There is prima-facie evidence to suggest there was some misappropriation of public funds by the Irish Council of People with Disabilities, the Department of Justice, Equality and Law Reform's accounting officer informed the Comptroller and Auditor General.
His comments follow a draft report by the Department's internal audit unit amid concern about apparent serious deficiencies in the council's financial management and credibility.
However, the Comptroller and Auditor General, Mr John Purcell, has been denied access to this draft report until legal proceedings currently before the High Court are finalised.
The State-funded body was established in 1997 and by the end of 1998 had received over £1.27 million from the Department.
Documentary evidence made available to the Department suggested that the council failed to follow proper accounting procedures and adopted a very unsatisfactory approach to the control of expenditure, which included:
a high level of expenditure incurred by members of the board and an apparently inordinate amount of travel by some board members;
high costs for legal services to no apparent advantage;
the very high level of settlement on the termination of employment of a former CEO;
failure to recover from relevant international organisations the travelling and subsistence expenses it advanced to delegates for attendance at meetings of these organisations;
advances to bodies, although they were in significant credit at the time and had not submitted expenditure plans;
allocation of significant funds which appeared to have been made in an informal manner and, on occasions, by individual board members.
Mr Purcell said the Department informed the council in June and July 1998 that there was little evidence that it [the council] had been involved with local disability networks, other than in handing out money and computers.
"There had been suggestions that the networks were suffering from lack of leadership, motivation, direction and training by the council," Mr Purcell said. "The Department concluded that the credibility and reputation of the council had been seriously damaged and directed the council to take remedial action."
The draft report of the Department's internal audit unit has been circulated on a confidential basis to those mentioned in it and to members of the former interim council.
However, the report cannot be published or released to Mr Purcell, as a former council chairman, Mr Frank Mulcahy, is seeking a judicial review.
The Minister for Justice, Equality and Law Reform, Mr O'Donoghue, appointed a seven-member steering committee in January to oversee the establishment of a permanent council.