Missing €218,000 costs CU €1.2m in losses

THE credit union at the centre of a fraud investigation has ended up spending a huge amount of money probing and rectifying the loss.

In total, the fraud amounts to €218,000 at the Citybus Employees Credit Unions, whose members work for Dublin Bus.

But the cost of investigation and compensating members meant it ran up total losses of €1.2m in 2016.

Members who attended a heated annual general meeting this week were left frustrated when credit union officials failed to provide them with the details of the financial irregularities.

The members were told the credit union can’t comment while the issues are being investigated by gardaí.

“There were ructions at the meeting. There were a lot of unanswered questions. Members are angry,” one member who attended the AGM said.

Half of the €1.2m cost to Citybus Employees CU to clear up the fraud issue went to consultants Grant Thornton which reviewed its books after the discovery that money was missing.

Compensate

It is understood the fee for Grant Thornton was in excess of €600,000.

Another €300,000-plus was used to pay back every member who had entered the prize draw over the eight-year period. People got more than they had spent on tickets in a bid to compensate them.

There is no suggestion the draw was rigged, but instead money was being taken from the entry charges every month in incremental amounts.

What the credit union described as “financial irregularities” arose due to how it ran its member prize draw, which resulted it losses of €218,547 from the running of the competition.

The Irish Independent understands the top prize in the draws was usually a car.

The credit union has made claim on its insurance to cover the loss. It has insurance cover of €2.6m against fraud, according to its annual accounts.

Legal advice has also been sought by the lender.

It also emerged from the credit union’s annual accounts that an underpayment of tax on the expenses given to directors has prompted the credit union to make a settlement of €61,000 with Revenue.

The annual report calls this a “history tax liability”. It relates to benefit-in-kind tax on Football Association of Ireland tickets.