This year the Tánaiste produced €12 million to help resolve a political crisis over college fees.
The money was part of a financial package for disadvantaged students put together by ministers to encourage the Minister for Education, Mr Dempsey, to drop a plan to reintroduce third-level fees.
Ms Harney's contribution to the package was described at the time as a "windfall" payment from a telecommunications deal.
However, the C&AG's report paints a more complex picture, and shows that the State is actually facing a €12.9 million loss from the deal.
The Government should have undertaken a more thorough examination of the telecoms market before signing the €77.1 million deal with the now bankrupt US telecoms firm Global Crossing, according to the C&AG's report.
Under the deal with Global Crossing in 1999, the Government bought fibre-optic communications links to several European cities and New York.
It then resold this capacity to several telecoms firms at low prices in an attempt to stimulate the market for international bandwidth, thereby making it attractive for firms to locate in Dublin.
Initially, the Government sold contracts worth €80 million to six telecoms firms.
However, the severe downturn in the telecoms market subsequently caused several operators to withhold payment.
The report notes that bills worth €12.9 million remain outstanding.
It also discloses that the IDA has initiated legal action to recover the monies owed.
