Mr. Michael McCarthy:

I thank the Chairman and members for the invitation to meet with us today to discuss the work of the National Oversight and Audit Commission, particularly our recent Local Authority Performance Indicator Report 2021 and Public Spending Code Report 2021. I am the chair of NOAC and I am joined today by two of my fellow board members: Ms Margaret Lane, chair of the financial management and performance working group; and Ms Fiona Quinn, the officer of the Minister, who is an assistant secretary in the Department of Housing, Local Government and Heritage. I emphasise that Ms Quinn is here today in her capacity as a board member of NOAC and not in her capacity as an official of the Department. I am also joined by Ms Claire Gavin, head of the NOAC secretariat.

Committee members may have been in attendance at our appearance before the committee in May 2022. By way of background, the Local Government Reform Act 2014 introduced significant changes to a wide range of aspects of the local government system, including matters of accountability and oversight. In that regard, the Act provided for the establishment of NOAC in July 2014 as an independent statutory body to provide oversight of the local government sector in Ireland. Its functions are wide ranging, involving the scrutiny of performance generally and financial performance specifically. NOAC also has a role in supporting best practice, overseeing implementation of national local government policy, and monitoring and evaluating implementation of corporate plans, adherence to service level agreements and public service reform by local government bodies. In addition, a Minister may request that NOAC prepare a report relevant to its functions on any specified aspect of local government.

NOAC's role in respect of local government policy is to oversee how national policy is implemented by local government bodies. NOAC does not have a function of providing input to the development of policy for the sector. Furthermore, NOAC has no role in decisions around funding models or levels of funding for local authorities. As prescribed in the Act, NOAC does not apply sanctions, penalties or fines or examine individual cases. Rather, our role is to act as an oversight body. Most of the work of NOAC is carried out through its four working groups. These deal with local government governance, efficiency and reform, performance indicators, communications and customer survey, and financial management and performance.

NOAC's membership is statutorily prescribed as comprising a minimum of six and a maximum of nine members. There is provision for the Minister for Housing, Local Government and Heritage to increase, by order, the number of members to a maximum of 12 for a period of up to two years. Currently, NOAC has eight members, including the chairperson, and there has been one recent vacancy on the board. Vacancies that arise are advertised by the Public Appointments Service, PAS, and appointments are made by the Minster for Housing, Local Government and Heritage. NOAC is funded from the Local Government Fund and our allocation for 2022 was €350,000. There is a massive appetite to grow the role of NOAC. This can be seen from the ambitious work programme we have completed, the array of stakeholder engagements and the number of reports we have undertaken and published. We are currently finalising our new two-year work programme.

We are invited here today to discuss two very important reports that NOAC publishes. The first is the annual performance indicator report. On 4 November 2022, NOAC published its eighth such report. In its 2021 report, NOAC examined 42 indicators under 11 headings in order to provide objective information on local authorities' performance. This allows the authorities to view the areas in which they are performing well and review any areas in which performance could be improved. The indicators record local authority activity in respect of certain aspects of their wide-ranging functions. The report also takes account of the level of uncertainly and instability whereby the local government sector has had to adapt and respond as we lurch from one crisis to another without drawing a breath. NOAC uses the data from the performance indicator reports to build profiles of each local authority and uses that information as a basis for the scrutiny meetings held with the chief executives and management teams of the authorities.

The other report we are discussing today is the Public Spending Code Report 2021, which NOAC published on 24 November 2022. The public spending code process provides an opportunity for Departments and agencies to review on an annual basis the decisions made and expenditure incurred in the previous year and to identify any areas that require attention. The code was developed by the Department of Public Expenditure and Reform, which provides guidance on carrying out the quality assurance process. The information provided is used to produce a composite report based on the Department's requirements. The code applies to both current and capital expenditure and to all public bodies in receipt of public funds.

According to the Department of Public Expenditure and Reform, the code brings together in one place details of the obligations of those responsible for spending public money. Local authorities completed their reports in accordance with the guidance issued by the County and City Management Association finance committee in agreement with the Department of Public Expenditure and Reform. Once the report has been complied, it is sent by NOAC to the Department. The reports are available to the public, along with all its other reports and minutes of NOAC meetings, on our website, noac.ie.

I hope this has given members some useful information. I look forward to the discussion to follow with committee members on the work outlined.