Compensation for victims of institutional child abuse may exceed €1 billion, according to a detailed analysis by the Comptroller and Auditor General (C&AG).
The figure is the first independent estimate available on the potential cost of the redress scheme, which also indemnified 18 religious orders against all current and future compensation claims from former residents of industrial schools and residential homes.
The report also reveals that in June 2002, the then attorney general, Mr Michael McDowell, warned Cabinet colleagues that the potential cost of the compensation scheme could exceed the maximum estimate of €500 million provided by the Department.
In advice on the controversial indemnity deal between the State and 18 religious orders, he also warned that the contribution of €128 million "might be regarded as insufficient", and that there was no mechanism within the deal to increase the contribution.
The C&AG report also found that the attorney general was not kept informed about negotiations between the Department of Education, and religious orders on the indemnity deal during a crucial period between October 2001 and March 2002.
The report, which was requested by the Public Accounts Committee, and which runs to 55 pages, outlines the background leading up to the signing of the deal between the State and religious orders.
It also provides details on the implementation of the deal, including the amount of property accepted and rejected by the State.
Under the scheme, the Government established a redress board, an alternative mechanism to the courts for former residents of children's homes to claim compensation.
The 18 religious orders also agreed to contribute 128 million, two-thirds of it in property, to the scheme in return for an indemnity against current and future court cases relating to the homes.
Based on the level of awards by the redress board to date, the C&AG has estimated that the average awards will range between €82,400 and €111,000, with a likely average of 96,600.
In a detailed analysis of the number of potential complainants, the report estimated that between 9,000 and 10,800 will be likely to make claims.
Based on this, and the average awards, the potential cost to the State lies between 887 million and 1 billion.
The Department of Education has disputed this figure, stating that, based on the average number of applications received by the redress board per week, the final number of cases was unlikely to exceed 8,000. With the current average award of 84,000, the maximum estimated cost was 672 million, or 772 million with legal costs. Even this figure was "likely to be an exaggerated estimate", the Department of Education argued.
The involvement of the Attorney General in the redress deal is also highlighted in the report.
According to the comptroller, he had "no contact" over a six-month period with those negotiating with the religious orders on behalf of the State between October 2001 and April 2002, although officials from the Chief State Solicitor's office were at meetings in March and April.
After the then minister for education, Dr Michael Woods, announced a deal in principle at the end of January, Mr McDowell wrote two letters seeking information on the detailed negotiations.
There was no response from the Department of Education, leading the then attorney general to write again in March, advising that his office could not take part in further negotiations or offer legal advice without such information. This information on the indemnity was finally provided in the form of a retrospective memorandum from Mr John Dennehy, the secretary general of the Department of Education. On the eve of the Government signing the deal, the attorney general also warned about the potential cost of the redress scheme.
The advice noted that the maximum estimate of 508 million was based on a maximum of 4,000 claimants. However, the latest estimate of 5,200 might be conservative, Mr McDowell warned.
In addition he pointed out that the contribution of €128 million might be regarded as insufficient, and highlighted the lack of a mechanism for increasing the contribution from congregations if the number of cases increased greatly. In relation to the deal, which included property transfers of €80 million, the report has highlighted serious difficulties the State has had in accepting nearly half of these properties.
Only one of 37 properties, valued at over 40 million, and transferred between May 1999 and June 2002 to State and voluntary bodies, is currently likely to be accepted as part of the deal.
A further 22 properties, worth €26 million, are in negotiation, while 10 properties, worth €12.73 million, have been rejected.