My comments relate primarily to the contents of chapters 29 and 30 of the report of the Comptroller and Auditor General and to Vote 34 of the appropriation accounts, which in 2009 covered the operations of the Department of Enterprise, Trade and Employment, now reconfigured as the Department of Enterprise, Trade and Innovation. With regard to the overall Vote for the Department, total gross expenditure in 2009 came to €1.5 billion, including €18 million in carry-over capital allocations from 2008. Comparative figures for 2008 were gross expenditure of €1.5 billion and €23 million in carry-over capital.
I am happy to note that the Comptroller and Auditor General's report on the Department for the year is generally positive. In spite of a particularly difficult global environment, there are a number of positive achievements to record on the basis of the supports provided to enterprise through the Department's Vote. For example, IDA Ireland approved 125 investment projects, Enterprise Ireland supported 73 new high potential start-ups, county enterprise boards exceeded their targets by supporting more than 1,000 enterprises, more than 700 indigenous enterprises undertook research development or innovation projects and IDA Ireland secured 62 research development and innovation projects.
I would like to address the two specific issues raised by the Comptroller and Auditor General's report, namely, redundancy and insolvency payments and the National Training Fund - Skillnets. There was a threefold increase in the number of redundancy and insolvency claims lodged between 2007 and 2009, placing a major administrative demand on the Department to deliver employees' statutory entitlements within acceptable timelines. The Comptroller and Auditor General's audit focused on redundancy payment administration and reviewed departmental controls to manage the payment systems. On this point I am pleased to note that, despite the considerable pressures on my Department to process redundancy payment claims as expeditiously as possible, the audit concluded that the control systems governing payments were satisfactory and that all cases reviewed for eligibility under the legislation were found to have an entitlement to payment.
On the issue of debt management, the Comptroller and Auditor General's report concluded that all debt was found to be listed for recovery and that the Department would need to apply focused risk management to all components of the debt and to guard against the premature write-off of amounts owing. I can assure the committee that my Department, through the efforts of the recoveries unit which I re-established in April 2008, continues to make every effort to recover moneys owing to the fund. To this end, I am exploring with the Revenue Commissioners, given the significantly greater resources and powers available to that office, the possibilities of Revenue also acting to seek to recover debts due to the Minister arising from payments made under the redundancy and insolvency payment schemes.
In terms of write-offs, I assure the committee that my Department does not engage in the premature write-off of debts outstanding as evidenced by the fact that, of the amount of €4.1 million written off in the year to date, €3.5 million related to debts dating back to 2004 and earlier. Of the total amount of €8.7 million written off in bad debts in 2009, some 83% or €7.1 million related to debts arising in 2004 and earlier.
At this point, the Department is engaged only in debt write-off in cases where the official liquidation or receivership process is complete and a final statement of accounts has been provided. As the committee will be aware, the Government has decided that with effect from 1 January 2011 full responsibility for this activity will transfer to the Department of Social Protection.
Chapter 29 of the Comptroller and Auditor General's report deals with Skillnets and the National Training Fund, NTF. Skillnets is an enterprise led limited company funded under the NTF to support development of workplace upskilling and promote training of those employed in the private sector. This funding model involves supporting networks of companies who come together to identify and meet their common training needs. While Skillnets now operates under the Department of Education and Skills, in 2009 it was run under the aegis of my Department. The financial allocation for the Skillnets training networks programme in 2009 was €16.6 million. A total of 103 networks were funded under this provision and 41,610 persons were trained over 193,757 training days, of which 93,020 days were provided to those with low basic skills. In the past five years to date Skillnets is estimated to have trained more than 200,000 persons, including almost 5,000 unemployed persons for the first time this year in an innovative element of the unemployment activation agenda.
Skillnets Limited currently employs 21 staff to administer, support, control and monitor its national training programme. Each of its networks is assigned a programme support manager who guides and advises on the implementation of training plans and Skillnets requirements, procedures and protocols. Skillnets Limited also conducts at least one monitoring visit over the normal two year programme period. Resource constraints in 2009 arising from budgetary adjustments meant these vital visits dramatically declined that year.
The Comptroller and Auditor General's report identifies two cases where allegations of malpractice were reported to the Department. The first had already been identified by Skillnets Limited and was being dealt with since September 2008. The Department sought a response from Skillnets Limited in February 2009 to anonymous allegations made that month and a further detailed report was sought in April 2009 and subsequently received in August 2009. The second allegation arose from an anonymous phone call in February 2010 which Skillnets Limited immediately brought to the attention of the Department before putting in train a thorough investigation which culminated in an external auditor's report being issued to the Department in June 2010.
In both these cases, my Department ensured that Skillnets took immediate action to ensure potential losses of public money were identified and minimised, and that training participants were not adversely affected. All appropriate bodies, including the Garda authorities, were duly notified of the allegations by Skillnets Limited and thorough investigations were conducted. These investigations uncovered a number of breaches of procedures which were addressed by Skillnets and culminated in the conclusions and recommendations set out in chapter 29 of the Comptroller and Auditor General's report. The fact that the allegations had foundation is of concern to the Department. We have pursued these concerns with the CEO of Skillnets, who has responded appropriately.
Key to the measures that have been put in train is the greater emphasis being placed by Skillnets Limited on the oversight of the relationship between networks and their training providers. In this context, more intensive spot checks and compliance visits are being undertaken, including sample checks by Skillnets Limited personnel of network companies and trainees. Greater emphasis has also been placed on network managers attending training events. We will continue to closely monitor these actions in consultation with Skillnets Limited. In addition Skillnets Limited is enhancing its control regime by: providing clear written instructions to each network of its responsibilities; allocating unique identifiers to training providers and conducting quarterly reviews of payments to providers; recording matching income and reconciling income for each course; reviewing procurement in each network; and confirming that only one bank account is operated and that independent accountants obtain standard bank confirmations. Moreover, in December 2009, even before the training provider allegations, my Department had agreed on the following new measures for Skillnets in 2010: a consolidation and streamlining of the number of networks funded with a cap of 70 networks in total, compared to the 123 networks funded under the 2008-09 programme; a revised public-private funding ratio for networks of 50:50; a capping of management costs of networks at 25% of total expenditure, that is, solely from private funding sources; and the capping of retention payments to networks at 10% of total grant paid and at the level of €1 million in total across the programme.
Skillnets has tendered for an external evaluation of all network activity under the 2010 programme, something that was previously procured by networks themselves. The results of this evaluation will be considered by Skillnets and the Department in due course with a view to informing any further improvements in programme operations. The maximum exposure of public funding arising from the activities of the training provider highlighted in the Comptroller and Auditor General's report is estimated by Skillnets to be just under €54,000. Skillnets is taking all appropriate steps to minimise this figure and recover any outstanding funding. It has also conducted a review of this training provider's earlier activity between 2005 and 2007 and is satisfied that there was no improper conduct or loss of public funding during that period. Moreover, it has instituted a wider ranging review and quality assurance of other significant training providers under the programme from 2008 to the present. The sampling results available to date provide positive assurance on all the training tested during that period.
The matters arising in the external evaluation, the ongoing work of Skilllnets Limited and the Comptroller and Auditor General's Report will all be taken into account by the Department of Education and Skills in the context of future funding for Skillnets.