The State body responsible for school attendance matters forfeited close to €700,00 because of lapses in internal controls, according to a special report from the Comptroller and Auditor General published yesterday.
The comptroller's report notes these lapses "were exploited by a member of staff, apparently in collaboration with a supplier".
As a result the National Educational Welfare Board paid out €698,000, which included:
• Information technology (IT)equipment costing almost €200,000. This transpired to be in excess of the organisation's needs;
• Payment for IT services not provided at an estimated cost of €270,000;
• Professional fees of €228,000 in investigating the matter.
The report is an embarrassment for the board which has been pressing hard for more funds from the Department of Education. However the comptroller's report highlights inadequate internal controls after the irregularities came to light two years ago.
The report reveals how a review of internal control in December 2004 had highlighted how deficient safeguards allowed "the same person [ in IT] to order goods, approve payments and sign cheques".
At the time, the board pointed out that the supplier for much of the IT equipment "was correctly sourced through a tendering process". However, the report states that some 64 per cent of IT purchases were sourced from a single supplier and only one of 122 individual purchases was the subject of a tender process.
Legal proceedings seeking recovery of amounts irregularly paid have been taken against the member of staff and the supplier.
Minister for Education Mary Hanafin said last night: "A number of deficiencies in the internal controls of the board had remained undetected for a time" notwithstanding ongoing efforts to review control systems. However she also acknowledged the important role the board played.
The report is also critical of the department, which devolved control for school attendance matters to the welfare board in 2002.
In his report, the comptroller acknowledges that "it is not always easy to prevent or detect situations where staff act collusively with suppliers or bypass controls".
The board refused to comment last night on the matter which is now the subject of legal proceedings. It says the staff member was suspended immediately and all aspects of the matter were fully and independently investigated at the time.
The individual involved did not co-operate with those inquiries and resigned some months later.
The board also says it deeply regrets the irregularities and is seeking full recovery of the money lost from the former staff member and the supplier.
