THE NATIONAL agency responsible for marine research, the Marine Institute, has expressed regret for its “entirely inappropriate” behaviour after incurring €1.4 million before getting approval from the relevant Government department.
The Comptroller and Auditor General (CAG) investigated the appropriation of a VAT refund to the Marine Institute in a special report, which was discussed yesterday at the Dáil Public Accounts Committee. In 2002, the institute bought Celtic Explorer, a research vessel, for €31.68 million and in 2005 it obtained a €5.24 million VAT refund from the Revenue Commissioners.
The institute’s chief executive, Peter Heffernan, told the committee the institute then sought sanction to allocate the refund to a number of urgent areas likely to emerge in 2006.
“In the absence of sanction, the Marine Institute took an executive decision to commence a drawdown of €1.4 million of the €5.2 million VAT funds on the basis that it fully expected the department to approve the institute’s request,” he said.
The CAG found the institute “acted inappropriately by incurring certain expenditure in anticipation of the receipt of the sanction of the department to do so”.
The institute received funding from the Department of Communications, Energy and Natural Resources until October 2007. Since then, funding has been provided by the Department of Agriculture, Fisheries and Food.
Mr Heffernan said: “The institute accepts the view of the CAG and department that this was entirely inappropriate, both in the sense of anticipating the sanction and exceeding its capital provision.
“The institute regrets its actions in the above regard and assures the Committee of Public Accounts and the CAG that such a situation will not arise again and, also, that all expenditures – albeit unsanctioned at the time of expenditure – were undertaken in accordance with full internal audit and accounting procedures.”
He said the institute had been put in an “extremely invidious position” by the delay in approving the expenditure and other significant pressures. It had chosen the “least objectionable” course of action, he said, believing the alternative was to cease research vessel operations and potentially postpone the start of its headquarters at Oranmore.
He said no expenditure was undertaken that was not ultimately sanctioned by the department in December 2006.
