There seems to be corruption in the air.
The Comptroller and Auditor General (C&AG) published its report on Fás, a body already renowned for its flippant spending of our money, today. Oh boy, it does make interesting reading. The newspapers are on it, check them out when you can.
While the headline on Irishtimes.com is, as usual, correct, it is a severe understatement. “C&AG criticises Fás financial controls” it says… the report is not a criticism, it’s damning indictment. Fás was a mess, a shameful joke of a company, a shambles run by people who were clearly inept.
Most of the interesting information centres around the advertising firms contracted for campaigns and the Corporate Affairs section of Fás, headed by Greg Craig, who has had some attention drawn to him in the past.
The coverage will tell you there is €600,000 of our money unaccounted for, yes. They made us pay €9,200 for a car that never materialised, yes. They spent €620,000 on a advertising campaign that never made air, yes. These are all fucking disgraces. But they also distract, or at least fail to fully illustrate, the evidence of a culture which lacks any sort of professionalism and the level of conscious mismanagement that permeates the company.
For example, in January 2006 “a media consultancy” was contracted to develop an advertising campaign for Fás for that year. They did so, presenting a campaign that would cost €4.7m. However, and I quote the report: “the approved budget for advertising for that year, including the cost of design and production, was €2.4 million indicating that advertising plans were being drawn up without reference to the available budgets.”
Yet the campaign was implemented, it in turn went over the non-budgeted budget and eventually cost €5m.
How is this in any way acceptable?
The consultants referred to also set out a media strategy for Fás which was completely ignored. They said that 25% should be spent on print advertising, which is the most expensive medium on a cost-per-thousand basis. Fás spent 62% of the €5m on print. 30% was recommended for TV, they spent 7%. Outdoor advertising, billboards, bus shelters etc was set for 30%, it got 13%. Why even hire the consultants?
On a side note, the list of publications who received this advertising is interesting. The Phoenix, a niche publication that possesses a readership which would hardly correspond to the Fás target market, earned more than The Irish Times, even though the other two broadsheets are in the top three Fás earners.
In general, within Fás budgeting seems to have set out nothing more than vague guidelines. Fás promotions ran on-average 38% over budget between 2002 and 2008. In 2003 they spent 85% more than budgeted for on promotions. In the same year they spent 127% more than planned for on advertising. The private sector would sack those responsible.
It was the same in the area of jobs exhibitions. In 2002 they managed to spend €2.4m on exhibitions, the planned expenditure was €800,000 – a 200% overspend. The second largest percentage overspend was in 2006, 85%. The excuse they gave the C&AG for that? ‘We ran exhibitions in New York and Munster which hadn’t been budgeted for’. What kind of company runs events costing €1.4m collectively that they don’t budget for? Notably, the budget in that area for that year was only €1.9m.
Additionally, strange things were happening when the contract for hosting Fás exams and events was transferred from the RDS to Croke Park.
From 1997 to 2003 the Opportunities exhibition was held in the RDS. In October 2003, the Fás Director General advised the Board that it was intended that Opportunities 2004 would be held at Croke Park. The DG noted that the change of venue had arisen following careful consideration of a number of issues including on-site facilities, location and value for money as well as the overall cost of staging the event. The minutes of the Board meeting noted that Board members had “raised a number of queries in regard to the proposed location” which the Executive agreed to consider.
It was then agreed the event would move to Croker.
Interestingly, the current GAA President, Christy Cooney, was at that time the Assistant Fás Chief Executive while also a member of the GAA’s Munster Council. But it should also be noted that most events run in Croke Park are managed by Páirc an Chórcaigh Teo (PAC Teo), not directly by the GAA – though the GAA is represented on the board of PAC Teo. Cooney’s ability to influence any relevant decisions, if he had any in either Fás or the GAA, is a matter of debate.
When the C&AG sought documents about the decision to move they were informed that the decision had been made by the former Director General and that no file on the background to the decision could be located. After Opportunities 2004 a number of exhibitors complained that the venue was “totally inappropriate”, that there was “excessive overcrowding” and difficulty in accessing the event. Some said that under no circumstances would they return to an exhibition in Croke Park.
The event returned to Croker in ’05. The DG said concerns were addressed. A board member enquired about the RDS but the DG said it was unavailable on the dates which the event was planned for.
Over the six years that Opportunities went ahead, 2002-2008, the venue never cost more than €100,000. The RDS got better reviews from exhibitors and visitors and is arguably far more suitable for these events. Yet it remained in Croker.
The report says the location was “not chosen in any year based on a competitive process but, rather, was unilaterally selected”. Not alone that, but it was selected, apparently, by one man, not the board.
The report says it better than I could.
“In February 2008, the Board approved the overall FÁS budget for 2008 including €2.65 million net for the Opportunities exhibition in Croke Park and one further event with its location to be decided at a later date. A contract with Croke Park, with an estimated value of €590,000, was signed on behalf of FÁS by the Director General and the ADG [Assistant Director General] for Corporate Affairs in January 2008 and a 50% deposit was paid.
Prior to entering into the contract with Croke Park, Board approval should have been sought as the value of the proposed contract exceeded the threshold at which the Director General had the authority to authorise expenditure.”
It goes on. Lists of exhibitors who displayed at the Fás shows were incomplete, it cannot be established who paid for what when. Some didn’t even pay. How many? We don’t know.
Something odd also happened with the company that Fás hired to build the exhibitions for its events. Croke Park recommends a company to all its clients, O’Brien Expo Services. Fás took their recommendation without question or tendering of the contract, the report says cheaper contractors were probably available. Then when Fás wrote to companies asking them to tender contracts for other events, O’Briens were seemingly the only ones to respond.
For the exhibition builds in Cork, the records indicate that FÁS sent requests for tender to a number of companies in 2006 and 2007 but, on each occasion, just one company responded. For the 2008 exhibition a tender notice was placed on the government e-tenders website. Three companies expressed interest but just one submitted a tender. Payments under the contracts were €81,000 in 2006, €132,000 in 2007 and €105,000 in 2008.
For the exhibition build in Warsaw, FÁS awarded the contract to O’Brien Expo Services. The cost was €26,000.
Odd stuff too with the Fás student program. Fás had a program where students would travel to the US to work with scientists there, locals were paid a stipend to represent Fás as well. These locals were responsible for paying the students their expenses.
In 2007 the expenses for participants were reviewed, money paid to students amounted to approximately €133,000 while €374,000 was advanced to local representatives for other expenses incurred. €210,000 of the cumulative advances was unspent at 31 December 2007, yet this was still charged to Fás accounts.
Fás made advance payments to the local representatives based on anticipated expenditure. They kept doing this without reviewing whether or not there was a need for more expenses to be advanced. Thus, by March 2008 a person in North Carolina had a float of €140,000 worth of Irish taxpayers money at their disposal.
Advertising spending that came from the accounts of one section of Fás was actually spent by the Corporate Affairs section too. The banking practices, especially regards paying advertising agencies, are simply off the wall.
They say they tendered a media consultancy contract but have incomplete information as to how they did so and no information as to how they selected the winning tender. This, added to the fact the person who won the contract was a former employee of AF O’Meara, an advertising company who were working with on a media campaign with Fás at the time, “casts doubts on the integrity of the tender process”.
Fás allowed themselves to be overcharged by €160,000 on outdoor advertising, which now subject of a Garda investigation. It also appears they paid for use of advertisement space which was not used, billboards, bus shelters and the likes, but this can’t be proven because insufficient records were kept.
They didn’t comply with the legal provision for contract procurement in regards the outdoor advertising either.
All in all, I believe there is something, very, very fishy going on in Fás. Watch this space.
But, Tanaiste Mary Coughlan isn’t looking for heads to roll. She says she’ll accept any resignations if they are offered by board members. She claims it’s not up to her to fire anyone from the Fás board. This is nonsense. She can fire them if she wishes.
If anyone is arrested on foot of this report the Tánaiste will say something like “I cannot sack anyone, I must let justice run its course”. This will also be nonsense.
People can and should be sacked simply for their incompetence if not for allowing the possibility, due to their poor record keeping, of criminality.
Remember, it’s our money.
The O’Briens Expo Services CRO document linked to in this post was purchased using donations from The Story.ie readers. We appreciate it.