Mr. Molloy and his colleagues appeared before this committee on 2 October. In the course of his evidence, Mr. Molloy agreed to provide the committee with details on issues that were raised at that meeting. This is normal practice for this committee, and the clerk to the committee set out the issues for FÁS in a letter dated 7 October. Following further consideration by the committee of the evidence given by FÁS, the clerk to the committee wrote two more letters to FÁS seeking further information relevant to our examination.
There has also been correspondence between FÁS and the committee about certain items that cannot be released due to legal advice. This relates mainly to personal data and the requirements of the data protection legislation. However, the details we sought that could be released were not sent to the committee until lunchtime on Monday, and their late arrival inhibits the effectiveness of the committee in doing its job. The material supplied should have been with the committee last week so that committee members could have the opportunity to analyse it. I am not taking issue with the material that was withheld, as this will be the subject of a review by the committee, in consultation with our legal staff. However, I find it unacceptable that detailed material sought in early October was not made available until this week.
Some of the briefing material on some issues, such as a detailed breakdown of expenditure highlighting major capital projects, travel and subsistence, advertising and bonus payments, contained very little detail. Members who asked those questions deserved better. We will be looking for extra documentation, and we hope that such documentation will be supplied within a seven-day deadline.
I would like to outline the contents of the information that was requested in a submission to FÁS, following our meeting on 2 October. These were: the number of special investigations carried out by internal audit since 2000; the figure for expenditure on advertising for each year between 2003 and 2007; a copy of the anonymous letter sent to the Tánaiste in 2004, which initiated the investigation; a schedule with a breakdown of expenditure for the last five years, highlighting major capital projects; a copy of the FÁS code of practice for its employees; a breakdown showing details of bonuses paid in 2007; the full details of the competency development programme, showing a breakdown of the companies involved in the scheme and the cost involved in each case; the full details on the number of internal audit reports that have shown a lack of compliance with Department of Finance rules; a copy of the Spollen report; and a breakdown of the expenditure of €5.7 million on travel and subsistence in 2007.
In addition, further items were sought by the committee on 9 October, following a review of the evidence taken at the meeting on 2 October 2008. We agreed to seek the following information from FÁS: a copy of the internal audit report which examined issues in the public affairs division, and upon which report No. 10 of the Comptroller and Auditor General is based, as well as any related correspondence between the internal audit unit and the executive directorate in FÁS, and any memos of meetings between FÁS and the internal audit unit which are on file in that unit or in FÁS itself; a note on the continued use of a consultant agency, and whether it was a subcontractor employed to do poster work for FÁS that caused subsequent difficulties with incorrect invoicing and overcharging; a note on the disciplinary action taken by FÁS; a note on the fact that three different directors of internal audit dealt with this issue and, in particular, the current status of the second internal auditor and the reason that individual was moved from his post to another position within FÁS.
We received a letter from Mr. Molloy on 3 November, addressed to Mr. Ted McEnery, the clerk to the committee. It states:
I refer to your letter of 7 October 2008 on behalf of the committee requesting certain documentation, together with a further letter of 13 October 2008 seeking additional documentation. Among the documents requested by the committee, there are documents that contain "personal data" within the meaning of the Data Protection Acts. For example, the committee's request for "a note of the disciplinary action taken by FÁS against the Director of Corporate Services".
I note that under the Committee's of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act 1997, the powers of the Committee are set out in Section 3 of this Act. I also note that under Section 8(e) of the Data Protection Acts, “any restriction in this Act on the disclosure of personal data do not apply if the disclosure is that of ...required by or under any enactment or by a rule of law or order of a Court....”
FÁS's legal advisors have advised that your letters of 7 October 2008 and 13 October 2008, on their face, do not appear to be directions pursuant to Section 3 of the 1997 Act.
As you will appreciate, we are mindful of our obligations under the Data Protection Act and therefore we could not release this information unless an appropriate direction is made under Section 3. While these matters are being clarified by our respective legal representatives, we are not in a position to release certain elements of the data requested by the Committee. I attach what information we can release as requested by the Committee:
1. A schedule "FÁS Internal Audit Investigations — 2000 to 2007" detailing the number and nature of investigations carried out by Internal Audit for the period 2000 to 2007. During this period 69 investigations were completed. Of the 69 investigations completed, 48 arose in the Community Services area and represent fraud perpetrated on the organisation and scheme sponsors. In total, the FÁS loss quantified by the investigations was €176,000. These losses should be seen in the context of a total budget of €7,164m in the corresponding period. It should be noted that the vast majority of investigations were initiated by Management.
2. A schedule "Total FÁS Advertising & publicity Related Expenditure 2003 — 2007 Actual per SAP GL" detailing expenditure on advertising for the period requested.
3. Based on legal advice, we are not currently in a position to release a copy of the anonymous letter sent to the Tanaiste in 2004.
4. A schedule "Total FÁS Expenditure 2003 to 2007" detailing a breakdown of FÁS expenditure for the period including details of major capital projects.
5. A copy of the FÁS Employee Code of Ethics and copies of our Statement of Interests declarations as per the Ethics in Public Office Acts 1005 [I believe that should read 1995] and 2001.
6. The following bonus payments were made in 2007.
Director General and ADC's: 7 recipients €125,493
Grades 4-7, 1% PCW restructuring Award*: 336 recipients €213,519
Special Merit Awards: 4 recipients €30,000
* This is a 1% annual non salary allowance paid to all staff on grades 4-7.
7. The Competency Development Programme (CDP) aims to encourage those in employment to increase their competency levels and to promote an ethos of life-long learning in the workplace. A copy of the CDP guidelines is attached, setting out full details of the programme, the eligibility criteria, levels of support etc.
Under CDP, FÁS provides financial support of up to 70% towards the cost of eligible training (+5% in BMW regions). This contribution is made directly to approved training organisations on completion of the contractually agreed training programme and on receipt of the necessary Invoice/supporting documentation. The balance is paid by the employer/employee to the trainer. Therefore the primary FÁS contractual relationship lies with the training organisation and not the employer. FÁS financial information systems are structured to collate information accordingly.
In 2007, FÁS/CDP supported the training of 44,993 employees in over eleven thousand companies throughout the country. This data is broken down by employer in the attached report — "CDP 2007 — Analysis of Participants by Company". The training was delivered on behalf of FÁS by 380 approved training organisations.
The total sum contributed by FÁS in 2007 under the Competency Development Programme was €42.2m. This programme is supported by the European Social Fund.
8. A schedule "Details of Internal Audit Reports — Non compliance with DoF Procurement Policy" detailing the number of audits conducted in the period 2000 to 2008 and the number of audits reporting non-compliance with Department of Finance (DoF) Procurement Policy. In total, 51 audits (25%) reported breaches of DoF Procurement Guidelines. The majority of these reports reflect on procedural breaches such as insufficient number of quotes on file, use of preferred suppliers for certain services, contracts register not up to date and some examples of items not being tendered through Head-Office.
Included in the attached analysis are 20 specific audit reports of all procurement units in Head Office and our regional locations. The audits covered the period January 2004 to July 2008.
In summary, 11 of the 20 locations were awarded a satisfactory audit opinion as audit tests revealed minimal non-compliance with internal controls and procedures. A further 6 locations were awarded an acceptable audit opinion as audit tests revealed moderate non-compliance and 3 locations received an unsatisfactory audit opinion as tests revealed substantial non-compliance. In addition, these 20 audits highlighted the following significant breaches of procurement procedure:
> Head Office procurement. Additional/emergency works in excess of €100,000 were not covered by tender and enabling works of €584,000 were not presented to the FÁS Board for their approval.
> Regional procurement. An unsatisfactory exception opinion was expressed in respect of the selection of a supplier to paint a training centre. The value of the work was €188,000. The selection process was handled locally, three quotes were obtained, the contract should have been advertised on the OJEU.
> Regional procurement. While a number of audits resulted in a satisfactory opinion, on three occasions the use of preferred suppliers for emergency works was found to be unsatisfactory.
9. Based on legal advice, we are not currently in a position to release a copy of the Spollen Report as requested.
10. A schedule "Travel & Subsistence 2007- Expenditure by Function" detailing the breakdown of €5.7m expended on Travel & Subsistence in 2007.
11. Based on legal advice, we are not currently in a position to release a copy of the Internal Audit report "Corporate Affairs Ref: INV 137" which examined issues in the Public Affairs Department and related correspondence between the Executive, the Audit Committee and Internal Audit. However, I attach a copy of the report as released under Freedom of Information.
There is another point No. 12, which I will not read into the record today because extremely sensitive Garda investigations are ongoing and these might be compromised. The letter continues:
13. Based on legal advice, we are not currently in a position to disclose details of the disciplinary action taken by FÁS [against the director of corporate affairs.]
14. Based on legal advice, we are not currently in a position to answer the Committee's query as to the fact that three different directors of internal audit dealt with the investigation of Corporate Affairs and in particular the current status of the second Head of Internal Audit and the reason that individual was moved from his post to another position in FÁS.
The letter is signed by Mr. Molloy.
As I said, the committee finds itself in an impossible position because of the late arrival of documentation, which arrived only on Monday, and the refusal of FÁS to provide other documentation because of legal advice it received. The committee will be in contact with FÁS over the next 24 hours in regard to the further documentation we require.
I would like to get clarification on a report that has come to our attention that FÁS set up a full formal investigation headed by an assistant director general, Mr. Oliver Egan, in the wake of a special audit inquiry into activities in its corporate affairs division. This documentation was released under freedom of information to The Irish Times. On our reading the transcript, we do not seem to have been made aware of the existence of this full formal investigation. Will Mr. Buckley clarify this? Has he been made aware of it?
