ANALYSIS:Fás may have been encouraged to spend taxpayers' money, writes COLM KEENA

THE SCARY bits of the latest Comptroller Auditor General report on Fás are not the ones that illustrate the rather wild and reckless spending on advertising and promotion that went on between 2002 and 2008.

The scary bits are the ones where it is made clear that the executive board of the organisation knew about some recurring instances of huge overspending, and did nothing.

One sentence in the report creates the impression that the executive was indifferent. It reads: “Because overspends on advertising were compensated by underspends in other areas, sufficient attention was not given to individual variances.”

But it could be worse than that. It could be that the top of the organisation was not indifferent to overspends, but rather was glad of them.

By 2008, at the end of more than a decade of full employment and a booming economy, the annual budget of the national employment and training agency had swollen to more than €1 billion.

There is a widespread view that organisations seek to spend their budgets. Such an attitude to taxpayers’ money could explain the Fás debacle, but it could be worse than that again.

There is a paragraph in the report that indicates that the Government department responsible for Fás, the Department of Enterprise, Trade and Employment, was encouraging the agency in its profligate ways.

Of the advertising expenditure examined, €8.6 million was spent by the Corporate Affairs division on behalf of the Services to Business division of Fás. A lot of this had to do with in-company training.

The report reads: “In February 2004, following a request from the department, the director general [Rody Molloy] wrote to the department attaching a submission for increased expenditure and activity under Measure 18.33.

“It noted that projections by the department suggested that the department was likely to be underspent in regard to funding from the European Social Fund, and that Fás had been asked if it could increase its level of activity to draw down the money over the remainder of the period. In a later submission, dated September 2004, the figure likely to be underspent was put at €60 million over the period 2000-2008.”

By September 2004, Fás had submitted a proposal as to how it would spend €60 million in 2005-2008.

As has been reported in this newspaper, the budget for the Fás competency development training programme went from €8 million in 2004 to €44.4 million in 2008, putting pressure on the organisation’s ability to spend the funds.

It enlisted outside help. Many of the organisations which received significant payments for delivering training under the scheme, such as the employers’ group Ibec, and the Irish Congress of Trade Unions, are represented on the board of Fás. These organisations ended up on both sides of the Fás fence.

The recent reports on Fás reflect badly on those who have been running the organisation over recent years.

You have to wonder at the extent to which the trends they illustrate, and the insights they provide, mirror the general mismanagement of the State over recent years, for which we are all now paying so dearly.