An examination by the Comptroller & Auditor General (C&AG) into advertising and promotional spending at Fás has found evidence of poor budgetary control and a failure to adhere to public sector procurement rules.
The report, published by the C&AG John Buckley today, says advertising budgets in the agency were exceeded by 38 per cent.
It found the agency spent €600,000 on a television advert that was never used and €9,200 on a car that was not delivered.
During the period under examination between 2002 and 2008 Fás spent just over €48 million on advertising and promotional activities.
The C&AG examination found advertising and promotional activities "lacked strategic direction", that much of advertising procured was ineffective, and that budgetary control was poor. It said a marketing and communications strategy had not been developed by by the organisation "despite longstanding commitments to do so".
"There was a substantial and prolonged breakdown in budgetary control in the area of promotional expenditure in the period under review with expenditure exceeding budgets by 38 period," the report said. "This lack of control was particularly evident in the area of general advertising where expenditure exceeded budgets by 66 per cent over the seven-year period."
It said Fás was exposed to probity risks "through a failure to meet public sector procurement requirements".
"Exposures arose from the purchase from contracted agencies of goods and services that were not contemplated within the scope of their contracts and the potential consequences of Fás playing a role in the selection of third parties by the agencies to provide services."
The report says the former director general of Fás, Rody Molloy, should have sought board approval before he signed a deal in excess of €500,000 with Croke Park in early 2008 related to staging the agency’s annual jobs fair.
According to the report, a contract with Croke Park worth an estimated €590,000 was signed in January 2008 and a 50 per cent deposit paid. The C&AG said board approval should have been sought before entering that contract "as the value of the proposed contract exceeded the threshold at which the director general had the authority to authorise expenditure".
"For expenditure over €250,000 authority lies with the board," said the report, which added the final cost of the contract with Croke Park was €640,000.
Mr Molloy resigned from his position in Fás last November as a result of controversy over expenditure.
The C&AG found €622,000 was paid for "certain promotional goods and services" over a number of years but that Fás was unable to provide evidence of any goods or services having been supplied for those payments.
As part of the agency's Opportunities 2000 exhibition, a raffle of a car was promoted by Fás and two cars were on display at the event at which attendees were asked to fill out a registration form to gain entry to the draw.
However, the report found the raffle did not take place as a licence to carry out the draw was not obtained, and that two cars on display were returned to the supplier.
Fás was invoiced by its then advertising agency for a car costing €9,200 including VAT and agency fees, the report said, and the invoice was approved for payment in February 2000. The director of corporate affairs confirmed no other car was provided to Fás following the return of the two vehicles on display at the event.
Welcoming the report, Tánaiste, Mary Coughlan, today said the report demonstrated there were "serious deficiencies" in financial controls in particular areas of Fás over a specific period.
The Dáil Public Accounts Committee said it would resume its investigation into Fás following "some alarming findings" in the C&AG report.
In a statement, committee chairman Bernard Allen said the report again highlighted "many disturbing aspects" about the way Fás operated over recent years, in particular showing that "lack of controls and poor corporate governance" has led to a waste of taxpayers' money.
The C&AG is an independent figure with responsibility for the audit of public funds and reports to the Dáil.