Finance chief - 'I don't know why I wasn't told about €3.6bn error'
Cardiff orders internal report on major gaffe in department
The Department of Finance has admitted it has no idea why a small number of officials failed to rectify a €3.6bn double counting error and also failed to refer the matter upwards to more senior civil servants.
A Department of Finance email from October 25 records one of the officials as saying: "I haven't talked to anyone here about it."
The secretary general of the department Kevin Cardiff yesterday said of the error: "I am puzzled myself."
Under severe pressure at a Public Accounts Committee hearing, Mr Cardiff said: "I am not going to tell you I have the full story, until I have the full story."
Mr Cardiff has demanded an internal report on the embarrassing error and also plans to appoint an outside expert to review systems within his department, where he acts as chief accounting officer.
He admitted that a potential error on the scale of €3.6bn should have been passed up the line within the department.
"If they had any doubt at all, of course they should have," Mr Cardiff said when asked if the matter should have been brought to the attention of more senior staff.
He denied the problem arose because of tension between himself and John Corrigan of the NTMA.
He admitted there was no body auditing the consolidation of debt figures which the department does on a regular basis, although the European body, Eurostat, does "look over" them, he said.
The department produces figures for the general government debt, while the NTMA does figures on the national debt, a smaller amount of money that doesn't take account of local authority borrowing.
Mr Cardiff was heavily criticised over his failure to know about the problem over recent months. "That's even more disturbing,'' said Sean Fleming TD.
Emails and letters that went between the NTMA and the department about the issue were released yesterday, but with names of the officials concerned blacked out, after a request from Mr Cardiff.
However he said if officials were found to have made major mistakes, they could face disciplinary action.
The emails show that on August 23, 2010, the issue of borrowing by the Housing Finance Agency was first brought up by the NTMA with the Department of Finance. The NTMA told the department under new arrangements it was now borrowing on behalf of this agency and the general government debt would need to be adjusted to take account of this and avoid double counting.
But Michael McGrath, who heads up the budget and economic section in the department, admitted there was no record of any response to this early email and subsequent NTMA communications.
Mr McGrath is one of the officials who will be compiling a report on what happened.
Mr McGrath said he was first informed of the error last Friday while abroad and he insisted that a report on it be sent to Finance Minister Michael Noonan. Mr McGrath also spoke to Mr Noonan on Tuesday about the double counting.
He revealed that some of the staff dealing with the NTMA on the issue were seconded from the CSO. He also disclosed that one official who was dealing with the NTMA earlier on was replaced in February/ March of this year.