C&AG report a depressing read

 

HOW CAN the Dáil best hold the Government to account and ensure adequate parliamentary control of public spending? The public accounts committee (PAC), which examines how departments manage their annual budget allocation, has been doing so for almost a century. This Dáil committee’s routine work derives from an annual report by the Comptroller and Auditor General (CAG), who audits the national accounts.

The CAG examines how public money has been spent, and whether value for money has been achieved, thereby highlighting issues the PAC may wish to investigate further. The comptroller’s 2011 report makes depressing reading. In difficult economic times, the need for efficient and effective management of public money has never been greater. And yet many departments have neither acted wisely nor spent well. Last year two departments – Social Protection and Education – stood out in this respect.

The Department of Social Protection made welfare benefit overpayments of almost €100 million – nearly double the 2007 figure. In all 63,310 claimants were overpaid. Fraud accounted for one-third of these excess payments, and human error – by those applying for benefits – for almost half. Of the remainder, 12 per cent involved overpayments to those no longer alive and 6 per cent were described as errors by the department.

The department’s failure to prevent these irregularities was compounded by its inability either to recover money from those who had fraudulently obtained €35 million – or indeed to prosecute the offenders. The CAG’s report notes that the recovery rate of fraud-related debt is unknown, while fewer than 3 per cent of fraud cases are referred for prosecution.

Against the background of a further tough budget in December, with intimations that some welfare benefits may be scrapped, benefit payments reduced and PRSI rates raised, the department’s failure to manage and control its own spending requires some better explanation.

The contrast between the limited money management skills of the Department of Social Welfare and those of another State body – the Revenue Commissioners – is striking. Last year Revenue collected €34 billion in taxes, thanks to high levels of compliance by taxpayers, and its willingness to use tough enforcement procedures. One department of state – it would seem – can ignore high levels of fraud, fail to recover most of the money owing, and also fail to prosecute welfare fraudsters.

The administrative failings of the Department of Education, albeit on a smaller scale, are quite inexcusable. Here the CAG found that after the December 2010 budget, which saw reduced pay rates for new entrant teachers, the department failed to make the required payroll adjustments. This resulted in overpayments of €1.2 million. It took the department nine months to apply the required cuts. But as the report says, the department has not yet arranged to recover the money paid in error. The CAG has done its work and the PAC now has a duty to investigate fully this mismanagement and misspending of public money.

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