AlThough it was "hairdos, pedicures or manicures" that eventually undid Fás director general Rody Molloy, the real and lasting damage to the state jobs agency was done when an anonymous letter arrived on the desk of Mary Harney, in May 2004.

This letter, the author of which Fás says cannot be identified for legal reasons, detailed major irregularities in the way the Fás corporate affairs section bought in services from outside advertising agencies, consultants etc. The cost ran to millions of euro. The corporate affairs department was headed by Greg Craig at the time.

An investigation by Fás's internal auditors revealed a catalogue of irregularities which the agency admitted was "extremely damaging" to the organisation. These included:

? The establishment by Craig of a separate jobs website, Jobs Ireland, advertising Irish jobs to workers around the world. He did this even though Fás had already established a similar website in-house, Jobs Bank.

Jobs Ireland was eventually closed down after little more than a year at a cost of €1.7m, approximately €1m more than Fás should have paid, the internal audit report noted.

? The failure to put out to tender advertising contracts for the annual Fás Opportunities event. One sales contract included an incentive bonus payment of €65,000, though the contract was signed after the event.

? The receipt by Greg Craig of personal financial advice from a firm of consultants he had hired himself.

? The instruction of advertising agencies and consultants who were awarded Fás contracts to hire particular individuals known to Craig.

? The placing of Fás advertising to the value of €100,000 in a local newspaper, the Lucan and Blanchardstown Gazette, without any explanation.

? The awarding of a €250,000 sales contract to a named individual for the Fás Opportunities 2002 event, even though the individual had received the contract before she tendered for it. This was the case in several other contracts awarded.

Other allegations flung in Craig's direction are that he sought tickets for sporting and other events from a newspaper in which Craig had booked €25,000 worth of advertising. In reply to this, Craig said he had been asked to secure the tickets by "other parties within Fás and generally at a level more senior to him".

Overall, while the auditors discovered an almost total disregard for procedures and tendering processes on contracts worth millions, the report did not find any evidence that Craig was involved in any fraud. The report did not find any evidence that a company that had a contract with Fás "had an arrangement whereby expensive goods are sent to Craig's home".

Craig was disciplined by Fás. The state jobs agency has since said that, for legal reasons, it cannot release details of the action taken against Craig.

Ironically, last week's decision finally to suspend Craig on full pay has nothing to do with the above audit report, which covers the years to 2005. The suspension has to do with "other issues" that have arisen since and are related to the controversial Science Challenge programme.