The Comptroller and Auditor General is to be allowed to examine the activities of the Dublin Docklands Development Authority following the publication of two independent reports.
Minister for the Environment John Gormley today published two reports into corporate governance at the authority.
The reports concluded there were doubts over the legality of some Dublin dockland developments because they involved inappropriate planning. They also found major decisions were taken by the authority’s executives without reference to the board.
Mr Gormley today they had identified “serious weaknesses” in the authority with a "loose culture" in parts of the organisation.
Drafts of the two documents were published earlier this year by Fine Gael without Mr Gormley’s consent.
The reports were commissioned after Mr Gormley last year requested a corporate governance review into the DDDA.
The authority commissioned two independent reports - one examining planning issues (prepared by Declan Brassil and Company), and a second examining financial, accounting and procurement practices (undertaken by Ray King and Associates).
Mr Gormley said that in response to the findings, the board of the DDDA had made “significant changes in its procedures and practices and also altered its management structures and approach during 2009”.
“The board’s own report concludes that, despite the significant challenges which exist, the authority is best placed to complete the work already significantly in train to implement the recommendations flowing from the corporate governance review.”
The Minister said the completion of the report represented “a significant milestone” for the authority.
“I think much credit is due to the authority’s chair, Professor Niamh Brennan who has, in her first year, done much to position the authority to address the significant challenges it faces," he said in a statement.
“On foot of the corporate governance reports, she has already introduced stricter financial controls and a clearer delineation between the authority’s planning and development functions; these changes, coupled with her determination to complete the implementation of the reports’ recommendations, provide a robust basis for the future governance of the authority.”
The Minister noted the conclusion of the executive board that “unanswered questions” remained about the background to the €426.8 million purchase in October 2006 of the Irish Glass Bottle site.
He has previously said that reports of the disappearance of files in relation to the deal showed up “serious malpractices” at the DDDA.
Mr Gormley said the Government had decided to bring the authority within the remit of the Comptroller and Auditor General. “This will mean that the DDDA will become subject to C&AG audit and may also be subject to the preparation of specific reports by the C&AG on the efficient use of resources and value for money.”
Speaking on RTÉ's News at One , Mr Gormley said he did not agree that Taoiseach Brian Cowen had questions to answer in relation to the purchase of the Irish Glass Bottle Site and that he "did not have direct authorisation" as minister for finance.
He said the C&AG and also the Public Accounts Committee could investigate the matter.
Mr Gormley said the ministers for finance and the environment had “acted properly at all stages”.
Chair of the DDDA, Prof Niamh Brennan, welcomed the decision to bring the organisation under the remit of the C&AG.
"The overriding objective of the executive board and staff of the Docklands Authority, at this time, is to address the legacy of past failures in corporate governance. These have undermined public confidence in the organisation, imperilled our financial position and given rise to serious concerns about past decisions made by the docklands authority," she said.
The board was committed to supporting the C&AG's audit "to the fullest possible extent".
Fine Gael’s Phil Hogan said the decision to allow the C&AG to investigate the DDDA marks an embarrassing u-turn for the Minister six months after voting down a similar measure in the Dáil.
He said: “If John Gormley had listened to us in December 2009 we could be reading the report of the C&AG today but we are still in the dark about what went on in the DDDA.
“It was obvious to everyone that there were systematic conflicts of interest for years in the DDDA board that eventually led it to its financial ruin.
“The question has to be asked as to what has brought about this sudden u-turn and change of policy by Minister Gormley,” he added.
Labour Party environment spokeswoman Joanna Tuffy said there were "serious questions about the adequacy of the political supervision of the DDDA as it embarked on its reckless, developer driven strategy."
She said Mr Gormley and his predecessors over the past decade had all had representatives on the board of the DDDA and she questioned why they had not "blown the whistle on the reckless strategy that was being embarked upon".
Ms Tuffy said the Minister's decison to bring the DDDA within the remit of the Comptroller and Auditor General was welcome, although it had "a ring of closing the stable door after the horse has bolted".