Audit finds million-euro shortfalls in state bodies
Audits carried out on several non-commercial Sstate bodies, health sector bodies and Vocational Education Committees (VECs) have uncovered numerous difficulties relating to procurement, governance and financial management within such organisations.
A report by the C&AG identified problems in eight different bodies: FÁS; the Abbey Theatre; the National Library of Ireland; the Irish Blood Transfusion Service (IBTS); Science Foundation Ireland; Beaumont Hospital; the Marine Institute; and VECs.
Mr Purcell said each case had resulted in undesirable consequences resulting from a failure to follow guidelines and proper procedures, particularly in relation to financial expenditure.
The C&AG said such failures had resulted in quantifiable losses, poor value for money, inefficient use of resources or serious breaches of public financial procedures.
“The existence of formal procurement guidelines within an organisation does not guarantee that they will be observed or that national public procurement policy will not be breached,” said Mr Purcell.
FÁS was strongly criticised by the C&AG for failing to achieve value for money in its use of an advertising agency. The report identified two instances where the state employment agency incurred losses worth more than €285,000. It also accused FÁS of failing to follow strict procurement guidelines “over a prolonged period”.
Mr Purcell claimed there were particular difficulties among several bodies in relation to the procurement of IT systems. He said deficiencies by senior management in overseeing such projects had resulted in poor spending controls which had frequently led to cost overruns.
In one case, the IBTS was forced to write off €729,000 after it abandoned a €1.9 million project to introduce a new IT control system, after three years without it ever becoming fully operational.
The C&AG’s report said the problems could be traced to the failure of the IBTS to adequately explain its requirements for the IT programme.
Similar difficulties with IT systems were encountered by Beaumont Hospital, with the potential loss of over €310,000, and Science Foundation Ireland at a cost of more than €121,000.
As a result of his investigations, the C&AG recommended that all civil and public servants should be reminded that they should adhere to ethical principles and avoid potential conflicts of interest in the course of their work.
He said public bodies also needed to put in place proper procedures to ensure that any deviations from normal tendering procedures were fully justifiable.
The C&AG also urged government departments to ensure state bodies under their control meet their obligations for good financial management procedures. He noted that grants were sometimes issued to them before they were in a position to use the money.
The report criticised some expenditure by state bodies which had taken place without the necessary agreement of their funding department.
Fine Gael spokesman Kieran O’Donnell said the C&AG should be given powers to review government spending on an ongoing basis. He said the Government appeared unwilling to learn from mistakes that had repeatedly been highlighted by Mr Purcell.
