Seán Sherlock (Cork East, Labour) | Oireachtas source

I will stay on the accounting issue because that is the issue of the day for the hundreds of providers that have contacted us. It was raised as an issue last week. I thank Dr. Brooks and Ms Fleming for engaging with me last Friday morning. I appreciate that. I also thank the Secretary General who took my call last week as well.

I will quote from a synopsis of the issue that I asked one provider to provide me with.

I believe he speaks for every provider who is dealing with the accountancy issue. With the Chair's permission, I will very briefly refer to his email. He says that any owner who has an accounting period different from that of the Department of Children, Equality, Disability, Integration and Youth, as most crèches large and small do, must now produce a second set of accounts each year to match the accounting period proposed by the Department. Yesterday, providers got a note from the Department saying that all they needed to do for the year ending in August 2023 was to provide a trial balance. The provider says this is very disingenuous as a trial balance is, in fact, a full set of accounts. I know reference has been made to trial balances. Could that point be addressed in the Department's response? The provider continues to say that anybody who did not have an accounting background would have thought this was a compromise. The sender of the email is an accountant and assures me that it is not. For the 2023-24 year, the Department has produced a working Excel spreadsheet that most providers will need to use to produce the Department-specified accounts each year. Most providers will now have to employ a bookkeeper as the sheet is very technical and knowledge of accounting is required.

In the core agreement, there was no mention of accounting period requirements and everyone assumed that they could use their own accounting periods when providing the figures the Department would look for. This provider says that under no circumstances should a funder insist on a different accounting period without this being contractually required and a longer lead-in time being given to allow providers to prepare. Owners with multiple crèches now have the financial burden of producing a full set of accounts or trial balances for each of their centres and this is totally unsustainable. He says that most multiple crèche owners will have centralised bank accounts for income and costs. The providers have asked how this will work but no solution had been provided up to the time of the email. That was this morning because I spoke to him when I was coming up on the train. When he emailed me, I rang him back straight away. He sent me a note within an hour so that is the situation as of a number of hours ago. He says the whole process seems to be totally ill-thought out.

According to the email, accountants cost a minimum of €100 to €150 per hour and this will be a very costly exercise for all providers but especially for small and medium-sized providers that do not have economies of scale. The provider says that, in a nutshell, the main problem is the production of multiple accounts to address this different accounting period, resulting in a minimum of two sets of accounts each year for each provider. He says it is also pertinent to again mention that different accounting periods are not specified in core funding contracts and that, even if they were, it would have been raised as a huge issue long before now.

That crystallises the issue for me and, notwithstanding our engagement here, I do not sense any concrete message to the sector that this issue is being addressed. The witnesses have used words like "review" and said they are looking at it and there is no question but that they are sympathetic to the challenges providers face. However, what those providers need to hear from the Department, the Minister and the Government is some language dealing with the lead-in time and the resource issues. It seems the Department is reviewing the sustainability fund with a view to its potential use in this regard and it has said it might look at targeted supports. Is there anything more it can offer by way of language that deals with this issue and moves the narrative on? Another person who contacted me said that the work they will now have to do is basically unpaid work. They are happy to receive core funding but finding that time is taxing. As other speakers have said, it is time providers just do not have. The Department fully understands this and is absolutely engaged on the issues. There is no question about that. What I am hoping for is hopeful language around getting over this hurdle, making the system as seamless as possible and reducing the cost and burden on people.