THE DIRECTOR general of Fás, Rody Molloy, said yesterday he did not seek to interfere with the internal audit process at the €1 billion per annum training and employment authority.
Mr Molloy was speaking at a hearing of the Dáil Committee on Public Accounts where some of his evidence was contradicted by the Comptroller Auditor General, John Buckley.
The committee heard that a special internal inquiry was initiated in November 2004 after an anonymous letter containing serious allegations was given to Mr Molloy.
While the resultant audit inquiry did not find any evidence to support the allegations, it did find overspends and a series of breaches of procurement rules in its corporate affairs division.
The Garda Síochána was contacted because of a concern that all of the outdoor posters paid for by Fás may not have been erected, and because of suspected overcharging, to a value of €160,000, through an agency supplying services to Fás.
Mr Molloy said Fás did not tell the CAG about the inquiry until after it was completed, as this was "normal procedure" with special investigations.
However, the CAG, John Buckley, said it would be "the norm" for allegations of fraud or suspicious activity to be brought to his attention.
He said he had recently directed that the matter be taken up with Fás.
Brendan Keneally (Fianna Fáil) questioned Mr Molloy about a letter he sent to the chairman of the Fás audit committee, Niall Saul, in February 2007. In the letter Mr Molloy, among other points, criticised the fact that the auditors had gone outside Fás to question people, without first informing management, and for pursuing allegations that arose after initial allegations had been inquired into, "without the courtesy of advising senior management".
Mr Keneally said he had conducted commercial audits in the past and what Mr Molloy was complaining about was normal. He said Mr Molloy was interfering in the audit process and "setting down a marker".
Mr Molloy said the audit was complete when he wrote the letter. "I in no way interfered with the findings of the internal audit."
Mr Molloy said 20 internal audit reports had been released to the media and to Fine Gael spokesman Leo Varadkar.
"Unfortunately the internal reports released by us under the Freedom of Information Act have been sensationalised by the media and used by some with a destructive agenda towards Fás."
The chairman, Bernard Allen (Fine Gael), said after the meeting that the committee would be extending its inquiry into Fás.