The Baker Tilly Report into CIÉ/Iarnród Éireann

The Baker Tilly Report details questionable procurement practices, suspected fraud and collusion between employees and tendering companies within Iaranród Eireann, the sub-section of CIÉ which manages our rail network.

It covers the period between January 2004 and January 2008 and runs to more than 350 pages, making it the biggest official report I’ve read in quite a while. Although the directors of CIÉ received a copy in early 2008, shockingly, they didn’t think it proper to give the minister of transport a copy until the Sunday Independent got a few leaks about the contents in October of this year. It became available under FOI in the last two weeks. It should be noted that the minister is a shareholder in CIÉ, and the company got more than €300m in taxpayers money last year alone. Also worth noting, the department only requested a copy of the report after seeing the SIndo – otherwise this may never have become public knowledge.

Since collecting a copy from the department last week I’ve scanned and sent it in batches to Gavin. He OCR’d them and stitched them back together into a single PDF file which can be viewed at the link below, it gets interesting around page 260. As far as I am aware, this is the only digital copy in the public domain.

The findings are shocking. There was widespread “on-going non-compliance” with procurement procedures resulting in “fundamental system deficiency” in how private companies won contracts. EU procurement laws were ignored. Employees stole railway sleepers from stock, continuously over a long period, and sold them for their own profit – the methods (or lack thereof) used to monitor stock meant this went unnoticed. Companies were paid for work which doesn’t seem to have been done. Paperwork on a serious number of contracts was near non-existent. Explanations for discrepancies arising in stock records are not investigated to a satisfactory extent. Employees colluded with companies to ensure contracts were won. Staff weren’t trained in how to do their job, and one person who signed off on a contract for work which didn’t seem to get done had the contractor working on their private residence.

It’s Fás Mark II.

One figure for definable loss to the company is €2.6m, but this is low due the lack of paperwork available to quantify whether or not elements of contracts, or whole contracts, were losses or not. The Baker Tilly team even state  “we are confident that other unidentified loss exists within the organisation”. Shane Ross puts the figure at €9m.

The Spencer Dock/North Wall development project makes up €892,887 of the definable figure of which €363,540 was down to “known or suspected fraud”. In another area a loss of €271,665 was put down to collusion with contractors – specifically “fraudulent invoices paid over a number of years” at the specific request of an employee whose name has been redacted. The report says the employee has repaid €100,000 in compensation, though it doesn’t say whether or not they’re still an employee to this day.

Another person was employed as an inspector to monitor the work of various contractors (aka vendors), however…

…the work which was being described on the system was not actually being carried out. Surveillance showed that the contractors were doing little or no work when they should have been under the supervision of the inspector in question.

In one instance the vendor was seen to be carrying out work at the inspector’s private address.

It is likely that the company [IÉ] has suffered financial loss whether through value for money or actual fraud during the period examined for the said inspector. Invoices for the period examined total €30,602. It is also highly likely that further losses have been incurred as a result.

However, it’s goes beyond the above. The first 200 pages, though insanely boring and lacking figures, document a complete lack of oversight and  management within the organisation. There was no standard procurement paperwork, for example, meaning it is difficult to trace who was responsible for issuing contracts, what the contracts were for or even who was invited to compete for the work.

Also, service entry details were being based on “pro-forma invoices received after work had been completed rather than being based on an original request, prior to the work commencing”, which makes little sense. The “quality of supporting timesheets and work dockets” and the level of information included on these documents “varied between contractors” due to the poor paperwork system and insufficiently trained staff. This meant there is “little or no detail” about what exactly what was being paid for in some cases.

In short, it seems that at times money was paid to companies, but nobody can tell what was paid for – there was just an invoice.

The Baker Tilly team interviewed a large number of staff and had more fill in questionnaires about their work. They found “no manager or Senior Executive Buyer was aware of the existence of a Corporate Board Procurement Strategy for the Iarnród Éireann Organisation for Infrastructure Maintenance, Signal Electrical & Telecommunications (SE&T) & New Works” – the departments which procure most work. Furthermore, In three Iarnród Éireann divisions – Athlone, Dublin and Limerick – the Baker Tilly team found:

Detailed procedures followed at the Dublin, Limerick and Athlone Division in relation to the following areas for Infrastructure Maintenance and SE&T are not currently documented:

The request for plant hire/labour by the Permanent Way inspector SE&T Inspector;
The approval of the request and the selection of the contractor;
The valuation of the work for the selected contractor;
The input of the details into SAP [business management software] and the creation of a service entry form, where required; and
The receipt, review and approval of the contractor monies and the release of the service entry

The part of the report about the New Works section lists the procedures which are said to be gone through when labour or plant hire is required. The procedure goes something like;

Relevant managers meet and discuss what work will required for the next few weeks;

The co-ordinator then prepares a detailed spreadsheet to estimate the value of the plant hire and labour being requested;

This is then entered in the SAP system;

The co-ordinator emails the contractors with relevant details;

The work is completed and timesheets are signed by an Iaranrod Eireann representative;

The contractor submits invoices which are reviewed in detail and approved by the co-ordinator, two managers and an accountant

But the sentence after that is… “the above procedures followed by New-Works Construction Unit are not currently documented”. It was the same for other sections also. No paperwork.

In the SE&T section “there was no documented evidence presented [to show]… the actual work performed and invoiced is monitored in accordance with the scheme plans and the tender” and that “an estimate of the work to be performed is not calculated prior to the work being requested from the contractor”. How the hell is that possible?

The most unusual piece activity related to payment, supposedly for the removal of soil, to a company whose details are redacted. I’ll finish by quoting a few paragraphs… they’re worth reading.

As part of the Docklands Station Development Project, work was completed in the freight yard in preparation for the project commencement in 2006. As part of the preparation New Works prepared a tender package in July 2006 for the removal of hazardous and non hazardous soils which were accumulated during the course of construction.

REDACTED tendered for this contract to remove non Hazardous Soil in July 2006 but was unsuccessful and the contracts were awarded to REDACTED. However, invoices were received at a later date from REDACTED for the removal of non-hazardous soil from the area outlined above from January to July 2006. It is the contention of New Works that REDACTED were never tasked with, nor did they perform soil removal activities from the North Wall Freight Yard during the course of the project and they are disputing the full extent of the invoices.

The invoices were signed off by and were paid by accounts payable between January and July 2006 quantified at €257,681.60 gross. The invoices were not matched to any planned work or budget of costs for the project, prior to payment of the invoices. Further invoices were submitted by REDACTED in December 2006 however these were not paid by The Company. We understand that there are currently legal proceedings ongoing with the said company.

Blanket purchase orders are set up on the SAP system at the beginning of each year by the procurement department for general plant hire work in the Infrastructure Maintenance Department. The invoices that are the subject of review were charged against a blanket purchase order and then coded to a capital WBS code.

On review of the invoice insufficient detail was provided and no supporting documentation was available. This made it difficult to determine if the work was actually done, figures provided by REDACTED independent consultant engineers, indicated that the work detailed in the invoices could not have been done as the quantity of soil left over to be removed from site was minimal.

It stinks, and I don’t mean the soil.

FOOTNOTE: CIE isn’t covered by the FOI Act, this document was obtained from the Department of Transport. Therefore, a lot of the dirty details may never come out.

Donations to senators 2002 – 2008

When this site first went live we posted spreadsheets of all know political donations made to TDs and political parties – you can view them here and here (annotations have been made to some donations to add relevant details about the donor).

We now have a spreadsheet for donations made to individual senators. There’s not too many, but they’re there now and will later be added to the KildareStreet database.

Donations to Irish senators 2002 -2008

Minister for Finance – Diary Oct 1998 to April 1999

When I requested the Taoiseach’s diary for the period between the introduction of the FOI Act and March 31 1999 – which can be viewed here – I made the same request to Finance. I have since received it and uploaded it to Scribd.

Minister for Finance (Charlie McCreevy) Diary April 21 1998 t0 September 31 1999 and October 1 1998 to March 31 1999.

It has been OCRd and can be searched by keyword using the document search field in the lower right hand corner of the Scribd box, alternatively you could download and use Ctrl+F to look for what you’re after.

Taoiseach's diary April 1998 to December 1999

I had reason to FOI the Taoiseach’s diary for the period between the FOI Act coming into effect (April 19th 1998) and December 1998 recently. It’s now up in case someone else has use for it too. It has been OCR’d – to search press ctrl+F and enter your term, then hit return.

Redactions marked ‘A’ are so because the department believes them to be “personal information” as defined in Section 28 of the FOI act. Entries marked ‘B’ relate to the Taoiseach’s private papers as a member of the Oireachtas. Regards ‘B’ redactions – the cover letter from the FOI officer states “Section 46 of the Act states, inter alia, that the Act does not apply to records relating to any of the private papers of a member of the Oireachtas and as such I consider that the Act does not apply to these entries.”

News stories from around that period include:

The OECD warning our economy may be overheating

“Overheating is the chief risk facing the Irish economy in the run-up to Economic and Monetary Union, the OECD warned in its latest economic outlook. It said signs of overheating were already evident, such as labour shortages in a number of skilled trades and a boom in housing and other asset prices.”

The Garda Commissioner appointing a team to investigate the tapping of the phones of George Lee and Charlie Bird

A decision being made on whether on not members of the public should charged for making an FOI request

The Government debating the merits of recommendations made in The Bacon Report

Local authorities in the greater Dublin area will be required by statute to ensure that their development plans comply with strategic guidelines for the region, according to the Minister for the Environment

John O’Donoghue, then minister for justice, denying he was attempting to shield holders of Ansbacher accounts

An angry Minister for Justice, Mr O’Donoghue, said he gravely resented any suggestion that the Government was in some way trying to shield any Ansbacher account holder. This was false and malicious.

The Minister was reacting to a claim by Mr John Connor (FG) that he intended to “hold in check at all costs” the powers of the Moriarty Tribunal in relation to the accounts.

Cabinet postponing setting up the Standards in Public Office Commission

Mary Banotti appearing before the Old Bailey

and lastly, Pee Flynn.

…though there may be nothing relevant in the document to any of the above.

Footnote: I’m sure someone will note that Bertie met the head of “The Ancient Order of Hibernians” on March 5th 1999. If ever there was a reason to polish up those tin-foil hats, lads… that is surely a secret society.

Seriously though, Bertie sure could open stuff.

Documents and OCR

Part of what we believe is our job here at is not just to dig out new information via FOI requests. Another important part of the work we are doing will be to make existing information more accessible. We have already started this work through importing TD donations and expenses into Google spreadsheets, centralising the data and opening it up to Google bots. It also allows anyone else to come in and retool or visualise the data we share.

But another important effort is this: publish existing documents in a more accessible format. We have already found hundreds of Government documents online that are scanned without OCR, meaning the contents of the documents are not searchabe, nor (for the moment anyway) are they indexed by Google in a consistent way. Many of these documents are legacy, some from as far back as the mid 1990s.

We have begun a process of downloading these documents, OCRing them, and reuploading them. We will publish all documents to the new Scribd account, as well as to Google Documents. This will mean two things. First the documents will be indexed by Google, second the documents will become instantly more usable to the general public, thus in a small way, creating a more transparent government, and one slightly more accountable to the people. We are under no illusions that this effort will have any instant or major effect, but it will have a gradual one. And this furthers our aims for helping create a more transparent Ireland.

The Dual Abode Allowance

The Examiner scooped me on Monday morning with their lede about the dual abode allowance, a story billed as a “revelation“.

I’d be working on-off on a piece on the DAA since August having heard it was racket for non-Dublin ministers.

To briefly explain: The Dual Abode Allowance is open to ministers and ministers of state from constituencies outside Dublin. It’s an income tax deduction which they can claim in a number of ways, depending on where they say they stay whilst attending the Dáil. There are no details on who avails of it, Revenue Commissioners cite “personal taxpayer confidentiality”, and several FOIs have been bounced in the last decade for the same reasons. So we know little of which ministers benefit from it, or to what extent. It’s rarely reported on due to this derth of information, though journalists and politicians know it’s there, and due to its quiet nature, it could be abused. It’s not a secret, if you ask someone relevant – even a politician –  about it and they’ll admit it exists – it’s not the Delta Force of allowances, as some may have you believe*.

It works like this; if a minister or minister of state has a second home in the capital they can claim an allowance on the mortgage for that property and on the costs of maintaining it. The maintenance costs must be vouched, unless they wish to opt for a flat-rate allowance of €6,500 (nice option, huh?). Furthermore, if the property is purchased while they’re in office they can claim for the full costs of the solicitors and auctioneers fees involved.

Ministers who rent accommodation can claim allowance for the full rent that plus maintenance costs, or a flat-rate of €4,500 per annum.

Lastly, if they’re using a hotel or guesthouse while in Dublin they can claim for the full cost of staying there, plus “additional costs associated with maintaining a second residence in a hotel” (whatever they may be, in a hotel – considering they can claim subsistence expenses generally also). A relative or friend’s house may constitute a guesthouse.

18 office holders availed of the allowance in 2005, 15 in 2006 and 16 in 2007, according to documents volunteered in August to me by the Revenue Commissioners after a brief phone call. A follow up email resulted in them supplying totals from 2002, 2003 and 2004 also. I’ve put all that documentation into one file, it can be viewed here and includes breakdowns for 2005, 2006 and 2007, which may interest some. That is the same information Shaun Connolly used for his story on the front of Monday’s Examiner, which was followed up on Tuesday and Wednesday. As he correctly points out, the cost over five years to the exchequer was just more than €550,000.

While that may seem a large figure in its own right, I didn’t think much of it upon receipt of the information. At least 18 different ministers, over three years, an average of circa €5,000, it’s not going to bring down the house – sure, the Leinster House lads spend that in a weekend at the races. I thought there may have been more to it than simply the €550,000 number, so I went looking.

I took the names of cabinet ministers who could avail of allowance and their wives names to the Land Registry to see if any of them owned property in Dublin. After checking out the results, I had drawn a bit of a blank (such is journalism; shadows, cul de sacs etc) so I tried cross referencing a few bits and pieces.

I gathered the names of every person who had occupied a minister or minister of state’s position in since 2004 and began some serious Microsoft Excelling. When I had the list of names I added their constituencies to see how many would have been able to claim the allowance each year. This wasn’t as simple as it may sound, reshuffles meant 2 ministers occupied one post in the same year. The results of the cross referencing can be seen on sheet two of this document:

  • 24 could have claimed DAA in 2004 – 13 did.
  • 23 in 2005 – 18
  • 24 in 2006 – 15
  • 28 in 2007 – 18

The numbers of claimants were not supplied for the other years, so it could not be calculated.

2005 had the smallest differential between claimants and possible claimants, so I worked on that to try and discover who exactly was claiming the allowance that year. I found this article by Harry McGee from last year in The Irish Times archive which gave me some more info. McGee reported that Noel Dempsey and Dermot Ahern travel home each night after the Dáil, making it logical to assume they don’t claim the allowance.

That reduces the differential to 3… two of the possible claimants, Barry Andrews and Mary Hanafin, are from Dun Laoghaire, which is easily within driving distance of the Dáil (particularly when you’ve a ministerial car and driver), so it may be fair to assume they don’t sleep in the city when the Dáil is in session. Assuming they don’t claim leaves one non-claimant from 2005 that we don’t know about. Taking it that a minister claiming the allowance in 2005 has continued to do so, we can logically conclude that all bar one of the following is claiming DAA:

Mary Coughlan, Brendan Smith, Martin Cullen, Eamon O’Cuiv, Willie O’Dea, Batt O’Keeffe, Micheal Martin, Dick Roche, Tony Killeen and Michael Finneran.

However, that relies on the taking Dermot Ahern and Noel Dempsey assertions that they travel home as a statement that they don’t claim the allowance and the assumption the two Dun Laoghaire representatives don’t claim.

In the end I got nothing unexpected, sometimes you chase stories and get nothing, no regrets.

Of course, the real story would be if Brian Cowen was still claiming it for his apartment behind the Four Courts, while having use of Farmleigh as Taoiseach. That was what I ultimately wanted to discover, unfortunately I didn’t have the resources to do so. Someone should consider asking An Taoiseach that question…

Note: A TD is claiming whilst not using the property personally – e.g. allowing a son or daughter to use the property while attending college in Dublin – is what is referred to in the UK as ‘house flipping’. And we know what happened when MPs admitted to that

Footnote A: I am aware there is an FOI being appealed on further details of the DAA at present.

Footnote B: It was still worth going after the bigger story to get scooped on the smaller one.

Footnote C: Enda Kenny has said he will abolish this allowance if he becomes Taoiseach; populist rhetoric of which I believe not a word. But I’ve taken note.

* now that you know about the uber-secret allowance, I will have to kill you.

Martin Cullen's ministerial expenses

I finally got around to scanning and uploading the rest of Martin Cullen’s ministerial expenses for 2008 and 2009, more for the record than for pushing a story.

Our thinking behind posting these is to allow Google to pick up the content of the PDFs through OCR – so when someone searchs “Cullen Beijing trip expenses 2008” they’ll get what they’re after. We’re trying to force transparency, I guess, in our own way.

I’m crazy-busy so haven’t had a chance to look through them properly, all I spotted to raise an eyebrow was a few Cartel Limos receipts. Have a look yourself.

Beijing August 2008

Kentucky (Ryder Cup) September 2008

London (re: Olympics 2012) October 2008

Brussels in November 2008

Other details of Martin Cullen’s ministerial expense can be found in our prior posts elsewhere on this website.

Martin Cullen goes to New York (June 2009)

Martin Cullen’s Paddy’s Day spending

Martin Cullen goes to London (November 2008)

Thanks to Ken Foxe for the documents. If you have any documents you want to put in the public domain give us a shout.

Documents relating to The Tank Field, Cork, now online

Elaine Byrne has posted a number of links relating to a decision by Cork City Council to acquire one of the few open spaces remaining in North East Cork City. You can view the information on her blog under a series of posted tagged “The Tank Field”.

Local journalists in Cork, lookin’ at you ‘ere…

The series is written in reply to a letter from the Board of Management of the school sent to the Irish Times following an opinion piece written by Dr Byrne on the matter. Links to correspondence and FOI documents are contained through-out.

There are ten points listed in the letter and Ms Byrne replies to each under a separete heading…

Continue reading “Documents relating to The Tank Field, Cork, now online”

Breen, O'Keeffe and Lowry claim €205.78 per day?

I’ve been doing the maths on the expenses documents Gav published last week. An interesting exercise…

As reported by the Tribune, the three biggest expense claimants over the last four years were Ned O’Keeffe of Fianna Fáil, Fine Gael’s Pat Breen and the independent TD Michael Lowry, so I’ve been looking at them to begin.

Before I go any further I wish to say I’ll be getting the median claimant and doing something similar to this at a later date too, before any one tells me I’m a populist gobshite for picking the top three (I knew that already).

Messrs Breen, O’Keeffe and Lowry all claimed within €10,000 of €300,000 for the period covering 2005 to 2008, mainly for the same things, so for the purpose of this post I’ll won’t be differentiating between them. Additionally, Gavin has since received documents for 2003 and 2004 – which he’ll post when he gets a chance – so I’ll be including their details from those years here too. Therefore the following numbers could from FOI documents for 2003, 2004, 2005, 2006, 2007 and 2008 for Pat Breen, Ned O’Keeffe and Michael Lowry. Feel free to challenge my methodology, or attempt to use your own, but I’m fairly confident in my maths (while welcoming confirmation/correction from those more qualified in the field)…

All of this is on top of the their salaries of around €100,000 per annum.

Over six years they claimed €1,319,070.49 (€1.3m) between the three of them.

In an average year they each claimed €75,110.21 (Seventy five thousand one hundred and ten euro, and twenty-one cent).

That works out at €205.78 every single day, [Annual figure divided by 365].

Which equals €1440.46 per 7 days. [Daily figure multiplied by seven]

However, I know most years the Dáil sits just 96 days per year, so that means they claimed: €782.39 per sitting day. [Total figure divided by 3 then divided by 576 – which is 96 multiplied by six]

…but I also know TDs say they do crazy hours in their constituency. If I take it that they’ve worked every day except Sundays and the 9 public holidays for all six years, the figure is €247.07 per working day. [365 minus 52 (Sundays per year) and nine (Bank holidays per year), then multiplied by six, all divided into the total expenses figure of €1.3m, then divided by three]

Finally, I’ve calculated that if on every one of those days, (six days per week for six years, without exception – no holidays, no half-days, no sick leave) they worked for 12 hours, they’d be claiming €20.59 per hour. [€247.07 divided by 12]

Note: the minimum wage is €8.65. Jobs Seekers Allowance is around €200 per week. And as stated, the above is on top of large salaries.

What do you make of that? That’s some amount of phone calls, and some serious petrol and lunch bills if you ask me.

You can view the document I used to calculate these figures here.

Two things I’d like to know: Why did Ned O’Keeffe claim €675 just last year for an ISDN line. Those lines are out-dated and useless for nothing except radio interviews… and very rarely used for those as a phone line is almost always more than sufficient. They’re slightly quicker than dail-up for browsing the internet, and far slower than an off-the-shelf broadband package, what’s he using the line for so? It certainly doesn’t sound like he used it for the interview with Newstalk I drew attention to a few weeks ago. Remember? The one where he waffled about politicians being value for money and expenses keeping corruption to a minimum… I wonder if he’d appear on morning radio to defend his expenses now? Hmmm.

Also, what do the constituency offices of these three lads look like? They spent about €52,ooo each on their constituency offices between 2003 and 2008, the offices all must be century-old manor houses in need of constant maintenance if they cost that much to keep upright, surely?

Footnote: The Sunday Tribune used the documents Gavin published here last week for their frontpage story and a double-page spread inside yesterday, taking the details to an audience larger than we could hope for here. Their report was followed up on RTÉ Radio too. I noticed said “some newspapers” had reported the information, if you spotted them in papers other than the Trib, do let us know. In fact, if you notice what appears to be one of our stories in any media, whether we’re mentioned or not, throw us a mail [tips AT thestory DOT ie].

We’re not interested in invoicing or shaming those who don’t credit us (though we’re no fans of the latter), just in seeing how the information disseminates. Thus far we’re aware of mentions in the Sunday Times, Irish Times, Daily Mail, Sunday Tribune, Irish Examiner, and of course Gavin’s appearance on RTÉ’s Prime Time. Not bad for a project that only started seven weeks ago, but we’d like to keep track…

Expenses documents for Mary Harney

Ken Foxe of The Sunday Tribune has uploaded files relating to expenses claimed by Mary Harney. You can check out details by clicking the links he has supplied on his blog.

There is a massive amount of information there, far too much for one person to digest (for example “part I” is 123 pages long). I encourage you to scan through it at random and email Ken if you notice anything interesting. He is available at Ken DOT Foxe AT gmail DOT com.

If you are a blogger then you may also consider linking to his post to get more eyes on the documents. The more eyes, the better.

I have noted some people, both online and offline, have said the expenses stories, because they are based almost solely on FOIs, are examples of “lazy journalism”. Completely wrong. Try sending a random FOI on expenses and see how far you get. Writing a good FOI requires more than guesswork, it needs an understanding of how the system works, an eye on what is coming down the line, and a decent steer.

Ken, and it seems now, various other journalists, are still on the expenses case, and it is not going to stop at some point in the morning. Ministers need to make these documents available for public inspection immediately. Until they do, Ken, and others, including Gavin, will continue to FOI them – perhaps simply on a point of principle. Right now the easy choice for all ministers is to throw their expenses to the public, anything is just delaying the inevitable.

And to the Opposition, Joan Burton is the only person to put her expenses online. What are the rest of you up to? Nearly all TDs expenses are already in the public domain because the papers FOI them annually, why not put them online yourselves as a symbolic gesture? Anything less and people might get curious.

Mary Harney expenses files – Ken

Note: If there are any spelling mistakes or errors in this post they are due to my recent return from a city centre pub. Your correspondent is currently chugging a pint of water in a desperate but undoubtedly feeble attempt to avoid a mother of a hangover. I was told it works but remain highly sceptical. I am likely to report the results tomorrow via my Twitter stream.

Be assured, all drinks were paid for from your correspondents own wage packet.

I will not be answering phone calls tomorrow.

Your correspondent recommends Paulanger, if available.