John McManus on CIÉ

CIÉ is funky.

The issue was so serious that CIÉ deemed that it merited an investigation in 2009 by external consultants Baker Tilly Ryan and Glennon. However, it did not think it worth keeping the department in the loop about the problem and more seriously, the executive chairman of the company, John Lynch, did not mention the issue in his annual statement on compliance by the company to the department. When tackled on the issue Mr Lynch acknowledged his mistake and explained that “as the issues arising were being dealt with, he felt that there was no need to make specific mention in that regard”.

[…] But the real problem – the failure of the CIÉ board and its executive chairman to disclose what at the very least was an embarrassing problem that did not reflect well on them – to its shareholder is not so easily fixed.

It might be possible to dismiss the issue as a once off, but for the fact that the C&AG’s limited enough study found other serious governance failures.

According to the report CIÉ was a month and a half late submitting its unaudited interim accounts to the department in 2009. It was also late with its draft unaudited annual accounts and over two months late in the submission to Government of its annual report and accounts.

The other issue raised by the C&AG was the failure of Lynch to submit his chairman’s report for 2009 under the 2009 Code of Practice for the Governance of State Bodies. He submitted it instead under the older 2001 code of practice and when requested to resubmit it under the new code, he did so in July 2010.

I’ve previously blogged on the Baker Tilly Report here in some detail. The only digital copy is available at that link if you wish to have a gander. John Lynch has got the odd mention or two around these parts also.

FOOTNOTE: CIÉ is not under FOI. I don’t know why either, guess various ministers never got around to it. The State is the sole owner. It’s a statutory corporation…

Digest – September 19 2010

Here ye, hear ye… yadda yadda yadda…

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Sara Burke on HSE spending on agency nurses and recruitment moratoriums

The C&AG cites the HSE’s own internal audit which shows that agency staff exceed the cost of employing nursing staff by 36.5% and he clearly implies that this is not the most efficient use of tight resources. Yet internal HSE figures for 2010 show that up to July of this year just under €30 million has been spent on agency nursing and €37 million on other agency staff, doctors, allied health profs etc..

This practice continues because if health managers want to keep services open they have no other choice to keep services safe, but it clearly highlights the blunt instrument that the moratorium is and the constraints its putting on the health service. It impacts on the quality of nursing care but also we are also seeing its impact on closed wards and reduced services.

Read this by Shane Ross: Humiliated, not humbled.

Anglo’s bosses immediately stood on their heads and pledged to promote the dreaded “wind-down” — the solution that they had been bad mouthing less than 24 hours earlier.

On Tuesday their mission was to keep Anglo alive; on Wednesday, to kill it.

Dukes lamely pleaded that the final solution was a “variation” on Anglo’s plan. Which it was not.

Will we now see the resignation of non-executive directors Dukes, Kennedy, Keane and Eames? Their pipe dream is in tatters. Rejected by the markets, the Commission, the Government — and undoubtedly by the people.

Not a chance.

The non-executives are humiliated but not humbled. Nothing has changed. Bankers sit tight, stand on their heads and take the money.

New location, old culture.

Miriam Cotton on women in politics, gender and merit.

John McHale on the mechanics of bond buy-backs.

Gerard O’Neill on illiberal democracy via Spiked! magazine.

WORLD Continue reading “Digest – September 19 2010”

Put down that cup of tea…

Irish bonds are at a new record high (6.250). Really should be watching closely today.

Update: Oh dear, AIB.

Update II: Alphaville again.

Update III: Alphaville again, again. See quote below.

Update IV: Record closing high today, having reached record trading high. Now lead story on FT.com. ECB intervened to prop us up. If you can’t access the story at that link head to Google and search “Irish bonds fall on bail-out fears”, then click through.

If the Irish real estate crash goes on, and the recovery rates on bank assets weaken – the Irish state is vulnerable because it’s pegged its support to certain levels of recovery in bank assets.

It’s a very uncertain process — but a dangerous one, because the extent of the bank rescue so far doesn’t give the Irish government much more room in 2011. So when you see things like this from the IMF on the wires:

RTRS-IRISH AUTHORITIES CONTINUING SUPPORT FOR BANKING SYSTEM HELPS MAINTAIN FINANCIAL STABILITY- IMF SPOKESPERSONRTRS-IRISH AUTHORITIES CONTINUING SUPPORT FOR BANKING SYSTEM HELPS MAINTAIN FINANCIAL STABILITY- IMF SPOKESPERSON

Know that this ‘continuing support’ is the entire problem.

Stuff you might find interesting to watch

Bloomberg; Irish ten year bond graph.

(Here’s the last year. See that high, team?)

This Property Pin Thread.

Comment on Twitter; Bondwatch. Ciara O’Brien of the Irish Times Online Business Desk.

And maybe the reasons why it kicked off? Alphaville picked up on this Barclay’s report (with the headline ‘Irish Government debt needs you’), which was then picked up by Zerohedge (‘Ireland Negotiating With Bondholders Over Anglo Irish Default, As Country Prepares To Call In IMF’) and the national papers this morning. Resulting in negative sentiment and ‘Irish panic‘.

Of course these new record highs are simply part of the ebbs and flows of the markets. Aren’t they?

Eek.

Deliberately making news of news?

There are days when you just want to give up.

Madam, – Are Irish politicians and the Irish media living in cloud-cuckoo-land that they would damage our image further for the sake of headlines or political point-scoring?

Brian Cowen was, of course, wrong to agree to an interview he was not ready for. It was an error of judgment, but to deliberately turn it into a world news event while the eyes of the world are focused on us and the state of our economy is a far greater error of judgment. – Yours, etc,

RICHARD McNAMARA,

Castleknock, Dublin 15.

“Shhhh… If we all stay quiet about that interview heard by 600,000 people we’ll be grand. Someone turn off the interwebs there, don’t let word get off-shore. Pretend to be asleep, all of ye! And keep those journalists off the airwaves, for jaysis’sake!”

Of course, it’s Simon Coveneny and the hacks’ fault that France 24 is broadcasting stuff like the report below (WARNING: contains moments of waffling estate agent and Alan Dukes) to an international viewership.

Or was that recorded pre-Morning Ireland? Indeed it was…

Boone and Johnson on Ireland, again

Click these here words to pass through the intertubes and find your way to the latest analysis of the Irish economic situation by the above named individuals. The pair had other posts on the same topic here, (May) and here (September). They seem to have a more rounded understanding of the Irish situation than many other international commentators.

But markets today think there is a 50% chance that Greece will default within the next five years – and a 25% chance that Ireland will do so. The reason is simple: both Greece and Ireland are likely insolvent.

While the Greek fiscal fiasco is now common knowledge, Ireland’s problems are deeper and less widely understood. In a nutshell: Ireland’s policymakers failed to supervise their banks, and watched (or cheered) from the sidelines as a debt-fueled spending binge generated the “Celtic miracle,” whereby Ireland grew faster than all other EU members and Dublin real estate became some of the most expensive in the world.

[…] To halt this downward spiral, Ireland’s risk of insolvency needs to be put to rest. Either banks need to default on their senior obligations, or the government will need to default alongside the banks.

For those who don’t know, Johnson is ex-Chief Economist at the IMF, Boone is Chairman of Effective Intervention at the London School of Economics’ Center for Economic Performance. The recently published a book on the crash called ‘13 Bankers‘ and they run the widely-read blog Baseline Scenario.

Fás Competency Development Programme

Several months ago as part of a dig into a wider Fás story we obtained copies of documents showing money distributed by Fás via the Competency Development Programme. The CDP was funded by the European Social Fund and National Training Fund.

As has been reported elsewhere a spot-check by the EC into the audit trail Fás was responsible for implementing on the programme raised serious cause for concern. This “audit of the auditing process” resulted in Ireland withdrawing an application to draw down €57m of ESF funds over the last 10 months. Prior to that there were stories about companies who benefited from the programme doctoring course results to brighten up their training standards. Ashfield Computer Training was one such company, earlier this month we published the audit on which this Irish Independent story by Shane Phelan was based.

We did a story on how the CDP was distributed for The Sunday Times last weekend (unfortunately behind a paywall, it’s on page 8, if you’ve a copy). An analysis of the figures available found that almost one-fifth (more than 19%) of funds went to bodies associated with social partnership. Five of the top 10 beneficiaries were social partners, each receiving more than €2m.

IBEC was allocated most funds, €5.6m over the six year period. Chambers Ireland received €5.2m, while the Construction Industry Federation, ICTU and SIPTU benefited by €2.5m, €2.4m and €2.1m respectively.

IBEC, SIPTU and ICTU are all represented on the Fás board. Of the 17 board members, 8 are nominated by IBEC and ICTU.

The Irish Management Institute, National College of Ireland, Dublin Institute of Technology, Optimum Limited and Solar Training Limited completed the top 10. Each benefited by between €1.7 and €4.5m, with the Irish Management Institute topping that list.

PDFs of the CDP documents released to us under FOI nearly 12 months ago are available here. We’re holding onto the spreadsheets for now as we may analyse them further for a later story.


Continue reading “Fás Competency Development Programme”

Breaking up Anglo

I’ve started re-examining the documents released by the Department of Finance in advance of the banking inquiry (remember that?). There are lots of interesting bits, and I will return to many of them. But here is one and it relates to the current events around breaking up Anglo – and the ideas of selling off deposit books mooted some time ago by some economists.

In September 2008, the Government was considering selling the deposit book of Irish Nationwide. Direct link here. In that month, there were four options listed:

1. Do nothing.
2. Ensure an orderly run-off of INBS
3. Break-up of INBS
4. Merge INBS with another institution.

None of these appear to have been acted on, but instead the entire building society, deposits and creditors, was guaranteed.

Merrill Lynch clearly advised that only senior creditors and depositors might be guaranteed, but this action would have clear dangers for sovereign credit ratings. Here is the passage.

Here is part one of the released DoF documents. I’ve marked each document using DocumentCloud. I hope to move away from using Scribd. To view the notes on the document you have to expand it to full screen using the button on the bottom left, or click the notes tab on the top.



Digest – September 13 2010

Wore a long coat for the first time this week. Winter is here, guys, are we all contented?

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Stephen Kinsella reminds us that the ‘nobody saw it coming’ meme is utterly wrong. Brendan Keenan doesn’t come out of this one too well; “we know what the Irish banks bad loans are, they’re going to be about one percent of their loan books…” Ouch. See video, there’s more.

Peter Stafford vents about the wheels on the bus.

Come Here to Me! is trying to trace details about the owner of a union card from 1918. Interesting post, that.

Michael O’Dotherty in bad journalism shocker. That man is an eejit of the lowest order. Scarlet for’em!

The Cold War, Operation Gladio and Ireland. Some little known history from one of the Cedars.

WORLD Continue reading “Digest – September 13 2010”

FAS Ashfield audit report

More from our FAS file. This is the audit report that was carried out in relation to Ashfield Computer Training (ACT). The company received € 30,264.00 via the FAS CDP scheme in 2006, €464,044.00 in 2007 and €443,361.57 in 2008, a total of €937,669.57. We don’t yet have figures for 2009. FAS director general Paul O’Toole has said that money could not be recovered from Ashfield Computer Training, because the company was liquidated earlier this year.

Critically, the report states, among other things:

no explanation was provided by ACT as to why the date created for the NEWSLETTER document in the Word Processing 2 module was 28 August 2007; two months after the course finished.

In the case of the NEWSLETTER document produced in the Word assessment there were 6 candidates whose documents were identical and contained a series of errors that suggest the document was copied. In the Integrated Applications the consistent use of the same incorrect pie-chart also suggested that the assessment material had been manipulated.

There was material missing from both the printed assessment material and from disk. In the view of Internal Audit, ACT were unable to provide a reasonable explanation as to how learner’s had passed these assessments in the absence of such essential material.

…it is the view of internal Audit that efforts were made on the part of the tutor to ensure that learners, who had not achieved a sufficient level in some assessments, were assisted in achieving a pass level after the assessment was completed.