The director general of Fás, Rody Molloy, has said that his organisation has suffered no losses from fraud or mismanagement.

Mr Molloy was speaking after the Irish Times revealed an internal audit report which described supervision of one €19m training scheme as 'out of control financially'. He also said that a brand new potential incident of fraud has been referred to the gardaí for investigation.

Opposition politicians have described the revelations as 'alarming' and a scandal.

Over the last two years, Fás has faced serious questions about management of its €1 billion a year budget.

The latest controversy centres on an internal audit report obtained by the Irish Times examining a €35m in-company training scheme.

Substantial advances were paid to some external contractors doing the training work - but auditors said there was no operational requirement for some advances.

It alleged that this exposed Fás to significant risk in the event that projected training volumes were not achieved.

This turned out to be the case in a number of instances - with possible overpayment of €1m.

But Mr Molloy says Fás suffered no financial loss. He says all incidents of potential fraud are taken seriously.