Auditors found "serious control weaknesses" in how the Department of Finance conducts its multi-million euro public procurement of goods and services, according to an unpublished internal report seen by RTÉ's This Week.
The report, which was finalised last November, concluded that only “limited assurance” could be provided that the department's public procurement function worked effectively.
Substantial changes were needed to put it right, the report's authors said.
The department spends millions of euro annually procuring consultancy, legal, and advisory services alone.
The most recent chairman of the Dáil's Public Accounts Committee, John McGuinness, told RTÉ's This Week the problems uncovered at the department were "unacceptable" – in particular the finding that there was an inadequate audit trail.
This would undermine the Comptroller and Auditor General's ability to later scrutinise whether tenders and contracts were above board, he said.
In two of the most serious findings, the internal audit team said it discovered significant shortcomings in the reporting and monitoring of procurement activity within the department and that in the "vast majority of cases" key purchase orders were only initiated after invoices were raised.
The department's own policy guidelines insist that all payments over €25,000 must be reviewed weekly, along with a random sample below this threshold, while all new tenders and purchase orders must also be recorded.
However, the auditors discovered this was not taking place, and that there was "no documented evidence of adequate monitoring of procurement activity within the department" despite the department having appointed a new procurement officer.
DCU lecturer in procurement and supply chain management Dr Paul Davis said that the accurate recording and monitoring of procurement activity was an essential pre-requisite to taking control over spending at the department.
Speaking to RTÉ, the procurement expert also said that timely purchase orders were "very critical" to the proper management of contract costs.
Without them, he said all manner of serious problems arise such as inadvertent "drift", which involved spending vastly more than was allowed under a contract, and "scope creep", which is the purchase of goods and services that were never actually included in the original contract.
The fact that this was occurring as a risk in the vast majority of the department's contracts was a concern, he said.
Among the other shortcomings that factored into their 'limited assurance' rating, the auditors also say that a complete and accurate central register of all procurement activity was essential to ensure transparency but that at the time of audit, which was conducted in the middle of last year, there was no complete listing of on-going procurement activity in the department.
Responding to the criticisms in the report, the department said it does now have a register as required by the audit team.
On the serious control weakness in relation to reporting and monitoring - it accepts that reporting structures did require improvement and it said this is being enhanced under a revised procedures document.
On the other serious shortcoming, relating to the late issuing of purchase orders, management said it issued two notices to staff members telling them what best practice was, and that it would be expected that staff should adhere to this guideline in the future.
Likewise, the department said the audit trail would be improved to include that all tender documentation, tenders received, and correspondence between successful and unsuccessful bidders be retained for later audit.