Ms Niamh Larkin:

A number of points were made and I will address them in sequence. The first point related to the overview report. We publish it each year and it sets out a number of sections. The first section is to provide clarity on the role of the local government audit service. We also produce value for money reports during the year and the section explains the criteria for selecting them. The second section goes into the financial figures that appear in the annual financial statements of the local authorities. We look at sources of revenue income and revenue expenditure and we look at trends over a number of years. We also look at capital spend and capital income and trends in that regard. We look at the main balance sheet items and any movements that are in those items.

The third section relates to audit issues raised. We look at issues that appear in a number of local authorities and what type of issues arise. As I said in reply to Senator O'Sullivan, we look at fixed assets, which always comes up in our audit report, unfunded balances, development contributions, the existence of land loans and loans that have to be serviced by the local authorities, and the impact that has on them. We also note areas where progress has been made. That report is published on the Department's website. It is freely available for everyone and a copy of it is sent to all local authorities as well.

With reference to land loans, if any of them are an issue, they would be referred to in the audit report. Auditors frequently refer to the impact of servicing loans. Many audit reports reference the amount it costs to pay the interest on a loan and the impact that has had on the revenue account of a local authority. The CCMA referred earlier to the fact that we have started a project this year whereby we are looking at value for money and fact-based audit reports. One of the areas is the interest cost of loans and the loans that exist in local authorities. We are compiling information across all 31 local authorities on loans, the purpose of the loan, the interest cost of it and how much of it is recoupable from the Department. That will give us a clear picture of the loans that exist, the number on an interest-only basis or loans where the interest may be rolled up.

In terms of value for money, we look at national studies. Apart from the four fact-based reports, they are purely to collect information in a certain format on four topics across all of the local authorities. We do have a consultative committee for the value for money examinations and it is made up of a number of chief executives, heads of finance and also our own staff. We look at topics on either spend or areas where people may have concerns within local authorities and then we would carry out a study on that area.

With regard to capital projects, they are frequently referred to in audit reports. The types of issue that come up are overspends, projects being referred for conciliation and arbitration, and the legal cost of that either as a percentage of the project or as a stand-alone figure. Capital projects are an area we examine. Procurement regarding certain projects is mentioned in a number of audit reports. We ask for feedback from the chief executives in terms of that.

We follow a very specific process with regard to fraud. At the commencement of each audit we correspond with the chief executive and his management team on fraud. We ask them to make us aware of any instances of fraud and then we look at that. We have to consider the legality surrounding certain ongoing cases and what we can refer to in our audit report. We do refer to issues of fraud in our audit report or we consider that they have impacted on either the running of the local authority and in terms of materiality as well. We look at the procedures local authorities themselves have to make sure that if fraud has arisen, it has been referred to the Garda and it is being followed up.

We do correspond in terms of issues that have been raised by the public. We follow a formal process if someone writes to us, but we have to consider that in terms of materiality. All of our audit reports are published on our website, and if something is brought to the attention of an auditor and it turns out to be an issue, it will form part of the audit report. Reports are freely accessible to all members of the public.