VEC criticised after €890k of IT budget paid to ex-employee

Kildare VEC was chastised after it bought more than €890,000 worth of computers and support services from a former employee.

The VEC spent 21% of its e1.9m hardware budget between 2006 and 2010 with a company formed by this person and a further €486,000 on maintenance and support services.

Comptroller and Auditor General, John Buckley, said there were a range of shortcomings in these deals, including insufficient tendering and the lack of proper records.

In a special report, he also highlighted failings in Kildare VEC’s flawed handling of a €23m property deal. It had departmental approval to take out a €20.7m loan over 24 months to pay for the development of new school. This was to be paid back from the sale of an old school site in Naas for e23m to Superquinn. When the grocery chain collapsed, so did the sale.

In the last four months the department has had to bail out Kildare VEC to the tune of €20m. There is still a dispute with the bank about the liability for rolled-up interest.

Mr Buckley also raised concerns about a number of arrangements linked to the new school deal. In one instance an auctioneer was paid €139,150 in 2008 without a competitive tender. In another, a company hired to work on a small scheme in 2004 was kept on as project manager for the larger development. As part of this, the firm earned €830,000 between 2005 and 2011 without the work being tendered for.

Chief executive of Kildare VEC, Sean Ashe, defended his organisation at yesterday’s meeting of the Public Accounts Committee and said the department had been kept informed at all times about its affairs.

However, he accepted mistakes had been made.

“I do of course fully accept the point by the C&AG that the process must not just deliver value, but be demonstrably open and transparent.”

Mr Ashe said lessons had been learned and, particularly in relation to the purchase of IT services, changes had been made.

However, he told the committee, and earlier the C&AG, that tender files did exist but had just been misfiled. He said just because it could not source the documents to back up its procurement process did not mean the proper rules were not followed.

In a document Mr Ashe supplied to the PAC, Kildare VEC said many of its files on the company run by one of its ex-workers were not available and were possibly “destroyed in an arson attack”.

PAC chairman John McGuinness criticised the Department of Education for failing to exercise proper oversight over the VEC system or police for value for money.

He raised the issue of the proposed merger of Longford and Westmeath VECs as a case of waste. In this instance it was confirmed to him that the decision was reached to house the two bodies in Mullingar, where the building is leased for €118,300.

This was instead of using the Longford premises, where the State was paying a peppercorn rent of €13.33 a year.

Mr McGuinness said the department had not realised the importance of making value for money decisions and ignored a perfectly good property in Longford.