BUSINESS OPINION:SOMETHING SEEMS to have gone very badly wrong at Fás, the State training and employment agency. It emerged last week that there are very serious issues about how taxpayers' money is spent by the body, which has an annual budget of €1 billion, writes John McManus.
The issue surfaced following the partial release to Fine Gael of an internal investigation into how the director of corporate affairs at the organisation, Greg Craig, operated in the period 2000 to 2004. Among the items listed in the report are the granting of "unusually generous" conditions on contracts to a firm of accountants and business consultants, despite a conflict of interest. It also found a lack of "real competitive tendering" for some elements of the Fás Opportunities jobs fair. Questions were also raised about incentive payments and fees.
According to the report, pressure was also put on an advertising agency that had been awarded a significant short-term contract to hire a particular individual. A further finding is that the agency's IT department was bypassed in the setting up of a jobs website.
This is just a flavour of what is contained in the parts of the internal report that were released, but it is enough to paint a very unsettling image of how Fás went about its business. However, before going any further, it should be pointed out that although the matter is being investigated by the Garda, there is no allegation of wrongdoing at present against Craig. Craig's lawyers claim that the full picture has not emerged and that an internal review of the first report raised questions about its veracity. Fás denies this.
Craig has not yet put his side of the story, but the various findings in the report are not inconsistent with the notion that he was simply trying to get things done in a State agency, which is not always the easiest thing in the world given their fondness for bureaucracy.
Insisting that an advertising agency employ a particular individual to do a job; making a judgment to avoid tendering in the interest of expediency; paying over the odds; going outside the company to get something done - these are all choices with which people in business are familiar.
Sometimes they are the right decisions, but even if this is the case, it does not let Fás off the hook. Instead it raises the question of just how dysfunctional an organisation must it be that the director of corporate affairs has to operate in such a manner.
However, the more important question is how Craig was allowed to ride a coach and four through normal procurement practices, whatever the reason. That in many ways is the heart of a matter as it speaks volumes about the governance and management of the organisation.
It is clear from the report that this is not some isolated event. The opposite appears to be the case. A modus operandi was adopted by Craig - and there is no suggestion that he did it anything but openly - which was at odds with the way State agencies are supposed to operate and involved some of the organisations flagship projects; the Fás Opportunities fair and one its websites.
Regardless of Craig's motivation or his effectiveness, he should not have been allowed to operate in the way he did. The missing part of the jigsaw - which may be contained in the blacked-out bits of the report - is how he was allowed to do so. The issue only came to a head after an anonymous letter was sent to then tánaiste and minister for enterprise and employment, Mary Harney.
To date the agency has been remarkably silent on this point. Last week Fás director general Rody Molloy told the enterprise, trade and employment committee that he had no problem with his own internal audit function, which one would presume should have detected these irregularities.
Fás now says it is working on a plan to aimed at ensuring all staff engaged in procurement are aware of their responsibilities and how compliance will be monitored. It is not really good enough. It would not be good enough at any time, but it's a particular problem now with unemployment heading towards 7 per cent or more next year.
If one were to venture an explanation for why things went the way they did at Fás, it would be that nobody has really been worrying about Fás for most of the last decade. The strength of the economy meant that the problems Fás is meant to tackle - unemployment and skills shortages - pretty much took care of themselves or required only a minimal amount of intervention by the State. At one stage Fás's primary role seemed to be making sure there was a steady stream of Polish plumbers available.
That is changing and changing quickly and if Fás is not up to the job, the consequences will be considerable. With thousands of people losing their jobs in construction, manufacturing and other sectors, it is vital the agency is on the ball or else those losing their jobs will not receives the sort of help they are supposed to get to re-enter the workforce - retraining, placements etc.
This is particularly true of young unskilled construction workers with all the downstream consequences that will entail.
It's time to sort out Fás.
