Mary Coughlan (Donegal South West, Fianna Fail)

Since the code of practice was issued, it has been confirmed by FÁS each year over the period 2002-07, with the exception of 2006, that steps were taken to ensure an appropriate control environment. It also stated that the audit committee on behalf of the board conducted a review of the effectiveness of the system of internal financial controls and that no weaknesses were found in the system which resulted in any material loss, contingencies or uncertainties being disclosed in the financial statements or the auditor's report on the financial statements. It was not until the 2006 statement on internal financial control, which was dated 27 June 2007, that it was noted that an internal audit had pointed to some weaknesses in procurement and that the board had taken steps to address them.

Since becoming aware of the issues in FÁS, I and my officials have been in constant contact with the organisation to ensure that it puts in place proper procedures to improve corporate governance. In this regard I welcome both the work of the Comptroller and Auditor General and the Committee of Public Accounts, as well as the publication of the committee's fourth interim report.

The measures FÁS has implemented to improve financial control and governance across the organisation include the restructuring and tightening of controls in the corporate affairs function, which is at the centre of the Comptroller and Auditor General's investigation; the implementation of a revised structure for its internal audit including resources for additional staff and external co-sourced audits; the commencement of a full audit of all procurement locations by FÁS internal audit, which is due for completion by the end of the year; the cancellation of all credit cards in FÁS with the exception of one used to purchase books and periodicals; and the cessation of the opportunities exhibitions and the reduction of the FÁS advertising budget to a minimum.

I want to address the issue of the severance package awarded to the former director general of FÁS. Mr. Molloy's severance package, which was negotiated to secure his departure from the post of director general, was broadly in line with the package he could have claimed under his employment contract had it been terminated by the board of FÁS.

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