Victor Boyhan (Independent) | Oireachtas source

-----and I am one of them. I looked at the report, which is excellent, and the combined report, which I downloaded from the website. Then, as auditors do, I looked at ten local authority reports at random. A few issues kept jumping out of the pages. Before I delve into those in more detail, I have a general comment that might be taken on board. The timelines for public engagement with the auditing process are very tight. Ms Larkin will be aware that statutory notices are placed in most of the national and provincial newspapers informing people when an audit is taking place. It could be next Monday, for instance. I saw one such notice last week - I think it was in the Meath Chronicle- which stated that due notice was being given that an audit was taking place and that it would commence the following Monday.

That newspaper came out on the Thursday. There was a ten day period, which is far too tight. I ask that the witnesses look at this again. People may buy a weekly provincial newspaper, such as the Wicklow Times, which will tell them on a Saturday that on Monday one can go in, within a very tight timeframe, pay a few euro and look at the accounts. Most people, however, would not quite understand the whole thing. Perhaps the witnesses might send a message to look again at this. If we are serious about public engagement, about engagement with the finances and the corporate governance of authorities around transparency and about seeking the public's opinions and views, which is all very positive, then we must assist them. Many of these people are lay people. They are not financial experts. I have heard where people have presented to the council and copies have not been made available, or the person asking for it is made to feel a bit of a nuisance. It is not encouraged, which is a pity. I would ask the representatives to look at this.

Reference was made to the management letters and I picked up on this from Deputy O'Dowd's engagement with the witnesses. Every local authority gets an audit report, but does every local authority get a management letter? It does. The witness confirmed that. Are these management letters sent directly to the councillors? We are aware from the audit reports that they are usually sent to the chief executive or the cathaoirleach of the local authority but are not sent to the local authority members. The chief executive invariably will tell the local authority members that it cannot be made public until he or she has discussed it with the audit committee. In many cases, their audit committees only meet four times a year so if, for example, it is not to meet for another three months, there is a situation where it is running late and councillors are looking at 2017 audit reports in 2019. I am aware it does not take two years but it takes some 15 months and there can be another deferral. There is not a proactive response. Some local authorities do not like engagement.

I was informed about two councils and I took the time to look at the webcasts of the meetings where the councils only discussed these reports briefly, sometimes just for ten minutes. We need to look at the situation of how the audit reports are circulated. I want the witnesses to confirm this to me. I see no reason, when the Local Government Audit Servicesends the report to thechief executive and the cathaoirleach or the mayor of the council, that all the councillors should not have it also. At that stage, it is all done. The audit committee cannot adjust or tweak any element of the audit report so there is no good reason all elected members of the council could not have the report. I ask the representatives to consider this and take it on board. It is feedback.

I now turn to the issue of the fixed asset register. I will give an example of some comments that are in some of the audit reports. I will not identify the councils because it would be unfair. A review of one council's fixed asset register of lands and buildings indicates that it has not been properly maintained. The report identifies that council assets have been incorrectly registered to a third party rather than to that particular council or were never registered in the names of the council. The Local Government Audit Service stated that a council needed to:

Review its historic assets, as issues highlighted above identify assets that were either unregistered or registered to an incorrect party. The Council must ensure that it has recorded appropriate title to all its assets. [This had not happened] Identify all way leaves or permissions pertaining to these assets, and record and register all its assets with the Property Interest Register [which were incomplete].

Another report said that a council should "Complete the process of transferring title to IW [Irish Water] for assets removed from the books of the Council totalling €300m." This is in a Local Government Audit Service report and is common in relation to the transfer of assets to Irish Water. Another report says that a council must ensure that "the insurance register needs to be reconciled with fixed assets", which is not happening in some cases. This is to ensure that all the assets are properly insured at year end. The report on corporate estate governance and management of local authorities shows that a number of local authorities are not carrying through on those audits. The audit service said that the follow up progress reports identified by a certain number of councils did not have such plans in place but would commence and have given an undertaking that they would do so. The standard chief executive response in all the audit reports I read was that they had a resource problem. We cannot have a situation where chief executives tell the audit service that the local authority has a resource issue. Millions of euro of real estate should be properly registered.

I commend the Local Government Audit Service on its work. It has identified that assets are not on insurance registers and are not on proper asset registers of local authorities. This has been going on for years. I am not going to ask the witnesses more about this because the audit service accepts this and knows it to be the case, a true account of which it has given in its reports. It is, however, an area that I would ask about. The audits are not one of my functions and I am only giving the feedback but we need a real focus on this. We need more training, more assistance and more IT skills. The mapping of our real estate is very important across the 31 local authorities.

This brings me back to Rebuilding Ireland, the land development agency, and all the various agencies that are now challenged with tapping into the potential of the State's real estate. Clearly, the remit of the Local Government Audit Service is the local authorities but there are also Irish Rail properties, the ports and many other places. There are vast tracts of land. In the case of my own local authority there are parklands that are not even registered. No one even seems to know them. There is a massive amount of work to be done.

Another area that needs to be looked at is the issue of companies associated with the councils. We aware that many local authorities have wholly owned subsidiary companies, of which the local authority is the sole shareholder. Substantial money is involved. The chief executives of those local authorities act as the agents on behalf of the shareholders. The companies are wholly owned by the local authorities and deal in millions of euro of real estate, yet we do not seem to know how the agent is accountable to the shareholder. This is a real challenge for local government auditing. There is now a situation where vast numbers of assets and properties are being put at arm's length away from the elected members. The witnesses will be familiar with section 83 and how we can dispose of properties. We cannot altogether blame the councils because the councillors themselves do not always have the expertise. They have the willingness and the desire to keep control as part of their elected mandated, but now we have these companies that are at arm's length and where the council executive is making the decisions unknown to the elected members of the council. The executives propose to dispose of the assets of these companies and in some cases are disposing of assets that are zoned for residential purposes or potentially for residential development. There is an issue there. Is the Local Government Audit Service planning to look at this? I would suggest that this is an area of focus, perhaps in a future audit, for the Local Government Audit Service and that it would look at these wholly owned subsidiaries and companies. I note in every audit report that the Local Government Audit Service has a section in the back. This goes from sports and leisure companies to arts, theatres and so on. There are a lot of problems around these issues with accountability and good governance. This is not to suggest that there is any other thing wrong, although the audit service has mentioned that. I do not want to get into those specifics here.

Does the Local Government Audit Service believe it has sufficient resources to carry out what is a very onerous task? Much work is required and the witnesses might want to comment on that. Do the witnesses have a view on the Committee of Public Accounts? Perhaps they have a view and do not want to share it, which I understand. Is there some format in which we can bring the Accounting Officers to account? It is all about accountability. From the Local Government Audit Service audit reports over the years, I have picked up that the service is doing excellent work and it is identifying weaknesses, but it is getting the usual old message from the chief executives saying "We do not have the resources." I do not believe the Local Government Audit Service has enough teeth to sanction. While the service can identify the problems and weaknesses, somehow this is about accountability also. The chief executives are very well paid and they have an onerous task, but they do not take personal responsibility. They are not personally held accountable for issues around this whole area. In private sector business they would be held accountable because there are consequences when people fail in the private sector. I am not convinced there are sufficient consequences for chief executives for failures that may be found, having gone through due process - I am not judging anyone. Would the Committee of Public Accounts or the Office of the Comptroller and Auditor General be the format? I would be very interested to hear the relationship the Local Government Audit Service has with the Office of the Comptroller and Auditor General.+

Is there a mechanism with which we can elevate the Local Government Audit Service's work? I am thinking of a means to bring chief executives to a public forum and hold them to account on the key issues, the recommendations the service makes and the areas it deals with. Indeed I would suggest going beyond that. I would be really interested in helping. I congratulate Ms Larkin on her agency's really important work. My concern is with following up on it and holding the right people to account on behalf of the public.