Oireachtas Joint and Select Committees
Thursday, 14 July 2016
Public Accounts Committee
Business of Committee
We are in public session. Apologies have been received from Deputy McDonald. We are joined by the Comptroller and Auditor General, Mr. Seamus McCarthy who is a permanent witness to this committee.
Are the minutes of our meeting of 7 July 2016 agreed? Agreed.
The next item is matters arising out of the minutes. Are there any matters?
I have one item. There was a comprehensive discussion at the last meeting about the staff complement of the Comptroller and Auditor General's office. Reference was made to the authorised maximum staff number and the actual number of staff employed. The authorised figure was 164 and the actual figure was 146. There was some discussion about agency staff, contracted staff and outsourced audits. I followed up with questions and I believe it merits discussion at a further meeting. In 2011, the staff complement as a percentage of the authorised maximum staff complement was 97%. It is now 89%. When the authorised maximum staff complement at that time was combined with contracted staff and outsourced staff for audits, it was greater in number. It is now less. This shows up potential capacity problems within an office that is very relevant to our work. It merits a discussion when we come back again in the autumn.
Are there any other matters arising from the minutes? In the minutes last week, we mentioned a few specific items. One item was a request for a report from Inland Fisheries Ireland about commercial rates. Have we received that?
They are on their way. The next item is an issue mentioned by Deputy Cullinane, who was seeking information on the capital project for a national paediatric hospital in Thornton Hall. We will return to that report again. We wrote to Dublin Institute of Technology regarding the €700,000 advance payment in respect of library services for which no service was delivered - the money was lost to the taxpayer - but we have not yet received a response. We also wrote to the Department of Jobs, Innovation and Enterprise regarding the policy on late payment. Different State organisations are paying interest on late payments of outstanding accounts. We have received no word back yet. We did receive correspondence on the land aggregation scheme as sought by one of the committee's members. That was all arising out the minutes. We will move on.
That will categorically be in our work programme. We will have representatives of the HSE before the committee to discuss its annual report as well.
We are now moving on to correspondence received since the last meeting. I will refer to the correspondence numbers. Correspondence items 26A and 30A refer to the Office of Public Works briefing and its opening statement for today's meeting. We will note that and its representatives will be here shortly. Correspondence items 17B, 18B, 19B, 20B and 21B were deferred from our last meeting and are to do with various reports of the Department of Public Expenditure and Reform on the Bytel project, wards of court, fisheries harbours and a review of costs associated with undelivered capital projects of the Dublin Docklands Authority. I propose that we try to sign off on those next week before we break up for the recess. I ask members to have a look at those documents in case they wish to raise any issues at the next meeting. We will try to deal with them. Item 14C is correspondence from an individual in connection with the wards of court report. We will discuss that next week with the other documentation to try to conclude that issue.
Next, we have correspondence items 26B(a) to (i). Amongst them is a letter from Mr. Ray Mitchell of the parliamentary affairs division in the HSE and a number of appendices. These documents are a response to the committee’s request for information about section 38 organisations and the Console charity. Can we note them? We will note them, but they are part of tomorrow's agenda.
The next item is under category C correspondence. Item 4C is an item deferred from last week; it is correspondence from Mr. Graham Doyle, the Secretary General at the Department of Transport, Tourism and Sport, regarding the committee’s request for information in relation to alleged unauthorised dumping on the R158 regional road upgrade. It has been determined that this matter is being dealt with by the local authority and does not fall within the remit of the committee. However, the clerk has reviewed past correspondence and the Environmental Protection Agency, EPA, in its supervisory role of local authorities, has a file open in relation to this issue. I therefore propose that the clerk write to the EPA and request an update.
Okay. We can deal with that next week as well. The next item is No. 25C, an e-mail from an anonymous source in relation to alleged financial abuse at a HSE-funded institution. I propose that the clerk write to the HSE outlining the key matters raised in the e-mail and ask for a response. There is no name on the correspondence. We will wait until we get a response before we deal with anything on that matter. Is that agreed? Agreed.
The next matter is correspondence item 27C, which is an e-mail from Deputy David Cullinane requesting that representatives of the Revenue Commissioners be invited to the committee’s meeting about Console tomorrow. The Deputy might wish to make a brief comment.
I had a brief conversation with the Chair. I accept that it is not possible for representatives from Revenue to come before us at tomorrow's meeting. We had a very lengthy discussion with legal advisors anyway with regard to the internal audit report. It has some relevance to that. At the same time, this whole issue flags and raises questions of process for the HSE, which we will deal with tomorrow as appropriate. It also raises questions for the Companies Registration Office in terms of controls, as well as the Revenue Commissioners. If we are going to ask questions of the HSE about its internal processes, we have a responsibility to ask the same questions of the Revenue Commissioners and the Companies Registration Office. There were many issues within that report that jump out at me as failures in processes and lax controls. That is my opinion. Others may have different views. My party and I certainly feel that it is very important in the context of this report that we have the Revenue Commissioners before the committee because the report flags systemic problems. If these problems arise across the full remit of these organisations, it has implications for taxpayers' money. It is important that we-----
We are going to come back to this issue anyway, I would imagine. As part of that, we should have a discussion, maybe after tomorrow's meeting, with the HSE about where we go from here. In that context, those points might be considered.
That is good. We will do that. Is it agreed to note the correspondence for today? Agreed. We will come back to that.
Items 28C and 29C are two notes prepared by the Comptroller and Auditor General's parliamentary liaison officer on the central funding of local authorities and the land aggregation scheme, as requested. Is that noted? Noted.
The next item on the agenda is the reports, statements and accounts received since the last meeting just over a week ago. It will not be as long a list as last week. We are getting it up on the screens now. The first item is Waterford and Wexford Education and Training Board, which received a clear audit opinion. The next item concerns the Health Products Regulatory Authority. That received a clear opinion except, again, for non-compliance in relation to the pension scheme. We have dealt with that before. The next item concerns the Ordnance Survey of Ireland 2014 accounts, which received a clear audit opinion. The next item concerns the Language Body, which received a clear audit opinion. The final item is the financial statement of the Regulator of the National Lottery from 27 February 2014 to 31 December 2014. That was the first year in operation for the regulator. There is a note in Chapter 7 on the Report on the Accounts of the Public Services 2014 which sets out the manner of accounting for the application of proceeds of national lottery funding. People can-----
That is fine. That was my mistake. The regulator was set up to regulate the National Lottery because once the licence for the lottery is gone out of State control, we have the need for an independent regulator. There is the lottery fund as well. Does Deputy Cullinane have a quick comment to make?
Mr. Seamus McCarthy:
The system of financial control in every public body is supposed to be examined and reviewed every year to ensure it is operating.
The requirement is that it is the highest level of the organisation - in this case it would be the education and training board, ETB, itself - that carries out that review. Obviously work is done, perhaps by internal audit, to test that the controls are working. The results of that would be fed up the chain. If there is a problem with some of the controls not working, it means the top level of the entity knows there is something to be addressed and makes sure the action is taken. It is a requirement in the code of practice for the governance of State bodies. There is a separate governance code for vocational education committees, VECs, as they were, and now for ETBs, but the requirement is there. As a result of the restructuring of the VECs and the creation of ETBs in 2013, they had an 18-month accounting period. In most of the ETBs there was a problem getting the systems in place to ensure that review was carried out. If we were to look back at last week's presentation, I would have been making the same point about most of them. They did not carry out the review in a timely way. We always flag it because we think it is an important control and a governance expectation. I would expect for 2015 that all the ETBs would have their systems fully functional and that we would not be making the same finding in respect of the 2015 financial statements.
The first part of my question has been answered and Mr. McCarthy expecting an improvement. The second part of the question relates to the non-effective expenditure of €108,000 in relation to the County Galway VEC premises. Was that an empty premises that rent was being paid on?
Mr. Seamus McCarthy:
I am not sure exactly what the position is today, but I do not have a sense that they have sorted the issue or sub-let the remaining part of it. It is a difficulty and it is something we have raised in relation to a number of organisations, particularly where there are amalgamations and restructuring. Many organisations are locked into 25-year leases, for example. There may be break clauses and it is good if there are, but some organisations have got caught with longer leases and they have this difficulty.
If members look at item 4.12 on the next page, it is a more significant case that has been brought to the attention of the committee previously, relating to the Industrial Development Agency Ireland, IDA Ireland. It was locked into a situation with a building called Carrisbrook House, which is in Ballsbridge. Every year we were reporting that it had non-effective expenditure of about €1 million and it was locked into that until 2023 or 2024, or even longer, but in 2015 it managed to buy out the remaining obligations under the lease at a cost of €9.4 million. Had it not paid that €9.4 million, it would have been tied into it. I recall now that it was for the next 22 years, costing €1 million a year. While this is non-effective expenditure, it is better to be out of the lease at this stage. That was the cost of doing the deal with the property-owner.
I appreciate that and I have experience of that in Galway, where the Health Services Executive was paying almost €1 million per year and it was cheaper to break the lease and pay a €1 million penalty. However, it certainly highlights the failure of these bodies to look at leases regularly and to see whether they can get more cost-effective and shorter leases. We must also look at building over the years. They went for leases that cost a fortune. The absence of any attempt at sub-letting the premises is also a concern. We are just paying rent for nothing.
Mr. Seamus McCarthy:
It certainly goes to the point that Deputy Connolly was making about the importance of having a good strategy in relation to getting into a lease. The lease on Carrisbrook House, as I recall, was a 65-year lease without a break and there were still 22 or 23 years left to run. It was never expected that it would be empty for any period like that. It was thought there would always be a State body that would be able to take it up. IDA Ireland, because of the rationalisation of State bodies over the past number of years, has only been the holder of the lease for about two years. Prior to that, it was Forfás, I think, and prior to that I think it was AnCO that originally took out the lease.
I propose that we write directly to IDA Ireland, saying that we are very concerned about those two notes, regarding the rental agreement and the €1.375 million spend on a judicial review in relation to the decision of the agency to acquire land by compulsory purchase order, which was never followed through on. We should write directly to IDA Ireland seeking a detailed explanation in respect of both items. Is that agreed? Agreed.
Is that the end of the discussion? We also note the Department of Agriculture, Food and the Marine funds on that list. It is a very small account and is on the schedule in front of members.
There are a number of accounts that have been laid late this week and next week by different organisations. I suggest the clerk have a look at those that are being very late in publishing their accounts and ask for an explanation, such that when we come back in the autumn we will have that information and will not be chasing them up at that stage. Is that agreed? Agreed.
Mr. Seamus McCarthy:
There is a circular from the Department of Public Expenditure and Reform with instructions that accounts are to be laid promptly after they have been certified by me. The expectation is that it would be three or four months, maximum. That would include where the accounts would have to be noted by Government, perhaps, before they are submitted to the Oireachtas. The expectation in the circular is that if an organisation expects to be late in laying the accounts, it would tell the clerk of the Committee of Public Accounts, because the Committee of Public Accounts has an interest. That circular was issued early last year, so it is beginning to have an effect and we can see that with the public trustee account, which had not been laid as a matter of course. There are no penalties involved in it. It is a standard that is expected and the committee or the clerk can take it up with any body that is late and require an explanation.
I think that concludes this week's review of reports, statements and accounts received. The next item is the work programme, which we all know. Today is the OPW, tomorrow is the HSE, next Thursday is that National Treasury Management Agency and by next week we will have to finalise our work programme for September and October so the committee secretariat can arrange to have witnesses available when we come back. Items that were mentioned in the last meeting include Project Eagle, public-private partnerships, institutes of technology, third level institutions, off-balance sheet expenditure, issues raised by the C&AG and section 38 and 39 organisations. There is a lot there to be going on with. If people have any specific items for inclusion in the work programme, they may notify the clerk.
At next week's meeting we must sign off on a work programme for the early part of the autumn in order that we can make arrangements. If no one comes back to me, I will come forward with a draft which we can discuss at that stage. I think we have covered all items.