Mr. David Cooney:

I thank the Chairman for inviting me to assist the committee in its consideration of the 2012 Appropriation Accounts for the Department of Foreign Affairs and Trade and also Chapter 13 of the Comptroller and Auditor General's 2012 report on official development assistance. I introduced them earlier but I am joined by colleagues who have particular knowledge of the aspects of the Department's work that may be helpful to the committee.

As I said earlier, I want to place on record my appreciation for the support of the committee in the appointment of a chief financial officer, which is a very positive development for the Department. I would like to thank also the Department of Public Expenditure and Reform for facilitating the creation of this post. Mr. Conlon will head an integrated departmental finance unit covering Votes 27 and 28, and I am confident that his engagement will improve the coherence, continuity and efficiency of the finance function across the Department.

I know the committee has been supplied with some general briefing on the Department and its activities. This material provides a factual summary of the main areas of departmental expenditure and receipts in 2012, and I do not propose to introduce it orally. Instead, it might be helpful if I briefly address some important developments since I last appeared before the committee in December 2012.

The Department has prioritised the national effort to rebuild Ireland's international standing after the financial crisis. Considerable progress has been made since we last met. Our successful EU Presidency in the first half of last year, together with our exit from the EU-IMF programme, was a major milestone.

The Joint Committee on Foreign Affairs and Trade in its recently published report on the contribution of the Department of Foreign Affairs and Trade to economic recovery kindly acknowledged our efforts. To maintain this positive momentum internationally, the Government has decided to expand the diplomatic network with the addition of eight new missions, including five new embassies and three new consulates general to be established in locations across south-east Asia, Europe, Africa and the Americas. The expansion is designed specifically to assist in promoting our economic and commercial interests abroad and takes account of the recently published review of the Government's trade, tourism and investment strategy.

The recently announced year-long programme of ministerial-led events targeting trade and investment for Ireland in 2014 will be supported strongly by the Department. The programme includes the Government's St. Patrick's Day Promote Ireland programme of international activity which will see 27 Ministers taking part in more than 100 business events and 80 high level political meetings in 35 cities across 23 countries.

Since our last meeting, we have seen the successful conclusion of Ireland's chairmanship in office of the OSCE, which culminated in the hosting of the OSCE ministerial council meeting in Dublin in December 2012 and the commencement of our term on the United Nations Human Rights Council. The budgetary and human resources situation facing the Department continues to be challenging, as is the case throughout the public service. The combined allocation of the foreign affairs Votes 27 and 28 continues to decline. It was more than €1 billion in 2008 and is €691 million in 2014, which is a reduction of 36%. We continue to face severe difficulties due to staff reductions. I am pleased to report that we have recently concluded a successful recruitment competition for third secretaries, which is the entry level grade for the diplomatic service. This is a welcome development which will assist us greatly to meet the challenge of establishing the eight new missions in the course of the year.

Vote 27 is directed to international co-operation. The annual overseas development aid allocation represents an ongoing and very significant Irish contribution to international development. Our last discussion with the committee took place against the background of a serious case of misappropriation of Irish Aid funds in Uganda, which was uncovered by the Auditor General of that state. A team of auditors from the Department's independent evaluation and audit unit was sent to investigate, and its report was subsequently made public. A key finding of the investigation was that the fraud was sophisticated and elaborate, involving an exceptionally high level of collusion at senior level which could not reasonably or normally have been anticipated. The report also highlighted a number of important areas in which Irish Aid's own management control systems needed to be strengthened.

This led to my request early last year for the conduct by the Department's evaluation and audit unit of a full review of all our internal control and risk management systems across the bilateral aid programme to ensure risks were being identified and managed appropriately. This was a major undertaking. It has been completed in respect of all nine key priority countries. All of the recommendations made in the report of these audits have been accepted by management. The report and management's response have been published online in compliance with good practice. The report was positive overall but highlighted a number of areas in which improvements are necessary to strengthen further our systems of management and financial control. I am pleased that actions have already been taken by us to strengthen our systems. This process will continue.

I am pleased to note that the final report into the misappropriation in Uganda has been published on our website. The report concludes that all of the recommendations made at the interim report stage have either been fully met or are the subject of satisfactory progress to address issues. The report also includes an assessment of systems and internal controls now in place in our mission in Uganda and concludes that these are good and appropriate for the programme. I visited Africa twice last year in follow-up to the reported fraud. I went to Zambia in February where I met heads of our development missions to discuss the lessons of the fraud for the development programme and stress the need for vigilance. In July, I visited Uganda itself where I met local officials and embassy staff and looked at aspects of the programme.

During the first half of this year, our aid programme is undergoing a searching peer review by the OECD's Development Assistance Committee. This arises approximately every five years and provides a valuable internationally benchmarked and independent assessment of the programme against best international practice. It also serves as a mechanism of public accountability and institutional learning. The result of the review will be published later in the year. The committee will have a great interest in its findings. I appreciate the committee's involvement with the programme and its visit to another programme country, which provided great support. The committee's interrogation is an added aspect of our efforts to ensure our programme incorporates best possible practice. It is absolutely right that our aid programme, which is paid for by the people, is subject to intense scrutiny. The committee's work is central to that. That level of examination enables our work programme to continue to make a real and tangible difference to the lives of millions of the poorest people in the world. I will do my best with colleagues to respond to any questions posed by members of the committee.