Noel Dempsey (Meath West, Fianna Fail)

The report referred to by the Deputy, which was commissioned by Irish Rail, raises serious concerns about procurement practices in Irish Rail. My initial reaction to the report is that the weaknesses in Irish Rail's procurement policies and practices that are identified in the report represent a cause for grave concern. The systemic deficiencies and weaknesses that have been identified, including a lack of management supervision and direction, poor training, inadequate monitoring and controls and lack of adherence to procedures, created the opportunity for employees and suppliers to misappropriate funds and materials. The report pointed to a high incidence of non-compliance with procedures and referred to many recorded instances of inadequate audit trails. In such cases, there was either a lack of documentation, or documentation was present but was improperly completed. These cases suggest that there is a serious problem in the company in terms of adhering to established procedures.

When I discussed the matter with the chairman of CIE on 22 October last, I expressed my concern about the weaknesses that had been identified and the failure to inform me or my Department. The chairman briefed me on the background to the report, indicated that the actual loss was limited to €2.6 million and confirmed that almost all of the recommendations in the report have been implemented. He informed me that certain staff members have been sacked and some cases have been referred to the Garda. Nevertheless, I have sought a full report from the board of CIE on the circumstances giving rise to the report, the extent to which progress has been made in implementing the report's recommendations and the measures being taken to ensure adequate controls in expenditure areas not covered by the report. In light of the report from the board, I will consider any necessary action on my part.

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