Oireachtas Joint and Select Committees

Thursday, 26 January 2017

Public Accounts Committee

Business of Committee

9:00 am

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We are joined by the Comptroller and Auditor General, Mr. Seamus McCarthy, who is a permanent witness. He is accompanied by Mr. Malachy Quinn, senior auditor.

Apologies have been received from Deputies Josepha Madigan and Catherine Murphy.

The first item on the agenda is the minutes of the meeting of 19 January. Are they agreed to? Agreed.

The next item is correspondence received since the last meeting. Item No. 268A is correspondence received from Mr. Tom Hussey at the Department of Defence about today's meeting. Item No. 269A is also correspondence from him containing further briefing material for today's meeting. Item No. 273A is correspondence received from Mr. Maurice Quinn, Secretary General, Department of Defence, enclosing his opening statement.

The next item on the agenda is correspondence received from private individuals and other correspondence. Item No. 257C is correspondence received from Dr. Matt Crowe, director, Environmental Protection Agency, in response to our correspondence on the Local Authority Waters and Communities Office and issues related to salmon stocks. The correspondence states the office is funded by the Department of Housing, Planning, Community and Local Government, not the EPA. As such, we will have to write to that Department directly, as suggested by the EPA. Is that agreed? Agreed.

Item No. 263 is correspondence received from Monaghan County Council requesting the committee to investigate EirGrid expenditure. Concerns have been raised elsewhere about EirGrid. Does the Office of the Comptroller and Auditor General audit its accounts? Is there direct funding by the Exchequer of EirGrid's capital expenditure programme?

Mr. Seamus McCarthy:

Not that I am aware of.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Is the industry the source of its funds?

Mr. Seamus McCarthy:

Yes, for transmission rights.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I refer to a paragraph in the letter from Monaghan County Council.

This is correspondence received from Monaghan County Council requesting the committee to fully investigate EirGrid’s financial expenditure in the past ten years, the misuse of electricity consumers' money expended on lavish public relations campaigns, sponsorship and the failed North-South interconnector application of 2010, as well as all of EirGrid’s expenditure as a semi-State company.

Photo of Shane CassellsShane Cassells (Meath West, Fianna Fail)
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Can we establish if EirGrid receives any direct subvention or funding from the taxpayer to fund its activities? The views expressed by members of Monaghan County Council have been repeated by council members in counties Meath and Cavan about the manner and the conduct of EirGrid during a very flawed process. At an oral hearing I attended, as pointed out last week at a massive rally which was covered by RTE, the views and considerations of Oireachtas Members and councillors were not recorded in a decision made by An Bord Pleanála. The points raised in the correspondence are legitimate. I have examples of weekly advertisements across all print media platforms. EirGrid sponsors radio shows on LMFM and expends significant moneys in sponsoring local and national GAA events. However, that will not be much good when there are 400 pylons running across the three counties that will be impacted on, devastating the lives of the people living in them. It is opportune and only right that Monaghan County Council is posing these questions. Can we identify if there are direct subventions from the taxpayer to fund EirGrid’s activities?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will write directly to EirGrid. Is its debt included in the national debt?

Mr. Seamus McCarthy:

I do not believe it is. The debt of commercial semi-State bodies is not part of the national debt.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Can we send the correspondence to the Minister for Communications, Climate Action and Environment for a response to the committee? I do not want to summarily dismiss it. It might not strictly be within our remit, but I would not like to be glib and dismiss it without at least getting a response from the Minister on the matter.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I agree with that suggestion. Does the sectoral committee have any responsibility in this regard? EirGrid representatives were before the communications committee to discuss its policy. Would it be appropriate for us to refer the matter to the sectoral committee and ask it to have a look at it? That is another avenue which could be used to get answers, if it is not strictly within our remit.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will do both. Obviously, being a commercial semi-State body, EirGrid representatives attend the other committee. In the meantime, we will write directly to the Minister to get a response to the letter to the committee. Is that agreed? Agreed.

Item No. 264C is correspondence received from an anonymous source on unneeded expenditure in parts of the HSE when the moneys could clearly be better utilised. This is a copy of a letter sent to the director general of the HSE. I propose that we note the correspondence. Is that agreed? Agreed.

Item No. 265C is correspondence received from an individual alleging the waste of public moneys on a school building in Rathnew, County Wicklow, and that there is a possible conflict of interest. It concerns Gaelscoil Chill Mhantáin in Wicklow town and the proposal that it be relocated to Rathnew two miles away. Concerns have been raised about the site and the costs involved. We will forward the correspondence to the Department and request a detailed response to the issues raised. Is that agreed? Agreed

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I refer back to the previous letter. Someone has gone to the trouble of drawing attention to various matters. It takes a big effort for somebody to write a letter. Will it be responded to?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The letter is to Mr. Tony O'Brien, director general of the HSE, from an anonymous source who signs himself as being a whistleblower. A copy of the letter was sent to the Comptroller and Auditor General.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Is it signed?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It is unsigned. There is no name, no address and no mention of any part of the country. When HSE representatives are before the committee, members will be free to raise the issues referred to in the correspondence.

Item Nos. 266C, i to iv, and 267C, i and ii, are correspondence received from an individual, enclosing various newspaper articles on the payment of public moneys by Dublin City Council for the Ballymun regeneration programme. The clerk has been in touch with the individual concerned to seek clarification which we have just received. It will be circulated to all members shortly. I suggest we delay consideration of this item and return to it next week. Officials of the Department of Housing, Planning, Community and Local Government will attend the committee shortly. I suggest we consider the matter next week and put the Department on notice that we will specifically raise it when we deal with the Ballymun regeneration programme. It involves the use of pyrite. The Comptroller and Auditor General dealt with the programme several years ago, but this is a specific issue. The programme is also funded by the Department, not just by Dublin City Council. The Department is the paymaster for everything involved.

Mr. Seamus McCarthy:

There was a special report, but our remit does not directly cover an audit of the Ballymun regeneration programme. It was on moneys emanating from the Department and the accountability of the Accounting Officer for these funds.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will put the Accounting Officer on notice that the committee will deal specifically with that funding. Is that agreed? Agreed.

Item No. 271C is a copy of an email sent to Mr. Dara Connolly, president of the Irish Pharmacy Union, regarding deficiencies in the legal system. I propose that we note it. Is that agreed? Agreed.

Item No. 272C, i and ii, is correspondence received from Deputy Catherine Murphy regarding a report from the Garda internal audit section which uncovered several financial irregularities. An article from The Sunday Timesis attached. The report has not been published. I propose that we write to the Garda Commissioner as Accounting Officer, asking her to indicate when the report will be published and to forward a copy to the committee. We will not publish the report on the website once received. Is that agreed? Agreed.

Item No. 274C is correspondence received from an individual on the Courts Service review of the management and performance of the spectrum growth fund. It is about the wards of court issue which was dealt with extensively by the previous committee. At one of our first meetings last year we received a minute from the Department on the previous committee’s report on wards of court. The Department explained that it was looking at how the fund was being looked at. I propose that we write to it to look at developments in the light of the minute given to us. I also propose that we forward a copy of the latest correspondence on the review that has taken place and look for a response. Is that agreed? Agreed. It should be noted that the fund is managed by the President of the High Court and that the Judiciary is not answerable to the Oireachtas. However, we can still try to be as constructive as possible in the matter.

I return item No. 125C. It was agreed at our meeting of 11 November to return to this item which concerns a letter received from an individual about Horse Racing Ireland. This and the previous committee, as well as several politicians and committees, have been approached by the person in question on several occasions. We also agreed to refer the matter to the Parliamentary Legal Adviser’s office, with all of the correspondence received from the individual since the start of the Thirty-second Dáil, to make a decision on if and how we could progress it further.

The clerk has been in touch with the Parliamentary Legal Adviser whose advice is that Horse Racing Ireland as a body audited by the Comptroller and Auditor General is accountable to this committee in respect only of its audited financial accounts. It is not the role of the Committee of Public Accounts to investigate the handling of complaints by such a body in respect of a specific individual or to become involved in resolving individual complaints between citizens and the body concerned.

In addition, and perhaps more importantly, the individual refers in correspondence that letters exhibited by him will be used in High Court case number 2015/10553/P. The Office of the Parliamentary Legal Adviser has checked the court listings and it appears that the person initiated proceedings on 16 December 2015 against Ireland, the Attorney General, the Ministers for Agriculture, Food and the Marine and Justice and Equality and the Garda Commissioner and that his case is listed for hearing on 23 March 2017. Therefore, it would also be in breach of Standing Order 59 of the Standing Orders for this committee to engage with any party to live proceedings. A copy of a draft letter is on members' screens.

I propose we write to the individual in question informing him of same and that we will be returning any future correspondence in relation to the matter to him. Could members take a moment to look at the letter we are proposing which has, essentially, been drafted by the Parliamentary Legal Adviser? There are live court proceedings on the matter and the Parliamentary Legal Adviser is telling us that we should not be dealing with it. Does anyone wish to comment on the letter or can we agree? I will give members a moment to look at it. There has been extensive correspondence. It is the person's right to write to us and bring these matters to our attention but after considering the matter since December, the Parliamentary Legal Adviser has recommended that we do not deal with it. We gave a commitment that we would try to deal with it before the end of January. Do members have any comments or do they agree or disagree with the contents? Can we get approval for the clerk to issue that letter on behalf of the committee?

Photo of Alan KellyAlan Kelly (Tipperary, Labour)
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I approve.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Has everyone read it? Are there any queries on it? The unanimous view of the meeting is that the clerk should issue the attached letter to the individual concerned.

The next item on the agenda concerns statements and accounts received since the last meeting. They will come up on the screen. The first item is No. 4.1, University College Cork, regarding a qualified audit opinion relating to recognition by the university of expected future Exchequer funding and the non-consolidation of the UCC Trust Fund. Attention is drawn to the non-consolidation of Cork University Foundation and disclosure in the statement of governance of instances of non-compliance with national procurement guidelines. The Comptroller and Auditor General is working on a document to summarise all these qualifications in the audit report and matters that have been brought to our attention. The issue of third level institutions is coming up in our work programme. We will note it and deal with it as part of our work programme.

The next item is No. 4.2., the Property Services Regulatory Authority, which regulates estate agents and maintains the residential property sales price register. We note a clear audit opinion. No. 4.3-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Will we come back to the issue of University College Cork?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What does non-consolidation of the Cork University Foundation, which has reserves of €5.5 million, mean?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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What this means is that there is a trust fund that is sometimes a fund-raising activity for the college but which is not run directly by the college. Obviously, there are common members involving senior people in the college and the trust. It means that it is a stand-alone fund that is not included in the accounts of University College Cork. The Comptroller and Auditor General can clarify it if the Deputy wishes to discuss it further.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The same thing happened with University College Galway.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It is happening with many third level institutions so the Comptroller and Auditor General-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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There is separate funding under this-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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-----and it is not included.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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-----that is not coming into it when we are talking about the crisis in third level funding.

Mr. Seamus McCarthy:

The reason I draw attention to the foundations is because these funds are there for the benefit of the college - usually for capital development. It is important that the committee in looking at the consolidated financial statements would be aware that there are other sums as well that are outside that which are expected to be available to the universities.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Does it relate to an income for third level institutions?

Mr. Seamus McCarthy:

They would be philanthropic contributions which would obviously be restricted. They are normally given for a particular capital development. In respect of looking at the balance sheet of the university without understanding that these other funds are also available, these funds are a reserve that is available for capital developments.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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We are coming back to that.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will come back to third level institutions separately.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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On the same issue concerning the non-consolidation of other funds in these universities or institutes of technology, there was a similar problem with Waterford Institute of Technology. A company called Campus Services Limited was brought in regarding the governance of the board so this seems to be a problem in these institutes. I accept that we are coming back to it.

We see non-compliance with national procurement guidelines far too often with many of these organisations, be they colleges or the HSE. I am uncomfortable that we just note it and move on. It is incredible that over and over, we see non-compliance with national procurement guidelines. Did we agree that we would come back to that as an issue because it is unacceptable that we just note these issues and there is no further scrutiny of what is happening.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I think that in the early part of the year, we will allocate at least two meetings to third level institutions.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Non-compliance with public procurement guidelines is not just happening in universities or institutes of technology. We see it in the HSE and across the board so I am troubled that this appears over and over again in these audit notes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We discussed this at last Thursday's meeting. The Comptroller and Auditor General is preparing a report on the 300 organisations he audits. In respect of where he had qualifications in his audit report or drew our attention to the topics, he will come back to us concerning all the organisations with procurement issues.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Under headings - I remember that.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That will lead into a special meeting on the issue of procurement in the next couple of weeks.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Very good.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will have an excellent summary of all the issues referred to by the Deputy because, as he said, we are getting bits week by week and they keep coming up so we need an annual summary.

The next item concerns Limerick and Clare Education and Training Board. Again, there was a clear audit opinion but matters drawn to our attention include the fact that the board was late in preparing its accounts and the effectiveness of the system of internal control for the period of account. That will come up in the summary to which I referred.

No. 4.4 concerns Longford and Westmeath Education and Training Board, No. 4.5 concerns Tipperary Education and Training Board, No. 4.6 concerns Donegal Education and Training Board, No. 4.7 concerns Cavan Monaghan Education and Training Board, No. 4.8 concerns Kerry Education and Training Board and No. 4.9 concerns Dublin Dun Laoghaire Education and Training Board. All have clear audit opinions. Any member is free to follow up any matter in those accounts which have been laid in the Oireachtas Library.

Nos. 4.10 and 4.11 concern The Gathering Project 2013 Limited. We have the accounts for 2014 and 2015 for which there are clear audit opinions. Nos. 4.12 and 4.13 concern the 2014 and 2015 accounts of the Dublin Regional Tourism Organisation Limited for which there is a clear audit opinion. Are those organisations still alive? There was zero turnover in some years.

Mr. Seamus McCarthy:

They are effectively dormant but we audit them and it is appropriate that the accounts would be submitted.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Okay, and it is a matter for-----

Mr. Seamus McCarthy:

In respect of The Gathering, we identified these as audits that had been completed but the financial statements had not been submitted to the Oireachtas. The Gathering was over in 2013 and, as far as I know, those financial statements have not been presented so for completeness, it would be of use to the committee to ask it to submit all of the financial statements for that company.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Do we write to the Accounting Officer of the Department of Transport, Tourism and Sport or Fáilte Ireland?

Mr. Seamus McCarthy:

It would be the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will write to the Accounting Officer in that Department in respect of the 2013 accounts. I thank the Comptroller and Auditor General for highlighting-----

Mr. Seamus McCarthy:

The total expenditure on the project was about €13 million and we have noted that, but for completeness for anybody consulting the Oireachtas Library it would make sense that all of the financial statements of the project would be there.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That is good. We will write to the Accounting Officer.

Item 4.12 concerns the Dublin Regional Tourism Organisation - that is the one we have just mentioned. We will note it even though there was no activity during the course of the year. Item 4.14 concerns the Marine Institute, which has a clear audit opinion for its 2015 accounts. That completes the review today of the accounts received since the last meeting.

The next item on the agenda is our work programme. This takes into account some of the items discussed the last day. The Department of Defence will be here today and next Thursday the Department of Justice and Equality will be before us to deal with a special report from the Comptroller and Auditor General regarding annual hours in the Irish Prison Service. Savings were expected but did not fully materialise. We will have the appropriation account for the Irish Prison Service. The following Thursday we have nothing specific. We had hoped to have the Department of Housing, Planning, Community and Local Government but it cannot come in so that may be a very useful week to complete our work on Project Eagle if we have no scheduled meeting. We might have to have more than one meeting that week to clear our report. We will hold that meeting open for the time being.

On Thursday, 16 February I am suggesting we deal with the Department of Agriculture, Food and the Marine. There is a special chapter in the Comptroller and Auditor General's report about levies in the agricultural sector and refunds from the EU. The following Thursday, 23 February, we will invite the Health Service Executive, HSE, in to deal with two items, the fair deal scheme and patient private property accounts. We will come back to the HSE on bigger issues but various members have asked to consider these two issues.

On Thursday, 2 March, we will have the Department of Housing, Planning, Community and Local Government before us to deal with its annual accounts and the issue in the Comptroller and Auditor General's report about central government's funding of local authorities and progress on the land aggregation scheme. I know members will want to talk about that issue. On Thursday, 9 March, the Office of the Revenue Commissioners will be here to discuss all the chapters in the report highlighting different issues, including the review of medical consultants' tax affairs and tax consultants' affairs. Many names were published in respect of unpaid tax. There was a chapter on research and development tax credit and deferral of stamp duty liability and the activities of the Revenue in general. We will skip a week because the Dáil is not sitting. On Thursday, 23 March, and the following week we will discuss third level institutions. Will members contact the clerk to the committee on how we will structure that? We will deal with each institution separately, allocating an hour or two for each one and then move to the next one. We cannot have six different institutions here at once because some will be skipped. We will probably have to bring in the Higher Education Authority, HEA, in the opening slot and we will try to structure a work programme with the third level institutions over those two weeks. Many people have mentioned that.

On 6 April, we will meet the Department of Finance to discuss the Exchequer financial return, the Government and Department's accounts. It is normal that the Committee of Public Accounts would have the Department of Finance in to deal with the national debt and financial position. The Department of Justice and Equality will be here on Thursday, 13 April, to deal with the normal Vote plus the procurement and management of contracts for direct provision.

I have a note of further items listed that we will give dates for in due course, for example, HSE section 38 and section 39 organisations. Procurement issues come up every week. We will have to have a session or two on that area. There are some other outstanding chapters regarding the Comptroller and Auditor General's report but many of them will have been dealt with. We may have some space after Easter to pick a few topics between then and summer. People may want to bring in some Departments not covered in the Comptroller and Auditor General's report to discuss their appropriation accounts. Is there general agreement on that schedule? Agreed. If anyone has comments on it, they can contact the secretariat because it is only a draft schedule and it can move a little as time goes on.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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The HSE decided last night not to challenge a High Court ruling on consultants' pay. It is estimated the cost could be as high as €700 million which will be very significant in terms of the overall spend and as a one-off payment. It does not, however, know how much it will cost. I am not suggesting necessarily that we discuss but is it something that would come before us routinely at some point? If not, given the level of money involved is it something we should focus on?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Does the Deputy want us to write to the HSE in the meantime to ask for information and its estimated cost?

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will have an item of correspondence about where it sees it going.

Photo of Alan KellyAlan Kelly (Tipperary, Labour)
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The caveat is that it is another case that may be before the courts. We need to confirm that there will not be another appeal.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will write to the HSE for an update and check the legal situation before the letter goes out. We will get a response in the usual HSE timely manner. We will give it a fortnight to answer that one.

If there is no other business there is no need for a private session. We will suspend to allow the witnesses from the Department of Defence take their seats.

Sitting suspended at 9.36 a.m. and resumed at 9.38 a.m.