€9m paid to local authorities for flood relief projects in 2007 not spent

SOME €9 million paid to local authorities in 2007 for flood relief projects has not yet been spent, the Comptroller and Auditor General told a Dáil committee yesterday.

In his report to the Dáil Committee on Public Accounts, John Buckley said the practice by the Office of Public Works of paying local authorities in advance of work beginning was not the best use of cash resources.

He said resources could be better managed if local authorities were funded only when they required the cash.

OPW chairman Seán Benton said the advances in question were made based on commitments entered into by the OPW with local authorities. Difficulties arose with projects in Carlow, Waterford, Fingal and Dublin which led to €9 million of the contributions not being expended by the local authorities.

He said he was satisfied that €7 million of the money would be spent this year and the remaining €2 million would be spent next year.

Fianna Fáil deputy Michael McGrath said advancing money to local authorities before they needed it seemed to be “an odd way of doing business”.

He asked whether the OPW tracked the money to ensure it was ringfenced for the purpose for which it was given.

“We are satisfied the money hasn’t been siphoned off,” Mr Benton said.

He said in light of Mr Buckley’s comments, the policy would be changed.

In future, local authorities would be issued with binding guarantees instead of being advanced funds, he said.

The committee also heard the OPW had paid penalties of over €35,000 under the Prompt Payments of Accounts Act 1997 for late payments to contractors.

Deputy Seán Fleming said the OPW had a “nice cosy relationship” with local authorities, who were getting paid in advance while poor contractors had to wait for their money.

Mr Benton said the OPW makes 50,000 payments a year and their record was generally excellent, but they were driving to eliminate late payments.

Mr Fleming also questioned Mr Benton about the purchase of 784 Garda cars in November and December 2006, bought in addition to a previous order after extra funds became available.

Mr Buckley had said it would have been good commercial practice to seek a discount on bulk purchases, but this had not happened.

Mr Fleming said the OPW had not looked after the interests of the taxpayer.

Mr Benton said they were “totally at the mercy” of the Garda when they asked about the quantity of vehicles needed at the beginning of the year.

“We do expect clients to be able to accurately guide us on the quantity of the goods required,” Mr Benton said.