A FÁS internal audit report strongly criticised monitoring of a €19 million programme, describing it as "out of control financially".
It is the second Fás internal audit report to come into the public domain in recent months expressing concerns over its controls on the expenditure of public funds.
The June 2007 report, released to The Irish Times following a request under the Freedom of Information Act, examined the operation of a new programme set up after the Government allocated Fás, the State's training and employment authority, an additional €35.6 million in 2005, to be spent on in- company training.
Fourteen external organisations were approved for the provision of training under the programme, and some of them were allocated substantial advances. The advances were understandable in some cases, the report said, but with others "it is difficult to see any operational requirement for these substantial advances. The front-loading of these contractors with advances involved substantial risk to the funder, Fás, in the event that projected training volumes were not substantially achieved. This did in fact turn out to be the case in a number of instances."
The report was strongly critical of how advances and expenditures made in 2006 were recorded within Fás, with some advances being recorded as expenditure on the Fás books. The audit of the programme run by the authority's services to business section came after a sub-committee monitoring the programme sought a review. "It has taken six months to get to the point of clarity we are now at, but during this time . . . over-postings and possible overpayments in excess of €1 million were being discussed, showing how out of control financially this was," the report said.
The audit found evidence of "a small number of monitoring visits" by Fás staff to contractors. "Monitoring appeared to have particularly reported on the presence/absence of Fás/EU signage (acknowledging the source of funding) at training locations or on trainers' and contractors' course documentation."
Jack Horgan, manager of the strategic initiatives and alliances services to business section in Fás, took strong issue with the report at the time. "I have to say that this report is largely unhelpful, unbalanced, demotivating, lacking in context and destructively critical," he wrote in an internal memo.
It had "effectively taken a number of minor weaknesses and exaggerated them out of all proportion".
He said the advances involved little real risk for Fás as most were to bodies such as Ictu, Ibec and the Chambers of Commerce.
A Fás spokesman said it had nothing further to say beyond what was said by Mr Horgan in his memo.
Although the board approved €19 million in 2005 for the programme, only €6.7 million was spent by December 2006. Eventually all the money was expended, the spokesman said. "The Government's budget for the upskilling of employees rose very significantly and very rapidly. It was a challenge, but Fás worked to ensure that the money was well spent," he said.