The director general of Fás Rody Molloy has rejected the charge that he sought to interfere with the authority’s internal auditors.
Mr Molloy was addressing a hearing of the Dáil Public Accounts Committee which is inquiring into breaches of procurement procedures and failure to achieve value for money at the authority.
The committee heard that there are currently two Garda inquiries under way into allegations of fraud and concerning the authority.
The committee heard that a special inquiry by the Fás internal audit division conducted between November 2004 and May 2006, was not brought to the attention of the Comptroller & Auditor General (C&AG), the body that audits Government departments and state bodies, until February 2007.
Mr Molloy said that Fás had followed “normal procedure” and not told the C&AG about the inquiry until it was completed. This was normal with special inquiries.
However the C&AG, John Buckley, told the committee it would be “more the norm in every organisation” for inquiries into “fraud or suspicious activity” to be brought to his attention. He said he had raised the matter while clearing the most recent set of accounts for Fás and “directed that the issue be taken up with Fás”.
Deputy Brendan Keneally, of Fianna Fáil, referred to a letter written by Mr Molloy to the head of the Fás board’s audit committee Niall Saul in February 2007, concerning the report. He said Mr Molloy, through what he said in the letter, was interfering with the Fás internal audit process.
“I in no way interfered with the internal audit process,” Mr Molloy said.
Mr Keneally said: “But you put down a marker for the future.”
Mr Molloy said: “I put down a marker for how things might be managed in the future.”
Mr Keneally said internal audits had to be seen to be independent. “To my mind what you are doing there is cutting across that.”
Mr Molloy said that when he wrote the letter the final internal audit report had already been written. In one part the letter, which includes a number of criticisms of how the audit work was carried out, Mr Molloy complained about the auditors contacted parties outside Fas without informing senior management.
Mr Keneally said he had been an auditor in the commercial sector and this was “normal”, and was done so that parties could not be “pre-warned”.
The Garda was contacted arising from the special inquiry, which was into matters concerning the Corporate Affairs Division at Fás. An inquiry was initiated into whether Fás had been charged for billboard posters that had not in fact been erected, and whether it had been invoiced by an advertising agency for more hours than had been actually worked. The amount involved in the latter instance is €160,000.
A second, separate inquiry has since been initiated after the authority was contacted by someone who was concerned a company name was being used for invoices being sent into Fás. A Garda inquiry is now under way into whether a person was submitting invoices in the name of this company, when in fact the person had no connection with the company.
At the outset of the meeting Mr Molloy said internal audit reports released through the Freedom of Information process were being “sensationalised” in the media and “used by some with a destructive agenda towards Fás”.
The chairman of the committee, Bernard Allen, said the remarks indicated “a sense of paranoia” and that no-one had any agenda. The Freedom of Information Act was law and people “are entitled to seek information from an organisation that spends €1 billion of taxpayers’ money” every year.
Mr Molloy and other Fás representatives are due to return at a later date to give more evidence to the committee.
