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Eircode property ID system to cost 38m euro, report finds

Published 29/09/2015

The audit found costs increased substantially relative to the estimates
The audit found costs increased substantially relative to the estimates

The Eircode system to uniquely identify every property in the country is estimated to cost 38 million euro.

Dogged by delays since the plan was announced in 2006, it is one of a litany of big spending projects that the Comptroller and Auditor General (C&AG) has detailed in its latest report on Government spending waste.

The audit found costs increased substantially relative to the estimates and the watchdog also warned that it is not clear the perceived benefits will ever materialise.

Six consultants were hired without a proper, open, competitive tender, the report said.

Among them were three retired public servants - one earned 137,000 euro, including for contract extensions with fees increasing by two-thirds; another earned 145,000 euro; and the third earned 38,000 euro even though he or she was only contracted to be paid 8,000 euro.

The most damning finding by the C&AG centred on how the Eircode was intended to turn a profit for the state: "It is not clear that benefits to the value projected will be achieved as a result of the implementation of Eircode."

The audit found that none of the cost benefit analyses carried out for the Department of Communications, Energy and Natural Resources were based on the address-specific code system introduced earlier this year.

Five different start dates were announced for Eircode, from 2008 to earlier this year.

The C&AG also warned that the long-running groundwork involved some "unsatisfactory procurement".

The Eircode report was one of 25 audits released by the C&AG on Government spending.

Other audits reviewed the cost of consultants and legal advisers during the bank recapitalisation programme.

Some 149 million euro was paid out by the state to 19 firms.

Among the payments were 33 million euro to law firm Arthur Cox, 23 million euro to Blackrock Financial Management, 21 million euro to Ernst and Young, and 13 million euro to KPMG.

Payments below the 10 million euro mark included 9 million euro to Goldman Sachs, 8 million euro to PricewaterhouseCoopers, 7 million euro each to Merrill Lynch and NM Rothschild & Sons, and 5 million euro to Boston Consulting Group.

The biggest payments were by the Central Bank - 23 million euro to Blackrock and 21 million euro to Ernst and Young.

The Department of Finance had one single bill of 19 million euro to Arthur Cox.

The calamitous set-up of Irish Water was also looked at. The C&AG found 1,099,545 households have registered with the utility while 422,455 homes have not.

In another inquiry, five schools have been reported for suspected abuse of the free meal scheme, the C&AG said.

Irregularities were identified in six schools, including 802,000 euro of irregular claims or payments made by two schools and 102,000 euro in a third.

Schools either inflated pupil numbers, spent the food money on other items or did not disclose where other money came from for the scheme.

Five of the schools have been reported to the Garda and a prosecution is pending in one, the C&AG report said.

The audit found 151,292 pupils were put forward for the programme at a cost of 32 million euro, with a 1.9 million euro surplus reported for 2014.

The scheme was intended to provide a breakfast or snack worth 60 cents, a lunch or light deal worth 1.40 euro and a dinner or hot meal costing 1.90 euro to disadvantaged pupils or those with special needs.

In the health sector the C&AG found insurers owed 290 million euro to the State for patient treatment in hospitals in 2014.

The C&AG report into the payment of patients' bills found delays in bills being paid while the value of claims being queried soared by 69%.

But some of the issues raised were not solely the responsibility of insurance companies as consultants were also found to be slow at signing off on claim forms for patients' care.

The C&AG warned: "Timeliness of sign off by consultants varies greatly by hospital, ranging from a high of 163 days to a low of 15 days at December 2014".

Cosultants are obliged to complete the forms within 30 days but the average wait for the senior doctors to sign off was 58 days - 68 in Health Service Executive hospitals and 47 in voluntary hospitals , according to the C&AG audit.

Some 172m euro was owed to hospitals under the control of the Health Service Executive and 118m euro to voluntary run hospitals at the end of 2014.

The C&AG said: "There was avoidable uncertainty in hospitals about changes to the charging regime for private patients following the commencement of the new legislation in January 2014."

It added: "Delays in collecting income due from private health insurers means that the Exchequer is effectively meeting the funding gap at hospitals until payment is made."

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