A long-awaited report by Forvis Mazaars found that the money was transferred from Jockey’s Emergency Fund to the Irish Horseracing Regulatory Body (IHRB) in January 2022, in breach of the Charities Act.
The charity’s money was used to plug a cash shortfall in the accounts of the IHRB because of a voluntary redundancy and retirement scheme that saw its former chief executive, Denis Egan, left with a package worth €384,870 – €141,000 more than he was entitled to under the scheme.
Donal O’Shea, who is not named in the report but was the IHRB’s chief financial officer at the time, initiated the transfer of €350,000 in January 2022.
Mr O’Shea took voluntary leave in June last year, just before the IHRB’s new chief executive, Darragh O’Loughlin, made the shock announcement to the Public Accounts Committee that a “grave financial matter” had come to light. Mr O’Shea later resigned.
The Forvis Mazars report, published today, found that Mr O’Shea and the finance manager had transferred the €350,000 to the IHRB’s account.
Mr O’Shea issued the instruction, the report found, “motivated by urgent cashflow pressures in order to pay monthly salaries in the context where monthly HRI funding had not yet been received, and having to pay significant voluntary and compulsory redundancy payments at that month end.”
The transfer was carried out without the approval of the Jockeys Emergency Fund trustees, or the IHRB board, nor was their approval sought, according to the report.
The Jockeys Emergency Fund is administered by the IHRB but is a separate registered charity that assists injured riders.
The review team received “no evidence” that Mr O’Shea reported this urgent cashflow situation to the chief executive or the board of the IHRB, or to Horseracing Ireland.
Their report noted that the €350,000 was returned to the Jockeys Emergency Fund bank account on 29 April 2022 after “further cashflow challenges experienced by IHRB.”
The transfers were not reported to executive, the board or the charity’s trustees, and the were not “in line” with governing rules, or in compliance with the charities act, the report found.
The review team found that the IHRB Board and executive “should have foreseen potential cashflow challenges arising on foot of making redundancy and retirement payments in the absence of corresponding funding being received.”
The Forvis Mazars review team criticised the exit payment to Denis Egan, which it said was “not made or formally approved within the criteria of redundancy and voluntary retirement scheme.
According to the report, Mr Egan’s exit package was “negotiated” through an “international professional services firm with a presence in Ireland”.
It was funded by a €242,990 allocation from the sport’s governing body, Horseracing Ireland (HRI) , and €141,880 from the Irish National Hunt Steeplechase Committee and the Turf Club – which are amalgamated into the IHRB.
The IHRB’s board approved the payment to Mr Egan after the payment was made, and even though it exceeded the terms of the voluntary redundancy scheme.
IHRB board members told the review team that HRI supported the payment to Mr Egan, and that governing body had “implied approval” by making a payment in support the IHRB’s transformation programme.
Having interviewed Suzanne Eade, HRI’s chief executive, and Nick Hartery, its chairman, the reviewers could not confirm that the governing body approved Mr Egan’s retirement payment.
“We consider that the use of public funds provided by HRI to IHRB for the purpose of a retirement payment to the Former CEO, was not specifically sanctioned in writing by HRI,” the report found.
The report also criticised the IHRB for “incorrectly” recording Mr Egan’s retirement package in its financial statements, as part of the Voluntary Redundancy and Early Retirement Scheme.
The payment “was not made or formally approved within the criteria of the Scheme, and this disclosure is therefore incorrect.”
Mr Egan’s exit package and the subsequent “grave financial matter” that led to Mr O’Shea’s going on voluntary leave, drew intense political scrutiny on the funding and governance in the horseracing industry.
Seamus McCarthy, the Comptroller and Auditor General (C&AG), raised concerns about Mr Egan’s retirement package, while the funding of the horse racing sector has been interrogated by the Public Accounts Committee.
The government approved an increase in funding for the horse racing sector to €79.3m in Budget 2025.
The IHRB said it was “reassuring” that no other unusual or unauthorised transfers were identified in the review of six years of financial accounts.
In a statement today, Mr O’Loughlin, chief executive, said the funds transfers that gave rise to the Forvis Mazars review “should not have happened”.
“Since we commissioned this review, we have taken significant actions to improve our financial governance procedures and internal controls and we have publicly reported on this work to the Oireachtas Public Accounts Committee,” he said.
The IHRB is “on target” to implement the report’s recommendations by the end of the year, he said. “Importantly, we have tightened our financial oversight and transaction approval controls to ensure that such an incident will not happen again.”
