Fás scandal puts EU funding at risk

A MULTI-MILLION euro income stream the country receives from Europe for social projects is in danger because of questions raised about the possible misuse of grants given to Fás.

The secretary-general at the Department of Enterprise, Sean Gorman, said Fás-related claims to the European Social Fund had been put on hold pending a European Commission audit.

EU money was used to prop up payments to the agency’s €111m Competency Development Programme (CDP), the management of which has been criticised by the Comptroller and Auditor General.

The Commission has now initiated its own audit into the fund and the department has to co-operate with this.

Mr Gorman said there are worries about what would happen if the Commission considered European money to have been spent inappropriately.

“There is concern some of this would have implications for [European Social Fund] draw-downs,” he said.

Mr Gorman said the difficulties were focused on Fás but this “posed a certain element of risk” beyond the agency.

He said “it was not possible to definitively say there might be implications for [more] ESF draw-downs”.

The secretary general did not agree that the money currently on hold, because of the Commission concerns in Fás, amounted to €100m. He indicated it was less than this.

However, Mr Gorman confirmed the thrust of an anonymous letter received by Public Accounts Committee chairman Bernard Allen.

“As a result of the European Union audit of Fás the Department had to cull all Fás expenditure for 10 years from the claims to the Commission for about €100m,” it said.

The same letter claimed the overall amount in jeopardy was €1 billion.

Mr Gorman said while there was likely to be leakage if the Commission took a dim view of audit procedures at Fás, he was not suggesting the entire ESF was in danger.

PAC was highly critical of the department for delaying its own report of the CDP.

Labour Party committee member Roisín Shortall warned Mr Gorman if the department thought the PAC would give up if it did not get answers quickly, it was wrong.

“It is not something we are going to get worn down on,” she said.

Mr Allen said the committee had its hands tied in its investigation into the CDP because of a lack of cooperation from the department.

He said the Comptroller and Auditor General, John Buckley, had brought forward a special investigation to try speed up the department’s inquiries.

“You had better conclude your review quickly. We will not go away,” Mr Allen said.

Mr Gorman said the department would complete its review in a matter of weeks.

And he said it had been delayed because the department wanted to appoint an independent investigator it sourced from the Department of Finance.

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