Oireachtas Joint and Select Committees
Thursday, 19 October 2017
Public Accounts Committee
Business of Committee
The committee is joined by the Comptroller and Auditor General, Mr. Seamus McCarthy, as a permanent witness to this committee, and he is accompanied today by Mr. John Crean. Apologies have been received from Deputy Peter Burke.
I welcome Deputy Pat Deering to the Committee of Public Accounts and we look forward to working with him. Deputy Deering replaces Deputy Josepha Madigan. Unfortunately, because of a family bereavement, the Deputy is not able to be with us today.
I want to hold over the minutes until the next meeting to have a review of them. We will move straight to the next item, which is correspondence.
Correspondence Nos. 817A and 818 are briefing documents, including an opening statement from Tusla for today's meeting. We can note and publish that.
Next item is Nos. 822A (i)to (iv), which are the opening statement and supporting documentation from the Health Information and Quality Authority, HIQA, for today's meeting, and we have received a revised opening statement this morning. Have members received the revised opening statement that arrived this morning? I want to demote yesterday's statement from the committee documentation because it has been replaced by the opening statement from this morning.
As committee members, I am assuming that because both have been circulated to us, we have both. We cannot pretend that we do not. It is most unusual. I do not know whether we have ever had circumstances where an opening statement has been recanted before it has been delivered. We have both.
We will discuss the HIQA correspondence. There might be a legal issue. The documents we discussed last week had "legal privilege" written on them. We have received correspondence to say that legal privilege is not withdrawn. We will come to all of that collectively because it is all connected. We must consider that point when we come to it.
We will deal with all the HIQA-issued correspondence as one item in a few moments.
We will now deal with the other routine items of correspondence. The next item of correspondence is category B, dated 11 October 2017 from Ms Moyagh Murdock, chief executive officer, CEO, of the Road Safety Authority following a request from the committee to provide information in respect of the impact of vaccines at board level.
My mistake. I wondered about that. There is an explanation on the non-competitive procurement of goods and services. We will note that reply.
The next item is correspondence No. 806B received on 11 October 2017 from Ms Joanna Murphy, chief executive officer of ConnectIreland. The correspondence, which relates to the meeting with the IDA on 5 October 2017, states that comments made by Mr Martin Shanahan, CEO of IDA, regarding a job creation target for the Succeed In Ireland initiative were not accurate. We will publish this document and write to the IDA for a detailed response. When we receive the response we will discuss it and how to proceed. It flatly contradicts some of the items the IDA mentioned in the meeting.
I also sought information from the IDA. I did not see it come in. It was specifically about how it calculates how many jobs are actually created by its clients. The CEO stated in his response that a survey is carried out, which is presented to the companies to fill in and is then monitored. The monitoring, however, seems to consist of information that is provided by the companies. There do not seem to be any real checks. It is important, because we need to have accurate figures. I asked for the methodology and precisely what the IDA do. Can that be followed up on, to ensure that we get it?
The IDA has stated that ConnectIreland is in dispute with it and that it is a contractor. We have no way of knowing if this is good or bad value for money. I have a major concern about that. I would like to see more about this but I do not know where we could fit it in. It might be a case of having an hour-long engagement with the IDA. I am not sure whether it is appropriate to have an engagement with a subcontractor, which means we probably should engage with the IDA directly. I am not satisfied with what we are hearing. I do not want to take a reassurance without satisfying myself.
We all know that ConnectIreland has contacted various Members of the Oireachtas and has had meetings with many people. As a first step we should get a response from the IDA and then take it from there. I am not long-fingering this. That company has made its case to quite a number of people in the House. We will come back to it once we get a response from the IDA.
There was also a concern raised about the IDA's response to the question of how much it costs to create a ConnectIreland job as opposed to an IDA job. The CEO said that there is no methodology to calculate how much it costs to create a ConnectIreland job. ConnectIreland says differently. There is obviously a dispute there. We need accurate, full information. Either there is a methodology to work out how much it costs to create an IDA job versus a ConnectIreland job or there is not. I am not satisfied with the response the committee received at the last meeting. It was a bit glib.
This item of correspondence from ConnectIreland has to be teased out fully, and it will be. This is the first step. We will get a response from the IDA and take it from there.
I should have said that the Road Safety Authority item mentioned earlier was reference No. 825B. I made a mistake there.
Correspondence item No. 823B dated 18 October from Mr. Tadhg Daly, CEO of Nursing Homes Ireland, will be discussed as part of the HIQA debate in a moment. We need to get the routine correspondence out of the way and we will come to the Nursing Homes Ireland and HIQA correspondence then.
It is the main item of discussion in correspondence, and I want to get the other things out of the way. That is all I am doing at the moment.
The next item is No. 808C,correspondence dated 13 October 2017 from Alan Kelly with a list of questions to be forwarded to Cork Institute of Technology. Can we note that? The letter has been issued by the secretariat.
As a general point, we often agree at this meeting to ask questions of bodies and send the questions on to them. On some occasions members have been asked to forward individual questions to the secretariat. When the letter goes out from the secretariat it is in the name of the Committee of Public Accounts, and it might be the particular view of a particular member. In future, when follow-up questions are sent in from individuals, the rationale for the question should be clarified. If questions are sent out in the name of the committee we have to be satisfied there is a rationale to the question.
The questions that have been submitted have been sent out. Members should understand that it is in all of our interests to know what questions are being asked in our name.
The next items of correspondence are Nos. 809C(i) and (ii), from an individual to the Taoiseach in respect of the issue of teachers not being State employees despite being covered by public sector pay deals. We have written to the Department of Public Expenditure and Reform on this matter and are awaiting a reply.
The next items of correspondence are Nos. 810C(i) and (ii), dated 13 October, from Ms Tereasa McGuire, chairperson of the Mayo, Sligo and Leitrim Education and Training Board, MSLETB, providing an update as requested by the committee on the status of the 2015 and 2016 accounts, which are still outstanding. I propose that we write to the ETB saying that it is our expectation that the 2017 financial statements will be completed within six months of the year end. The Comptroller and Auditor General might wish to comment on this matter, given the letter from his office to the MSLETB. Is he satisfied that progress is being maintained?
Mr. Seamus McCarthy:
Yes. I am in agreement with everything that is in the ETB's letter. We are progressing on the 2015 accounts. I expect to have those completed by the end of this year. The 2016 accounts are due to be submitted by the end of October, and we will move as quickly as we can to get those completed.
We will acknowledge this letter and tell the ETB that we expect the 2017 financial statements to be completed within six months of year end, which is the normal procedure. Is that agreed? Agreed.
Next is No. 812C, dated 13 October, from the general secretary of Education and Training Boards Ireland, ETBI. He has also spoken to the clerk by phone. The general secretary points out that the ETBI is a voluntary body and does not have any governance role over ETBs. Rather, its job is to promote the interests of the sector. As such, it does not have a similar role to that of the Higher Education Authority, HEA, in respect of the third level sector.
When we discussed inviting a number of ETBs to appear before us, members asked that we also invite the ETBI, but it is a different type of organisation than the HEA, in that it is not a conduit for funds and receives no State funding. It is just an association. It has annual conferences and might arrange training, but it is not funded directly. It has no oversight role even though it has a fancy name. Given that the oversight role in respect of ETBs remains with the Department of Education and Skills, I propose that, when we are engaging with the sector, we should direct these questions to the Department. I see no role for the ETBI in our examination.
When we debate our work programme and decide which ETBs to invite, I ask that members submit which ETBs they would like to attend and the rationale for same. There are 16 of them and we will not invite them all, so let us have a rationale for choosing which to invite rather than just members choosing to invite - or not invite, as the case may be - their own ETBs.
That is right. It is an item on our work programme, but it does not have to be done immediately. I am asking whether members have any particular ETB in mind. At the beginning of the month, we received a note from the Comptroller and Auditor General to the effect that there were outstanding issues in respect of the Kildare and Wicklow ETB. As the Deputy mentioned, there is an investigation. The Limerick and Clare ETB's 2015 audit is still in progress. Audit queries remain outstanding in respect of the Louth and Meath ETB and the process in respect of the MSLETB is still under way.
Mr. Seamus McCarthy:
I wish to add something. I misspoke earlier. The MSLETB's 2014 financial statements are not completed. We basically got two sets - 2013-14 and 2015 came in June and July. The two audits have been completed and we are working on following up on items arising from those. We expect to have the two of them done by the end of this year.
Leaving the Kildare and Wicklow ETB aside, and so that we might have a decent sample of ETBs to invite, it would be useful to be steered by the Comptroller and Auditor General as to which ETBs there was most engagement with on their accounts or where the same profile of issues emerged.
Mr. Seamus McCarthy:
I can discuss what might be interesting with the clerk. There is great variety in them. Some are the amalgamations of three vocational education committees, VECs. Some have not amalgamated with any other. The experience is different. The City of Dublin ETB deals with Student Universal Support Ireland, SUSI, which is in a class of its own in terms of scale of operation and so on. I will speak with the clerk and give some suggestions.
I am not fixed to this, but I will suggest the City of Dublin ETB, given its sheer size. It would be an obvious one, seeing as how it is the largest by a mile. I have no particular issue with it, but it would be strange not to invite it to attend. It is the most prominent ETB, so inviting it to attend would almost be automatic.
Absolutely. We will discuss that and perhaps agree at our next meeting which ETBs to invite. We have scheduled a November date for them, so we will try to finalise which to invite next week.
The next items of correspondence are Nos. 813C(i) to (iii), inclusive, dated 13 October, from an outsourcing company called Forward Emphasis. The company is trying to ascertain whether properties of dissolved companies pass to the State and whether it can buy such a property to expand its company.
I have raised this matter outside the committee previously. Forward Emphasis knows that a company has been dissolved and that there is an asset. It understands that the assets of dissolved companies transfer to the State legally and it wants to buy an asset from the State. For the benefit of members, I raised this issue following a previous meeting by way of parliamentary question. According to the Minister for Public Expenditure and Reform, when a company such as the one in question is dissolved, its remaining assets automatically transfer to the State. The State has no mechanism in place to know which assets are being transferred to it, which is extraordinary.
I asked a further question on this topic. This person might have written to us after seeing my parliamentary question. I asked what monetary assets had been transferred to the State from dissolved companies. In 2013, they amounted to €151,000. In 2014, they amounted to €10.8 million. In 2015, they amounted to €513,000. Last year, they amounted to €371,000 up to the date of my parliamentary question. The €10.8 million was from a single company's bank account outside the State. It landed out of the blue and was lodged into the Central Fund.
All that we can do is ask the company to engage directly with the Department of Public Expenditure and Reform. The Department is the only body that should have a handle on assets automatically transferring to the Minister, but we now know that it has no handle on that at all. The company should take up the issue with the Department. We will advise it accordingly of where to go.
Yes. As the current Chairman, I raised this matter arising from a previous Committee of Public Accounts that dealt with the Social Insurance Fund, which handles unpaid amounts by employers in respect of PRSI, redundancy and insolvency payments. There was talk of collecting money from a widow who got something that she should not have got. After discussing the Social Insurance Fund and an outstanding €500 million to that account in the context of dissolved and non-trading companies, I raised this issue and pursued it.
It is in light of that I have discovered that it can actually happen that a company can be liquidated and there might be an asset at the end of the process. Any encumbrance on that asset also transfers to the State but the State has no mechanism in place to know whether the entity owned an asset.
If it is a case that there are properties that, theoretically, are owned by the people then they are wide open, if there is no register, to squatters' rights and are lost to the State, in any event. It is an important issue to raise.
We will take the matter up further. Last year, I tabled a parliamentary question on the matter on an individual basis but we need to formally follow up the matter now. We will ask the company to contact the Department of Public Expenditure and Reform directly and we will write to the Department directly asking it to put a system in place and advise us accordingly.
Yes. In fact we have encountered the other side of the equation where a local authority sought one of the pieces of land to go and there is a mechanism to do so. None of this is very transparent. It is not just one Department that has an interest but several Departments.
It is a bit like people who die intestate where one must rely on the solicitor, and I am probably not being exact when I say the following, to conduct a transfer. In terms of whoever liquidates the company, there can be an asset but the original owner may have left this jurisdiction.
Mr. Seamus McCarthy:
While it does not deal with the issue of identifying properties that can be taken in, if properties are identified, or moneys identified, which is the property of the State, it is actually paid into the State Property (Miscellaneous Deposits) Account. Traditionally we have audited it by agreement because it is not a statutory account. The figure that the Chairman mentioned of €10.8 million received in 2014 is in that account. Now that account is not formally presented to the Oireachtas.
This issue is, and it comes back to another question, what other accounts are out there that are not lodged to the central fund that we do not know about. This seems to be one of those accounts. We know that all of the FEOGA payments do not go through the Central Fund.
A sum of over €1 billion comes to Ireland out of that fund. It does not come through the State accounts or the Estimates, and does not come through the Dáil at any stage. We have discussed this matter when we got the FEOGA accounts because the matter arose when we had the Department of Agriculture, Food and the Marine here. There are a few extra accounts out there.
Ultimately, in regard to real property as in buildings or land, if somebody comes back he or she can ask to have the company reinstated, within the 20-year period, and get his or her assets back. That is probably why the assets have to be held for 20 years----
Having said that, it is easier to audit something when it is cash. In terms of the value of the assets, whether lands or buildings, if continual valuations have not been carried out then how can one conduct an audit? Could some of it be used, if there is something from 20 years ago? I am aware of a piece of land that was transferred from a Department on which a Garda station was built. I am aware of the situation and familiar with the case mainly because there was a dispute over who owned the land. Could pieces of assets be used to build houses on?
-----because we have identified a gap.
The next item is No. 814C from Sage support and advocacy services, which attaches a discussion document entitled Contracts of Care for Nursing Home Residents - Issues of Policy and Practice. The matter will be of interest to members. As a matter of policy, I propose we forward it to the Oireachtas Joint Committee on Health for its consideration. Is that agreed? Agreed.
The next item is No. 815C, dated 15 October 2017, from an individual questioning the economic justification for the holding of a stand-alone referendum next summer when a further referendum is planned for next autumn. This is a matter of Government policy and is not within the remit of the committee. I propose that we write back to the correspondent saying that and note the matter.
The next item is No. 816C, dated 16 October, from an individual in relation to the sale of a loan note attached to an hotel in Kinsale by NAMA. The individual questions whether the interests of the State were best served and raises a number of questions. I propose that we write to NAMA for a response to these and we can consider the matter when we get the response. Is that agreed? Agreed.
The next heading is statements and accounts and there are three statements of accounts. I will come back to all of the HIQA-related correspondence. The first of three statements and accounts is the National College of Art and Design, a qualified audit opinion on the basis that it did not keep adequate accounting records and failure to control governance over the year's, an operating deficit of €758,000 and an accumulative deficit of €1.4 million. The basis for the recognition of deferred pensions is an issue. The 2014-15 financial statements were certified on 3 October 2017 but have not yet been presented. When will we see the 2015 and 2016 accounts?
Mr. Seamus McCarthy:
I did report in 2014. I do not know if members remember, I prepared a special report on the difficulties that there were in the college. They got into very deep arrears of completing financial statements. They have been working hard to retrieve the situation and progress is being made in relation to that. A new board was appointed in 2015. So, if one likes, dealing with part of the next accounting period, the one that I have signed off on, we are working on 2015-16 accounts. We will move as quickly as we can with the college to bring them up to date.
-----asking where their 2015 and 2016 accounts are and for a detailed response to the matters that the Comptroller and Auditor General drew attention to in his audit report.
The next item is No. 4.2, the Commission of Aviation Regulation, which is a clear audit opinion. We note that.
The next item is No. 4.3, Microfinance Ireland Limited 2016 account, which is a clear audit opinion. That is the end of the accounts.
The next item on the agenda is the work programme.
There is nothing to add to the work programme. If people have specific issues about a particular ETB that they want to be included in the work programme, they should write to the secretariat and outline why they think it should be included.
There has been no response. It normally takes a couple of weeks. If we meet here on Thursday, it is probably after the weekend by the time the letter goes out. There is a lot of work to be done so they probably have only received it. We give them a short period of time but we have a checklist to make sure we get them all back.
We are now back to dealing with items of correspondence in connection with Nursing Homes Ireland and HIQA. I will refer to the various items of correspondence first. We will then discuss them because they are all on the same issue. I want to put them all together for discussion. Items Nos. 822A(i) to (iv) are the opening statement and supporting documentation from HIQA for today's meeting. We received an opening statement yesterday and a revised opening statement this morning.
The next item of correspondence related to this is correspondence dated 18 October from Tadhg Daly, CEO of Nursing Homes Ireland, declining an invitation to appear at the committee. I will read that letter into the record. It is a short letter. We wrote to Nursing Homes Ireland after the last meeting after we had considered the correspondence that had been sent to us anonymously. We discussed it at the last meeting. The committee received that documentation and it was circulated. We wrote to Nursing Homes Ireland and the reply that came in yesterday said:
I acknowledge receipt of your request to NHI to attend, as a voluntary witness, a hearing before the PAC next Thursday (19th October) in regards certain matters that have been the subject of recent media coverage.
The Board of Directors has instructed me to reply as follows.
I am not in a position to attend such a meeting at this time. It is also important that I emphasise that all information connected with the matters to which you have referred, and aspects of which have been the subject of certain recent media reports, remains strictly confidential and covered by legal privilege.
It is a matter of the most serious concern to NHI, its officers and its memberships that purported extracts of a clearly recognised confidential and legally privileged memorandum have appeared in the public domain. NHI has not waived privilege over the content of its documentation and continues to rely on the strictly confidential nature of the information to which you have referred. Equally this privilege also applies to the setting within which the discussions you refer to took place, as this involved a consultation with legal advisors. The priority for NHI remains to ensure that there are no further breaches of NHI's legal rights, or of the legal rights of its officers, ex-officers and members.
A further issue which prevents me from accepting your invitation to attend is that you have not provided me with the nature of the questions which the members of PAC might wish to canvass and as you will appreciate this substantially curtails my ability to prepare appropriately for any such meeting. Should you wish me or any other officer of NHI to re-consider such a request in the future I would respectfully ask that you would provide an agreed agenda, including a schedule of agreed questions which the members of PAC intend raising, and that you would do so within a reasonable time frame in advance of such a meeting.
As a result of that, it is clear the document we received the last day was a document prepared for Nursing Homes Ireland which it says is legally privileged. It is saying it is not waiving its legal privilege. The issue is that the Oireachtas has a job to protect the rights of citizens and citizens have rights to legal privilege. It is not the function of the Committee of Public Accounts to ignore that we have been specifically informed in legal writing that these documents have legal privilege regardless of how they came into our possession. They were published in the Sunday Independentwhich is the reason we discussed the matter. It is the function of the Oireachtas to protect our citizens and their legal rights. I am just making that statement before we decide what to do.
Our function is to protect the legal rights of the citizens and taxpayers who pay into the nursing homes support scheme fund, otherwise known as the fair deal scheme, which finds its way to public, private and voluntary nursing homes and which has been the subject of considerable comment and controversy as we have said repeatedly in recent times. When private nursing homes interact with the National Treatment Purchase Fund, which administers taxpayers' money, they have to do so on an individual basis. To act collectively is illegal. We are all about observing the letter of the law. I find this letter from Mr. Daly quite extraordinary and unacceptable. It is unacceptable that he is refusing to come in and assist the committee with our deliberations. We have in our possession not an extract of minutes but the complete minutes of a meeting that Mr. Daly convened on 23 October 2015. It was with three partners from Eversheds who are Nursing Homes Ireland's legal advisers. Mr. Brian McEnery, who is the serving chairperson of the board of HIQA, which regulates nursing homes, was also in attendance at that meeting. The provenance and authenticity of the minutes of the meeting have not been challenged anywhere so far as I can see. The minutes were signed off on by Dermot McEvoy who was in attendance at the meeting and who is a partner with Eversheds.
I am very alarmed by Mr. Tadhg Daly's correspondence. It is regrettable that he will not be here to assist us with his inquiries. Mr. Daly will be aware that we wish to speak to him about a number of issues and newspaper accounts of a meeting that occurred in October 2015, which I understand he convened. These raise very serious issues. We understand that issues regarding using a collective effort to bring the State to the table to extract more money from the fair deal scheme were considered and debated at this meeting. We also understand that methods of increasing voluntary or individual contributions in private nursing homes were also discussed. Of course, it is not appropriate - in fact, it is illegal - for a collective effort to be entered into in those matters, which is alarming. The whole area of conflicts of interest is also alarming. As we have seen reports of it, we know that Mr. Brian McEnery, the serving chairman of the board of HIQA, also attended this meeting.
We cannot overstate the seriousness of the matters that arise. Mr. Daly needs to present himself to the committee. He will be aware that we are in receipt of documentation and that we are in receipt of an email he sent to members of Nursing Homes Ireland. He will be aware that we are in receipt of correspondence in which he directs those same people to destroy the minutes we have. All of this is very disturbing. While I know Mr. Daly would be presenting himself as a voluntary witness, I am sure he would not contest the fact that large sums of public money find their way into private voluntary nursing homes, all of which are members of his organisation. It is essential and it is in the interests of Nursing Homes Ireland that he present himself before us.
Regarding the letter from Mr. Daly and Fiona Kenny, I agree with Deputy McDonald that it is regrettable that he has declined to come in on this occasion and is unavailable. However, he has agreed to come in as a witness and we should embrace that. We should have him in here. We do not know how accurate the report from a Sunday newspaper is, from which serious issues arise, but it is extremely important that he comes in..
Earlier the Chairman dealt with correspondence on nursing home contracts. On Thursday, the Ombudsman, Mr. Peter Tyndall, launched an important document on nursing home contracts prepared by Sage. It is important to support an advocacy service for vulnerable adults and older people, the issues relating to nursing home contracts and so on. There is another side relating to vulnerable people. It has come up clearly and I know we will deal with it.
We should write to Mr. Daly and get him to appear before the committee at a mutually convenient time. His presence here is extremely important. It is important that he has offered to come in and, subject to further clarification, we should do that.
I agree we should afford Mr. Daly the opportunity to appear before the committee as soon as that is possible for him. I wish to return to one paragraph of his letter, which the Chairman read out as follows:
It is also important that I emphasise that all information connected with the matters to which you have referred, and aspects of which have been the subject of certain recent media reports, remains strictly confidential and covered by legal privilege.
If something is in the national media, we cannot un-see it. It is perfectly valid for us to act on something that is in the newspapers that is drawing attention to an issue of major concern. It is perfectly valid and it would be absolutely inappropriate for us not to follow up on it. It has been raised here on numerous occasions that the fair deal scheme requires a thorough investigation. This particular aspect would be very much part of the deliberations that would take place at a single point or over a number of meetings.
I agree with everything that an Teachta McDonald and the other speakers have said and I will not go over it again. I know the witness has said he needs to leave by 12.30 p.m. and we have spent a lot of time in private session. Is it possible for us to ask him if we could get an extra half an hour?