Persistent financial problems at Teagasc research firm

Persistent financial and corporate governance problems have existed at a pioneering research company controlled by Teagasc.

Moorepark Technologies Ltd is based at the Fermoy campus to help farming innovators develop products for the dairy industry.

But it has been the focus of multiple queries from Teagasc’s audit committee as well as the Comptroller and Auditor General.

This year, outside consultants were charged with carrying out a strategic review of MTL at a cost of €48,370.

The review followed an independent audit of MTL by Mazars and an internal audit produced by Teagasc.

Both were finalised in the second half of 2011 and criticised its operation and the support provided to it by Teagasc.

MTL has a turnover of over €1.3m and remains a joint venture between the semi-state agricultural body and investors from various coops.

Teagasc has not released the full extent of its concerns or the contents of the various reports.

However a summary of the problems was released under the Freedom of Information Act, after it was discussed by Teagasc’s audit committee.

This highlighted 13 high-priority issues for MTL. These included a failure to implement public sector pay reductions and shortcomings with its internal audit and corporate governance structures.

There were concerns about bad debts and the fact some staff were working out of contract without sanction from its parent company.

The firm had not returned the money it recouped from the pension levy to Teagasc.

The company had also brokered a working agreement with staff without Teagasc or departmental approval.

In particular, Teagasc repeatedly expressed concern at MTL’s failure to address the corporate governance weaknesses identified in the various audits.

MTL is 51% owned by Teagasc but has significant overheads underwritten by the semi-state agricultural body. It also benefits from preferential rent in Fermoy.

MTL’s managing director, Kieran Downey, said it was now delivering quarterly reports to Teagasc and the problems were being dealt with. He said the shortcomings were rooted in resource issues.

In 2007 Teagasc’s campus manager at Moorepark, Mark Ryan, was asked to get more involved with MTL to try to reign in the consultancy costs associated with the company.

A new memorandum of association for MTL was drawn up, to limited Teagasc’s exposure, but this was not filed with the Companies Registration Office.

In 2008, Teagasc delivered a full review of all consultancy services provided to Moorepark. This found that the company was paying in excess of €50,000 for accountancy services through a budget provided by Teagasc.

And the firm was being charged top consultancy rates regardless of the service being provided. A review of these deals led to the appointment of DFK Crowley as its accountants through a tender process at half the price — €25,000 a year.

Teagasc has also demanded a paper on the objectives, operations, and performance of MTL.