Shane Cassells (Meath West, Fianna Fail) | Oireachtas source

I thank the Chairman and congratulate him and the Vice Chairman on their appointments. I thank Mr. McCarthy for his presentation.

I propose to address the issue of demarcation lines raised by Deputies Aylward and Cullinane from a different angle. I seek clarity on this issue because the local government sector is responsible for the expenditure of hundreds of millions of euro. I acknowledge what Mr. McCarthy said regarding the current auditing process and audit committees in the various counties. However, these are very much focused on revenue streams.

I will address the capital expenditure side and the correlation between funding provided directly by Departments for capital schemes. Some of the most substantive work done is the funding of capital schemes that come under a separate budget distinct from the revenue stream. Housing schemes are about to become the subject of a strong focus because they will soon be delivered very rapidly, including in terms of land acquisition.

I note the number of Departments and agencies, including the Housing Agency, which the Comptroller and Auditor General audits. In recent years, bad debts of tens of millions of euro generated by land acquisition have nearly bankrupted some councils. These debts have been offloaded into the land aggregation scheme, LAG, to get them off the books of local authorities. The debts arose when public funds were used in bad deals involving the acquisition of landbanks that could never have been developed. These deals crucified councils because interest payments on them removed money from revenue streams that were to be allocated for public expenditure. This issue comes under the remit of the Housing Agency, one of the bodies that are audited by the Comptroller and Auditor General. While I acknowledge Mr. McCarthy's point on approaching the issue from the local government side, there is significant scope for approaching it from the other side because all of the schemes are ultimately funded by a superior body, whether through the funding of loans by the Housing Agency or through the schemes that will be implemented on the ground by the Department of the Environment, Community and Local Government. I seek an explanation in this regard because large sums have been expended in an incorrect manner. These must be examined because they have an impact on public funds and are not subject to an appropriate level of scrutiny under the current regime.