Senior management in FÁS interfered with an Internal Audit investigation, the former head of that audit section has told the Public Accounts Committee.
Committee Chairman Bernard Allen said this was contained in a letter it had received from a senior FÁS official, a Mr Corcoran.
He said this made for disturbing reading.
The letter also said that the executive head of a semi-State body, with a budget of €1bn, had been able to face down a sub-committee of the Board, and to delay a report from Internal Audit being presented to the Board and to the Comptroller and Auditor General.
Mr Allen said these issues had to be addressed by FÁS and the Department of Enterprise as it indicated flagrant breaches of corporate governance.
Earlier, Mr Allen reprimanded the Secretary-General of the Department of Enterprise, Trade and Employment for what he said was an unacceptable delay in providing a report on FÁS.
Mr Allen said there was no real urgency in the way the Department was dealing with an investigation into one FÁS programme, on which €126m had been spent.
Sean Gorman, said an outsider, unconnected with either his Department or FÁS, had been brought in to do this report, which was almost ready for the committee.
Mr Allen said he did not accept the explanation and told the Department to get its act together.
He said the PAC had problems getting at the truth of what had gone on in FÁS and the Department was dithering and always a step away from action.
The Committee was being hampered by the ineptitude of the Department, he added.
The Oireachtas Public Accounts Committee has been told about some lavish entertainment bills run up by FÁS, under the former director general Roddy Molloy. It emerged that at one lunch 64 percent of the bill was for alcohol.
Committee chairman Bernard Allen raised some of the smaller bills paid by FÁS for so-called business expenses
He was told Mr Molloy had approved all that. But FÁS did have the list of those who got free tickets for a Robbie Williams concert.
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Some of them may have been in FÁS or the Dept of Enterprise at the time. But no reason was given as to why the tickets were paid for by FÁS.
Separately, the severance payment given to the former Director-General of FÁS, Roddy Molloy, cannot be set aside, according to advice given to the Department by the Attorney General.
Mr Gorman told the PAC that in November, Tánaiste Mary Coughlan had ordered a review of that severance package.
He said the advice was that there was no legal basis to set aside that deal.
It has emerged that FÁS staff who usually take up to three months unpaid leave in the summer to care for their children have been told they may not be able to do so this year because of the Government moratorium on recruitment.
SIPTU Official Brendan O'Brien said that under the ‘Term-Time’ scheme, up to 200 predominantly female lower paid staff members took unpaid leave over the summer.
Temporary staff was recruited to replace them during their absence on this family friendly leave arrangement.
However, this year, FÁS has warned staff they cannot do so because of the government ban on recruitment.
SIPTU say they proposed that the temporary vacancies could be filled by unemployed people on a cost-neutral basis - as the permanent staff would not be receiving salaries, and the unemployed people would not be claiming welfare.
A spokesperson for FÁS said they around 100 staff had applied for term time leave.
When assessing the situation for 2010, FÁS consulted with the Department of Enterprise Trade and Employment.
The Department did not block FÁS from allowing such leave arrangements.
However, it had advised FÁS that it may not "back-fill" positions without specific sanction from the Department of Finance due to the moratorium on public sector recruitment.
FÁS pointed out that a number of operational issues arise because of this, first, term time coincides with a period when most staff members take annual leave.
Second, staff numbers have been cut by 220 since last year, at a time when they have experienced a simultaneous 'dramatic increase in clients requiring their services.
Because of these factors, FÁS has decided that in the interests of its clients, it is not in a position grant term time this year.
SIPTU called on the government to reverse what it called an unjust and immoral decision.
A Department of Finance spokesperson said exemptions from the moratorium on recruitment would be examined on a case by case basis.
However, other sources suggested that in the current economic crisis, derogations were unlikely, and that organisations would be expected to manage within their existing resources.
