Controls at Fás collapsed, board director concedes

MANAGEMENT AND executive controls at the State training agency Fás broke down, one of its directors conceded yesterday, creating the culture that led to a series of scandals at the agency.

Speaking to the Dáil Committee of Public Accounts (PAC) yesterday, Niall Saul, a member of the Fás board and chairman of its audit committee, said there was a breakdown in areas such as finance, human resources and procurement within the organisation.

Last year, the agency’s director general Rody Molloy resigned after a series of controversies about spending on foreign travel for Fás executives and their guests.

At the same time, Fás closed its corporate affairs department, which had been responsible for areas such as advertising and media relations. The department had spent over €600,000 making a television advertisement which was never screened as Fás did not have the budget for the air time.

Mr Saul said, in some cases, there was no communication between management and executives – and thus up to board level. This meant the board did not get the information it needed to perform effectively. He added new, stringent procedures were being introduced at the State agency to ensure this does not happen again.

Senior Department of Finance official Ciarán Connolly told the committee that top civil servants approved a pension payment to Mr Molloy to avoid beginning termination proceedings which could possibly have led to prolonged legal action.

After his resignation, it emerged Mr Molloy was being paid an enhanced pension of €111,000, worth €1 million in actuarial terms, a lump sum and a car. The deal was agreed between Fás and the Departments of Finance and Enterprise, Trade and Employment.

Mr Connolly argued that Mr Molloy’s resignation was “induced” rather than voluntary as board members had told him his position was untenable. He said that the “threat of legal action” hung over the proceedings.

“If he decided not to resign, either because no terms were offered or because he decided to turn an offer down, and the Fás board wished to terminate his contract, it would have had to initiate a dismissal process which could have been prolonged,” Mr Connolly said.

He added that Fás could have ended up paying a settlement on much the same scale as the one it agreed.

A number of committee members, including the chairman, Deputy Bernard Allen, argued that Mr Connolly and his colleagues should have sought Government approval for the deal, as it fell outside the guidelines for the termination or resignation of chief executives of State-sponsored bodies.