Oireachtas Joint and Select Committees

Thursday, 25 January 2018

Public Accounts Committee

Business of Committee

9:00 am

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail) | Oireachtas source

We are coming to that matter. Some of the other recommendations touch on non-compliance and the Department has responded and outlined what it proposes to do, including a financial penalty. What the Deputy and Mr. McCarthy have been discussing will be discussed shortly.

Recommendation No. 35 related to Dundalk Institute of Technology's overseas contract, which has been put out to public tender. Recommendation No. 42 has been accepted. It concerns producing the accounts for annual audits more quickly. Substantial progress has been made on that. We are all singing from the same hymn sheet. The next recommendation deals with what we were discussing.

Recommendation No. 43 was referred to a few times in the report from the Department of Public Expenditure and Reform, DPER. Our recommendation states:

It is the view of the Committee that penalties in relation to funding should be implemented by the Higher Education Authority where institutions fail to present accounts within 6 months of the financial year end.

The Department accepts this. The minute goes on to state on page 6:

The Minister is further informed by that Department that a proposal is being considered, as part of a review of the grant funding model [- this concerns the education sector team -] to impose a financial penalty for serious breaches of [corporate] governance compliance, including failure to provide timely and accurate submission of [accounts]; unsanctioned payments to staff; false financial, statistical or governance reporting; and wilful breaches of the relevant codes of governance.

I think procurement will come into that. The Department is stating it is now looking at having some financial penalty in place where there are breaches of governance by any of the funded organisations. That rolls into the question Deputy Cullinane raised. This has worked in the HSE, as we were told at a previous meeting when Tony O'Brien was before the committee. The section 38 and section 39 organisations were told that unless and until they have their financial accounts in on time, there will be a withdrawal or withholding of funding. This has brought a remarkable improvement in these organisations turning around their financial statements and in their accountability, and the Department of Public Expenditure and Reform now thinks the same can happen here. The Department seems to be following the recommendation, so that is that point covered. We will watch that because the Department is only in the process of following the recommendation. Generally, the Department accepts all of what we are saying and it is moving to implement it.

I want to highlight another recommendation, unless members want to discuss any others. I am moving on to recommendation No. 73 on the bottom of page 9 and the top of page 10. It concerns approval of "a value for money based business case in respect of proposals for significant outlays" by third level institutions such as UCC. We were speaking about the purchase of the Irish Management Institute. I just want an information note on this. The first paragraph proper of page 10 states - some people will find this interesting and some will find it boring:

With respect to Universities more generally, historically they were classified as privately controlled non-profit institutions in the National Accounts. In 2012 the CSO reclassified the universities as market producers meaning they were classified to the non-financial corporations sector rather than the non-profit sector. Currently the universities are classified outside Government on the basis that they are (a) privately controlled and (b) market producers. Therefore, the requirement to ensure accountability in respect of the use of public funds must be balanced with the autonomy of [the higher education institution] to make decisions on expenditure.

We want a note from the CSO spelling out what that is all about because I think there is talk about universities going-----

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