Business Irish

Tuesday 27 June 2017

Decade of Fas funding to come under scrutiny

'Problems' identified in audit lead to new probe

Peter McLoone, who himself resigned last year,pays brief tribute to Rody Molloy (pictured)
Peter McLoone, who himself resigned last year,pays brief tribute to Rody Molloy (pictured)

Shane Ross and Nick Webb

European funds for Fas, the State's bloated training agency, dating back to 2000 are under scrutiny by the European Commission following "problems" identified on the audit trail.

As a result Fas may be required to repay funds granted by the commission.

The "problems" initially emerged as a result of the possible failure of Fas to satisfy commission requirements in the use of European Social Funds (ESF) in the 2007-2013 programme. But the discovery of these has prompted Europe to re-examine Fas spending of ESF funds for the earlier 2000-2006 period, amid fears that the same practices may have been widespread in the spendthrift state agency.

Commission sources would not reveal the nature of the problems, but if beneficiaries do not comply with the rules the offending body is liable to a clawback. Some sources suggest that Fas could face bills of as high as €100m but department sources insist that such claims are exaggerated.

Last week, 48 hours after receiving a query on European funding, Fas officially denied it had received any ESF funding for several years, protesting that this funding "goes directly to the Department of Enterprise, Trade and Employment".

A surprising response sitting uneasily alongside the statement by former Fas chairman Peter McLoone -- in its latest annual report -- recognising what he calls "the continued important funding support provided to Fas through the European Social Fund".

Fas is believed to have received €6bn from ESF for education, training and employment purposes.

The Commission's probe of the treatment of its payments to Fas has prompted the Department of Enterprise to withhold certain current funding claims to Europe.

Meanwhile the painfully out-of-date 2008 annual report from Fas was released only last week, several months overdue under government guidelines.

A Fas spokesman explained that the delay was due to "translation difficulties" in producing its Irish version.

The report, which covers the period when former director-general Rody Molloy resigned, fails to mention the circumstances of his departure or the excessive expenses revealed by the Sunday Independent.

In his chairman's report Mr McLoone, who himself resigned last year, pays brief tribute not only to Rody Molloy but also to the Tanaiste and Minister for Enterprise and Employment Mary Coughlan.

No director-general's section is included in the 2008 report but the summary reveals the end of the so-called 'Science Challenge Initiative' in Florida and elsewhere in the US. Without reference to the controversy surrounding first-class travel and high living on the Florida project, the report says "in light of the current downturn it has been decided to discontinue this initiative in 2009, as part of a prioritisation process in order to devote greater resources to the core activities of Fas".

In a significant but highly unusual comment on the operations at Fas, Comptroller and Auditor-General John Buckley draws special attention to defects at the agency.

Although he says he is not "qualifying" his opinion on the financial statements, he wishes to highlight the statement on internal financial control setting out the Fas response to shortcomings in financial control at the agency.

Mr Buckley also points out that during the year he had written a Special Report on Advertising and Promotion in Fas. The report was a damning indictment of practices at Fas.

In 2008, travel and subsistence at Fas was still running at €5.2m

Sunday Independent

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