John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Are the minutes of the meeting of 27 September agreed to? Agreed. On matters arising, the note circulated to members last night outlined the options available to us to examine the issue of public sector allowances in the short timeframe between now and the budget. The proposal is that the committee should concentrate on the big allowances in terms of cost and application. It is suggested that in order to get a balanced view of these payments the committee should give the trade union movement an opportunity to make a presentation and that in this context, the ICTU be invited to make a presentation. We could start with the Minister for Public Expenditure and Reform and use the information provided in the business cases, together with information supplied by Accounting Officers, to stress-test the main allowances, covering the bulk of the figure of €1.4 billion. A timeframe is suggested that would see a report published two weeks from the budget. The committee will appoint a rapporteur to assist members in dealing with this issue in the light of the massive amount of paperwork that will be involved. We agreed to this proposal last week. Is the committee happy to proceed on the basis of this outline proposal?

Seán Fleming (Laois-Offaly, Fianna Fail)
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Agreed.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Deputy Mary Lou McDonald has asked that the committee be given further information from Accounting Officers. We can do this.

Kieran O'Donnell (Limerick City, Fine Gael)
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Which Departments account for the bulk of the payments?

Clerk to the Committee:

As members will see from tier one, the bulk of the allowances - €600 million - are accounted for by the Department of Education and Skills; there is a figure of €400 million for the HSE, €200 million for the Garda Síochána, €43 million for the Defence Forces and €50 million for the Irish Prison Service.

Kieran O'Donnell (Limerick City, Fine Gael)
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Approximately €1.2 billion of the total of €1.3 billion is spent by three Departments.

Clerk to the Committee:

One could argue that four Departments spend €1.4 billion between them. The proposal also involves a cross-cutting examination of the Civil Service and local government sector which would cover almost all of the allowances.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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We would have outside assistance in pulling the paperwork together and presenting it.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Will the rapporteur be a member of the committee or an external party?

Clerk to the Committee:

We will get an external person.

Shane Ross (Dublin South, Independent)
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How will we find this individual?

Clerk to the Committee:

The tendering process is almost complete. We have gone to the markets to find somebody.

Paschal Donohoe (Dublin Central, Fine Gael)
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I have a quick question about our role in striking a balance. The Chairman stated it was important to bring in the ICTU for this reason. Will one appearance by the ICTU, given the numerous sittings planned, allow for the level of balance and variety of opinion required to make for a successful investigation? By the time the ICTU appears before us, our hearing with the Department of Education and Skills, which acounts for the highest expenditure, will have taken place almost a fortnight before.

Clerk to the Committee:

This is just an indicative plan. If members want to invite the ICTU before we begin to examine the allowances, that is a matter for the committee to decide. We have not yet approached the Departments to agree to the dates, but we will be outlining our timeframe to them. Would Deputy Paschal Donohoe prefer to bring in the ICTU beforehand?

Paschal Donohoe (Dublin Central, Fine Gael)
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I am simply asking the question. In respect of the hearing on the figure of €600 million spent in the education sector, should we not get the perspective of employees as part of that session? Similarly in the case of the Defence Forces, should the representative group which issued a statement this week on allowances be included in that session?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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We can do that. The purpose in setting out the timetable is to obtain these views in order that we can change or reconstruct the timetable for it to be as inclusive as possible, given the time constraints involved.

Paschal Donohoe (Dublin Central, Fine Gael)
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I am asking whether we can be inclusive in a different and better way. It would be a pity if, after investing a lot of time in this process, some group complains it never had the chance to express their points of view. Allowing the collective body to appear at only one session in the middle of our investigation to present its views might mean that those affected by our hearings will ask at the end when are they going to be given an opportunity to contribute. Perhaps we might consider including representatives of the unions in each of our sessions in order that they can make their case and we can ask them questions.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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That sounds like a good idea.

Kieran O'Donnell (Limerick City, Fine Gael)
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That is a sensible suggestion. In regard to logistics, it appears that our hearings will take place over a period of 11 days. For how long is it proposed that we should sit on each of these days? Our hearings have to be structured and inclusive. The briefing by the Minister will use up one day, while our private meetings will use up two. We will have only five days of public hearings.

Clerk to the Committee:

There will be six days of public hearings.

Kieran O'Donnell (Limerick City, Fine Gael)
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I am excluding the Minister.

Clerk to the Committee:

I am excluding the Minister also.

Kieran O'Donnell (Limerick City, Fine Gael)
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My apologies, there will be six days of public meetings.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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What is the Deputy proposing?

Kieran O'Donnell (Limerick City, Fine Gael)
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I am not proposing anything. I am asking about the logistics in terms of the number of hours we will sit. Will we sit all day? It is important that we be inclusive, as the time period involved is relatively short.

I seek information on the logistics. While I obviously will defer to the other committee members, I think it should be intensive and over a short period. It should be perceived that the committee is doing a substantial body of work. Obviously, members have other issues to which they must attend but by the time the Department of Education and Skills appears before the committee, members should be getting down to the nitty-gritty. By that stage, they probably should have dispensed with some of the elements as being core and they then should be in a position to do the body of work on those issues that are up for discussion. Has consideration been given to how long the committee will sit on any one day? Second, as Deputy Donohoe noted, consideration should be given to the type of witnesses to appear before the committee. My inclination is it should be very intensive and over a short time.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The views expressed this morning can be taken into account in terms of how these meetings can be set up. As to how long we sit or how long it takes, it will depend on the witnesses, the volume of information and the depth of the discussions. However, bearing in mind members' remarks this morning, we can adjust the schedule and can deal with the question of being as inclusive as possible. We can factor that into the schedule. Arising from our previous meeting, we must also include the Houses of the Oireachtas Commission because we need to hear from it. While I will ask the clerk to look at it again, this is how it will work in principle. As for the other aspects we have discussed, such as the hours, what it will entail and how the meeting and hearing itself will pan out, we can discuss them again as we build on the work the clerk has done to date.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I have three small points to make. Deputy Donohoe touched on the point that the representatives of Garda members and Defence Forces personnel are not covered by the Irish Congress of Trade Unions and consequently must appear separately. Second, I believe the committee should meet in the week the Dáil is not scheduled to sit because I believe members must finish their work considerably more than a week earlier as, in truth, I believe the Estimates will have gone to the Bundestag, through the troika, before Wednesday, 21 November. There is no point in members discussing something here during the last week in November when they might be reading about it a week earlier through the European press. If members seek to have an input into the forthcoming budget and Estimates process, they will need to have completed their work by 14 November. I suggest they should make up that week by sitting once or twice in the week in which the Dáil is not scheduled to sit.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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There is no difficulty in sitting in that week. The purpose of this exercise this morning was to elicit members' views and because the Dáil is not scheduled to sit, we simply factored that in.

Seán Fleming (Laois-Offaly, Fianna Fail)
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All I wanted to suggest was that this could be taken into account.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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If it is members' wish to meet, there is no difficulty in that regard.

Seán Fleming (Laois-Offaly, Fianna Fail)
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It should be considered.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Okay. Is that agreed? Agreed. We are agreed in principle on the various points made by members this morning being factored into the new timetable and schedule.

Kieran O'Donnell (Limerick City, Fine Gael)
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If it is a question of members sitting for the week and of that pulling back our proposal, there is much merit in it.

Clerk to the Committee:

Yes, there is. It gives members a little more leeway at the finish and the Houses of the Oireachtas Commission can be brought in.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Is that agreed? Agreed. Proceeding with correspondence, No. 3C is individual correspondence and complaints. As Deputy McDonald is not present for this morning, Nos. 3C.1 and 3C.2 will be deferred again.

No. 3C.3 is correspondence received on 25 September 2012 from Ms Kay Kearney, Glanmire, County Cork, re public sector allowances. This is to be noted.

No. 3C.4 is correspondence, dated on 25 September, from Ms Maria Brophy, Enniscorthy, County Wexford, re public sector allowances. This is to be noted.

No. 3C.5 is correspondence, dated 24 September 2012, from Mr. Thomas Woodbyrne re forwarding correspondence sent to the Private Residential Tenancies Board. This is to be noted.

No. 3C.6 is correspondence, dated 24 September 2012, from Mr. Mal Keaveney, Askeaton, County Limerick, re Limerick greyhound stadium. This is to be noted. While the resolution of this complaint does not fall within the remit of the committee, we should ask Bord na gCon to address these issues directly with the complainant.

No. 3C.7 is correspondence, dated 26 September 2012, from Mr. Hugh Rance, Bantry, County Cork, re County Cork Vocational Education Committee. This is to be noted and a copy of correspondence is to be forwarded to the Department of Education and Skills for direct reply to Mr. Rance. The resolution of this issue is not one that falls within the remit of the committee.

No. 3C.8 is correspondence, dated 28 September 2012, from Ms Martina Healy, Drumkeeran, County Leitrim, re alleged misconduct of school principal. It is confidential and is to be noted. A copy of the correspondence is to be forwarded to the Department of Education and Skills for direct reply. The resolution of this issue is not one that falls within the remit of the committee.

No. 3C.9 is correspondence, dated 2 October 2012, from Mr. John Moriarty, Dublin Waterworld Limited, re information given to the committee at its meeting of 16 February 2012. This is to be noted. This issue relates to the issue raised by Deputy McDonald and we must forward this letter to the Department. At the previous meeting, I raised the issue that we had sent the report to the Ministers concerned. We have not received a reply as yet. Can a reminder be sent to them?

Clerk to the Committee:

Yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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This is just an example of issues not being dealt with by Departments and we should insist on a speedy response.

No. 3C.10 is correspondence, dated 2 October 2012, from Mr. William Treacy, Ballybrophy, Portlaoise, County Laois, re Turf Club and Horse Racing Ireland. This is to be noted.

Seán Fleming (Laois-Offaly, Fianna Fail)
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May I come in on this correspondence? This committee has received a lot of correspondence on this issue and I note that, in one letter recently received, the correspondent expresses the belief this committee's handling of the correspondent's case should be investigated by the Garda Bureau of Fraud Investigation, as the correspondent considers the committee has gone out of its way to cover up for misappropriation and, as they term it, "inappropriation" of citizens' money. This allegation has been made against this committee and I believe members now have no option other than to forward the committee's entire file of all correspondence it has received to the Garda Bureau of Fraud Investigation in light of what has been written. The committee should let that organisation examine it because it is an allegation of fraud.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Is that agreed? Agreed. Let them flog a dead horse.

No. 3D is documents relating to today's meeting. No. 3D.1 is correspondence received on 1 October 2012 from the Higher Education Authority, HEA. It is a briefing paper on Special Report No. 78 of the Comptroller and Auditor General. This is to be noted and published.

No. 3D.2 is correspondence received on 1 October 2012 from the Higher Education Authority. It is a briefing paper on HEA annual financial statements for the year ended 31 December 2011. It is to be noted and published.

No. 3D.3 is correspondence received on 2 October 2012 from Mr Tom Boland, chief executive, Higher Education Authority. It is the opening statement and is to be noted and published.

No. 4 pertains to reports, statements and accounts received since the meeting of 27 September 2012.

No. 4.1 is finance accounts, audited financial statements of the Exchequer for the financial year 1 January 2011 to 31 December 2011. This is to be noted.

No. 5 is the work programme. This will be subject to change as members are dealing with public sector allowances. As we agreed, one schedule of meetings may have an impact on these and we must determine how we deal with it.

Paschal Donohoe (Dublin Central, Fine Gael)
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I have one question in this regard. Has the scheduled meeting on 9 October concerning the HSE been confirmed?

Clerk to the Committee:

Yes, that will take place next Tuesday at 5.30 p.m.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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That meeting is to deal with two matters, is it not?

Clerk to the Committee:

Yes, it is to deal mainly with the budgetary position.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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On the work programme, the committee received a report on the Health and Safety Authority some months ago. I believe we should put it down as a specific item in respect of the Department itself in order that we can deal with the expenditure, the questions raised and the attitude of the Department to that expenditure. It is important not to lose sight of it.

The second item that concerns me is the school transport system and the number of complaints I receive regarding that system and the cost thereof. I note the recent allocation by the Government to Bus Éireann of €32 million. How do we audit the actual expenditure of those funds as distinct from their allocation from the Department to Bus Éireann. How do we know for what it is being spent? In other words, have the accounts of either Bus Éireann or Iarnród Éireann been examined to the extent that the waste and so on has been removed and there is a need for this money or are we simply giving the aforementioned companies the money? Who accounts for it and how does it come before this committee?

Mr. Seamus McCarthy:

A line item in the Vote for the Department provides for the payments to Bus Éireann. Under an agreement between the Department and Bus Éireann, a methodology is used to calculate the amount due. This system has been in place since the 1970s. I am not aware that it has been updated since. I was planning to look at the methodology for it. As I understand it, the calculations are audited. The payments are based on a report prepared by independent auditors and submitted to the Department. I am not aware of the details of the recent payment. I do not know whether it was a stage payment in amounts provided for, or whether it was an additional payment.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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It seems to have been an additional payment which was made by the Minister to that company. I am concerned about whether the accounts have been examined to the extent that the company is running efficiently and well. Is the State exposed to these payments being made when the company gets into trouble or its accounts are in difficulty? Is it the case that in such circumstances, the money is just asked for? How is the money actually accounted for? How do we know what the company is doing with the money? Is it going into the school transport system or the general public transport system? Is it distorting the market for the independent operators? Are Iarnród Éireann and Bus Éireann being given an unfair advantage when they are given this money? A range of issues needs to be raised in this respect. There is public concern about it. We should be taking an interest in it, as the moneys involved are substantial.

Seán Fleming (Laois-Offaly, Fianna Fail)
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During the summer somebody sent me a set of the audited school transport accounts and a separate set of financial statements. They were audited independently by one of the main firms. There is information available. I think it is an EU requirement. I am sure it is not being used to subsidise Bus Éireann's other activities. I am not saying I agree with anything in it or that I support it, but there is documentation available. That is all I am saying.

Mr. Seamus McCarthy:

That is exactly the material we want to examine. We will examine and report on it. We raised the concerns identified by the Chairman in the course of our own audit and plan to look at them in more detail.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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There are two separate items - the allocation of the funding and school transport.

Mr. Seamus McCarthy:

Yes.

Shane Ross (Dublin South, Independent)
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Is it within our remit to broaden that somewhat? The various CIE companies receive almost €300 million between them. Their accounts are audited separately. Is there any way for anyone to trace whether the money these companies receive from the Exchequer goes to the places to which it is directed? Does the Comptroller and Auditor General do this?

Mr. Seamus McCarthy:

No. I do not audit the accounts of commercial semi-State companies.

Shane Ross (Dublin South, Independent)
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I know. The money comes from this Department.

Mr. Seamus McCarthy:

Yes.

Shane Ross (Dublin South, Independent)
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When it leaves the Department, it goes to CIE and is lost somewhere in the mess there. I am not sure the auditors regard it as their duty to see that it goes to the right place. Is there any way we can include the subsidy which is getting bigger rather than smaller in our remit to ensure it is directed and spent as the State wishes it to be spent?

Mr. Seamus McCarthy:

When the Accounting Officer issues the funding to a commercial semi-State body, obviously he or she does so for particular purposes. We can look at the service level agreement that might be in place and talk to the Accounting Officer for a particular area on that basis. We can ask why the money is being provided, what conditions attach to it and how he or she knows it is being spent in the way intended.

Shane Ross (Dublin South, Independent)
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Is there a trail? That is not being done, is it?

Mr. Seamus McCarthy:

I think there is reporting. Performance measurement reports have to be submitted by a body to a parent Department.

Shane Ross (Dublin South, Independent)
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To the Department-----

Mr. Seamus McCarthy:

Yes. When we look at an agency within the aegis of a Department-----

Shane Ross (Dublin South, Independent)
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Yes.

Mr. Seamus McCarthy:

We have reported previously on the requirement to have in place specific service level agreements, with measurable indicators that can tell one whether the money is being used for the purposes intended. If a grant is given to a body for general purposes, it may form part of its funding and there may be a difficulty in following this precise amount of money to an end purpose. If a specific grant of €100 million is provided for a capital project, however, one would be expect it to be spent on that project. It is a little more difficult to follow a grant provided for general purposes by way of an audit trail.

Shane Ross (Dublin South, Independent)
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That is alarming. When Mr. McCarthy says "it is a little more difficult", does he mean it cannot be done?

Mr. Seamus McCarthy:

No.

Shane Ross (Dublin South, Independent)
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It is just not done.

Mr. Seamus McCarthy:

It is important to recognise that when a general purposes grant is provided, it is taken into the funding of the organisation. The income is recognised. The spending of it thereafter is not linked with specific purposes. We have the same issue with general purpose grants provided for local authorities. The State needs to ensure such income is recognised in the financial statements, but it cannot identify what that specific amount of money is spent on thereafter because it is pooled by the body in question with the other resources available to it.

Shane Ross (Dublin South, Independent)
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Would that apply to the €300 million that goes to the three CIE companies? Is it the case that we cannot actually be sure where that money goes?

Mr. Seamus McCarthy:

My recollection is that the moneys provided for Bus Éireann are linked with specific services on specific routes.

Shane Ross (Dublin South, Independent)
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Would that be the case with regard to Iarnród Éireann also?

Mr. Seamus McCarthy:

It would probably be better for me not to speculate on how it is used. I expect that there would be some service level aspect to it also.

Shane Ross (Dublin South, Independent)
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Will Mr. McCarthy come back to the committee on that issue?

Mr. Seamus McCarthy:

I will.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Arising from Deputy Shane Ross's contribution and the suggestion Mr. McCarthy will come back to us with further information, perhaps he might also provide a detailed overview of exactly how far the Committee of Public Accounts can go in this matter. What happens in terms of the questions raised by Deputy Shane Ross? It is a concern. A document that I do not have to hand brought my attention to the purchase for $9 million of carriages which were later not used. When such issues come to our attention, we need to be able to get answers. I suggest that in addition to what Mr. McCarthy is going to do, we should send a transcript of the proceedings of this meeting to the Accounting Officer in the Department and ask for an overview from that side also. That would enable us to pursue the matter, if necessary.

Over a number of meetings a number of Deputies mentioned the €91 million spent at Poolbeg to date. The committee has not yet received the type of report on this matter that I would have expected from the Department. When we asked for such a report, we called for the matter to be taken up by the Accounting Officer and the local government auditors. I remind the Accounting Officer that a commitment was given that this would happen. We are expecting a report and concerned about the €91 million figure. We require explanations in this regard. That reflects the views of a number of members of the committee who raised the matter.

Simon Harris (Wicklow, Fine Gael)
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I refer to the decision by AIB to increase the variable interest rates it charges on mortgages. I think the matter falls directly within the remit of the committee. It is our job to ensure taxpayers' money is spent in the manner in which it was expected to be spent. Even though approximately €7 billion in taxpayers' money has been given to AIB for the purposes of mortgage write-downs, according to figures in the public domain, we are seeing a second increase of this nature. Ideally, we would bring in those involved, but I am conscious of the demands of our work programme. Can we write to the Secretary General of the Department of Finance to get clarity on the exact purpose of the money given to AIB? Was a specific amount provided for the write-down of mortgages? If so, has that money been used?

It is not too dissimilar from the CIE situation. I have a deep suspicion, as I think all mortgage holders do, that what has happened is that the money that was given for the purpose of writing down mortgages has just been put into a black hole within AIB and it now continues to hike up the variable interest rate. Can we try to get some clarity on this? We had a lengthy discussion with the Secretary General of the Department of Finance, but there is no clarity in the minds of the public as to the use to which this money has been put. It is taxpayers' money.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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On foot of the Deputy's query we will ask the Accounting Officer about this. Then we can take the issue up again.

Item No. 6 is the draft report from the HSE. We will wait for the evidence to be taken at our meeting next Tuesday before we finalise that report. Is that agreed? Agreed.

John Deasy (Waterford, Fine Gael)
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As a matter of interest, when did we invite the witnesses to next Tuesday's meeting? Was this arranged a couple of weeks ago?

Clerk to the Committee:

Yes, it was agreed about three weeks ago.

John Deasy (Waterford, Fine Gael)
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Who is coming in?

Clerk to the Committee:

The Accounting Officer for the HSE and the Accounting Officer for the Department of Health. Both of them are coming in.

John Deasy (Waterford, Fine Gael)
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Thank you.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Is there any other business?

Paschal Donohoe (Dublin Central, Fine Gael)
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I have a question on a matter the Chairman himself raised at a recent meeting. Where do we stand with regard to the skills fund investigation? The Comptroller and Auditor General indicated that his office was involved in a matter. When will this come back to the committee?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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It is a special report, but I will ask the Comptroller and Auditor General to respond on that.

Mr. Seamus McCarthy:

I spoke about that last week also. I have a draft report on my desk, but have not got to it yet. The field work is completed. We need to clear it and the clearance process is likely to require legal advice, given the nature of the issues. I expect to complete this by the end of the year.

Paschal Donohoe (Dublin Central, Fine Gael)
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Thank you.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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We have agreed our agenda for Tuesday, 9 October, which will involve the HSE and the Department of Health and their 2012 budgets. Can we also agree the agenda for Thursday, 11 October 2012? The first part of the meeting will be a briefing by the Minister for Public Expenditure and Reform on the public sector reform programmes. Separately, we will receive a briefing from the implementation body on progress to date in implementing the public service agreements 2010-14. Is that agreed? Agreed.