PAC: Departments must heed findings

Taxpayers’ money will continue to be wasted because government departments are not taking the recommendations of the Public Accounts Committee as seriously as they should, its chairman warned.

John McGuinness was speaking at the publication of a report by the committee which said the State agency, Campus Stadium Ireland, should never have pursued a costly legal battle.

The Dáil’s spending watchdog investigated the case waged between 2002 and 2010 against Kerry-based John Moriarty to pay a €10m Vat bill as part of a contract his company won to run the National Aquatic Centre.

It concluded the dispute “should not have happened” because “the State would have derived no benefit form the outcome of the case”.

In Sept 2010, the Supreme Court found Mr Moriarty was not liable for the bill and even if he had been there would have been no net gain to the exchequer as the monies could have been recouped in a rebate.

The Department of Sports, Arts, and Tourism relied on faulty advice from the Revenue Commissioners who failed to update their guidelines on Vat law, so they did not take into account anti-tax avoidance measures introduced in the Finance Act 2002

The Department of Finance gave oral advice to the Department of Sports to pursue the claim, also disregarding the provision in the Finance Act.

The PAC report said the State’s legal costs so far amount to €240,000 and it’s also liable to pay the costs of Dublin WaterWorld which “is likely to be substantial”.

About €11m was paid to consultants during the eight-year timeframe, who advised to go ahead with the case even though the “best advice was free”, according to Mr McGuinness.

Both the Attorney General and Comptroller and Auditor General &told the Department of Sport in 2004 to “use common sense” and “forget about” the action. “It smacks of the State pursuing an individual or a company just because it could,” Mr McGuinness said.

He urged the departments to take action to ensure such waste never happens again: “When there are serious findings made by the PAC and when we put forward recommendations they should not only be pursued but they should be rigorously examined so that corrections can be made to stop waste of money in the future.

“Until we get to that point we are going to continue to see a litany of waste within government departments and agencies because that is not being done as thoroughly as it should be done at present.”

Committee member and Sinn Féin TD Mary Lou McDonald said there was an expectation that the relevant departments acted on the report’s findings. “If it comes to light that there are individuals who have questions to answer or who need to be pulled up on any of these issues, of course that should happen,” she said.

Fine Gael’s Eoghan Murphy said he believes the committee does not have the resources it needs: “People are demanding more from their public representatives and rightly so. But it’s at a time when we have less resources,” he said.

“A committee as important as this, doing the work that it does week in week out, does need more.”

Mr McGuinness agreed and said the committee has just three support staff.