SHANNON Airport Marketing overran its £1.8 million budget for promoting the airport by £985,000 due to poor financial management, according to the report.
Shannon Airport Marketing was set up in October 1994 to boost traffic through Shannon. Set up as a section within the Department of Transport, Energy and Communications, it was based in Shannon with a chief executive on loan from the Department and four staff on loan from Aer Rianta at Shannon.
A budget of £1.8 million was provided for 1995. On December 11th, 1995, the Department got invoices from Shannon Airport Marketing indicating total costs of £2.8 million. The overrun of £985,000 related to promotional work done by SFADCo (£514,000) - and Aer Rianta (£471,000) for Shannon Airport Marketing.
The Comptroller and Auditor General asked:
. Why the Department failed to contain Shannon Airport Marketing's 1995 spending within the set limits;
. Why the Department failed to comply with the directions of the Department of Finance on the control of expenditure and the submission of the strategy plan.
The accounting officer of the Department of Transport, Energy and Communications said it had made clear to Shannon Airport Marketing that its funding was limited to £1.8 million. "It was the clear understanding of the Department that the amount of £1.8 million would be more than adequate to meet all commitments."
Arrangements put in place to supervise the operation "should have been adequate to the task if Shannon Airport Marketing had kept the Department fully informed of commitments as they were being undertaken", the officer told the Comptroller and Auditor General.
But, he said, the Department was satisfied that all monies paid in 1995 were "in pursuit of traffic promotion".