C&AG Report: Coalition fails to rein in wasteful spending

Millions of euro in public money have been lost by government departments and state agencies through sloppy practices and ill-conceived projects, the national spending watchdog has found.

C&AG Report: Coalition fails to rein in wasteful spending

Comptroller and Auditor General (C&AG) Seamus McCarthy said that, despite the still-fragile condition of the State finances, failure to properly monitor and review spending decisions last year meant that scarce cash resources were squandered.

His annual report for 2014 also found that failures of the past continue to haunt the public balance sheets and will keep costing the exchequer into the future.

Among the issues he highlights is the decade-long saga of the super-prison intended for Thornton Hall which has so far cost €50m in public money with the only thing to show for it being a site in north Dublin worth €2m.

He also notes the “extensive” use of consultants by the Department of Finance and State agencies to advise them on how to handle the banking crisis.

The €152m spent to the end of last year on external lawyers, accountants and investment gurus is small compared to the total of €60bn the C&AG says the bailout has cost the State since late 2008.

However, €150m would have paid for the much-stalled plan for a new National Maternity Hospital, which is only now being revived after years of delays. It is also the figure the HSE told hospitals to make in savings this year.

Spending on Eircode, the Government’s ambitious postal-code project, is also questioned, with its cost now estimated at €38m, not the €27m originally stated. Worse, the C&AG says it is not certain the post-code system will live up to its promise to deliver efficiencies for businesses and State agencies.

Wasted opportunities for bringing in money are also highlighted. The Revenue Commissioners were owed €2bn in unpaid taxes last year, two thirds of which was categorised as “collectible”, yet, half that sum — around €750m — was not the subject of any payment agreements or enforcement proceedings.

Cash-strapped State-funded hospitals also failed to adequately pursue money owed to them, allowing private health insurance companies to build up IOUs totalling some €290m by the end of last year.

The C&AG found that it was taking an average of six months for hospitals to send out invoices to insurers and collect the money owed, with consultants taking an average of 58 days to sign documents verifying the services they delivered.

“This is well above the target of 20 days agreed with consultants as part of the Labour Relations Commission agreement in September 2012, and the revised temporary target of 30 calendar days adopted by the HSE in November 2013,” the report states.

Also highlighted were the following:

  • Overpayments of €2m per week by the Department of Social Protection on illness benefit schemes and the invalidity pension because of failure to carry out timely medical reviews of recipients.
  • A failure by the Department of Social Protection to explain a €44.8m discrepancy in its records of redundancy payments owed by employers. The report notes that payments owed are recorded variously as €469m and €424m. Either way, it says only 10% of what is owed is likely to be paid, so neither figure is realistic.
  • €1.4m was overpaid in the schools meals scheme to a number of schools that inflated pupil numbers or claimed for spending on non-food items.
  • The State Exams Commission made an €11m settlement with the Revenue Commissioners after failing to deduct tax from expenses paid to exam supervisors and correctors.

The annual report was published as the Government unveiled its €42bn capital spending plan for 2015-2021 — leaving questions over the readiness of government departments and state agencies to properly oversee large-scale infrastructural projects after years of stalled investment.

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