Oireachtas Joint and Select Committees
Thursday, 26 February 2015
Public Accounts Committee
Business of Committee
We will get to it in correspondence.
No. 3A is correspondence from Accounting Officers and-or Ministers.
No. 3A.1 is correspondence from Tom Boland, chief executive officer, Higher Education Authority, HEA. It is a follow-up letter from our meeting on 22 January. This is to be noted and published. We will be returning to a number of issues relating to the HEA and there is a number of pieces of correspondence outstanding, especially relating to the merger between Waterford and Carlow. I also understand that the Comptroller and Auditor General is currently doing a report on the HEA. There are figures in that correspondence that do not correspond with the information we had received previously so that might be a matter that can be dealt with when the Comptroller and Auditor General is examining it.
I had a note on it. It is to do with figures we got the last day to do with expenses and so on. I think the figure we got the last day came from the briefing we got and they do not correspond with the figures in Mr. Boland's letter. We have to examine it in more detail, and the way to do that is perhaps through the Comptroller and Auditor General.
We will get them and flag them for the members.
No. 3A.2 is correspondence dated 16 February 2015 from Mr. Seán Ó Foghlú, Secretary General, Department of Education and Skills, re follow-up to our meeting on 22 January 2015.That is to be noted and published.
No. 3A.3 is correspondence dated 18 February 2015 from Mr. Joe Hamill, Secretary General, Department of Arts, Heritage and the Gaeltacht, which is again a follow-up from our meeting on 29 January 2015. This is to be noted and published.
On the correspondence from the Department of Arts, Heritage and the Gaeltacht concerning the airstrips, could I request that we would get a further breakdown of the detail? A very considerable amount of money was spent. The feasibility study was conducted in 1997. Two airstrips were completed, one in Clifden and the other in Inisbofin, in 2009 and 2011, respectively. Another study was done on how to manage them and so on. The total amount of money was in the region of €9 million, and the ongoing managerial aspect involves a very substantial amount also.
In regard to the amount of money spent on the purchase of the airstrip, the contract for the construction, in one case it is over €5 million and over €3 million in the other case. Could we get a breakdown of where the money was spent? It is not in the reply that was given. There are two replies. One from the Secretary General, Mr. Hamill, and the other reply is from the Department itself, presumably in Mr. Hamill's name, but there are two separate documents. It is not in Mr. Hamill's document but in the other document. There is the reference to the timescale and so on. Could I request that we get a full breakdown of the costs in regard to all the items of expenditure that brought about the situation where close to €10 million was spent?
There was no detail either on the future use of those airstrips. There is the optimistic hope that they might be used by the Coast Guard or by a private person to set up some sort of tourist resource but there is no firm information on that. We do not even know whether these people are still engaged with the Department on it. It is very much up in the air. There was no extra detail on what was given to us when they appeared before the committee. Could we get a full breakdown of that?
I was looking for the correspondence from the Secretary General of the Department of Arts, Heritage and the Gaeltacht; I do not know if it was sent to me. The Clerk to the Committee might remember this. I asked the Secretary General a question specifically about Department's specific plans to memorialise the people who died in 1916. The Department spent a good deal of money in 2014. I believe it was €22 million, but the witnesses were to come back and outline the specific plans they had to memorialise those individuals who died in the Rising. I have not read this but-----
Could I raise another point? On the invitation we received from the National Library of Ireland, a number of us around the table visited yesterday to inspect the system and see the difficulties in the system. A large quantity of priceless documents are housed in circumstances that are unacceptable from an environmental point of view. If a problem arose and it involved paper, it would go up in smoke and the building would disappear rapidly. Also, damage is being caused because documents are not being housed in a sustained environment in that it is too hot or too cold. This is a priceless treasure in the library which is at imminent risk. Having listened to what was said and inspected the conditions under which they operate in the National Library, I believe there should be some response from this committee to the need for urgent action to protect that invaluable resource, which goes back hundreds of years. A great deal of the material in the library is not digitised so there is no other record of it in many cases. The documents are in their original format but they are being housed in dangerous conditions. We should contact the Government or make a special effort to ensure some action would be taken to protect them.
That is agreed.
No. 3A.4 is correspondence from NAMA in regard to the De Vere Hunt case. I want to put on record that I am not one bit phased by this correspondence. While it may be factual in terms of how it quotes what the members have said and the action that was taken, the fact of the matter is that this letter was sent to us on the day they had a meeting with this lady. It is clear from that, therefore, and from what is in the correspondence, that they are attempting to tick off the Committee of Public Accounts, and I reject that approach.
There is a reference to nominating a solicitor in this case and it mentions various things that were discussed in the course of the meeting, such as the serving of papers. In my view, in a case where a person has died by suicide, it is not acceptable to serve papers by throwing them at the porch door. There are other ways of doing business than using such tactics, particularly when a person is acting on behalf of the State. I wish to put my view about that on record. The correspondence also quotes Deputy Mary Lou McDonald.
I have not had the opportunity to look at the transcript but I have no doubt they quote me accurately. The impression I was given as a member of this committee was that mediation was the preferred channel of resolution. A reasonable person who went back and read the totality of the exchange would come away with that impression, although I am prepared to go back and look at exactly what was and what was not said. I may have been too emphatic in my understanding of what the delegates were saying but it does not, at any rate, resolve the issue and I do not know where it leaves this particular family or other people caught up in this process. My impression of the delegation was that they were quite sure-footed and I felt reassured that they were committed to mediation as the best and first option.
This correspondence leads one to a different view. It states that it outlined how mediation works, which it did, and the purpose of mediation. It also states: "NAMA's evidence about its attitude to mediation was very clear, as is evident from the various excerpts of the transcripts of the meeting. It cannot be reasonably well argued in the circumstances that the committee was misled." I am not saying they were deliberately misleading us but I took a different meaning from them on the day from the meaning I get from this letter. This letter is mediocre in tone as regards NAMA's commitment to mediation but that was the whole basis of our discussion in regard to the matter we were probing in respect of Mrs. De Vere Hunt and her family. Rather than clarifying matters, I feel this correspondence has confused things. I would like clarity from NAMA and would like them to write to us to amplify the position they took while before the committee. I would like to know what their commitment to mediation is in general and in the particular case of the De Vere Hunt family.
The response we got from Revenue is extremely helpful. It is fairly detailed but it still leaves us with the reality that the recoup for the State was extremely low when measured against the full asset value in the accounts. I suggest we ask Revenue to attend the committee to walk us through the information they have provided and give members the opportunity to raise other matters. For example, one thing that jumped out at me was the statement that 33 investigations were initiated, 27 had been completed, six were ongoing and a small number of cases were being considered for investigation. In other words, the process is not complete even though they first had notice of this in 2010. Given the extent of public concern and interest in the matter and the money involved, I propose we invite Revenue to attend to explore the issues further.
I agree with Deputy Mary Lou McDonald that we need to explore this further. There are serious questions to be asked about all the circumstances surrounding the HSBC offshore accounts. It is a live issue with Revenue at the moment and it would be valuable to explore it in further depth.
Based on what has been in the news in the past few months and on what Revenue has sent us, is there new information arising from what has appeared in the media recently or does Revenue say they knew this back in 2010 and acted? As I understand it, 27 cases have been completed out of 33 and six are ongoing.
I have no problem with doing that but I have a word of caution. If six cases are still ongoing and involve criminal prosecutions, the final figure will not be known. What they say in the committee will have to be open-ended in that regard.
The week before last there was a police raid on HSBC offices in Switzerland relating to offshore accounts and various documents were taken. Can we get an update on that? It is still a live issue but it would be interesting to know whether any new documents have come into the public domain.
Is there any intention of asking a representative from HSBC to come before the committee? The head of HMRC, the UK equivalent of the Revenue Commissioners, testified in Westminster yesterday along with the CEO of HSBC.
We have different terms of reference. I would love to extend an invitation to someone from HSBC to attend and if they were willing to do so, I would love to hear what they had to say. Our remit, though, is to work directly with Revenue in this case. It might be worthwhile to write to HSBC to ask if they want to be present at the meeting.
We will extend an invitation to them.
I wish to go back to the HEA correspondence and wish to clarify what I was saying. Under the details for WIT, it states the institute has incurred direct costs of €152,000 and it gives a breakdown of the expenditure. It includes travel and subsistence of €5,900 and office and other expenses of €5,000. I am trying to relate that to the cost of the merger as set out in our briefing document. Perhaps we can clarify these figures before we talk to the HEA again. There are a number of points in this letter. We had asked about the projected costs for Carlow and Waterford and, despite of the significant amount of work already done on this, the letter states that the costs are not yet available.
This is the very point we were making, that they do not have a business plan or a forecast of the costs or what it entails. Yet they are going down the line of this amalgamation without knowing what the costs are. It just does not make sense. I believe we should ask the HEA to address that fact before it comes before us again. The other issue I want to raise on this correspondence relates to Carlow Institute of Technology. At our meeting we referred to the costs of the two communication companies and as we can see from the reply, the tender for the press liaison and public relations service of Wednesday, 18 September 2013, provided by Kearney Melia Communicationswas €4,070 plus VAT per month. That is €78,000 per year they are paying one company for public relations. The second company they use, by tender on Friday, 9 May 2014, provided by the Communications Clinic, was €30,645. That is €109,000 simply on PR and we have not gone into the procurement process in this. We need clarification on these points as to the plan, the costs of these PR firms and the whole procurement process that is gone into. We may be better informed when they come before us again.
I will turn to correspondence from individuals. There is correspondence to be noted from Mr. William Tracey of Horse Racing Ireland and from Mr. Thomas Duggan of Millstreet Equestrian Services around the ongoing issue with Horse Sport Ireland. I would advise the committee that arising from this correspondence the clerk and I met with Mr. Kieran Mulvey and Mr. John Treacy of the Irish Sports Council and we discussed the detail of the correspondence in order to move the issue on. What came from that meeting was that the mediation process initiated by Mr. Mulvey had failed to bring the parties together.
It is to be suggested to Millstreet that a binding arbitration process be entered into by both parties. On the matter raised today in the letter from Mr. Duggan, the Irish Sports Council will now audit the State funding to Horse Sport Ireland and will come back to the Committee of Public Accounts with that outcome. These are the two points of action agreed upon.
No. 3B.3 is correspondence from Mr. Gary Delaney of Loc8 Code regarding the national postcode tender process. I will ask the Comptroller and Auditor General for a response to that.
Mr. Seamus McCarthy:
Yes Chairman. The Department of Communications, Energy and Natural Resources is undertaking a project to develop postcodes. It is ongoing for a number of years. This correspondence, as I understand it, is from an underbidder in the process. We are examining the development of the project at the moment and we expect a report on that in September.
No. 3B.4 is correspondence received from Ms Marie Hickey-Dwyer regarding a Health Service Executive matter which will be passed to the HSE for its comments. Correspondence dated Friday, 13 February 2015 from the HSE is a reply to an anonymous correspondence regarding cover up and corruption in the HSE. This is to be noted and published. Correspondence dated 2 February 2015 from Mr. Brian Lynch and Associates solicitors regarding the school transport system, is to be noted and published. Correspondence dated 16 February 2015 from Ms Anne-Marie Swift regards the cost of the central access scheme in Kilkenny. This is a matter for the National Roads Authority so we propose to forward that correspondence to the NRA for a note on the matter.
No. 3B.8 is correspondence dated 10 September 2014 from Mr. John O'Connell regarding State-sponsored methadone clinics. This is to be noted and forwarded to the HSE for a note on the matter. No. 3B.9 is correspondence dated 23 February 2015 from Ms Claire McGrath, chairperson of the Office of Public Works. It relates to the Irish Jewish Museum and will be noted and forwarded to Mr. Jim O'Callaghan.
No. 3B.10 is correspondence dating 24 February 2015 from Ms Eileen Creedon of the Chief State Solicitor's Office regarding a Probation Service project. No. 3B.11, correspondence dated 24 February 2015, is again from the Chief State Solicitor's Office and regards the costs of the Fleury and Shine cases. The committee will recall that we wrote and asked for the cost of various cases that were taken by the Chief State Solicitor's office but which were abandoned or terminated for various reasons. She quotes the Act in her response to us and reference is made to not commenting on individual cases. We have asked that the Chief State Solicitor's Office would come before this committee for examination of its spend on administration and so on. We are not interested in names in cases, what we are interested in is the approach to how cases are taken, the cost of each case from any Department or agency which may have gone on for years and have been lost or dropped by the State for various reasons. The committee wants to determine the spend on those cases without needing to know who was involved in the cases. I believe we are in agreement with the contents of the letter but we certainly want to get more detail on the administration of the Office of the Chief State Solicitor, the cost of the office and the cost of the cases I have described. We will write back in that vein and set a date for the office to come before the Committee of Public Accounts.
No. 3C.1 and No. 3C.2 are briefing documents and opening statements for today's meeting. These are to be noted and published. No. 4 is statements and accounts received from Waterford Institute of Technology financial statements 2012. Could I ask the Comptroller and Auditor General to explain?
Mr. Seamus McCarthy:
Yes Chairman. I draw attention to two things in relation to the institute. The accounts for the past two years show that it incurred deficits in both of those years. If one looks at income and expenditure for the institute there are substantial transfers to the group of companies which provide services on the campus. The results of those companies are not yet consolidated into the financial statements of the institute. A process is under way to make them subsidiaries of the college and to incorporate their results. I understand they will be in position to consolidate the full results for the 2013-14 financial statements.
Mr. Seamus McCarthy:
Yes. I just draw attention to an unsanctioned loan taken by one of Horse Racing Ireland's subsidiaries. It is a relatively small sum. Horse Racing Ireland has the sanction of the Department to borrow up to €40 million on condition that any specific element of borrowing is subject to departmental approval and it did not seek that approval. We note this as an irregularity.
These accounts are all to be noted. We have had our attention drawn to the two issues by the Comptroller and Auditor General.
Last week, as part of the work programme, we went to Howth to see the situation out there. A number of members examined the properties and heard from local business people. It was quite a shocking experience to listen to the story of properties being vacant for considerable periods of time and no plan either to develop or assist local businesses. There was also very little information on the background to what was happening regarding the leasing of these properties. I propose that we draw together the information we have and get the information about leasing. Would we ask the Office of the Chief State Solicitor about that or is it independent?
Lest there be any doubt about this, we wish to find out where the leases have been stalled and whether it is within the Department or from a legal perspective, either in house or out of house, to determine each lease across Howth and in the other locations we are discussing. Does any member who was there wish to comment?
Our work programme is set out. Next week we will have the procurement issues we discussed previously in respect of school supplies and so forth. The members of the group that were in the Visitors Gallery will be present also. Will members indicate to the clerk to the committee whether they are available next Wednesday? It is our intention to travel to Northern Ireland.
No. 6 is reports of the committee. A copy of our draft report on wards of court will be circulated to members this week and we can consider it at next Thursday's meeting. A number of other reports on the fishery harbours, Bord na gCon and the glass bottle site are now in preparation. I was speaking to the clerk to the committee yesterday about general governance issues across different Departments and agencies. We should look at that and compile a report from the hearings we have had to date.
Is there any other business?
Mr. Seamus McCarthy:
May I point out that Ciaran Wright is leaving as liaison officer and returning back to my office on promotion? His place will be taken by Deirdre Shields, who is in the Visitors Gallery. She will make herself known to you in the coming weeks and will take over the briefing role.
I thank Ciaran and welcome Deirdre. We look forward to working with her.
In the first session at 10 a.m. next week we will have the Small Firms Association and the Irish Schools Arts Supply Federation. The second session will be at 12 p.m. with the Department of Public Expenditure and Reform to examine Vote 11 - Office of the Minister for Public Expenditure and Reform; Vote 12 - Superannuation and Retired Allowances; Vote 18 - Shared Services; and the Comptroller and Auditor General Special Report 87 - Effectiveness of Audit Committees in State Bodies and Issues with Public Procurement.
Mr. Seamus McCarthy:
I should point out that a special report will be published on Tuesday next week. It is a report on an examination that was done in conjunction with the Comptroller and Auditor General in Northern Ireland relating to a grant to a specific company, the management of that and difficulties arising from it. I expect that to be available on Tuesday morning.
The representatives of that office are appearing before the committee immediately afterwards. We are hearing first from those who are affected by, or have a view on, procurement. After that we will deal with the Accounting Officer and their staff.
We are giving the opportunity to both organisations to give their views about procurement, why it is not working for them and how they have been adversely affected by the procurement process. Having dealt with that, as an example, we have other examples from previous hearings that we will be able to put to the Department's officials and to the section that is responsible for procurement. We will be reasonably well informed of what the Small Firms Association and the federation consider to be wrong with the procurement process and we can address that with the Department. If there are recommendations to be made following that, we will be able to put them forward in our report on procurement.