Invoice redirection scam costs training board nearly €250k

By Niall Murray, Education Correspondent

An invoice redirection scam has cost Louth Meath Education and Training Board (LMETB) nearly €250,000.

The incident last November may have been behind a public warning about such fraud, when gardaí said in December that losses totalling €700,000 were reported to them in the previous month. This appears to include the €246,000 which LMETB said it was caught out for in the invoice redirection fraud.

The matter is the subject of an external criminal investigation and we are seeking recovery of the amount in question,” LMETB said in its most recent financial accounts.

This type of fraud involves a scammer contacting an organisation or individual, usually by email, purporting to be a supplier. They instruct that invoices should be paid to a new bank account so, unless proper checks are put in place to verify the request, payment of the real supplier’s subsequent invoice is made to the fraudster’s account.

As well as introducing new requirements around proof of identity, LMETB said that it reviewed recent changes to payment arrangements to make sure they are authentic. Training for staff in relation to guidelines was also set in train, and two external people were brought in to investigate and make recommendations arising from the incident.

Gardaí said before Christmas that numerous attempts at this type of fraud were reported to them in the previous month, with the amounts that scammers tried to have redirected reaching more than €1.3m.

The Garda National Economic Crime Bureau has made a number of arrests this year in relation to such activities or the laundering of related amounts, with two investigations connected to amounts totalling almost €2m. They related to money obtained by deception from Irish companies, but also from organisations in Spain and in Denmark.

LMETB’s 2016 spending was more than €115m, mainly on the education of 35,000 students, nearly two-thirds of them at 16 second-level schools and three post-Leaving Certificate colleges.

The board’s statement of internal financial controls also reveals that schools that also ran PLC courses had been allowed to accumulate €1.377m from fees they charged, to be used to fund or part-fund development works at the schools.

However, the schools have been directed to comply fully with 2011 Department of Education rules around the use of PLC fees.

Such funds are supposed to be retained and declared to the department, which offsets the amount collected against a grant it pays PLC providers towards equipment, materials and other running costs.

Rather than requiring repayment of any money paid out unnecessarily in such grants, the department has allowed the amount to be run down against such grants over a period of around 18 months.

However a number of capital projects that had been planned to start last year using the accumulated funds have been put on hold until money is made available from the department or further education and training authority Solas for the work.

LMETB has secured funding commitments for two projects that had already started, playing pitches at Drogheda Institute of Further Education and prefabs for Dunboyne College of Further Education.

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