Investigators have failed to trace bogus documents used in a £100,000 dairy scheme fraud in the Department of Agriculture and Food, according to the report of the Comptroller and Auditor General. Separate Garda and Department investigations are continuing into the fraud at the Department's farm development service office in Sligo last year.
No action has been taken to date against any member of staff for the fraud, but an official at the Sligo office has been suspended for separate irregularities.
The Garda inquiry began last December after the Department was alerted to the alleged fraudulent cashing of cheques issued under the EU-supported dairy hygiene scheme, under which small farmers were helped to invest in their farms.
Internal investigations by the Department revealed that four irregular cheques totalling £101,479 were issued in September 1997 and cashed the following month. Five further payments totalling £131,059 were issued in December, but were detected and cancelled before encashment.
The fraud was perpetrated through the use of bogus documents with false applicant names and addresses but with legitimate reference numbers - which were given to each person applying under the scheme - and herd numbers already used in abandoned applications.
The addresses provided were registered guest-houses which were apparently used for collecting payments. The bogus forms also included fraudulent signatures of two authorised signatories. The Department has been unable to trace the bogus documents in the Sligo office as it appears they have been intercepted, the report said.
An interim report last March by the Department's internal audit unit noted that procedures in its agriculture services division in Cavan, where payments under the dairy hygiene scheme were authorised, did not ensure that the documents concerned were valid.
"While all [the fraudulent] payments were close to the maximum of £27,000 which can be claimed by any one applicant under the scheme, this level of grant indicated a size of investment not consistent with the small milk quotas declared on the bogus applications," added the Comptroller's report.
"Had checks for reasonableness been in place in [the] ASD, they might have highlighted an incorrect application, as the average grant for the Sligo area in 1997 was £8,281 while the national average was £6,003."
The report also reveals that a payment of £112,824 was made last year to an employee of the Department who was suspended without pay in 1982. A Department spokesman said the employee was suspended as a result of allegations by a number of far mers that he was engaged in commercial activities which would have compromised his role with the Department. However, he had successfully challenged his suspension in the courts.
Staff who were given no work were paid almost £500,000 in salaries by the Department of Agriculture over a three-year period, the report revealed. The staff had formerly been employed by the State-owned Dublin and Cork District Milk Boards which were abolished in 1994. They were subsequently let go by two private companies which took over some of the boards' ancillary businesses.
The staff then exercised their right - conceded earlier by the Government - to redeploy into the public service, but the Department said its ability to find positions for the 22 was constrained by "legal and industrial relations difficulties".
As a result the staff were paid just under £500,000 by the Department from mid-1995 until May this year, though they were not engaged in Departmental work.
