Audit reveals 'deficiencies in internal control' at IFI

In terms of the use made by IFI of dormant accounts funding between 2019 and 2021, the C&AG said that, of €1.18m delivered to the organisation during that timeframe, more than €28,000 was eventually refunded due to the dubious nature in which it had been put to use. Picture: David Creedon

Ireland’s waterways regulator has been sharply criticised over a litany of governance failures, including dozens of credit cards given to employees and an uninsured vehicle involved in an accident leading to a €230,000 repair bill.

The State’s auditor, the Comptroller and Auditor General (C&AG), has published his special report into Inland Fisheries Ireland (IFI) after a damaging series of administrative errors and irregularities saw the organisation’s entire board stood down in 2023.

In the report, the C&AG Seamus McCarthy described “significant weaknesses” and “deficiencies in internal control” in describing multiple governance failures in various guises — from inappropriate use of the dormant accounts fund to the failure of unsanctioned enforcement actions at a cost of close to €200,000.

The report notes that in 2020, IFI made 53 credit cards available to its staff for their use, with a combined total bill of €148,000 eventually being run up.

By the end of 2024, the number of cards had been reduced to 17, a figure which “remains excessive for an organisation of IFI’s size”, the C&AG said.

Regarding the controversial move of the organisation’s then chief executive from his Dublin base to the local IFI office in Ballyshannon, Donegal in 2021, Mr McCarthy noted that the move had not been approved by the board of IFI.

He noted further that no business case had been put forward to advocate for the move, and that the explanations eventually offered for the move — that the CEO Francis O’Donnell had been spending more time in Galway than in Dublin — were “inadequate to explain the benefit to IFI of the change of work location for the CEO”.

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Mr O’Donnell went on extended sick leave in early 2024, before exiting IFI entirely earlier this year.

In terms of the use made by IFI of dormant accounts funding between 2019 and 2021, the C&AG said that, of €1.18m delivered to the organisation during that timeframe, more than €28,000 was eventually refunded due to the dubious nature in which it had been put to use, specifically that it had not been used clearly to target disadvantaged groups, a key principle of the dormant accounts fund.

One of the purposes for which the returned €28,000 had been earmarked was to cover the costs associated with the management of an IFI stand at the national ploughing championships, Mr McCarthy said.

With regard to enforcement powers, the C&AG found that, despite close to €1.3m being spent on legal fees over prosecutions taken between 2018 and 2023, delegated authority had not been in place for those cases to have been taken.

At the time, in March 2023, IFI was advised that it should not proceed with any of the live prosecutions which had been initiated prior to March 2023 when the appropriate delegations were not in place, leading to roughly 50 cases being dropped at a cost of about €4,000 in lost legal fees apiece.

Meanwhile, following a road traffic accident involving a vehicle leased to IFI in 2021, it emerged that 15 of its hired vehicles, including the one involved in the accident, had been uninsured for the period.

Subsequent legal actions and repairs of the leased vehicle led to costs of €230,000 being incurred by IFI, while its insurance premium for all vehicles subsequently increased by close to €30,000 up to €116,500 between 2021 and 2023.

“There have been significant lapses in the system of controls operated in IFI over a number of years,” Mr McCarthy said, adding that neither internal audit nor annual reviews by the board of its control structures had managed to identify those lapses.

As governance issues came to light, a series of resignations from the board of IFI between 2021 and 2022 eventually led to it being impossible to reach a quorum, meaning the board could not take decisions or function effectively, a fact which led then environment minister Eamon Ryan to dissolve the entire board in early 2023.