Oireachtas Joint and Select Committees
Thursday, 19 November 2015
Public Accounts Committee
Business of Committee
Are the minutes of our meeting on 12 November 2015 agreed? Agreed. Are there any matters arising from the minutes? There are no matters arising. The next item is correspondence received since our meeting on Thursday 12 November 2015. Correspondence was received from accounting officers and or Ministers. Correspondence received from the HSE dated 11 November 2015 is a follow-up from our meeting on 22 October 2015 and it is to be noted and published. Correspondence was received from NAMA dated 11 November 2015 and is a follow-up to correspondence we received from representatives of families of 1916 regarding Moore Street. This is to be noted, published and also circulated to Deputy Maureen O’Sullivan. Correspondence, dated 11 November 2015 was received from Mr. Jim Breslin, Secretary General, Department of Health. This is a follow-up to the Committee of Public Accounts meeting with the HSE on 22 October 2015 and is to be noted and published.
Correspondence, dated 13 November 2015, received from Mr. Aidan O’Driscoll, Secretary General, Department of Agriculture, Food and the Marine refers to the special investigations unit, SIU. This correspondence is to be noted and published. I draw members' attention to this correspondence because this is the third letter the committee has received from the Secretary General since his appearance before the committee on the 18 June 2015, which is five months ago. Mr. O'Driscoll has still not answered the committee's queries in respect of the more serious case of Mr. Douglas Fannin, to which I will return later. The letter is a stout defence of the activities of the SIU and the committee could expect no less from a Secretary General. However, there is a complete denial of the heavy-handed tactics which led to people being manhandled or treated without dignity. Anyone who suggests that the SIU operates outside the codes of conduct for civil servants are simply saying that these things are untrue. The committee met privately last May with seven individuals and listened to what they had to say. All but one had seen at first hand the work of the SIU. Some have had their livelihood's ruined as a result of huge legal bills which were run up in order to defend themselves. Some were simply appalled at the behaviour of State employees. The Department tells a different story and has rejected all of what was said by the individuals who have come before this committee. It would appear that the Department is saying that these individuals have lied to the committee. The truth is probably somewhere in between.
I will make one further point regarding the Committee of Public Accounts. The committee is not advocating on behalf of anyone else here, that is not the job of the PAC, but to be fair to the seven individuals, only one of them has been in contact with the committee since. The others told their stories but did not ask that the committee would act on their behalf. They were disturbed by their experience and they reported to us. Some of their reports tally with what members hear in their constituencies. It is right that a citizen can contact a public accounts committee to enable the PAC to question Departments about the ways in which they conduct business. This is part of the job for the PAC and for the Oireachtas committee which has an oversight function. Department officials are answerable, through their Ministers and through their Accounting Officers, to these committees.
Mr. Douglas Fannin has been in contact with some members of this committee and with the secretariat. Mr. Fannin was prosecuted by the Department and the case against him was dismissed. His integrity was exonerated two years ago by Judge Reynolds. Since then Mr. Fannin has continued his fight for justice and it is in desperation that he has turned to this committee. He should not have had to do that in the first place. The Department appears to be reluctant to recognise Mr. Fannin's innocence. I understand that the Department has not engaged with Mr. Fannin and that he is owed money for cattle that were taken from his farm and slaughtered and which were then allowed to enter the food chain. Given the outcome of the case, and out of respect for Judge Reynolds, Mr. Fannin should be paid for his losses. Is it right that Mr. Fannin has to go the civil route to seek justice? We know that going the legal route is extremely costly and the Department will know that Mr. Fannin may not have the financial muscle to take on the Department again.
Last week the issue was raised of a Department official apologising to the Judiciary for remarks made at this committee. What the Department of Agriculture, Food and the Marine continues to do to Mr. Douglas Fannin, in ignoring the decision of Judge Reynolds, is far more serious. The committee is coming towards the end of its term so it may not be able to fully follow up on this matter. There is a need to find a resolution to the issues arising from the Fannin case so that Mr. Fannin can try to get on with his life. The Department should engage with Mr. Fannin to seek a resolution, if necessary with the help of an independent third party. This is the least that is owed to Mr. Fannin. The committee awaits Mr. O'Driscoll's next letter but this matter is so serious that, in the light of the remarks made by Judge Reynolds and by this committee, the case should be highlighted again and the Department be asked to take note of what is being said.
Item No. 3A.5 is correspondence dated 13 November 2015 received from Mr. John Pollock, project director, National Paediatric Hospital Development Board. It is a follow up to a PAC meeting on 8 October 2015 and it will be noted. As there is an inspector's report from An Bord Pleanála the committee should seek a note on the contents of that report and the committee could consider the issue again next week. I ask that Deputy Joe Costello make that contact.
I have raised this issue before with regard to the National Paediatric Hospital. It is one of the three major projects in my own constituency that incurred enormous expense of State money which was not recoverable. One project was Thornton Hall which incurred €50 million of costs and the other was the Docklands which incurred costs of €52 million and that report has been published. The third project was the National Paediatric Hospital which incurred costs of €30.5 million. Having read the inspector's report there are clearly some very serious issues around the deviation from and the disregard for the statutory Dublin City Development Plan and the Local Area Plan. The inspector found that these plans had been breached and the inspector would effectively have no choice or alternative but to find against the planning application that was put before the planning authority. That opinion was upheld by the senior planner. These are very serious matters and the end result of this was that the children's hospital that should have been built by now, and which was to be a landmark building marking 1916 and how the Proclamation cherishes children of the nation equally, has still not had a sod turned on it. We have a new location and the planning process is currently in train but we do not know how that is going to eventually work out. The process and costs so far raise very serious matters for public concern. We should have a full-scale report to look at all of the related elements and all the circumstances that gave rise to this debacle.
The committee will set it out in context and report for the next meeting. Item No. 3A.6 is correspondence dated 18 November 2015 which was received from Mr. Joe Hamill, Secretary General, Department of Arts, Heritage and the Gaeltacht, regarding the air service for the Aran Islands and the national monument at 14 - 17 Moore Street. It is to be noted and published. The matter of the air service can be discussed at today’s meeting in the context of procurement.
The correspondence in question is a classic case of bureaucratic doublespeak especially when one gets to the third paragraph. It does not explain what has happened. It just takes fragments of different regulations and constructs an argument as to why the Department did what it did. The correspondence does not explain how the Department got into the dreadful mess of a disastrous tender process that ended up being extremely embarrassing for the Department in question as well as for the Office of Government Procurement. I am not surprised that Mr. Hamill did not appear before the committee today. I can understand why he would not, considering the mess which has been made by him and his officials. We will deal with this, as best we can, through the Office of Government Procurement.
I will now turn to items of individual correspondence. Correspondence dated 11 November 2015 was received from the HSE, which is a follow-up from our meeting on 22 October 2015. It relates to a payment to a bed and breakfast accommodation. It is noted that I raised this with the HSE and I wish to reject their response entirely. I could have obtained that information myself from the HSE. I had asked for the situation to be investigated, not that the HSE was to report what it deemed to be the facts of the case. The HSE has not addressed the matter. The function of the Committee for Public Accounts is to obtain further information but in reality this correspondence is just a report on what happened; it does not address or investigate the case. I reject the HSE's response to this committee and I intend to raise this again with the HSE.
The next item of individual correspondence was received from Ms Mary Farrell, dated 10 November 2015. It regards the Report on the Wards of Court. It is to be noted and the committee still awaits a reply to our report. The matter of the delay in replying to recommendations made by the committee can be taken up today with the Secretary General of the Department of Public Expenditure and Reform.
With regard to the Report on the Wards of Court, there is a certain degree of urgency around this because the Assisted Decision-Making (Capacity) Bill 2013 is going through the Final Stages in the Seanad. I believe that Ms Mary Farrell and the families were expecting that this matter might be addressed in that legislation. From speaking with the Minister, I understand that it is not the appropriate legislation with which to address the matter of wards of court because the intent and purpose of this legislation is to discontinue the wards of court mechanism. However, this underlines the need to have an independent review and to have the Comptroller and Auditor General conduct an audit.
Once the legislation is through then we would be entering into another round of dispensation, so I think there should be a sense of urgency with this matter to have it dealt with as quickly as possible. People are in exposed situations regarding the investment process that took place, how it is going to operate and how the legislation is not retrospective. We need to see how the situation is where the exposure is at a given time.
Mr. Seamus McCarthy:
Yes. It might be a specific amendment regarding specific funds managed by the courts. While there is a clearly distinguishable category of funds called wards of courts funds, if that category is abolished and the funds become general funds which are managed by the courts then that might be problematic. Ultimately, some research would be needed into what are the objectives of the accountability regime and whether it is appropriate for the Comptroller and Auditor General to be involved.
The Department of Public Expenditure and Reform is responsible for this area and the committee can ask it directly. The Deputies can pursue the matter with the Secretary General today.
I will now return to individual correspondence. Item No. 3B.3 is correspondence, dated 13 November 2015, received from Mr. John McCarthy, Secretary General, the Department of Environment, Community and Local Government regards strategic policy committees. It is to be noted and forwarded to Councillor Kenneth O’Flynn. Item No. 3B.4 is correspondence dated 16 November 2015, received from Mr. Michael Ewing of the Irish Environmental Network and is regarding the allocation of national lottery funding. This correspondence is to be noted and published. This matter can be raised with the Department today as the committee will be dealing with the national lottery fund today. Item No. 3C is documents relating to today’s committee meeting. Items No. 3C.1 and No. 3C.2 are briefing documents and are to be noted and published. Item No. 4 is reports, statements and accounts received since the meeting of 12 November 2015. I now invite the Comptroller and Auditor General to comment.
Mr. Seamus McCarthy:
The first issue relates to the Social Insurance Fund, the audit for which was completed on 22 September 2015. It is a clear audit opinion but attention is drawn to the estimated level of irregular payments in respect of certain schemes paid for from the fund. I consider this is material and I have outlined my concerns in chapter 16 of the Report on the Accounts of the Public Services. I also draw attention to a chapter on the management of redundancy and insolvency scheme debts. These are payments that emanate from the Social Insurance Fund and there are liabilities that could be collected. I have a report on that. Chapter 15 of the report relates to the mechanisms used to provide cashflow for the Social Insurance Fund because under schemes there is a mismatch between income and outflow.
I have also drawn attention to Bord na gCon which had a deficit of €1 million at group level in 2014. Note 25 of the financial statements discloses the basis upon which the board considers it appropriate to prepare the financial statements on a going-concern basis. It is not the first occasion on which there has been a deficit and there is a significant borrowing question for Bord na gCon. There are also continued instances of non-compliance with public procurement guidelines in 2014, although I believe the situation is improving. These are matters which the committee can examine next week when Bord na gCon appears before it.
Mr. Seamus McCarthy:
Yes, that is correct. They have referred to the basis on which they are satisfied that it is appropriate to prepare the accounts on a going concern basis. The existence of persistent deficits is a problem. As we have discussed previously, other institutes of technology have similar difficulties. It is something of which the sector and the Higher Education Authority are aware.
Mr. Seamus McCarthy:
A governing authority is required to be satisfied that it has enough money to continue to operate for at least 12 months from the period on which it signs off on the accounts. The institute is flagging that it has a mismatch between its spend and its income, but it is not in imminent difficulties. It is something that needs to be kept under review.
-----that an organisation would wonder at the end of every 12 months whether it will be in business at the end of the following 12 months? It is asking whether it can keep going over the next 12 months.
If the Comptroller and Auditor General draws attention to this in the context of an organisation's 2014 accounts, when will the organisation have to submit a plan to him to convince him that it is possible for it to continue?
Representatives of Bord na gCon will be with us next week so we can deal with that then. All these accounts are to be noted. The work programme, which is running out of road, is on the screen. It is as we set it out last week. We will deal with Bord na gCon next week. In December, we will deal with the Department of Finance and the Department of Education and Skills. Are there are queries in this regard? No. Is there any other business?
It is on the website. Under any other business, claims of irregular payments of expenses have been raised with this committee. The clerk recently received a protected disclosure from a former employee who raised concerns in 2012. As is normal with all protected disclosures, legal advice was sought to ensure those making the disclosure enjoy the protection of the Act. As Deputies will see from the note that has been circulated by the clerk, the advice is for the committee to await the outcome of a current investigation being conducted for the HEA into claims of irregular expenses payments. In the meantime, the records submitted with the protected disclosure can be forwarded to the Comptroller and Auditor General. We will come back to this issue when the Mazars report into the University of Limerick is available. The timeline for this is 30 November. Is that agreed? Agreed. At next week's meeting, we will focus on Bord na gCon generally. Today, we are dealing with the Office of the Minister of Public Expenditure and Reform. We will invite the witnesses in now.