UNIVERSITY MISLED THE SPENDING WATCHDOG
Revealed: the damning audit over secret payments UL did NOT want you to read
THE University of Limerick misled the Comptroller & Auditor General, State bodies and RTÉ over unauthorised severance payments worth more than €1.2m, an internal audit reveals.
The audit, obtained by the Irish Mail on Sunday, also shows breaches in procurement at the university.
It is the latest development in an ongoing scandal over alleged inappropriate spending at UL, brought to light by three female whistleblowers. Four independent reports have attempted to unravel a number of governance and finance issues at UL.
Two of the women were suspended on full pay for more than two years. Although UL’s new president, Dr Des Fitzgerald, has lifted their suspensions, the pair have yet to be reinstated.
A Deloitte audit which UL refused to release under Freedom
of Information legislation is one of the four reports.
The MoS has seen this audit. It found 42 instances of major concern, including 16 termination payments that Deloitte deemed an ‘extreme priority’.
An extensive trawl through UL’s correspondence with major stakeholders found that a number of its most senior staff provided ‘inaccurate’ and ‘incomplete’ information to the C&AG, the Department of Education and Skills, the Public Accounts Committee, the national broadcaster and even UL’s own legal advisers.
A copy of the confidential audit, carried out over a two-month period during which 20 key staff were interviewed, has now been circulated to those named bodies, as well as the Higher Education Authority, and is listed for scrutiny at a forthcoming PAC hearing.
The audit shows that former UL president Don Barry provided ‘inaccurate’ or ‘incomplete’ information to the Department of Education on three occasions, while Tommy Foy, UL’s director of human resources, provided ‘inaccurate’ or ‘incomplete’ information four times to the C&AG.
Mr Barry told auditors that he had invested authority in Mr Foy to make decisions regarding severances. The president emeritus
No mention of contracts after job termination
also said he did not brief the Governing Authority, UL’s highest decision-making body, on staff terminations.
Mr Barry disclosed only one termination to the top board – it related to a member of UL’s own Governing Authority who received €177,543 following an investigation of gross misconduct. Mr Barry was the sole member of the disciplinary panel in this case.
None of the severance agreements examined had received approval from the Department of Education, UL’s own finance committee or UL’s Governing Authority, and in one case had not received approval from the UL president himself.
One agreement was backdated before it was presented to the C&AG as a sample of the agreements on file. In several cases, legal advice was sought formally after agreements had already been signed, the audit states.
Specifically, both Mr Barry and Mr Foy sought to mask the fact that UL offered substantial consultancy contracts to two employees at the same time as they received ‘excessive’ redundancy packages – against departmental guidelines – and, furthermore, without any tender process being applied.
A total of €815,838 was received between both men – director of lifelong learning at UL Dermot Coughlan and UL’s former financial controller John Fox. The audit found that in the case of both men’s consultancy firms, it was not clear precisely what work was performed during a three-year period.
This issue is now the subject of another report being conducted by Dr Richard Thorn for the Higher Education Authority.
The audit shows Mr Foy wrote to UL’s legal advisers on February 8, 2012 seeking advice for the ‘exit’ of both men when, in fact, their packages had been signed by UL in November and December 2011.
Mr Foy wrote: ‘I am exiting two senior staff from UL. Their performance has been unsatisfactory for many years and the opportunity now presents itself for UL to enter exit arrangements with these staff.
‘The alternative is for UL to have two highly paid staff on the payroll for the next 6-7 years or to pursue dismissal on grounds of nonperformance which is likely to be quite costly and the individuals probably getting an award from the courts...’
However, in discussions with auditors, President Emeritus Barry indicated that the reason for the termination of Mr Coughlan ‘was linked to a strategic realignment of roles to university needs’, and ‘was not a performance related termination’.
UL’s legal advisers were not told that the two men were being retained on contracts after their termination.
The auditors found Mr Foy’s correspondence to the C&AG was not ‘wholly accurate and complete’ as there was no evidence that severance payments were formally approved, as he indicated. Mr Foy also indicated these payments were compromise agreements, but to auditors they were presented as severance agreements prepared by HR. In a letter to the C&AG from Mr Foy on May 20, 2015, he said there were ‘performance issues’ relating to both men. The audit deemed this inaccurate.
On the same date, the C&AG was informed the payments were a saving as the individuals were not replaced. Mr Foy did not detail awards of contracts to consultancy companies for both individuals as part of ‘stepping down agreements’.
When the C&AG requested copies of the ‘compromise agreements’, Mr Foy told them on September 14, 2015, that a search yielded only signed letters, not the agreements.
UL backdated Mr Coughlan’s agreement, then Mr Foy forwarded a copy to the C&AG. Mr Fox’s was not forwarded as he never signed it, which the C&AG was not told.
Mr Barry, who stepped down last May after a 10-year term as president, informed the Department of Education on March 28, 2017, that UL entered compromise agreements with four individuals due to disputes or disciplinary issues – which was incorrect in one case.
In the same letter, Mr Barry stated that UL followed the six elements of good practice in offering severance packages – including holding documented legal advice on agreements, ensuring signatures from all parties, and disclosing payments in UL’s annual financial statements.
Again, this was deemed ‘inaccurate’ by the auditors.
In a letter on April 20, 2017, Mr Barry stated that Mr Coughlan’s consultancy firm, Linndubh, ‘has been periodically engaged by the university to provide consultancy services on a number of externally funded projects’.
The audit highlighted that this ‘does not fully articulate the continuous
Inaccurate and incomplete information
relationship in place’ between March 2012 and February 2015.’ Mr Barry declined to comment to the MoS this weekend.
A C&AG spokesman told the MoS last night that ‘following an audit or examination, the C&AG may decide to report any matters of concern to Dáil Éireann, which are subsequently subject to examination by the Public Accounts Committee. He does not comment otherwise on matters relating to individual audit clients’.