An Investigation of Local Councils Funding Schemes launched between 2008 and 2013

On 25 March 2015, the Minister for Justice and the Parliamentary Secretary within the Ministry for Justice, Culture and Local Government requested the Auditor General to investigate various operational aspects of local councils (LC) funding schemes launched during the previous administration, undertaken between 2008 and 2013. Essentially, the National Audit Office (NAO) was requested to establish whether the processes applied, the structures of government utilised and the administrative decisions taken were in line with the expected principles of good governance and transparency. In all, the NAO reviewed 25 LC funding schemes that resulted in an aggregate funding allocation of €11,519,388.

The NAO noted that no budget was set for a number of schemes. This was particularly evident in the scheme for the resurfacing of roads, which resulted in a disbursement in excess of €6,000,000. Further concerns relating to financial control were noted with respect to the other schemes reviewed, with budgets set not adhered to, generally resulting in the allocation of additional funds. Moreover, this Office identified serious shortcomings in the retention of documentation. The failure of the Department for Local Government to provide documentation impeded the NAO from verifying the most basic aspects relating to the schemes. Deficiencies of this nature undermined the accountability and transparency that should characterise the disbursement of public funds.

Of serious concern to the NAO were the schemes where no evaluation report was provided despite numerous requests made. In the light of such absences, the NAO could not establish the justification for such disbursements. In other cases, reports reviewed provided scant details and lacked any form of critical input by the Evaluation Committee. Moreover, the absence of minutes hindered the NAO’s understanding of how decisions were arrived at by the appointed Committees, rendering unclear the factors that were considered at evaluation stage and the rationale employed in determining eligibility, selection and funding. Similar concerns emerge with respect to revisions in grants, which at times were substantial in terms of materiality yet inadequately justified or explained.

At times, the NAO deemed the interventions of the Parliamentary Secretariat for Consumers, Fair Competition, LCs and Public Dialogue as unwarranted, particularly in terms of the shortlisting of applications received, the evaluation of submissions and the determination of funds to be allocated. This Office is of the opinion that this involvement occasionally impinged on the independence of the Evaluation Committees, evident in the revisions to grants or in instances when funds were sourced through direct recourse to the Parliamentary Secretary. The NAO maintains that, in line with the principles of good governance, the Parliamentary Secretary should have ensured that the proper decision-making structures, reporting arrangements and systems of record keeping were in place rather than intervene in a direct manner through the allocation of grants to specific LCs.

Other shortcomings may broadly be understood as departures from the conditions stipulated in memos and guidance notes issued with respect to the schemes. These instances of non-adherence related to various aspects, including changes in the modality of financing, the treatment of late applications, stipulated completion dates and payment terms. Other departures involved the extension of deadlines for the submission of applications and the failure to adhere to thresholds set. These changes were often inadequately documented, rendering it impossible for the NAO to establish whether all LCs were notified of changes in the schemes’ parameters, thereby ensuring the principle of fairness.