Thursday 22 February 2018

Watchdog to rule within weeks on 'sacking' of Central Bank auditor

Mary Lou McDonald: report ‘did not make for good reading’
Mary Lou McDonald: report ‘did not make for good reading’
Shane Phelan

Shane Phelan

A ruling is expected early in the New Year on whether the Central Bank acted appropriately when it ended the employment of a senior auditor who complained that his views had been suppressed.

The auditor has alleged that his contract was not renewed just a month after he had claimed that he was put under pressure to remove critical findings about the bank from a report.

He complained that he was effectively sacked and brought a case to the Workplace Relations Commission in September.

Sources familiar with the case have said they expect a ruling early in 2016.

The issue is also set to be investigated by the State spending watchdog, Comptroller & Auditor General Séamus McCarthy.

The Central Bank has refused to discuss the decision to end the auditor's employment, but insists that it was cleared of his allegations following an independent investigation.

That probe was launched after the man made a protected disclosure to former Central Bank Governor Patrick Honohan.

Details of the case were outlined at the Dáil Public Accounts Committee by Mary Lou McDonald. She said the former employee had also made a protected disclosure to her.

Under the Protected Disclosures Act, Ms McDonald is prohibited from naming the former Central Bank employee.

She told the committee that he had been tasked with carrying out a review of the bank's compliance with the code of practice for the governance of State bodies.

The auditor joined the bank in July 2014 and carried out field work between August and September 2014, before producing a draft report that October.

This criticised an alleged lack of appropriate monitoring of arrangements for the engagement of external auditors, alleged ineffective monitoring of the bank's internal auditing arrangements and the alleged failure to review its internal audit manual.

Ms McDonald told the committee that during the course of November 2014, there were discussions on the draft document.

"It is the strong view of the whistleblower that they were encouraged [and] instructed to omit, delete, amend certain findings within the draft," she said.

The whistleblower made a protected disclosure to Mr Honohan on November 17 and had no further involvement in completing the audit report.

Consultant Deloitte was tasked that December with carrying out an assessment and it found in favour of the bank.

The whistleblower was informed of Deloitte's findings on December 21, 2014, and two days later he was told that his contract was coming to an end.

The final audit report was delivered on January 29 this year.

It did not contain some of the auditor's criticism. However, it did find that the bank was only partially compliant with the code in relation to the composition of its board, remuneration, risk management, accountability, internal control, procurement and tax compliance.

Ms McDonald questioned alleged behaviour within the bank, in particular "the practice of asking people, encouraging people" or "attempting to coerce people into removing, amending, altering findings in an audit report".

She added: "The question that arises in my mind is, was the whistleblower punished for speaking out and not going with the flow?"

She said the final report did not "make for very good reading".

Irish Independent

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