C&AG report: Report queries ‘missing’ €44.8m

The Department of Social Protection has been unable to explain a €44.8m discrepancy in its data on debt recorded as outstanding from employers.

The C&AG Annual Report says that the amount of redundancy and insolvency debt recorded as outstanding from employers has risen year on year, from nearly €200m at the end of 2010 to an estimated €469m at the end of 2014.

In the chapter on ‘Management of Redundancy and Insolvency Scheme Debts’, the C&AG states: “The department considers that approximately 90% of the €469m debt recorded as outstanding at the end of 2014 will require write-off given that it related predominantly to insolvent companies in liquidation.

“The department considers that, on average, less than 10% of the outstanding balance has a realistic chance of recovery.”

The department operates two schemes in relation to payments to employees made redundant: The redundancy payments scheme and the insolvency payments scheme — with €64.6m paid under the former last year and €23.6m paid out under the latter.

The accuracy of the department’s data was called into question by the C&AG.

“The figures prepared by the department’s accounts section for the 2014 Social Insurance Fund account showed the debt outstanding at the end of 2014 at €468.9m,” the report states.

“The figures recorded on DRAS [a debt and receipts accounting system introduced by the department last November] and the spreadsheets at the end of 2014 total €424.1m, giving rise to a difference of €44.8m. The department has been unable to explain this difference.”

The C&AG also criticised the department’s “ad hoc” liaison with other agencies, such as Revenue, stating: “The department does not have a written policy which sets out the thresholds and related authority for writing off debts.”

It said that “while the department aims to recover as much employer debt as possible, it has no formal targets for recovering outstanding amounts”.

It recommends a review of the outstanding debt figure to “ensure that a complete and accurate picture of the amount due for recovery is disclosed” and that the department put in place formal policies for the management and write-off of employer- related debts.

The report noted that the number of employees receiving statutory redundancy payments has fallen from 77,000 in 2009 to fewer than 10,000 last year.