Aubrey Magill, sales and marketing manager of the Careers and Occupational Information Centre (COIC), a part of the Department of Employment, is suspended pending the outcome of disciplinary proceedings.
Based in Sheffield, the COIC publishes booklets and leaflets for schools and careers offices around the country. It also produces Newscheck, a monthly magazine for school-leavers and careers teachers, an annual directory, Occupation, and joint publications with the BBC.
The inquiry was launched after Marcel Anciano, a COIC project manager and commissioning editor, complained about the award of the division's pounds 350,000 public relations and marketing contract to a small agency in Derbyshire. He suggested that departmental guidelines on the tendering out of contracts had not been followed.
His query coincided with a letter from a former member of COIC who left to set up his own rival operation, accusing Mr Magill and senior colleagues of employing unfair tactics against him.
In her reply to the letter, dated 6 May, Valerie Bayliss, head of youth and education policy at the Department of Employment, wrote: 'You will be very aware . . . that every effort is made to maintain the Civil Service's reputation for integrity and impartiality. As you know, we were already aware of the possibility that problems had arisen and thought it necessary to look not only at the award of the contract to the marketing-public relations agency . . . but at all contracts placed by COIC during 1993.'
Ms Bayliss said the investigations 'were carried out by a joint team from this department's Internal Audit and Management Services. They found breaches of the departmental procedures that are intended to safeguard public money. This should not have occurred.'
As well as marketing and PR, the other contracts under investigation are understood to cover publishing, printing and distribution.
In a recent parliamentary answer to John Hutton, Labour MP for Barrow and Furness, Ann Widdecombe, Under-Secretary of State for Employment, said the COIC had placed contracts and orders worth pounds 2.2m. Mr Hutton's attention had been drawn to the issue by the former staff member, who was one of his constituents.
In another answer to Mr Hutton, the minister said: 'I can confirm that an investigation into the award of contracts by officials in the Careers and Occupational Information Centre has been held. The outcome is being dealt with under the department's disciplinary procedures.'
Department of Employment sources confirmed Mr Magill had been suspended. A spokesman said: 'Investigations are still under way . . .'