Press Release - Internal Control in County Cork Vocational Educational Committee

The Comptroller and Auditor General has produced a report about the operation of internal controls in County Cork Vocational Educational Committee (VEC). The report has been presented to the Houses of the Oireachtas today, 29 April 2015.

The audit of the 2011 financial statements of County Cork VEC was extended to examine various alleged financial losses and control weaknesses.

Main Examination Findings

Operation of Macroom Youtreach

Youthreach is a national programme of second chance education and training directed primarily at unemployed early school leavers aged 15 to 20. County Cork VEC operated seven Youthreach centres. One of the centres, Macroom Youthreach, had an approved allocation for 30 students.

Between 2007 and 2012, payments totalling €114,000 were made to eight students attending Macroom Youthreach who were subsequently deemed by the VEC to be ineligible for the programme. The examination found that the available records about the application and assessment process in relation to the eight students were inadequate, and did not provide evidence in relation to the reasons for their inclusion on the Youthreach programme.

An internal audit report carried out for the VEC completed in August 2010 also identified a number of weaknesses over payments to staff at the Macroom Youthreach centre.

  • It was estimated that the VEC paid for 1,070 teaching hours in the year 2009/10, estimated to cost €60,000, where teachers were not timetabled to teach.
  • The VEC had also paid teachers for a further 500 administration hours at the Macroom centre at an estimated cost of approximately €25,000 for the academic year 2009/10.
  • Payments were made to two part time staff without deduction of PAYE and PRSI.
  • It appeared that two individuals paid student allowances were not attending training but were in fact employed to provide tuition in English.

Leases of Property

By law, a VEC had to get a formal sanction from the Minister for Education and Skills prior to entering a lease. In 2012, an internal audit in County Cork VEC raised concerns about two leases entered into without obtaining the required sanction, and recommended that the VEC conduct a general review. This identified six further leases where the VEC had not obtained the required sanction. The position in relation to seven leases has now been regularised by way of retrospective sanction granted by the Department.

One of the unsanctioned leases provided for the option to purchase a building in Mallow for a nominal sum at the end of the lease term. However, the lease agreement was altered, extending the term of the lease, and committing the VEC to additional lease payments of €431,700. Further revised arrangements provided for the cessation of lease payments and the transfer of ownership of the building for a nominal sum as provided for in the original lease. No monetary loss to the VEC arose as a result of the revised lease arrangements.

In 2010, the VEC also entered into a lease with a property owner committing itself to a cost of €20,000 a year for 99 years in the form of the award of scholarships to pupils of Schull Community College. In return, the VEC was given the use of a site of 0.9 hectares adjacent to a marine outdoor education centre in Schull. No analysis comparing the projected cost of the scholarships against the likely benefits was carried out. The lease arrangement was terminated in August 2013 by mutual agreement with the land owner. The cost of scholarships paid by the VEC amounted to a total of €40,000, and the VEC had the use of the site for four years.

Other Issues

Between 2010 and 2013, legal settlements amounting to €111,600 were made by the VEC from its own funds and a further 23 cases were settled and paid for by the VEC’s insurers at a cost of €95,000. In addition, legal costs incurred by the VEC amounted to €442,200 for the four years 2010-2013, significantly above the VEC sector average. A further case settled by the ETB in 2014 included arrears of salary for 11 years amounting to €168,000 and compensation of €10,000.

In 2002, the VEC accepted a gift of a boat – the Omar B – and used it as part of a sailing training programme. The boat, which now requires repairs, has been in dry dock storage since 2007, at a total cost of €10,700.

Under long standing co-operation arrangements, VECs provide teaching services to other institutions. Under an arrangement between the VEC and a voluntary group providing services to people with disability, the VEC provided funding in lieu of teaching hours. That arrangement was in breach of Departmental guidelines in relation to the operation of such arrangements.

A tax audit of County Cork VEC by the Revenue Commissioners resulted in a settlement of €115,700 in June 2013. The settlement related to tax periods as far back as 2003.

Notes for Editors

County Cork VEC had an annual budget of just under €100 million per year and was responsible for a range of facilities, including 22 post primary schools and community colleges, seven Youthreach centres, two outdoor education centres, a traveller training centre, a school of music and a cultural centre.

As part of the reform of the VEC sector, County Cork VEC was dissolved and its operations and functions, assets and liabilities (along with those of the City of Cork VEC) were transferred to Cork Education and Training Board with effect from 1 July 2013.

The Comptroller and Auditor General is an independent constitutional officer with responsibility for the audit of public funds. He reports to Dáil Éireann.