Oireachtas Joint and Select Committees

Thursday, 13 April 2017

Public Accounts Committee

Special Report No. 96 of the Comptroller and Auditor General: Child Abuse Inquiry and Redress

Total legal costs of some €200 million have been paid to firms that provided legal services to applicants - this represents an average of some €12,800 per awardee. The redress board has no further applications on hand and is awaiting the outcome of a number of judicial review applications which are before the courts. Once those reviews are finalised, and any outstanding matters dealt with, the board will be dissolved. The review committee which reviews decisions of the redress board on awards is also fully up to date in its caseload but is awaiting the outcome of an appeal of a decision to the Supreme Court. The Commission to Inquire into Child Abuse published its final report in 2009, the Ryan report. Since then the commission has been finalising third party legal costs and preparing for its dissolution. There is one legal bill of costs outstanding and a hearing before the Taxing Master is awaited. Total expenditure in relation to the commission is expected to amount to €82 million, broken down between third party legal costs of €31 million, the commission's legal costs of €15 million and its direct administration costs of €34 million. Indirect legal costs of €2 million were incurred by the Department as a respondent to the inquiry. The report identifies other expenditure under the redress umbrella, including the funding of €12.7 million provided to the now dissolved Education Finance Board, a maximum of €110 million that has been allocated to Caranua, €10 million in support for counselling, and €42 million in funding provided by the Department of Education and Skills, the Department of Health and the HSE for survivor support groups and family tracing. Turning to the issue of contributions from the religious congregations that managed institutions, there are two separate rounds of such contributions - the 2002 indemnity agreement and the 2009 voluntary offers. The 2002 indemnity agreement between the State and the 18 participating religious congregations that managed the institutions provided for a collective contribution by the congregations of €128 million in cash, counselling services and property. This committee has previously examined a report of the Comptroller and Auditor General on the agreement and published its own detailed report on the matter. The cash contributions of €54.42 million under the agreement have been received, while information has been provided to the Department that confirms that counselling services in excess of the €10 million provided for in the agreement have been funded directly by the contributing congregations. With regard to property, the Department agreed in principle that a total of 64 properties would be accepted under the agreement subject to good and marketable title and agreed valuations. This number was reduced to 61 when the Department accepted and received a cash sum in lieu of three properties where good and marketable title could not be established. A total of 50 properties have been fully transferred. These properties are valued at €48.47 million in total. When combined with the cash and counselling contributions referred to above, a total of €112.9 million, representing 88% of the amount provided for in the agreement, has been received. Work to complete the outstanding property transfers is actively progressing. In most of the remaining cases the transfer process is at a very advanced stage. Most of the properties are already in use by the intended recipients. In response to calls by Government and Dáil Éireann for further substantial contributions towards the costs of redress made in the aftermath of the publication of Ryan report, many of the congregations that were party to the 2002 indemnity agreement made offers which, in total, were valued at €352.6 million. These offers are voluntary and do not form part of any agreement. One significant element of the most recent offer, relating to playing fields and associated lands, valued at €127 million, was withdrawn by the Christian Brothers. When this is combined with some changes in the valuation of properties previously offered, the exclusion of certain property offers and other offers not being reckoned as contributions, the total value of the voluntary offers currently in place stands at €193 million, of which contributions of cash and property amounting to some €97 million, or 51%, have been realised. The value of the additional property that I mentioned earlier is not included in this amount as a valuation as of the date of transfer has yet to be provided. The remaining cash offered is expected to be fully contributed or appropriately reckoned by 2018. A number of property transfers have been fully completed and the remaining transfers are progressing. When the contributions provided for in the 2002 indemnity agreement are combined with the subsequent voluntary offers, the maximum total contribution that is expected to be realised stands at €321 million, of which amount €210 million, or 66%, has been received. It has been the position of successive Governments that the religious congregations should commit to making further substantial contributions towards the cost of abuse. Having regard to the work of the independent panel's report, the Government adopted a position that the congregations had the resources to bring their contribution over time to 50% of the then estimated costs. Based on a maximum total contribution of €321 million, there is a shortfall of some €429 million in advance of achieving a 50% share. The congregations have never accepted the 50% principle and have refused further requests to augment their contributions. The recommendations set out in the Comptroller and Auditor General’s report have been accepted and the Department will be progressing them. Recommendation 1.4, which recommends that the Department actively pursues the outstanding balance agreed under the indemnity agreement, is particularly important. I can assure the committee that the Department is actively engaging with the Chief State Solicitor’s office, whichliaises with solicitors for the congregations and the HSE, in order to bring this about. Caranua was established under the Residential Institutions Statutory Fund Act 2012 to utilise up to €110 million in contributions offered in the aftermath of the publication of the Ryan report to help meet the needs of former residents. While Caranua is a body under the aegis of the Department of Education and Skills, it is independent and operates under its own board. The Department has provided support to Caranua since its establishment and exercises an oversight role applicable to statutory bodies with a view to ensuring that the organisation operates in an efficient and effective manner and in accordance with the legislation and the Code of Practice for the Governance of State Bodies. The Department is in regular contact with Caranua to discuss progress and performance and related governance issues. Caranua's annual reports and financial statements for the years 2013, 2014 and 2015 have been presented to the Houses of the Oireachtas. It is understood that the draft 2016 accounts are currently in preparation. The Statement on Internal Financial Control that formed part of Caranua’s accounts for both 2014 and 2015, and the Comptroller and Auditor General’s certificate to both sets of accounts, identified a number of potential weaknesses in Caranua’s payments processes. An explanation was sought from Caranua in regard to these matters and a report was recently received. The report notes the context under which the control weaknesses emerged. These related primarily to the fact that Caranua was in a start-up situation and that it took time to have appropriate staffing resources, systems and procedures in place. In addition, in striving to meet the needs and expectations of applicants in a compassionate and person-centred manner, Caranua is challenged to meet sometimes very stringent control requirements. The Caranua report also sets out the response to the various issues raised and notes the measures taken to address the weaknesses identified, which it regards as being legacy issues. The report also notes the position in regard to the recommendations set out in the Comptroller and Auditor General’s management letter for 2014 and 2015. The Department has noted the responses of Caranua and the measures being taken to address the potential weaknesses and risks that have been identified. It will continue to work with Caranua to ensure that an appropriate control framework is in place. I thank the members for the opportunity to address the committee. I am happy to take any questions they may have.