Mr. Michael O'Keeffe:

The Broadcasting Authority of Ireland, BAI, welcomes the opportunity to attend this meeting of the committee to assist it in its examination of the matters identified. We have submitted detailed briefing documents to the committee on the matters under examination and I will now summarise some of the key elements.

The sound and vision scheme has been in operation since early 2006 and has supported the production or "in production at present" of over 500 television programmes and just under 1,300 radio programmes. These have been broadcast on public, commercial and community broadcasting services in the State, a total of 58 radio and television services. We have provided funding of over €108 million from the licence fee allocated to the BAI to support the making of these programmes. Over 90% of that funding has gone to the independent production sector. Many of the programmes have received critical and audience acclaim, for example, the animation project "The Secret of Kells" which received an Oscar. In the current week, a number of programmes we funded are showing on television, including "The Estate" on TV3, "Scúp" on TG4 and "John Lonergan's Circus" on RTE.

With regard to reviews of the scheme, we undertook a formal review in 2008 and we are currently in the process of a review. There is strong endorsement from all stakeholders for its existence and continuance. It is viewed as having a positive economic and cultural impact on the broadcasting and independent production sectors, particularly in the independent production sector, which has highlighted employment in the sector as being supported by the scheme. We also have an arrangement with the Irish Film Institute on archiving of programmes made, which allows access to the public for all of the programmes through the scheme.

As committee members are aware, the Comptroller and Auditor General conducted a review of the scheme during 2012. This was a thorough process which produced a fair report and no significant issues for the BAI arose. The report made a series of recommendations with regard to administration and management and outputs and performance of the scheme. The BAI co-operated fully with the Comptroller and Auditor General and agreed to implement all of the recommendations, either in full or in part. Significant progress has been made in regard to some of the recommendations and progress has been made on all of them since the report was completed in 2012. We detailed progress in respect of the recommendations in appendix 1 of the briefing document. I will be happy to answer any questions members may have on those matters today.

With regard to the financial statements for 2011, the BAI has continued its policy of operating tight financial controls on expenditure. As a result, the levy invoiced on broadcasters was reduced from €5.6 million in 2011 to just under €5 million in 2012. Recently, we sent out invoices to broadcasters in respect of 2013 and these have been based on a further drop in the amount liable for levy. The estimates we have submitted in respect of the following years, 2014 and 2014, show this pattern continuing. The finance audit and risk committee of the BAI operates as a sub-committee of the authority. It met on eight occasions in 2012 and it oversees all finance, investment and audit matters. It also meets with the Comptroller and Auditor General, considers a series of internal audit reports and reviews and updates the risk register.

The sound and vision scheme paid out grants and awards of just under €14.4 million in 2012, up from €11.8 million in 2011. There was no recommendation within the report of the Comptroller and Auditor General with regard to the surpluses we held, but they were noted. In keeping with the principle of the review, we have sought to reduce surpluses and in doing that the scheme made awards of over €19 million in 2012. Administrations costs, which include staffing, legal and audit fees and assessment and consultancy costs, have been kept at less than 8% of the total income to ensure that the majority of funds are allocated to the making of programmes.