Mr. Robert Watt:

I have not read the report. In relation to inappropriate claiming for travel, as I have not seen the details I will not comment on the case, but should a person make an inappropriate claim, the expectation is that the money will be recouped and the money will be paid back to the Exchequer. We will ensure that the Department of Health together with the HSE will pursue the case in order that people who make claims which are not appropriate will repay the money which will be recouped to the taxpayer. The guidelines from the Department are crystal clear and there is no doubt whatsoever on the issue. We expect the money will be repaid to the Exchequer.

I will now respond to the question on procurement. I read the Comptroller and Auditor General's report on procurement in the HSE. Clearly the approach is not satisfactory. The level of non-compliance is not satisfactory. We absolutely agree with the recommendations of the Comptroller and Auditor General. We do not believe those practices are appropriate. Mr. Paul Quinn from our office has been engaged with the procurement side in the HSE to improve and professionalise practices. We have signed a memorandum of understanding with them on how we will help them in the procurement of common goods and services, but the non-addressable spend will remain the responsibility of the HSE. To answer the Chairman's question directly, we are not satisfied with procurement and we are working with the HSE to professionalise procurement procedures and to ensure that in cases such as contracts, where we do not have basic competitive processes, we have procedures.

The Comptroller and Auditor General reported a number of years ago on such spending in Departments. I think €140 million of the spend involved non-competitive processes. In most cases there are good reasons for that but within the HSE it is not appropriate to have that level of spend which is not subject to a competitive process. We will be following up the report. Mr. Quinn has already done some of the work in following up the case.

We also agree with the Comptroller and Auditor General's comment about sanctions on units and staff who have not complied or have not provided the basic information. Our system is governed by circular 40/02 which provides that I must sign on the occasion that we do not go through a competitive process. We go through a process in the Department where colleagues come to me with examples and we review them and we must ensure we are happy with them. The Comptroller and Auditor General has identified that this is not happening in the HSE. That is not acceptable. There were various discussions about IT systems and manual systems but I absolutely agree with the Chairman and do not disagree with anything he said at all.

The Chairman raised the issue of the Bytel project and the Department of Communications, Energy and Natural Resources. This is unusual. It involved EU funding. The project involves the Department and an equivalent Department in the North as well as the Department of Public Expenditure and Reform, which was not the lead Department. I know the Chairman has been briefed separately on that. Public money has not been spent appropriately and if there is any misappropriation, we will need to do everything we possibly can to recover that money. I am not exactly sure where we are going with this so I do not want to prejudice anything that might happen. We are very concerned that what happened should not have happened and it is a clear example of where taxpayers' money was not spent appropriately. The Chairman has probably been briefed better than I have been about this but we will follow it up.

Let me make a general point about EU projects and EU funding. We have extensive audits of this and the Comptroller and Auditor General would be aware of this. Thankfully we have not come across many cases like this. I am not for a moment excusing it, but we are confident that more than 99% of the spending co-funded by the EU is appropriate. We have done well from this fund over the years. This is not satisfactory and given that there were two Departments involved in a North-South project, we need to learn the lessons from it.