Major concerns have been expressed about financial controls in a scheme run by the Department of Social Protection, according to an unpublished report obtained by RTÉ.

Internal auditors said they had "high concerns" about how funds were allocated, and the lack of follow-up inspections or monitoring of the scheme, which is supposed to help social welfare recipients get back to work.

The audit team discovered that more than one-fifth of certain types of payments were made to people or groups who did not deserve it. And they found that thousands of euro had been spent on clothing, staff costs, travel expenses and one-to-one mentoring - and other payments which the auditors said were ineligible.

The report, which was obtained by RTÉ's This Week radio programme, into the Activation and Family Support Programme (AFSP), said the scheme was beset by "numerous specific control weaknesses" over how monies were spent and how spending was monitored.

It said the problems with the AFSP posed a "financial and reputational risk for the Department" if left unchecked. The department insists they have moved to fix all the problems identified, since the report was carried out in recent months.

The AFSP is a non-statutory programme run by the Department of Social Protection. It funds proposals, usually on a once-off basis, to cover the cost of education and training supports for people on social welfare, mainly in conjunction with other employment organisations and agencies.

More than €7m has been paid out under the programme over the past five years. The scheme pays out sums of money above €5,000 and below €5,000. The sums above €5,000 require approval by the Department's Employment Support Services (ESS) division which runs the scheme, but sums below this can be approved by a senior official after a funding proposal.

When it examined a sample of funds paid out under the €5,000 threshold, the auditors found that more than one fifth (22%) of this had been paid out to ineligible recipients.

And when they examined a sample of funds paid out over the value of €5,000 - which had been approved at a high level in the Department - it also found that significant overpayment had occurred. In total, it found that 9% of these payments had been paid out to ineligible recipients.

The audit team found that thousands of euro had been spent on clothes, ineligible staff costs, and travel expenses - even though these were not covered under the programme. The report does not specify which or how staff benefitted from these payments, or what costs they incurred to claim these payments. 

It also criticised the lack of formal checks and validation of how money had been spent once it was allocated.

Auditors found that the operating guidelines for the programme did not include any obligation for staff at the Department to conduct formal control checks or inspections on the organisations which were being funded.

The report concluded that there were "inconsistent control procedures across the Divisions and these, individually or combined, could lead to fraud and error".

Of 19 sampled cases had "no evidence that monitoring visits or inspections were carried out in 18 cases".

Sean Fleming TD, the chair of the Dáil's Public Accounts Committee, told RTÉ he was "deeply concerned" with the findings of the report, which he said was "riddled with financial and reputational risks for the Department".

He said there were "far too many people" with the authority to issue payments under the scheme, and it was time to consider the future of the scheme.

Because there was so little evaluation of how the money was spent, the auditors also warned there was a risk that some of the recipients under the scheme could be getting money from other state funding providers for the same thing and that there was an obvious risk of duplication.

The auditors looked at how the funding was handled by local managers in 26 regional areas across the country and they found that a significant number do not forward a copy of funding approvals up to the unit of the department which is actually responsible for this money - and so there was no second sight on a lot of this money - and the auditors said that this also exposed the department and the scheme to a risk of fraud, if this documentation was not available for reconciliation purposes.

The department said that the audit had been carried out in August, and that it had accepted all of the recommendations made.

"Following the completion of the report the existing guidelines were reviewed and updated having regard to the commitments given in the IAU report. The revised operating guidelines were finalised and issued on 23 January 2018 and a review will be undertaken to ensure that the new guidelines are being implemented within six to nine months. IAU has scheduled a follow-up review of the Activation and Family Support Programme for the latter part of 2018," the department told RTÉ. 

"All the changes as proposed have been fully implemented. The new operating guidelines for the Activation and Family Support Programme were introduced on 23 January 2018," they said.