THE DEPARTMENT of Finance has been asked to conduct an investigation into how Fás was authorised to pay more than double the initial valuation for leased office space in Birr, Co Offaly, as part of the decentralisation process.
Chairman of the Dáil’s Public Accounts Committee, Fine Gael TD Bernard Allen, said yesterday he was deeply concerned at the apparent lack of oversight by department officials regarding the contract.
The issue was first highlighted by the Comptroller and Auditor General earlier this year, who reported that Fás had entered into a 10-year lease for office space in Birr at a cost that was about 77 per cent higher than the typical market rate for the area.
In addition, Fás signed a €1 million contract to fit out the premises which never went out to tender. The company chosen by Fás to undertake the work was a firm owned by the landlord of the premises in Birr. When fit-out costs are included, the training agency is paying about €200,000 per year for the premises.
“Someone must have authorised this transaction in Offaly,” Mr Allen said at yesterday’s meeting of the committee. “This issue was raised in the comptroller’s report, yet it didn’t prompt any question marks from the parent departments as to how this could happen.” He added: “There is no point in these reports unless there are consequences for people ... it seems that nothing happens.”
Mr Allen formally requested the department to co-ordinate an investigation into how the deal was allowed to take place and to report back within weeks.
An official from the department, principal officer Dermot Keane, agreed to pass on Mr Allen’s request to senior officials in the department.
In relation to the Fás contract, Mr Keane said his department had issued a letter to the Department of Enterprise, Trade and Employment in March 2005, authorising the transaction. However, he said he was not personally aware of the details surrounding the deal or issues regarding the fit-out at the time.
The committee also heard that the Office of Public Works (OPW) has spent almost €44 million on acquiring sites or offices where the decentralisation process has stalled. While over 3,000 staff have been transferred out of Dublin as part of the process in recent years, the transfer of a further 6,000 staff has been put on hold.
The OPW has also signed leases for property as part of the plans for decentralisation, some of which is not being used. The committee heard the state of the property market means it is unlikely in the medium term that the OPW will be able to avail of early surrenders of these leases in advance of expiry or lease break dates.
In a report earlier this year, the Comptroller and Auditor General reported that six sites were acquired for decentralisation by the OPW at well above market rates. However, OPW chairman Clare McGrath said she did not accept the market valuations cited by the comptroller.
She said these values were based on a desk-based exercise with no site visits, and also queried the classifications used by the comptroller in relation to towns and cities.
For example, she said Newbridge was classified as a “large provincial town” yet it was well known as a commuter town for Dublin city with significantly higher land values.
