Report finds €738m was taken from State's Central Fund without proper authorisation

The Comptroller and Auditor General said the withdrawal was 'a matter of serious concern'

The Department of Finance took €738m from the Central Fund of the Exchequer without the proper authorisation, a new report has found. Picture: Jason Alden/Bloomberg

The Department of Finance took €738m from the Central Fund of the Exchequer without the proper authorisation, a new report has found.

Both the Department and the Central Bank have been criticised for the withdrawal, which the Comptroller and Auditor General said was "a matter of serious concern".

The report released today says that the withdrawal from the Central Fund of the Exchequer, which receives most of the State’s revenues and is the source of most State spending, was "more than the amount of credit available" to then-Finance Minister Paschal Donohoe. 

The account of the Central Fund is held at the Central Bank of Ireland and funds can only be released to the Minister for Finance, or an agent, as provided for by law. The Comptroller and Auditor General must issue a grant of ‘credit’ in advance of any such withdrawals.

This report outlines a situation in October where there was "a failure of the controls over the withdrawal of money from the Central Fund", when the Central Bank issued €738m more than the amount of credit that was available to the Minister to fund the delivery of "supply services". These are the day-to-day services funded by central Government departments and offices.

On October 28, 2022, the report says, the department submitted two requests for supply services funding to the Central Bank, with a combined value of €2.597bn. The department did not identify that the total amount of these requests exceeded the value of the credit remaining at the start of the day. 

The Central Bank also did not identify that the credit limit would be breached, and made the payments. The report says that the Department could have applied earlier for additional credit, but this had not happened.

"Notwithstanding this, it is a matter of serious concern that funds were released from the Central Fund without the necessary authorisation. It is also a matter of serious concern that the Central Bank of Ireland released significant funds without the necessary authorisation being in place."

What's your view on this issue?

You can tell us here

The report adds that both the Secretary General of the Department of Finance and the Governor of the Central Bank have said that a number of changes to controls have been, or will be, made to prevent any recurrence.

In its review, the department found two main issues. These were an oversight with the original application and secondly, no checks were made to ensure the existing credit was available.

"First, there was an oversight whereby the Department did not seek a credit from the Comptroller and Auditor General earlier in the year, after Dáil Éireann had approved all of the revised estimates for 2022. Second, at the time the payment orders were submitted, no check was made of the existing credit to ensure that sufficient credit was available to cover the request."

The Central Bank said that its post-payment tracking processes of the availability of credit were "not robust enough to prevent this incident from occurring".