Oireachtas Joint and Select Committees

Thursday, 9 November 2017

Public Accounts Committee

Business of Committee

9:00 am

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We are joined by the Comptroller and Auditor General, Mr. Seamus McCarthy, who is a permanent witness at the committee. He is accompanied by Ms Georgina O'Mahony, deputy director of audit. We have received apologies from Deputy Mary Lou McDonald.

The first item on the agenda is the minutes of the meetings of 24 and 26 October. Are they agreed t? Agreed. As any matter that may arise from the minutes will arise in the course of our work this morning, we will move straightaway to the third item on the agenda, which is correspondence.

There are three categories of correspondence. Category A is correspondence specific to this meeting. Items Nos. 869A and 876A are the briefing document and opening statement from the Department of Communications, Climate Action and Environment. We will note and publish them.

Category B is correspondence received from Accounting Officers and Ministers in a follow-up on previous meetings, with other items for publication. Item No. 839B( i-ii) is correspondence, dated 24 October 2017, received from Mr. Gordon Bond in the remuneration, industrial relations and pensions division of the Department of Public Expenditure and Reform. It is in response to the committee’s request for information on the terms and conditions of employment of certain State employees. It appears from the information provided that there are approximately 230,000 people who are paid by and entitled to pensions from the State but who are not employees of it.

The same applies to work in agencies funded by the HSE and the schools and universities in the country.

The committee followed up the matter, which was raised by an individual, in respect of teachers in particular. The individual has copied us with other correspondence, which we will deal with later. The individual raised the question of how teachers can be in receipt of State salaries if they are employed by the local school boards of management. It is an interesting question.

From previous correspondence, I understand that the relationship of the State and schools is derived from the provisions of the Constitution. The State has a constitutional obligation to provide for free primary education. The Department says that the State discharges its obligations by paying teachers in national schools owned by the churches; making grants available for renovation, repairs and, at times, building of new national schools; and paying for heating in schools, books and the provision of proper curriculum and appropriate supervision. In accordance with the provisions of the Education Acts, the board of a school manages the school on behalf of the patron. The Minister for Education and Skills operates a payroll service in respect of teachers and special needs assistants on behalf of the boards of management. The Minister has statutory functions in terms of setting terms and conditions of employment for teachers and special needs assistants.

I am unsure whether this is clear in legislation and I would like to receive a note from the Department on the matter. I note the correspondence did not deal with secondary schools or third level institutions. We will seek specific further information on the legal position. The Department has outlined the general position. Can we agree to get a further note on that before we consider it further? Agreed.

The next item is 840B, correspondence dated 24 October, from Barry O'Connor, president of Cork Institute of Technology, providing details, as requested by the committee, regarding a retirement function for the previous president of the college. The retirement function cost a little under €13,000 and was signed off by the outgoing president himself. That is an issue we specifically asked about and I imagine many people will have trouble with it. We will note and publish the correspondence. The details include €4,892 spent on catering and €5,000 spent on tables, frames, drapes, carpets and audio-visual set-up. A total of €1,840 was spent on senior staff invitees at the president's dinner. There were cleaning costs and caretaker overtime costs. A music quartet played as well.

The account has been paid in full but I believe some element of control within the finance section of Cork Institute of Technology must not have been followed. We will note and publish the correspondence. We will ask the Higher Education Authority to examine the controls that were in place and whether it could happen again.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I propose that.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That is grand. You are happy with that, Deputy. We will proceed on that basis. I thank the Deputy. We will get further information on it. Although that particular horse has bolted, we have no wish for another to bolt.

The next item is correspondence No. 841, dated 24 October, from Seán Ó Foghlú, Secretary General of the Department of Education and Skills. As requested by the committee, the correspondence follows up on the transfer of properties as part of the redress scheme and costs of the child abuse inquiry. The Department says that it will continue to provide regular updates to the committee in respect of the progress.

I have a proposal in this regard. Some of this is 15 years old. If someone said the Department of Education and Skills was to start something today in respect of the transfer of properties and that in 15 years' time the Committee of Public Accounts was still being told that the matter had not been finalised, it would be outrageous.

Representatives of the Department of Education and Skills will be before the committee next Thursday in any event to discuss educational and training boards. I propose that we allocate the first 15 minutes of the meeting specifically to this matter. It is 15 years on and it has not been dealt with. We might allow two speakers five minutes each. We will not all get in but we cannot let this pass. We will note and publish the correspondence.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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This is a matter that I have followed up and raised repeatedly. Certainly, if representatives of the Department are appearing before the committee to answer questions, I would like to ask some questions. This would have gone completely under the carpet only for the Committee of Public Accounts and the report of the Comptroller and Auditor General. That report set out the total cost of the redress board, the commission of inquiry and so on.

I zoned in on one building in Galway, which has remained empty since 2009. It was offered in 2009. I see from the latest clarification that the Government considered offers in 2011. It went from 2009 to 2011. The Government considered it again in July 2013. At that point, the Department took over. That is only one example. That building has remained empty all this time. It has an upsetting history, which I know intimately. The council in Galway called by motion for the building to be given over but it was refused. Rather than give it over and be used, it remained empty.

I am keen to go through all these buildings to discern precisely the position. First, this is a waste of money. Second, the deterioration in the building from that time is remarkable. That is only one example. It has now been handed over with a contribution of €750,000. That has been hailed as a donation to the city. In reality, it is part of a redress scheme. Certainly, it is the second part of the voluntary redress scheme.

I am dwelling on the matter because it has taken this much time to highlight the matter. At the same time, a different narrative was being shared with the people of Galway in respect of the matter. There are all sorts of narratives going on, but really the only narrative is that this building has been scandalously empty. The money that has now been handed over will not even come close to dealing with the deterioration of the building. Perhaps 15 minutes is not enough but certainly I welcome the opportunity to put questions.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Do you want us to put the Secretary General on notice to have specific details in respect of the Galway property?

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes. He has given more detail now and we know some details from the local radio, but I wish to discuss all the buildings, including Galway.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will put the Secretary General on notice. We will allocate 15 minutes to that. Since it is not the main business of our meeting we should limit it to those members who have a particular interest in it. We will want to move on to the main business of the meeting. Given that the man will be here and we have a letter from him today, I believe we should have a short discussion on the matter while he is before the committee prior to getting in to the main business. That is agreed. We will note and publish the correspondence.

Next item is correspondence 844B, dating from 24 October, from Graham Doyle, Secretary General of the Department of Transport, Tourism and Sport, providing information, as requested, on projects funded by the Department that are processed via the Transport Infrastructure Ireland payment management system. At our last meeting we asked for funding directly from the Department for various road projects. The correspondence refers to road restoration, maintenance, road improvement grants, discretionary grants, bridge rehabilitation, safety improvement, works training grants, special grants and strategic projects, various bypasses in Sallins, Adamstown, Portlaoise, Shannon, Laytown and Bettystown, Garavogue, Dingle and the Athy southern distributor road. However, not one item of money was attached to any of the projects. It is extraordinary to get a letter in reply when the Committee of Public Accounts asks for specific information in respect of the projects under 20 headings. The Department has not put one figure on anything.

We are sending the letter back and asking the Department to give us a proper reply with the appropriate money. We will publish the letter but we are sending it back. We do not accept that letter.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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In respect of the previous matter, there was one outstanding piece of information from the Comptroller and Auditor General report. I am sorry for going back to this. Under the 2002 agreement, outstanding moneys remain unpaid. Perhaps we could have an update on that as well.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That will be communicated to the Department of Education and Skills after today's meeting in advance of next week.

That is the reply from the Department of Transport, Tourism and Sport. It is being returned to the Department and we will ask for a comprehensive detailed reply.

The next item is 860B, correspondence dated 27 October from Ray Mitchell, parliamentary affairs division of the Health Services Executive, on the membership of the audit committee. There is a new addition to the committee. The committee has sent the details to us. We will note and publish the correspondence.

Next item is correspondence dated 27 October from Martin Shannon, chief executive of IDA Ireland, providing follow-up matters in respect of the meeting on 5 October. The matters covered include the accommodation costs of IDA Ireland centres abroad, grant aid on a county-by-county basis and a note on the independent assessment carried out by the IDA Ireland and the Department of Business, Enterprise and Innovation. We will note and publish that correspondence.

The next item is correspondence No. 864, dated 27 October, from Michael Nolan, chief executive of Transport Infrastructure Ireland. The correspondence provides a briefing note to the committee, as requested, regarding safety benefit appraisal of the national road scheme. We will note and publish that. It was requested at an earlier meeting.

Correspondence Nos. 865B1 and 865B2 are from Siún Hanrahan and Professor Alex Middleton, co-acting directors of the National College of Art and Design.

The correspondence provides an explanatory note on the status of the financial statements for 2014, 2015, 2016 and 2017 as well as progress in relation to meeting the requirement to publish financial statements in a timely manner. We will only accept this letter when we receive the accounts. We are still awaiting some of these accounts.

Mr. Seamus McCarthy:

That is correct, Chairman. To put it in context, obviously there has been a long running problem with the NCAD producing financial statements. We have had a difficulty with its accounting records for a number of years. Three sets of financial statements have been completed in the past 12 months and there are two further sets that require completion. We are working as hard as we can with NCAD to get those completed and to try to bring them forward for delivery within some kind of reasonable timeframe.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will note that and keep it under control. We will be coming to the issue of financial reporting in the public service separately in a few minutes. The next item is correspondence No. 866B from Mr. Marty Whelan of HIQA providing follow-up information to the committee arising from the meeting on 28 September. Matters covered include risk profiling in HIQA and the lease for HIQA's office in Smithfield. We will note and publish that correspondence.

The next item of correspondence is No. 875B, dated 7 November. This is also from Mr. Marty Whelan of HIQA providing a note on interactions between Mr. Brian McEnery on the establishment of Letsbuyhealthcare scheme as a partner in BDO and a copy of the invitation of Nursing Homes Ireland to Mr. Brian McEnery to attend a Nursing Homes Ireland meeting on October 2015, as requested at the committee meeting on 19 October 2017. We will note and publish that. For the record, we discussed yesterday in private session correspondence that the committee received, namely, the note of the meeting from Eversheds to Nursing Homes Ireland. The committee decided in private session that it will not be circulating that document and will not be referring to it in public session because the owner of that document, Nursing Homes Ireland, has claimed legal privilege. By and large, however, the contents of that document are already in the public arena and have been well publicised. Any discussion we will have will be in relation to the information that is already in the public arena but not in relation to that specific document.

The next item is No. 879B, dated 7 November 2017, from Mr. Marty Whelan of HIQA providing a note on the appeals mechanism for bodies which do not accept HIQA decisions. This is important given the issues raised by a particular nursing home discussed at our meeting two weeks ago. HIQA also includes an explanatory note, as requested, on the role and function of the chief inspector and delegation of that function. This is an issue to which we will return. We received correspondence from a particular nursing home last week and further information from that nursing home is on its way to us. We will consider that information when we receive it.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Is it the same nursing home as the one we discussed yesterday?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes, it is the same one. Further information is to come and we will consider it when we get it. That may happen next week.

The next item is No. 880B, correspondence dated 7 November 2017 from the Comptroller and Auditor General, Mr. Séamus McCarthy, attaching two notes on non-standard accounting processes in bodies audited by his office and accounts which are operated outside the Central Fund. It is good to get that note although I have not had an opportunity to consider it in detail. Does the Comptroller and Auditor General want to speak on it now?We will be returning to it as part of-----

Mr. Seamus McCarthy:

I think it is probably best to leave it over until people have had an opportunity to study it. There were two requests made by the committee around special purpose accounts operated by the Departments of Finance and Public Expenditure and Reform. There was also a request around the accounting frameworks that were being used and exceptions to standard accounting. We have tried to provide an overview of the situation.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will note and publish it but will hold over the discussion on it. I ask members to keep it to hand because it is a valuable source of information for us in terms of our work. I thank the Comptroller and Auditor General for that document.

Category C is correspondence from or in relation to private individuals and any other correspondence.Item No. 827C was held over from our last meeting.It is from Mr. Aidan O'Driscoll, Secretary General of the Department of Agriculture, Food and the Marine, providing information sought by the committee on the foal levy and impediments to basing the levy on the actual amount paid by the breeder rather than a standard nomination fee. We will note and publish that and provide a copy to the person who wrote to the committee on the matter.

Nos. 833C and 858C are items of correspondence from the last few weeks from the individual who raised the issue of teachers who are not State employees but who are being paid by the public purse. The items in question are copies of correspondence with the Taoiseach on the matter. Given the repetitive nature of the correspondence, I propose we direct the clerk not to circulate further items on which we are copied in relation to this matter. Documents are being supplied to this committee which are also being sent to the Taoiseach and others. We are not being asked to do anything with those documents. It amounts to a lot of correspondence and the issue has been raised with other people. It is not an issue that we can deal with directly so we will direct the clerk not to circulate any further correspondence from this individual on this particular issue.

Item No. 837C (i) (ii) and (iii) is correspondence, dated 23 October 2017, from an individual who made a disclosure to the committee in relation to the appointment of a person to receive protected disclosures in the Department of Employment and Social Protection. I understand that there have been other communications from the individual. I propose that we hold over all of these communications and that we consider them all together in coming weeks. This person has sent a lot of documentation to us.

Correspondence No. 843C, dated 25 October 2017, is from Mr. Aidan O'Driscoll, Secretary General of the Department of Agriculture, Food and the Marine providing an update, as requested by the committee, on the case of a particular individual and his herd. The matter remains sub judice and has not been progressed by the individual in question. I propose that we send the individual a copy of the correspondence and advise him that it is up to him to progress the matter further through the legal process that has been initiated. If the individual has initiated legal proceedings he cannot come to us and ask us to operate in parallel to such proceedings. It is one or the other and given that the legal process is still in existence, I propose that we write to him accordingly on that matter.

The next item, No. 846C, is correspondence dated 25 October from Mr. Hubert Loftus of the Department of Education and Skills providing a clarification in relation to the Education and Training Board Ireland, ETBI. The Department provides funding to the tune of €168,000 to ETBI for which it has a service level agreement. We will note that. We thought that ETBI was not funded by the State but that is not the case. It gets a small proportion of its funding from the State.

The next item, No. 848C, is correspondence dated 25 October 2017 from Deputy David Cullinane in respect of Connect Ireland and IDA Ireland and the criteria used for assessing job creation. The Deputy raised this matter last week and asked that the secretariat follow it up with a letter to IDA Ireland. Does he wish to comment on this now?

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I think correspondence came in yesterday so maybe we could discuss it next week.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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There is correspondence on its way back from IDA Ireland and we will discuss the matter next week. We will note that and hold it over until next week.

Nos.850C and 868C are items of correspondence, dated 19 October 2017 and 1 November 2017, from myself with responses to two parliamentary questions on the costs associated with the opening of Stepaside Garda station in 2016 and 2017. The replies state that no costs have been incurred in 2016 or 2017 to date. We will note these answers. We had a lot of discussion on this issue and I understand that a further parliamentary question has recently been replied to by the Minister for Justice and Equality. The aforementioned two parliamentary questions were replied to by the Minister for Public Expenditure and Reform and relate to the role of the OPW in connection with the building itself. There is a reply on its way from the Minister for Justice and Equality on the same topic. We will note that. Representatives of An Garda Síochána are scheduled to appear before us again at a later date and I am sure that the matter will be raised by someone at that point.

The next item, No. 851C, is correspondence dated 26 October 2017 from Dr. Anne Taheny, President of St. Angela’s College, providing a note as requested by the committee on corporate governance at the college, the legal costs of an ongoing contractual dispute, the impact on services and the financial position of the college. We have also received correspondence, No. 859C, from the Secretary General at the Department of Education and Skills, Mr. Séan Ó Foghlú, providing a note on the legal costs and impact on services of the contractual dispute at St. Angela’s College. The other party in the contractual dispute had written to the committee on the matter. Both notes are quite comprehensive. I do not believe it is appropriate for the committee to involve itself in such a contractual dispute, especially one that has been subject to High Court consideration. I propose that we write to the individual enclosing copies of the correspondence received and relaying the message that it is not the committee's intention to pursue the matter any further. Is that agreed? Agreed.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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My understanding is that the High Court is finished with it and it has two interpretations of the decision. NUIG and St. Angela's College have formally merged now but to advance that in terms of the taking over of the property NUIG's legal people are taking one interpretation of the implications of this case and the owners of St. Angela's, namely, the nuns, are taking another interpretation and that is holding up progress. I suggest that we would invite them in, even if it is after Christmas, just to see if a public airing of some of the issues could advance matters. I think it would be worthwhile. In the event that the committee decides not to proceed, given the person who made contact with the committee sought that I should recuse myself from these matters, I would like any letter going back to him recording that the committee decided not to proceed noting that I was a dissenter on the matter because I would prefer that we would have a public airing of it.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Is the Deputy satisfied that we write back stating that it is not our intention to pursue this matter further but that Deputy MacSharry dissented from the decision?

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I would have preferred if we were able to deal with the issue publicly.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes. We can write that. Could we agree to sending the letter? I know we normally operate as a committee. I think it is only right for Deputy MacSharry to make his point because it is his area and he wants to be involved.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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No, the individual in question made a big song and dance about the need for me to recuse myself, which does not apply. I proposed a public session previously on it. He is alleging that public money was used in pursuit of a legal case to resolve property matters involving third parties, namely, the nuns, as opposed to St. Angela's College itself.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I looked at the case and there is High Court decision but I do not know anything about the details. The two organisations involved have two different interpretations of it. At this stage I think it is a matter for the Higher Education Authority, HEA, which is responsible for those organisations. We should pass the matter on to the HEA and ask it to follow up on it. It is more appropriate for the HEA. If anyone at national level is it follow it up, it is within the bailiwick of the HEA to deal with such issues.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Will we seek that the HEA should come back to us then?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes, in due course. I think we will forward this correspondence to the HEA, ask it to follow it up and keep us informed.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Could we formally ask the HEA whether given its familiarity with the issue it feels that any of the allegations being made by the individual who has approached the PAC require further examination by the PAC?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That would be up to us to decide. The issue is whether the matter should be examined by the HEA.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Yes, but the HEA is not going to investigate misappropriation of funds if that is the case. That is our gig.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Would the HEA have a role in talking to the two parties, which we do not have? That is not our job.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I sense the HEA will know this case back to front-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Of course. I expect that to be the case.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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-----and because nothing is happening it is coming to us as a result. I am not consulting either party.

Mr. Seamus McCarthy:

Obviously I do not want to suggest what the committee needs to do but we have examined this issue and the implications of it for St. Angela's and I did not feel there was anything I needed to report to the committee in regard to it. It obviously relates to matters from some years ago and the court case involved was some years ago as well. It became a stumbling block to the amalgamation of St. Angela's and NUIG but the notes that are provided now suggest that agreement has been reached and that stumbling block has been gotten over. That was really why it became a live issue again in recent times. It is expected, according to the correspondence that is here, that matters will be resolved with NUIG and that the amalgamation will proceed. If that happens then I would consider it is a matter in the past.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Okay.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Is it GMIT?

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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No.

Mr. Seamus McCarthy:

No, it is NUIG and St. Angela's.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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It is the only constituent college of UCG north of a line from Dublin to Galway. If a note is being sent back, while it is clear that I will be outvoted I would put on record that I would prefer that we did give this a hearing. I wish to just state that.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The matter should definitely be kept open. We will go to the HEA and ask it to look at it in the first instance.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I think we will ask the HEA and the fact that we are doing so might give it a little bit of added impetus, but we must be mindful of the fact that the Comptroller and Auditor General has looked at the issue and he feels there is nothing in it for him to bring to our attention. We will send the matter to the HEA for it to deal with it and to keep us updated on progress. Is that agreed? Agreed.

The next item is correspondence dated 9 November, No. 853C, from Ian Carter, chief executive of Beaumont Hospital, in regard to compliance with procurement requirements. Details are provided of breaches of the requirements and the CEO points out that there is ongoing work to formalise what had been historical relationships and to reduce the level of non-compliant expenditure in the future. There is a detailed letter which emerged from us noting breaches of procurement rules in its annual accounts. I will just refer to one sentence in regard to Noel Recruitment and the sum of €365,000. It was pointed out that this recruitment is not fully subject to the procurement regulations as it is an Annex II B service under the Directive 2014/18/ EC and an Article 74 service under the Directive 2014/24/EU. It is not considered a cross-border interest and that is why it probably did not advertise it on that basis, but it anticipates that it will bring such matters into line. There seems to be a significant amount of technical issues involved but we will note it and we will keep after all those organisations in regard to non-compliance with procurement issues in the future. We will note that.

The next item is No. 855C, correspondence dated 24 October 2017 from Deputy Brendan Smith, forwarding a resolution from Monaghan County Council for the Committee of Public Accounts to investigate Eirgrid's financial expenditure for the past 16 years. We received a similar resolution from Monaghan County Council in January. Eirgrid does not come within the remit of the Committee of Public Accounts as it is not audited by the Comptroller and Auditor General. It is a commercial semi-State operation. At the time we requested a note from the Minister on the matter and forwarded the reply to Monaghan County Council. We also wrote to the sectoral committee which I believe had an engagement with Eirgrid in May of this year. I also understand from the clerk that that committee has received further correspondence from Monaghan County Council in the past month. I propose that we write to Monaghan County Council and include Deputy Brendan Smith in the correspondence, enclosing copies of previous correspondence, pointing out that the sectoral committee has more latitude than the PAC in this area. Is that agreed? Agreed.

The next item is No. 854C, correspondence dated 24 October 2017 from the Rehab group, in regard to the funding of section 39 organisations to pay staff in line with public sector increases. Rehab claims that funding has not been provided to restore pay to their employees even though the employees took the same cuts as public sector employees during the austerity years and that its ability to retain staff is affected. This was a matter which was discussed at our recent meeting with the HSE. That exact point was well discussed with the HSE and it is an issue for the National Treatment Purchase Fund and nursing homes as well. The costs for some organisations are increasing but that is not being matched by an increase in funding from the State body. Can we note the item because we did discuss it on the previous occasion with the HSE?

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Should we forward the correspondence to the health committee because it is not just individual workers who have a genuine grievance but there is a real and noticeable problem with the delivery of services as a consequence because there is no doubt there is a real difficulty in holding on to staff. I believe we should forward the correspondence to the Joint Committee on Health because it has a knock-on consequence for the delivery of public services.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I think the issue was raised during Leaders' Questions this week. Deputy Murphy's point is correct. We will send the correspondence to the Joint Committee on Health. I think we should also send it to the Minister for Public Expenditure and Reform because the issue is a difficult one.

When the minimum wage rises as a result of Government legislation, those who are employing people on the minimum wage expect that the same Government would provide funding to meet that increase. The argument is that the Government is not doing so and that this is making staff retention difficult. It is a matter for the Minister for Public Expenditure and Reform and this committee will highlight the impact this is having. We will send it to the Oireachtas Joint Committee on Health but also directly to the Minister for Finance and for Public Expenditure and Reform for his consideration.

Item 856C is correspondence dated 23 October from an individual relating to the alleged waste of €50,000 by Dublin City Council on the digging of bore holes on the individual’s property. I propose that we write to the Department of Housing, Planning and Local Government for a response. Is that agreed? Agreed.

Item No. 857C(i) to (vi) is correspondence dated 22 October 2017 from an individual relating to the value of a land on which two schools are to be built. The individual suggests that the price paid was excessive and that the site remains unsuitable. An article from a magazine plus documents obtained through a freedom of information request are attached. The individual was in contact with the committee previously and we received a note from the Department explaining the purchase process and rationale. With the agreement of the individual, I propose that we forward this correspondence to the Department to address any further issues raised. Just to refresh everyone's memory, this is about a school in Wicklow. The matter came before the committee a few months ago as an issue arose with regard to the location of a new school. We have already dealt with it but there are still outstanding issues. We will now pass it over to the Department and ask that it deal with the individual directly. Is that agreed? Agreed.

Item No. 861C is correspondence dated 20 October 2017 from a group which calls itself FLAME, or Former Local Authority Members Éire, in relation to the winding up of the Association of Municipal Authorities of Ireland. The winding up is related to a policy decision to abolish town and borough councils. The group has reported matters to An Garda Síochána. I propose that we write to the group stating that An Garda Síochána should be allowed to carry out its investigation. The Committee of Public Accounts will not carry out an investigation of the alleged criminal matters referred to in the letter because such matters are the responsibility of An Garda Síochána. Is that agreed? Agreed.

Item No. 862C is correspondence dated 25 October 2017 from an individual, which was copied to several others, entitled “Ongoing Revenue fraud by the Office and the DPP”. The purpose of the email is not clear. We will note it and move on.

The next item, No. 867C, is correspondence dated 2 November 2017 from Mr. John McCarthy, Secretary General of the Department of Housing, Planning and Local Government, providing information requested by the committee on insurance arrangements for local authorities, including Dublin City Council. We will note this. I am sure committee members will want to read that correspondence and possibly refer back to it at a later date.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Why are we receiving correspondence from the county councils? They are not under our remit or under the remit of the Comptroller and Auditor General.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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They are not-----

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Why are we getting all of this correspondence from county councils?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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They think we can sort out everything. An individual wrote to us about this issue. We did not go to the county councils on it. All we did was write to the Department of Housing, Planning and Local Government because we just deal with Departments. The councils receive their funding from the Department so we asked it to give us information on it. We are not investigating the matter but are just getting an answer to the question raised and sending it on. We are not examining the case at all because it is not within our remit, as Deputy Aylward rightly points out. That said, the information from the Department is quite interesting and members will want to note it.

The next item is No. 870C, correspondence dated 3 November 2017 from Professor Patrick O’Shea, President of University College Cork, relating to refurbishment works at the university's school of chemistry during August 2016. This information was requested by the committee. We will note the correspondence and publish it. Is that agreed? Agreed.

Item No. 871C is correspondence dated 2 November 2017 from an individual in respect of the FÁS-SIPTU investigation. We will just note this item, which is historical.The next item, No. 872C, is correspondence dated 3 November 2017 from Mr. Michael Moriarty, general secretary of Education and Training Boards Ireland, ETBI, regarding the attendance of the chief executive of Kildare and Wicklow ETB at the WorldSkills conference in Abu Dhabi. We will note and publish this item. Members will see from the reply that it was not paid for by ETBI although the correspondence does not specify who paid for it.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I was the one who raised this. I said that ETBI paid for it and I want to acknowledge that I was incorrect on that. I do not know who paid for it but ETBI did not. I just want to acknowledge that.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It is good to put that on the record and I thank Deputy Murphy for that.

The next item, No. 873C is correspondence dated 3 November 2017 from Mr. Tom Hogan, HSE consultant, clarifying elements of a letter received by the committee from HSE management on consultants' pay. We will note and publish that. Item No. 874C (i) to (iv) is correspondence dated 6 November 2017 from Mr. Michael Moriarty, general secretary of Education and Training Boards Ireland, ETBI, providing a copy of the 2016 audited accounts as well as its strategy statement and its 2016-2017 annual report. We will note and publish that correspondence.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Will representatives of ETBI be coming in with the ETBs?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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No because ETBI does not have a major role. It receives very little funding and is just an umbrella group. It has no function in terms of funding. It is simply an association of the ETBs. It provides some information and training courses but it has no governance role. The HEA and the Department are the ones with a direct role in this area. We considered this matter previously but realised that ETBI is not even funded directly by the Department. It is just an association of the ETBs. It would be like bringing in one of the local government-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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ETBI gets funding from the ETBs.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes, to the tune of €168,000.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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That is still taxpayers' money.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes, but the key body in terms of overseeing the ETBs is the Department. ETBI does not have any role in overseeing-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I understand its role but my point is that it receives money that is given to the ETBs by the State. ETBI gets its funding through the ETBs. The ETBs are a conduit for that money.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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What I would suggest is that we ask the Department about the role of ETBI and if we want to pursue it further, we can do so. ETBI is not scheduled to come before us next Thursday.

Mr. Seamus McCarthy:

ETBI actually has a couple of lines of funding. I think there was correspondence from the Department on this. There is a figure of about €150,000 or €160,000 which comes directly from the Department. There are also contributions from individual ETBs to ETBI, which amount to around €500,000. ETBI provides training and other services to ETBs for which it is paid. The total budget is between €1 million to €1.5 million

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We have written to the ETBI and it has given us its financial statements, which we have just noted. Subscriptions amount to €571,000 and I suspect those subscriptions come from the ETBs.

Mr. Seamus McCarthy:

Yes, that is correct.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Conferences and seminars are listed here. Core funding from the Department amounts to €168,000. ETB shared services amounts to €140,000. ETBI gets quite a bit of funding from the Department. The majority of its funding comes directly from the Department or directly from the ETBs. We will raise this matter at the forthcoming meeting and can pursue it further with the Department but ETBI is not on the list to attend that meeting. We can hold this open.

As that is the last item of correspondence, we will move on to our work programme.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Before we move on from correspondence, I seek an update from the Chairman. We were due to receive correspondence from the HSE on the draft report from Deloitte. Is that not the case?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We have written to Deloitte and are awaiting a response. We will watch that space.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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There was one other issue around goodwill contributions. I cannot remember if it was related to the IDA or the NRA. Maybe we could come back to it?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We can come back to it.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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There were two issues I wished to raise. The Deloitte response has not been received yet.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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No, we are awaiting that

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Sorry, the other matter was the nursing homes. We were to write to seek clarification from HIQA on the role of the chief inspector and to find out if there were other inspectors. That was just a factual matter.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We have received information on that but it arrived very late, which is why it is not on today's schedule. It will be on next week's schedule.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That is fine.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It did arrive but just not in time for yesterday's circulation.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I doubt that this should be raised under correspondence but I am not sure where is the correct place to raise it.

There was a report published on the University of Limerick, UL, which came from the work of this committee that we should at least acknowledge. I not saying we should discuss it but we should at least acknowledge it came from this committee. It is a good document. It sets out recommendations.

There was to be a report published into conflicts of interest or potential conflicts of interests in Waterford Institute of Technology, WIT. That was to be published in October as well. I have not heard anything so I am just wondering if we can follow up with the Higher Education Authority, HEA, to see where that is and when we are likely to see that report published.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We are following up on the last issue straightaway. Yesterday, the HEA issued a statement on Dr. Richard Thorn's independent review of certain matters and allegations relating to the University of Limerick. We received the letter too late to circulate. In any event it was publicised in the media yesterday and we will just note two or three points. We will come back and discuss it in more detail. From the point of view of the Committee of Public Accounts this issue was raised in the Comptroller and Auditor General's report and we raised it here. The review looked at eight packages and severance packages totally €1.7 million. There are several key points in the report but the report does not deal with what the university had told key stakeholders and that includes us. This report did not deal with the issue of the evidence that came to us and over which there is a question mark. The report recommended that the University of Limerick prepare a comprehensive and accurate account of the circumstances of each of the severance payments to be sent to the Comptroller and Auditor General and the Committee of Public Accounts. The report is coming back to us. That is as much information as I have on it at the moment.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I was a bit tired a minute ago but I refer to the draft report from the Health Service Executive. I apologise for going back but it was simply to tell us whether they were going to give it to us or not.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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What we made clear the last day was the final report presented by a professional firm like Deloitte to the HSE is the property of the HSE. The working papers and earlier drafts are the property of Deloitte but we have now written to it. We have not had a reply back. It has been in contact with the clerk but we have no definitive word.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Was it made clear in writing to Deloitte that the director general of the HSE had indicated that he had no difficulty with the draft reports being given to this committee?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That has been done. It is aware of that. I would hope that we would have a proper response by next week.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Could I ask about the engagement between the HSE and Deloitte, backwards and forwards?

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

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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We are still awaiting that.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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There has been direct contact between Deloitte and the committee secretariat. We not got a formal response yet. It is being watched on a daily basis. We will come back to it next week. We will make a point of making sure that issue is on our agenda for next week.

The next item is statements received since the last meeting. The Cork Institute of Technology 2016 accounts have a clear audited opinion except for the pensions issue; Letterkenny Institute of Technology 2016 accounts have a clear audited opinion except for pensions, costs and liability issue; and Galway Mayo Institute of Technology 2016 accounts have a clear audited opinion except for the non-recognition of pensions costs and liabilities and the Comptroller and Auditor General referred to the going concern issue. The institute has incurred deficits in each of the last five years and has an accumulated deficit of €3.3 million. The auditor's report has been signed off on on the basis that it will continue as a going concern. That is an important statement.

The next item is the 2016 accounts for Bord Bia, which has a clear audited opinion and the Food Safety Promotion Board-safefood 2016 account, which also has a clear audited opinion.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Can it be outlined what the issues are in regard to the non-recognition of pension costs and liabilities?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Ask the Comptroller and Auditor General.

Mr. Seamus McCarthy:

Historically, the institutes of technology did not pay pensions. The pensions were handled by local authorities in relevant areas. In 2015, there were changes to the statutory pension scheme. Anybody who was on a pension scheme in the institutes of technology pre-2013 was brought into a new pension scheme. The legislation that set that up provided for the institutes to be liable. However, in their financial statements, they have not recognised those liabilities. The pensions are being paid by the pensions section of the Department of Public Expenditure and Reform as the agent of the Department of Education and Skills. There is a question as to where the liability should be recognised. I am just drawing attention to it because it is not compliant with the framework for accounting that the institutes of technology are following. I am obliged to do that. It is a technical matter as to where the liability exists. Nobody is suggesting that the pensions will not be paid but there are different accounting arrangements and nobody is recognising the liability that has already accrued and continues to accrue.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Last year, there were changes to the baselines of the funding for local authorities. I refer to the baselines in respect of the distribution of local property tax and it was in recognition of the pension change. That was the exclusive reason for it. The local authorities became not liable but the liability was at national level. It is an accounting matter. Perhaps it is just a policy matter. However, since they were linked to the local authorities, why was that change not made? The two were originally linked.

Mr. Seamus McCarthy:

Obviously, it is a very complex area. It is an economic issue rather than purely an accounting issue. However, it has accounting implications. From 2013 onwards, people who join a public body are in the single public sector pension scheme. In that situation, the employee contributions have to be remitted to the Department of Public Expenditure and Reform because that Department will be on the hook for paying the pensions in due course. Anybody who is a pre-2013 employee is on an existing scheme for which there are many different kinds of accounting arrangements. I am not sure all the employee contributions for pre-2013 employees are going to the centre. It is a very complex matter. Those in the Department of Public Expenditure and Reform are probably the best people to address any concerns the Deputy may have. They own the policy in relation to all these matters.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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If the Deputy wants, she can take it up directly with the Department of Public Expenditure and Reform in her own time, but if she wants to come back to the committee we will follow it up as well.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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That is fine.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I have a question on the GMIT in Galway and the going concern. The Comptroller and Auditor General noted that as an issue and I understand that it has a plan in place. Is that correct?

Mr. Seamus McCarthy:

Yes, absolutely, because there is an obligation on the institute to present their financial statements on a going concern basis so long as it is satisfied that it continues to be a going concern. It has done so. What I am doing here is drawing attention to a situation that has persisted for five years now. It has an accumulated deficit and it is not the only institute of technology in that situation. There are five or six of them in a similar situation. They are required by the HEA to present a plan that will allow them to move into a surplus situation, to stabilise and ensure that they are going concerns into the future.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That has been done.

Mr. Seamus McCarthy:

It has been done.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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On accounts submitted, I want to raise one other issue. This week, the Comptroller and Auditor General published his special report No. 99 on public sector financial reporting for 2015. I thank the Comptroller and Auditor General for his work. Briefly, there are 224 semi-State, health, education, and North-South agencies with a turnover of €43.7 billion. We are not talking about Government Departments here, rather we are talking about all the other agencies. Of these, 60% failed to produce their financial accounts for audit within the required three-month period. This is unacceptable and we have already indicated that the Committee of Public Accounts will not be prepared to tolerate this any longer. Primarily these organisations have received public funding and they have not produced financial statements to account for that.

The job of the Committee of Public Accounts is to hold these organisations to account, and we would not be doing our job. There is far too lax an approach right across Irish public life, where people are not being held to account. We will be coming back to this report but I am asking the Comptroller and Auditor General to assist us. Specifically, prior to our next meeting, I want him to give us the list of those organisations who have still not presented their 2015 accounts to him for audit. It is only a small number at this stage. We will write to them, to the chairperson specifically as well as perhaps the chief executive, demanding that they account for their failure, not for any-----

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Is it 2015 or 2016 you are speaking of?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I am speaking of 2015.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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They have not produced accounts for 2016.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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There is still a handful.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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They have not produced 2016 statements either.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I am referring to the 2015 accounts.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Surely the Chairman could-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I am taking it step by step. For 2015, there is a handful still outstanding, and some of them are the education and training boards, ETBs.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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What excuse is being used?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We are going to get that now. I expect it will be that there were complications. However, despite all the excuses up to now, we consider that they have failed to meet their duties and we want them to account for their failures regarding the 2015 accounts, and not with some soft explanation. We will be writing to them saying that we want them carried out immediately. Next week, we will draft a letter to that group saying that we want the 2016 accounts completed by the end of this year, and that they are to have the 2017 accounts completed by the end of March 2018. We are not tolerating receiving accounts for this year in two years' time. We would not be doing our job. It is time the public sector was made accountable. That concerns 2015 accounts. That is the letter that will address that.

I am also asking the Comptroller and Auditor General to give me a list of those organisations that have still not presented their 2016 accounts to you for audit. There will be a number on that list, but I do not have the number. We will write to tell them to account for their failure to meet their obligations, to have the 2016 accounts issued immediately to him, and to have their 2017 accounts issued by the 31 March 2018.

The Comptroller and Auditor General might not have the third list I want for next week but if he has, well and good; if not, we will have it the following week. I want a list of those organisations which have submitted their 2016 account for audit, but did not do so by the end of March in 2017 - in other words, the accounts came in in six, seven or eight months after the year's end, more than three months late. We will write to those, acknowledging that their accounts have been received, but saying that with their 2017 accounts they must meet the deadline of the end of March 2018. There are three different groups. We are going to have this list in front of us in future. There will have to be accountability. If they are lax in their work, we will not be lax in ours. I will call Deputy Cullinane and then Deputy Catherine Murphy.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I have no problem at all with what is being proposed, and I believe that we have to hold public bodies to account. I have not read the Comptroller and Auditor General's special report. I would imagine, and perhaps I am wrong, that it would give us a glimpse of some of the reasons some public bodies are not up to date with their accounts. Perhaps at the next meeting we should have ten or 15 minutes, or less, for the Comptroller and Auditor General to give us an overview of the main issues. That would inform how we approach those organisations so that we can be fair. In some organisations, there could be perhaps not a good reason, but a reason. Also, concerning process, I would imagine that there is commonality. There is probably an overlap in some of them. If there are issues that need to be improved in the area of process, then that is what we need to examine.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The meeting next week is with the Department of Education and Skills, and the principal offenders are under the remit of that Department. The majority of them are in the third level education sector-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Regarding this specific report, even a five-minute overview from the Comptroller and Auditor General-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will ask for that next week-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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-----would be of benefit.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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-----at the beginning of the meeting. I call Deputy Catherine Murphy.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Essentially, what we really need to be looking at is situations where there is an audit and something is found in that audit. However, there is a feeling that we cannot even get to that. There is a huge amount of going forward and backwards, and, I am sure, a huge administrative burden in trying to get these accounts audited. Is there an additional burden on the Comptroller and Auditor General's office as a consequence of these particular audits not being delivered on time, or is that burden quantified? Does this impact on the treadmill of audits, and how you distribute the work over the year within your office? Are there sanctions? We heard last week that essentially the buck stops with this committee.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We are the gatekeepers

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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We are the gatekeepers. Maybe it is time that, along with looking at this, we look at what potential sanctions could be applied for non-adherence, over and above appearing before the Committee of Public Accounts. It would have struck me as a pretty basic function that they should fulfil. If we are going to change behaviour, there has to be a mechanism for doing so, and I do not think just appearing before the Committee for Public Accounts, or the risk of that, is enough, given the length of time some of these are outstanding.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I agree with you, Chair. Deputy Murphy has touched on this. If all these institutions were to give their accounts regularly and keep up to date, what implication has that for the Comptroller and Auditor General's office staff? He might address that particularly.

Mr. Seamus McCarthy:

I can certainly go into it in more detail next week when I do a formal presentation around it. Almost all public sector bodies, with the exception of third level education bodies and one or two others, are on a calendar year basis. What we face, therefore, is a very highly peaked demand for work. There are a number of strategies that we try to follow to deal with that peak. One of the things we would like to do more of is audit testing in-year. It is called interim audit testing. That works quite well with the HSE, the National Treasury Management Agency, NTMA, and so on, that is, larger entities with bigger budgets and more transactions. Due to the fact that there are organisations that are in arrears, it is a bit of a job to shift the emphasis to carrying out the audit after delivery of the financial statements in total. That is one of the strategies, and it will take time to turn the ship and get into a more efficient situation.

The second thing we do is contract out a certain number of sets of financial statements for audit to private sector auditors. They carry out the audit work and report to me. I still issue the audit opinion, so we would have a certain amount of review. That helps us. It gives us additional resources at the time when the peak occurs. Those are the kind of strategies that we need to undertake.

Obviously, the first and most important issue for us is to get the financial statements delivered. We have been taking a harder line in recent years whereby if the financial statements are thrown in but they are not ready for the audit, we discount that. We do not regard that as having been received. They have to be ready for audit when they submit the financial statements, and then we try to schedule as optimally as possible. Realistically, however, without an enormous increase in the resource level, we could not have all the financial statements audited within, say, the first half of the year. That just would not be possible.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Chair-----

Mr. Seamus McCarthy:

Can I just finish the point? When we do our scheduling, we do it on the basis that the financial statements as presented are correct, and that our work will effectively be focused on validating that, and checking that what they have presented is correct. The difficulty we run into is when there are errors in the financial statements, or particularly if there are propriety matters or report matters that cause a concern. The process then gets slowed down. In that situation, we have carried out the audit but it takes a long time to get follow-up explanations. It is difficult for us to do it right in a very narrow timeframe. We take a very wide view of the business of an organisation.

We consider propriety issues that may not be considered to the same degree by a private sector auditor doing standard financial statements and the question arises of whether the financial statements were correct. That creates a complication for us, slows the process and knocks out other schedules, for instance, if we are scheduled to do an audit and find they are not ready we may not have anybody else lined up immediately. It takes a week or so and we lose time. There are many aspects to this. We try to assist and to be as helpful as possible but if somebody misses their slot, for whatever reason, we cannot necessarily go back and do it. We also cannot walk away from a client. If a client has a problem we are stuck with one another. A private sector auditor would say they will not do this but we do not have that luxury.

There are several sectors where the three-month submission date is not actually the prescribed date.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Great.

Mr. Seamus McCarthy:

There are different dates for universities and institutes of technology, IoTs. We have been bringing them forward. We are heading for a three-month time limit on that. Specifically for 2015 and 2016 it is not a three-month period.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Are the deadlines specified legally?

Mr. Seamus McCarthy:

Not legally. I have the power in respect of the universities and IoTs to specify a time limit. I have done that and it is moving progressively toward a three month period. I will explain that in the note.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Before we issue those letters we will make sure that what we say is in synch with what the Comptroller and Auditor General has already issued and we might move it on another month or so.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Mr. McCarthy is saying it is moving-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It is normally three months.

Mr. Seamus McCarthy:

I think for 2016-17 it is four months for the universities and three months for the IoTs. I took a pragmatic view that because there had been a problem there was no point in setting a three month deadline when they were six, eight and nine months out. I started with six months for the universities and five months for IoTs and signalled two to three years ahead that it was coming down a month every year until we reach three months.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will ensure the letters tie in with that.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Following what Deputy Murphy said about repercussions, if there are bold boys in the class there will be bold boys in the class unless there are some fines or some reason why they must make their accounts available and have their audits carried out. Can any sanctions be built in? Someone running a business must have the audit done for the taxman and if it is not done the person is fined or there is a surcharge or interest to pay and so on. Are there any fines in this case? This is public money, given to people and they are two years behind. I find it hard to believe that we are giving money for 2018 to someone who has not shown audits for 2015. There should be some repercussions where public money is being given to a body that has not given its accounts for two or almost three years. That is unbelievable.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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To conclude, I understand what the Deputies are saying on that. What I have outlined is step one. We have to get to step one before we talk about what happens if they do not take that step early in the spring.

Two important points to highlight: several of the key offenders are in the education sector. The Secretary General of the Department of Education and Skills will be here next week.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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He will make an excuse because they are in the education sector.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We are going to ask him how he gave out money to organisations in 2016 and 2017, and he is probably preparing an Estimate to give them money for 2018, without seeing the accounts.

Photo of Alan KellyAlan Kelly (Tipperary, Labour)
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Exactly.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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At the start of the meeting we will be putting the Secretary General of the Department of Education and Skills in the hot seat for sanctioning estimates and expenditure year in year out when he has not seen the previous year's audited accounts.

The second point: there were only a couple of us here at the end of the last meeting with the Health Service Executive, HSE, and it was one of the most positive conclusions I have seen to a PAC meeting, as a result of all the pressure PAC has put on the HSE in respect of payments under sections 38 and 39. Mr. O'Brien said that in respect of every organisation, and there are hundreds of them, that get a grant from the HSE in excess of €150,000, it is in receipt of 100% of the 2015 accounts, completed. It is well over 70% of the way through the 2016 accounts and we are not near the end of the year. He did not threaten to cut their funding but to delay it until such time as they got their accounts in. That resulted in 100% compliance by the sections 38 and 39 organisations. That has not happened in any other section. There is a great lesson to be learned from how the HSE did it, without any statutory authority, just a straight business approach, if they delayed sending in accounts it would delay sending out next year's cheques. It brought them all to heel. That is remarkable. I asked him if he could second some of the staff who achieved that to another Department. We had a good laugh at the end of it. I am not saying we should go that far but the HSE is one third of the public service. It has achieved this as a result of the pressure from what goes on here. We can actually achieve something. The first step is to get the audited accounts in. We do our job and we put the pressure on others to do their job.

The work programme for today is to meet the Department of Communications, Climate Action and the Environment. Next week we will meet the Department of Education and Skills, Solas, City of Dublin Education and Training Board, ETB, Kilkenny and Carlow ETB, Kildare and Wicklow ETB and Tipperary ETB. That is four ETBs. We will break it into three sessions, first, the Department of Education and Skills and Solas; the second group will be City of Dublin and Kilkenny and Carlow ETBs; and the third will be Kildare, Wicklow and Tipperary ETBs. We have said that all people from all organisations are to be present for the duration of all the meetings. We want the people from City of Dublin ETB to hear what Solas says and people from Tipperary to hear what is said about Kildare and Wicklow because we want them to hear what is going on. Some may have particular issues, others not. If they do not all fit in the Public Gallery some of them will be asked to sit for the duration of the day's proceedings. Next week's meeting will be long, with three separate sessions of two hours apiece. There might be a voting bloc between them.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I know there were some changes in membership of the committee recently on the Government side. Some people stepped down and others joined it.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Does the Deputy mean the Committee of Public Accounts?

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

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We dealt with that the last day. Deputy Deering has joined the committee.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Is Deputy Rock still a member of the committee?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes, and he attended the last day.

Photo of Alan KellyAlan Kelly (Tipperary, Labour)
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Why is the Chairman making that point?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Deputy Madigan has resigned from this committee and joined another and the Oireachtas appointed Deputy Deering who was here last week. He was here at the private session yesterday.

Photo of Bobby AylwardBobby Aylward (Carlow-Kilkenny, Fianna Fail)
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He was here yesterday.

Photo of Alan KellyAlan Kelly (Tipperary, Labour)
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I am listed to be the lead speaker on 30 November. I am unlikely to be around that day. I would appreciate if I could I swap with Deputy Cassells or Deputy Rock the week before that.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I will take the lead on that day. I will jump from second to first place.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The Deputy should do that through the secretariat.

Photo of Alan KellyAlan Kelly (Tipperary, Labour)
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I will send an email.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The Deputy can just talk to them. We always want to ensure that two people are lined up in advance and they are ready in time honoured tradition rather than ringing somebody else up.

Photo of Alan KellyAlan Kelly (Tipperary, Labour)
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I will send an email. I have a keen interest in the meeting on 23 November. At that meeting we will be dealing with management of ancillary services at An Garda Síochána. That is also the day we are spending a couple of hours on the opening of Garda stations.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The only issue we have is that the Policing Authority has a meeting in the afternoon of that day and the witnesses have to be out of here at 1 p.m. If we have to we can skip dealing with correspondence and start early.

Photo of Alan KellyAlan Kelly (Tipperary, Labour)
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Fine. We may have to do that. We might state that on the agenda so that the public is aware that we are not just dealing with the management of ancillary services at the Garda training college but also-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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If there are any updated internal audit reports we have not seen over the summer we want to get those too.

Photo of Alan KellyAlan Kelly (Tipperary, Labour)
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We should also, as we agreed previously, deal with the opening of Garda stations.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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On the work programme, one final issue I want to raise, we have scheduled for the Revenue Commissioners to appear at the meeting on 30 November to deal with a report the Comptroller and Auditor General has written on corporation tax receipts.

Many people think the role of this committee is to simply monitor expenditure. That is part of its role, and perhaps it takes up most of our time, but a significant part of the role of the Committee of Public Accounts is to look at the income side of things, including revenue collection and taxation receipts. In this case the Comptroller and Auditor General has produced a specific chapter on the corporation tax receipts, and we will deal with that specifically.

Everyone who has written about this issue has mentioned the volatility of corporation tax receipts and the risk to the Exchequer and public services by heavy reliance for a large proportion of that tax - some 75% - on the multinational sector. In addition to that, I believe that ten Irish companies are paying a very high proportion of that corporation tax; perhaps as high as 36%. It is a risky business and an issue we need to examine. We will be examining the Revenue Commissioners on that issue, but it is important for the Committee of Public Accounts and the public at large to hear from the Revenue on one side and the multinational companies on the other, including their understanding of how the taxation system works in Ireland. There has been much discussion on this matter, and because corporation tax is a specific chapter we need to examine the interactions between the multinational sector and the State on tax receipts. We will not be able to look at information other than what has been published. These companies are all listed on the stock exchange. However, I believe we should invite some of these major companies in to assist us. I have looked at the situation and had the Oireachtas Library and Research Service prepare a paper for me in the last couple of weeks on corporation tax receipts. The main areas concerned are the financial-insurance sector, the IT sector and the manufacturing sector. I am proposing that we write to these companies. It is likely to be early in the new year before they are able to avail of the opportunity to come in. We will ask those parties to send the person who is most equipped to deal with taxation issues and with the Exchequer. We will ask these companies to provide assistance to us. These companies, and many similar companies, have attended in Westminster and the House of Representatives. They all have a big footprint in Ireland, and they should show the same respect to our Parliament as they have shown to other national parliaments.

I have had a look at some of the biggest players. If any of the members of the committee notes that a major player has been left out we will discuss it. I am proposing that from the finance sector we invite JP Morgan and CitiBank, from the IT sector we invite Apple and Google, and from the pharmaceutical and medical devices sector we invite GlaxoSmithKline and Pfizer. They are six big companies, and it would help our understanding of how the system operates enormously. We will draft a suitably worded letter of invitation. It is a voluntary attendance of course, but when we worked on Project Eagle companies such as Lazard from outside the State came to the committee to assist us in our work. Hopefully these organisations will show the same respect to the Irish national parliament as they have shown to other national parliaments. I would like to get this in motion. No letter will issue until we clear the content. It is slightly unusual, so we have to frame it in a proper way. At this point there will be requests for these companies to appear voluntarily.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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The Revenue Commissioners can tell us what came in, and I understand that they will not be talking about individual taxpayers, but the Department of Finance, in advance of any budget where there is a change, must have carried out an analysis of what is expected to come in. It might be found then that there is a tax shelter being used or that section 110 reliefs have been used in a way that was not anticipated. Can we have insight into some of the thinking behind this from the Department of Finance? Some of these things ended up using fairly significant tax shelters.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The Department of Finance is on the list. We will write to it next week seeking this information in advance.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I am interested specifically in what it had anticipated would come in and did not, or where a tax vehicle was used in a way that was not anticipated.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I want to draw the line here between this committee and the role of the Committee on Finance, Public Expenditure and Reform, which deals with the Finance Bill and future proposals. We are taking the legislation as it stands at the moment and how it operates. We are interested in how the legislation of previous years was assessed, the impact of it and what happened as a result of the legislation that was passed. Future legislation and policy is a matter for the other committee.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We need to examine the process that is happening today.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I have no difficulty with the proposal. The Chairman gave the example of these companies appearing in different jurisdictions and committees of parliaments. Some of those committees are very high-powered and have many staff, and the members have lots of support. We do not have that. It is a caveat to this.

Much of this focusses on alleged loopholes that these companies were operating to avoid paying tax. This is all legal and above board, but the companies were allowed to use structures to reduce their tax liability. The Committee on Finance, Public Expenditure and Reform has done a lot of work on this already. Can we get a briefing for the members of this committee on what the lie of the land and the tax code was before the changes? There were changes made in 2013 and 2015. Perhaps that is contained in the Comptroller and Auditor General's report, but I doubt all of it is. It would be useful to have as much information as possible available to us to prepare for those meetings. I imagine that we are talking about meeting the companies next year, so that gives the secretariat enough time to get solid briefing packs for us. We also require the information about the operation of the tax code and the changes that were made. Otherwise we will not be able to do the type of job that is required. Given the limited resources that we have we will depend on as much background information as we can get.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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There is a budget available for consultancy for committees. We might possibly need a senior taxation consultant from some establishment who is very au faitwith this and can inform and educate this committee on how we need to deal with those we are meeting. The level of taxation expertise required does not exist anywhere in the Oireachtas. It is not its function. We will have to use the consultancy budget, with the agreement from the commission, to allow us to get proper professional advice for that situation. That is a good suggestion.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I agree with the suggestion. When we were in Cardiff for the conference on public accounts, we found that there was precedent for bringing these companies before a public accounts committee. The former chair of the Public Accounts Committee in England noted that she had asked these companies to appear before that committee and they had. I fully agree with the suggestion, and I agree with my colleague that we cannot do this with the staff that we have.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We need help.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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It would be simply a window dressing exercise if we do this without proper staff.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We need professional advice.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes, absolutely.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Will we move on to today's business?

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Can we move the screen up slightly so that we can see the next meeting dates?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Social protection is on 7 December, and on 14 December we are dealing with bank stabilisation. That is in the Comptroller and Auditor General's report.

I think at this stage-----

Photo of Alan KellyAlan Kelly (Tipperary, Labour)
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ETBs are still listed under outstanding matters, but they will have been dealt with by then.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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They are not off the hook yet.

Sitting suspended at 10.39 a.m. and resumed at 10.43 a.m.