The Comptroller and Auditor General John Buckley said in his annual report that Dublin law firm Arthur Cox Solicitors was the largest fee recipient, with €9.6 million paid by the Department of Finance for advice and €1.95 million by the National Pension Reserve Fund Commission.
US bank Merrill Lynch received €7.33 million in fees for advising the National Treasury Management Agency (NTMA).
The Central Bank spent €4.95 million on advice from PricewaterhouseCoopers, which also received €1.58 million for advice to the National Pension Reserve Fund (NPRF).
Sir Andrew Large, a former deputy governor of the Bank of England, was paid 120,000 euro (#99,000) to be a “trusted adviser” to the NPRF.
The report into public spendng revealed that Sir Andrew, PricewaterhouseCoopers and Arthur Cox were hand-picked to give advice on investing in Bank of Ireland and Allied Irish Banks.
Normally State agencies have to go through a transparent tender process.
Fixed-fee arrangements with Merrill Lynch and Rothschilds did not require them to provide details of any work carried out, according to the official report.
Mr Buckley asked for a specific breakdown of the charges but was told by an NTMA accounting officer that “time was of the essence” and the urgency of the crisis meant normal procedures could not be followed.
The report found the highly technical issues thrown up by the near banking meltdown and the urgency of the situation required specialist outside legal, financial and economic advisers.
While €33.7 million was spent on consultancy services up to the end of July, this does not include fees paid by banks and lenders themselves on the direction of the Department of Finance or Central Bank.
The report said it was important that sound procurement and contracting practices were followed to “ensure that the expenses being incurred are no more than is warranted in the circumstances”.
Up until the end of July, the State had spent €24.3 billion on measures to stabilise the banking system, including a €7 billion investment from the National Pension Reserve Fund into AIB and Bank of Ireland.
A further €4.2 billion was spent supporting Anglo Irish Bank and nationalising Irish Nationwide and EBS.
Promissory notes worth €10.3 billion were issued to Anglo, €2.6 billion to Irish Nationwide and €250 million for EBS.
The Comptroller’s report noted that a further €10 billion in promissory notes for Anglo and €437 million for EBS have been allocated but fell outside the period reviewed by the auditor.
The State has received €1.026 billion from lenders in return for this guarantee.
At the end of June the liabilities of the credit institutions covered by the Government guarantee were an estimated €334 billion, including €78 billion covered under the deposit guarantee scheme.
Fine Gael finance spokesman Michael Noonan said the “huge sum spent on financial advice represents appalling value for money”.
He said the Government had paid €7.33 million to Merrill Lynch but had ignored its warnings about the dangers attached to a blanket guarantee for the Irish banking system.