DUBLIN, Ireland–A review of prize draws by Ireland’s credit unions–a long-time, traditional aspect of this country’s CUs–has found that in approximately 30% of drawings for prizes, the winners are CU employees and directors.
The review, released by the Central Bank, which regulates credit unions in Ireland, said it reviewed prize draws at credit unions between October 2014 and March 2017, found poor practices relating to prize draws across a raft of credit unions, according to The Irish Times.
The discovery that it’s often board members and employees going home with prizes has been the subject of considerable press attention across Ireland.
“Prize draws are a significant financial activity across the credit union sector. As such there is an onus on credit unions operating such draws to ensure that the governance, operation and recording of financial transactions are in line with legislation, regulations, and guidance, and are fully transparent to members,” the Central Bank review said, the Times reported.
According to the report, a number of credit unions were failing to apply guidance issued on prize draws and found many instances of poor oversight by boards,
a lack of documented policies and procedures and poor record keeping.
The analysis found 46% of credit unions operated prize draws in the two and a half-year period, with 446,220 members participating in those draws.
The vast majority of draws, or 95%, had cash prizes available while 55% of draws had a car as the main prize, the Central Bank found. Overall, around €40 million was distributed between October 2014 and March 2017, according to the Central Bank.
The Times reported the Central Bank report also found poor record-keeping specifically relating to keeping members’ authorization and withdrawal forms. It also noted that in 85% of credit unions, staff could partake in prize draws.
“The review into prize draws came after the failure of Rush Credit Union. After the appointment of Grant Thornton as an independent third party to carry out a forensic review of the institution, a number of members disputed deductions from their accounts relating to car draws,” the Irish Times reported.
“Grant Thornton was unable to locate details of winners of previous draws, as no information was recorded.”