VECs face hands-on system of scrutiny

The Department of Education has revealed it is to tackle waste and mismanagement in the VEC sector by unveiling a new system of scrutiny.

When it is rolled out it will fill the gap in the “level of assurance provided to the department regarding financial arrangements at VECs”.

Under the plan, the department will take a more hands-on role in directing the work of auditors to examine risky and one-off expenditure in the €1.16bn sector. It will restrict the financial freedom of chiefs executive at VECs by expanding the types of transactions that require specific departmental approval.

Each VEC will be required to bring in an external person to sit on its audit committee to provide independent oversight.

Underpinning this will be a new reporting structure which will for the first time create a formal link between the VEC’s auditing unit and the department. Up to now the VEC sector has operated at arm’s length.

The department said the scope of the reforms have responded to recent financial scandals that saw the chiefs executive of Cork City VEC, Co Cork VEC, and Kildare VEC hauled before the Public Accounts Committee. In addition, separate failings at VECs across the country have emerged through investigations of the VEC network.

The precise details of the new accounting system have not been revealed as they have yet to be agreed by all stakeholders.

However, in a letter to the Public Accounts Committee, the secretary general of the department, Seán Ó Foghlú, looked to assure its members that it was taking the concerns for the VEC sector seriously.

“I believe the changes we are making and the new practices that are being initiated will strengthen the VEC oversight arrangements in the management of financial risk,” he wrote.

The system will set up a direct reporting structure between the auditors at the VEC’s Vocational Educational Support Unit and the department, he said.

This will allow the department, through a beefed-up steering committee, to have internal auditors focus on areas considered to be of a “particular concern or potential risk”.

Mr Ó Foghlú said VECs will have their autonomy to spend money restricted.

“The department is introducing new procedures to increase the areas of expenditure where specific approval has to be sought before any financial commitment is made.” He said the revised system of scrutiny included a new code of governance for VECs.

This year, it emerged the chair of the Co Cork VEC audit committee, Humphrey Deegan, resigned as he was dissatisfied with the level of co-operation it was getting in its inquiries into financial issues.

In February, Mr Ó Foghlu’s predecessor, Brigid McManus, shipped criticism from the committee because of the perceived failure of her department to police spending in VECs.