Should FAS management be pursued personally?

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LDFerguson

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I see [broken link removed] that the liquidator of a private sector building firm is attempting to make the directors personally liable for debts of €3.2M.

How would people feel about pursuing the managers of FAS personally for any expenses that were, on examination by a third party, found to be inappropriate for the job at hand?
 
Yes, they should have to repay any expenses they claimed which are outside the normal public sector expenses rules.
 
I noted in another thread that nobody has suggested holding the auditors of Fás to account, even though they have issued clean audit reports to Fás in relation to accounts that failed to disclose any internal control weaknesses or other problems.

Maybe the reason for this is that Fás is audited by the Comptroller & Auditor General, who seems to be above reproach :eek:

http://www.askaboutmoney.com/showthread.php?t=97779&page=5
 
Certainly not a tribunal but I do think that Gardai make better investigators than barristers.
 
i think so. In private sector they are singled out and also finance people are hauled over the coals for not flagging high payments to employees for expenses.
 
ubiquitous said:
I noted in another thread that nobody has suggested holding the auditors of Fás to account, even though they have issued clean audit reports to Fás in relation to accounts that failed to disclose any internal control weaknesses or other problems.

Maybe the reason for this is that Fás is audited by the Comptroller & Auditor General, who seems to be above reproach :eek:

http://www.askaboutmoney.com/showthread.php?t=97779&page=5
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I thought the whole thing kicked off because of problems with the audit especially the internal one. But wasn't it the Controller & Auditor General who discovered the procurement problems with the advertising contracts and brought it to the attention of the Tainaiste hence all the attention turning towards FAS.
 
Sunny said:
I thought the whole thing kicked off because of problems with the audit especially the internal one. But wasn't it the Controller & Auditor General who discovered the procurement problems with the advertising contracts and brought it to the attention of the Tainaiste hence all the attention turning towards FAS.
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Certainly no sign of anything like that in the Accounts for 2007, either in the Statement on the System of Internal Financial Control (which states the following), in the Auditors Report, or elsewhere.

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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http://www.fas.ie/en/PubDocs/AnnualReports/ANNUAL_REPORT07/accounts.htm
 
I don't know to be honest. Heres what Coughlan has said at various times

“This goes back to the year 2000 - 2004. Secondly the internal audit process within FAS found this irregularity and the matter was brought to the C&AG and he has dealt with it. Arising from his report the matter has been sent to the Gardaí, they are investigating that."

"The report referred to by the Deputy deals with a number of issues which arose in recent audits of Non-Commercial Semi-State Bodies, including FAS and I have discussed this matter with the Director General of FAS.
The issues referred to by the Comptroller and Auditor General had been previously identified in a report by the FAS Internal Audit Unit which was subsequently forwarded by FAS to the Comptroller and Auditor General. The issues identified in the report arose in the period 2002 - 2005.
FAS has already taken a number of steps in response to its internal audit report, on which the Comptroller and Auditor General’s report is based. It has clarified its procedures and strengthened its internal controls."

Its all one big mess whatever way you look at it and nobody comes out of it looking too good.
[broken link removed]
 
The questions are:

1. If the Board knew that there were significant unresolved internal control issues dating from earlier years, why did they sign off on the Statement on the System of Internal Financial Control, in the 2007 accounts, that failed to disclose the existence of these issues?

2. If the auditors knew of these issues and the contents of the Statement on the System of Internal Financial Control, why did they issue a clean audit report on the accounts including this statement?
 
Purple said:
I agree completely. They are also far cheaper.
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The tribunals were only a way of shaming middle class people without having to actually send them to prison, with the brief exception of Liam Lawlor, who was a so blatant it was comedic.

Now that the boom is over and reality is back in fashion the cold dull thud of the truncheon should be applied. :mad:
 
LDFerguson said:
I see [broken link removed] that the liquidator of a private sector building firm is attempting to make the directors personally liable for debts of €3.2M.

How would people feel about pursuing the managers of FAS personally for any expenses that were, on examination by a third party, found to be inappropriate for the job at hand?
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Not quite a fair comparison there. Why directors on one side and managers on the other?
 
No one will ever be held to account...how could they be all those in the higher echelons of public service, to coin a crude phrase p**s in the same pot !
 
Complainer said:
Not quite a fair comparison there. Why directors on one side and managers on the other?
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Presumably because the functions, responsibilities and rewards of executive board members are similar, if not the same, in both private and public sectors. The thing is there is no equivalent of the ODCE to monitor and punish executive wrongdoing or negligence in the public sector.
 
There aren't too many managers on the executive board of Fas. They have director-general, assistant directors-general and directors before you ever get near a manager. Hence the imbalance I was highlighting.
 
ubiquitous said:
The questions are:

1. If the Board knew that there were significant unresolved internal control issues dating from earlier years, why did they sign off on the Statement on the System of Internal Financial Control, in the 2007 accounts, that failed to disclose the existence of these issues?

2. If the auditors knew of these issues and the contents of the Statement on the System of Internal Financial Control, why did they issue a clean audit report on the accounts including this statement?
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Apparently there is an ongoing investigation in the C&AG into how FAS got clean audit reports in recent years. You are right though, there is not the same accountability for C&AG auditors as there is for private sector auditors (where you can direct complaints to the professional body). I was actually surprised to learn this was the case. To offer a defence they may have been misled in their investigations. For example, when it comes to foreign travel the auditor may ask "has there been any significant foreign travel expenses?" and been told that there wasn't. I am only theorising though.

It is also interesting to note that the European Commission raised issues with the government about FAS internal audit procedures as far back as 2002 but were ignored.
 
I guess the reason why a liquidator can pursue a director personally would be where there has been reckless trading, and other external parties (customers or employees) have been left short. I don't think the liquidator could pursue a director where the shareholder has been left short.

AFAIK, I don't think any 3rd parties have been left short as a result of the shenanigans at FAS. Gardai are currently investigating, and I guess if someone is convicted of an offence, they could be pursued.

room305 said:
Apparently there is an ongoing investigation in the C&AG into how FAS got clean audit reports in recent years. You are right though, there is not the same accountability for C&AG auditors as there is for private sector auditors (where you can direct complaints to the professional body). I was actually surprised to learn this was the case.
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Are you certain that C&AG auditors can NOT be reported to their professional body? Is there some special exclusion?
 
Complainer said:
I guess the reason why a liquidator can pursue a director personally would be where there has been reckless trading, and other external parties (customers or employees) have been left short. I don't think the liquidator could pursue a director where the shareholder has been left short.

AFAIK, I don't think any 3rd parties have been left short as a result of the shenanigans at FAS. Gardai are currently investigating, and I guess if someone is convicted of an offence, they could be pursued.
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Apart altogether from the intricacies of liquidator powers in the winding up of a company, (which isn't really relevant to Fás, as it isn't being wound up) it is worth noting that in the day-to-day running of a company, the directors have an additional duty of care to protect the interests of shareholders who are not directors. (This additional duty of care also extends to the company auditors.) When the directors or auditors neglect this duty of care, there is normally adverse financial consequences for the shareholders.

This is especially relevant in the case of Fás where the Board were running the company on behalf of the taxpayer, its shareholder.

Are you certain that C&AG auditors can NOT be reported to their professional body? Is there some special exclusion?
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I too would be most grateful if someone can answer this question.
 
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