Below is the letter former IFA Economist Con Lucey sent to IFA President Eddie Downey about his departure from the IFA Audit Committee.
I wish to inform you that I am resigning forthwith as Chairman of the IFA Audit Committee.
The immediate reason for this decision is what I consider as unacceptable interference by the General Secretary, Pat Smith, in the work of the Committee. The first significant working meeting of the Audit Committee (AC) was fixed for the 22nd July to deal with three items. On 18th July I received a phone call from IFA at the direction of Pat Smith requiring that the meeting be deferred until he had the opportunity to review the material prepared by the Financial Controller for the meeting. The relevant item was to “check that all expenditure is authorised and the method of authorisation is robust”. The normal checking procedure involves reviewing transactions over a randomly chosen recent period. In my view, it would be a waste of the AC’s time and a charade if documentation were first to be sanitized before being considered by the AC.
There are also some general reasons for my decision, based on my experience during the short life of the AC to-date.
First, the condition that the General Secretary attends the meetings of the AC, while not a member, is an anomaly. It is apparent that his presence is intended to influence the meetings; if the purpose is solely to provide information then it should be by invitation of the Committee. This condition is undesirable, as it is likely to stifle open discussion at the Committee. It is unnecessary, as recommendations from the AC go to the Executive Board, and there is adequate scope at that point for the General Secretary to influence the outcome. And it is in conflict with the very purpose of the Audit Committee.
Second, it is now clear to me that I should not have accepted the position of Chairman of the AC. The Chairman should have qualifications and experience in Accountancy / Auditing (which I have not), and should be “emotionally detached” from IFA (which also I am not).
My parting advice is that the AC should be continued and that an appropriate person should be found for the Chair.
I hope that you find these comments of assistance and, as I already indicated, I see a valuable role for the Audit Committee in the more demanding times we now live in. Also, I hope that Jer Bergin and JJ Kavanagh will continue to participate in the AC.
For my part, I have no wish to conclude my relationship with yourself or IFA on a discordant note. However, in the circumstances which I have outlined here, I now see that continuing as Chairman of the AC would not be the best outcome for either IFA or myself.
I wish you and the Association well.
Pat Smith, General Secretary
Tim O’Leary, Deputy President
Jer Bergin, Honorary Treasurer and member of AC
JJ Kavanagh, member of AC
Ken Heade, Financial Controller.