FAS chief defends executives' expenses (again!)

what about the auditors of FAS? Surelay as a company, FAS would have had to have an audit every year. should they not have come accross this whole expense fiasco before now? you wouldnt expect to see a heading in teh accounts of FAS for "travel to Florida" of €640,000 but a review of the expense woudl have revealed this. Also i woudl be surprised if there was not an internal audit committee in FAS. If so what was there role in all of this?
 
Towger said:
Why did you feel the need to post the same message twice?
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I reckoned that you didn't seem to get the point first time, as you repeated your misleading and incorrect claim about the board membership.

Mpsox said:
If I resigned from my job in the morning, I can't see my employer saying, "sorry to see you go, here's 2 years salary"
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While I don't agree with the payment and I'm not defending it in anyway, such payments would by no means be unusual at top levels in the private sector.
 
Sunny said:
And then of course there was milage. The best part of it was that all of these expenses were unreceipted and tax free. He was staying in B&B's and living on a lot less that €44 a day but still got the full allowance. I won't tell you how much 'profit' he reckons he made last year. He had colleagues who stayed with family and friends and still got the allowance.
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Of course expenses are "tax free". They're tax free in the private sector as well. I know a senior level auditor in the C&AG and her daily expenses excluding mileage are about €160 for three meals and board. Definitely not excessive.

Purple said:
If FAS are just following general public service travel and expense guidelines then this has much wider implications.
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Believe me this is not the norm by any means. I know people working at fairly senior levels in the civil service and they were all appalled.

Purple said:
I agree. He’s from Birr, down the road from Brian. This sort of “I know him well, he’s a descent skin” attitude is sickening.
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When I heard this the first thing that popped into my head was "Isn't FAS supposed to decentralise to Birr?". The second thought was to chastise myself for even being so naive as to imagine anything else would be the case.

Purple said:
From today’s Irish Times “the Fás Science Challenge project, which spent over €600,000 on transatlantic travel for the director general of Fás, Rody Molloy, his wife and senior Fás executives in a four-year period.” If this is the case then it’s €600’000 for Mr Molloy and an unknown number of other executives. This changes everything; it may not be that big a deal after all. Until we know how many people this €600’000 applies to, specifically what projects they were working on and what the returns were in jobs, investment etc over the four years I don’t feel I can stay on the bandwagon. (Not that Rody Molloy cares but) I reserve my judgement on this specific story ‘till I have more of the facts.
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It's still an awful lot of money to spend on air travel on this one project. What the hell was it? I've lectured in science for two years and I've never heard of it. Was it pitched at third level or secondary or primary? To hear Hot Rod on the radio I thought we'd launched a second IDA with a mandate to pursue a space programme or something but the papers seemed to be billing it as a secondary level project. In which case it was a jolly boys outing for the senior level people and a great experience for the students involved but hardly the foundation stone for building an aerospace research industry.

Purple said:
I suggest that the office of the Comptroller and Auditor General needs to be expanded.
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Absolutely. One of the major problems is that many semi-states and local authorities are audited by private sector auditors rather than the C&AG. Private sector auditors have quite different requirements when it comes to auditing and might not see €400 haircuts as a problem once they are properly accounted for.

orka said:
There isn't even a business class flight direct to Florida (Aer Lingus is economy only to Orlando) so it would have to be via the UK to get first class. And as I think has already been mentioned, there is really NO justification for any public employees travelling first class - there is a marginal difference in comfort but the price can be a 2-3 times multiple. Once you've got a flat bed, power for your laptop and enough space to spread out some papers and stick your elbows out while you work on your laptop (and you get all this in business class), anything extra is an unnecessary extravagance. I'm really shocked that senior civil servants (how senior/how many?) are 'entitled' to this.
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This sticks out for me too. Is he saying that he booked a flight for first class direct with one airline then redeemed it for two business class flights with another airline (fraud)? Or is he pointing to some imaginary accounting in his head where he was intending to buy one first class ticket with one airline but then at the last minute decided to bring the wife (and clearly feeling first class is only worth paying for with someone else's money) decided to book two business class tickets instead?

Sunny said:
Does such a system operate in the civil service or is it each to own with regard to travel arrangements
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This might have been answered elsewhere but it's fairly tightly controlled. In my own case as a public sector employee I get an allowance specific to the country I'm travelling to and the number of hours I'm staying. The hotel must be booked by the travel department but comes directly out of my allowance. Airline flights are economy only.

Perhaps the only extravagances allowed are airport taxis but only outside of the hours of work.

Purple said:
Now the $400 it for a group of people, Mary Harney being one (getting her hair done for an official engagement). There may well be massive waste in FAS but this is not it.
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I wouldn't consider haircuts in any way a reasonable expense.

sidzer said:
Apart from the apparent massive abuse of state monies - from my perspective we get a very poor service from an organisation that spends 1billion a year.

As a career adviser I regularly ring FAS to find out about courses on offer on my locality on behalf of students who don't fit easily into the traditional third level college groove. I am amazed by the lack of information and the difficulty and digging that must be done to get a sense of what's on offer - and invariably the range of options are very poor and in most cases not relevant to the needs of the average school leaver in the current employment market.

So when they are fininshed with the nail bills I think there are bigger questions about what is or is not happening in FAS and how relevant it is to the current pool of school leavers and unemployed people in need of retraining.

S
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Excellent post, I couldn't agree more. I have been routinely shocked by the incompetence of FAS. Shane Ross and others seemed to tripping over themselves recently to mention the "good work performed by people on the ground" but personally I haven't seen it.

Sunny said:
I take your points but I was listening to the news on one station and it was pointed out that Molloy and other senior civil servants are entitled to travel first class so he actually didn't do anything wrong in that regard. Now I can understand business class for long distance flights but first class is just taking the pi**.
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There is absolutely no way this is standard even for very senior civil servants. Business class maybe but not first class. It should also be pointed out that the senior executives travelling on the FAS ticket were public sector employees not civil servants. It's an important distinction often glossed over and I say this as a public sector employee myself, the major waste is in the public sector not the civil service, by virtue of size alone if nothing else.
 
viztopia said:
what about the auditors of FAS? Surelay as a company, FAS would have had to have an audit every year. should they not have come accross this whole expense fiasco before now? you wouldnt expect to see a heading in teh accounts of FAS for "travel to Florida" of €640,000 but a review of the expense woudl have revealed this. Also i woudl be surprised if there was not an internal audit committee in FAS. If so what was there role in all of this?
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UCD Professor Niamh Brennan, [broken link removed] who is one of Ireland's leading Corporate Governance experts was quoted in the Irish Indo yesterday as saying that the $400 nail bar bill and most of the other controversial expenditure items would be too small to attract the attention of auditors, due to the constraints imposed by materiality.

http://en.wikipedia.org/wiki/Materiality_(auditing)
 
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ubiquitous said:
UCD Professor Niamh Brennan, [broken link removed] who is one of Ireland's leading Corporate Governance experts was quoted in the Irish Indo yesterday as saying that the $400 nail bar bill and most of the other controversial expenditure items would be too small to attract the attention of auditors, due to the constraints imposed by materiality.

[broken link removed])
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Very interesting. It seems that “Death by a thousand cuts” is not a diagnosable ailment in the public sector.
 
room305 said:
Of course expenses are "tax free". They're tax free in the private sector as well. I know a senior level auditor in the C&AG and her daily expenses excluding mileage are about €160 for three meals and board. Definitely not excessive.
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Yes but in the vast majority of companies in the private sector, expenses are vouched for. They don't just get a supplement whether they spend it or not. I have an ex auditor from the C&AG sitting two desks away from me. He got €150 for accomadation and around €50 for meals. He said they very rarely spent over €100 per night on accomadtion. Breakfast more often than not included in with the B&B or Hotel so the €50 was really only for two meals and as he said lunch was often a sandwich. If he was away for more than a week in the same place, he got the allowance for the weekend even though he more often than not came back to Dublin for weekend. He knows people who claimed the milage even though they took turns car pooling to assignments if there was more than one person travelling. He said it was not uncommon to make a "profit" of around €500 on a week long assignment depending on where it was.

Why on earth can expenses not be vouched for?
 
I know a HSE employee, front line staff and all that, who was employed in Meath but mover to Dublin. She requested a transfer but could only be temporarily seconded (for three years so far). She gets a travel allowance from Meath to Dublin even though she lives in Dublin. She asked that this be stopped (as she lives in Dublin) and was told off by her manager for “causing trouble”. She was then rounded on by her union rep for the same thing.
 
Sunny said:
Yes but in the vast majority of companies in the private sector, expenses are vouched for. They don't just get a supplement whether they spend it or not. I have an ex auditor from the C&AG sitting two desks away from me. He got €150 for accomadation and around €50 for meals. He said they very rarely spent over €100 per night on accomadtion. Breakfast more often than not included in with the B&B or Hotel so the €50 was really only for two meals and as he said lunch was often a sandwich. If he was away for more than a week in the same place, he got the allowance for the weekend even though he more often than not came back to Dublin for weekend. He knows people who claimed the milage even though they took turns car pooling to assignments if there was more than one person travelling. He said it was not uncommon to make a "profit" of around €500 on a week long assignment depending on where it was.
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Someone is pulling your leg, or has a poor memory. The public service travel and subsistence rates are public knowledge - see http://www.finance.gov.ie/viewdoc.asp?DocID=5327&CatID=28&StartDate=1+January+2008&m= for the current ones. The 24 allowance (currently €145) includes accommodation AND all meals. There is no extra €50 for meals. My experience is that some nights you make a few quid on the allowance, particularly if you choose a B&B, and some nights you lose a few quid. I stayed in Jury's Inn Cork (not exactly the lap of luxury) on business earlier in the year at about €90 per night, plus €12 breakfast. We had dinner with a 1/2 bottle of wine, and a pub lunch, and I was over my allowance.

If there are multiple people claiming mileage while car pooling, this is fraud and weak management. If this is happening, report it today and make it stop. If he gets the allowance for staying the weekend, he doesn't get the travel costs for returning to Dublin.

The only way anyone is making any money through T&S is
a) fraud
b) stay in crappy accommodation

Sunny said:
Why on earth can expenses not be vouched for?
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This is a double-edged sword. By sticking to the fixed allowance (as commonly happens in the private sector for sales staff out on the road), it is up to the employee to manage the costs. The exposure to the employer is fixed. If you want vouched expenses, then you have to be prepared to pay the extra when the accomodation costs pushes you over the fixed cost per day.
 
room305 said:
One of the major problems is that many semi-states and local authorities are audited by private sector auditors rather than the C&AG. Private sector auditors have quite different requirements when it comes to auditing and might not see €400 haircuts as a problem once they are properly accounted for.
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Er, Fás is audited by the Comptroller & Auditor General :eek:
 
I can't see much evidence of this by reading their accounts.

http://www.fas.ie/en/PubDocs/AnnualReports/ANNUAL_REPORT07/accounts.htm

1. The Audit Report is "clean" ie no qualifications or other matters highlighted for readers' attention.

2. The Statement on the System of Internal Financial Control states this: (particularly relevant passages highlighted by me)
On behalf of the Board of An Foras Áiseanna Saothair (FÁS) I acknowledge our responsibility for ensuring that an effective system of internal financial control is maintained and operated.

The system can only provide reasonable and not absolute assurance that assets are safeguarded, transactions authorised and properly recorded, and that material errors or irregularities are either prevented or would be detected in a timely period.

The Board has taken steps to ensure an appropriate control environment exists by:

* the consideration and approval of the organisational structure
* delegating to the Director General responsibility for ensuring management responsibilities are clearly defined
* establishing procedures for reporting significant control failures and ensuring appropriate corrective action is taken.

....
The system of internal financial control is based on a framework of regular management information, administrative procedures including segregation of duties, and a system of delegation and accountability. In particular it includes:

* a comprehensive budgeting system with an annual budget, which is reviewed and agreed by the Board of Directors;
* reviews by the Board of Directors of monthly and annual financial reports which indicate activity and financial performance against forecasts;
* setting targets to measure financial and other performance;
* procedures for the control of capital investment that are in accordance with Guidelines for the Appraisal and Management of Capital Expenditure Proposals issued by the Department of Finance in February 2005.
..
I confirm that for the year ended 31 December 2007 the Audit Committee on behalf of the Board conducted a review of the effectiveness of the system of internal financial controls.

No weaknesses were found in the system of internal financial control, which resulted in any material loss, contingencies or uncertainties being disclosed in the financial statements or the auditor’s report on the financial statements.
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:rolleyes:

3. There are no disclosures in the Accounts of internal control weaknesses or other problems.
 
Strange, I thought what sparked the Garda investigation was the C&AG audit. I could be mistaken though.

I know auditors working in the public and private sector, this was a difference in audit procedures pointed out to me on both sides. Maybe it's not as big an issue as I thought.
 
room305 said:
I know auditors working in the public and private sector, this was a difference in audit procedures pointed out to me on both sides. Maybe it's not as big an issue as I thought.
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I am an auditor myself (private sector) and I am damn glad it was not me who signed the last Fás audit report. Had any private-sector auditor done so, they would now be facing serious questions on their knowledge of the transactions highlighted last week, leading probably to a rigorous investigation into their compliance in this case with professional standards, and the possibility of significant professional sanction at its conclusion. Its interesting that the C&AG are spared this discomfort. Another case of 4 legs good,... ?
 
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