Oireachtas Joint and Select Committees

Thursday, 18 May 2017

Public Accounts Committee

Business of Committee

9:00 am

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We have a quorum and the committee is now in public session. We are joined by the Comptroller and Auditor General, Mr. Seamus McCarthy, a permanent witness at the committee, who is accompanied by Mr. Mark Brady, deputy director of audit.

I have no list of apologies to be recorded so far.

The next item on the agenda is the minutes of the meeting of 11 May 2017. I have just had a quick look at them and I want to make a minor amendment to them. I am holding them over until next week when we will approve them.

The next item is matters arising out of the minutes. Everything is included-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Sorry, just in case-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We are not holding over the minutes but I will give the Deputy a bit of latitude. They were draft minutes not approved.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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On the correspondence, did we get correspondence from the whistleblower?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Grace’s whistleblower?

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

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We are coming to that.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Is that in correspondence?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Absolutely. Before we go into public session with Bord na gCon, we will have a private session on that exact issue and, obviously, the Templemore issue. We have two issues to talk about in private session before we go into public session.

The next item is correspondence received since the last meeting. Nos. 449 A and 452A, carried over from the last meeting with Bord na gCon, are the briefing document and opening statement from Bord na gCon relevant to today’s meeting.

There is correspondence from Accounting Officers and-or Ministers and follow-ups to previous meetings. No. 475B, correspondence dated 10 May 2017 from Seamus McCarthy, Comptroller and Auditor General, is a briefing document on the Comptroller and Auditor General reporting framework. This is a very important and useful document and I suggest that all members read it.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Do we have homework to do?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes, more homework. We will not have a public quiz on it, however.

Mr. Seamus McCarthy:

It was a request from the Chairman. We were discussing FeedHenry and the potential to report on it. I made the point that I would have to do a value for money report if I was to report publicly on it. I was explaining the difficulty in reporting a single issue other than in a value for money context.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Fine. That is useful information for committee members to have. We will note and publish that.

Nos. 477B (i) and (ii), correspondence dated 10 May 2017, from Professor Patrick O’Shea, president of University College Cork, providing follow-up information subsequent to the university’s appearance before the committee with information of the gender breakdown and the Irish Management Institute’s pensions which is now owned by the university. This information will be reviewed next week along with documentation from the other third level institutions, the Higher Education Authority and Department of Education and Skills. It will be noted and published.

No. 480B, correspondence received from Caranua, regarding liaison officers.

No. 481B, correspondence dated 10 May 2017 from Mr. Sean Ó Foghlú, Secretary General, Department of Education and Skills, on the signing of a lease agreement by Caranua.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Under the Act, the Minister has the responsibility to give permission or not for each contract for leases. It is not clear whatsoever if the Minister gave permission in this case. That is the question we have asked. I do not know where that answer is. We have got answers to parliamentary questions. We have got an answer from Caranua which is totally and utterly confusing. The message from the committee was that the agency should not waste survivors’ moneys on signing a rent agreement.

The second message was whether the Minister had given permission. At this point, having read it, does the Office of Public Works, OPW, own the building in which Caranua working? It is not clear. One is pushing the other. The OPW is talking about a signing a new lease on behalf of Caranua where it is the third party as it were. Why is the OPW signing a new agreement? Does it not own the building? I have no idea what is going on. The reason for that is not through any lack of diligence. I have read about it and tabled questions about it. I have no idea. I do know when Caranua was here; it said it did not pay rent. I asked the Comptroller and Auditor General’s office if Caranua paid rent. It said it did not pay rent but was about to because it had to move. Now it looks like it was obliged to pay rent of over €100,000 from 2016 onwards. Now, it will pay even more rent. On top of that, it seems to me it was outfitting premises.

At this point, I am appealing to the Chairman that this is a limited fund. There is absolute upset over the way the survivors have been dealt with. We know the agency’s chairperson said when he went into the organisation that it was a mess and a shambles. There is currently no board. Its term finished in March and its last meeting was on 23 March or 24 March. This organisation is functioning without any oversight. It would seem it has delegated permission to the chief executive officer and the chairperson to sign a lease. I have gone through the minutes and it is extraordinary at a time when the board was more worried about the level of pay-outs rather than their own costs.

This committee is of the opinion that Caranua should not be paying rent. We asked it to clarify and not to sign a lease. We do not know if it is value for money. No business case was ever presented through any of the minutes. We have asked the Department of Education and Skills to clarify what is going on.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Does Deputy Cullinane wish to talk on this topic?

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

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Can we try and deal with the point?

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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As it feeds into a broader issue, I want to make this point.

I agree with everything Teachta Connolly said on this issue. We ask questions to get clarity. Unfortunately, we have not got clarity. There is more confusion now than there was before we got the correspondence. Obviously, that is problematic for is.

We are juggling many issues which is quite difficult for us. We have the issue of the Garda training college, as well as the third and fourth level sectors. We are going in the right direction in putting a focus on many of these issues. Caranua is a good example. I have said a number of times that we are holding hearings. The hearing was also in respect of the special report the Comptroller and Auditor General did on the redress schemes. Many were issues were raised by members with the Secretary General as to how the scheme was devised in the first place, false and mistakes and so on. Where is the follow up for the committee? If one looks at the structure we are putting around the third and fourth level area and the Garda training college, we are moving in the right direction.

Maybe we can do something similar here so that we know exactly what the follow-up is. Teachta Connolly has raised serious issues. I am not sure how it is best for us to proceed. It is not good enough that we have hearings and ask questions to which we receive inadequate responses. We just go back and forth in correspondence and do not get anywhere. We need to give some thought to dealing with this. It is somewhat similar to the other issues.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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These services were designed to provide for a particularly vulnerable group. Survivors bring up the issues of the legal costs and the fact that it was supposed to be mediated, along with other overheads. When an organisation is asked a specific question by the Committee of Public Accounts and does not answer it, the only conclusion we can draw is that the organisation does not want to answer the question. The group receiving services from Caranua is most vulnerable and is relying on us to get responses. We have to be very clear with Caranua that we want a yes or no answer. We do not want to go around the houses. We want clear responses and a commitment that we will not have lease arrangements hoovering up funds that will not be replenished, as Deputy Connolly has said. As the Deputy has also said, the timeline is important here.

Photo of Josepha MadiganJosepha Madigan (Dublin Rathdown, Fine Gael)
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I agree with everything the Deputies have said. Bord na gCon is coming in later and we have the issue of money spent in Limerick. Now we have a situation with the lease for Caranua. I have a sense of déjà vudiscussing these topics, which concerns me. Would the committee consider having a private meeting in which we set out how we are going to approach each of these questions that have not been addressed? I feel we are having the same conversation all the time.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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To be fair to Caranua, it has replied to us. The difficulty is that the reply is not easy to interpret. The more serious difficulty is with the Department of Education and Skills and the Office of Public Works. I do not know who told Caranua it had to move. It seems to have been both the Office of Public Works and the Department. One or other of them is telling Caranua it has to pay rent and cannot have a building for nothing. That seems to be the position. The board of Caranua, however, also seems to want a new building. I am not sure where the truth lies. Neither the Office of Public Works nor the Department of Education and Skills has clarified it for us.

Photo of Josepha MadiganJosepha Madigan (Dublin Rathdown, Fine Gael)
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The main thing is that we do not want money spent unnecessarily when it is needed for the more urgent issues of redress.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We are going to contact the Department of Education and Skills and the OPW. We will give them the transcript of what has been said and cover the points we need clarified. That letter from the Department of Education and Skills does not clarify the matter at all. It is actually confusing because on the one hand, it claims that the legislation states they shall pay their own costs, while in the previous paragraph the impression is given that they had it free for a period and are now being charged for a lease extension. They are even contradicting their own stated position in their letter, on the face of it.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I know the Chairman has been very generous with the time. If he will allow me, when the Department official was here he said he would go away and check. That in itself was disingenuous because they have been involved with Caranua from day one. It has come up repeatedly in the minutes from 2013 in respect of the premises. The Department of Education and Skills is part of this process.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We are concluding this. We need proper clarification. That letter does not satisfy the Committee of Public Accounts in terms of clarity. We want the issues raised here and the transcript given to them.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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We do not want a lease signed.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will state that in the letter as well.

We have covered both of those items, Nos. 480B and 481B. I also want to record apologies from Deputy Alan Farrell who is not here this morning and has sent me a note.

The next correspondence item is No. 478B from Mr. Seán Ó Foghlú, Secretary General of the Department of Education and Skills, providing the committee with the terms of reference of the independent investigation being carried out by the University of Limerick. Mr. Ó Foghlú has asked that the independent review consult with members of the Committee of Public Accounts on their involvement in the process. In order to assist this, I would ask the secretariat to forward a transcript of our meeting and ask members to submit any proposed additions or changes to the terms as they are. The secretariat will be happy to compile them. This gives us an opportunity in addition to what we said as per the transcript to have other items considered as part of the investigation. Members should submit any such proposals to clerk to be compiled and sent on.

The next item is No. 489B(i) and (ii), further correspondence from Mr. Seán Ó Foghlú in follow-up from the committee meeting on 13 April 2017 on the cost of redress and Caranua's financial statements. The areas covered include meetings with religious orders, a note on Barnardos service, a list of all institutions contributing to the redress scheme, a list of property and lands offered by the Sisters of Mercy, property offered and transferring under the 2002 indemnity scheme, properties offered on a voluntary basis, and a note on the Christian Brothers playing fields. There are many pages in this correspondence. Have members had an opportunity to read them? While we note and publish the correspondence, I think we will hold it over as part of our consideration of the Caranua issues.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I have one question which might be clarified in due course. It concerns section 4(b) of that long document, properties offered to the State and State bodies on a voluntary basis in 2009 and accepted for transfer. Do I take it that they have now been transferred and accepted? That is good news. However, being parochial, I do not know if St. Anne's, Lenaboy Castle at Taylor's Hill in Galway, the former industrial school, has been transferred and accepted.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It does not mean that at all. We had a case in Portlaoise in which a property was offered and taken back and then they offered money. There can be a lot of legal impediments to completing the actual transfer, even after people accept and agree to do something.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That was for 2009, it said it was accepted and transferred. The transfer might not have been completed, but has the offer been given and accepted?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes, but I think we need to know whether the transaction has been completed.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That building in particular has huge significance. I mix up the reformatories and industrial schools although I should not. It is lying idle. I was only there on Sunday. The former residents come back and visit it every year and go to the grotto. We have asked in the past for it to be transferred to the city council. At the time, they offered it to the Health Service Executive, which did not want it. If there is a chance for the city of Galway to get that building, it is an absolute golden opportunity. We have many ideas about how to use it.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will specifically ask in respect to that property. We will ask for clarification as to whether all those properties that have been accepted for transfer have been transferred. There is a quite a difference between accepting and completing a transaction.

The next item is Nos. 494(B)(i) and (ii), from Mr. Seán Ó Foghlú, Secretary General in the Department of Education and Skills, replying to the committee's request for information on the purchase of Harold's Cross stadium. We will hold this over until the meeting with Bord na gCon later this morning. Will will note and publish it for now.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Will there be any input from the Department of Education and Skills at the hearing this morning?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I would not have thought so. It is just the greyhound board resuming the discussion. We can follow up items by way of subsequent requests afterwards.

Correspondence item 497B, dated 16 May 2017 from Bord na gCon, provides follow-up information from our meeting two weeks ago on pensions, employment details, Harold’s Cross stadium, the marketing strategy and a note on the organisation review. We note and publish this and will discuss it with them shortly.

Category C is individual correspondence from persons, not Government Departments. No. 476C is correspondence dated 9 May 2017 from the UK Public Accounts Committee Network, informing us that the conference to be held in June has now been postponed until September.

We will note that.

Nos. 478C(i) and (ii) are correspondence received from the Department of Public Expenditure and Reform with a holding answer on a reply regarding the wards of court issue sent to it for a response. We are still waiting for that and will note that.

Nos. 479C and 486C are correspondence dated 12 May 2017 received from an individual regarding the evidence given by the former president of the University of Limerick. As an independent review has begun, I suggest we seek permission from this individual to send this letter, along with a copy of the transcript mentioned, to Professor Richard Thorn, who is leading the investigation. Is that agreed? Agreed.

Nos. 482C(i) and (ii) are correspondence dated 18 April 2017 from an individual wishing to remain anonymous regarding the inability of the HEA to carry out its functions. I think the matters raised deserve some consideration by members when considering matters related to the third-level sector. We will come back to complete our consideration of the third-level sector so we will note it and hold it over for exercise.

No. 483C is correspondence dated 9 May 2017 from Mr. Jim Breslin, Secretary General, Department of Health, in reply to the committee seeking information on Novartis. I suggest that we note this correspondence and forward a copy to the original correspondent who wrote to us.

As for Nos. 484C(i) to (iii), inclusive, 485C, 490C and 491C, this is correspondence received from Deputies Alan Kelly, Catherine Murphy, David Cullinane and Mary Lou McDonald and myself, respectively, with recommendations for the committee on potential witnesses and how to structure the forthcoming examination into the Garda College in Templemore. We will discuss this in private session before we go into public session.

Nos. 488C(i) and (ii) are correspondence dated 12 May 2017 from NAMA in reply to correspondence regarding the sale of the Savarin portfolio in the Czech Republic. We will note this response and forward a copy to the original correspondent. Is that agreed? Agreed.

No. 492C is correspondence dated 11 May from George O'Callaghan, chief executive officer, the Limerick and Clare Education and Training Board, ETB. The correspondence is a reply to the committee on the late presentation of accounts of the ETB. Can we see that on the screen? It is saying it expects to have its 2016 accounts submitted to the Comptroller and Auditor General by September 2017. The 2017 accounts will be submitted in the first quarter of 2018. That seems reasonable. There is background information regarding the difficulties but at this point, we just want to make sure it gets up to speed now. It seems to be but we will check that as time rolls on. It is a reasonable response.

The next item concerns Nos. 493C(i) to (iii), inclusive, correspondence dated 5 May 2017 from Patricia Quinn, managing director of Benefacts, with a copy of its annual report and a report on non-profit sector analysis. The report is very interesting and I suggest that all members give some time to read it.

No. 495C is correspondence dated 15 May 2017 from Deputy Alan Kelly. This is an email containing a reply from the Tánaiste's office on a matter raised in the Dáil by Deputy Kelly on the finances in the Garda College and related matters. We will discuss that shortly when we discuss the issue relating to the Templemore issue.

No. 498C is correspondence dated 16 May 2017 from Deputy Alan Farrell stating that he wishes to discuss the Department of Defence's disposal of the naval vessel, the LE Aisling. Deputy Farrell is not here so we will hold it over. Obviously, we will want to get information from the Department. In the absence of Deputy Farrell, we might agree on his behalf because we know what he is looking for, which is to write to the Department for a full briefing on the matter. His letter is on the record.

Photo of Josepha MadiganJosepha Madigan (Dublin Rathdown, Fine Gael)
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He had not spoken about it but I am sure-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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He would not expect us to hold things up. His letter is on the record and we appreciate his letter. He is just not here in person.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Has he entered the race?

Photo of Alan KellyAlan Kelly (Tipperary, Labour)
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Given what is in the public domain and the previous discussion with the Department of Defence regarding other issues, we should write to the Secretary General of the Department of Defence asking for his detailed report on this and how it was dealt with.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will proceed with that straight away. I will inform Deputy Farrell of that.

Mr. Seamus McCarthy:

It relates to 2017 transactions. It will be examined.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will look at that report in September 2018 if we are all here.

Nos. 499C (i) and (ii) are correspondence dated 2 May 2017 from the Oireachtas Library and Research Service requesting permission to circulate a report requested by the previous Committee of Public Accounts on the remit of the Committee of Public Accounts. A copy of the document was requested by another Member of the Houses. Is it agreed that we make this document available to the Member? Agreed. The Library and Research Service has a protocol. If somebody asks it to do a body of work, it does so but before a third party seeks a copy, it must get the consent of the person who asked for the work to be done. We have no problem regarding making a document on the remit of the Committee of Public Accounts widely available. We will note and publish that ourselves. I think it is doing some further work on it. It is a very useful document that is helpful to us. The last Committee of Public Accounts went to the trouble of getting a document produced so I ask members to read it in their own time. We will give the Library and Research Service permission to release to whoever requested it.

The next item on the agenda is statements and accounts received the last meeting, of which there are only a couple. The first one is the Revenue account. As the account of State revenues and income received, it is only a slight matter of €66 billion in total revenues to the State in 2016. The Revenue Commissioners are scheduled for a visit and we will deal with that then. There is a clear audit opinion. The next item is the Irish Museum of Modern Art for which there is a clear audit opinion. The next item is the Sea-Fisheries Protection Authority for which there is a clear audit opinion for 2015. The next item is the National Library of Ireland for which there is a clear audit opinion for 2015. In respect of the Irish Museum of Modern Art, the Sea-Fisheries Protection Authority and the National Library of Ireland, it is 17 months after year end. That is an excessive period in all three cases. Does the Comptroller and Auditor General know when they were presented to him?

Mr. Seamus McCarthy:

I do not have the detail of when we received their draft financial statements but they were all completed in December 2016. We tend to prioritise the bigger accounts so that is why the 2016 Revenue account is done. We will be doing the audits of the smaller entities over the summer. We try to spread the work over the year and to prioritise the bigger accounts. It is a difficulty.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We know that but it is still 17 months since year end. The Comptroller and Auditor General might have completed his work some months ago and it took-----

Mr. Seamus McCarthy:

Allowing for late completion, they probably got them in late January so the expectation would be that within three months, they should be here. For a number of these, there is really no particular reason for delaying.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I thought three months was for special reports. Is it for annual reports?

Mr. Seamus McCarthy:

It is a different set of rules around the presentation of financial statements. The expectation is that we give the audit certificate to the body, which is expected to give it to the Minister within a month. It is expected that the Minister will approve the presentation of it within two further months. It is one of the issues we deal with in the report on the timeliness of financial reporting.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will come back to that separately because there seems to be an unnecessary time lag.

We will go into private session to discuss the work programme with regard to the issue of the whistleblower in the Grace case and the interim audit report on the Garda College in Templemore. Is there any other business?

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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As part of the work programme, could we have a quick discussion of the third and fourth-level sector? Are we returning to it next week?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes. As there are no other items, we will go into private session and will resume in public session with Bord na gCon.

The committee went into private session at 9.40 a.m. and resumed in public session at 11 a.m.