The Department of Foreign Affairs has suspended funding of new projects for the leading Third World relief agency, Goal, following an unprecedented row over the accounts submitted by the agency. The move coincides with an investigation last month by the EU's fraud unit into the use of funds by the agency.
That inquiry identified possible irregularities and the Department has now brought in auditors to conduct its own investigation. But Goal has responded by describing this decision as "outrageous" and "heavy-handed" and has opposed the appointment of the auditors, Ernst and Young.
A Department official last night confirmed the funding of Goal projects had been "interrupted" until matters relating to the agency's accounts had been dealt with. The Department was seeking compliance with standard public service criteria for accountability, he said.
The initial investigation by the EU was prompted by Irish officials. According to the European Community Humanitarian Office, Irish Government officials said they believed Goal may have double-claimed for expenses on some projects from two separate donors.
The investigation related to claims made to finance the work of Goal personnel on projects in Angola and other developing countries.
These staff were funded both by ECHO and the Agency for Personnel Overseas. The sum of money involved is not known.
Goal denied the allegation of double-funding and said both ECHO and APSO supported personnel costs on some programmes but neither amount was sufficient to cover the entire cost.
In a preliminary judgment, ECHO auditors say that although some irregularities may have taken place with regard to staff accounting, these were "of limited scope" and mostly likely resulted from poor knowledge of ECHO procedures.
The auditors ruled that as Goal is an agency of limited size, it should not be awarded large contracts with ECHO.
But the Department has appointed Ernst and Young to carry out a separate investigation on its behalf.
This would examine whether the grants provided by ECHO and APSO were used for the purposes agreed. It would also attempt to clarify that double-funding did not take place, according to a Department memo.
Goal says it is already independently audited by an independent firm, Arthur Andersen, which is satisfied with its accounts.
Among the projects affected by decision to suspend funding to Goal are two famine relief programmes in Kenya, assistance to refugees in Sudan and a children's mental health project in Bosnia.
The director of Goal, Mr John O'Shea, is on holiday abroad this week. However, a spokesman last night accused the Department of pursuing a vendetta against Goal which would destroy the agency.
