John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Are the minutes of the meeting of 16 October 2014 agreed? Agreed. Are there any matters arising from the minutes? Last week, the Comptroller and Auditor General was asked to provide a note on the number of audits that have been completed within the six-month timeframe recommended in the code of practice for State bodies, and within a 12-month period. We will start the meeting by asking the Comptroller and Auditor General to provide us with an update on that.

Mr. Seamus McCarthy:

I have prepared a table indicating where we are at the moment. It does not specifically address all the things we have there, but I can certainly expand it and provide the additional information next week.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Last week, Deputy Ross commented on bodies publishing unaudited accounts with their annual reports. He raised that matter last week.

Shane Ross (Dublin South, Independent)
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I did, Chairman.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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It concerned bodies publishing unaudited accounts.

Mr. Seamus McCarthy:

I will make a quick comment on that. It is a relatively unusual event for a body to publish unaudited accounts. I only know of a handful of cases where it has happened. In the code of governance there is an expectation that unaudited financial statements, with all the notes and so on, are submitted to the relevant Department within two months of the end of the financial year. Therefore, unaudited accounts are being used at an official level, but it is quite unusual for them to be published.

Shane Ross (Dublin South, Independent)
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The accounts were late anyway.

Mr. Seamus McCarthy:

Yes.

Shane Ross (Dublin South, Independent)
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Maybe that is the reason but it is a strange thing to place unaudited accounts in the public arena, is it not?

Mr. Seamus McCarthy:

It is. One would normally expect that there would not be much change between the unaudited financial statements which would be presented to us for audit and the finished product.

Shane Ross (Dublin South, Independent)
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But there might be.

Mr. Seamus McCarthy:

There can be and certainly there have been instances where in the course of discussions we would point out to them that something is not properly presented or particularly that additional disclosure would be helpful to users of the accounts. That is one of the things that holds up the completion of the audit, but there can be changes. It is important that, if that occurs, it is very clear what is the final audited version.

Shane Ross (Dublin South, Independent)
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When is this going to be resolved? When will the final audited version come through? This is the LRC, is it not?

Mr. Seamus McCarthy:

Yes, the LRC. My understanding is that we have the signed accounts from the body after any audit changes have been put through. I do not know if there were any significant changes from those that were published.

Shane Ross (Dublin South, Independent)
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Mr. McCarthy does not think there is any particular reason in this case? Does he think they just threw them in because they were late with the other ones?

Mr. Seamus McCarthy:

No. If one looks at the legislation around annual financial statements and annual reports, in general a distinction is made between the preparation and the presentation of the two. There is a provision for them not to move in locked step. Sometimes one will see in the certificates that we issue a reference to where an annual report is being published together with the financial statements. We have an obligation to consider the content of the annual report to establish that there is no inconsistency between what is in the report and what is in the financial statements. Most organisations will publish their financial statements separately from their annual report which generally focuses on performance and what the organisation is doing rather than on the financials.

Shane Ross (Dublin South, Independent)
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That is fine. I think we have bigger fish to fry next.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Would the fishery harbours be unique due to the fact that they did not keep proper accounts? That came across last week.

Mr. Seamus McCarthy:

Yes, it is quite unusual. One of the things we have to be satisfied about in preparing and presenting an audit report is whether they kept proper books of accounts. Occasionally we will reference it. There would be situations where there may be a lot of manual aspects of the books of accounts. In such situations we may find ourselves having to do more work to try to be satisfied as to the correctness of the financial statements. However, there is an expectation that proper books of accounts are kept and we do address it in every audit.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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In terms of the audit committee itself in a lot of these places, does Mr. McCarthy get copies of the internal audits?

Mr. Seamus McCarthy:

Yes, that would be one of the things done as part of the audit planning. We would look at internal audit reports that have been published to see if there are any issues that may have an implication for the financial statements particularly. We would also look at internal audit reports to see that a proper regime is in place for carrying out internal audits so that, first of all, the findings of the internal audit are sound and, second, that they are acted upon. Those are the things we would examine in relation to internal audits.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Just to conclude on this point, I thought what happened last week was extraordinary because so many items within an audit were ignored. I am not talking about Mr. McCarthy's audit, but their audit in fisheries. Leases were not being put in place and money was not being collected - the basic management of all the harbours. Last week, I asked them to give us a copy of their internal audits because they said they had them. Would those internal audits have shown up the issues we discussed last week?

Mr. Seamus McCarthy:

The normal expectation would be that an internal audit would look at the risks particular to the business, and they would design their work to test the key risks. For instance, if the collection of fees from trawlers is one of the key potential income areas, an internal audit should on a cyclical basis - one would not necessarily expect them to do it every year - give it a thorough examination. Similarly, if rents are a key aspect of the activity of the organisation, there would be an examination of the assets and of the rent generation.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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They did not just fail in one year. They failed in a number of years.

Mr. Seamus McCarthy:

Yes.

Kieran O'Donnell (Limerick City, Fine Gael)
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By way of observation, there was something slightly curious about the fact that from 2007 on, the accounts for the harbours were qualified whereas in 2006 they were unqualified. I was wondering how we went from a situation where they were unqualified to being qualified the following year. At that stage, both were under the Department of Communications and Natural Resources. It is just an observation.

Mr. Seamus McCarthy:

We were carrying out the audit of the 2007 financial statements, that was after the transition had occurred between one Department and the other. It was in the process of handover that the thing fell apart. There were obviously ongoing issues that had not been picked up in previous years, like a property sale going back to 1993 which would be very difficult.

Kieran O'Donnell (Limerick City, Fine Gael)
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That is new information. We did not have that at the time they were here. Mr. McCarthy is saying that his audit qualification was based on the fact that it went from the Department of Communications and Natural Resources to the Department of Agriculture, Food and the Marine. Yet we were told on the day by the latter Department's officials that, in essence, the same people were on the ground, were they not?

Mr. Seamus McCarthy:

There was a transition arrangement put in place. I think the official handover was in October 2007, but the practical handover was in April 2008.

Kieran O'Donnell (Limerick City, Fine Gael)
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So Mr. McCarthy had no issue when they were with the Department of Communications and Natural Resources, but he had an issue when they were with the Department of Agriculture, Food and the Marine?

Mr. Seamus McCarthy:

I would not say we had no issue.

Kieran O'Donnell (Limerick City, Fine Gael)
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But Mr. McCarthy gave them an unqualified report?

Mr. Seamus McCarthy:

We did but we had certainly identified that there was scope for a lot of improvement in the financial statements.

The financial statements are quite unusual in that there is a cash account and an accrual account, but there were issues we would have been picking up and requiring changes, as I explained to Deputy Ross, from the initial draft presented. What happened in 2007 is that when responsibility transferred, there was a fall down in the billing of landing charges.

Kieran O'Donnell (Limerick City, Fine Gael)
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It was two years.

Mr. Seamus McCarthy:

It affected 2007 and 2008.

Kieran O'Donnell (Limerick City, Fine Gael)
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Would the witness agree that a timeframe of six years before the audit was concluded for the 2008 accounts was not good?

Mr. Seamus McCarthy:

I am extremely unhappy that it should have taken so long. However, something might creak along and be barely adequate for purpose and then some change happens and it just falls apart. There is not enough robustness in the system.

Kieran O'Donnell (Limerick City, Fine Gael)
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The final point is one which arose at the last committee meeting. In future, when the Comptroller and Auditor General is doing an annual report, it is important that audits that are ongoing would be highlighted so we can be made aware of audits that are ongoing for six years. If that happened in the private sector, companies would be struck off and gone.

Mr. Seamus McCarthy:

Yes.

Kieran O'Donnell (Limerick City, Fine Gael)
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We cannot have double standards.

Mr. Seamus McCarthy:

I fully agree. I have been contemplating what is the best format to present that report, and the best timing. One option would be to put an additional report into the September annual report. The difficulty with that might be that the information might not be as complete as the committee would wish. It might be better to do a special report in January or February.

Kieran O'Donnell (Limerick City, Fine Gael)
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It is an annual matter. It is not taking from the great work that the various organisations do, but in terms of consistency this highlights that attention must be drawn to it on an annual basis.

Mr. Seamus McCarthy:

We have another report coming forward - it is with the Minister for Education and Skills at present - on the National College of Art and Design. Again, there are similar issues about the capacity to produce financial statements.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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No. 3A is correspondence from Accounting Officers and-or Ministers. No. 3A.1 is correspondence, dated 15 October 2014, from Mr. John Treacy, Irish Sports Council. It is a follow up to our meeting on 2 October 2014, to be noted and published. I ask the Clerk to the Committee to check on the correspondence that has been received from Dr. Thomas Reid. We asked that all of the issues he addressed in his correspondence would be answered by the Irish Sports Council. I am not sure if this letter deals with all of those issues, but we will check it. Second, Dr. Reid suggests that the council meet with him to discuss the issues. We should have a response from that meeting, if it happens. We might write and ask them to keep the committee up to date on the matters that have been raised. We can return to this correspondence again at our next meeting. The correspondence is to be noted and published.

John Deasy (Waterford, Fine Gael)
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Mr. Treacy also sent a note to the committee, or perhaps it was directly to me. I asked a question about Team Ireland Golf Trust and he responded by saying that nobody who applied for it did not get it. However, my point was that the amounts of money involved were tiny and the cost of pursuing that career is enormous. I have been surprised at the reaction to the exchange, because so many people were also of that opinion. Perhaps the committee could ask the Irish Sports Council to examine how much other countries give to similar young professionals starting their career. It is a reasonable issue. The success Ireland has achieved in this area has been amazing and the amounts of money being disbursed to these young professionals are very small. We should at least try to compare it with the situation in other countries, particularly in Europe.

Clerk to the Committee:

We can do that.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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We might again ask about its mediation relating to the item we raised regarding Millstreet. It is still outstanding, and there is no note here as to whether a meeting was set. I am anxious to know if there is a process in place to deal with that, because it is an exposure to the organisation and to the State.

No. 3A.2 is correspondence, dated 15 October 2014, received-----

Joe Costello (Dublin Central, Labour)
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A matter I raised with the Irish Sports Council was the fact that 50% of all the grant funding went to the big three organisations - the Football Association of Ireland, FAI, the Gaelic Athletic Association, GAA, and the Irish Rugby Football Union, IRFU. Considering the other mechanisms they have for accessing funding, sponsorship and so forth, I asked that it review that and also include a criterion that would be based on need, which it does not have in its existing criteria. The council agreed to do that. Could we ask the council to send us a copy of the new criteria, including the criterion it agreed to include henceforth, for its determination as to how certain bodies, such as boxing and so forth, are to be included in the grant allocation?

Clerk to the Committee:

We can do that.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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No. 3A.2 is correspondence, dated 15 October 2014, from Mr. Ray Mitchell regarding issues raised at a meeting in June 2014 on procurement. It is to be noted and published.

No. 3A.3 is correspondence, dated 17 October 2014, from Mr. Tom O'Mahony, Secretary General of the Department of Transport, Tourism and Sport. It is a follow up to our meeting with the Irish Sports Council and is to be noted and published.

No. 3A.4 is correspondence, dated 17 October 2014, from Mr. Kieran Timmins, chairman of the board of governors of the Central Remedial Clinic, CRC. It s a follow up to our meeting with the CRC in July 2014 and is to be noted and published.

No. 3B.1 is correspondence, dated 15 October 2014, from L. Ryan re second level school for Traveller students only. That matter is to be sent to the Department of Education and Skills for a note. When we receive that note, we can comment on it further.

No. 3B.2 is correspondence received from Mr. Joe Hamill, Secretary General of the Department of Arts, Heritage and the Gaeltacht re funding at Pointe Pier, Connemara, County Galway. It is to be noted.

No. 3B.3 is correspondence received from an anonymous source re corruption and cover up in the Health Service Executive, HSE, County Meath. This is to be noted and forwarded to the HSE for a note on the issues raised.

No. 3B.4 is correspondence received from Mr. Sean Martin re Mater hospital debt collection. It is to be noted and forwarded to the Department of Health and the Mater hospital for a note on the serious issues raised.

No. 3B.5 is correspondence received from Mr. William Treacy re wrongdoing in the Department of Agriculture, Food and the Marine. It is to be noted.

No. 3B.6 is correspondence received from Brendan T. Muldowney & Co. Solicitors reporting to the committee. This relates to the special investigation unit and the fact that this person is now anxious to come forward and speak to the committee regarding the costs and so forth. It is an issue I raised last week. Perhaps we could list the names of individuals who have asked to appear before the Committee of Public Accounts to raise certain issues, and we can decide on it later when we see the extent of their interest. It is something the committee would be interested in because it is taxpayers' money and it is very hard to get a handle on how much was spent in respect of these matters, particularly when the court cases were stood down or the charges were dropped. A considerable amount of money had been spent in one case over ten years. We will gather the information, bring it to the next meeting of the committee and perhaps decide on a date for a hearing with these individuals.

No. 3C is correspondence relevant to today's meeting. No. 3C.1 is correspondence received on 20 October 2014 from Mr. John Pollock, project director of the national paediatric hospital, regarding the briefing material. It is to be noted and published.

No. 3C.2 is correspondence received on 21 October 2014 from the national paediatric hospital, the opening statement. It is to be noted and published.

No. 4 is reports and statements received since our last meeting in October. There are two. One is the Higher Education Authority financial statements 2013.

Attention is drawn to the existence of pension control funds in five universities which are held for disposal at the direction of the Health Service Executive. The accumulated funds stood at €125 million at 30 September 2013 and €94 million in 2012. Do any issues of significance arise in this regard?

Mr. Seamus McCarthy:

We have reported on that each year for the past number of years. It is a complex arrangement on pension funding for universities. In effect, the Higher Education Authority controls the disposal of these funds, although they are held not by the authority, but by the individual universities. It is a technical issue, which will probably wash out in due course.

I draw Deputies' attention to the fact that we published a special report this week on the effectiveness of audit committees in State bodies. The report was presented to the Dáil on Tuesday. Also, just this morning, a special report was presented on the development of the greyhound stadium at Limerick. The committee previously discussed this issue when it met representatives of Bord na gCon.

Clerk to the Committee:

Was the report presented this morning?

Mr. Seamus McCarthy:

Yes, we were waiting for the letter to come through. It was presented at approximately 9.30 a.m.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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We will read the report and schedule it in our work programme.

Shane Ross (Dublin South, Independent)
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I raise an issue that relates both to correspondence and the committee's work programme. Last night, members received from the Clerk to the Committee a copy of a letter sent to him by Ms Ramona Quinn, the parliamentary legal adviser, in which she refers to an earlier conversation regarding the proposed examination of Irish Water officials by the committee and notes that is envisaged that officials of Irish Water will be invited to attend a public meeting wherein managers will be examined. The letter then states that this is absolutely unlawful. Why has this issue arisen? I was not aware that representatives of Irish Water were due to appear before the committee.

Clerk to the Committee:

They are not due to appear.

Shane Ross (Dublin South, Independent)
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In that case, what is this letter about?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The matter was not raised at a meeting of the committee. Representatives of Irish Water appeared before the committee some time ago. I believe the letter also refers to the Poolbeg incinerator project. Deputy Eoghan Murphy and other Deputies had asked whether the committee could investigate the money spent on the project and sought a report on the issue. We received a report from the Department of the Environment, Community and Local Government on its audit of the project and it was proposed to return to the issue. While the committee discussed Irish Water in the context of the Poolbeg incinerator project, nothing materialised from these discussions until officials from the Department of the Environment, Community and Local Government appeared before us. I did not see the letter to which Deputy Ross refers until this morning.

Shane Ross (Dublin South, Independent)
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Has a legal opinion been sought?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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No.

Shane Ross (Dublin South, Independent)
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Why are we receiving legal opinions which we have not sought? How did this matter arise?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I cannot explain how it arose or the reason the letter was sent to members. The issue is not on our work programme and has not been raised here, although it was mentioned repeatedly in meetings with departmental officials. Representatives of Irish Water appeared before the committee and members of the committee expressed an interest in the role of the Department, Dublin City Council and Irish Water in the Poolbeg incinerator project. The issue continues to be of public interest and members have expressed an interest in examining it. We have a report on expenditure on the project. I do not know the reason a legal opinion has issued because, as I stated, the matter is not on our work programme.

Shane Ross (Dublin South, Independent)
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Are lawyers in the business of sending us legal opinions from time to time or when they feel like doing so? Perhaps the Clerk to the Committee can throw some light on the issue because I do not understand it.

Clerk to the Committee:

I received the letter yesterday evening with a direction to send it to members. My understanding is that some media comment was made yesterday suggesting that representatives of Irish Water were to appear before the Committee of Public Accounts and members would also discuss the issue of Poolbeg. I saw some media comment to that effect. The issue is not on our work programme, however. In fact, we were working on a proposal with the Department of Public Expenditure and Reform, arising from a letter received by the committee in September from the Secretary General, Mr. Robert Watt, in which he stated he saw considerable merit in having the start-up costs of Irish Water and the Poolbeg project come within the remit of the committee. The Poolbeg project will be a major project and it is not dissimilar to the issue the committee will shortly examine. I wrote to the Department on the matter to ascertain how this could be done. As to the legal advice, I received it yesterday evening and was told to forward it to members. I believe it arose from media comments.

Shane Ross (Dublin South, Independent)
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The letter refers to "our earlier conversation". To what does this reference pertain?

Clerk to the Committee:

I received a telephone call from the legal adviser beforehand in which she stated it had been brought to her attention that there was considerable media comment on the issue of bringing representatives of Irish Water before the committee.

Shane Ross (Dublin South, Independent)
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Do lawyers pick up every bit of tittle-tattle in the media and issue legal opinions to the committee as a result of it? We had not proposed to have the individuals in question come before us.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Two issues arise. Representatives of Irish Water should come before the committee and someone should answer questions on the Poolbeg incinerator project. These are two major issues on which there has been considerable public comment. I stated in public my belief that representatives of Irish Water should appear before the committee. I based that on the suggestion by the Secretary General, Mr. Watt, that the committee have a role in these matters. Mr. Watt stated he was prepared to examine, with the committee, the possibility of examining the start-up costs of Irish Water and the costs the State has incurred to date from the Poolbeg incinerator project. That is the extent of the commentary, if one likes.

I take exception to the fact that, arising from the comment I made and possibly other comments made by members, this legal advice dropped out of the sky last night or this morning. I was not asked about it and I do not know about it. I am simply reacting to conversations we had with the Secretary General of the Department of Public Expenditure and Reform and the interest expressed by members. Legal advice should be given after it has been sought, not on the basis of information that appears in the press or comments made by someone else. The legal advisers will be very busy if they propose to adopt an approach of responding to every comment that is made. Frankly, I find it ridiculous and a waste of money.

Shane Ross (Dublin South, Independent)
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I do not know whether the Chairman will agree with me but there appears to be a pattern developing of deliberately trying to muzzle the activities of the Committee of Public Accounts by anticipating its activities and trying to stop or obstruct us. I am very alarmed by this unsolicited legal advice. It is a unique case.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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After this meeting, I intend to find out the reason the Houses of the Oireachtas was so anxious to have a letter sent to us on the basis of what Deputy Ross described as tittle-tattle in a newspaper.

John Deasy (Waterford, Fine Gael)
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The letter has not been forwarded to me and I have not read it. Will the Chairman outline what it is that is perceived to be unlawful? Is it the opinion of the legal adviser that it would be unlawful of the committee to ask representatives of Irish Water to appear before us or simply for its representatives to appear? What is the advice?

Clerk to the Committee:

I cannot interpret the advice. It relates to straying beyond the remit set out in Standing Order 164, under which the committee must confine itself to the reports of the Comptroller and Auditor General. Irish Water and the Poolbeg project are not audited by the Comptroller and Auditor General. If the word "unlawful" is used, that is the view of the lawyers.

John Deasy (Waterford, Fine Gael)
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I have a practical question that applies to everything we are doing including the other court case. If we deal with the Health Service Executive or the Department of Transport, Tourism and Sport or a body funded by a Department that wants to come in here to explain a situation to money expended from the public purse, is that unlawful then? We are getting to a point of absolute absurdity here.

Clerk to the Committee:

Yes.

John Deasy (Waterford, Fine Gael)
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The Oireachtas commission should cop itself on with regard to the workings of this committee. It will constrain everything this committee does if it applies that kind of attitude. That should be registered. If the commission does not understand what this committee does - it is becoming clear it may not-----

Shane Ross (Dublin South, Independent)
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It understands it very well.

John Deasy (Waterford, Fine Gael)
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If that is the case then, as I said, from a practical standpoint that an agency that is funded by a Department would request to be here, is it the case that the Oireachtas commission will prevent that by sending us a legal letter every time it occurs? This is a reasonable issue that needs to be dealt with now.

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

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I agree with Deputy Deasy that this is a reasonable question and does have to be clarified. I am curious to know who requested the legal services to send the letter. The Chairman has indicated, as has the clerk, that the opinion was not sought by either of them. It stretches belief that this happened on the basis of a comment. With all the commentary on Irish Water, meters, who can pay and who cannot pay, the Committee of Public Accounts has not been a big part of that media commentary. I would like to know who precisely asked the legal services to send that letter? I find it hard to believe that off their own bat, because they are extremely busy and we know they are under-resourced, they took the initiative themselves. We need to know who asked them to send that piece of unsolicited advice and why.

I share Deputy Ross’s concerns and I have said it before that I have a sense - nothing more than a sense and I cannot prove it - that there has been an attempt to trim the sails of this committee. I do not think that is in anybody’s interests. I want to be proved wrong in that sense. The best way to do that is to get to the bottom of who instructed - not who wrote the advice - that the advice be written and sent to the clerk and an instruction given for all of us to be circulated with it. Can you tell us, Chairman, when we might get answers to those questions?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I can tell you today, Deputy McDonald, that I had no hand, act or part in any of this. I was surprised and disappointed to get that letter. Second, while not speaking for the clerk, I am aware that he did not instigate this either. Therefore, I can only presume that there is another active section of the Oireachtas which is anxious that we would not do our work the way we have been doing it. I agree entirely with you, Deputy McDonald, and I would like to be proved wrong. There is an effort, however, being made to stall the work of this committee. That does not make for good governance in the State. It does not send out the right signals to people who come before us. We have gained considerably from people who have come before us wanting to explain their story. After this meeting, as I have said, I will discuss this letter with the clerk and take it up immediately with whoever is responsible. I intend to defend the right of this committee to its independence in terms of how it is viewed in the Dáil and, indeed, in the public.

In his letter Mr. Watt stated: "I would agree that the Committee of Public Accounts should have a role in examining these issues [this is relative to Irish Water] in this phase of the company’s development until it begins to operate on a fully commercial basis". I believe that is entirely reasonable. I think the members have acted correctly and wisely in relation to their work programme. I find that this letter going out is somewhat offensive and that some other entity in the Oireachtas would decide with greater authority that it had the power to do this.

Joe Costello (Dublin Central, Labour)
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Chairman, I have seen the letter as well like everyone else which has appeared very suddenly. It is quite clear in its assertion in that the author states, “I note that it is envisaged that officials of Irish Water are to be invited to attend the public meeting [of the Committee of Public Accounts]”. That is a very clear statement. I would propose that the way to resolve that is that the author of the letter - the legal adviser - would be invited to our next committee meeting and that this matter and the other issues raised around the arrival of this particular letter could be clarified for once and for all.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I hope that the letter has gone to other committees.

Shane Ross (Dublin South, Independent)
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I doubt it.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The same practice goes on right across the committees in this House. Deputy Costello, we will take this matter up and move on with our programme of work.

Joe Costello (Dublin Central, Labour)
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Can that proposal be agreed?

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

John Deasy (Waterford, Fine Gael)
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I have other correspondence. It is a piece of correspondence I forwarded to the clerk with regard to an issue concerning University College Cork.

Clerk to the Committee:

Payment of a subcontractor.

John Deasy (Waterford, Fine Gael)
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It has to do with a subcontractor who was in agreement with a prime contractor to do some building works in University College Cork. To make a long story short, the subcontractor is caught between the prime contractor and UCC. They are in a situation where they are owed well over €100,000. UCC has said it will not pay the money in that it is bound by the contract it had with the prime contractor. The reason I am raising it here is that it really does bring up an issue. We have updated prompt payment legislation in the Oireachtas over the past three or four years. I am not sure if it is operating or functioning yet but there has been legislation dealing with subcontractors being paid by the State within a certain period of time. It runs contrary to that. The replies UCC has given this subcontractor are, in my opinion, unsatisfactory. It might be something we could take a look at and send to the Department of Education and Skills to ask its opinion. The danger is that the prime contractor will go out of business and this subcontractor will never be paid. That is the issue.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Can we take it up by way of writing directly to UCC with a copy to the Department of Education and Skills and insist on an immediate response?

John Deasy (Waterford, Fine Gael)
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Yes. The reason I am bringing it up is the underpinning of the prompt payment legislation which has been updated in the last few years as well as the legislation dealing with subcontractors being paid by the State. Is there a precedent for subcontractors to be paid directly by an organisation like UCC? Is there some kind of nexus for this company which will be in serious financial trouble if it is not paid?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Maybe in writing we might do that. The clerk might telephone the Department or UCC to alert them to fact we are pursuing this.

Mr. Seamus McCarthy:

My recollection is that the committee already discussed issues of subcontracting and prime contracting and was planning a series of meetings with Departments that manage significant capital projects, most of which would be operating as subcontractor systems. Perhaps it is an issue that fits in with that.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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We will not wait for it in this instance. We will pursue it arising from this meeting today.

John Deasy (Waterford, Fine Gael)
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Thank you.

Kieran O'Donnell (Limerick City, Fine Gael)
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In the context of the work programme - it may have come already but at the risk of repeating - when is the Commission for Energy Regulation due to come before the committee?

Clerk to the Committee:

The CER is not on our schedule.

Kieran O'Donnell (Limerick City, Fine Gael)
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I ask that CER is put on our schedule, as a matter of urgency, in the context of charges in respect of Irish Water and the commission's work in that area. My queries relate to the area of Irish Water. The Commission for Energy Regulation falls directly under the remit of this committee. I do not know how my colleagues feel but I ask that an immediate invitation is extended to the CER to appear before the Committee of Public Accounts.

The type of questions that need to be considered are as follows. The type of financial appraisal or various works it has done in terms of the various options that can be put in place, in terms of charging the public, in terms of a flat rate, time periods and what work it has done. It is critical that the CER is brought before this committee as quickly as possible. With the indulgence of my colleagues, I ask that an immediate request is extended to CER to appear before this committee.

Clerk to the Committee:

Yes, that is fine.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Any other business?

Shane Ross (Dublin South, Independent)
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I wish to mention the work programme. An issue has been rumbling along in the background for a long time which has surfaced again in the past 24 hours. I refer to Positive Action, a group funded by the HSE, which has come to the public's attention in a very obvious way for the use of public money in a way which has been found to be utterly unacceptable to an internal audit report commissioned by the HSE. These are very serious money and Government issues. Everybody is probably aware of them so I will not go through them. I would have thought we could invite Positive Action to come in and explain to us what happened to at least €2.3 million which it got from the HSE.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Positive Action is funded through the HSE, as the Deputy said. Therefore, we will make direct contact with the HSE and ask for an early hearing on this matter and seek the information that it has in terms of the audit and so on. Has Positive Action disbanded?

Shane Ross (Dublin South, Independent)
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I think it is a section 39 organisation.

Clerk to the Committee:

It may have been funded under section 39 but my understanding is that it is no longer in existence.

Shane Ross (Dublin South, Independent)
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Correct. It was liquidated earlier this year but that does not stop us from bringing them in.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I ask the Deputy to allow us time. We can agree that we are going to seek the information and we are going to ask the HSE to come before us to explain this. I do not know what is left of Positive Action.

Shane Ross (Dublin South, Independent)
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There are directors and officials who could come in and tell us what happened. Do not let the lawyers near this one, please.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Deputy Ross is correct in asking us to seek exactly the decision-making process and what happened with those moneys. The matter has given rise to public comment.

On the issue of Positive Action, I am sure it no longer exists. I would like us to be conscious that it was an advocacy and service group that represented people who were poisoned by the State and suffered as a result of direct negligence by the State. That is not to say that we do not get to the bottom of this issue - it is absolutely legitimate. In terms of how we approach this issue, we need to be very clear that whatever happened with that pot of money and whatever flaws need to be identified. That should be done in a spirit of recognising that Positive Action existed, in the first instance, because women were damaged and had their rights violated by the State. I say that for the record because we need to keep it in mind as we proceed.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The Deputy made an important point.

Joe Costello (Dublin Central, Labour)
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I agree. Where public moneys are concerned we should always seek to ensure they are properly accounted for. There are question marks over Positive Action which should be explored and clarified. I would like to see the organisation before this committee as well.

I wish to query another body that is about to be liquidated.

Shane Ross (Dublin South, Independent)
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Before the Deputy does so, I wish to know whether we have made a decision about Positive Action.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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We are going to set about determining who is left in Positive Action that would come before us, we have to ask the HSE and we have to get the information. We will do that this week and will report back next Thursday. If it is a case that we can put that meeting together quickly, we will have an early hearing.

Shane Ross (Dublin South, Independent)
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I thank the Chairman.

Joe Costello (Dublin Central, Labour)
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I wish to mention another body that is about to be liquidated, the Dublin Docklands Development Authority. The organisation is not listed on our draft programme. Has the committee received a reply on when it is likely to be available?

Clerk to the Committee:

I shall mention two items. We contacted the Dublin Docklands Development Authority in regard to the issue about the sale of the house to U2 and it will come back to us on that matter.

The DDDA has a final set of accounts that have not been completed yet for 2014, I think. I am not sure whether it is 2013 or 2014 but the audit has not been completed yet. We will get the authority in because it will give us a great summary as to wherein lies all the assets or whatever has to be handed over. The DDDA will be part of our work programme before it is wound up, yes. There is not a current account that we can examine, for the docklands authority. I shall talk to the Deputy about it afterwards. Yes, we have. It did indicate that a final, or an almost final account, was being prepared which will be audited. We will be able to bring it in once that is done.

Joe Costello (Dublin Central, Labour)
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I wish to express caution in regard to a final account for 2014. It could be along time before that would come before us.

Clerk to the Committee:

My understanding is that there is a piece of work that is almost complete which will give us a comprehensive picture.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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We will be able to get an early meeting.

Clerk to the Committee:

We will be able to get an early meeting, yes. It may not be the 2014 accounts but it may be the 2013 accounts.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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They can explain that when they are due in.

Clerk to the Committee:

Yes.

John Deasy (Waterford, Fine Gael)
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At the risk of clogging up the work programme I shall raise something else, a matter concerning the Waterford Institute of Technology and Carlow Institute of Technology. Both bodies come under the remit of the committee and have been in here recently.

An abrupt announcement was made a couple of days ago that the amalgamation or merger of the two organisations was ending. A joint application was being worked on by those two bodies with a mind to ultimately putting together a successful application for a technological university in the south east. Similar applications by a number of different educational institutions in Dublin are ongoing.

I have a question for the Comptroller and Auditor General. It is my understanding that when it comes to a restructuring like this one, which has gone on for many years, there is a significant cost for restructuring. Those on the boards of these two organisations have a responsibility to account for the money that has been spent on the process of restructuring which I believe could be reasonably significant. They need to answer for that. The suspension of this amalgamation or merger, as abruptly as it has occurred, needs to be questioned because of the cost that has been incurred by the State over the past few years.

I ask the Comptroller and Auditor General the following. Is it the case that a significant amount of money accrues when it comes to this kind of restructuring? Does the Committee of Public Accounts have a remit to ask both of these organisations to come in here to explain the amounts of money that have been expended and find out why they decided to abruptly end the merger or amalgamation?

Mr. Seamus McCarthy:

Certainly there is expenditure in regard to restructuring. That is not just a question for Waterford and Carlow because there are other organisational restructurings in the offing.

My recommendation to any institute of technology would be to disclose exceptional expenses of that nature in the financial statement. It is the Higher Education Authority that dictates the format of accounts and the type of analysis that is done of expenditure. If there was expenditure incurred, it is presented in the financial statements.

Therefore, for anything that is an expenditure item, one would certainly be entitled to ask and to try to go behind if the-----

John Deasy (Waterford, Fine Gael)
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Mr. McCarthy is saying it should be itemised for the special cost with regard to restructuring.

Mr. Seamus McCarthy:

That would be my recommendation because it is exceptional expenditure. Normally, one would expect a restructuring to be on a slightly shorter timescale. In a way, it has become embedded in the institutions because this has been going on for quite some time.

John Deasy (Waterford, Fine Gael)
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I think what the Comptroller and Auditor General is saying is that the HEA should also be asked to come in to the committee, if we were to ask WIT and CIT to account for this. Time is of the essence here. I do not want to clog up the work programme any further but there is an imperative to ask these organisations to come in quickly. This has been going on too long. Depending on who one asks, one gets different answers as to why this occurred. It is unacceptable. Representatives of both boards need to be asked now what exactly has happened here.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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In order to be able to focus on this directly, we should write to WIT and CIT and ask them to extract from their accounts over the years the exact amounts of money that were spent in regard to the project so that we get the figures. Otherwise, we will be looking at accounts and the figures will be wrapped up in some other figure for one thing or another. It is likewise with the HEA. We can bring in the three bodies and we will insist on it being done as quickly as possible.

John Deasy (Waterford, Fine Gael)
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Will you make it clear to them that the expectation is that they come before the committee in the short term?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Yes, and they should bring these figures because we do not want a job of work to dig out the figures. They should have them on hand and we will then know the exact cost over the years since this began of the merger negotiations or discussions, or the project itself.

John Deasy (Waterford, Fine Gael)
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I think I speak for a lot of people in the south east, not just in Carlow and Waterford, who, when they look at this situation, view it as being messy. They are tired of it. It has gone on too long. They can reasonably expect a reasonable degree of governance when it comes to these two bodies and this joint application. I am coming to the conclusion that the governance of this application has not been adhered to. We need to get to the bottom of this sooner rather than later.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I agree. We will set it up as soon as possible. We will ask for the figures beforehand because we need to see them.

John Deasy (Waterford, Fine Gael)
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Can I ask a further question related to something the Chairman brought up earlier?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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That is one way of getting a question in.

John Deasy (Waterford, Fine Gael)
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It joins up with what Deputies Ross, McDonald and others have mentioned. If it is deemed unlawful for Irish Water to come in to this committee, is there a committee within the Oireachtas that it would be lawful for it to appear before, for example, the environment committee?

Clerk to the Committee:

The environment committee would be the first one.

John Deasy (Waterford, Fine Gael)
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Does its remit allow Irish Water to present itself?

Clerk to the Committee:

Yes.

John Deasy (Waterford, Fine Gael)
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On a second question, what is the process when it comes to changing a standing order?

Clerk to the Committee:

An issue we are looking at and have been looking at is to go to the CPP and the Dáil. Ultimately, the Dáil decides on the terms and the powers of the PAC. It is a Dáil standing order and the Dáil changes it. If the Dáil decides we can look at what Mr. Watt has outlined in regard to the set-up costs, there may be scope to do a piece of work around that. I think that is what we should do immediately. We should look at the possibilities and get the advice we need in order to make a submission to the CPP in the short term.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Can we liaise with the Comptroller and Auditor General on this and take up the Secretary General on his suggestion in the correspondence dated 8 September? We could then outline the two pieces of work, one in regard to the set-up costs of Irish Water and the other, which is similar, on the set-up costs of Poolbeg. Those are the two.

Clerk to the Committee:

Yes, it just those two.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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It is the set-up costs. That is not interfering with the other committees and it is following a suggestion made by the Department of Public Expenditure and Reform.

We will deal with the special report of the Comptroller and Auditor General, Managing Elective Day Surgery.

Clerk to the Committee:

That is on Thursday week.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Yes. Today we are dealing with the National Paediatric Hospital Development Board. We will agree next week's work and we will then agree to bring in the witnesses to the committee.