OPW set for court over fraud, Dail group told

The Office of Public Works is taking legal action to recover almost £380,000 paid out in a "sophisticated" fraud involving claims for rental premises, the Committee of Public Accounts has heard.

The fraud centred on falsified rent increases, as well as service and maintenance charges for five Garda stations over an 11-year period, starting in 1984.

Rental irregularities amounting to £177,000 were first discovered in 1995.

But despite an internal investigation carried out by a firm of accountants, it was not until the Garda Fraud Squad began an inquiry earlier this year that the full extent of the irregularities came to light.

Yesterday the chairman of the OPW, Mr Barry Murphy, told the committee that, since the discoveries, his office had instituted a system of "double signatures" for all payment authorisations. He also confirmed that the OPW had secured a High Court order attaching the property of "an individual" and added: "We're well in control of the recovery of monies."

Mr Murphy added that he could not go into detail about the matters concerned because they were currently before the courts. But he was severely criticised by the committee chairman, Mr Jim Mitchell, who said he had made the same excuse when speaking at a previous hearing in 1996.

"We cannot allow the committee to be fobbed off year after year by the threat of court proceedings," he said.

Members were also critical of the failure of the initial inquiry to identify the full extent of the fraudulent claims. Asked by Mr Sean Ardagh (FF) and Mr Pat Rabbitte (DL) how much the accountants' report had cost, Mr Murphy said £68,000. "It was a very exhaustive trawl through the system," he added. "It wasn't an exhaustively successful one, it seems," said Mr Rabbitte. Mr Murphy said the frauds uncovered represented "an abuse of procedures rather than a failure of procedures". Faced with forged documentation, including solicitors' letters, he added: "You cannot say that procedures have failed". However, he added he was "reasonably certain" the system was now secure.

The OPW's current accounting procedures also came in for strong criticism at yesterday's session. Mr John Dennehy (FF) said the Comptroller and Auditor General's latest report was the "most damning I've ever seen", while Mr Ardagh (FF) said the OPW appeared to have the worst control systems in the Civil Service.

Mr Mitchell adjourned the session, saying he would recall Mr Murphy on November 25th. In the interim, he asked him to submit the draft report by Price Waterhouse on approved accounting procedures.