Consultants paid €61,500 to review €3.6bn error

Consultants Deloitte are being paid €61,500 to carry out a review into the €3.6bn accounting error recorded at the Department of Finance.

Michael Noonan, the finance minister, has confirmed that Deloitte’s work is well under way and he understands that the consultants are likely to complete the process this week.

In a written Dáil response to Sinn Féin TD Mary Lou McDonald, Mr Noonan also said that an internal departmental report is nearing completion “following its circulation to relevant parties involved, who were given sufficient time to provide their final comments on it.”

Mr Noonan said Deloitte is being paid €50,000 (excluding €11,500 Vat) and any associated expenses that are capped at a maximum of 10% of the contract price to complete the report.

When the error was revealed last November, it overshadowed the candidacy of Kevin Cardiff to the European Court of Auditors.

Mr Cardiff was secretary general of the Department of Finance when the accounting error was made.

The error stemmed from a change in the relationship between the National Treasury Management Agency and the Housing Finance Authority. The NTMA previously acted as an agent for the housing authority, the liabilities of which are included in general government debt, but now the NTMA loans directly to it.

The loans appeared in the NTMA accounts for 2010 as assets and again as liabilities in the Housing Finance Authority accounts.

In his response, Mr Noonan said: “Following consideration by the Government, it is my intention, subject to legal advice and in a timely manner, to send the internal report and the external review to the Committee of Public Accounts. It is also my intention to publish them.

“As previously highlighted in questions on this matter, it has to be recognised that while this matter was most regrettable, it was a statistical reporting discrepancy where our debt level was mistakenly stated as being higher than it actually was.

“This discrepancy had no impact on the 2011 budgetary deficit and the State is no better or worse off as a result of it.”

Mr Cardiff was appointed to the European Court of Auditors in December having earlier been rejected for the post by the EU Budgetary Control Committee.