Gas Networks Ireland fined for overrun cover-up

An investigation into “serious financial impropriety” in Gas Networks Ireland north and south of the border has resulted in a fine of £500,000 (€644,122) in the North and sanctions against four employees of the company in the Republic, the Irish Examiner has learned.

Gas Networks Ireland fined for overrun cover-up

Despite the impropriety being primarily focused here, the regulatory authority here has not fined the company as it is not empowered to do so.

The impropriety was first reported in this newspaper in December 2014 after a whistleblower came forward with a series of claims about how an overrun of £500,000 on a pipeline project in the Republic in 2003 was covered up by assigning costs to other jobs, including one that was based in Northern Ireland.

Following receipt of the information, KPMG was retained to investigate it by Gas Networks Ireland — the successor company of Bord Gáis – and the results forwarded to both regulatory authorities which conducted their own probes.

Those investigations found that the activity resulted in overcharging for customers, both north and south.

According to the final report issued by the Commission for Energy Regulation (CER), it resulted in the company receiving “over- recoveries from Ireland and Northern Ireland’s gas customers” as “Bord Gáis Éireann did not ensure the accuracy of data that it uses for the calculation of related charges”.

The Northern Ireland authority regarded the breach as so serious that it merited the fine, which is to be confirmed at the end of this month.

In the south, the CER made a number of recommendations, but noted that it wasn’t empowered to invoke financial penalties.

The Irish Examiner has learned that six employees were involved in the transactions, four of whom are still working for Gas Networks Ireland. All have received sanctions within a range of “verbal or written warnings or suspension”.

A spokeswoman for Gas Networks Ireland told the Irish Examiner that the company accepts the findings of the reports: “This incident was a clear breach of the company’s values and the company deeply regrets and apologies for this misallocation of costs.

“Having completed its own internal investigations, the company believes that the misallocation was an isolated incident and did not reflect a pattern or practice within the company.”

The impropriety is believed to have occurred because some involved were unwilling to report to the company’s board that overruns had occurred.

The KMPG report also found that individuals did not benefit financially from the transactions.

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