyth, Tusla’s director of finance, described the investigation into Extern as a “very serious issue” in a January 10th email to other officials.
Repayment plan
A department for the economy spokeswoman said it had completed its investigation, following which a “repayment plan” had been put in place with Extern. It had also made a number of recommendations for reforms of the administration of the charity’s projects, she said.
A spokeswoman for Extern confirmed it had agreed to repay the funds the investigation found it was not eligible to receive.
The issue was identified during an annual department audit last year where “some specific historical claims were identified as ineligible”, she said.
“Extern was made aware of the concern and fully engaged and co-operated with the department throughout their investigation. Extern continues to receive funding from the funder to deliver essential services to support the most vulnerable in our society,” she said.
Separately, earlier this year Tusla also sought to recover €450,000 from Extern, which had been previous funding left unspent and included in the organisation’s financial reserves.
An audit undertaken by Tusla flagged concerns with how Extern treated surpluses of funding provided to run services, which were carried over in its financial accounts for several years.
A spokeswoman for Tusla said “due to the significant accumulated reserves held by Extern” from State funding, it had asked Extern to repay €450,000 over three years.
Reserves ‘misclassification’
In a March 2nd letter to Tusla, Pauline Flynn, Extern’s director of finance, said there had previously been a “misclassification” of the charity’s reserves in its financial accounts.
To have to repay any more than €450,000 “would negatively impact on the financial governance of Extern Ireland, its liquidity and potentially its ability to continue as a going concern,” she said.
The correspondence between Tusla and Extern was released to The Irish Times under the Freedom of Information Act.
A spokeswoman for Extern said it had come to an agreement with Tusla to repay €450,000 by taking a cut in its annual funding from the agency for the next three years.
“Extern continues to work in close partnership in the provision of essential services on behalf of Tusla,” she added.
“Currently Tusla is funding 16 Extern services across 19 counties in 2022, benefiting over 2,500 vulnerable families, children, young people and adults,” she said.
The charity received more than €28 million in income last year, largely from public funding between Tusla in the Republic and from regional healthcare trusts and the Public Health Agency in Northern Ireland.
