Fás failings on advert spending to be laid bare

THE ORGANISATIONAL structures in Fás are not conducive to the control of advertising expenditure or the achievement of value for money, a report due to be published today is expected to find.

The report, from the Comptroller Auditor General John Buckley, examined advertising spend – including expenditure by the corporate affairs division on behalf of other divisions.

It is expected to find that confusion within the organisation led to €612,000 being spent on producing a television advertisement for a division that did not have the resources to have it transmitted. In the end, the advertisement was not transmitted and the entire expenditure was “useless”.

A draft of the report seen by The Irish Timessays that "at organisational level", although budgetary indiscipline was identified by financial control, it was not subsequently addressed from an accountability standpoint, and no "post hoc action" was taken to adopt or ratify overruns on a reasoned explanation to the governing organs of the agency. "This militated against meaningful accounting." This "arbitrariness" led to the production of the wasted TV advertisement, according to the draft report.

Overall, it found, there was a lack of clear rules and norms sufficient to clearly identify those with whom decision-making should rest, with the consequence that internal resource deployment decisions in the area of advertising appeared arbitrary and contestable, with outcomes depending on the persuasive power or position of individuals rather than on structured systems.

The report is expected to say that, in 2005, the director of corporate affairs, Greg Craig, sought approval for the recruitment of a finance officer for his nine-person division because of the pressures it was under.

However, the assistant director general with responsibility for finance said this would not be possible, as the finance division was there to provide the necessary expertise in the financial area.

The report is expected to say that the corporate affairs budget for advertising was over budget in every year between 2002 and 2008, the years covered by the report. The overruns varied from 15 per cent to 85 per cent.

Overall, €35 million was budgeted and €48.2 million was spent. Despite commitments to do so in its statements of strategy in 2002 and 2006, Fás never developed a communications and marketing strategy, despite being a non-commercial semi-State body that had the largest advertising spend. A proposal was made to the board in 2008, but it deferred the matter.

The report is expected to find that a high proportion of the advertising expenditure by the corporate affairs division was in the print media. Reductions on the quoted prices of up to 52 per cent were achieved, which the report is expected to say was normal given the size of the budget Fás had.

Over the 2004 to 2008 period, the Independent group of newspaper was paid €1.97 million for advertising, the Star €1.69 million, the Irish Examiner €1.4 million, and the Sunday World, the Phoenix and The Irish Timesabout €0.5 million each. The total spend on print advertising over the period was €10.79 million.

Total advertising spend grew significantly from 2002 to 2008, almost doubling between 2004 and 2005 and increasing by 20 per cent in 2006.

Advertising in the print media increased by almost 300 per cent between 2004 and 2005, while radio advertising grew by 168 per cent in 2006.

The report is expected to say that oversight of the corporate affairs division lay with the assistant director general with responsibility for the division. Some examinations of the advertising spend raised queries as to its effectiveness.