The mismanagement of taxpayers' money revealed by the Auditor and Comptroller General's annual reports could result from senior public servants' lack of knowledge of company law

In an article in the current issue of Public Affairs Ireland magazine, Mr Paul Appleby - the director of corporate enforcement - says he suspects that public authorities and their staff are insufficiently prepared for their duties because they are not familiar with companies' legal obligations, or with their rights as shareholders, directors or creditors of corporate entities.

Mr Appleby, said that as a result, many public authorities are operating below their optimum when it comes to protecting the State's and taxpayers' interests.

"Indeed one only need to read the annual reports of the Comptroller and Auditor General (C&AG), which regularly identify significant failures by public authorities in their management of client and other related companies, to obtain confirmation that this is the case," he says.

He points out that many public servants have to monitor the performance of companies supplying goods and services to their organisations or be accountable for public money invested via companies for economic or social purposes.

Mr Appleby states that they increasingly act as company directors.

His article argues that when public servants are acting as company directors, this can lead to potential conflicts of interest with the public body that appointed them in the first place. "Authorities and directors should be award of how they should act in such circumstances," Mr Appleby says.

He says that since his office was formally established almost two years ago, over 50 company directors have been successfully prosecuted for breaches of company law.

"We intend to continue with an active enforcement programme to improve corporate standards, deter malpractice and limit commercial risk for all market participants in the future," he says.

The article was written before the C&AG's 2002 report was published this week.