Dáil committee to widen probe into FÁS spending

THE Dáil Public Accounts Committee is to widen its investigation into FÁS and its spending and procurement practices after the state agency came under sustained criticism from TDs yesterday.

Members of the Oireachtas public spending watchdog expressed concern over controls within FÁS after incidents of poor financial management were highlighted in a recent report by the Comptroller and Auditor General John Buckley.

PAC chairman Bernard Allen and Mr Buckley also criticised the failure of FÁS to inform the C&AG’s office about a special internal audit into such matters until 2006, even though it had begun 18 months earlier.

Mr Allen said a decision was taken to expand the PAC’s inquiry because yesterday’s meeting with FÁS officials had left unanswered questions about internal checks and controls.

A special internal audit report was carried out by FÁS as a result of an anonymous tip-off to former Tánaiste Mary Harney in 2004 alleging criminal conduct. Although it failed to substantiate any claims of fraud, the report uncovered breaches of procurement rules and several failures by the agency — which has an annual budget of €1 billion — to achieve value for money.

The report also resulted in FÁS contacting gardaí about the conduct of a senior official within the organisation.

He is at the centre of two separate Garda investigations which also involve a leading Dublin advertising agency and the alleged overcharging of €160,000. The individual who has already been subjected to disciplinary action is on sick leave and no longer holds the same position within FÁS.

During the hearing, FÁS director general Rody Molloy confirmed a second official is under investigation over suspicion of fraud. Mr Molloy revealed an employee was reported to gardaí after concern arose last June about the apparent creation of false invoices.

Mr Allen expressed concern the two cases of alleged fraud were only uncovered as a result of FÁS management being notified by people outside the organisation rather than through any internal monitoring process.

The FG TD said a letter written by Mr Molloy to the chairperson of the FÁS audit committee in February 2007 appeared to contradict his claim to the PAC that he fully accepted the recommendations of the special audit report. Mr Allen also pointed out that Mr Molloy had criticised the audit committee for interviewing people outside the agency without informing FÁS management.

However, the FÁS director general, defended his position, claiming he was merely critical of some aspects of the report including the conduct of the inquiry and the length of time it took to complete.

“I in no way interfered with the conduct of the audit,” he stressed.

Mr Molloy said FÁS management had acted on recommendations contained in the report.