Fas Internal Audit INV 137

{Internal

Audii

INTERNAL AUDIT REPORTCorporate Affairs

i

Ref.: INV137

18 May 2006I / 68

FAS Corporate

Affairs

Investigation

1. Introduction

Internal Audit was made aware

of

an anonymous letter containingallegations relating to the Director

of

Corporate

Affairs

in October 2004.The letter had been passed to the organisation from the Department ofEnteiprise Trade & Employment where the original recipient was the then. Minister, Ms Harney. Internal Audit commenced its investigation in early| November 2004. The following report details the findings

of

InternalAudit on this matter and in relation to matters, which wereraised/identified during the investigation work.

2. Background and methodology

The nature of the allegations were such that they covered a considerablenumber of years and specifically mentioned the last 3 advertisingagencies with whom FAS has had contracts; Helm O'Connor O'Sullivan,Euro RSCG and AFA O'Meara. Internal Audit decided in the firstinstance to examine Corporate

Affairs

activity from the year 2000 upuntil the end

of

£004.From the outset of the investigation it was recognised that the allegationswere

of a

highly sensitive nature and that they were potentially extremelydamaging both to the individual named and to the organisation as awhole. Internal Audit decided that the investigation would be conductedby two

staff,

the Director Corporate Governance / Internal Audit and theManager IT Audit & Support. The initial phase

of the

investigationinvolved an internal examination of transactions relating to the two mostrecent advertising agencies, Euro RSCG (contracted between November2001 and November 2003) and AFA O'Meara (contracted fromNovember 2003 to date).The Director

of

Corporate

Affairs

was interviewed twice in November2004 regarding the specific allegations in the letter. Members

of staff

working in the Corporate

Affairs

Department were also interviewed by

18 May 2006 2 /68

Accounts Payable material

from

the years 2000 and 2001 was supplied toInternal Audit in January 2005 and was thoroughly examined.In January 2005 it was agreed that Internal Audit would commenceinterviews with a number

of

individuals, external to FAS, who had eitherprovided services directly to FAS i.e. the contracted advertising agenciesor who had provided services to FAS via these advertising agencies. |Arising from its initial meeting with the current advertising agency (AFAO'Meara), Internal Audit was approached by the Managing Director ofthat agency in relation to serious concerns he had regarding the operation

of the

FAS contract. In due course, statements were provided by anumber

of staff from

AFA O'Meara. The content of these statements wasinvestigated in detail by Internal Audit. 'Interviews were also held with anumber

of

senior ex-employees of the previous FAS advertising agency(Euro RSCG) but these individuals were unwilling to make detailedstatements to Internal Audit at the conclusion

of

discussions. A number ofindividuals who had provided services to FAS via the current advertisingagency were interviewed and where necessary, statements were taken.Internal Audit attempted to interview a

sufficient

number

of

peopleexternal to FAS bearing in mind the sensitivity of the allegations.Arising from the examination

of

material from 2000 and 2001, whichlargely related to the interaction between Helm O'Connor O'Sullivan andFAS, interviews were held with two former staff members

of

Corporate

Affairs

who now work elsewhere in the organisation. Statements werealso taken from these individuals.On the basis

of the

work completed up until that time, Internal Audit metwith the Director

of

Corporate

Affairs

in late April 2005 and providedhim with copies

of

material which had arisen during the investigation thatrequired either comment or clarification. This material includedstatements, correspondence, copy invoices and other schedules. InternalAudit then met' with the Director

of

Corporate

Affairs

in May 2005 todiscuss these issues. The Director

of

Corporate

Affairs

brought asubstantial amount

of

information to this meeting and arising out anumber

of