Mr. Andrew Harkness:

Fishery harbour centres were established under the Fishery Harbour Centres Act 1968 as centres in which to promote and develop sea fishing activities. Six centres have been designated under the Act - Howth, Dunmore East, Castletownbere, Dingle, Rossaveal and Killybegs. Overall responsibility for management operation of the centres rests with the Department of Agriculture, Food and the Marine. Its responsibilities under the 1968 Act include the production of annual accounts.

The Comptroller and Auditor General is required under the 1968 Act to audit and report on the accounts of the centres. The 2010 Report of the Comptroller and Auditor General on the Accounts of the Public Services outlined difficulties in invoicing harbour centre income that had arisen in the period from October 2007 to April 2008. This occurred while responsibility for managing the centres was being transferred from the Department of Communications, Energy and Natural Resources to the Department of Agriculture, Food and the Marine. The invoicing problems led to long delays in the preparation of the 2007 draft accounts, which required amendment to take account of the amounts invoiced late. The audit opinion on the 2007 annual accounts of the centres reported that there were inadequacies in the books of account and accounting records maintained by the Department and outlined other difficulties encountered by the audit.

Significant further delays arose in the preparation by the Department of annual accounts of the centres for the period 2008 to 2011.

The audits of those accounts were completed in March 2014. The Comptroller and Auditor General was satisfied that the final accounts were properly presented in accordance with the stated accounting policies and principles. However, his opinion was qualified because proper books of account were not kept during those years. Accounting entries in the books were not made in a timely manner, with the result that the books and records would not have enabled the financial position of the centres to be determined with reasonable accuracy throughout the period, and the books and records did not enable the annual accounts to be readily and properly audited.

In addition to delays in accounts production for the years 2007 to 2011, and the late billing of income, the special report identified a number of other shortcomings in the financial management of the harbour centres, including the following: Of the €1. 2 million in harbours dues billed in arrears, approximately €0.5 million remained to be recovered at the report date, with half of this amount owed by one customer which is the subject of a Supreme Court appeal. Delays led to €210,000 in harbour dues not being billed and deemed irrecoverable by the Department. A flat charge was applied for landings by some foreign vessels rather than the various charges set out in the legislation - based on a review of a sample of vessels, it is estimated that an additional €100,000 could have been billed had the official charge rates been applied. Substantial amounts of rent continued to be billed in arrears up to 2012 - in one case, a tenant had not been billed for eight years leading to the build up of arrears of €264,000. There was a failure to bill for rent on a property which was the subject of a sales process that commenced in 1993 - a sales price of €317,000 was agreed and a deposit of 50% was received at that time, but the sale had not been completed at the time of the report. There has been a substantial build-up in the amount owed to centres – this came to just over €5 million at the end of June 2013. There have been difficulties in generating a return from the use of car parking facilities in some centres.

The report also highlights particular accounting principles adopted in the preparation of the accounts which do not accord with up-to-date accounting practice, such as the recognition of capital assets and depreciation. It sets out a number of recommendations in regard to the format and content of the accounts, the governance arrangements for the centres, improving controls and monitoring procedures and the setting of targets to reduce the extent of arrears. The Accounting Officer will be in a position to update the committee on the progress in implementing these recommendations.