Report finds Fás had controls in place but failed to implement them

FÁS HAD proper controls in place during the past decade but failed to implement them adequately, the Comptroller Auditor General, John Buckley, has concluded in his latest report on the training authority.

The report, which focuses on transactions at the authority’s head office on Baggot Street, Dublin, and on its governance structures, examined spending on hospitality and on sports and concert tickets; the use of credit cards; and expenditure on travel, including foreign travel for executives and, in one instance, the spouse of a board member.

On more day-to-day issues it found that the executive board of the authority was aware of overspending on advertising and promotion, but did not give this information to the board.

The financial information presented to the board was sufficient to allow it identify variances from budget at programme level, but not to identify variances below that level, the report said.

There have been a number of reports and inquiries into Fás over recent times arising from controversies mostly concerning spending by the authority’s corporate affairs division.

Controls in the €126 million competency-development programme, a training and upskilling programme for employees funded by Fás in the period 2003-2008, are criticised in the report. More than 90 per cent of the spending went to external training providers but monitoring of the quality of the training being provided was inappropriate and the extent to which participants “achieved certification” was not recorded.

In one instance in the midlands, an inquiry by internal audit found that the training provider had claimed for participants that had not been trained.

The report found that over the 2002-2008 period, Fás spent €4.7 million on foreign travel costs and €1.7 million on business expenses. Of this, some €862,000 was spent using credit cards.

Compared with other public sector bodies, Fás used business class for a lower proportion of long-haul flights, but for a higher proportion of short-haul flights, the report found. First-class flights were used in four instances.

Fás staff other than the travel officer booked flights to the value of about €950,000 in the period 2002-2008.

The €950,000 comprised flights for former director general Rody Molloy and staff members of the corporate affairs section, and flights booked by corporate affairs for non-Fás staff including board members, Government Ministers, staff of the Department of Enterprise, Trade and Employment, journalists and participants in the Science Challenge Programme.

Fás paid about €32,000 for travel by spouses of senior management in the period reviewed. €21,000 was incurred for eight trips by the spouse of Mr Molloy.

The report details instances of expenditure on golfing events, concert and match tickets, and associated hospitality, where no stated business purpose for the spending was found.

“There was some evidence of a lack of regard for economy in the case of some expenses incurred. On one occasion, alcohol accounted for 64 per cent of a bill for a lunch attended by three Fás personnel to discuss the One Step Up project, while on another occasion alcohol accounted for around 40 per cent of a claim for expenses relating to a workshop held for the International School for Peace.”

The report found that controls over the use of credit cards were weak. Total expenditure on all credit cards between 2002 and 2008 was almost €980,000, about €827,000 of which was incurred by senior managers and corporate affairs staff.