Mr. Seamus McCarthy:

The Child and Family Agency, also known as Tusla, was established in 2014. Its primary functions include supporting the development, welfare and protection of children, offering care and protection for children whose parents are unable to do so, and maintaining and developing the services needed in order to deliver supports to children and families. Prior to 2014, many of the agency’s functions were undertaken by the Health Service Executive. Staff, assets and systems were transferred from the HSE to the agency on its establishment.

The agency's financial statements for 2016 record total income of €682 million, almost all of which comes from Vote 40 - Children and Youth Affairs. This includes €16 million provided to support the agency's capital investment. The agency's expenditure in 2016 was €680 million. Some 35% of expenditure related to staff costs. The agency employed approximately 3,600 whole-time equivalent staff at the end of 2016.

The agency incurred expenditure of €118 million on foster care and aftercare allowances in 2016, and a further €96 million on independent placement provision, including residential care. Expenditure in 2016 of €144 million was in respect of grants to almost 1,000 organisations delivering services under three key programmes: €98 million on child welfare and protection; €25 million on the school completion programme; and €21 million on family and community support measures.

I issued a clear audit opinion in respect of the agency's financial statements for 2016, which were certified on 23 June 2017. However, the audit report drew attention to the statement on internal control in which the board acknowledges that there had been inadequate monitoring and oversight of grants paid to outside agencies. The control weaknesses identified included delays in the signing of some service level agreements — audit sampling found that some agreements for the calendar year 2016 were signed as late as quarter 3 of 2016; inconsistencies in the agency's ongoing monitoring of grant-funded agencies, which is carried out through monitoring meetings and receipt of financial reports and staffing returns from grant-funded agencies; and consistent review of the financial statements, with some cases identified where no evidence was available to demonstrate that required financial statements had been received or reviewed.

In 2016, as in previous years, non-compliance with procurement rules continued to be an issue for the agency. When it was established, the agency took over a number of contracts which had originally been put in place by the HSE. The HSE continues to provide support in defining the agency's procurement needs and in managing its procurement processes. The agency noted that it will take a sustained focus over a number of years to achieve high levels of adherence to public procurement rules.

The agency's statement on internal control outlines steps being taken to resolve the issues. The chief executive will be able to provide the committee with an update on progress in this regard.