The Government will decide what steps are needed to ensure “full public confidence” in the State training agency Fás following the resignation of the director general after controversy over payment of expenses at the organisation, Taoiseach Brian Cowen said.
Mr Molloy announced late last night he had handed his resignation to Tánaiste and Minister for Enterprise Mary Coughlan, after controversy surrounding the payment of more than €640,000 in expenses to himself and senior Fas executives accrued in promoting a science programme in the US.
Mr Cowen told the Dáil he “commended” Rody Molloy for resigning.
“He is an honourable public servant and he did the honourable thing on behalf of the organisation that he led."
The Government met with criticism today, with Opposition leaders calling on the Tánaiste to take responsibility for the regime that allowed such expenses be claimed by Fás executives.
Fine Gael Leader, Enda Kenny also said the position of the Fas board was now untenable.
He said in the Dáil that if the board was unaware of the misuse of taxpayers’ money, “they should have known, and if they did know and failed to act they were guilty of gross corporate negligence”.
“The work of Fás is too important now, above any time in the recent past, for the management and governance of the agency to be under such a cloud.”
Mr Kenny claimed “new documents” disovered by Fine Gael staff members after a “five-hour trawl” of documents in Fás offices yesterday highlighted “an even wider abuse of public funds than has been reported”.
“Rody Molloy should not receive a standard severance package until all these matters are cleared up and he has fully co-operated with the Public Accounts Committee investigation in to Fás finances.
“Finally, I want to know if any Government Ministers benefited from Fás largesse on these international trips,” Mr Kenny said.
Labour Party leader Eamon Gilmore asked the Taoiseach whether the Minister for Enterprise had approved the expenses claimed at Fás, under which Mr Molloy and other executives claimed “entitlements” to first-class air travel.
Mr Cowen said he did not believe the Labour leader was expecting that the Tánaiste directly approved people's expenses.
But he said the Department of Finance had issued a letter to all Government departments in 1998 instructing them that it was a matter for the board and management in charge to ensure that Government policy on expenses was complied with.
"The issue that's arising here is clearly…is the evidence suggests prima faciethat it wasn't being complied with," Mr Cowen said.
He said if it wasn’t being complied with, the question was “what accountability arises as a result of that”.
“The director general has made a decision himself as head of the day-to-day operations of the agency as regards what he feels he should do in these circumstances and I commend him for that.”
The Taoiseach said the Tánaiste would report on the matter and the Government would decide what action was needed.
Mr Gilmore said the Taoiseach’s answer was “not good enough at all”.
“It’s the taxpayer that has to pay for this. Telling them ‘circular letter this’ and ‘circular letter that’, is not an answer.
“The Act which was passed by the Oireachtas, representatives of the people - which set up Fás - says without any doubt or ambiguity about it that it is the job of the Minister to approve the expenses regime in Fás.”
Speaking on RTÉ’s Morning Ireland, Fine Gael TD Bernard Allen, who is chair of the Public Accounts Committee, said Mr Molloy’s resignation had become inevitable.
He said he had hoped to have Mr Molloy before the committee tomorrow to ask him to explain €5.7 million expenditure at Fas for 2007. The committee got some information on this, but not enough, he said.
Junior minister in the Department of Enterprise Billy Kelleher said Mr Molloy had done the right thing by resigning.
He said the organisation was being undermined which was creating huge difficulties for staff, and added that the Tánaiste would have conveyed those views.
Green Party finance spokesman Dan Boyle said that given the level of public concern "it was good that Mr Molloy decided to stand aside".
"All of this comes at a time of rising unemployment and a difficult jobs environment generally. It is very important for Fás to re-group quickly so it can serve the ireland's work and training needs. Hopefully, Mr Molloy's resignation will give the organisation the space to do this," he said in a statement.