Mr. Seamus McCarthy:

Yes. I think perhaps the first point is that the grants circular issued at the end of 2013 or 2014 has changed the rules in relation to how grant funding is accounted for by recipients of that funding. That was the circular that came about after the SIPTU report and this committee reported and made recommendations to the Department of Public Expenditure and Reform. It requires that all funds from public sources are identified in the financial statements of a body. Therefore, any line of funding that emanates from public bodies to grant-funded agencies should be identified.

Second, a more recent development is a system put in place with support from the Department of Public Expenditure and Reform, which is harvesting information from the financial statements of all charities and voluntary bodies. That is a huge database. It is an exercise which requires reliance on the financial statements that are published and presented. That is trying to identify for any individual charity or voluntary body where their funding is coming from, so we should be able to get a better handle on who is substantially funded from the public sector or who may be with minority support in the public sector and then charity funds or other donations. That development will probably yield a better capacity to oversee what is happening.

More specifically with the section 38s and section 39s, we have been encouraging the HSE to expand the piece of material it has in the statement on internal financial control. That, effectively, is the place that one should expect to see the kind of information this committee is talking about. It is information that would be sufficient for the committee to be satisfied that the oversight regime is not only appropriately designed but is also working.

Performance indicators in that area would show what percentage of section 39s had submitted audited financial statements within a year of the end of the year to which they related. Those kind of statistics would give the committee a handle on it if, let us say, there was 70% or 90% compliance. The committee could then look at it in terms of numbers and also the value of the spend that was issued. For instance, one might find that 10% of the section 39s get 80% of the funding and so one would obviously be more concerned about what is happening there.

From my recollection of Mr. O'Brien's presentation last week, he was talking about expanding the more demanding governance and reporting regime in place for section 38s and also applying it to section 39s. Rather than focusing on section 38s and section 39s, one might focus on the ones that are benefiting from large amounts of funding and ones that have a lesser amount of funding.

There is a lot of work to do yet in getting to the position that the Chairman described. That arrangement should be in place and should be functioning. I suppose persistence by this committee, myself and my staff in following up on that is the only way we will get to that.