Public spending - Scandalous waste of our money

A report published by the Comptroller and Auditor General Seamus McCarthy, the State’s public spending watchdog, reveals not just the shocking state of the Government’s finances but huge shortcomings in controlling spending, overseeing payments from both within and beyond the state and in the management of a range of services.

The report finds that General Government Debt — in other words State indebtedness — was in the region of €192.5bn at the end of 2012 compared to €169bn at the end of 2011. It also shows just how much of a black hole was created by the recapitalisation of the banks. The report finds the State had injected €20.8bn from the National Pension Reserve Fund into recapitalising the banks by the end of 2012. The market value of the total investments from the fund in the banks was only €8.6bn at the end of last year, a fall of more than €12bn.

To make matters worse, the report shows €12.7m in compensation has been paid to 817 depositors with Irish Bank Resolution Corporation — formerly Anglo Irish Bank — since its liquidation. The report says the compensation was paid by the Central Bank for its deposit protection accounts.

Among the mismanaged projects, the report reveals around €3.3m was spent on a now-abandoned project to develop a new State Pathology Office and facilities for the Dublin Coroner. Due to delays relating to planning, procurement and the building contractor going into receivership, the project was ultimately shelved. A partially constructed complex on the site was subsequently demolished.

The C&AG also reveals how a civil servant was paid nearly €300,000 in overpayments after receiving duplicate salaries from two separate state bodies due to administrative errors. It involved the transfer of an official from the Central Statistics Office to another Government department in 2006. However, the CSO continued to pay him for a further six years, despite the official writing to inform them of their mistake and enclosing a cheque for €120,000 to cover overpayment up to that date.

Other state bodies fare little better. It beggars belief the Department of Foreign Affairs and Trade should be so slipshod over its spending that it paid €4m in aid money to a foreign government without even a receipt. The money had been transferred to an account controlled by the office of the Ugandan prime minister. It was subsequently withdrawn by fraudulent means. According to the C&AG, the department should have been aware of concerns being raised about aid funding being given to the Ugandan government before the fraud was discovered last year. The C&AG’s report found there was no documentation supporting the receipt of the €4m payment and no confirmation of its subsequent transfer into the proper account.

Financial management reports were not received either and there was no detailed action plan allocating responsibility between donors about how they monitor joint aid. Other weaknesses shown up include a high failure rate in serving summons by gardaí. A&round half the summonses issued were not served.

While much of the above can be attributed to so-called ‘legacy issues’ and conveniently blamed on the previous administration, there is little doubt the report finds a number of ongoing failures the current Government must address.