Mr. David Cooney:

I thank the committee for inviting me to assist in its consideration of the 2011 appropriation accounts of the Department of Foreign Affairs and Trade. I am joined by colleagues who have a particular knowledge of aspects of the Department's work which may be of assistance. I understand the committee has been supplied with general briefing material on the Department which gives a factual summary of its main areas of expenditure and receipt and I do not propose to rehearse that information in my brief opening remarks. I will instead address a number of issues I know are of particular concern to the committee. I thank the committee for taking time to travel to Mozambique to examine the Department's development programme there. I look forward to discussing with members their comments on conclusions. The programme in Mozambique is Irish Aid's largest priority country programme and is closely managed by results. It demonstrates how Ireland can make an effective contribution to the fight against extreme poverty and hunger, help to build national systems and move in our lifetimes towards a scenario in which bilateral relations are defined primarily by mutually beneficial economic and trading relationships.

The committee's visit to Mozambique took place against the backdrop of the misappropriation of €4 million of Irish Aid funds in Uganda, which was uncovered by that country's auditor general. It came as a significant shock to all involved in the Irish Aid programme and to the wider donor community. Ireland reacted swiftly and decisively and the donor community has followed our lead. On the Department's recommendation, the Tánaiste immediately suspended all funding through Government systems in Uganda. At our insistence, the government of Uganda has agreed to reimburse the misappropriated Irish funds and will shortly do so. On learning of the fraud, I dispatched a team of auditors from the Department's evaluation and audit unit which reports directly to me to investigate the matter in Uganda. The team's report has been made public and I am committed to ensuring we implement all of its recommendations. A key finding of the report was that the fraud was very sophisticated and elaborate and involved exceptionally high levels of collusion at senior level which could not reasonably or normally have been anticipated. However, the report highlighted a number of important areas in which Irish Aid's management control systems need to be strengthened.

It is clear that, in common with the other donors involved, our risk assessments, based in part on the very strong international assessments of Uganda's public financial management systems, result in a stronger focus on tracking results on the ground than on the movement of funds once they were received by the Bank of Uganda.

Following receipt of the report from the evaluation and audit unit I initiated a full review of all management systems across the bilateral programme to ensure that risks are being identified and managed appropriately. I directed the ambassadors, who are the sub-accounting officers for the country programmes, to carry out a full review of their management and risk assessment systems. I have already received their responses and I have asked the evaluation and audit unit to examine them and identify matters in need of attention. I am arranging to meet the ambassadors to review our systems and to underline the critical importance of managing risks effectively in all programmes supported by Irish public funds. This forms part of a further general strengthening of the Department's risk management arrangements, which I have appointed a chief risks officer to lead and direct. I am also seeking sanction for the recruitment of a professionally qualified chief financial officer to oversee financial controls across the entire Department, including the development programme.

I am ready to answer any questions the committee may have on this matter, on its visit to Mozambique or on the wider Irish Aid programme managed by the Department of Foreign Affairs and Trade. I am also happy to address any of the diverse range of policy, administrative, programme management and public service functions that the Department conducts through its headquarters staff and network of 73 diplomatic and consular missions abroad.

In the period covered by the 2011 report and more recently, the Department has continued to contribute actively to the drive to rebuild Ireland's international standing. The historic back-to-back visits of Queen Elizabeth II and President Obama were successfully organised in 2011. Each visit in its own way represented a major milestone in the consolidation and development of these key relationships and appreciably enhanced Ireland's overall image and profile in Britain and the United States. Ireland is concluding a successful year of chairmanship-in-office of the OSCE, which culminated in the recent ministerial council meeting in Dublin, the largest intergovernmental conference ever held in the State. External feedback on the organisation and management of the complex logistics and agenda surrounding the meeting has been very positive and Ireland's general performance in the chair will contribute valuably to the external perception of our country.

Ireland's recent election to the United Nations Human Rights Council for a three-year term, commencing next month, achieved in the teeth of very strong competition, was a further morale-boosting reminder of the standing Ireland has earned and continues to enjoy in the international community. We are also about to assume the Presidency of the Council of the European Union for the seventh time. My Department is committed to making its full contribution to a successful Presidency performance, delivered with maximum cost efficiency.

The Department continues to reduce its cost base and to make economies. Like all public service organisations we are absorbing substantial reductions in resources, both human and financial. However, despite a drop of 12% in our staffing complement I believe we have managed to maintain the range, quality and geographic reach of the various services we provide. We have achieved significant efficiency gains through ambitious internal organisational restructuring, consolidation of functions and streamlining of our business processes. Regrettably, at the end of 2011 it was found necessary to close three resident diplomatic missions, in East Timor, Iran and the Holy See. The committee may recall that the matter was discussed when I last appeared before this committee in April of this year. Overall, the annual administrative cost of the delivery of the Department's functions has been reduced by over 20% over the past four years. I thank the Chairman for the opportunity to make this short statement. I will do my best to assist him and his colleagues in their considerations.