Remember Kevin Cardiff and the €3.6bn error in the national debt?

In what was one of the most impressive displays of government at work, last November 2011, the Oireachtas Committee of Public Accounts wasted no time after a €3.6bn error was uncovered in the calculation of Ireland’s General Government Debt; within two days of the revelation, the Committee hauled before it, the three organisations involved in the blunder – the CSO, the NTMA and the Department of Finance. It quickly became apparent that it was the Department of Finance which was responsible for the collation of the General Government Debt statistic and, in addition, the NTMA had warned the Department of Finance about the error on several occasions. So it fell to the Department to explain what had happened. Remember this wasn’t €3.6bn in cash that had gotten lost down the back of a sofa but was an accounting error which showed Ireland’s debt to be 2% greater than was in fact the case.

But having hauled the protagonists in lickety-split on the 3rd November 2011, which was impressive given the error was only revealed on 1st November, it was particularly disheartening to see the Committee fobbed off with responses which deflected investigation into the long grass. The Secretary General at the Department, Kevin Cardiff had testy exchanges with deputies and senators and said that there would be an internal review completed by the end of the month – that is, by the end of November 2011 – and there would be a separate external review. In both cases, it was, astonishingly Kevin who was drafting the terms of reference and selecting the reviewers which prompted unease amongst committee members, but not enough so as to write to the Cabinet demanding external responsibility for the reviews.

In any event that was the end of the matter back then. But the end of November 2011 came and went, as indeed so did the end of December and still no review was forthcoming from the Department. So the Committee wrote to Kevin Cardiff on 4th January 2012, seemingly asking for an update. The response from Kevin is here. The relevant extract is reproduced below.

So what could probably have been an inexpensive expedient review carried out by the Comptroller and Auditor General under the auspices of the Committee, has now been dragged out to what looks like five months – three months for the internal review and five months for the external review – with costs unknown. And the €3.6bn error has grown to €3.719bn, according to the CSO.  All we wanted to know is what checks the Department has to ensure the accuracy of its debt calculations and that appropriate checks are in place to prevent the recurrence of such errors, and why the communication from the NTMA about the error was not appropriately responded to. It seems incredible that it will take until March 2012 for an external review to be produced. What started out as a badge of honour in the performance of the public accounts committee no longer looks so worthy.

Meanwhile Kevin shuffles off to the €276,000 plum role at the European Court of Auditors in Luxembourg in February 2012, following intense lobbying by the Government for the appointment, despite widespread opposition.

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