Probe finds poor practices in VECs across country

A trail of poor practices and expensive mistakes were uncovered in a national probe of buying habits among 32 VECs across the country.

The report of the internal audit unit cross-checked invoices in all but one VEC area against Department of Finance spending rules.

It found breaches in almost every aspect of procurement, and itemised errors to underscore general problems around tendering in the €1 billion budget of the VEC sector.

Properties were leased without a proper valuation, staff were paid without paying tax, a telephone system was rented each year for more money than it would cost to buy, and numerous suppliers were given business without recourse to proper procedure.

The audit, which did not name individual VECs at fault, highlighted the issues in a report to Department of Education in 2009.

It examined €2 million worth of purchases per VEC, representing between 7% and 36% of all capital and non-salary spending by the individual bodies.

One VEC decided to rent a telephone system for its headquarters and paid €12,000 per annum for this service. The auditor found a similar system could be bought for a once-off cost of as low as €10,000.

Separately, a VEC paid €600,000 on leases every year but no professional valuation was carried out on any of the agreements, despite it being required under national guidelines.

Another VEC was found to being paying rates to its local authority for a property, even though under law does not have to pay commercial rates.

IT services were another source of concern. A supplier was paid €13,455 when another business offered to do the work for €2,458 cheaper. There was no rationale offered for paying over the odds.

In terms of staffing, a tutor earned €11,000 without any deduction for tax or PRSI.

The report highlighted concerns which were raised by Chairman of the Public Accounts Committee, John McGuinness, last week when he chastised the Department of Education for not exercising enough oversight over the sector.