Oireachtas Joint and Select Committees
Thursday, 30 March 2017
Public Accounts Committee
2015 Annual Report of the Comptroller and Auditor General and Appropriation Accounts
UCC: Financial Statements 2013-2014
9:00 am
Alan Kelly (Tipperary, Labour)
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Last week we met officials from the Department of Education and Skills and yesterday we met with the Higher Education Authority. Between today and next week, we will meet with six higher education institutions. In this session we will examine the financial statements for 2013-14 for University College Cork, UCC. From UCC we are joined by Professor Patrick O'Shea, the president who is new into the job and we wish him the best of luck in his position, Mr. Diarmuid Collins, chief financial officer, and Mr. Cormac McSweeney, acting finance officer.
From the Department of Education and Skills, we are joined by Mr. Christy Mannion, and by Dr. Graham Love and Mr. Andrew Brownlee from the Higher Education Authority.
I remind Members, witnesses and those in the Visitors Gallery that all mobile phones need to be switched off.
I draw the attention of witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.
Members are reminded of the provisions within Standing Order No. 186 that the committee shall also refrain from enquiring into the merits of a policy or policies of the Government or a member of the Government or the merits of the objectives of such policies. Members are reminded of the long-standing ruling of the Chair to the effect that they should not comment on, criticise or make charges against any person outside the House or an official by name or in such a way as to make him or her identifiable.
Mr. Seamus McCarthy:
The financial statements before the committee for UCC today relate to the academic year 2013 to 2014. The University College Cork financial statements before the committee today relate to the financial year ending on 30 September 2014. In that year, UCC recognised income of just over €340 million. Academic fee income totalling €120 million represented over one third of the total, of that, some €43 million was received directly from the HEA. In addition, recurrent State grant funding from the HEA totalled €47 million; and State funding for pensions amounting to €55 million was also recognised. Research grants coming from State bodies, the European Union and industry totalled €79 million.
The percentage distribution of income is included in my written submission. The university’s total expenditure in 2013/14 was over €345 million, with pay and pension costs accounting for nearly 74% of that figure. The result for the year was a deficit of almost €5 million.
My audit opinion in respect of the UCC financial statements is qualified in two respects. First, in regard to the recognition of some of the future pension funding receivable from the state and second, in relation to the non-consolidation of the UCC trust fund into the accounts of the university.
On future pension funding, the university has been in dispute with the Department of Education and Skills about one element of its pension funding. The college agreed, for pension purposes, to award what are referred to as "professional added years" to certain staff recruited from elsewhere in the public sector. The Department of Education and Skills has told the university that it will not meet that liability in its funding of the university. Following the settlement of a legal case taken against the college by one retired staff member, the cost of the professional added years for transferred-in service was fully borne by the university from its non-Exchequer funding.
At the end of the 2013 to 2014 period, UCC estimated the total future cost of the disputed pension benefits at €14.3 million, and included this amount in its deferred pension funding asset. I concluded that the recognition of the €14.3 million asset is not in accordance with applicable accounting standards. I understand that contacts are ongoing between UCC and the Department to resolve this issue. The president will be able to update the committee on any developments in that regard.
The second aspect of my qualified audit opinion relates to the failure to consolidate the results of the UCC trust fund into the accounts of the university. The audit concluded that consolidation was required on the basis of evidence gathered of the university’s ability to control the financial and operating polices of the trust fund. The accumulated reserves of the trust fund stood at €12 million on 30 September 2014. The university has now indicated its intention to consolidate the results of the trust fund in its 2015 to 2016 accounts.
The audit certificate also draws attention to the non-consolidation of the results of Cork University Foundation Limited on the basis that the foundation is not controlled by the university. The foundation’s main purpose is to provide financial and other support to assist the university in delivering on its strategic goals. It had accumulated reserves of €5.5 million at 30 September 2014. The foundation is identified as a related party in the university’s accounts and some information is provided in note 28 on transactions between the university and the foundation.
The audit certificate also draws attention to disclosures in the university’s accounts regarding specific instances of non-compliance with national procurement guidelines. The audit identified payments totalling €616,000 made to eight suppliers during the year in respect of goods and services that had not been subject to competitive public procurement.
My recent special report on financial reporting in the public sector indicates that UCC was one of four universities that had not completed their financial reporting for 2013 to 2014 by the end of 2015. UCC was the last of these audits to be certified, in December 2016, which was almost 27 months after the end of the period of account. I am glad to report that some progress has been made with the 2014 to 2015 financial statements and I have just signed off on that audit. The financial statements will now need to be finalised by UCC’s audit committee and governing body, and I expect that the process will be completed by the end of April this year.
Alan Kelly (Tipperary, Labour)
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I thank Mr. McCarthy and call Professor Patrick O'Shea to make his opening statement.
Professor Patrick O'Shea:
I am delighted to be here. I have recently returned from 37 years in the United States, working most recently at the University of Maryland. Though just returned, I am fully aware of the financial constraints Irish higher education sector has been operating under for the past decade, and I think the people of Ireland and the Government are to be congratulated for their accomplishment and forbearance during this difficult time.
UCC has risen to these challenges with increasing student participation, increased graduate output, lower staff numbers and growth in income diversification to offset the reduction in State support. While the university has provided briefing papers to the members on the areas the committee wishes to examine in detail, I will make the following comments on the overall financial performance during the period 2013 to 2014, while my colleagues will be in a position to provider greater detail to members during the session.
Income from operations was €285.4 million and shows a decline of €5.2 million, or 1.8% from the previous year, primarily due to the reductions in Exchequer funding in support of all teaching, learning and research activities. While academic fee income has increased year on year, it did not increase to a level to keep pace with the Exchequer decline. Research income recorded a welcome increase of €1 million to €79.4 million. To offset the decline in income, expenditure at €290.3 million is lower by €4.7 million as the university reduced pay by €1 million and operating costs by €1.5 million, despite rising student numbers. Depreciation is also lower by €2.6 million, given the continued reduction in Exchequer grant support for the university’s estate. Overall earnings before depreciation, interest, tax and amortisation result in a surplus of €4.4 million. However, when adjusting for depreciation and amortisation, the net out-turn for the year on the income and expenditure showed a deficit of €4.9 million, primarily due to a greater level of depreciation vis-à-visamortisation due to asset revaluation. There was a delay in 2014 of total resolution of funding issues for the dental school and hospital, and there was the overall decline in State funding for higher education. Reserves on the balance sheet following the performance in the year have declined to a surplus of €138.1 million, comprising revenue reserves now of €3.9 million and revaluation reserves of €134.2 million.
In the longer term, the decline in capital support for the sector remains a major concern. The existing recurrent funding model assumes continued Exchequer support for ongoing refurbishment, maintenance and infrastructural capacity needs. The absence of same will seriously impact the quality of higher education and further increase the financial pressure on already reduced operational funding. On funding policy, the sector urgently requires the ambition we all have for our young adults to be matched by implementation of one of the recommendations of the expert group on future funding for higher education, currently being considered by the Joint Committee on Education and Skills. In saying this, I acknowledge that legislators must make difficult choices with competing demands for limited resource allocation. As pointed out by the chair of the group, Mr. Cassells, doing nothing for funding of higher education is no longer an option. The changing geopolitical landscape presents some real opportunities for higher education. There is a great opportunity for higher education to contribute strongly to the overall economic recovery.
I myself am committed to ensuring accomplishment, transparency and accountability for all taxpayer resources that flow to the institution. I want to build trust between public, legislators and the university. I want to increase the socioeconomic and ethnic diversity of our student population. I am a strong supporter of what I call “needs blind admission”, which is that those who can pay should and those who cannot pay should be provided with necessary financial support to realise their potential. I support the application of knowledge we create at the university for the benefit of the community, society and economy. I am committed to increasing philanthropic funding for the university to leverage the contribution the State already makes to the university. My own overriding goal and ambition for my tenure is that after my stewardship at UCC, we will be seen as a great modern metropolitan model of a research university that is dedicated to discovery and understanding of knowledge, its dissemination through education, and to application of that knowledge for the good for all people.
Alan Kelly (Tipperary, Labour)
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I thank Professor O'Shea. I now call the first speaker, Deputy Marc MacSharry, and propose that the lead speaker will have 15 minutes today if he needs to question the witnesses. All other members will have ten minutes. We have three sessions today, so I ask members to be concise with their questions and to direct them to witnesses for answer. Both the clerk and I will be keeping a watchful eye on the clock, because we are under significant time pressure.
Catherine Connolly (Galway West, Independent)
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Could the speakers be indicated? We are watching the other screen as well.
Alan Kelly (Tipperary, Labour)
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First is Deputy MacSharry, second is Deputy Cullinane and third is Deputy Connolly. Those are the speakers we have at the moment.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I welcome the professor and his colleagues and thank them for taking the time to be with us today.
If the university is changing its accounting approach for the trust in order to fulfil its obligation under the new reporting standard, does it not undermine its previous case for disagreeing with the Comptroller and Auditor General's position and his resulting qualified opinion?
Mr. Diarmuid Collins:
In terms of the trust fund, we will be consolidating 2015 and 2016. It is already reflected in our accounts in a disclosure in note 31 and the interaction between the trust fund and the university is already on the body of the accounts themselves. As such, when the trust fund that is there to support students, scholarly activity, access and so forth provides income to pay for that, the income arrives into the university and is included in the university's overall banking position and accounts. The expenditure as a result of that income is also included in the university's accounts. What is not consolidated is the balance of the fund that is invested. That will be invested post the 2015-2016 accounts. FRS 102 allows us, in the construct of that reporting standard, to be a bit more expansive on the face of the balance sheet between reserves that are restricted and those which are unrestricted. Arguably, up until now, we would not have had that level of it. In the prescribed accounts we have today, unrestricted reserves would not be as visible in the accounts that are there post-FRS 102 consolidation. Our position is that once we have 2015 and 2016, which is up and running today, we will consolidate. It is not as if we have not reflected the trust funds today in the accounts. They are in note 31, which is a disclosure note showing the balance in the trust fund and the interactions themselves. The income and expenditure is in the accounts in any event.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Does Mr. Collins think I am wrong then? I am only asking. It does not matter what the answer is. What is important is that Mr. Collins answers the question. As such, UCC is changing this. Is that not an admission that it had it wrong up to now and is going to put it right?
Mr. Diarmuid Collins:
As I said, the new reporting standard, FRS 102, allows for a better visibility of unrestricted reserves on the face of the balance sheet. These funds are restricted for the use of students. To have included them on the balance sheet to date, whereby they would have been in the overall university balance sheet position, would have given the impression that the university had greater reserves available to it. In reality, these reserves are restricted for the use of students. When we consolidate under FRS 102, our reserves will split between general, or unrestricted, reserves and restricted reserves. These funds will be included in restricted reserves. The overall financial health of the university itself as we know it today will not change when we consolidate these amounts of money because they are for students and their support.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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For clarity then, the Comptroller's qualification was wrong as far as UCC was concerned.
Mr. Diarmuid Collins:
The university takes a perspective. That is reviewed by our audit committee and governing body. The accounts themselves are already audited by our commercial auditors, Deloitte, who have given us a clear set of accounts. While we respect the Comptroller's view, they are university accounts. The Comptroller has chosen to qualify on this issue and in our view it will be resolved in the context of 2015-2016, once we consolidate.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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How will the change be reflected in financial statements?
Mr. Diarmuid Collins:
There will be no change to the income and expenditure side because the expenditure and income are already in the accounts. What will happen is that on our balance sheet today, where we have revenue reserves of approximately €3.9 million at the end of 2014, revenue reserves will split between reserves, a total number which will be restricted and unrestricted. There will be no change. The unrestricted reserves will be the same as the number we have today in total reserves and there will be a new line "restricted reserves" and that will include the trust fund.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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The total amount of reserves relevant to the figures we are talking about is approximately €17.5 million between the trust and the foundation. Is that correct or does UCC look at it like that?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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The new accounts under the new standard will say, "These are our reserves, but €5.5 million is the foundation so that has to be used for sports equipment, for argument's sake".
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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The trust is €12.5 million. Is the foundation not €5.5 million?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Yes. For clarity, what is the trust used for?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I saw that.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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There is €233,000 in a given year for medals and scholarships.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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What is the rest of it used for?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is the capital sum untouchable?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is that a rule of the trust?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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It is that a prescribed role of a donor? If I want to leave the college a sum, do I say it is only allowed to use the interest?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is that what is happening given that the college is keeping the capital amount?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Does the college only get a proportion of the return per annum?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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As such, €233,000 was the return on €12 million.
Mr. Diarmuid Collins:
A benchmark is set. One must remember that there are two returns. If one imagines there was one stock in which we had invested, there would be a return on the investment growth had the share price moved. That is one return. The return of €233,000 is, in effect, the dividend. It is the yield or dividend in the year, namely, the real cash the investment earned. That is what is given to the university. The investment itself would have grown by a larger amount.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is it all in one asset?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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The accumulated return on a €12 million investment for the year was that.
Mr. Diarmuid Collins:
I will give it to the Deputy. I have it here on the balance sheet. It is the opening position at the start of the 2013-2014 year. The fund started the year at €10.6 million and by the end it had grown to just over €12 million. As such, the overall growth was made up of growth in the value of the fund itself plus the yield that we got to pay prizes. The fund itself, in total, returned €1.5 million on €10.5 million at the start of the year.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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What was the total? Did Mr. Collins say €1.5 million?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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What happens to the rest?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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In real terms, the college has €12 million invested in respect of which it gets the benefit of 1.9% per annum.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Was it the donor who prescribed that or is it the trust?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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It just seems unusual that, theoretically, the college has €12 million at its disposal and it is getting a fraction of the benefit which has accrued on that. I know we are not here to look at the trust, but with a 1.9% return on €12 million, it could be a lot better invested.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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It is still very poor on that amount of money. I know I am probably digressing, but the college should look at who is managing its fund.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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The college should talk to the trust to see how it can gain better benefits from a €12 million value that is accruing as 1.9% in terms of usable money on an annual basis. It does not seem to me to be a good use. In the best interests of those great donors who made the money available, they could not have ascribed such a minimal benefit to the college if they genuinely wanted to help the university. However, that is an aside. Where does the money come from? Does it all come from donors?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Are there fund-raisers out there saying "Give us a few quid"?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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How is the foundation different?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is Professor O'Shea on that board?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Where does that money come from?
Professor Patrick O'Shea:
It comes from outside donors. It is invested and can be given to the university for various activities. It is a little bit different from the trust which goes directly to students. It can be used for other university activities such as named chairs, supports for student services for disadvantaged students, capital projects and so forth.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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If there was a capital project which the university was funding from a number of sources and it was €2 million short, can the college apply to the foundation for €2 million?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Are donors that prescriptive?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Can anyone just give money and say it is for the university?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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It is for a particular faculty or use.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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On the issue of pensions, I note the pension asset value is €318 million or thereabouts. I do not have the figures in front of me. Is that managed externally?
Mr. Diarmuid Collins:
We have to go back to 2010. Up to 2010, the university had its own pension fund which was professionally managed. In 2009-10, five of the universities with pension assets transferred that money to the State. There was a transfer to the Exchequer in 2010. Following that transfer, the asset moved into the Exchequer on the basis that future pension liabilities would be made good by the State. Up to then, pension lump sums, retirees and ongoing pension payments were funded by the university pension asset. Post-transfer, we gave away the €318 million and it went into the Exchequer. It was on the basis that future pension lumps sums and payments would be funded by the State.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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That €318 million has gone into the Exchequer. Are there other-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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So that I am clear, was all of that transferred to the Exchequer?
Mr. Diarmuid Collins:
What was transferred was the closed statutory scheme, the scheme that had a pension asset. The remainder of that recognised asset relates to staff who were in the model scheme, for which there was never a pension fund. They are like everybody else in the public sector who are funded on a pay-as-you-go basis. They were the two main elements that make that up. The closed scheme, which had a fund and was closed in 2004, had a pension asset transferred into the Exchequer. Other staff recruited after that are in the standard public sector model scheme, which is funded on a pay-as-you-go basis. We never had a pension asset for those. The liability on the balance sheet reflects all of our staff discounted for interest rates, yields and an actuarial assessment of what that future liability would be. We recognise a full asset, given the commitment when we transferred our funding to the Exchequer.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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An issue arises if somebody is transferred in and their pension does not come with them and the State says it will not pick up the tab.
Mr. Diarmuid Collins:
In the UCC pensions statute before the transfer, if someone transferred from another university or elsewhere in the public sector into UCC as an employee and into the UCC pension scheme, that transfer of service was reckoned for added years if that person was in a post for added years when they retire following the transfer. We recognise that the interpretation is now made by the Ministers. In the Minister's interpretation, that transfer in service is no longer recognised when it comes to the totality of pension entitlement, so we have a disconnect.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is the university keeping money aside to meet the difference if that arises?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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It is not really the university's asset; it is the State's asset now. The State is saying it is not covering it.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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There are discussions ongoing and "good progress" was referred to. Will Mr. Collins define good progress for the committee?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is there a timetable for the completion of these discussions?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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That is more of a report-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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That is more a report on when the next meeting is. Is there a deadline?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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It might be worthwhile for Mr. Collins to suggest one to focus minds. How is this affecting the university's litigation against the State?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is that litigation dormant, for want of a better expression, while the negotiations are ongoing?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Another interpretation might be that the university is happy to use it as leverage while the negotiations are ongoing.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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In the interest of the taxpayers' money, the university should consider postponing its litigation pending the outcome. I have some final questions. How many campus companies are there in UCC?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Companies in which the university is a shareholder. A rough number is fine; I do not need specifics.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Does Mr. Collins know the accumulated borrowing of any of these companies?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am not asking the one with the most, but the accumulated borrowing. If one added up all the borrowings of all these campus companies, what is the figure?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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In the event that these companies went under for some unknown reason, that liability falls back on the university and the State. Is that correct?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Ultimately, the State is guarantor if the university goes under.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Ultimately, the State is guarantor if the university goes under. Are all the companies trading on campus with this liability of €20 million profitable? Are there any which are not so profitable?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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The University is in good shape on the campus.
David Cullinane (Waterford, Sinn Fein)
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I have two issues. As I have ten minutes, I will spend five minutes on the first one and five on the second. The Chairman might give me a heads up when the first five minutes is up.
David Cullinane (Waterford, Sinn Fein)
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I welcome all our witnesses. I will pick up on the spin-out issue. How many spin-out companies are there in UCC?
David Cullinane (Waterford, Sinn Fein)
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Over the past seven or eight years, were any spin-out companies sold?
David Cullinane (Waterford, Sinn Fein)
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How much was it sold for?
David Cullinane (Waterford, Sinn Fein)
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Did the institute have a shareholding?
David Cullinane (Waterford, Sinn Fein)
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Does the institute have a shareholding in the other four companies that are present at the moment?
David Cullinane (Waterford, Sinn Fein)
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What is the average percentage holding in such companies?
David Cullinane (Waterford, Sinn Fein)
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That would be standard across most universities and institutes.
David Cullinane (Waterford, Sinn Fein)
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The nature of spin-out companies is such that staff or researchers could also potentially be directors and shareholders. Is that common or uncommon?
Mr. Diarmuid Collins:
In terms of our model, it is consistent with the national policy in that a staff member who is a promoter of a spin-out company - taking the example of where the company was sold and we had a return - will leave and go with the company. We have no staff who are arguably in the university and the spin-out company.
David Cullinane (Waterford, Sinn Fein)
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In the past few years was any head of research and innovation a director or a shareholder in any of the companies?
David Cullinane (Waterford, Sinn Fein)
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Does the head of research and innovation at the institute have a role in governance and the management of conflicts of interest to ensure the institute is protected?
David Cullinane (Waterford, Sinn Fein)
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In policy terms, if the head of research and innovation was to approach Professor O'Shea or somebody else in the institute about the start-up of a spin-out company of which he or she wanted to be a director and a shareholder, would that be possible?
David Cullinane (Waterford, Sinn Fein)
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Why would it be a serious issue?
David Cullinane (Waterford, Sinn Fein)
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When Dr. Love appeared before the committee yesterday, I put these questions to him and he offered a completely different view. He was of the view that it would not be a conflict of interest. In fact, he said he would see no difficulty with it. It was put to the Secretary General of the Department of Education and Skills that a former vice president of an institute, the head of research and innovation at an institute and a current president of an institute had a shareholding and had been a director of multiple spin-out companies in an institute. That person had responsibility for oversight and governance and also had a shareholding in one institute and that institute was under review. Dr. Love said yesterday that he had no difficulty with this. Perhaps he might clarify his position today. Professor O'Shea has told me today that in the case of UCC he would have a problem if the head of research was to approach him about establishing a spin-out company of which he or she was to be a shareholder.
David Cullinane (Waterford, Sinn Fein)
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Will Dr. Love elaborate on his comments yesterday?
Dr. Graham Love:
I think there is some confusion. What I believe I communicated to the committee yesterday was that there were scenarios in which people in management positions in universities could be researchers with an involvement in spin-out companies, etc. and that there were processes for them to step aside from it in order that they managed the conflict of interest.
David Cullinane (Waterford, Sinn Fein)
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What I have asked Professor O'Shea is that if the head of research and innovation at the institute was to approach him with a proposal to establish a spin-out company of which he or she proposed to be a shareholder and a director, would that be possible. Is Dr. Love saying he would say it would be inappropriate and that the person should leave his or her space as head of research and then by all means enter the innovation space, or is he now saying that as long as the person was to absent himself or herself from decision-making solely on that company, he or she could remain as head of research and innovation? Perhaps Dr. Love might clarify the policy of the HEA.
Dr. Graham Love:
The policy of the HEA and, more particularly, national policy, in this regard is that if there are a set of procedures and processes that enable a person to step aside from the decision-making process that would affect the spin-out company or any set of associated companies in the execution of his or her university managerial duties-----
David Cullinane (Waterford, Sinn Fein)
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But not necessarily as head of research.
David Cullinane (Waterford, Sinn Fein)
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Perhaps Dr. Love might elaborate on what he means by the words "much broader than that". What I am asking specifically is if a head of research was considering establishing one or more spin-out companies and that he or she had responsibility for oversight and governance, in Dr. Love's view, should he or she remove himself or herself from the position of head of research and then concentrate on the innovation and spin-out companies?
Dr. Graham Love:
It would depend on the nature of the spin-out company and the set of procedures put in place for implementation of the local IP policy protocol. What has to be manifest is that there is a separation of influence in the person in question executing decisions as a university manager and as a key entity in a spin-out company.
David Cullinane (Waterford, Sinn Fein)
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Would that not be very difficult to do if the manager also had responsibility for oversight? Professor O'Shea has said that if the head of research was to put that proposition to him, he would immediately see a conflict of interest. I am assuming that what he is saying is that despite the person having a management and governance role, if he or she wants to get into the innovation space and set up spin-out companies, he or she can do so. Would Professor O'Shea have a difficulty with that person staying on as head of research?
Professor Patrick O'Shea:
Not necessarily. I concur with some of what Dr. Love said. It would depend on the particulars of the case. The head of research would certainly have to recuse himself or herself from all involvement in and oversight of the area at the university. There would then have to be a discussion on whether it would be possible. It might not be.
David Cullinane (Waterford, Sinn Fein)
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If the head of research was a shareholder in multiple spin-out companies, would that complicate the matter even more?
David Cullinane (Waterford, Sinn Fein)
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Will Professor O'Shea forward to the committee a copy of his policy on intellectual property and the management of conflicts of interest?
David Cullinane (Waterford, Sinn Fein)
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My second issue concerns the Irish management institute, IMI. What is it?
David Cullinane (Waterford, Sinn Fein)
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How did it become part of UCC?
Mr. Diarmuid Collins:
We built an academic relationship with the IMI in the past few years. During that time we developed a number of joint programmes that are still ongoing. We acquired the IMI as a subsidiary of UCC in November 2016. In terms of UCC subsidiaries and the 2016 accounts, the IMI is to be a 100% owned subsidiary of UCC. It is a provider of executive level education, an area in which UCC has traditionally been weak.
David Cullinane (Waterford, Sinn Fein)
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I presume UCC paid for it.
David Cullinane (Waterford, Sinn Fein)
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What I am asking is if there was a cost involved.
David Cullinane (Waterford, Sinn Fein)
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How much did that cost?
David Cullinane (Waterford, Sinn Fein)
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Did UCC have to take on the liabilities of the IMI?
David Cullinane (Waterford, Sinn Fein)
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There were no liabilities in terms of pension or bank payments, etc.?
David Cullinane (Waterford, Sinn Fein)
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There were no liabilities and no payments were made to acquire the IMI such that the acquisition was cost neutral for the institute.
Mr. Diarmuid Collins:
As I mentioned, we acquired the IMI company at no cost. UCC became the sole member, the other members having discharged themselves. As a subsidiary of UCC, the IMI sold its campus to UCC and then UCC as the parent company leased the campus back to the IMI. There was an inter-company transaction post the acquisition of IMI.
David Cullinane (Waterford, Sinn Fein)
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Will Mr. Collins provide the committee with a breakdown of the transaction? Perhaps Mr. McCarthy might comment on whether the relationship between UCC and the IMI featured in the audit?
David Cullinane (Waterford, Sinn Fein)
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If Mr. McCarthy was to carry out a look-back, would he examine whether there was due diligence and whether there were liabilities and so on?
David Cullinane (Waterford, Sinn Fein)
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Am I correct in saying Mr. Collins said there were no liabilities?
Seán Fleming (Laois, Fianna Fail)
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May I clarify the matter? Mr. Collins is saying the company sold the asset back to the parent company of UCC.
What was the cost of that transaction to UCC?
Seán Fleming (Laois, Fianna Fail)
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It cost UCC €20 million to get the assets.
Seán Fleming (Laois, Fianna Fail)
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Mr. Collins mentioned that there was a leasing agreement with someone. With whom?
David Cullinane (Waterford, Sinn Fein)
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May I come back in on the €20 million figure?
David Cullinane (Waterford, Sinn Fein)
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Will Mr. Collins be accurate? I asked for a figure. There was a transfer of money involving €20 million plus.
David Cullinane (Waterford, Sinn Fein)
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Talk me through what that means.
Seán Fleming (Laois, Fianna Fail)
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To whom did UCC pay the €20 million? Who was the recipient or beneficiary of that payment?
Seán Fleming (Laois, Fianna Fail)
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UCC paid it €20 million so that it could discharge outstanding liabilities.
Seán Fleming (Laois, Fianna Fail)
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The transaction cost UCC €20 million.
Seán Fleming (Laois, Fianna Fail)
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What was in it for the IMI, if Mr. Collins does not mind me asking? Could he give us that detail?
Seán Fleming (Laois, Fianna Fail)
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The IMI was in deficit to the tune of €20 million and it had to clear its liabilities.
Seán Fleming (Laois, Fianna Fail)
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And it had to clear that.
David Cullinane (Waterford, Sinn Fein)
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I want to be fair to the witness, but I also want to be sure that the responses I received were not disingenuous. Was the €20 million paid to the IMI used to pay off liabilities?
David Cullinane (Waterford, Sinn Fein)
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When I asked whether there were liabilities paid for by UCC, for example, pensions and loans, Mr. Collins said, "No".
David Cullinane (Waterford, Sinn Fein)
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What is the exact figure?
David Cullinane (Waterford, Sinn Fein)
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An even €20 million.
David Cullinane (Waterford, Sinn Fein)
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That was paid to the IMI, which used it to discharge liabilities. Did the institute have a full breakdown of what those liabilities were?
David Cullinane (Waterford, Sinn Fein)
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Will Mr. Collins explain to us what those were? Does he have that information to hand?
David Cullinane (Waterford, Sinn Fein)
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Could Mr. Collins furnish the committee with the full breakdown?
David Cullinane (Waterford, Sinn Fein)
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If necessary, we can invite the witnesses to return.
Seán Fleming (Laois, Fianna Fail)
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We will get that information. To move on, Deputies Connolly and Kelly are the next contributors. We are down to ten minutes, as we have two other groups to meet today.
Catherine Connolly (Galway West, Independent)
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The Chairman might let us know. Cuirim fáilte roimh na finnéithe. An leanfaimid ar aghaidh trí Ghaeilge nó trí Bhéarla?
Catherine Connolly (Galway West, Independent)
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Bhuel sin sin. Anyway, go raibh míle maith agat as bhur iarracht leis an nGaeilge.
Does Professor O'Shea agree that the foundation should be consolidated from now on?
Catherine Connolly (Galway West, Independent)
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Let me be clear. The Comptroller and Auditor General's strong recommendation is that those funds should be consolidated within UCC's accounts. Is that right?
Mr. Seamus McCarthy:
I make a distinction between the trust and the foundation. It turns on the question of control. It would be beneficial to consolidate the trust and the foundation, but the college is permitted, under accounting standards, not to consolidate the foundation because it does not control the foundation under the tests that are set in accounting standards. However, that did not apply when we examined the level of control that the college exercised over the trust, albeit with restrictions. Our view is that consolidating the trust would be the appropriate route. That is why I qualified. I would encourage the consolidation of the foundation.
Catherine Connolly (Galway West, Independent)
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Let us examine that encouragement. The Comptroller and Auditor General's office is asking the college to consider consolidation of the foundation. This issue will arise with all universities. UCC is getting public funds and providing public education, but it has a separate stream of income. The witnesses can imagine how this committee views it as great that people are generous and giving cash, but let us see that being done in an open and accountable way. The only way that we can see what is happening is through what is presented to us in the accounts.
Mr. Diarmuid Collins:
Transactions between the foundation and the university are reflected in the accounts. This is similar to the trust fund. Disclosure note No. 28 sets out how the amount that is invested by the foundation is not consolidated. This question relates to Deputy Cullinane's point about taking on liabilities. In any consolidation, due diligence must be done. The foundation is a private company, with its own board and governance model, and there may be liabilities. I am not saying that there are, but we could go hard and fast when consolidating just to be open or we could publish an expanded disclosure note or an appendix.
Catherine Connolly (Galway West, Independent)
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There has been no expanded disclosure note or appendix to date.
Catherine Connolly (Galway West, Independent)
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It is a tiny note in the accounts. I read it.
Catherine Connolly (Galway West, Independent)
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Is UCC telling us that, from now on, it will be happy to give greater disclosures regarding the foundation?
Catherine Connolly (Galway West, Independent)
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UCC can do that or it will do that?
Catherine Connolly (Galway West, Independent)
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I welcome that. If UCC does not have control of the foundation, does the foundation have control of it?
Catherine Connolly (Galway West, Independent)
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I am only speaking in terms of what is done with the money.
Catherine Connolly (Galway West, Independent)
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The president is on that foundation.
Catherine Connolly (Galway West, Independent)
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How does that work? Does Professor O'Shea report to UCC on the foundation or is his loyalty as a board member of the foundation to it?
Catherine Connolly (Galway West, Independent)
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Is that not difficult? Professor O'Shea is on a board and his loyalty is to it, but he is also president of UCC.
Catherine Connolly (Galway West, Independent)
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Tell me how that is managed.
Catherine Connolly (Galway West, Independent)
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It is something that Professor O'Shea will be actively looking to.
Catherine Connolly (Galway West, Independent)
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How long has he been in the post?
Catherine Connolly (Galway West, Independent)
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Professor O'Shea was aware that there could be a conflict.
Catherine Connolly (Galway West, Independent)
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How many students are there on UCC's campus?
Catherine Connolly (Galway West, Independent)
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The HEA gave us a detailed presentation on its overall role yesterday. It mentioned two matters that caught my attention, the first of which relates to access to education. Will Professor O'Shea tell me about that? The HEA also mentioned that it kept an eye on payments from corporations to staff.
Catherine Connolly (Galway West, Independent)
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I know how important it is. I just want to know what UCC has achieved.
Professor Patrick O'Shea:
A tremendous amount. My colleagues can provide the detailed numbers, but we are among the leaders in the country in terms of student representation from disadvantaged groups. Our retention rates for those students are high. We have a programme called UCC PLUS+, which actively engages with students well before the application process so as to ensure that they are prepared in various ways. Once they get to the campus, we have many programmes - we would be happy to provide the committee with details on them - to ensure their success.
Catherine Connolly (Galway West, Independent)
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Has UCC met its set targets?
Catherine Connolly (Galway West, Independent)
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What are its targets?
Mr. Diarmuid Collins:
For the most recent academic year, there are 257 student admissions under the access programme from disability support services. Under the UCC plus programme, which is another support mechanism, there were 255 admissions while there were 310 mature students admitted. That was the intake for that year. Our total student cohort for the current year under the disability programme is 1,288, under UCC plus, 769 and in our mature student stream, 1,055.
Catherine Connolly (Galway West, Independent)
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How does that measure up to the targets?
Mr. Diarmuid Collins:
We have just got our allocation for 2017 and we are number one this year in the access programme funded through the HEA. We are typically one or two in terms of access funding, so on the national targets, we would argue that we are meeting the benchmarks, given the level of funding we are getting vis-à-visthe other universities.
Catherine Connolly (Galway West, Independent)
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Is that on all three programmes?
Catherine Connolly (Galway West, Independent)
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The targets are set by the HEA. Is that correct?
Catherine Connolly (Galway West, Independent)
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Is that for each university?
Catherine Connolly (Galway West, Independent)
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Is UCC reaching those targets?
Catherine Connolly (Galway West, Independent)
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I will ask one last question relating to conflicts of interest. This issue has come up in the context of discussions on intellectual property rights, companies and the HEA. I might come back to that later, in terms of policy-----
Catherine Connolly (Galway West, Independent)
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Will UCC be revising its target upwards?
Catherine Connolly (Galway West, Independent)
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What is the target now?
Catherine Connolly (Galway West, Independent)
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What target will UCC be putting in place for 2017-2018?
Catherine Connolly (Galway West, Independent)
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Finally, we dealt with the issue of conflicts of interest earlier in the context of a discussion on NAMA, which is why the witnesses were delayed, for which we apologise. I have said repeatedly that inquiries would be unnecessary if institutions were open and accountable. The witnesses are nodding in agreement. We have the Comptroller and Auditor General and this committee to keep track of matters. Are the witnesses satisfied there are no conflicts of interest on the campus with regard to companies? Has anything come to their attention? In court terms, this would be called a fishing exercise but I am not intending to fish. I am just asking for accountability. Has anything come to their attention like what happened in Waterford and other third level institutions? Are there conflicts of interest that have been brought to their attention or matters that are under investigation?
Mr. Cormac McSweeney:
In terms of policy and how we manage it, there is a very robust process for review and approval before a company is actually spun out by the institution. Within that, there is a conflict of interest policy that is reviewed by a number of committees across the organisation, including the finance committee and the governing body. There are lots of checks and balances within our processes to ensure that no academics or staff members can put themselves in that position.
Catherine Connolly (Galway West, Independent)
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We have been assured so often about protocols and yet we have huge problems in our society. As each institution has appeared before us, they have all told us they had checks and balances. UCC is here before the Committee of Public Accounts today and is telling us that everything is okay, that the university's policies are robust. Is that correct?
Seán Fleming (Laois, Fianna Fail)
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Deputy Alan Kelly is next and I remind him that we are trying to stick to ten minute slots.
Alan Kelly (Tipperary, Labour)
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I thank the witnesses for coming in today. I want to wish Professor O'Shea, from my alma mater, the very best. I must declare up front that he gave me a badge on the way in.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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A conflict of interest.
Alan Kelly (Tipperary, Labour)
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Well, UCC shaped me, for good or for bad. How much of the amount spent on professional fees was for legal advice and services? There seems to be a serious issue in UCC with regard to legal advice for staff issues and cases involving staff. In fact, I would argue that more money is being spent on that than in many of the other universities put together. What is going on?
Professor Patrick O'Shea:
I understand there has been a large spend on legal fees. My goal is to focus on mediation, not litigation. As I have pointed out to people, I am inheriting a situation with which I must deal. Going forward, the words I will be using are "mediation, not litigation", to ensure that issues are resolved earlier. My colleagues can give the Deputy details on the expenditure.
Alan Kelly (Tipperary, Labour)
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I appreciate that these are issues that predate the Professor O'Shea's presidency, to be fair. That said, the amount involved is extraordinary. It seems that a mallet is being used to crack a nut. I agree with the professor about the importance of mediation but the volume of fees being charged is extraordinary. It is almost the same as that spent by the other six universities all together. What is going on? I accept the professor's answer regarding mediation going forward and I believe he will do that but historically, why has this happened? What is going on in UCC, in terms of the volume of cases?
Alan Kelly (Tipperary, Labour)
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I understand that there are property transactions, the IMI and other issues but I am asking about the staff related issues. Why are there so many issues with staff?
Alan Kelly (Tipperary, Labour)
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You are. We can see across all the institutions-----
Alan Kelly (Tipperary, Labour)
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It is obviously a question that the witnesses cannot answer comprehensively so I will just make a point and move on. I would point out that the legal fees relating to staff issues in UCC are considerably higher than anywhere else. In fact, I estimate that the spending on legal fees relating to staff issues at UCC equals that of the other six universities put together. There is a trend there that needs to be addressed and I presume that under Professor O'Shea, it will be addressed.
Seán Fleming (Laois, Fianna Fail)
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What is the figure for legal fees? I cannot find it.
Seán Fleming (Laois, Fianna Fail)
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What is the figure we are talking about?
Alan Kelly (Tipperary, Labour)
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My understanding is that a considerable amount of the professional fees are legal fees.
Seán Fleming (Laois, Fianna Fail)
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Do we have the figure for legal fees?
Alan Kelly (Tipperary, Labour)
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It runs to millions.
Alan Kelly (Tipperary, Labour)
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The next issue I wish to raise is travel and subsistence. In that context, are staff at UCC allowed to have credit cards? If so, how are costs controlled and audited? The figure for travel and subsistence is €7.4 million. Which is more important - travel and subsistence for staff or books and journals? I spent years in the Boole Library and I would presume that the latter is more important. However, €7.4 million was spent on travel and subsistence but only €2 million was spent on books and journals.
Alan Kelly (Tipperary, Labour)
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Does that not seem a bit odd?
Mr. Diarmuid Collins:
Again, I have not done the bench marking, but given our location, we would tend to conference a lot in Dublin. However, our rates are lower than the standard rates. For example, irrespective of the size of the car engine, we only pay the mileage rate for a 1.2 litre engine. We do not pay the standard five hour, ten hour, 12 hour or 24 hour subsistence rates. We operate on a vouched basis. Every expense has to be vouched before it is recouped.
Alan Kelly (Tipperary, Labour)
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That is fine but-----
Alan Kelly (Tipperary, Labour)
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The train fare might work out better.
Alan Kelly (Tipperary, Labour)
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How are the credit cards controlled?
Mr. Diarmuid Collins:
We have six credit cards. The president and senior staff use a credit card but their use is very restricted. We have specific areas of expenditure for which the credit cards can be used and I would argue that the credit limits set are fairly low.
We review them every month as part of the approval mechanism. I am sure the Comptroller and Auditor General would look at our credit cards every year to check if the expenditure for which they have been used is consistent with our policy on for what they should be used.
Alan Kelly (Tipperary, Labour)
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It seems extraordinary that €7.4 million was spent on travel and subsistence and only €2.2 million was spent on books and journals. For a university, about which I am quite passionate, it seems extraordinary, but I accept what Mr. Collins said.
Why did the accounts not distinguish between staff and travel costs funded by research funding and staff and travel costs funded by the core budget, or are there plans to do so, and why does that not happen?
Mr. Diarmuid Collins:
The form of the accounts is as prescribed since 2003 when we moved to the current generally accepted accounting principals, GAAP, accounting format. It does not allow for that element of disclosure as such. Our internal management reporting can easily identify exact travel costs split between-----
Alan Kelly (Tipperary, Labour)
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Could Mr. Collins provide us with that?
Alan Kelly (Tipperary, Labour)
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I suggest that the university finds a way of providing that in its accounts in future because it is important.
With regard to retired staff who have been brought back on occasion to do some work, I understand this was in breach of the university's employment control framework, ECF, and that a considerable number of individuals are contractually entitled to be paid for the work they did. Is this true?
Mr. Diarmuid Collins:
The ECF model, on approval by the Higher Education Authority, HEA, allows for a return of retired staff for up to 20% of their time, so for a day a week. We have a number of retired staff who would come back for a day a week. Ordinarily if a staff member was retiring, say, during the academic year, he or she would remain on to teach out the academic year, so there would be no lost-----
Alan Kelly (Tipperary, Labour)
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Have there been cases where staff who have come back to work have exceeded the time threshold they are allowed to work and who have now be contractually owed money?
Alan Kelly (Tipperary, Labour)
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As in that they have not been paid yet.
Alan Kelly (Tipperary, Labour)
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Mr. Collins might check that and come back to me on it.
Alan Kelly (Tipperary, Labour)
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Regarding Cork Savings Bank on Lapps Quay, Cork City Council purchased it in 2014 for €600,000 and University College Cork purchased it for €1.42 million from the council in 2016. There was €800,000 of a difference in the purchase price in less than two years. How is that justified?
Alan Kelly (Tipperary, Labour)
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The university is happy with that.
Alan Kelly (Tipperary, Labour)
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I want it noted on the record that Mr. Collins is happy with that purchase price because there was a difference of €800,000 in the purchase prices.
Alan Kelly (Tipperary, Labour)
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I had some questions regarding the Irish Management Institute, IMI, but Mr. Collins has answered them in response to questions from Deputy Cullinane. There are no pension liabilities on the books as regards the taking over of that. Is that correct?
Alan Kelly (Tipperary, Labour)
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There are no pension liabilities at all.
In terms of what the university has purchased, and it was trying to fill a gap - I agree with Mr. Collins that there was a deficit and I say that as somebody who had to go to UCD after having spent five years in UCC - has the university any intention of disposing of any of the lands in Sandyford?
Alan Kelly (Tipperary, Labour)
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I fully endorse that.
Seán Fleming (Laois, Fianna Fail)
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The next speaker is Deputy Catherine Murphy.
Mr. Seamus McCarthy:
I would like to make one observation on some of the questions Deputy Kelly asked about the format of accounts. It is important that all the universities use the same framework for reporting. In a situation where appropriate further information or disaggregation of figures can be given, there is no difficulty with doing that. It is always open to a college to disaggregrate a figure such as professional fees as long it is clear what the total figure is in order that comparisons can be made. We have encouraged both universities and the institutes of technology to do that where we consider it is appropriate.
Seán Fleming (Laois, Fianna Fail)
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Deputy Catherine Murphy has a ten minute slot.
Catherine Murphy (Kildare North, Social Democrats)
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I might not need to take the ten minutes. Mr. Collins has described the difference between the foundation and the trust and how the money can be used. Regarding the income for both, he said that some people who donate money to both will more or less say where the money should be directed. What proportion of the income coming into both the foundation and trust would be directed where the money should be spent?
Mr. Diarmuid Collins:
The income we get for the trust fund is always prescribed by the donor, so the income we get is already agreed by the donor's intentions. The university has no discretion on how that money would be spent. It goes for funding for the students. Regarding money from the foundation, if we are successful in securing donor funding, in many cases, it is for a specific project for which the foundation is seeking funding. It may be to support a capital project or it may be to support students.
Catherine Murphy (Kildare North, Social Democrats)
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I should have been more specific. I am referring to money that supports students. Are there particular faculties that would be supported? Does the source of the income that comes into the foundation have an influence on the direction of the university or the primacy of one faculty over another? Is there any influence or how does the university maintain a balance?
Mr. Cormac McSweeney:
It depends on the donor or the bequest in terms of their vision with respect to what they want to support. They might support something broad such as the UCC plus programme, the objective of which is to open up avenues for socio-economic disadvantaged students and we have got funding through donors for that in the past. It might be specific in that they want to contribute to our western gateway building, which is primarily focused on information and communications technology, ICT. It very much depends on the donor.
Mr. Diarmuid Collins:
Essentially, the university's mission objectives in terms of what it is planning to do are in line with national policy. If a donor is aligned to that, that is great, but it is not the other way around. It is not that we are responding to a donor's needs to determine what the university does. If the donor's way of thinking is in line with ours, that is great and we will work to get support for what we want to do.
Catherine Murphy (Kildare North, Social Democrats)
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I have one further question relating to the IMI. How did the purchase of the IMI come about? Was an approach made to the university? Was that something the university was seeking, or what way did it occur?
Mr. Diarmuid Collins:
Prior to the university's purchase of the IMI, we would have had very good programmes at undergraduate and postgraduate levels in the business area but we did not have an executive education arm similar to other universities, so we had a gap there. The IMI spoke to a number of universities from 2009 to 2012 about it getting more formal accreditation for its programmes. For its rankings and accreditation it needed to have more formal linkages with a university. Following discussions with UCC, the IMI's board chose to enter into an alliance, which we had over the past number of years. We ended up delivering a number of joint programmes between us and in 2016 as we spoke about earlier, we purchased the IMI.
Catherine Murphy (Kildare North, Social Democrats)
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Has the asset increased in value since the university purchased it?
Catherine Murphy (Kildare North, Social Democrats)
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Obviously, the association of the IMI with the college and the accreditation that comes with it helps with a potential increase in the valuation.
Seán Fleming (Laois, Fianna Fail)
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I call Deputy Madigan.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I will be brief. I apologise for missing the earlier part of the meeting but the Chairman had an interview on RTE. First, I want to declare that I was guest of UCC law department recently at Hayfield Manor in Cork on the subject of women in law reform in case there is any perceived conflict of interest.
I want to ask about needs-blind admission and those who can pay and those who cannot. Professor O'Shea mentioned there were approximately 22,000 students in UCC. Access to education is very important, particularly for people who are disadvantaged or do not have the means. What percentage of the 22,000 students are financially assisted by UCC? How is the assistance means tested? I am not suggesting that people use fraudulent means but that has to be policed in order that the bona fides of each applicant is taken into account.
Professor Patrick O'Shea:
A total of 34% of our students get SUSI grants. Our analysis is not simply based on income, there are other socioeconomic factors and we would be happy to provide the Deputy with that comprehensive information. It is not strictly income; it is the whole family situation and other factors.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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That is important
Josepha Madigan (Dublin Rathdown, Fine Gael)
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Does Professor O'Shea envisage that being increased? Does UCC get many applications? I presume those 34% are the successful applicants.
Mr. Cormac McSweeney:
The students themselves apply directly to SUSI for the funding support. We have a number of internal hardship funds as well that we manage locally. In the past five years, there has been significant growth in those applications to those funds, which are there to assist with the ongoing costs of going to third level, as opposed to the fees themselves.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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How many of those applications would be unsuccessful?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I would be very grateful if we could be furnished with that.
On postgraduates, we were provided with a figure of €1.53 million for training and development. Does UCC keep track of the progress of undergraduates? Does the university have something like a benevolent undergraduate programme for people who encounter difficulties? Just because someone has a degree from UCC, it does not mean that they are going to secure employment and people can fall upon hard times. Does UCC have a policy around that?
Josepha Madigan (Dublin Rathdown, Fine Gael)
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It is something the university might consider. Other universities do it and other jurisdictions. Education is for life. If they are a graduate, there is more of a moral than a financial responsibility but it is worth looking at.
On the source of funding for people with economic difficulties in paying for college, does the university source any funds from the EU or does it just come from the trust fund?
Mr. Cormac McSweeney:
There is a student assistance fund that is managed through the Higher Education Authority. All the institutions get some funding through that. There is a mechanism locally for how we organise and assess the applications. The students' union is also involved in the process of reviewing the applications because its welfare officer is very clued-in to the sort of issues which are being raised with the union by students. We have our own hardship funds to try to support students as they go through and the students' union also has an engagement in overseeing them with people in the finance office.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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It is good to explore all the options.
Josepha Madigan (Dublin Rathdown, Fine Gael)
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I appreciate that. Thank you.
Seán Fleming (Laois, Fianna Fail)
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I have three quick questions. It might be a timing issue but the accounts include a figure of €28 million for academic fees received in advance. The accounts go to the end of September. Who pays in advance?
Seán Fleming (Laois, Fianna Fail)
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That would be quite a high amount of people paying so much.
Seán Fleming (Laois, Fianna Fail)
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Would a significant proportion of that be international students? Because I do not think SUSI would pay -----
Seán Fleming (Laois, Fianna Fail)
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So they could be a couple of months in advance.
Seán Fleming (Laois, Fianna Fail)
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That is new to me.
How much does the university pay out on the student assistances fund and the hardship fund? If the witnesses do not have the details here, they could send us a note on how many applications were received and how much was paid out, and how many did not get it. As Deputies, we regularly meet families who run into financial difficulties and there is the cost of rent going up. We all know the situation. There are probably people driving to Cork and back every day from places as far away from Laois because they cannot afford a place.
Seán Fleming (Laois, Fianna Fail)
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I am asking specifically on the hardship fund, because these are issues that we as Deputies encounter all the time.
Finally, a number of years ago there was serious flooding in Cork. There was a dam upstream and major litigation with the ESB. There was some damage to the university. I visited the university myself some years ago along with my then colleagues on the environment committee. Could the witnesses tell us briefly what the outcome?
Seán Fleming (Laois, Fianna Fail)
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So the university was fully covered.
Seán Fleming (Laois, Fianna Fail)
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Did that affect the university's premium in subsequent years?
Seán Fleming (Laois, Fianna Fail)
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Who can explain about insurance? Does this cover all the universities or all third level?
Seán Fleming (Laois, Fianna Fail)
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There is group purchasing. Who handles that for third level institutions?
Seán Fleming (Laois, Fianna Fail)
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No. Is there a representative from each college on a steering committee?
Seán Fleming (Laois, Fianna Fail)
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Could Mr. McSweeney explain about the IUA?
Seán Fleming (Laois, Fianna Fail)
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How, when the overall quote is supplied, how is the split worked out between what UCC should pay versus another university?
Mr. Diarmuid Collins:
It would be from the claims history from each institution and through risk assessment. While we are going to the market to pool our resources and get the best price, when the premiums come in they are split across the different universities depending on risk profile and history.
Seán Fleming (Laois, Fianna Fail)
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I am pleased to hear the public sector is combining its purchasing power. The witnesses might send us a note on that. What is the name of that group that was mentioned?
Seán Fleming (Laois, Fianna Fail)
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Is it audited?
Seán Fleming (Laois, Fianna Fail)
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Could we be given a range of the services covered by the IUA? There is insurance, what about legal fees?
Seán Fleming (Laois, Fianna Fail)
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What other services are jointly procured?
Seán Fleming (Laois, Fianna Fail)
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Is that the Department of Public Expenditure and Reform?
Seán Fleming (Laois, Fianna Fail)
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Do those prevent the universities co-operating as a group to get group purchasing power or does that framework assist it?
Seán Fleming (Laois, Fianna Fail)
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We have covered insurance because I asked about flooding and I had not been aware of this. I am pleased to hear it is there. The question I am asking is whether there are other services which are being tendered for collectively through the IUA. If the witnesses do not know, they can send us a note.
Seán Fleming (Laois, Fianna Fail)
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Just send us a note for information.
Seán Fleming (Laois, Fianna Fail)
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Okay, I appreciate that.
We will conclude. Can we agree to dispose of UCC's financial statements for 2013 to 2014?
David Cullinane (Waterford, Sinn Fein)
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We will be getting a paper from the IMI, but if we have specific questions on the institute, can we forward them to the Chairman?
We do not want to get into a second round, although there are some unanswered questions. Will I put them in writing to the Chairman? Would that be appropriate?
Seán Fleming (Laois, Fianna Fail)
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No, to the secretariat.
We will approve the noting of the accounts, subject to UCC meeting requests for outstanding information. We will agree to dispose of it financial statements for the years 2013 and 2014. On behalf of the committee, I thank the witnesses for participating.