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Adoption body got €200k HSE grant in spite of reporting errors

By Conall Ó Fátharta
Irish Examiner, October 19, 2013

The HSE gave an adoption agency €200,000 this year despite being told in a report that the agency had misreported HSE grant money in financial statements between 2007 and 2010.

A review of the financial statements of Cork-based Helping Hands Adoption Mediation Agency, carried out on behalf of the Adoption Authority of Ireland, expressed reservations about how the agency treated the grant money in its accounts.

The report was forwarded to the HSE by the AAI in early Nov 2012.

The agency, which was accredited by the AAI five months earlier, has arranged more than 600 adoptions from Vietnam for Irish couples.

In 2009, it was directly criticised in an International Social Service report for Unicef into adoption practices in Vietnam for the lack of transparency over how it reported an increase in the fees it charged adoptive parents.

The heavily redacted accounting report, commissioned as part of the agency’s application for accreditation, expressed “reservations concerning the basis on which grant and other income was recognised in the annual financial statements”.

The financial review, carried out by accountants Crowleys DFK on behalf of the AAI, found that Helping Hands’ accounting treatment had the effect of “smoothing out” the company’s results in the financial statements over the period 2007 to 2010.

“It appears that a portion of the HSE grant income towards the annual running costs in respect of 2007 was treated as deferred income in the financial statements of that year,” the report states.

“In our opinion, the full amount of such funding should have been included as income in the 2007 financial statements.

“In our opinion it was incorrect for HSE grant income to be deferred in HHAMA’s [Helping Hands] financial statements.”

The report says Helping Hands’ accounting policy for income was “not sufficiently comprehensive to allow a clear understanding of how income is calculated and recognised in HHAMA’s financial statements”.

It was “unable to gain further clarification” on this policy from Helping Hands or its auditor.

The report, released to the Irish Examiner by the HSE following an appeal to the Information Commissioner, says that while it is appropriate for grant income to be deferred in certain circumstances, grant income for general overheads and day-to-day running expenses and operating costs should not be deferred.

“On the basis of our work we found that HSE funding allocations for 2007 and 2008 were not fully recognised as income in the financial statements of those years,” the report states.

“A total of €170,393 was treated as deferred income and therefore not recognised in HHAMA’s Income and Expenditure Account until subsequent years. €143,792 of this total was included in income in the 2009 financial statements, €11,600 in the 2010 financial statements and a balance of €15,000 remained in deferred income at Dec 31, 2010.”

Crowleys DFK report also says: “In 2009 an amount of €99,000 due to HHAMA from HSE in respect of its 2009 allocation was not included in the financial statements as income. In 2010 an amount due of €46,534 was omitted.”

Speaking to a newspaper earlier this month, Helping Hands chief executive Sharon O’Driscoll said the AAI had put her agency’s accounts “through the wringer” and that no “smoking gun” had been uncovered.

A PR company acting for Helping Hands was contacted on Thursday in relation to this report but, at the time of going to print, declined to provide a comment.

In a statement, the HSE said it had met formally with Helping Hands and that “funding has been accounted for to HSE satisfaction”. However, it said funding for the agency in 2014 “remains under consideration”.

© Irish Examiner Ltd. All rights reserved

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