Mr. Seán Ó Foghlú:

I thank the committee for the invitation to appear before it. To assist me in the discussion, I am joined by my colleagues, Mr. William Beausang and Mr Tony Gaynor.

The HEA’s 2017 financial statements were certified by the Office of the Comptroller and Auditor General on 29 June 2018 with a clear audit opinion. The HEA is the statutory funding body for the higher education sector. One of its core functions is the allocation of moneys provided by the Oireachtas for universities, institutes of technology and other designated institutions. In 2017 the HEA allocated over €1 billion of Exchequer funding to the higher education sector in the form of recurrent grants, access grants, capital grants and research grants.

The importance of good governance is a theme which can be clearly identified within the HEA's financial statements. In addition to the high standards of corporate governance within the authority, as evidenced by the financial statements, the HEA has also introduced a number of measures in recent years to further enhance its role in the governance and accountability of the higher education institutions within its remit. Measures that have been taken include the following: the introduction of a new governance framework for the higher education system in 2015, the purpose of which is to provide assurance of compliance with legislative and other requirements and more timely and responsive interventions to address issues arising.

The new governance framework also makes clear the central oversight role of the HEA in monitoring governance practice across the system.

A further measure that has been introduced is the reduced timelines for the submission of draft accounts for certification by the Comptroller and Auditor General and the submission of annual governance statements to the HEA. The HEA also meets quarterly with the Comptroller and Auditor General to discuss the status of his audits of the financial statements of higher education institutions and the identification of issues or difficulties arising.

In 2016 the HEA commenced the introduction of a programme of rolling reviews of governance matters. The first rolling review focused on procurement, which was followed by a review of intellectual property in higher education institutions. A further rolling review has commenced in 2018, focusing on staff remuneration and benefits in higher education institutions.

Another measure undertaken was the review of the allocation model for funding higher education institutions, undertaken by the HEA, which was published in January 2018. The review proposes a reformed funding model that would provide for greater transparency in how State investment in higher education is allocated. It would also provide for stronger and clearer links between national strategic priorities and the types of programme delivered in higher education institutions. In addition, the HEA ensures codes of practice are in place in respect of the institutes of technology and the universities. The updated code of governance for institutes of technology was published by the Technological Higher Education Association, THEA, in January 2018 and it is anticipated that the universities' code of practice will be completed shortly.

The Department of Education and Skills works closely with the HEA to strengthen governance arrangements and ensure a robust system of accountability in the sector. The HEA, as a body that acts under the aegis of the Department, is required to comply with the 2016 code of practice for governance of State bodies. The annual allocation letters from the Department to the HEA highlight the code’s requirements. Compliance with the code is one of the terms and conditions under which the Department funds the HEA. In accordance with the provisions of the 2016 code of practice for governance of State bodies, the Department has a performance delivery agreement with the HEA. It sets out the purpose and scope of the agreement and defines the roles of both organisations. The core activities and key services to be provided by the HEA are agreed and set out, together with how each service commitment is to be measured. The current agreement covers the period 1 January to 31 December 2018. The 2018 performance delivery agreement supports specific high level goals and objectives of the Department and the HEA and sets targets in line with the HEA's statement of strategy and work plan for 2018. It also defines the output and outcome indicators, on which the performance of the HEA will be measured. A number of review meetings are set out within the agreement to allow the Department to formally review the HEA’s progress towards the agreed key deliverables.

In addition to these meetings, the Department and the HEA meet more regularly than is provided for in the performance delivery agreement. There are regular meetings on specific issues and general themes such as funding or governance across the sector. As well as ensuring open channels of communication are maintained, these regular dialogues between the Department and the HEA facilitate a collaborative approach to managing issues presenting across the sector.

Another important element of the relationship between the HEA and the Department is the annual system performance report which sets out progress across the higher education sector against the agreed national policy objectives identified by the Minister. In addition, the financial accountability framework is an agreement to provide for proper and effective use of public funding, effective control audit and accountability measures and cost effective and efficient delivery of services. A corporate governance risk register and an early warning reporting system are also in place to enable the HEA to identify to the Department potential risks and allow for early intervention to address them.

During his time as chief executive of the HEA the Department has worked very closely and effectively with Dr. Love on a range of issues that include very significant reforms to the funding model for higher education, the institutional landscape and the governance framework between the HEA and the Department and between the HEA and higher education institutions. I publicly acknowledge the contribution Dr. Love and his colleagues in the HEA have made in the past 18 months in delivering these important reforms. I also wish him every success for the future.

I am conscious that the Department has been in correspondence in recent times with the Committee of Public Accounts on a number of issues particular to higher education. I assure the committee that the issues raised in the sector are taken very seriously by the Department. We are working with the institutions, through the HEA, to seek to have the issues dealt with appropriately and as efficiently as possible. I will be happy to provide an update for the committee on any of the issues raised.

Before concluding, I would like to highlight one issue, in particular. I understand the committee has inquired about the current position on the independent review of the spin-out and sale of companies from the Telecommunications Software and Systems Group at Waterford Institute of Technology. As members are aware, I am precluded from involvement in the matter and will defer to my departmental colleagues present to answer questions members may have in this regard. I will be happy to answer any other question for the committee.