Central Bank takes action over Exchequer Fund to prevent more unauthorised transactions 

The mistake by the banking regulator lead to an unauthorised transfer of €738m to the Department, which was under the control of Minister Paschal Donohoe (left) at the time. File photo: Gareth Chaney/ Collins Photos

The Central Bank is “satisfied” it has controls to prevent further releases of unauthorised money from a taxpayer fund.

Last October, shortly before the bank holiday Monday, the Central Bank granted the Department of Finance more funds than it had credit for.

“It is important to note that at no time was the actual Exchequer account overdrawn and there was no financial loss,” said William Molloy, deputy head of risk management at the Central Bank.

The mistake by the banking regulator lead to an unauthorised transfer of €738m to the Department, which was under the control of Minister Paschal Donohoe at the time.

“The Department and Central Bank have worked individually and collectively to address the issue and introduce additional controls. To prevent re-occurrence, the Department has introduced changes and enhancements in relation to the monitoring and tracking of credits,” said Mr Molloy.

The Central Fund account is held at the Central Bank of Ireland. The account receives most State revenues and is the source of most State spending.

Mr Molloy said the regulator is now updating the grant of credit balance in real time.

The normal process to get access to this Fund involves a Minister for Finance submitting a request for credit to the Comptroller and Auditor General (CAG), which then grants the request which allows the Central Bank to release the funds.

“It is a matter of serious concern that a significant sum of money was released from the Central Fund without the necessary credit authorisation,” said CAG Seamus McCarthy. Mr McCarthy and Mr Molloy made their comments at a Public Accounts Committee meeting.