Tánaiste Mary Coughlan has asked the Comptroller and Auditor General to carry out an investigation into the effectiveness of management and control systems in the state training agency Fás.
Ms Coughlan said concerns were raised by a report by the Comptroller and Auditor General John Purcell into procurement practices at Fás that was published last May.
The report criticised Fás for failing to achieve value for money in its dealings with its principal advertising agency, as well as misdirecting Fás funds on a website project.
"This examination is to ensure that appropriate public procurement procedures exist to prevent or detect irregularities or wrongdoing and, in particular, examine and report on the activities of the Fás Corporate Affairs area since 2000," Ms Coughlan said in a statement.
The Minister for Enterprise, Trade and Employment added that she was "committed to ensuring value for money and the best possible use of scarce public resources in these challenging economic and employment market circumstances".
Fine Gael's enterprise spokesman Leo Varadkar said Ms Coughlan had "effectively expressed no confidence in the Fás leadership".
He called on the Tánaiste to completely overhaul the board of the agency and demand an end to all wasteful spending.
"At a time of rising unemployment, Ireland needs a proper and functioning training and skills policy to ensure that the tens of thousands of people who lose their jobs have the right skills that will enable them to get a new job," he said.
"Skills and training has been ignored by Fianna Fáil for the past ten years," Mr Varadkar claimed.
"They turned a blind eye while Fás transformed into little more than a billion euro slush fund for big business, the union barons and left-wing special interest groups."
