A report by the Dáil's public spending watchdog into expenditure at the State's training agency Fás stops short of calling for resignations of board members but is highly critical of its failures to follow proper procedures.
The Public Accounts Committee today published its interim report into spending practices at Fás with a particular focus on the manner in which it procured goods and services.
The PAC's report makes a number of highly critical conclusions of Fás's Corporate Affairs Division. It says a culture existed within the division where controls were simply bypassed.
The report examines the integrity of the procurement of goods and services by the state training agency and analyses the waste of public money by the organisation on luxury foreign travel. It finds that Fás should not have paid in full as it did for flights, some of them in business class and first-class, for former board members, journalists, and spouses of executives.
The "substantial credit limits" for company credit cards is also highlighted. One card had a limit of €76,000 and the throughput of the card used by the director of corporate affairs in Fás was €223,838 between 2003 and 2007. The report notes that the limits have now been lowered to €7,000.
The other major findings are criticisms of the "unorthodox fashion" or procurement practices for advertising in the period between 2003 and 2007. Fás spent some €35 million in advertising in that period. It also criticises the agency's engagement with the relatively short-lived Jobs Ireland website – the operation of which was awarded to a company formed only ten days previously.
The board of Fás, said PAC chairman Bernard Allen, "did not engage sufficiently with the issues. It failed to discharge its responsibilities in regard to ensuring good corporate governance".
He continued: "It took three years before the serious matter of undermining procurement process was formally brought to the board."
The report is based on evidence taken over five meetings last year. It makes several recommendations, the principal of which is a demand that the board of Fás should be radically restructured to remove the automatic
right of unions and employers' groups to make appointments to the board.
The report also recommends a stronger disciplinary code. It also said that the findings of an internal audit which uncovered "favouritism" in granting contracts should be sent to the Director of Corporate Enforcement.
Speaking at the launch of the report this afternoon, Mr Allen said: "Today's report makes some alarming findings about the activities and pervading culture which existed at Fás.
"There was a serious lack of oversight at corporate and executive level throughout the agency which led to wastage and excess. Our report makes a serious of findings and offers recommendations for both Fás itself and other state bodies which will help lessen the likelihood of these occurrences again."
Mr Allen also said that Fás had not exercised its discretion wisely when it came to managing its €1 billion annual budget. "A culture of apathy and extravagance seems to have pervaded the organisation, with a distinct lack of any proper systems of checks and balances," he said.
"This has meant that significant sums of money were wasted meaning a loss to the taxpayer. There are a lot of lessons that apply not only Fás, but to the wider public service arising from what is covered in the report."
However, he stopped short of calling for the resignation of the board. He said that this was in part because of the findings of the Supreme Court case on the Oireachtas Abbeylara inquiry into the fatal shooting by gardaí of John Carthy. The court ruled that an Oireachtas committee did not have the authority or powers to make adverse findings against individuals who were not members of the Oireachtas.
However, Labour TD Roisín Shortall pointed out that it would have been hard to implement any recommendation for resignations in any instance as there were a number of changes in the composition of the board of Fás in the period under examination.
Fine Gael's Jim O'Keeffe said the Abbeylara judgment had placed significant restrictions on Oireachtas committees and there was now a strong case to introduce legislation to overturn, or dilute, its findings.
Darragh O'Brien of Fianna Fáil said that Fás had reviewed and introduced changes as a result of the committee's inquiries. He pointed to the fact that spending limits for credit cards had been reduced to €7,000.
In a statement this evening, Fás said it welcomes the publication of report. “The board of FÁS has already agreed that whatever additional actions are necessary arising from the Interim Report will be fully implemented,” it said.