My Department has raised a number of issues with Co. Cork VEC in relation to the expenditure of its funding. These relate to ineffective expenditure on an IT project that was the subject of a report by the Comptroller and Auditor General (C&AG), in accordance with Section 7 of the Comptroller and Auditor General (Amendment) Act 1993, and to an internal audit report on Macroom Youthreach centre.
The C&AG's report found that the processes employed by the Co. Cork VEC in this case were defective in regard to certain aspects of procurement, that the approval of the Minister had not been sought to enter into a leasing agreement, that the financial risk associated with the arrangement rested mainly with the VEC and that the contract was inadequate.
Resulting from this report my Department issued Circular 39/2011 "Good Practice Guidelines in relation to Contracts for the Provision of Goods and/or Services" to the Chief Executive Officers (CEOs) of the VECs in June 2011. Circular 39/2011 informed VECs that, whether commissioning public services or providing them directly, they have a duty to strive for economy, efficiency, transparency and effectiveness in their expenditure.
The Circular drew the attention of VECs to their obligations with regard to procurement, to the importance of adherence to EU Directives and national regulations in regard to advertising, and to the use of objective tendering procedures for awarding contracts above certain value thresholds.
The guidelines also dealt with the evaluation of proposals, borrowing/leasing, and the reporting of losses.
The Secretary General of my Department also wrote recently to each CEO, in the context of the Co. Cork VEC report and a number of other C&AG Section 7 reports, reminding each of their responsibility, as accounting officer, to ensure that value is achieved in the engagement of services and the procurement of goods. CEOs were reminded that, as public servants, they have a responsibility to ensure that funds provided by the Exchequer are expended in a manner which is economic, efficient, transparent, and effective and achieves the very best value for the taxpayer.
An internal audit report on Macroom Youthreach centre was received in my Department on 29 September 2011. On receipt of the report my officials wrote to the acting CEO of Co. Cork VEC and sought a report on how the irregularities highlighted arose, how it was proposed to rectify them, or if already rectified how this was accomplished, and how it was proposed to safeguard against their recurrence in the future. The acting CEO confirmed to my Department that the recommendations of the internal audit had been implemented, however, my Department has sought clarification from the acting CEO on any possible losses arising.