Court: Accountant covered up CEO’s bills, says club

PART ONE
By Conor Kane http://www.irishexaminer.com

Thursday, November 22, 2012

An accountant with the Irish Coursing Club was fired for involvement in a "cover-up" which allowed a former club CEO to spend funds on his own "personal lifestyle", the Employment Appeals Tribunal has heard.

Edmund O’Brien, of Newmarket, Co Cork, took a case against Clonmel-based Irish Coursing Club in relation to his dismissal in Jan 2010.

In evidence yesterday, the club president, Brian Divilly, said an internal investigation found the club’s books had been "manipulated" and the organisation had lost up to "a million pounds".

Mr O’Brien was suspended in Sept 2009 after he was arrested by gardaí as part of an investigation into the club’s accounts. It was later found he had no garda case to answer.

He was dismissed the following January because he "falsified the accounts", Mr Divilly said yesterday.

"There was over one hundred thousand a year for club funds being wasted on junkets," said Mr Divilly. "He, as an accountant, was put in there as the accountant to keep an eye on our affairs... There was something going wrong. Obviously Mr O’Brien knew there was something going wrong and he facilitated the cover-up."

An example of this was that the accounts showed €60,000 more for insurance costs than was actually being paid on an annual basis, said Mr Divilly: "He was misrepresenting our books."

This went on for at least eight years.

The former secretary and chief executive of the ICC, Jerry Desmond, since deceased, was asked on one occasion about a hotel meeting paid for by the club, Mr Divilly said, and was told it was attended by "12 politicians".

Mr Desmond told a former treasurer about the function of that meeting: "That was to keep in with the politicians." The only one Mr Desmond could name was former Fianna Fáil TD Batt O’Keeffe.

During the internal investigation, the club realised the books were being "manipulated", Mr Divilly said. "There were items put down to cover expenses by the secretary [Mr Desmond] for his own personal lifestyle."

The gardaí became involved in 2008 when Mr Desmond "wasn’t prepared to answer a lot of our questions", Mr Divilly said.

Asked by Edmund O’Brien’s solicitor, Frank Nyhan, what his client was alleged to have done wrong, Mr Divilly said: "He was recommended for dismissal because he told us he had falsified accounts at the request of Jerry Desmond."

Money was being spent on "holidays and dining and wining and memberships and so on", Mr Divilly said. "There was €100,000 buried into more costs for insurance and more costs for grants for [coursing] clubs that the clubs never got."

He said the money was "robbed, squandered, whatever way you want to put it" and Mr O’Brien "knew that Jerry was overspending".

"Edmund is only a pawn in all this," said Mr Divilly, but denied there was a conflict between himself and the late Mr Desmond.

The case continues today

PART TWO

Auditor ‘appalled’ at falsifying of ICC accounts

By Conor Kane

Friday, November 23, 2012 http://www.irishexaminer.com


An auditor has told a tribunal how he was "appalled" when he realised that a fellow accountant was involved in falsifying the accounts of the Irish Coursing Club.

The evidence was heard during an unfair dismissals claim taken by former ICC accountant Edmund O’Brien, of Newmarket in Co Cork, against the club.

The Employment Appeals Tribunal heard allegations on Wednesday that Mr O’Brien was involved in a "cover-up" while employed by the Irish Coursing Club, allowing former club chief executive, the late Jerry Desmond, spend funds on "holidays and dining and wining". This led to Mr O’Brien’s dismissal.

Yesterday, Ian Ronan of auditors Glavin and Ronan said his company were engaged by the ICC to audit their accounts in 2008.

They found that, for the 2008 accounts, a number of journal entries were made by Mr O’Brien to change the figures.

When the auditors removed the "false journals," for which they could find "no logical explanation," general expenses came to €124,083, of which flights and accommodation and entertainment accounted for €45,506.

One example involved €70,000 being "removed" from the miscellaneous section and, of that, €36,000 being entered for "grants to [coursing] clubs".

Mr O’Brien told the auditors the journal entries were made "for commercial reasons, at the request of Jerry Desmond".

The accounts were made to "look correct" at the club’s AGM by having the same bottom line, but details within them were changed.

Mr Ronan said he asked Mr O’Brien what the "commercial reasons" for changing the accounts were, but that he got no answer.

He told the hearing the practices amounted to "false accounting, to write into the books and records of a company, false information".

An effect of this was to prevent ordinary members of the club from knowing everything that was being spent. "It probably prevents anyone asking a question. In my eyes, it was to make the accounts look consistent, to prevent people asking questions."

Asked how he felt about another accountant engaging in such practices, Mr Ronan said: "As a professional I would be appalled to see another professional carrying out such journals."

Under cross-examination by solicitor Frank Nyhan, for Mr O’Brien, the witness said his company reported Mr O’Brien and Mr Desmond to the Office of the Director of Corporate Enforcement but no action was taken against either.

The hearing has been adjourned until Feb 26.