Civil servant in €3.6bn error still supported for EU position


PUBLIC ACCOUNTS COMMITTEE:THE GOVERNMENT will not alter its plans to recommend the Department of Finance’s top civil servant for a senior European Union job despite calls for his resignation over an accounting error involving €3.6 billion.

Government sources said that secretary general Kevin Cardiff will remain its recommendation as Ireland’s nomination on the European Court of Auditors early next year.

Yesterday Sinn Féin deputy leader Mary Lou McDonald questioned the tenability of his position in the Dáil and also told Mr Cardiff at the Public Accounts Committee that she had no confidence in his being appointed to the European role, once held by EU commissioner Máire Geoghegan Quinn.

She was one of several TDs who criticised Mr Cardiff as being ultimately responsible for an error, in which the double counting of money borrowed by the Housing Finance Agency (HFA) resulted in the general government debt being overstated by €3.6 billion. The double counting, flagged as a potential issue by the National Treasury Management Agency as far back as August 2010, was not detected by the Department of Finance until last week.

Ms McDonald, who was cautioned by PAC chairman John McGuinness not to personalise her comments, told Mr Cardiff that he had “ultimately failed” in his duties. She said that it was “mindboggling” that he was not held responsible.

Earlier Ms McDonald was rebuked in the Dáil by Tánaiste Eamon Gilmore.

He said she had attacked individuals who were not in a position to defend themselves in the House and in particular “civil servants who are not permitted to engage in political or public debate”.

In his response to her direct criticism, Mr Cardiff said that as accounting officer he accepted responsibility and would act on the error to ensure it would not happen again. “If an accounting officer were to resign every time there was an error you would have no accounting officer. If they were to resign after every major error you would only have lucky accounting officers left,” he said.

“I have served this country as diligently as I can during the best and worst of times . . . My record is very solid and very strong.”

Mr Cardiff, described as “unshowy” and a deep thinker, has been secretary general since March 2010. He previously worked as the senior official in the banking and taxation divisions of the department.

Mr Cardiff and officials from his department and the treasury agency appeared before the committee to explain how the error involving €3.6 billion went undetected for so long.

In the course of the meeting, the department agreed to release e-mail correspondence between it and the NTMA. It showed that at least five e-mails and three letters from the treasury agency asked for guidance on dealing with the HFA borrowings in the books. The first e-mail was dated August 23rd, 2010.

Mr Cardiff and Oliver Whelan of the NTMA said that the issue was being dealt with by an official at middle management level at the Department of Finance.

Another senior department official Michael McGrath admitted that there has been no evidence until now of any response from the Department of Finance to the NTMA on this issue between August 2010 and last week.

He pointed out that its inquiries might yet uncover some correspondence.

Mr Cardiff said it had been flagged as an issue by the NTMA but the error and its magnitude became apparent only last week. He said that there would be two inquiries into the matter. An internal probe to ascertain all the relevant facts and systems failure would be completed by the end of November, he said. The other would be a broader and deeper external one.

Mr McGuinness and Ms McDonald said the terms of reference needed to be drawn up outside the department.

Deputies were uniformly critical of the error. Mr McGuinness said the public was conscious about the credibility of the department. Seán Fleming (Fianna Fáil) pointed out that the error had been perpetuated for six quarters. Kieran O’Donnell (Fine Gael) said that the NTMA had written seven times about the matter.