Oireachtas Joint and Select Committees
Thursday, 30 March 2017
Public Accounts Committee
University of Limerick: Financial Statements 2014-2015
9:00 am
Seán Fleming (Laois, Fianna Fail)
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Earlier, we discussed the financial statements of University College Cork and Dundalk Institute of Technology. In this session, we will examine the 2014-2015 financial statements of the University of Limerick, UL. We are joined by Professor Don Barry, president; John Field, director of finance; Callista Bennis and Tommy Foy. We are also joined by Mr. Christy Mannion from the Department of Education and Skills and Dr. Graham Love and Mr. Andrew Brownlee from the Higher Education Authority.
I remind members, witnesses and those in the public Gallery that all mobile phones must be switched off. I wish to advise the witnesses 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 this committee. If they are directed by the committee to cease giving evidence in relation to a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of your 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 nor make charges against any persons or entity by name or in such a way as to make him, her or it identifiable.
I call the Comptroller and Auditor General to make a brief opening statement.
Mr. Seamus McCarthy:
The University of Limerick’s financial statements for 2014-2015 show total income of €243 million, and a surplus for the year of nearly €4.7 million. As shown In the figure now on screen, academic fees account for around one-third of the income. Of the total €86 million in fee income, almost €29 million was received directly from the HEA. In addition, recurrent State grant funding from the HEA totalled €34 million; and State funding for pensions amounting to €35 million was recognised. Research grants totalled €35 million while other operating income derived from a variety of sources, including rental income from student residences and income from sports facilities. The university's total expenditure in 2014-2015 was nearly €239 million, of which pay and pension costs accounted for €156 million.
My audit opinion in respect of the financial statements was unqualified, but I highlighted a number of issues in the report. These include a standard note on the reasoning behind recognition of a deferred pension funding asset, which I outlined yesterday. The results of the UL Foundation have not been consolidated with those of the university group, on the basis that the university does not control the foundation, and notwithstanding that the main purpose of the foundation is to support education and research carried out by the university and other bodies associated with the university. I draw attention in the audit report to the fact that at 31 August 2015, the foundation had net assets of €15.1 million. I also draw attention in the audit report to the disclosure in the university’s statement on governance of a number of instances where goods and services were procured without the standard required competitive tendering, and the circumstances in which this arose.
Professor Don Barry:
I thank the committee for the opportunity to address members this afternoon. At this session, I hope to provide them with further detail on UL's financial statements ending 30 September 2015 and to address any further questions they may have.
As I approach the end of my term as president of UL, I wish to provide a brief overview of the university which it has been such a tremendous privilege and honour for me to lead over the last ten years. UL is a large centre of academic activity and student life and is home to more than 14,000 students, a full-time staff of approximately 1,400 and a range of high profile thriving centres of research, learning, cultural and sporting excellence.
Employability has always been at the core of our teaching mission and it continues to be a central tenet of our distinctive approach to higher education in Ireland. We pride ourselves on our reputation for delivering research that delivers impacts for industry, society and the wider community. As a university, we are committed to continually raising the level of ambition of our staff and students. We have worked through the difficult decade of funding constraints Irish higher education has experienced and remain in relatively good financial health mainly because of our efforts to build new income streams to sustain the university.
To deal with the matters at hand, I have provided a detailed statement to the committee in advance of today's meeting which addresses the matters highlighted in the invitation to attend, namely, the relationship with the UL Foundation, non-compliance with procurement guidelines and the HEA investigation into allegations regarding financial irregularities and HR practices. I hope to provide reassurance to the members that in respect of the matters raised and in the context of the recommendations made by the HEA-commissioned Mazars report, UL has applied progressive systems changes that have further enhanced financial governance and HR practice in the university.
The committee has indicated that it wishes to examine the relationship between the University of Limerick and the UL Foundation. Specifically, the question arises as to whether it is appropriate to continue to exclude the foundation from the consolidated financial statements of the university. The University of Limerick does not have formal control, exercise control or have a dominant influence over the UL Foundation in accordance with the provisions set out in FRS 2 and the statement of recommended practice. Following a review by the university, which is detailed within the briefing paper, and a 2012 report by the Comptroller and Auditor General, the university considers it appropriate to continue to not include the UL Foundation in the consolidated financial statements of the university. However, we recognise that philanthropic funding is an important resource in helping to widen the funding base of the university and we will continue to consider this issue annually when finalising the financial statements of the university.
As with all universities in Ireland, procurement within the University of Limerick is subject to legislative requirements in EU procurement directives which are enforceable under Irish law. Systems improvements introduced by the university in 2014 have enabled us to do a full, 100% review of all our transactions in 2014-2015. This review identified a number of issues, which in total amount to approximately a 2% of recurrent, research and capital expenditure. In 2014-2015, the university procured 98% of spend on recurrent, research and capital costs in line with procurement guidelines and regulations. As president, I am confident that the university has strong controls and systems in place and continues to introduce process improvements.
I turn to the HEA-commissioned Mazars report. In the briefing paper circulated to members, I endeavoured to compile and provide a timeline of the objective elements, events and processes pursued by the university in advance of the commissioning by the HEA of the Mazars report. As indicated in the paper, this has been a lengthy, complex and multifaceted process. As such, the background to the process is not a matter I intend to repeat to the committee in this opening statement. However, I assure the members that the University of Limerick is committed to an ethos of continuing improvement and it is in this context that we welcome the Mazars review and, in consultation with personnel and trade unions, that we have applied the lessons learned, implemented 12 of the 15 recommendations and are in the process of implementing the remaining three.
We remain mindful of the need to review our processes and procedures continuously in order to ensure that they adhere to best governance practice, both nationally and internationally. As a key education stakeholder in Ireland and receiver of public funds, we are always cognisant of the need to be accountable for our actions and to operate in a transparent and fair manner. We recognise fully that the expenditure of public funds must always adhere to the highest standard of governance. We remain open to new learnings and to taking on board perspectives as to how we can continue to ensure the confidence of all our stakeholders. I thank the committee again for the opportunity to come before the members. I hope I can provide any further clarity required and look forward to any questions.
Seán Fleming (Laois, Fianna Fail)
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Speakers have indicated in the following sequence, namely, Deputies McDonald, Cullinane and Connolly. We have agreed 15 minutes for the opening slot and then ten-minute slots thereafter because we have a lot of colleges to go through.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I presume that we can go to a second round of questions. To declare my interest, I wish to state that I did postgraduate studies at the University of Limerick and, as such, I am certainly not going to question the excellence of its academic endeavours.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I thank the Professor so much. Flattery will get him nowhere, as he will discover.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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We are here to discuss the financial arrangements of the university and, as Professor Barry outlined in his opening statement, there are several elements to that. At this stage, I want to talk to Professor Barry about UL's expenses system. Professor Barry accepts that UL has to play by the rules.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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He made reference to the funding constraints of the past decade and said, quite correctly, that the highest standards of governance must obtain with regard to the use of public moneys. I put it to him that this has not been the practice in the University of Limerick, specifically having regard to expenses and their administration on Professor Barry's watch.
Professor Don Barry:
I do not accept that judgment on Deputy McDonald's part. In the briefing paper, I indicated the actions of the university which are consistent with the commitments I made in my opening statement to introduce process improvements and clarity around allowable expenses back in 2010. I went on to detail at considerable length in the briefing paper the impact those changes had made.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I have read the briefing paper with interest and thank Professor Barry for it. How long has he been in position as President?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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President Barry has beenin situsince 2007 but has been with the university since 2004. Is that not the case?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Professor Barry has a long history and has been around the block, to put it in the nicest possible way.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I am aware that there was a change in systems in 2010 but I am also aware, as the briefing document also states, that three specific individuals referred to as A, B and C came forward with astonishing complaints in respect of what they described as something of a VIP system in terms of how expense claims were awarded. I put it to the professor directly that these allegations were extremely serious and represented, at best, a systems failure or confusion and at worst corruption within the system in the university.
Professor Don Barry:
We have to make a distinction between person A who last worked in the university in 2010 and persons B and C who are current employees. It is correct to say that in the course of her work in the expenses section, person A identified improvements which could be made to the process of claiming expenses, particularly in the context of sign-off authority and clarity regarding what was an allowable expense and what was not.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Can I say that Professor Barry is using very muted language to describe what happened? As I understand it, and please correct me if I am wrong, hard as they tried person A found it almost impossible to get management to take responsibility or to sign off on what person A regarded as fraudulent expense claims. The detail of it is really quite astonishing; an allegation that mileage expenses were repeatedly misused to pay for the work done in the university; allegations around massive payments for academic staff to go as far away as Sydney; an attempt by staff to charge to the university and to the taxpayer expenses for their spouses; use of expense accounts to perhaps bypass procurement rules and guidelines in the purchase of PC equipment. I could go on. All the while, person A, exercising due diligence and operating in accordance with their responsibilities, hit a brick wall when dealing with management. I put it to Professor Barry that this is much more the experience of person A than simply finding systems deficiencies or areas where improvements were necessary. I put it to the witness that person A stumbled across a system that was arbitrary, a system that displayed favouritism and a system that went completely against the grain and broke the University of Limerick's rules, according to the status of the person making the claim.
Professor Don Barry:
The first thing I would say, in the context of seven expense claims that were brought to the attention of the university by person A, and later to the attention of this committee in 2012, if the members want to consider the detail of any of those I will ask the director of finance to deal with those expense claims. What the Deputy is getting at, which is the attitude of the university towards person A-----
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I am, in part. I want Professor Barry's view on that but initially - with regard to the sample of the complaints raised by person A - the witness is not disputing the fact that person A brought these complaints forward.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay, that is part one. Part two is that person A reported she was being blanked and perhaps even being left to hang out to dry by supervisory management in respect of these expense claims.
Professor Don Barry:
I am not disputing the fact that this is how she felt, but I also draw the Deputy's attention to the fact that when a system of process improvement was being planned in the finance department, person A was a key member of the team that brought about the new expenses policy and process that was introduced at the end of 2010. She was not ignored or blanked. She was a key member of the drive by the university to improve its systems.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Perhaps Professor Barry will explain to me why person A no longer works for the University of Limerick.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Was person A's sick leave, and matters as they subsequently unfolded, connected with person A coming forward and making the complaint and all of that?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I do not, so maybe I will make it straightforward for Professor Barry. He actually referred to person A in his own briefing document so he was quite at liberty to discuss this case and it is important that he does. It is my understanding that person A stumbled across the abuse of the expenses system repeatedly. Professor Barry referred to seven instances that were subsequently examined in the university and in the Mazars report. It is also my understanding that person A identified many other breaches and that she was stonewalled and leaned on by management in the university for having the temerity to come forward and insist that the rules be followed. I understand that person A got sick directly as a consequence of this and that when she was on leave the HR function of the university did not cover itself in glory. Far from it. In other words, I put it to Professor Barry that not alone was there fiddling of the system for selected individuals but that the very person and people who brought this to the attention of the university were punished. In the case of person A the punishment meant that the person no longer works for the university. That is my summation of what happened. Later in this meeting we shall get to the control changes that were made, if Professor Barry wishes but it is very important that we understand exactly what happened in this turn of events and why a person, who Professor Barry has said was critical to the changes made in 2010, was kicked to the kerb and no longer works for the university.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Perhaps Professor Barry would share with me the elements of his understanding please.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Will the witness tell the committee about person A's complaints? I believe this is a diversionary tactic. I am not asking Professor Barry to describe the nature of person A's sickness, if that is what concerns the witness. I want him to tell the committee about person A and the turn of events when person A discovered the claims and, holy hour, queried what was going on. People went to their management for direction and they got knocked back. Staff knocked back certain expense claims and then more senior people intervened to say "That is okay, put that through". I want Professor Barry to talk to the committee about his understanding of this. Did this not happen?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Really? Professor Barry's own submission, and the Mazar's report and the position of the Higher Education Authority - if I understand them correctly - actually contradicts that.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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By the very fact that the university introduced the changes. The university had to settle with Revenue did it not, as a result-----
Mary Lou McDonald (Dublin Central, Sinn Fein)
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-----and as a consequence? Will the witness tell the committee about the settlement with Revenue?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I would prefer if Professor Barry explained it as he is the boss. No offence is meant to Mr. Field.
Professor Don Barry:
It is my understanding that we had a policy on sabbatical and associated expenses, about which the Comptroller and Auditor General raised questions. On the advice of the Comptroller and Auditor General we engaged with Revenue and made a disclosure to Revenue as to how we were dealing with expense claims, the policy we had for dealing with expense claims and in that context-----
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Did the university have to make a settlement with Revenue?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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How much?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I just need a figure.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Was the case I referred to bound up in this settlement, which was a travel arrangement while a person was on sabbatical leave? It involved a trip to Sydney. Initially, the expense claim was approximately €4,500. It was for a couple, in other words, the staff member plus their spouse. That got knocked back but a different arrangement came into place and an expense of €15,000 was cleared on the basis of a per diemrate. Does that sound familiar?
Mr. John Field:
Yes. With regard to the way sabbaticals worked in the period between 2008 and 2012, which was the period covered by the submission we made to the Revenue, when individuals were approved to go on sabbatical leave, an amount of expenses to be paid to them would be agreed as part of that.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Certainly.
Mr. John Field:
The process we had in place at that time was that this was paid as a round sum amount, and it was paid monthly to the person while they were away. The issue raised by the Comptroller and Auditor General with us was whether that was compliant with taxation rules. In or around that time, 2011-12, the Revenue had published a policy paper on the payment of round sum expenses.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I am sorry to cut across Mr. Field but time is limited to us. In this case, I am advised that initially Person A was advised to knock back that claim because it did not comply. That advice was given by two managers, not least because the claimant in question was to retire shortly around that time and then, subsequently, a direction came from further on high. Is Mr. Field the financial controller for the university?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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What is Mr. Field's relationship to the financial controller? Did they work for Mr. Field?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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It seems that the direction for €15,000 might have come from the financial controller.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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There are other instances but the Chairman need not worry as I am not proposing to go into each of them. Person A brought this forward so Person A was right, were they not?
Mr. John Field:
If I could clarify the process that happened in that regard because I would have reviewed that when the allegation was raised in 2012, there were two expense claims referenced in that allegation. It is referred to by Person A as allegation B. The first expense claim is the one the Deputy has outlined regarding flights to Sydney, and that expense claim was rejected at the time. The person was going on sabbatical and in line with all the other people who went on sabbatical at that time, as I mentioned already, the calculation of the expenses payable, which were round sum amounts, we calculated and paid to the individual as part of the second claim. When we reviewed the second claim in 2012 as part of the review of the allegations, we found that it was appropriately approved and the evidence was available on the claim that it had been appropriately approved.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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So this was all kosher. There was nothing wrong with this claim.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Of course it had been approved. I am not disputing that. We know it had been approved.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I know the €15,000 claim was approved-----
Mary Lou McDonald (Dublin Central, Sinn Fein)
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-----but what I am querying is not the fact that these matters were approved. The professor has asserted that Person A identified minor issues that required improvement. That is not a minor issue. It is not a minor issue that, according to Person A, there was messing going on and interference from high level management to lean on staff within the university to award expenses that were not valid. In a nutshell, that is what happened.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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We will come to Mazars.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Correct.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Was Person A wrong?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Was that the one on spa treatments?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I accept that was not paid. If that had been paid, that would seriously set the chattering classes in Limerick alight in terms of someone having spa treatments paid for by the taxpayer.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Who carried out the university's internal review? I ask the Chairman to bear with me on this line of questioning. Person A, and I assume we will get to Persons B and C later, came forward. The allegations were made. Let us stick to the seven, although there were more. Mr. Field had his own internal inquiry. Obviously, that was an assessment.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Who headed that up?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Who helped Mr. Field with that? Did he do it alone?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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His financial controller.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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The university examined itself.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I am just trying to establish the facts. The university examined itself regarding all of these matters.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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What did the interaction with the Comptroller and Auditor General consist of?
Mr. John Field:
When Person A's allegations were referred to this committee in 2012, this committee referred them to the Comptroller and Auditor General for follow up and then I received correspondence with the allegations from the Comptroller and Auditor General's office. They asked me for a report.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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How did Mr. Field interact with the Comptroller and Auditor General? Was it by letter?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Did the Comptroller and Auditor General pay Mr. Field a visit?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Into these matters.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I accept that but there was not a detailed hands-on engagement by the Comptroller and Auditor General. Rolling the tape forward, so to speak, Mazars then came in. Am I correct in saying it was appointed by the Higher Education Authority, HEA, to carry out a review?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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What is curious is that the review is of the process by which the university carried out its own investigation. I put that to the HEA representative but also to the university witnesses. I would have been much happier if an independent outside agency had been given the entire job to do, not just the process by which the university reviewed matters, but to go in and examine the allegations. That would have been a far more credible approach to take because I read with some concern in the Mazars report that it was not making a finding or a conclusion and that it did not take a view on the allegations themselves but simply went in to look at the process. I find that a very unsatisfactory approach. The university, for reasons that are evident, will seek to manage and minimise these matters as they emerge, and I say that with the greatest of respect to the witnesses. That is what bureaucracies and systems do. A series of allegations were brought forward, not just by Person A - we will get to Persons B and C later in the questioning - that raise very serious concerns and I am not convinced that they had the kind of outside rigorous examination that would be required, certainly to reassure me. Person A is now banished and no longer works for the university. I believe Persons B and C are on leave. Is that the case?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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None of it ended well for any of the people who stepped forward.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Sure.
Seán Fleming (Laois, Fianna Fail)
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We can come back to that. I want to let other speakers contribute. Professor Barry might be brief.
David Cullinane (Waterford, Sinn Fein)
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We have plenty of time.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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My question is for the HEA.
Why was this Mazars report and examination limited to an overview of the university's own process?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay, that is fair enough.
Dr. Graham Love:
As a general comment, from my reading of the brief and from trying to get to grips with it, I think, in retrospect, the Deputy would agree that a wider probe was needed but at the time we felt the conditions of this were appropriate. I will call on Mr. Brownlee to provide further information.
Mr. Andrew Brownlee:
That was the basis of the decision at the time. We had received two protected disclosures - one from person A and one from persons B and C. The focus of the information that they had given us appeared to question the veracity of the processes that were in place and in order to have quite a focused review that could be undertaken within a reasonable timeframe, we limited the terms of reference to the processes employed by the university. As this chief executive officer said, maybe in retrospect we should have looked at a wider review but that was the basis of the decision at the time.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I suggest to the HEA that it should consider that deeper investigation. I note it is at greater remove now. My view is, for the purpose of reassuring this committee and, more importantly, with an eye to proper procedure and good governance in the university, that deeper process is still required.
Seán Fleming (Laois, Fianna Fail)
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Does Professor Barry want to make a comment there?
Seán Fleming (Laois, Fianna Fail)
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I will then go to Deputy Cullinane.
Professor Don Barry:
-----that in the briefing paper I submitted to the committee there is an extract from the Committee of Public Accounts meeting of 8 October 2015 which, I think, indicates that the individual allocations were looked at by an external party, namely, the Comptroller and Auditor General, and that the Comptroller and Auditor General at that meeting was asked for his view as to whether the control lapses that I have spoken about earlier had been dealt with and replied to in the affirmative. The Comptroller and Auditor General is the authority who I rely on to do the kind of detailed assessment of the individual payments the Deputy is referring to.
Seán Fleming (Laois, Fianna Fail)
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Deputy Cullinane is next. When we are done with the ten minute slots, we will go back around a second time.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay.
David Cullinane (Waterford, Sinn Fein)
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The Chairman might let me know when there are three minutes left. I have two issues. The first issue is the carry-on with the expenses system issue.
I welcome all of the witnesses. Can Professor Barry confirm who in the institute would have responsibility for the robustness of financial controls and compliance with financial rules in relation to the expenses system?
David Cullinane (Waterford, Sinn Fein)
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At the highest level, it would be Professor Barry. When one goes below that, in terms of the day-to-day management of the financial controls, who would that be, not the individuals but the positions they hold?
David Cullinane (Waterford, Sinn Fein)
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The director of finance is Mr. Field.
David Cullinane (Waterford, Sinn Fein)
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Then below Mr. Field, who would it be?
Mr. John Field:
Given that the Deputy's question is specifically about expenses, expense claims can arise from any part of the university. Obviously, any employee can make an expense claim. In terms of policy, each employee of the university is obliged to follow our travel and subsistence policy in the making of a claim. The first step in the making of a claim is that an employee, having incurred expenses in the course of his or her duties, will prepare a claim. The process then is his or her supervisor signs off on that claim - the supervisor would be aware that he or she would be travelling or whatever. The claim, once approved by the supervisor, flows into finance then. Within finance, the first port of call is the expenses administrator. That was the post which was held previously by person A. The expenses administrator will check the claim has been approved and is in accordance with policy. Then, within our finance department, we have a structure, depending on where the claim originates, such as whether it is related to research or the recurrent budget or whether it is over a certain value. That will determine who signs off on it within finance.
David Cullinane (Waterford, Sinn Fein)
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There would be a role then. I understand that from the person who makes the claim right up, ultimately, it would be Mr. Field, as the director of finance, but would the financial controller also have role in ensuring that there are proper financial controls in place.
David Cullinane (Waterford, Sinn Fein)
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If Mr. Field can understand the question I am putting, it is not on the micro-management. In terms of policy in relation to financial controls, Mr. Field would have a role and the financial controller would have a role to ensure, in the first instance, that those financial controls are robust and, in the second instance, that there is compliance with them.
Mr. John Field:
Yes. There are two aspects, I suppose, to the role. There is the necessity to ensure that one has appropriate policy - that role ultimately falls with the governing authority of the university - so our travel and expenses policy is approved by the governing authority. That is the policy piece of it.
David Cullinane (Waterford, Sinn Fein)
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I understand that bit. I have that.
David Cullinane (Waterford, Sinn Fein)
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The answer to my question then is, "yes", that both the financial controller and Mr. Field, as director of finance, have a strong role in ensuring that financial controls are robust and are being complied with.
David Cullinane (Waterford, Sinn Fein)
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Yes. In a general sense.
David Cullinane (Waterford, Sinn Fein)
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Is "yes" the answer-----
David Cullinane (Waterford, Sinn Fein)
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-----in the general sense in policy?
David Cullinane (Waterford, Sinn Fein)
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I thank Mr. Field. He has an obviously robust and strong role to play and, ultimately, the buck will stop with the president. That is fine.
If there were systems failures or process failures in relation to financial controls, where would the responsibility lie?
David Cullinane (Waterford, Sinn Fein)
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If, for example, it was found that there were breaches in financial controls, if the standards were lax, if there were difficulties and problems, would that in part be down to the fact that those who were responsible for ensuring that the financial controls were robust would also have to be held to account? Would that be fair?
Mr. John Field:
A weakness or breach of a control can arise. They can be identified in different ways. There are people responsible for the implementation of controls. As I outlined, the expenses administrator is responsible for ensuring the controls are followed and if that person identifies a breach in controls, he or she would refer it appropriately.
There are also instances that might be identified through an audit where something was identified that this control did not operate in this instance. In that case, either the likes of myself or other people with responsibility for controls would look at how we can implement improvements to our process to make sure the breaches-----
David Cullinane (Waterford, Sinn Fein)
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My point is that if it was found in any institute, and, certainly, in Mr. Field's institute, there were systems failures, process failures, governance failures or financial control failures in relation to expenses or money being spent generally, then there would be some responsibility for Mr. Field, for the president and for financial controller in the institute because ultimately the buck stops with them in relation to making sure, as Mr. Field stated earlier, that the systems in place are robust. That is all I am trying to determine. That would be correct.
David Cullinane (Waterford, Sinn Fein)
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That brings me to the allegations that were made by persons A, B and C and then all the complaints that were made. We understand that there was an internal review carried out in the first instance.
David Cullinane (Waterford, Sinn Fein)
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Mr. Field went through this with An Teachta McDonald.
David Cullinane (Waterford, Sinn Fein)
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Was this internal review carried out by the financial controller?
David Cullinane (Waterford, Sinn Fein)
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By Mr. Field. Did the financial controller had a role to play in it?
David Cullinane (Waterford, Sinn Fein)
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Is that not part of the problem because how is it possible that a person who ultimately would have to take responsibility for failures is also the person who was carrying out an internal review? One would have to point out, potentially, if one was to uncover that there were systems failures, that was in part Mr. Field's responsibility. How is it possible that an internal review that would look into financial control failures could be carried out by the director of finance and the financial controller? How would that be perceived as not being a conflict?
David Cullinane (Waterford, Sinn Fein)
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That is not the point.
David Cullinane (Waterford, Sinn Fein)
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We understand that but that is not the point.
David Cullinane (Waterford, Sinn Fein)
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I will have to hold Mr. Field there, because at that point we had no review.
David Cullinane (Waterford, Sinn Fein)
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I will bring in the Higher Education Authority, HEA. This is my final question on this issue, and I will come back to the second issue. I raised the issue of a separate internal review into a different issue in another institute when other institutes were present in previous sittings. Given what has been outlined, would Dr. Love be satisfied that having internal reviews in institutes is the best way to examine issues which are brought to the attention of the HEA about allegations of bad practice in institutes by whistleblowers or such? Given what we have seen here and in other instances, would he not now see that it would not be wise to have internal reviews in the first instance?
David Cullinane (Waterford, Sinn Fein)
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Would Dr. Love say, as a matter of practice, that in most cases it would be better if the reviews were external rather than internal?
Dr. Graham Love:
It depends on the circumstances and what the findings of some of the internal reviews are in certain cases. It would warrant it in some cases and it would not in other cases. In some cases, internal processes that are handled well that remove people from direct responsibility but invoke external parties to do some of the validation and investigation would be appropriate. A full external review is required in other cases.
David Cullinane (Waterford, Sinn Fein)
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My second question is to get clarity from Professor Barry. How many spin-out companies are there in the University of Limerick?
Professor Don Barry:
There are an average of approximately two per year. I think they are all listed in the financial statement. A full list of our subsidiary companies and companies in which we have a shareholding is on page 34 of our financial statement. When a spin-out company is established by the university, the university takes an initial shareholding in that company and all such companies are listed there at the bottom of page-----
David Cullinane (Waterford, Sinn Fein)
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Even the ones that are there at the moment? So Professor Barry is saying there are two-----
David Cullinane (Waterford, Sinn Fein)
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Two per year, okay. What is the average percentage shareholding that the university has in these companies?
Professor Don Barry:
The common practice in the university at the moment is to take 15% of the initial shareholding. The way in which a spin-out company develops itself as a company is to seek investment by venture funds in return for share capital, so that, over a relatively short time, if the spin-out company is showing any signs of success, the initial shareholding is considerably diluted by the addition of external funds which are necessary to develop the company beyond-----
David Cullinane (Waterford, Sinn Fein)
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I understand that as I have been through this process with other institutes. I am asking for specific reasons. I am hearing that the average is 15%. While it can be diluted if the venture funds require it, on average, it would be about 15%. Who would have responsibility for management of conflicts of interest and for protecting the interests of the institute or university in Professor Barry's organisation?
David Cullinane (Waterford, Sinn Fein)
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The vice president for research. Can I stop Professor Barry there for a moment? The vice president for research obviously has a governance role. Were there any situations in which the vice president for research in Professor Barry's institute was a director or shareholder in any of these spin-out companies?
David Cullinane (Waterford, Sinn Fein)
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Why not?
David Cullinane (Waterford, Sinn Fein)
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If the head of research at Professor Barry's institute was a director and shareholder in several spin-out companies in his organisation, would he see that as a conflict of interest?
Professor Don Barry:
I would see it as a major potential conflict of interest. We have a policy on intellectual property, IP, and the commercialisation of IP which is developed in line with the national guidelines of Knowledge Transfer Ireland. It specifically mentions the potential for conflict of interest where a member of management - for want of a better term - is involved in the commercialisation of IP.
David Cullinane (Waterford, Sinn Fein)
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I thank Professor Barry for the answer. I ask that it be noted by the Chair and the secretariat that the presidents of both UCC and UL have stated it would be their view that there would be a strong conflict of interest if the head of research-----
Seán Fleming (Laois, Fianna Fail)
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Potential, to reuse the word.
David Cullinane (Waterford, Sinn Fein)
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A potential conflict of interest, if the head of research in their institutes was a shareholder in multiple spin-out companies located in their institutes. I want that noted in the record.
Seán Fleming (Laois, Fianna Fail)
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The Deputy's point is well made. I call Deputy Connolly.
Catherine Connolly (Galway West, Independent)
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I am going to give Professor Barry a break for a moment and address my question back to Mr. Mannion on something I raised this morning about Dundalk Institute of Technology. I have been thinking about that the matter concerning the Public Appointments Service.
Catherine Connolly (Galway West, Independent)
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Then Mr. Mannion mentioned the Office of Government Procurement. Is that what he said?
Catherine Connolly (Galway West, Independent)
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Does that mean tendering out?
Catherine Connolly (Galway West, Independent)
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Can Mr. Mannion try to make it clearer for me? It was the Public Appointments Service up until now. I went through it myself in a different life. This has been changed to the office of-----
Mr. Christy Mannion:
This is the development of the shared services agenda across Government. There was a reference to it the earlier this morning on a different issue. The Office of Government Procurement was set up to drive a national shared services agenda. As part of that, these frameworks have been set up across the range of-----
Catherine Connolly (Galway West, Independent)
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How does the Department of Education and Skills tender for a president?
Catherine Connolly (Galway West, Independent)
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So the Department would tender for a company? Am I being deliberately-----
Mr. Seamus McCarthy:
I will try to assist here. The involvement of the Office of Government Procurement would be around what is called a framework agreement. Framework agreements are being put in place for all public bodies to avail of if it suits their circumstances. There could be one for electricity supply, for cleaning services and for security services. It creates a panel of potential service providers using a competitive process which is publicly advertised and so on. Mr. Mannion is referring to a panel that has been put in place for recruitment agencies to assist public bodies to carry out recruitment processes under licence.
Catherine Connolly (Galway West, Independent)
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I have serious concerns about that but have not had enough time to think about it. A move is being made from the Public Appointments to a private recruitment process where the Department tenders for a recruitment company to provide a president-----
Catherine Connolly (Galway West, Independent)
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Is a company or a single individual being used? I am conscious that there was an article in The Irish Timeson a new company that has sprung up and note Ruairí Quinn is in the photograph. The company is called EduCo. Mr. McCarthy was in the middle of explaining it to me, but I was trying to explain where I was coming from. I see a privatisation agenda.
Mr. Seamus McCarthy:
A public body has to apply to the Public Appointments Service for a licence to permit it to go to the market and carry out recruitment.
Let us say the entity doing the recruitment is DkIT, as we were discussing this morning, or it could be my own office if we were to apply for that licence. The public body would have to satisfy the Public Appointments Service that it will run the competition to the same standards of independence and assurance. There would have to be an independent panel to carry out the recruitment exercise. The Public Appointments Service would have to be satisfied that the panel carrying out the interviews would not be interfered with. The recruitment agency would then do the advertising, perhaps source the interviewers and run any aptitude tests or whatever might be required. That would be the professional skill set that we would expect to get from the Public Appointments Service in any event. If the service is under pressure and one would have to wait too long, it is possible to avail of the framework agreement to provide the technical assistance.
Seán Fleming (Laois, Fianna Fail)
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In simple English, it is a method of contracting out some of the work to the private sector.
Catherine Connolly (Galway West, Independent)
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That is what I am concerned about - contracting out. Five of my ten minutes have been used up and Mr. Mannion is to come back to me so we can follow it up separately. While I am raising my serious concerns about that, I will go no further now as I have not had time to reflect on the matter. It certainly seems to be a privatisation route for a college that has been left without a president since January 2016. It is an extraordinary situation, to leave a place without a president.
Seán Fleming (Laois, Fianna Fail)
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If I might intervene, I would like to clarify the issue of contracting out. Would the company that gets the award do a first round of interviews or produce a short list? Would it actually do the interviewing?
Seán Fleming (Laois, Fianna Fail)
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The agency would come back with a person at the end of the process.
Mr. Seamus McCarthy:
All of the terms for the competition, the conditions of employment, the definition of the role and so on would be set out by the employing agency. I would expect one would purely be getting services like advertising, providing venues, maybe secretarial assistance with the competition, experts and so on. They might also be involved in devising a strategy for approaching the market. If there was a particular problem in a specific sector, they could advise the entity in how best to approach the market.
Dr. Graham Love:
Very briefly and to try to assist, as I have come through this myself, I think there is also an additional need sometimes for very focused, specialised services, where the job might require searching for overseas candidates in particularly technical fields. I know this from my own scientific background. At times that has warranted the assistance of a very specialised international recruitment company.
Catherine Connolly (Galway West, Independent)
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I have seen that being used to justify not having an Irish language requirement for the president of NUI Galway. I have a difficulty there but it is for a different forum. Sin lá eile.
There is so much to address here. How much time have I left, five or six minutes?
Seán Fleming (Laois, Fianna Fail)
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The Deputy has ten minutes.
Catherine Connolly (Galway West, Independent)
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The Chair has been very generous. Like Professor Barry, I am most uncomfortable talking about specific people. I share his concern, although perhaps not for the same reason. I do not think it is my role to be identifying people here although they are easily identifiable in respect of the complaints that have been made and so on. The report by Mazars cost €69,000, and it was commissioned following complaints about procedures and a Dáil question or topical issue matter, to which Professor Barry referred in the briefing document. I think Deputy Collins raised it.
Would it be fair to say that various people made complaints, including these three persons who have been identified? Were there other complaints from other people? I will deal with the three first and then come back to that. The three made complaints, the matter was raised in the Dáil, there was a feeling of discomfort about it not being dealt with and finally, after the internal investigation, came the report by Mazars for €69,000. Would that be right?
Catherine Connolly (Galway West, Independent)
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How many recommendations were made in the report? I found it confusing. I think there were 14.
Catherine Connolly (Galway West, Independent)
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Can Professor Barry take me through those 15 recommendations as quickly as possible? Have they all been implemented? I think his briefing paper says they have not.
Catherine Connolly (Galway West, Independent)
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It was published on 29 January.
Catherine Connolly (Galway West, Independent)
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By the time of the publication of the report?
Catherine Connolly (Galway West, Independent)
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What are those three?
Catherine Connolly (Galway West, Independent)
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So that one is subject to negotiation with the unions.
Catherine Connolly (Galway West, Independent)
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What are the next two?
Professor Don Barry:
The other two are recommendations 14 and 15. To implement them will require changes to be made to one of the university statutes. We drafted a revised statute incorporating the recommendations of the Mazars review and sent it off to our legal advisers to cast an eye over it. They advised us that the statute, as amended by us, was in conflict with the Universities Act 1997 so we are engaging with the HEA to resolve that matter or to find a way of making the changes in a manner consistent with the Act.
Catherine Connolly (Galway West, Independent)
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In respect of recommendation 15, that the university should develop clearly documented criteria for suspension, why would that require a change in the statutes?
Catherine Connolly (Galway West, Independent)
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The other recommendation, that the university should consider being more prescriptive in its policies in respect of the selection of disciplinary panel members, does not require a change in the statutes, does it?
Catherine Connolly (Galway West, Independent)
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Is there a timeframe for when this is going to happen, if it is possible? What is the university going to do if it is not possible?
Catherine Connolly (Galway West, Independent)
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I understand that but they are not implemented. I understand there is a difficulty and I am asking Professor Barry when and how he sees that difficulty being resolved.
Catherine Connolly (Galway West, Independent)
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Why has the university not explored this? The report was published in January 2016 and it is now March 2017.
Catherine Connolly (Galway West, Independent)
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I could not be happy. The Mazars report followed an internal report with which nobody was happy. Mazars was given a very limited brief in respect of processes, an issue to which Deputy McDonald has already referred. At the very least, since all those recommendations were accepted, they should have been looked at quickly and implemented. Professor Barry is saying it has been difficult for the final two recommendations.
Catherine Connolly (Galway West, Independent)
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I understand all that. It has been recommended that the university change that and it has got advice that it is difficult. I am simply asking at this point what is the time span for resolving the issues one way or another.
I am not interfering with how UL will change, but when does Professor Barry see those two last recommendations being implemented one way or another?
Professor Don Barry:
My understanding of the legal advice is that it would be next door to impossible to implement the recommendation which states that there should be independent external people on the disciplinary panel. The Universities Act is quite explicit that disciplinary processes are a matter for the president and the president may delegate to employees of the university.
Catherine Connolly (Galway West, Independent)
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Professor Barry stated that he was in contact with the Higher Education Authority, HEA, and that there is a way around it. Is there?
Catherine Connolly (Galway West, Independent)
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It is a big university. Professor Barry has given us the figures. Is it 15,000 students?
Catherine Connolly (Galway West, Independent)
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How big is the human resources department?
Catherine Connolly (Galway West, Independent)
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Does anyone know? Perhaps the financial director knows it.
Catherine Connolly (Galway West, Independent)
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Is that adequate to deal with the issues arising?
Catherine Connolly (Galway West, Independent)
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It is a big university. We want to champion universities. They are essential. Are they not? They are essential on every level.
Catherine Connolly (Galway West, Independent)
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Let us look at this. If the human resources department is not sufficiently staffed to deal with the issues arising, the university is left with a series of complaints where those who made the complaints are totally unhappy with the way that they are being dealt with. They were either suspended or have come to some sort of arrangement, which I see here but will not read out. It is stated that the person was forced into the arrangement, but that is for another day. For me this is about the processes. We ended up with an internal inquiry that is no good and with the Mazars review at great cost. How many facilitators were brought into the university?
Catherine Connolly (Galway West, Independent)
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I asked questions rather than saying something.
Catherine Connolly (Galway West, Independent)
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To save Professor Barry-----
Catherine Connolly (Galway West, Independent)
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I am not querying Professor Barry on that matter. I am not using my time to go into one case. Professor Barry has set out what he has set out. Other things have been said to us. It is not my function to judge. It is only my function to check the processes. In that regard, I asked the price of this report, which was €69,000. I asked the price of the facilitator, Jane Williams. It was €7,000. How many other facilitators have been brought in to deal with PR issues?
Catherine Connolly (Galway West, Independent)
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My apologies. HR issues. My apologies for the-----
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Freudian slip.
Catherine Connolly (Galway West, Independent)
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-----Freudian slip. One and the same.
Catherine Connolly (Galway West, Independent)
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Absolutely.
Catherine Connolly (Galway West, Independent)
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May I-----
Professor Don Barry:
-----and it is often not possible to bring these processes to conclusion in such a way as to make the person subjected to them happy. Apart from persons A, B and C and one or two others, I am not aware of anyone else who is dissatisfied in an organisation that has 1,400 employees. The HR function in UL does a marvellous job.
Catherine Connolly (Galway West, Independent)
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Professor Barry says that but I do not know that and I am allowed to ask questions. UL brought in a company that cost €70,000 and a facilitator. Professor Barry is not answering me and telling me how many other facilitators were brought in. When two people remain suspended for a very long time on full pay, one has to ask what is happening with the human resources department and what is happening in terms of the resolution of issues in a speedier fashion.
Professor Don Barry:
I will attempt to answer the question in terms of why the B and C case is going on so long. The B and C case is going on so long because, at the request of the HEA, we suspended our own processes for the duration of the Mazars review. At the request of the HEA, we then agreed to continue to suspend the disciplinary process while Jane Williams was doing her work. B and C have exercised their right to take a claim against the university for penalisation to the Workplace Relations Commission, WRC. It is my belief that, as president of the university, I should continue to suspend the disciplinary process in recognition of the statutory role of the WRC and await its view on the claim made by B and C. Our processes basically have been suspended since September 2015.
Seán Fleming (Laois, Fianna Fail)
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Explain "suspended". Is the person suspended or-----
Seán Fleming (Laois, Fianna Fail)
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Professor Barry stated that he had suspended UL's disciplinary policy.
Seán Fleming (Laois, Fianna Fail)
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What does that mean?
Seán Fleming (Laois, Fianna Fail)
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Okay. We will finish now. The ten minutes is up.
Catherine Connolly (Galway West, Independent)
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On the separate foundation and that, a page of information has been provided. As with University College Cork, there was a recommendation from the Comptroller and Auditor General. Am I right or am I wrong? Is the Comptroller and Attorney General letting this one go, that is, that there is no control? At this point I am getting exotic.
Mr. Seamus McCarthy:
It is because the exercise of control cannot be identified explicitly in relation to the university. It is not required by accounting standards to consolidate. They are two separate entities. In that situation, it is still important to note that there are significant resources which would be expected to be available for the benefit of the university at some point in the future. The idea that was suggested by the Chairman yesterday of an information memorandum being added to the financial statements would give good disclosure around the resources being raised through philanthropic donations and so on.
Catherine Connolly (Galway West, Independent)
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In terms of the university, who is on the foundation board? I think Professor Barry and someone else was mentioned in the briefing document.
Catherine Connolly (Galway West, Independent)
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I will come back to that matter but this is my final question. Have any conflicts of interest come to Professor Barry's attention in terms of any of the companies operating? He listed out quite a number. Have any issues come to or been brought to his attention or that of any relevant committee?
Catherine Connolly (Galway West, Independent)
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Absolutely not?
Seán Fleming (Laois, Fianna Fail)
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Deputy Aylward is next.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I thank the Chairman. We are all dealing with persons A, B and C and I will go back to that matter again. It was stated that it was amicable and by agreement when Person A retired on sick leave. Did this person leave on good terms with the university? Was there any ill will over this? I suppose that these three people could be called whistleblowers. In the modern language of the Dáil, the modern term is whistleblowers. They are seen as whistleblowers at this stage.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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My understanding is that the first complaint from Person A was in 2009. In 2010, Person A went on sick leave and retired from the university in 2012. She was on sick leave for two years before she retired.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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On the complaints made to the university, there were seven specific allegations. That was in May 2011 while she was on sick leave.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I read in Mazars report that some of those specific allegations included allegations of irregular practices and misconduct in a higher education institution, irregular payments and victimisation and bullying. These are serious things. These were mentioned in the Dáil in reply to a parliamentary question that had been tabled by Deputy English.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Did UL take them seriously at that stage?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I want to move on. There was an allegation of a culture of inappropriate expenses claims.
Person A outlined her work environment in which it was alleged that it was difficult to sign off on individual expenses claims and there was a lack of clarity on whether certain items being claimed were allowable. Those are also serious allegations.
Professor Don Barry:
Yes, I mentioned that in my remarks to Deputy McDonald. I also indicated that before she went on sick leave, person A was a key member of the team that sought to amend our expenses policy to provide more clarity and to improve our process for dealing with expense claims to facilitate difficulties that arose in sign-off.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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With regard to proper governance and procedures and oversight, how was it allowed to happen that this would come to head in 2011 following allegations by a staff member? Why was that system allowed to be in place in such a large university?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I will go through the claims individually. I refer to expenses claimed by an employee while on sabbatical. How can a person claim expenses while on sabbatical? A person cannot claim expenses when he or she is on leave in his or house or wherever and not working.
Professor Don Barry:
One is not on leave when one is on sabbatical. This person was travelling to Australia to carry out business that had a positive impact on the university. Being on sabbatical and being on holidays are two quite different things. The issue that arose in respect of sabbaticals is that we a had policy on them, which was wrong.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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When the person went to Australia, was the person still representing UL? The person was not on sabbatical then. My understanding of a sabbatical is when a person takes time off and do another job. A staff member is still not employed by the university when on sabbatical.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Why say the person is on sabbatical? Why not say the person was visiting Australia on behalf of the university? There are two question marks here.
Professor Don Barry:
One has to apply for sabbatical leave and one has to indicate why the leave in the best interests of the university. Academics go on sabbatical leave to other universities to build collaborations with people in those universities that can lead to an enhancement of the research performance of UL. They do not go sunning themselves on the Bahamas and describe themselves as being on sabbatical.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I am not asking whether these people are sunning themselves on holidays. My understanding is when people take a sabbatical they are no longer employed by that company but they can return to their job. They are taking a break but they are not representing the business then. Professor Barry said this person went to Australia. Why would the person get expenses when taking a sabbatical? The person took the sabbatical for a year or two and yet could claim expenses. Of course, the job is there when the person returns.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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And fully entitled to claim expenses?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Why did Person A complain that she did not think this was right?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Following Mazars report, did UL change its sabbatical policy or is it still the same?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Can a person still go on sabbatical and claim expenses from UL? If a person applied in the morning to go anywhere for whatever reason, can he or she still claim expenses?
Mr. John Field:
Yes. We still have a sabbatical policy and the amendments to the policy we brought in were primarily directed at compliance with taxation laws. Sabbatical outside of the university sector has a slightly different meaning. It is a professional development leave. People are working but they are furthering their research in different fields and they are not necessarily teaching. They are still employees and they are on university business. The expenses are incurred conducting their job and, therefore, they are a claimable expense. We have staff on sabbatical at this time and still claiming expenses.
Seán Fleming (Laois, Fianna Fail)
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Do they get their salary?
Seán Fleming (Laois, Fianna Fail)
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What Mr. Field means by sabbatical is a little different from-----
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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My understanding of a sabbatical is completely different.
Seán Fleming (Laois, Fianna Fail)
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The common definition of a sabbatical is simply getting an extended leave from work to pursue a break. Universities seem to say staff remain on the payroll and can travel. Their definition of "sabbatical" is not the common usage of the word.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I might be a bit slow but------
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Will the HEA officials comment on whether that is the norm in universities and institutes of technology?
Dr. Graham Love:
I am glad the Deputy asked because I just overheard Deputy McDonald. This is standard practice in the higher education industry across the world. It is a classic opportunity for a given academic staff member to, for example, go to a foreign laboratory and build relationships and acquire techniques. The idea is to bring it back home and improve his or her teaching and research in their original institution.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Is it normal practice?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I have a different issue to raise. Purchasing equipment through expenses does not sound right. Why not do the norm - purchase the equipment, get an invoice, put it in and get paid? Why pay it back through expenses? That also sounds unorthodox.
Mr. John Field:
The allegation as outlined related to the practice we had between 2006 and 2009 and the policy at that time was not specific in respect of whether people were allowed to purchase equipment through expenses. We revised the policy, as indicated, in 2010. There are still instances where people will purchase small pieces of equipment but €175 is the maximum limit.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Why pay it back under expenses? Why not get paid through an invoice?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I see that €50 was the maximum.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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In another case, a UL staff member travelling one mile from home to work received €3,496 in mileage expenses, which is not normal. Does the university pay staff mileage expenses to go to work?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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How did this come about?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Is it normal practice?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Did the university recover the money?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Was the money recovered?
Mr. John Field:
The individual who claimed that was working for us only on an hourly basis. He has not worked with us since 2009. We made attempts to recoup the money and we did not get it back. Rather than pursue legal proceedings, we felt the cost of that would outweigh the value of getting the money back so we wrote it off.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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My final question on claims relates to removal expenses and relocation greater than 100 km. Will Professor Barry explain how that came about?
Professor Don Barry:
We have a relocation policy which is part of our effort to recruit the best candidates to come to UL.
The policy provides for an upper limit of €4,500 to cover relocation expenses incurred in moving to Limerick. Claims are fully vouched, with receipts for expenditure incurred. The expenses covered by the relocation policy are the cost of temporary accommodation in Limerick while seeking permanent accommodation, the cost associated with the moving of the person's belongings from his or her current location to Limerick and travel costs incurred in bringing his or her family from their current location to Limerick. On more than a few occasions our ability within the policy to assist in that fashion has been the difference between somebody coming and not coming to Limerick.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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In other words, it is an enticement, which is understandable. I understand persons B and C who are currently suspended are whistleblowers. On what grounds were they suspended? It is extraordinary that they were suspended in December 2014, almost three years ago, and that they are still being paid their full wages and that nothing is being done. Why has there been no investigation into or ruling on this matter? Will Professor Barry disclose the reason they were suspended?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Bullying.
Professor Don Barry:
Yes. In accordance with the processes of the university, the first step is to carry out an investigation of the claim, which we immediately did when we received the complaint. The investigation was carried out by an independent external party. The report of the investigator was that there was no evidence of any physical threat by their colleague and that in the investigator's opinion the complaint made was malicious. As is their right, persons B and C appealed the finding of the investigation and the university appointed a barrister to hear the appeal. The barrister upheld the finding of the investigator. This meant that we moved from a complaint about B and C being physically threatened by a colleague to B and C having allegedly made complaints against their colleague with malicious intent, which was another very serious matter. We began the disciplinary process to deal with that finding, but it never got off the ground.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Three years on it is still ongoing. I presume persons B and C are also represented by barristers and that as such, there are legalities involved.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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According to the note, it occurred in December 2014. It states a complaint was made by persons B and C in respect of an incident which had occurred in December 2014.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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It is still a long time ago.
Professor Don Barry:
The Mazars process started in September. We were asked to suspend the disciplinary process and we did. Following the Mazars process, the HEA asked us to suspend the process further while it appointed facilitators to mediate on a range of issues involving persons B and C. That mediation was not successful. As I explained, persons B and C exercised their right to take a claim to the WRC, which they did in November 2015. That claim has not yet been heard by the WRC. In fact, hearings were scheduled-----
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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What is the WRC?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Are persons B and C on full pay?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Depending on the final outcome, will they be reinstated or will the university be able to terminate their employment?
Professor Don Barry:
They are still employees of the university. They have been suspended on full pay. A lot will depend on the view taken by the Workplace Relations Commission. The disciplinary process has to do two things. It has to make a judgment on the validity or otherwise of the finding of the investigation and it has to decide what action the university should take if it upholds the finding of the investigator. That is the process involved. There are a range of possible actions the university could take against persons B and C if the disciplinary process finds them guilty of the accusation.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Have their positions been filled temporarily?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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That is an extra cost to the university which is now paying the wages of four people in two positions.
Seán Fleming (Laois, Fianna Fail)
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While I do not wish to comment on a particular case, it is easy for public bodies to agree to pay people indefinitely because it is not their money they are spending. It has been suggested the taxpayer can meet the costs arising as long as the case runs. If this was a private company, a different approach would have been taken. I know that cases have to be dealt with, but no private company would agree to pay the wages of four people in two positions. No business could survive in that way, yet because the taxpayer is picking up the tab, this is being allowed to continue. There is no incentive on any side to bring the matter to a conclusion. That is my concern. It is the job of this committee to look after the taxpayers' interests. I see no incentive on any side to resolve the matter. It could continue indefinitely and the taxpayer will be expected to foot the bill.
Seán Fleming (Laois, Fianna Fail)
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I heard everything Professor Barry said.
Seán Fleming (Laois, Fianna Fail)
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I ask that that be done in fairness to all concerned, particularly the taxpayer who is paying the bill. I am only making a general observation about the general principle involved. I am sure there are other cases across the public service where people have been suspended while matters are being addressed. No private company could afford to run a business in that way. It is easy to pay people when it is not one's own money that is being used. Would Dr. Love like to comment?
Dr. Graham Love:
We have been pushing hard to bring the matter to a conclusion. As the committee has heard, all sides have become entrenched. We are also trying to afford fair treatment. The Mazars report and mediation etc. were undertaken to ensure a fair and reasonable process for all involved. I do not want to give the impression that we are being glib in the use of taxpayers' money.
Seán Fleming (Laois, Fianna Fail)
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Does the witness understand the general point? I am not specifically directing it.
Seán Fleming (Laois, Fianna Fail)
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I call Deputy McDonald. Are we on our final round-up now?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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We will see. How many people work in the finance department?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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About 38. In the course of this afternoon's meeting, we have discussed persons A, B and C. That is three people. That is quite a high percentage. It is almost 10% of the staffing levels of the department. I am concerned because what I am hearing from the witnesses is that in the case of person A, the person was unwell. In the case of persons B and C, they were, the witnesses allege, malicious. I am left with that sinking feeling that all is not or was not well in the witness's department. To have three people fall foul of the system and for the witness to say the fault is not on the side of the university is to me quite extraordinary. I would need a lot of convincing that what happened here was simply somebody who was key but became unwell, but everything was hunky-dory otherwise, and that persons B and C were simply malicious. There is more to this than meets the eye. I do not think we have the scope in the course of this meeting to get into it, but I want it recorded that for three people to find themselves in - let us be diplomatic - this level of controversy with the university from a staffing level of 38 is a very high percentage. Is it not?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I know. Person B replaced person A, did they not?
Professor Don Barry:
Yes. The dispute and the use of the word "entrenched" particularly bother me. My function is to implement the process that we have agreed with our staff and governing authority to resolve disputes amongst staff. There is another person the Deputy has not mentioned at all, who is the person who was accused of engaging in physically threatening behaviour towards persons B and C. We are not alleging that persons B and C are malicious. What I have told the committee is that an external investigation upheld by an external appeal has come to that conclusion. The disciplinary process-----
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Remind us who carried out that investigation and who arrived at that decision.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Say that again.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Who is Gerry Mitchell?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I want to know who carried out the investigation. Who are they?
Professor Don Barry:
Mr. Gerry Mitchell was the head of industrial relations in Bank of Ireland up to 2012 and has conducted such investigations in Ireland and the UK. He has carried out work for the Rights Commissioner Service, the Workplace Relations Commission, the Labour Court and other public bodies. Ms Mairéad McKenna is a barrister with a specialisation in labour and employment law.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay. Did they make the initial finding of a malicious allegation?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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At no stage was this an internal university disciplinary panel or procedure.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Quite outside of the allegations of physical threats and bullying, on the issues around expenses and the experiences of persons B and C, did their complaints mirror those of person A?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I appreciate that but, leaving aside the physical bullying and intimidation, I simply want to establish that the complaints in respect of the expenses system of persons B and C echoed the complaints of person A. Is that correct?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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So they were in a similar vein. Can the professor understand why that would raise alarm for people like us? What we are seeing now is a pattern, are we not? I ask the witness to leave aside the bullying and intimidation piece and to focus in on the systems part of it. It is not just one person raising these complaints, nor two; it is in fact three people from a pool of 38. That is quite something, is it not?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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In what respect, concisely, if the witness could?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I acknowledged at the outset that the Mazars report was about process and evaluating process. I made that distinction. I have no difficulty in acknowledging that Mazars acknowledged that process. That is for sure. However, that does not solve the problem for me. I see a cultural problem that screams out at me of people perhaps being leaned on, not being supported and possibly getting sick as a result of the stress of it. I do not accept that the net point here is that person A was ill and the other two were malicious in all of their intent. I think that is a wrong depiction of what happened. The difficulty is that we do not have a single in-depth analysis of each of these allegations to establish if the rot went wider or deeper than what we have had a glance of. That bothers me. I do not want to think badly of the professor, much less of the university, but I would be misleading if I said anything other than the fact that situation to me is extremely troubling.
Do retired persons return to the university to act in a consultancy basis?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay. Did that happen in respect of any of the personnel within Mr. Field's department?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I would like Mr. Field to answer the question.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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He is more than welcome to do that but I am on limited time.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I asked about people retiring and then coming back on a consultancy basis. The professor informs me that this is something that happens and I want to know about that within Mr. Field's department.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Yes.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Who might that be?
Seán Fleming (Laois, Fianna Fail)
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The witness cannot identify a person by name.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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No, I want to know about the position. I am not interested in the name.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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The former financial controller. Would that person have been the financial controller when all of the controversy around person A was in play?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Had that person completed his or her full service at the university?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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How did the person retire? Did he or she get a lump sum payment?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay. Did he or she receive a lump sum payment?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay, so the person did not get any singular gratuity on exiting. Is that correct?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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All rules were observed and followed when this person exited. Is that right?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I ask Mr. Field not to talk in riddles. He should bear in mind that we are putting things on the record here. I ask him to just answer my question.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Never mind the report. I ask Mr. Field to tell us now what happened.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Where was it that the university had not complied with good practice?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Which case was that?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Was this individual in receipt of one of those severance packages?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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That would have been a really simple thing to tell me, rather than doing a grand tour like that. This individual left, having almost reached 60 years of age and is now back as a consultant. He or she received a severance package, which was one of two severance packages which were not in compliance with the rules and regulations. Is that right?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Of course, the university should have done so, should it not?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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No. The rules are the rules; there is no "our view" and "its view". The university should have sought approval for that. Does Mr. Field accept that now?
Professor Don Barry:
We have made severance arrangements up to this point in time based on an understanding that if we had fulfilled the other criteria outlined in the Comptroller and Auditor General's report around best practice, that we did not require departmental approval for those. It has been made crystal clear to us and to the other universities in Ireland that such departmental approval is required. We accept that now but it came as a surprise to us. We were operating in good faith based on what we thought the Department's desires were-----
Mary Lou McDonald (Dublin Central, Sinn Fein)
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That point is fairly made. I am simply establishing that the university should have sought that approval. The financial controller - the position we are now discussing - was running things when these controversies arose. He or she exited the employment of UL and received a severance payment. What was the order of that severance payment? Is Mr. Field in a position to tell us that?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I ask Mr. Field to disclose it again.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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The severance payment was between €220,000 and €230,000. Then the same person re-enters UL and still works there in a consultancy capacity. Is that right?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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How long was that person working in a consultancy capacity?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Three years, from what date to what date?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I thank Mr. Field for helping me with my mathematics. I can add. Let us compare and contrast the experiences here. Person A comes forward, gets sick-----
Seán Fleming (Laois, Fianna Fail)
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Excuse me Deputy, but I want to ask one question. Did the pension abatement rules in the public service apply to that person when he or she came back? I am sure Mr. Field knows what I am talking about. When a person has retired, is in receipt of a pension and comes back to work, the amount he or she earns cannot exceed his or her original salary. Did those pension abatement rules apply?
Seán Fleming (Laois, Fianna Fail)
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Yes, but what about after reaching age 60, given that the person was there for three years? Did the pension abatement rules apply?
Seán Fleming (Laois, Fianna Fail)
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For the three years, he was not in receipt of what?
Seán Fleming (Laois, Fianna Fail)
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The pension did not kick in until 60-----
Seán Fleming (Laois, Fianna Fail)
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That means he had retired at least three years before 60.
Seán Fleming (Laois, Fianna Fail)
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I got the impression he was quite close to 60-----
Mary Lou McDonald (Dublin Central, Sinn Fein)
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That was certainly the impression given.
Seán Fleming (Laois, Fianna Fail)
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Okay, so the three years spent on contract were completed before the pension kicked in. Is that right?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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His exiting of the organisation coincides with the kicking off of a lot of the investigative procedures and so on around the complainants. Is that not so?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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He had retired at that time. I just think it is interesting if one looks at the sequence of what happened next and I am struck by the contrast. I presume the financial controller was the direct line manager for these staff, for persons A, B and C. Is that right?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Who was?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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What would the financial controller's role have been and what would have been his interaction with persons A, B or C?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I would have thought that the financial controller, notwithstanding a layer in between, is the person in charge - the authority figure.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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Okay, so the boss winds up exiting with a very generous severance package. The whistleblower ends up unwell and not working for the university. The other two whistleblowers are engaged in a protracted dispute process with the university and the Department. This is very troubling.
Seán Fleming (Laois, Fianna Fail)
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I ask the Deputy to conclude because one or two other members want to get in a second time.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I would like the witnesses to explain to us in more detail the settlement the university made with Revenue in respect of the sabbatical policy. What was that all about? Was UL making a habit of paying for peoples' spouses, for their travel expenses, accommodation and so forth? How did that bill work up? Was it a liability in terms of benefit-in-kind? I would like more information on that.
Seán Fleming (Laois, Fianna Fail)
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I ask the witnesses to answer that and then we will go to Deputies Cullinane and Connolly, who will have ten minutes.
Catherine Connolly (Galway West, Independent)
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I will not need ten minutes.
Mr. John Field:
On the sabbatical expenses, as I identified earlier, the Revenue Commissioners had issued guidance on the treatment of round sum payments. The process that we had in place was that round sum payments were paid monthly. The revised process that we agreed was that we would have regard to the Department of Finance circular on per diemrates for foreign countries and work out the period of time during which the person is in the country. We went back and looked at every sabbatical and worked out the length of time that people had spent outside of the country. We recalculated the amount of expenses that they would have received in accordance with the new methodology that we had agreed, which we had confirmed with Revenue was compliant with taxation rules. We went back and looked at four years of sabbaticals.
We identified cases where the level of expenses we had paid would have worked out differently under the revised methodology, so we treated the difference as pay and deducted tax on that as though it was salary rather than expenses. It did not relate to benefit-in-kind or travel expenses for spouses etc. Salaries were reduced when people went on a sabbatical and the effect of this was to bring their salary up a little bit. We then treated a portion of what we had paid them as a round sum amount as salary, rather than expenses.
Seán Fleming (Laois, Fianna Fail)
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How much interest and penalties were there?
Seán Fleming (Laois, Fianna Fail)
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Of what?
Seán Fleming (Laois, Fianna Fail)
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How much was interest and how much was penalties?
Seán Fleming (Laois, Fianna Fail)
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Were there any penalties?
Seán Fleming (Laois, Fianna Fail)
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There were no penalties because it was a voluntary disclosure.
Seán Fleming (Laois, Fianna Fail)
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Was that published?
Seán Fleming (Laois, Fianna Fail)
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Even though it was more than €10,000, because it was a voluntary disclosure, it was not required to be published.
David Cullinane (Waterford, Sinn Fein)
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I have a few questions for Professor Barry. Given that he has been in the institute for a long number of years, given that we have information that was brought to his attention by people who have been characterised as whistleblowers, given that there was an internal review and then an external review, and given everything Professor Barry has seen since then, would it be his position that there was abuse of the expenses system in his organisation?
David Cullinane (Waterford, Sinn Fein)
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Would he be of the view that there was any wrongdoing by any individuals in claiming expenses in his organisation?
Professor Don Barry:
Individuals made claims which were not in accordance with policy. There are many reasons that can happen, including a lack of awareness of the rules about what are and are not allowable expenses. Among the improvements we made to the expenses regime, for want of a better term, in 2010 was to make it crystal clear what claims were allowable and what claims were not.
David Cullinane (Waterford, Sinn Fein)
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Is Professor Barry aware of the statement that ignorance is no defence in law? It is no defence simply to claim one is unaware of the rules. Is it his view that there was any wrongdoing by individuals in his organisation relating to claiming expenses? He is talking around these issues and not being direct about them. If an organisation is to learn lessons from something like this, the first thing it has to do is accept there were failures. Does Professor Barry believe there was any wrongdoing by any individuals in claiming expenses?
David Cullinane (Waterford, Sinn Fein)
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My understanding of wrongdoing may be different from Professor Barry's. What I am hearing from him is that he does not believe there was any abuse of the system, nor any intentional wrongdoing by anybody. If there was any wrongdoing it was because people did not understand the processes relating to the rules. Certainly he would not agree that there was any level of corruption with a small "c" or fiddling of expenses. For all of what has been disclosed to Professor Barry and to us, he simply does not accept any wrongdoing by anyone other than process failures. Would that be a fair summation of his position?
David Cullinane (Waterford, Sinn Fein)
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Professor Barry can reject that and he is entitled to do so, but I am saying that he rejects that there was any level of corruption or that there was any level of wrongdoing by individuals intentionally or maliciously, to use that word that Professor Barry used in a different context. He rejects there was any abuse. Does he accept then that there were financial control failures?
David Cullinane (Waterford, Sinn Fein)
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Does he accept there were control lapses?
David Cullinane (Waterford, Sinn Fein)
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Who is responsible for system failures and control lapses?
David Cullinane (Waterford, Sinn Fein)
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Does Professor Barry take personal responsibility for these control lapses and system failures?
David Cullinane (Waterford, Sinn Fein)
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Does Mr. Field accept any responsibility for any of these failures?
David Cullinane (Waterford, Sinn Fein)
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Mr. Field is gearing up for another round-the-houses answer. It is a very simple question.
Mr. John Field:
We aspire at all times to do things in accordance with best practice. We have made our best efforts to give assurances to the committee on this, and in fairness to Deputy McDonald, she has expressed concern about assurance. We have tried to outline in our briefing paper that we have implemented robust processes and procedures and they are followed. I am satisfied on the evidence available to me that they are followed. I do not believe there is a pattern or culture that indicates otherwise.
In answer to Deputy McDonald's earlier question, the allegations made by persons B and C were made in general sense and there were not specifics. In the absence of specifics, we conducted a general review of travel and subsistence policy and its implementation within the university. We brought in Deloitte to audit, and we made available to it all of our expense claims from March 2014 to August 2015, which we felt covered the period of the allegations. Deloitte did not identify any issue. I wish to give that assurance that it was an independent review and the company was given access to every expense claim it went through in that period. Subsequent to the review being completed, in January 2016 persons B and C identified 69 specific transactions about which they raised concerns. We reviewed all those transactions. They were all ones which had been paid. They differed from person A's allegations in that they were paid rather than unpaid. They also differed in that persons B and C did not raise issues about having difficulty in getting them signed off, because as we have outlined, we changed the approval process so that it was an entirely online process. The expense claim must be approved online or it does not progress to the next step and will not get paid.
David Cullinane (Waterford, Sinn Fein)
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I have given Mr. Field a long time to answer the question but he has still not done so. I accept what he says and thank him for his clarity, but we got a straightforward answer from Professor Barry who accepted some responsibility for the failures. I am asking the same question of Mr. Field. Rather than giving me again a long-winded response, I ask him to be quite short and succinct about whether he accepts any personal responsibility for the control lapses that happened?
David Cullinane (Waterford, Sinn Fein)
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Is that a "Yes" or a "No"?
David Cullinane (Waterford, Sinn Fein)
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I take it that Mr. Field feels he was less responsible. He is saying that he had not been around for as long as Professor Barry.
David Cullinane (Waterford, Sinn Fein)
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Who was Mr. Field's predecessor? We do not know his or her name. Would he or she have had some responsibility?
David Cullinane (Waterford, Sinn Fein)
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Somebody was doing the job temporarily.
David Cullinane (Waterford, Sinn Fein)
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Sorry, with respect, I have to ask the witness to hold for a second because we have very limited time windows and the witness is very good at giving long-winded responses to questions. He has given me his position. He joined the organisation later than Professor Barry. Previous to this, an individual was there for 12 months, temporarily, and somebody would have held the post previous to that.
If Mr. Field is not able to take full responsibility because his tenure does not capture all of the time this was happening, logic would dictate that if Professor Barry has taken responsibility. Mr. Field's predecessors have to take responsibility as well.
David Cullinane (Waterford, Sinn Fein)
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We are talking specifically about control lapses that have been accepted. I am not asking about micro-management of very minor lapses here and there but about general control lapses that have been identified. Does Mr. Field know the ones to which I am referring?
David Cullinane (Waterford, Sinn Fein)
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I will come back very quickly to the sabbatical expenses and the €186,000 that was then paid to Revenue. Mr. Field has partially explained that in terms of my understanding of it. Is Mr. Field saying that €186,000 was, in part, a result of income liabilities for staff who got the expenses?
David Cullinane (Waterford, Sinn Fein)
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If that had been done and the mistake had not happened and the person then got the expense but it was treated as pay, would that individual have had to pay tax on that amount? Would he or she have been liable for the tax? Would it have been classed as income from his or her perspective?
David Cullinane (Waterford, Sinn Fein)
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I understand that. I am not talking about the settlement. If the mistake had not happened and the payment was made, it would have been appropriate if that was declared as income and the person would have then paid tax on it to Revenue. Is that not the case?
David Cullinane (Waterford, Sinn Fein)
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Exactly. So the individual would have paid it, not the institute.
Seán Fleming (Laois, Fianna Fail)
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Tax was certainly due but the onus-----
Mary Lou McDonald (Dublin Central, Sinn Fein)
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It was their mistake so they paid it.
David Cullinane (Waterford, Sinn Fein)
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I am not talking about the mistake.
Seán Fleming (Laois, Fianna Fail)
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It certainly was taxable.
David Cullinane (Waterford, Sinn Fein)
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If there was no mistake made, would the tax be paid by the individual who was in receipt of the expenses or would it be paid by the university?
Mr. John Field:
It would be paid by the university because we pay over all the PAYE and PRSI of our employees.
David Cullinane (Waterford, Sinn Fein)
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I know the university would actually pay it but who would be liable for the tax? Is it the individual or the university?
Mr. John Field:
We have a statutory responsibility. If anything is paid to employees, we must pay PAYE and PRSI to the Revenue Commissioners. Is the Deputy questioning whether the employees got more than they should have?
David Cullinane (Waterford, Sinn Fein)
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No. Do the witnesses understand the question I am putting?
David Cullinane (Waterford, Sinn Fein)
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Yes, by the individual which would then be paid to Revenue.
David Cullinane (Waterford, Sinn Fein)
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In other words, that did not happen and, as a result, the institute had to pick up the tab of the individuals.
David Cullinane (Waterford, Sinn Fein)
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So the university had to pay €186,000 that it should never have had to pay because the individuals would have had to pay it.
Seán Fleming (Laois, Fianna Fail)
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It should have deducted the tax at source like every employer does. That is what should have happened.
David Cullinane (Waterford, Sinn Fein)
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Was that €186,000 in the context of a wider figure in terms of the overall spend? How much was spent on the travel expenses and the sabbatical expenses? What was the total amount over that four-year period? I am not talking about the tax liability? How much was actually incurred by the institute and how much was received by individuals in these sabbatical expenses?
David Cullinane (Waterford, Sinn Fein)
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Mr. Field should have that detail; he is coming before us to deal with the sabbatical expenses.
David Cullinane (Waterford, Sinn Fein)
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Those 30 or 40 people would have received expenses or income.
David Cullinane (Waterford, Sinn Fein)
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Will Mr. Field furnish the committee with the figure?
Seán Fleming (Laois, Fianna Fail)
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A detailed note.
Catherine Connolly (Galway West, Independent)
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I have a number of quick questions. What is the breakdown of the students between Irish, EU and non-EU?
Professor Don Barry:
At any one time, approximately 20% of the students are not from Ireland. The vast majority of those who are not from Ireland are from outside of the EU, that is apart from those who are on an ERASMUS placement. We have the largest ERASMUS programme of any university in Ireland and we are very keen to internationalise the campus community to the greatest extent.
Catherine Connolly (Galway West, Independent)
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Of the 20% that are non-Irish-----
Catherine Connolly (Galway West, Independent)
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A huge source of the university's income is non-Irish students, as it is with more and more universities.
Catherine Connolly (Galway West, Independent)
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Non-Irish students are a huge source of income; 20% come from outside the EU. Their fees provide a huge source of income.
Catherine Connolly (Galway West, Independent)
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What is the figure then if Professor Barry would not describe it as huge?
Catherine Connolly (Galway West, Independent)
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I am not talking about ERASMUS.
Catherine Connolly (Galway West, Independent)
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Will Professor Barry come back to me with that figure?
Catherine Connolly (Galway West, Independent)
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How much accommodation does the university have?
Catherine Connolly (Galway West, Independent)
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Is there any accommodation off campus?
Catherine Connolly (Galway West, Independent)
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My final questions are on the Mazars report. It goes back to what I asked about the cost of reports and facilitators. Presumably, Professor Barry will come back with the cost and number of facilitators. It is 5 o'clock so it is okay if Professor Barry does not have that figure. I would like it because I have seen a reference to at least two. There are all of the legal costs as well as a result of the human resource issues. I would like to know the number of facilitators.
It took a report to get the university to implement the recommendations. I ask this of every institution, how come the university's internal controls did not result in alarm bells ringing? Why did it take a €70,000 report, which is just one specific item, to tell the university to implement these recommendations? They highlighted lots of things and the university accepted them. It has implemented all of the recommendations with the exception of two. The university has accepted that there were failings. Why did it take such an effort? I will not go into the people who have contacted us but considering the toll on the institution, the toll in terms of the taxpayer and the toll on the people, why did it take so much to rectify something?
Catherine Connolly (Galway West, Independent)
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Yes, but that was well after the complaints were made. That report was only published in January 2016.
Catherine Connolly (Galway West, Independent)
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It took the report and the complaints to get the university to act.
Catherine Connolly (Galway West, Independent)
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Yes, but after people made complaints and raised issues. It was not the university's internal controls that sorted this out. Is that not right?
Professor Don Barry:
There have been improvements in processes in the finance department. I will take the opportunity of saying quite clearly to the committee that John Field was appointed as director of finance in August 2009 and has introduced a major review of the processes in place in the finance part of the organisation. He has introduced and enhanced practically every single process we have. To give some level of assurance to the committee, there was a full Revenue audit of the university in 2013 which looked at all our pay and expenses. No serious issues were raised in the course of that audit. Every time there is an audit there are recommendations for how things can be done a little bit better.
We welcome those recommendations from audit and any suggestion that we are so perfectly brilliant that there should be no possibility of improving the processes within the university is a wish that no private or public sector organisation could fulfil. We are not going to sit here and be pilloried as if we were useless until someone came along and told us what to do. We have always operated to the highest possible standards and we have accepted recommendations from external audits and reports and are determined to implement them.
Catherine Connolly (Galway West, Independent)
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I did not wish to finish on this but I would not characterise any questions I have asked as pillorying Professor Barry. I listened without-----
Catherine Connolly (Galway West, Independent)
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I listened without interrupting and I did my best to stick to questions. I was hoping to finish.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I do not think any of us in asking questions is trying to pillory or make allegations against anyone. We are trying to get facts. That is our job. That is what we are here for.
Catherine Connolly (Galway West, Independent)
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I intended to ask earlier about a reference on page 6 of the accounts, the university paid a former service provider €209,600 in connection with the termination of the service provider's appointment to the university. Would Professor Barry explain that?
Catherine Connolly (Galway West, Independent)
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I read that but I do not understand it. Could Professor Barry explain it to me?
Catherine Connolly (Galway West, Independent)
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Could Professor Barry say that again? I am sorry; I am tired. Is this separate entirely from everything else that has been mentioned?
Catherine Connolly (Galway West, Independent)
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I missed that completely. Can Professor Barry tell me what it is in connection with? I am tired.
Professor Don Barry:
It is in connection with a claim of bullying against the external provider, which was upheld by an investigation leading to a disciplinary process. In the middle of the disciplinary process the external provider's solicitor wrote to our solicitor seeking a negotiated settlement and the number mentioned there is the outcome of those negotiations.
Catherine Connolly (Galway West, Independent)
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An external provider was providing a service to the University of Limerick. Is that right?
Catherine Connolly (Galway West, Independent)
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What was the nature of that service?
Catherine Connolly (Galway West, Independent)
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The witness can say "No" to the questions. There was an allegation against that provider that there was bullying and then there was a settlement.
Catherine Connolly (Galway West, Independent)
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The settlement was that figure.
Catherine Connolly (Galway West, Independent)
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My original question was to ask how many complaints have arisen in the University of Limerick - over five years or ten years - that have led to internal or external reports or settlements. Is it possible to get that figure?
Professor Don Barry:
We disclose settlements in the financial accounts every year. There are very few of them. The majority of disputes that arise between staff in the university are settled informally without ever going outside their departments. Occasionally, however, as one would expect in any large organisation, some disputes prove intractable. The ones highlighted in the Mazars report and in our financial statements dealing with that aspect of our business are the few that have led to disciplinary processes that in some cases have ended with negotiated settlements.
Catherine Connolly (Galway West, Independent)
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Is it possible to put a figure on those?
Seán Fleming (Laois, Fianna Fail)
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Professor Barry addressed the foundation. I will ask the Comptroller and Auditor General to speak on this. The university seems to have agreed that because it does not control the University of Limerick Foundation, there is no requirement under accounting standards to consolidate it. The professor has accepted that and both sides accept that is the position.
The Comptroller and Auditor General has included a note in his audited report to that effect. There are assets of €15.1 million in the foundation. That was by way of information. I know the university does not control the foundation but are those foundation accounts published elsewhere?
Seán Fleming (Laois, Fianna Fail)
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The accounts are published. The university might not be required to consolidate but is it allowed to consolidate something without being required or would it be wrong to include them? Does the Comptroller and Auditor General accept that there is not a requirement-----
Mr. Seamus McCarthy:
I do accept there is not a requirement because if I felt there was a requirement, I would have qualified and I did not do that. I did feel that it was important that anybody reading the consolidated financial statements as they are should understand that there are other resources that may be to the benefit.
Seán Fleming (Laois, Fianna Fail)
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Given that the reference to the foundation is in the small print in the Comptroller and Auditor General's report, one could easily go through the accounts and miss that reference. Would the university consider giving some summary of that foundation's figures by way of an appendix to, or a memorandum with the financial statements notwithstanding it would not be a consolidated account? In that way, a person reading the financial statements at the end of the year would at least get a picture of the foundation.
Professor Don Barry:
Yes we would and we recognise the interest that people have in the foundation. Our payments to the foundation and its payments to us are all included in the financial statements but its donations are included under other income and we will in future separate those donations out and the purpose for which the money was given to the organisation either in the main document or in an appendix.
Seán Fleming (Laois, Fianna Fail)
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That is good because it would be helpful if it could be done by way of an appendix or some other way.
Are there any guarantees from the University of Limerick to the foundation? There may be no borrowings in the university's case. We did encounter guarantees given in another third level institution where the debt ultimately fell back on the college. Has the University of Limerick given any letters of comfort?
Seán Fleming (Laois, Fianna Fail)
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I ask because another institution had given letters of comfort but that is not the case for the University of Limerick.
Seán Fleming (Laois, Fianna Fail)
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It is happy to confirm that.
David Cullinane (Waterford, Sinn Fein)
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I have some follow-up questions for Mr. Field. As I have only two minutes I am sure he will help me by being distinct in his answers.
Mr. Field said that before he took up his post it was a temporary position for a period of maybe 12 months. Before he took up his permanent position who held that permanent position?
David Cullinane (Waterford, Sinn Fein)
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I asked who was the last person to hold the permanent position, not the temporary one.
David Cullinane (Waterford, Sinn Fein)
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He worked for the institute, or she did.
David Cullinane (Waterford, Sinn Fein)
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I am asking Mr. Field the question.
David Cullinane (Waterford, Sinn Fein)
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If Mr. Field was not there then Professor Barry can answer the question.
David Cullinane (Waterford, Sinn Fein)
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Did this individual receive a severance package when she left?
David Cullinane (Waterford, Sinn Fein)
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What was the reason for her departure? Did she raise concerns in respect of capital funding?
David Cullinane (Waterford, Sinn Fein)
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Is Professor Barry quite clear about that?
David Cullinane (Waterford, Sinn Fein)
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She did, however, receive a severance package.
Seán Fleming (Laois, Fianna Fail)
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I presume that was in line with public sector guidelines.
Seán Fleming (Laois, Fianna Fail)
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We have completed our consideration of the University of Limerick's financial statement 2014-2015.
Does the committee agree to dispose of those accounts for our purposes?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Yes, that is agreed.
Seán Fleming (Laois, Fianna Fail)
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That is fine. On behalf of the Committee of Public Accounts, I thank all our witnesses from the University of Limerick, the Department of Education and Skills and the Higher Education Authority for their attendance. I also thank the Comptroller and Auditor General and his staff for being here today. The next meeting of this committee will be at 9 a.m. next Thursday. We will hear in the morning from representatives of Waterford Institute of Technology, Dublin Institute of Technology and the Grangegorman Development Agency and in the afternoon from representatives of NUI Galway.