Mr. Seamus McCarthy:

The financial audit obviously focuses on the financial statements. One of the exercises we do involves analysing the expenditure under the headings that are reported in the financial statements. When we look at variances and trends from year to year, we look for explanations if it transpires that expenditure is increasing significantly. As there was no line in the financial statements that drew attention to the budget of the president's office, we were not looking at that. The internal reporting to the governing body and the audit committee would not generally have been focused on those kinds of cost centres. The president will correct me if I am wrong in that regard. One of the recommendations that has been made is that there should be formal reporting of some of those key cost centres as part of the normal financial reporting to those involved in the governance of the organisation. When we instituted the change in our procedures - in relation to propriety - in 2010, we picked up three or four instances in which difficulties arose with regard to expenses relating to the president's office.

We would probably have raised those in the normal way, as management letter items, with the president. They would have been dealt with and there would have been an opportunity for the institute to reflect and to investigate further to see if there was a deeper problem. Subsequent to our reporting at the end of the audit in 2010, the freedom of information request was made and it became apparent that there was a deeper problem then we had identified at that stage.