ANALYSIS:The rapid expansion of in-service training created enormous pressures for Fás

WHILE FIRST class travel, golf in Florida and hospitality in Croke Park grabbed many of the headlines about expenditure controls at Fás over the past few years, the big ticket item was always its training programmes.

In the early part of this decade, when the false period of the economic boom was gathering steam, there was a huge increase in training spending by Fás.

Since then internal audit reports and reports by the comptroller and auditor general John Buckley have suggested that the organisation was more focused on spending money than it was on achieving value.

An “internal audit special exercise report” in Fás in June 2007 reviewed the authority’s strategic initiatives and Services to Business programme.

The report detailed how, in 2005, the Government provided €35.6 million in additional funding to Fás for the expansion of in-company training.

“While Fás would utilise a significant percentage of the funding allocation using its existing processes and resources, other avenues had to be sourced and used to achieve the required training volumes.”

Last year a report by Mr Buckley detailed how the Services to Business division in Fás grew its in-service training activities during the bubble years.

In February 2004, following a request from the Department of Enterprise, Trade and Employment that he do so, the former director general of Fás, Rody Molloy, wrote to the department about the capacity of the authority to spend European Social Fund money, the report said.

“It noted that projections by the department suggested that the department was likely to be underspent in regard to funding from the European Social Fund, and that Fás had been asked if it could increase its level of activity to draw down the money over the remainder of the period. In a later submission, dated September 2004, the figure likely to be underspent was put at €60 million over the period 2000-2008.”

By September 2004, Fás had submitted a proposal as to how it would spend €60 million in 2005-2008.

As has been reported in this newspaper, the budget for the Fás Competency Development training programme went from €8 million in 2004 to €44.4 million in 2008, putting pressure on the organisation’s ability to spend the funds.

Labour Party TD Roisin Shortall has described the programme as a “slush fund” overseen by the parties that were represented on the Fás board, essentially the social partners. “I have the impression that this was a slush fund,” she told the Dáil Committee of Public Accounts at Leinster House last year.

Mr Buckley told the committee the programme operated by Fás had cost €126 million up to 2008.

The secretary general of the Department of Enterprise, Trade and Innovation, Seán Gorman, said that in the period 2004-08, a total of 123,000 people had been trained under the programme.

He told Ms Shortall the programme was “100 per cent” funded by the exchequer but the State was eligible for a partial “clawback” from the European Social Fund which was expected to be “about €44 million” for the period 2000-06, subject to approval by Brussels.

A further claim was being lodged for the period 2007-13, he said.

A value-for-money study of the programme was initiated by the department soon after the programme began, but took five years to complete. The civil servant in the department who was chairing the study group resigned because of unhappiness with how its work was being treated. The chairman of the Dáil committee, Bernard Allen TD, said there was a “lack of will” in the department to finish the study.

A new internal audit report from Fás is to be reviewed by its board when it meets next week. The report has reviewed some contracts issued under the Competency Development programme, and found difficulties with between 15 per cent to 20 per cent of those reviewed.

Because of these difficulties the report suggests the contracts be excluded from future European Social Fund claims.

A generalisation of this finding across pending and already processed claims for European funding has led some to wonder whether more than €100 million might be at issue as a result of the difficulties that have been identified by European auditors.