John Paul Phelan (Fine Gael)

I did not have a copy of the speech when the Minister was speaking.

I am also interested in the review of labour market programmes in which FÁS is involved. The Minister made the point that this review was initiated before the current controversy came to light. I believe it has been initiated far too late, even if it was before the current controversy. The country has been through approximately 15 years of unprecedented growth, but in that 15 year period I failed to see a commensurate change in the way FÁS operated. For much of that time it was operating with virtual full employment in the country. I am aware FÁS was involved in trying to attract foreign workers to this country but one cannot say the structures of the organisation have been reformed in any meaningful way during that period.

Other speakers who have commented on the recent controversies in FÁS have correctly suggested that many people connected to the FÁS organisation always point to the good work FÁS does and use that as a barrier to answering questions about the recent announcements. I acknowledge that FÁS does much valuable work. I have not been particularly involved in FÁS operations in my local community but I am aware that through the community employment scheme it does tremendous work in local communities throughout the country. However, I do not believe the community employment scheme should be lumped in with all the other activities in which FÁS is engaged. It is not suitable. There is a significant case for reform in how that service is provided in terms of whether it should be provided by the Department of Community, Rural and Gaeltacht Affairs or the local authorities. It does not fit in easily with other aspects of the work done by FÁS.

Speakers will refer, quite correctly, to the positive work by FÁS with regard to apprenticeships over the years. However, the realisation that our construction industry would not continue as it was forever does not appear to have dawned on people in FÁS in terms of the structure of the apprenticeships that were delivered. Nevertheless, the apprenticeship scheme has been, by and large, successful. Many young people have acquired a trade through FÁS and the schemes it operates in that regard are very worthy.

The two areas of community employment schemes and apprenticeships account for less than half the funding allocated to FÁS for the past 12 to 15 years. Where has the rest of the funding gone? There have been many stark revelations about wastage, particularly by top management in the organisation. I will not go into the nitty-gritty details of personal spending by individuals, but major questions have not yet been answered as to the relevant audit conditions in the agency and, in particular, about the role of the board of FÁS. It is a social partnership-style board and others, with whom I agree, have said that serious questions arise as to whether those people should remain in the positions they hold at present. At board level there has been a serious failure to spot several inefficiencies and the sheer waste of money, news of which has emerged in recent weeks. It is surely the function of the board of any company, especially a State company as the matter concerns taxpayers' money, to ensure a level of scrutiny is in place. Given what we have seen emanating from FÁS in the recent past, it is clear this was absent. The entire board should consider their positions. The Minister of State, Deputy Kelleher, referred to the resignation of Mr. Molloy, but the board members have a duty to consider their positions also and to consider whether they lived up to the roles to which they were appointed.

I previously referred to the funding of FÁS. For six or seven years there was virtually full employment in the country, yet we invested €1.2 billion in the organisation, much of which was spent on very worthy schemes throughout the country. However, nearly the majority of it was spent on some very questionable initiatives. I refer especially to the initiative in Florida. The extent of the material benefits which accrued to the taxpayer, the Government and the citizens of the country because of the initiative undertaken in Florida are not plain to see. Rather, I have seen a scandalous waste of public money whereby it was used to ferry individual board members, management and Ministers, who were in a virtual relay for more than a year, to Florida to see the joint effort in which FÁS was involved.

On 9 May the report of the Comptroller and Auditor General into the internal audits of several State bodies was published. FÁS was one of the bodies in question. Arising from the report, Fine Gael noticed a particular anomaly in the advertising funding and a payment of €100,000 to a local newspaper on which we sought further information through the Freedom of Information Act. This opened a can of worms which was subsequently revealed in the media and the Oireachtas in recent weeks. There has been a particular focus on the activities of Mr. Greg Craig, director of corporate affairs, who is now on suspension with full pay from his position in FÁS. The report also contained several revelations about senior management, Ministers and bonuses paid to staff. It contained conflicting statements given to committees of the Oireachtas based on information circulating internally within FÁS.

We have all become familiar in the past two weeks with the level of opulence enjoyed by some of the senior management of the organisation in recent years, including luxury travel. There was a sense of entitlement felt by some, an example of which was the car crash interview given by the former chief executive on the national radio channel the day before he was virtually forced to resign. In that interview he expressed his belief that he was entitled to spend taxpayers' money willy-nilly and on overly elaborate forms of transport and hotel accommodation. I am glad he came to his senses the following day and realised he was wrong. Unfortunately, the money was already spent and it is difficult to see how it can be recouped.

The Comptroller and Auditor General's report also dealt with several specific issues related to advertising campaigns and private companies which had contracts with FÁS under several headings. It seems to have been standard practice across the board that the regular tendering processes for State agencies and Departments was cast aside in many cases, whether for advertising, companies involved in the FÁS opportunities scheme or the www.jobsireland.ie initiative.

It is also apparent that a cosy relationship existed between certain of the senior management in FÁS and several private institutions and businesses. An especially cosy arrangement existed between the firm OSK Accountants and Mr. Craig. It provided private advice to him related to his personal finances while also receiving contracts for business from FÁS. In one case the firm received a contract and advised FÁS about which other organisations should receive tender invitations, which is remarkable. We are also told that various advertising agencies were aware they would receive contracts before they were tendered. I am referring specifically to the FÁS opportunities programme in this regard.

Perhaps the most glaring and obvious abuse of taxpayers' money occurred with the www.jobsireland.ie initiative. First, this website did not work. It was only accessible for a short period and did not carry out the function for which it was created. The cost of the website was €1.7 million. It would be hilarious were we not discussing taxpayers' money spent by a State agency. It is reckoned this project cost €1 million more than necessary. We also learned of the strange situation whereby a private company, Ultimate Communications, was paid €3.55 million over 12 months by FÁS for handling the www.jobsireland.ie contract, even though the same company had been in existence for less than ten days when it was awarded the contract. This raises serious questions. There were activities involving other marketing companies, namely, AFA O'Mara and Kingram Studios Limited, which do not seem to have been subjected to what we would regard as the regular tendering processes applicable to all State agencies and bodies.

As matters stand, there are several investigations under way into the activities of FÁS. I realise the Committee of Public Accounts is meeting regularly to discuss the audit report of FÁS. I have expressed on the Order of Business my outrage that when the committee requested particular documents from FÁS, the company believed it could get away with blacking out information rather than making it available to the elected members of the Committee of Public Accounts. It has since recanted that position, but that was a shocking example of how these people thought they were above questioning by the relevant committee of the Oireachtas.

The Comptroller and Auditor General will begin his investigation after the Committee of Public Accounts finishes its deliberations. I understand two Garda investigations related to FÁS are under way. One involves a poster company which, it is alleged, defrauded FÁS and the other relates to FÁS personnel who, it is alleged, have defrauded the taxpayer. This is an opportune time to discuss FÁS and we must consider seriously the structures of the organisation and how to reconcile its different roles. I am concerned the Government might use this as an excuse to reduce radically funding for the important work of FÁS. There is no question the FÁS budget allocation of €1.2 billion needs to be examined seriously in light of the waste which has been revealed. At a time when so many apprentices are finding it difficult to finish their apprenticeships and so many people are losing their jobs in construction in particular, the role of FÁS is more important now than it has been for the past 15 years. We must ensure taxpayers' money is spent in a much more judicious manner in future but also that the important role of FÁS can be fulfilled.