Tánaiste confirms publication of C&AG Report on Internal Control and Governance in FÁS

The Tánaiste and Minister for Enterprise, Trade & Employment, Ms. Mary Coughlan, T.D., today (Thursday, 28 January 2010) confirmed publication of the report of the Comptroller and Auditor General on Internal Control and Governance in FÁS.

This is the second of two reports on FÁS prepared by the C&AG following a request by the Tánaiste for him to consider undertaking an investigation into the effectiveness of the financial management and control systems in FÁS. This report deals with internal control and governance in FÁS and focuses on the processing of transactions at FÁS Head Office and governance arrangements for the organisation in the period to 2008.

The report identifies serious procedural deficiencies in financial controls and governance in the Agency, but also concludes that transactions processed were in the vast majority of cases for the benefit of the agency, and that transactions comprised in its annual accounts were properly chargeable for the objectives of FÁS.

The Tánaiste said that the failure by FÁS to implement elements of its plan of internal control, being the key failure identified by the C&AG, had caused considerable damage to the organisation. The Tánaiste said that she has subsequently sought and received assurances from FÁS that internal controls are being fully complied with and that FÁS has, among other actions, now:

• restructured and significantly tightened controls in the Corporate Affairs function of FÁS, which had been at the centre of the C&AG’s investigation;
• approved new procurement procedures and is undertaking a full audit of all procurement locations, which will be completed by the end of 2010; and
• put in place new procedures for reporting significant control failures, ensuring appropriate corrective action is taken.

While the Tánaiste welcomed the conclusion of the C&AG that the governance structure in FÁS during that period was consistent with its then governing legislation, she said her commencement of the Labour Services (Amendment) Act 2009 last week ensured that today, a stronger, more efficient and accountable governance structure is in place at the organisation.

The Labour Services (Amendment) Act 2009 provided for a more robust governance and accountability structure at FÁS and, specifically, provided for:

• a reduction in the size of the Board of FÁS from 17 to 11;
• introduction of a rolling system of appointments to the Board;
• removal of the automatic right to nominate individuals for appointment to the Board from bodies not directly accountable to the taxpayer;
• making the Director General of FÁS accountable to the Oireachtas;
• requiring the disclosure of conflicts of interest by directors and staff of FÁS;
• banning directors and staff of FÁS from any involvement on matters where they have a conflict;
• providing for the removal of directors or termination of staff contracts where there is a breach in this regard; and
• protection for ‘whistleblower’ members of staff who report serious wrongdoing in the organisation.

The Tánaiste said that since becoming aware of the serious issues that have arisen in respect of FÁS following her appointment as Minister for Enterprise, Trade and Employment, she has acted effectively and with consistency to address them, while also ensuring that FÁS can continue to provide essential services and training to jobseekers at a time of significant need. She said that a new Director General and Board have now been appointed and that new procedures and controls have been put in place both at governance level and within the organisation. Concluding, the Tánaiste stated that FÁS must now concentrate fully on its core mission of providing training and activation measures for the unemployed.

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