As members are aware, the report of the Comptroller and Auditor General draws attention to shortcomings in the accounts which are very much regretted and, to a large extent, due to the following points. There were staff shortages, to which reference has been made, particularly in the finance area, which caused us major problems, on which I will elaborate, if members wish. We have a poor career structure for administrative staff in the sense that one third are employed above recruitment grade, in respect of which there are low promotional prospects. This is being addressed by way of a new report, the Rochford report, which recommends a substantial increase in numbers and also covers the grade to which staff can aspire in a career structure. I hope we will be able to retain staff for a greater period. Staff turnover in the period 1998 to 2000 was very high. Some 47% of core administrative staff resigned during this period. While that was bad enough, the position was aggravated by the fact that 48% of those to whom replacement offers were made did not take up duty, which left us with a serious staff shortage.
With regard to the internal audit function, we did not have any dedicated or qualified staff which gave rise to many problems. This issue is being addressed. We expect to have an audit plan before our committee at its next meeting. We then hope to move forward with the appointment of dedicated audit support staff.
During this period we, like everybody else, were going through problems in relation to Y2K compliance and the introduction of the euro. While doing so, we had to look at existing finance systems which were not satisfactory. We got consultants to advise us and found that we needed to replace them as, to put it mildly, they were antiquated. This combination gave rise to many delays and difficulties. There were also some illnesses which did not help matters.
There are, however, positive aspects to report. Since mid-2000 the annual accounts for 1998 and 1999 were signed off, eventually. We very much regret the delays that occurred with them. The accounts for 2001 have been signed off and the audits completed. We are pleased that there have been significant improvements which are continuing. The accounts for 2002 have been completed and submitted to the Department of Education and Science. They have also been copied to the Comptroller and Auditor General's office.
The other significant development, although there is probably nothing more significant than having the accounts signed off, is that the computer software introduced to the financial system is functioning well and we are pleased with it. It is delivering everything we expected of it. We are not at the end of its development but are satisfied with it. For example, the interfaces with payrolls, the euro conversion and prompt payments are done; Vision is being used with Excel; the annual accounts are easier to prepare and the reports needed for management information are available. The purchase order system is being implemented and operational in about 12 of the centres at this stage. There is ongoing roll-out of the system. There is also an enhanced coding structure. Many of our problems arose due to miscoding and, probably, misallocation to a number of different areas. Payroll reconciliations are done and staff allocations reconciled while capital accounts payments and reconciliations take place monthly.
On an ongoing basis the negotiations in relation to staffing were part and parcel of a national issue but a specific report was done on staffing in Dublin. Rochford made recommendations. In a nutshell, it recommended an enhanced staffing level compared to what we had. It brings us to a reasonable level for delivery of the type and nature of service now required.
I should mention, for the benefit of members, that there has also been a culture change. Our accounting systems were receipts and payments based. They changed over to income and expenditure which gave rise to many difficulties for staff. There was much retraining involved, not to mind the replacement of personnel, which did not help anybody during the period. We are hoping the Rochford recommendations and the offer made by the Department have been accepted by the trade union and are looking forward to getting approval in the near future for implementing the report which should address the staffing issue. To be fair, it should be pointed out that the rapid staff turnover has stabilised, as it has in most other places, as a result of the changes which have taken place in the economy.
With regard to internal audit, we have made good progress. The Department has agreed to support us in the development of a dedicated internal audit provision within the scheme, of which the first part is the preparation and delivery of an audit plan. We are expecting the report this week which should be before our committee at its next meeting in a week's time.