John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The first item on our agenda is the minutes of the meeting of 18 September. Are the minutes agreed to? Agreed. On matters arising from the minutes, on the issue raised by Deputy Mary Lou McDonald about the use by subcontractors of workers in the black economy, at our last meeting we asked the Clerk to engage in a scoping exercise. I ask him to brief us on it.

Clerk to the Committee:

I started with those involved in the school building programme in the Department of Education and Skills. I spoke to them and provided a note for committee members yesterday evening. It lists some of the controls that have been put in place, including requiring declaration of a tax free certificate. They also have a company carrying out random audits which refers any case of malpractice to the appropriate authorities - Revenue, the Department of Social Protection and the National Employment Rights Authority, NERA. There is a problem in the school building sector owing to the fact that registered employment agreements can no longer be enforced. This is causing difficulty because some are only paying minimum wage which may contribute to bringing other issues back into the system.

I propose that, in order to have a meeting on the issue, we seek a detailed note from each Department, including the Department of Social Protection, Revenue, the NRA and NERA and then bring in all of these groups for a meeting with the committee which would focus on the black economy in regard to public sector contracts.

Robert Dowds (Dublin Mid West, Labour)
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I am aware that both the Minister for Education and Skills, Deputy Jan O'Sullivan, and the Minister of State at the Department of Jobs, Enterprise and Innovation, Deputy Gerald Nash, are focused on this issue which they take seriously.

Clerk to the Committee:

It is in regard to registered agreements. They are bringing forward new legislation.

Robert Dowds (Dublin Mid West, Labour)
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It is related to it, but they are also concerned about some individual sites.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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It is probably time that we concluded that piece of work.

Clerk to the Committee:

We will seek detailed notes from Departments and invite officials from all of the organisations involved to come before the committee.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Is that agreed? Agreed.

Joe Costello (Dublin Central, Labour)
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What has been outlined by the Department of Education and Skills demonstrates that it has a reasonably thorough monitoring process in place. It has taken various steps to deal with the issue by requiring a tax clearance certificate, declarations of compliance and having an online complaints system, etc. What we need is information on the outputs of that process. However, we need to do the same with all of the Departments involved, including the Department of the Environment, Community and Local Government which is in the business of procuring contracts for house building. What we should be concerned with is the procurement system for contracts and the monitoring of the employment and social welfare systems because we regularly hear about irregularities in the manner in which contracting and subcontracting takes place. The issue of subcontracts may well be part of the main problem.

Kieran O'Donnell (Limerick City, Fine Gael)
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As this is mainly a social welfare issue, if officials of the Department of Social Protection are to come before the committee, they must provide information on certain matters. The Department must inform us of how many fraud investigators it has on its books who are carrying out inspections, particularly in the construction sector. Fraud within the social welfare system is something ordinary people want to have investigated. We want people to receive their social welfare entitlements, but fraud also needs to be stamped out. Therefore, in looking at this issue, the Department needs to provide us with a comprehensive, overall view of the position and indicate the number of fraud officers it has.

Clerk to the Committee:

We need to take a period, say 2012 and 2013 together, and ask with regard to the outcomes of the investigations - how many investigations were started, the number of people involved and so on. We need to take a specific period and ask for the information from all Departments who were involved in public sector contracts.

Robert Dowds (Dublin Mid West, Labour)
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Will the Chairman ensure that my name is attached to this because I indicated to him the day before last week's meeting that I intended to raise this issue?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Yes. We will proceed. I proceed to correspondence received since our meeting on 18 September 2014. 3B.1, correspondence, dated 3 September 2014, from the Acting Commissioner of the Garda Síochána regarding reply to query on outsourcing of speed cameras, to be noted and a copy forwarded to Deputy Niall Collins who worked with the committee on that issue.

3B.2, correspondence, dated 23 July 2014 from Mr. Gerry Naughton regarding Ward of Court Service and Revenue Commissioners, to be noted. Both the Revenue Commissioners and the High Court are unlikely to deal with the Committee of Public Accounts on individual cases. However, the issues raised by Mr. Naughton point to systemic failures on the part of both the Wards of Court and the Revenue. The matter to be referred to both the Courts Service and Revenue to follow up as appropriate and also to send the committee a note on the issues involved. The committee will examine the issue of the protection of Wards of Court when the Court Service is before us in November.

3B.3, correspondence, dated 13 September 2014 from Eleanor Leahy re issues with the HSE, to be noted. We will have to get more details from Ms Leahy in order to follow up on the matter with the HSE. I ask the clerk to contact her and obtain the documentation of which she speaks.

3B.4, correspondence, dated 17 September 2014 from the HSE re St. Michael's House, to be noted. 3B.5, correspondence, received from various sources re Tipperary Hostel Project, to be noted. We can defer this to next week so that the clerk can prepare a note on the issues relating to State expenditure at this Tipperary hostel. This is an issue we have raised with the Department of the Environment, Community and Local Government. There is a serious issue here as taxpayers' money, in excess of €4 million, was spent on the refurbishment of that building, one part of which lies unfinished while the other part is finished but going into a state of disrepair. It is a waste of money in terms of doing the work and then leaving it. The clerk will follow it up. There is a need for a more constructive response from the Departments involved in order to get to the end of the problem. We have to continue to remind them of this. I ask the clerk to get the note.

Clerk to the Committee:

I will get the note. It will provide a context for them to follow it up.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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3B.6, correspondence, received from an anonymous source regarding overstaffing and waste in HSE nursing homes, to be noted and forwarded to the HSE for a note on the matter. We can return to it when we get that response.

3B.7, correspondence, received from Mr. William Treacy regarding ongoing issues with Horse Racing Ireland, to be noted. 3B.8, correspondence, dated 18 September 2014 from Mr. Tom Moran, Secretary General at the Department of Agriculture, Food and the Marine, regarding Charles Farrell, to be noted and a copy forwarded to Mr. Farrell. Last week I asked the Department of Agriculture, Food and the Marine for a reply on a long outstanding issue relative to the Fleury case. I understand that matter was before the courts. After 160 summonses over a period of ten years, and I am sure substantial legal costs, the matter, so far as I am aware, is not being pursued by the Department. In other words, the case has ended. I think we should get an idea of the costs involved in this and in the other cases that were mentioned.

I refer to the letter re Charles Farrell which is an ongoing issue. We have asked for the papers relating to that case but we have not got them in full.

Clerk to the Committee:

We have got some of the papers. I think they are-----

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Do we have them all?

Clerk to the Committee:

We have some of them.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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At one stage we asked the clerk to do an exercise on this. Perhaps he would look at the papers-----

Clerk to the Committee:

I will.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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-----and determine the extent of the issue. We can return to it.

Still on correspondence, we are awaiting a reply from the Department of Education and Skills regarding Cork Institute of Technology and a report it received. A number of matters were raised but we have had no report from it.

Clerk to the Committee:

I will follow it up, Chairman.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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No. 4, reports, statements received since 18 September. There is a clear audit in respect of the four bodies noted. We can note those accounts. Are their any questions on them?

No. 5 is the work programme which is now on the screen.

Clerk to the Committee:

Next Thursday we have the Irish Sports Council.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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We have the Irish Sports Council next Thursday, Údarás na Gaeltachta and Shannon Development.

Joe Costello (Dublin Central, Labour)
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Has any work been done on Thornton Hall, the prison proposal in terms of expenditure in the region of €50 million and where it is at now?

Clerk to the Committee:

Not in the last number of years. It was an issue at the time it was being purchased. The Comptroller and Auditor General did a report on it probably in 2004 or 2005. I can ask the Comptroller and Auditor General the position on it and we can get a note from the accounting officer in the Department of Justice and Equality as to where lies the current costs and the current position. I presume it is lying idle in State ownership in north County Dublin.

Joe Costello (Dublin Central, Labour)
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There appears to be very strong parallels between that and the National Paediatric Hospital where a huge amount of assets were invested in it and then it moved into another domain entirely. All of that appears to have been wasted.

Clerk to the Committee:

I will get a note.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I call Deputy Dowds.

Robert Dowds (Dublin Mid West, Labour)
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Where stands the request to invite St. Michael's House to appear before the committee? Are all those things in abeyance until after the court case?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I would imagine so. I requested it but we will not pursue it until we get clarification-----

Robert Dowds (Dublin Mid West, Labour)
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So that relates to any organisation that has a charitable status.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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It is not that we are prohibited from doing it. We need to take some legal advice. Can we agree the agenda for Thursday, 2 October which is the accounts of the Irish Sports Council? Agreed. Today we have to examine the three draft reports, one of which is on penalty points. We said at the last meeting that we would wait for the report on the current issues from the Garda Síochána but apparently it will not be available for some time. It is proposed to conclude our work on that issue. We can return to it by way of our normal work with the Accounting Officer at a future date.

The second issue is the medical card review while the third relates to a number of issues: WIT, a particular land swap, the State Pathology Office and payments to the director of the National Gallery. If Members have anything further to add to the findings and recommendations on any of those reports they may do so now. I ask the clerk to go through those.

John Deasy (Waterford, Fine Gael)
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Has a deadline been set for comments?

Clerk to the Committee:

Maybe next Tuesday and publish on Thursday.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Tuesday and publish on Thursday.

Clerk to the Committee:

After the PAC meeting.

John Deasy (Waterford, Fine Gael)
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What is the position with regard to the launch? Will they be launched singularly?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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We could do them all together and then they are finished.

Eoghan Murphy (Dublin South East, Fine Gael)
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If there is a substantive point that a member wants to make, it may need to be discussed or disputed among the committee.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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In the event of anything substantive arising we will bring them back, perhaps before Thursday.

Should a substantial point arise in respect of any of the issues, the member should get it to clerk before Tuesday and, we could have a meeting to clear it on Tuesday or Wednesday evening, so that we can publish on Thursday and that will finish that body of work.

Joe Costello (Dublin Central, Labour)
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What is the custom?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I will ask the clerk to go through the outline of each report.

Clerk to the Committee:

In regard to the penalty points, the fixed charge processing system and the related road safety issues, members will see on their screens a table that gives us a good overview of what happens to penalty points and fixed charges. Our report is dealing with a number of these issues, such as lost tickets which accounts for 2%. The key point in the report is that 70% of fixed charges are paid by people when they get the notice in the post. Mr. O'Brien, the former superintendent, who gave evidence to the committee said the system is excellent when it comes to dealing with people who pay their fixed charges. The issue of leaking arises in the 28% of fines that are not paid and is causing significant difficulties.

Let us turn to the findings and recommendations. Findings 2 to 5 deal with data entry on the system. We are looking to review the system whereby if somebody is stopped on the side of the road, that the Garda who is taking the details has the details on a touch screen and should be able to link in to the driver's identity file that is kept in the RSA. That would get rid of a great many problems where somebody detects and takes note of a car that is driving at speed and there is a problem that goes back into the system and is not followed up because it becomes statute barred.

Second, difficulties have arisen for a long time with drivers of company cars. I know there will be a change in the law. One of the issues that came up at our meetings was the photographic evidence which can be used for people who drive company cars and this should be used.

The third issue is the non-serving of court summonses, where approximately 50% of summonses are not served. I know the law has changed but we propose that the summons should be served by registered post, where the onus is on the driver to prove that the summons was not delivered. The point we are making in the report is that the majority tax their cars online and there is never a problem with the tax disc coming by post. There should not be problem with this either.

The fourth issue relates to the driver who is not present when his or her fine is before the court, which is the situation in the majority of cases, and his or her licence is not being endorsed with the penalty points. The issue is to capture the driver's licence at an early stage of the process and use the driver's licence number as the unique identifier and the national vehicle and driver's file can be updated almost automatically.

The next part deals with the cancellation of penalty points by senior gardaí. We have seen from the Comptroller and Auditor General's report the problems that existed in that area. There was no evidence to back up a case. Superintendents were cancelling fines outside their area. I know that the procedures have been tightened up by the centralisation of the cancellation process. We are raising a number of things, such as an annual audit of the process and a report by the fixed charge processing office. That should deal with the issues in this part.

The third area which we looked at was the way complaints are handled and investigated subsequently by the force. The issue is that the confidential recipient process did not appear to work in the case of Sergeant McCabe and there was never a review. The final issue is that when a complain is made is there a system capable of adjudicating on it so that the system is independent.

Joe Costello (Dublin Central, Labour)
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As the clerk has indicated, the system operates efficiently and effectively for 70% of cases but in the remaining 30% half of the summonses are not served properly and there is no endorsement on two thirds of the offenders who come before the courts. That is incredibly ineffective. I hope that the consolidation and centralisation of the system to which the clerk referred will deal with the problem. It would require a degree of monitoring and auditing to ensure that it takes place in the short term.

I am concerned about vehicles that cross the Border. The cars may be stopped and intercepted in the Republic but they are under the jurisdiction of the other area. To what extent can we assess the loss to the Exchequer in respect of cases that are registered in another jurisdiction? Are there proposals to close that loophole because it is a two way process in regard to the island of Ireland but also in respect of the neighbouring island.

I am also concerned about the criticism in regard to the whistleblowers. The report was very good on the ineffective confidential recipient system. It was certainly not effective in the case of Sergeant McCabe. Has the committee made a suggestion on an alternative mechanism for internal complaints to be investigated? It would seem that GSOC would be the external independent body that should deal with internal complaints. This is a serious issue that needs to be addressed in the report. There should be recommendations on this issue.

My final point relates to the GoSafe cameras and the GoSafe contracts, which is separate from the Garda in the sense that it is operated by a private company and accounts for 22% of the camera intercepts, which is quite substantial. The 6.3% rate of cancellation of fines requires attention. Is it done internally by the Garda Síochána or by the private sector system? It seems strange that one of the highest rates of cancellations would be in the private sector, GoSafe cameras. It is not operating effectively, considering that €15.6 million is spent on the system and the return is only €4.6 million, with a loss of €11 million. As the report states, that €11 million on an annual basis would have been sufficient to refurbish the entire fleet of the Garda Síochána and make them more effective and efficient.

The future of the GoSafe cameras must be given very serious consideration. We should be coming up with a recommendation as to whether that should be dealt with on a different basis because it is one of the most expensive mechanisms of dealing with the issue. It claims that there is 89% to 99% compliance effectiveness where the cameras operate, yet the number of road fatalities has been increasing alarmingly in recent years.

There is a certain degree of contradiction that requires further investigation.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Deputy Costello, what we are doing here is reflecting within this report what has come out of the hearings the committee has held, as well as the report of the Comptroller and Auditor General. For example, we have not touched on the issue of cross-Border offences because it was not included in the Comptroller and Auditor General's report and did not come up in the course of the hearings. The issue of the GoSafe cameras did arise and we have made recommendations there in respect of the contract itself, how it is working and is operated and so on. All we can do is recommend to the Minister that the recommendations be taken on board for future consideration of that system. We will look again at the recommendations and findings and determine whether we can tighten up on some of them.

Joe Costello (Dublin Central, Labour)
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I can make suggestions.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Yes, absolutely.

We will move on to the next report, which is-----

Shane Ross (Dublin South, Independent)
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Sorry Chairman, I have a couple of points I wish to raise on this report, one of which is fundamental. I refer to the comment, I believe it is on page 9, where the committee states it has no problem with the principle of discretion being given to gardaí. That is glossing over the problem somewhat. While I understand the reasons for it to be there, the entire problem members are addressing here is a problem of discretion. Moreover, it is a problem of abuse of discretion and to state the principle is fine but that it is just being abused in 9,400 cases or whatever it is, ducks the issue somewhat. In view of what happened in this case, I have real problems, as I believe do many others, with the issue of giving gardaí discretion. It is a fundamental difficulty to which members have not faced up. The committee must face up to the fact that there was abuse of discretion in so many cases. The report quite rightly refers to gardaí being vulnerable to the accusation of squaring charges but they obviously used discretion wrongly in more than 9,000 cases. They pleaded they were on duty when they were not and members should not duck this issue but should ask why they are abusing this discretion. Moreover, members should ask the radical question as to whether they should be given discretion. If so many of them are abusing it, why should they have it?

The second point I wish to make is there appears to be a reluctance to comment on all the other reports that are going on at present. I refer specifically to the O'Mahoney report as in my view, what happened in that report is highly questionable. There is a reluctance to comment on the findings of the O'Mahoney report. It is questionable because it was soft on the Garda and did not have the same findings as did other reports. It looks as though the committee should be utterly critical of the principle of an internal report and the Garda should never again be allowed to undertake an internal report.

The second one is the Garda Síochána Ombudsman Commission, GSOC, inquiry that is under way at present. Is there any reason the committee should be mealy-mouthed about its own findings or opinion as to what happened there, where its report overlaps with that inquiry? I consider these to be substantial points and perhaps I would be better putting them in a memorandum. I will do this, if the Chairman wishes, for next Tuesday. However, the committee should face up to this and while the detail here is very well researched, for which I thank the Clerk, I believe this substantial points are ducked.

Clerk to the Committee:

If I might make one point to Deputy Ross on the use of discretion, when the Commissioner appeared before the committee and we had a discussion, at that stage we were talking about discretion on the part of a garda on the side of the road. For example, if he or she stopped the Deputy to tell him he was driving at 62 km/h and he agreed he was, a garda at that stage would use discretion by not issuing a ticket. That is the discretion to which I was referring, not the subsequent discretion in respect of a system that is in place whereby a superintendent can cancel a point. As far as I can see, the problem is that sometimes, they have cancelled the point where the garda already had not used discretion and had issued a ticket. In such a case, a garda had stopped one for speeding and while one stated one had an excuse, the garda replied that he or she was obliged to give one a ticket and a caution but the ticket in question was cancelled subsequently. The garda already had used discretion at that stage and I think this is where the fundamental problem lay with discretion.

The other problem with discretion was that if penalty points and a fine were cancelled on the PULSE system, there should be an audit in place. For example, if one petitions somebody to state one was on the way to hospital in an emergency and shows the emergency card, that person would agree this fits the policy and that is fine. However, this was not in place. Similarly, somebody might state he or she is a garda who was on duty and was apprehending someone. In such a case, there is an outcome of a crime that can be backed up somewhere else. This is the kind of environment in which we in fact were not operating.

As for the use of discretion, what the committee was saying, and what I was reflecting, was where a garda stops somebody on the side of the road and decides whether to issue a ticket. That is discretion that is used by all police forces and probably entails gardaí using common sense on the side of the road. That is the only discretion to which I was referring and the committee had no difficulty with it.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The discretion to which Deputy Ross refers is within the system after that.

Shane Ross (Dublin South, Independent)
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No, it is both. The initial discretion to which the clerk referring, in which a garda stops somebody on the side of the road, is obviously also open to abuse. While I take the clerk's point about the distinction, because of the findings we have about it further down the line, members must ask the question about what is happening there as well. It is clearly open to huge abuse. If the gardaí stop people to tell them they are driving at 60 km/h but then let them go on, they should answer questions about that. While I have often heard the point that this is practised overseas, that is no reason for it to be a good thing. It is clear this also is open to abuse and I am questioning whether, because of the committee's findings here, as well as other findings about the practices of the Garda, we should question the right of gardaí to exercise that sort of powerful discretion, which will be and has been abused as well.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The Deputy will write to the clerk.

Shane Ross (Dublin South, Independent)
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Yes, I will put in a memorandum.

Eoghan Murphy (Dublin South East, Fine Gael)
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On the points Deputy Ross raises, I do not know whether it is within the remit of the Committee of Public Accounts to make comments on the O'Mahoney report as to its findings or, if there was consensus on the committee, how members believe that report was conducted or whether it had weaknesses. The committee must be careful in its own report to stay within the remit of the functions of the Committee of Public Accounts, which is how the system might have led to a loss of revenue to the State. This is what members have done all along and consequently, I do not believe they should stray away from that unnecessarily at this point.

While the issue of discretion is an interesting and important debate, again I question whether it is one for the Committee of Public Accounts, because the committee must work based on evidence. Members have examined the use of discretion at the latter end of the process and systems are being changed to correct that, in order that there no longer is the same discretion as there was, where it had been shown there had been a loss of revenue to the State. Members cannot know about discretion at the front end, that is, at the beginning of the process. Members cannot make judgments about figures and they cannot possibly know how many gardaí might be abusing discretion in such a way. As members do not know how many, they must be very careful if they make allegations in that regard.

The committee must also accept that gardaí need to be able to exercise their own judgment and to use their common sense because that is important for the integrity of the force and for the maintenance of people's confidence in them. They are gardaí for a reason and they must be able to act as they perceive to be appropriate given the situation or the circumstances. Members heard from Sergeant McCabe how discretion was useful and necessary for gardaí at that front end. Consequently, in changing or attempting to change the report, I would be wary lest the Committee of Public Accounts strays beyond what is its role. Members should keep in mind what they have heard and learnt to date in the many hearings they have held.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Deputy Ross will provide us with a note on his views on this issue.

Shane Ross (Dublin South, Independent)
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Yes, thank you.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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From my point of view on the report, I wished to raise the issue of the internal Garda report. I agree with Deputy Ross that the day of internal reports or secret reports or reports that are kept secret is over. Any reports that are conducted privately and produced on this kind of matter, as well as on the loss of revenue to the State, should be publicised.

There is an issue in respect of the McCabe report and the evidence we heard at our hearings on the whistleblowers afterwards. It could be glossed over, but the fact of the matter, in respect of our report, is that the force did not listen to Sergeant Maurice McCabe. He was treated in a way that was just unacceptable, in particular when he was attempting to do his job and point to the wrongdoing and the loss of revenue. It took the Committee of Public Accounts to provide the platform in private for him to explain it. I wonder how much would have been uncovered had we refused him the opportunity to be interviewed in private. He spent a long time trying to draw attention to this issue in the force. He raised it in many public forums and with Members of the House, but his superiors did not listen to him. That must be questioned, not just because he gave evidence here but also because a number of other whistleblowers have come forward, of whom Una Halliday is one. However, there are others and there is correspondence relating to them for today's meeting. They are not being listened to. Somebody in the system must cry "Stop" to the cover up on the issues whistleblowers have been exposing. We have an opportunity in the report to highlight this relative to Sergeant McCabe and the need for independent reports from outside the system on which the Oireachtas could rely. The system is simply not working. We must take into account the fact that after all of the hearings, after everything that has been said, further reports were made to the Commissioner on the abuse of the penalty points system. I think it happens regularly. The report will be presented and go to the Minister. How will it influence the changes that need to take place? Reform needs to take place. It is up to us, as Deputy Shane Ross said, to tell it as it is. That has to be done. It is about taxpayer's money, governance and how Accounting Officers of Departments manage their affairs. I would have grave doubts about the respect shown to whistleblowers and the information they bring forward. That must change. We can reflect this in the report.

Shane Ross (Dublin South, Independent)
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I endorse what the Chairman said. We must be realistic. To say it is beyond or may not be within our remit is not helpful when we are trying to chase the loss of public money, as the consequences are way beyond the immediate implications. The point about discretion is fundamental. If members of An Garda Síochána are bent, the abuse of their powers means that they are indulging in utterly unacceptable and probably illegal activity. If they are doing it in one place, they are liable to be doing it at the initial stages. If we are to funk that issue, we will be doing the wrong thing. We must be upfront and face the issue, instead of saying it is outside our remit, that we will not touch it and let us bury it. Let us face the facts about the Garda force. The clerk addressed the issue by constantly referring to the need for a culture change in the Garda. I accept that, but a culture change means changing the habits of gardaí who have done these things at all stages. That means addressing the issueab initio, at the very first stage. It also means that the members of the Committee of Public Accounts should address the O'Mahoney report on Sergeant McCabe, the findings of which, after all, as the Chairman said, were very convenient for An Garda Síochána, whereas the other reports were very uncomfortable for the force.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Let us move to the report on medical card eligibility. The findings and recommendations are listed from one to ten on page 15. The first recommendation deals with a comprehensive risk profiling system which should be developed at the PRCS as a matter of top priority. It refers to the information held by the Department of Social Protection that should be of help in building the profile. Second, medical card holders with a high risk profile should be a priority for review. Third, the HSE should examine ways of extending medical cards automatically. Fourth, there are the control procedures. The recommendations are clear. If there are other matters members want to have reflected in the report, they should contact the clerk. The findings are outlined in chapter 5 on page 15.

Robert Dowds (Dublin Mid West, Labour)
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I visited the medical card centre with other members of the health committee. One of the things that really struck me about it - in a sense it reflects some of the worst aspects of the Civil Service - was that one would never have found the office if one did not get good directions. There was barely a sign on the door to indicate it was an office of the HSE. It is located behind a garage, just off the M50 as one heads into Finglas. In a sense, it reflects a frame of mind that one tries to put as much distance between oneself and the public as possible, even though a public service is being provided. I find this unacceptable. I know that, as public representatives, we must make representations on medical cards, but in most cases it should not be necessary for the public to come to us; they should be able to deal directly with the HSE and with the same person once they get to talk to a person rather than being sent from one to the other. While there have been some improvements in how the service has operated, I find the general approach unacceptable.

Joe Costello (Dublin Central, Labour)
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Determination of eligibility is dealt with on page 5 of the report. The Accounting Officer for the Department of Health outlined "the HSE uses its discretion to grant a medical card to a person who is unable without undue hardship to arrange a GP service..." We should be careful when we are dealing with one report that we do not to an extent contradict recommendations made in another. Unfortunately, Deputy Shane Ross has left, but he referred to the discretionary powers available to the Garda. The appropriate body, in the case of medical cards, is the HSE which uses its discretion where normally a medical card would not be available on the grounds of cost. If we are discussing the question of how the Garda operates in exercising discretion, whatever recommendations we make in the two reports should not vary to the extent that there would be a degree of contradiction. Sergeant McCabe did not criticise the discretionary powers of the Garda.

We did insert powers but not in relation to the operation of discretion in the main by gardaí. It is not appropriate to come down with a heavy-handed approach on that area and at the same time acknowledge that discretion on the part of the HSE is a very valuable instrument in terms of ensuring that people in need of medical cards receive them. I point out the possibility that we could produce an anomaly in the manner in which introduce our reports.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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That particular reference is actually a quotation from what the Accounting Officer stated on the day.

Kieran O'Donnell (Limerick City, Fine Gael)
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I thank the clerk for the work done on the reports. On the medical card issue, anomalies were referred to. It is touched upon in the report but perhaps there should be a few recommendations.

There is an inconsistency in the way in which the over-70s are dealt with for discretionary cards compared with the under-70s. A person over 70 who applies is either granted or not granted a card purely on income grounds, not on medical grounds. People can appeal on income grounds, but not on medical grounds. People who wish to apply on medical grounds have to make a completely fresh application and they lose the card before they can make that application. Those under 70 who have a card that is up for review can appeal and hold the medical card for the duration of the review.

The system needs to be streamlined whereby people over 70 can apply for the normal over-70s card and the discretionary card at the same time and be able to hold their card until both applications have been processed. At the moment I am finding that the over-70s are losing their medical card and it can take a significant period of time before they get it back on discretionary grounds.

Another small anomaly is for people over 80 years of age. They get an extra €10 a week in their social welfare and can find that they qualify for a medical card at 79 but no longer qualify at 80, when one would expect their health might deteriorate, because they are getting an extra €10 a week.

There is a need for consistency within the system. On the over-70s card, there should be some transition measure for people turning 80. In addition, people over 70 should be entitled to apply for a discretionary card at the same time they apply for a normal over-70s card, which is purely income-based. Like everybody who is under 70, they should retain their card until both applications are processed. I have no doubt the Chairman would be aware of this in practice on the ground. It is an issue that concerns that age group.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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It is an issue we should reflect in the report. We move on to the composite reports on four meeting, the first of which deals with Waterford Institute of Technology.

Clerk to the Committee:

In a nutshell what we are talking about in this case is that people did not shout "stop" when they became aware of the issue. Much the report is based on the roles of the Higher Education Authority, the governing bodies and the internal audit in order that this kind of thing does not happen again. What happened in WIT was that the major focus was on developing the university status and it lost sight of the control mechanism. We need to ensure that does not happen again. There are a number of recommendations on the governing bodies, the size, the need for the internal audit to review propriety spending, and the need to develop a whistleblowers' charter. It is much the same stuff that is coming back in. It is about making sure that this cascade of responsibility, which they referred to at the meeting, actually works because it did not work in the Waterford situation. They did not know what was going on. That is it in a nutshell.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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At last week's meeting we noted the audits of different organisations, one of which was the Cork Institute of Technology. It is similar and the same recommendations could be made for CIT. We noted that audit and maybe we should not have noted it because a report was provided through this committee to the Department that raised serious concerns about a range of issues in CIT. There is a problem in the whole education sector with how they are made accountable, how transparent they are and so on. At the end of the hearing with WIT, we got our information and it was obvious what we concluded from it. Then similar circumstances prevailed in CIT. We have still not received the report on that from the Department of Education and Skills. Too much time elapses between the committee hearing evidence, getting information or getting reports from anonymous sources and getting a reply from the Department. We can learn from WIT, but we need to ask the Department for a speedy response to all the issues raised in the context of that report we received about CIT.

We move on to the land swap.

Clerk to the Committee:

On land swap, there is the ability to fulfil a contract, a commitment was entered into, and there was a doubt about it. What we are talking about is that where one enters a contract, one should make sure there are no doubts and have better co-ordination between Government agencies. Again we see this a lot where public bodies end up in court and they incur costs of approximately €1 million. That should not happen.

The other issue in this respect is better risk sharing. At the start of the process the developer had carried a lot of the risk, but it transferred back to the State because the house prices that had to be paid in 2012 were reflective of 2006. Those are just a few recommendations that carry across Departments about avoiding court cases and having better co-ordination.

Kieran O'Donnell (Limerick City, Fine Gael)
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Am I correct in saying that by sheer twist of fate, the land ended up going into NAMA?

Clerk to the Committee:

Yes.

Kieran O'Donnell (Limerick City, Fine Gael)
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That was a pure twist of fate.

Clerk to the Committee:

I think it was fortunate from the State's point of view that they did not have to pay to developers prices for houses in 2012 that reflected those in 2006.

Kieran O'Donnell (Limerick City, Fine Gael)
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If NAMA had not been there at the time, the State could have been caught.

Clerk to the Committee:

It would have taken the full risk for this process.

Kieran O'Donnell (Limerick City, Fine Gael)
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Was there any lead authority on this project at the time?

Clerk to the Committee:

The Affordable Housing Partnership was, but there were a number of what were described as rolling balls. The Department-----

Kieran O'Donnell (Limerick City, Fine Gael)
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If my memory is correct, no one was sitting on the ball in midfield. There were a lot of corner forwards, but very few playing in midfield. Would that be a fair analysis?

Clerk to the Committee:

Yes, that is right.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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We might call on Deputy O'Donnell on Saturday.

Kieran O'Donnell (Limerick City, Fine Gael)
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I am always available, for Limerick. I think Brian Cody has more than enough. Am I correct that the two things to come out of this were, first, the State had a lucky break in terms of NAMA, which is an unusual comment to make, but that is the case, and, second, there was no proper lead authority structure in place in terms of proper due diligence being done on this contract at the time?

Clerk to the Committee:

That is correct.

Kieran O'Donnell (Limerick City, Fine Gael)
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If my memory serves me right, the lack of a lead authority at the time resulted in no one directing the play.

Clerk to the Committee:

Many decisions were being made which were contingent on other issues. For example, they said they would swap a piece of land, but there was a Garda Síochána barracks on it and it did not become vacant until 2012.

That is part of the problem. Had there been a lead authority to call the shots, it could have ensured the State would have delivered on its side of the bargain-----

Kieran O'Donnell (Limerick City, Fine Gael)
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We might include that in the recommendations.

Clerk to the Committee:

That is right.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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So the State ended up paying compensation of €31 million for a site that was worth less than €3 million.

Clerk to the Committee:

At that time. Yes, that is correct, but it paid the €31 million to NAMA.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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We have to accept the fact that the process completely failed.

Kieran O'Donnell (Limerick City, Fine Gael)
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I suppose there is another issue also. From a cashflow viewpoint, the €31 million the State had to give to NAMA could have been used to address many other on-the-ground issues, now rather than in the future.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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How many times have we seen similar occurrences, although not the same? One could say the €4 million associated with the hostel in Tipperary is the same. Some €4 million has gone into the building with no return whatsoever.

Clerk to the Committee:

When we come to the State Pathologist's office, we will see €4 million gone for a building that is knocked.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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These are not insignificant amounts of money. When added up, they amount to a colossal loss to the State. Despite this, the State does not seem to learn that there should be a lead authority, as stated. It would be a simple thing. The State does not seem to learn from all the areas of hearings of this committee and recommendations. There is sometimes reluctance on the side of the State to implement some recommendations that we would put forward that would be accepted by any business but which are not accepted by the Department in question. Something really has to happen in regard to how this is managed.

Kieran O'Donnell (Limerick City, Fine Gael)
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We keep raising this at meetings of the Committee of Public Accounts. When Departments are dealing with money, they must look on it as if it were their money because it is taxpayers’ money, or money paid by the taxpayer. This needs to be clearly fixed in the mindset of the public sector in terms of how it operates. It is operating with taxpayers’ money. I often find this does not appear to come through.

In the context in question, a sum of €4 million was spoken about. Many schools in my constituency are looking for €1 million or €2 million to construct classrooms. The €4 million would more than contribute towards this. In isolation, each sum of money is significant but when added up they comprise a tremendous amount. The State operates on a cashflow basis. Therefore, if the €30 million that has gone to NAMA were not in NAMA, it would be put to far more constructive use in the short term in terms of the delivery of services on the ground, which is the role of the Government. We collect money from the citizens and taxpayers, including people who pay VAT, right across the spectrum and they are entitled to be certain their money will be spent in the most prudent manner. That is the role of this committee.

With this particular report, we need to put in place a structure, particularly in respect of lead authorities and proper due diligence, which is many cases is not applied. Applying due diligence is the normal process to ensure the circumstances under discussion do not arise. In this particular case, that of the land swap, the State or Departments were left off the hook by the establishment of NAMA, which is still resulting in a cashflow delay as money is going into NAMA and not to people on the ground. We should be very strong on this issue.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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It is very difficult to explain to a 79 year old who is turning 80 that his €10 is going to prevent him from having a medical card while at the same time the Accounting Officer for the State pathology laboratory can come before us and say he demolished a certain building. People are tired of it, quite frankly. Maybe we should find some way of expressing that in the overall context pertaining to Departments in this report, in this particular-----

Kieran O'Donnell (Limerick City, Fine Gael)
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Obviously in a constructive way.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Yes. I would not do it any other way.

Joe Costello (Dublin Central, Labour)
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I agree with everything that has been said. Was it a fact that the deal was done in 2006 and that the property was not available for the swap until 2012, six years later?

Kieran O'Donnell (Limerick City, Fine Gael)
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With multiple Departments involved.

Joe Costello (Dublin Central, Labour)
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With multiple Departments involved and no proper lead Department. That this could have happened and that someone could have made a decision knowing full well that the property would not be available for swapping for a considerable period, and knowing also that we were in a bubble in the development market and that prices were going out of control in 2006, mean a lot of questions have to be answered. Having a lead agency and somebody responsible for any proposed future swap in the future would be highly important. Is it also a fact that, through a fluke, more or less, NAMA has done well out of it? Is it the case that while the original value was €77 million, the houses built by the developer, thereby fulfilling his part of the deal, were sold for €46 million, and the compensation amounted to only €31 million, the State, by default more or less, did not end up being a loser?

Clerk to the Committee:

Overall, it did not, I suppose. It got over 200 houses. The cost of those houses---

Joe Costello (Dublin Central, Labour)
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Two hundred and fifteen houses costing-----

Clerk to the Committee:

They got that. The point is that-----

Joe Costello (Dublin Central, Labour)
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The developer would have delivered a value of €77 million.

Clerk to the Committee:

Yes.

Joe Costello (Dublin Central, Labour)
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Between the jigs and the reels, the developer got compensation of €31 million when he went to court and all the rest of it.

Clerk to the Committee:

Basically the developer pulled back his full costs; that is what happened. The developer would have said, "The value of those 259 houses is €77 million and I am going to sell them as affordable houses for €46 million and get an asset from the State on top of that as compensation." However, the asset was worth only €15 million, at a maximum. By the time the whole deal had fallen through, the asset was worth only €3 million.

Joe Costello (Dublin Central, Labour)
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Three million euro. What did the developer get out of it?

Clerk to the Committee:

The developer got his full-----

Joe Costello (Dublin Central, Labour)
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He got compensation of €31 million.

Clerk to the Committee:

Yes.

Joe Costello (Dublin Central, Labour)
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Did he get the site?

Clerk to the Committee:

No, the site is still with the State. There is a school on the site now.

Joe Costello (Dublin Central, Labour)
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So he never got to swap?

Clerk to the Committee:

No.

Joe Costello (Dublin Central, Labour)
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It is worth €3 million only at present.

Clerk to the Committee:

It was worth €3 million but has gone up a little now.

Kieran O'Donnell (Limerick City, Fine Gael)
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From whose budget did the compensation of €32 million come?

Clerk to the Committee:

It came out of budgets of the OPW and the Department. They split it.

Kieran O'Donnell (Limerick City, Fine Gael)
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Is it the Department of the Environment, Community and Local Government?

Clerk to the Committee:

Yes. I did not reflect it in the report but it is coming out over a number of years. There is about €6 million coming out of the Vote of the Department of the Environment, Community and Local Government this year.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Can the clerk set that out in the report?

Clerk to the Committee:

I can, yes.

Kieran O'Donnell (Limerick City, Fine Gael)
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Did they get any tangible assets for that?

Clerk to the Committee:

The affordable houses were delivered and they held on to their assets. It is as if they agreed to provide 259 affordable houses in 2006, and 259 families got them. That is the tangible asset we have.

Joe Costello (Dublin Central, Labour)
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Overall, it was an advantage in respect of the 215 houses. It was a sizeable amount and the State did not lose per se on the deal. The developer, one might have said, would have lost more had he got the property at that time. It was very valuable at that time and he could have used it.

Clerk to the Committee:

Yes. The developer was taking the risk at the time but by the time the process had finished the risk had transferred back and the State met the full risk. It paid the full price for the houses. That is essentially it.

Kieran O'Donnell (Limerick City, Fine Gael)
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For argument's sake, had the arrangement gone through as normal in a reasonable period, what would have been the cost to the State?

Clerk to the Committee:

The cost would have been a lot less in the sense that it would have given over an asset - the Harcourt Terrace station - to the developer. He, at that stage, would have borne the risk because he was in a falling market, etc. Ultimately, the State probably did not lose out a whole pile given that the developer went into NAMA anyway.

Joe Costello (Dublin Central, Labour)
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Did the State lose at all? It would have benefited overall.

Clerk to the Committee:

There would have been less cashflow.

Joe Costello (Dublin Central, Labour)
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If there were a write-down of the €77 million value of the 215 houses to €46 million, it would still be well in excess of the €32 million in compensation that the developer got.

Clerk to the Committee:

What one does is take the €46 million that the developer got on selling the houses to the 215 families. He got €46 million but the houses were actually valued at the time at over €70 million.

He got the difference between the two prices, the full value of the houses.

Joe Costello (Dublin Central, Labour)
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The developer got the difference between the maximum in 2006 and-----

Clerk to the Committee:

He got full value for the houses.

Joe Costello (Dublin Central, Labour)
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In that case, there was a substantial loss to the State.

Clerk to the Committee:

The State ultimately had to pay up.

Joe Costello (Dublin Central, Labour)
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It is a salutary lesson.

Kieran O'Donnell (Limerick City, Fine Gael)
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Is it fair to assume that the loss to the State would have been greater if the National Asset Management Agency had not been established?

Clerk to the Committee:

No; the loss would have been the same. The developer would have met his full costs. He did not take any risk in developing the houses in 2006.

Joe Costello (Dublin Central, Labour)
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A haircut was applied to the loan.

Clerk to the Committee:

Exactly.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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We will proceed to the appointment of the director of the National Gallery of Ireland, on which three findings and three recommendations have been made. The first finding is that while removal and relocation expenses can be paid in limited circumstances when an appointment of a person based abroad is being contemplated, no guidelines are in place governing when such payments are deemed appropriate. The second finding was that the payment of relocation expenses on the appointment of the director of the National Gallery was not in accordance with the sanction of the Department of Public Expenditure and Reform. An issue arose as to whether the payment had been sanctioned.

Clerk to the Committee:

It was not sanctioned.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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There is no provision in place under which the director of the National Gallery of Ireland must repay moneys if his vouched expenses fall short of the up-front payment of €40,000 made to him in 2012. We have made three recommendations. This is another example of a process involving a Department and an agency that was too loose. It is a straightforward matter.

Clerk to the Committee:

In fairness to the National Gallery, it wanted to avoid the cost of €30,000 associated with re-running a competition. It was, therefore, under pressure. It is a relatively minor issue.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The final case relates to the State Pathology Service.

Clerk to the Committee:

The upshot of this case is that the State, having made a commitment to build a facility, ended up spending €4 million on a building that was subsequently demolished. Much of this relates to project management and one State authority being challenged before An Bord Pleanála by another State authority. Two public authorities, Dublin City Council and the Department, used the wrong tender form, which set the project back by approximately two years. Despite the Dáil approving the Estimates for the Department in 2007 and 2008 and providing adequate money for the project, the funding was not available in 2012 and the building was knocked down.

The key point arising from this case is that many of the Departments that become involved in building projects do not have expertise in this area. The Department of Education and Skills is an exception as it has expertise in the area of school building projects. For this reason, the Department of Justice and Equality should transfer responsibility for building projects to the Office of Public Works, which is the expert in handling these matters. It is crazy to have public bodies engaging in a dispute before the courts or An Bord Pleanála.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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This brings us back to the point Deputy O'Donnell made on having a lead authority when we discussed an earlier case. His point also applies in this case.

Clerk to the Committee:

That is correct.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I was struck by the casual acceptance of the view that building cost of €4 million was relatively minor.

Clerk to the Committee:

At the relevant meeting, the Chairman raised the point that while expenditure must be sanctioned by the Department of Public Expenditure of Reform, there is no requirement to inform the Department if the money is subsequently written off. In this case, the Department of Public Expenditure and Reform was not aware of what had taken place. The Department should remain involved in the process and it should be difficult to write off money. Where it is written off, a detailed process should apply.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Departments must pay the same attention to spending taxpayers' money as they do to collecting it. It would be much better if they treated public money as if it were their own money.

Clerk to the Committee:

Yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I wish to raise a number of issues for inclusion in each of the reports. Once they have been finalised, will the reports be submitted to the relevant line Minister or the Minister for Public Expenditure and Reform?

Clerk to the Committee:

Once the reports are signed off by the Committee of Public Accounts, they will be laid before the Houses and referred to the Minister for Public Expenditure and Reform. This report will go to the line Minister. In the case involving the National Gallery, the report will go to the Minister for Arts, Heritage and the Gaeltacht, who is the line Minister. The report relating to the State Pathology Service will go the Minister for Justice and Equality.

Kieran O'Donnell (Limerick City, Fine Gael)
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What mechanism is in place to have Departments respond to the committee when we send them reports?

Clerk to the Committee:

The normal mechanism is that the response is co-ordinated by the Department of Public Expenditure and Reform. The response comes back by way of a minute from the Minister.

Kieran O'Donnell (Limerick City, Fine Gael)
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Is it issued by the line Minister?

Clerk to the Committee:

No; it comes back through the Minister for Public Expenditure and Reform, whose role is one of co-ordination. The Minister will indicate that the Department either accepts or does not accept a recommendation - for example, on medical cards. At that point, the Committee of Public Accounts can consider the response.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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That concludes our discussion of the various reports.

On a point of clarification, are Departments obliged, as part of the process of accounting for their expenditure, to provide the Committee of Public Accounts with any papers we seek - for example, in connection with cases such as the Fleury case to which I referred I earlier?

Clerk to the Committee:

My understanding is that if the committee seeks papers in connection with an issue it is examining, it is entitled to receive them. The powers of the committee are that it can call persons and obtain papers and records. If a member indicates that he or she has an interest in a particular case that does not arise from a hearing the committee has had with the relevant Accounting Officer, the Department will generally provide us with a detailed note. Sometimes difficulties arise if court cases are involved or an issue is before the courts. In general, however, Departments should provide full information and a full account to the committee.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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In a number of cases that we have touched on - other members have raised this issue - the Departments should have been much more forthcoming with the information. Members need to be informed when dealing with the various Accounting Officers.

Clerk to the Committee:

Yes.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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If it is necessary to meet next Tuesday to deal with any major issues that arise in the meantime, we will do so. If not, we will publish the reports next Thursday.

John Deasy (Waterford, Fine Gael)
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If issues arise, will members be given late notice of a meeting to deal with them on Tuesday in order to have these matters finalised by Thursday?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Yes.

Kieran O'Donnell (Limerick City, Fine Gael)
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If a meeting is necessary, it should be held as late as possible on Tuesday.

Clerk to the Committee:

Any meeting will probably be held at 7 p.m.