Mr. Seán Ó Foghlú:

My opening statement focuses on two main areas, namely, the reform programme and the challenges facing the ETB sector and the steps being taken to enable it to meet its requirements for submission of accounts.

There is an exciting and ambitious reform programme under way in the ETB sector. Through a series of Government decisions, 33 VECs were amalgamated into 16 ETB in July 2013 and SOLAS was established as the new further education and training authority in October 2013 to provide strategic direction, co-ordination and funding to the further education and training sector. The reduction from 33 to 16 entities gives better scale for the delivery of education services in an efficient manner. The reform also brings better cohesion to the further education and training sector and enables it to be transformed into a strong and vibrant fourth pillar of education and training. This is one of the most ambitious reform programmes occurring throughout the public service and it involves transformational change including the disbandment of the VECs and FÁS, the mergers of former VECs through the establishment of ETBs and the transfer of training functions from SOLAS to the ETB sector. It is also the case that positioning ETBs to respond effectively to demand for well-designed and high quality education and training programmes involves significant and ongoing organisational change within and between ETBs and ETB Ireland and increased interaction with bodies such as SOLAS and Qualifications and Quality Assurance Ireland. In addition to managing significant change, the ETBs, along with SOLAS, have played a key role in our economic recovery. Many ETBs are also involved in developing and delivering new apprenticeships and traineeships and supporting the upskilling of people in employment. Mr. Paul O’Toole, chief executive of SOLAS, will outline the further education and training reform programme in more detail.

I take this useful opportunity to clarify for the committee the role of Education and Training Boards Ireland, or ETBI, which is recognised in legislation as the national representative body for the 16 ETBs to enable it to provide a single voice for the sector in its engagement with the Department and others. This single voice for the sector was particularly important in helping to work successfully through the transition from VECs to ETBs and the integration of training functions.

The Department engages and works closely with ETBI on a number of fronts particularly in relation to the implementation of the ETB reform programme and the development of shared services. Another important aspect of the reform programme is the introduction of the payroll and finance shared services projects for the sector. Payroll and finance are operated at individual ETB level using outdated systems which results in inefficiencies and duplication and is a contributory factor to the delays in completing accounts in time. A robust project governance model has been put in place to develop shared services for both the payroll and financial services needs of all ETBs. This will be a transformational change for the sector. As part of this process, the Department had significant engagement with a range of Government offices prior to initiating the tender process for the payroll shared services solution. These tenders are currently being evaluated. The ETBs will be migrated into shared services in three waves to commence early next year and with a target to have fully migrated all ETBs to payroll shared services by the fourth quarter of 2019. The finance shared services project is currently drafting the request for tender with a plan to publish in the second quarter of 2018. The target is to have fully migrated all ETBs to finance shared services in 2020.

It is not satisfactory that ETBs have not finalised their accounts within the required timescales. Several factors have contributed to this. The transition from VECs to ETBs, including the transfer in of training functions, centres and employees, represented a momentous restructuring of the sector and was a major contributing factor in the delay in producing accounts in most cases. The most significant issues can be categorised as relating to systems or human resources capacity. Some of these are still live and will take time to fully work through. They include compatibility issues arising from the variety of IT and financial systems in operation in former VECs and in former FÁS training centres; connectivity at server level between centres within an ETB; the added complexity arising from the transfer of training functions; the 18 month period for the first set of accounts; the impact of the moratorium on recruitment in the public sector; and the need for ETB staff to support the development of a number of shared services and other sectoral reforms.

I have provided members with a graph to give a visual representation of the progress made by ETBs over the past three years in relation to getting their accounts submitted to the Comptroller and Auditor General. The statutory deadline in the ETB for submission of accounts to the Comptroller and Auditor General for audit is 1 April in the year following the period of account. There has been progress in the timing of submission of accounts and this is encouraging. While just two ETBs submitted their 2016 accounts by the 1 April deadline, a further eight ETBs improved the date of submission of their 2016 accounts compared to 2015. The progress made over the past three years can also be assessed by the average time it took ETBs to submit their accounts. It took ETBs an average of about ten and a half months to submit their initial 2013-14 accounts. This average reduced to about eight months for the 2015 and was reduced to about six months for 2016 based on 14 of the 16 which have been done to date. However, further improvements need to be made and efforts redoubled to ensure that, as we move out of the period of establishment and restructuring of the sector, all ETBs comply with the deadline.

The Department is very concerned about the delays in relation to ETB accounts. These delays are not acceptable and the Department is working closely with the ETB sector and through its regular engagement with officials in the Office of the Comptroller and Auditor General in order to ensure that statutory timelines can be achieved. The Department has tried to address challenges and reduce delays by focusing on two key areas, namely, improvements in systems and in staffing. In relation to systems improvements, the long-term plan, in line with public sector reform, is to move the ETB payroll and finance systems to a shared services model. While this is in progress, a significant number of interim measures have been implemented by the Department in co-operation with the sector to supplement the existing systems. These interim measures included merging of systems and supporting ETBs by the provision of additional functionality, all of which are helping the ETB sector to reduce delays. Other non-IT related system improvements include supporting reconfiguration of functions in ETBs; strengthening the internal audit function; supporting the work of the audit and finance committees through the provision of briefing sessions for committee members; working with ETBs and the Comptroller and Auditor General on the format of the accounts; regular meetings with individual ETBs on staffing and financial matters; strengthening the role of ETBI in supporting the ongoing ETB reform programme; professional advice and support to individual ETBs by the Department’s accountant; and regular liaison with the Comptroller and Auditor General, and consequently with ETBs, regarding the timing of submission of accounts and issues arising during audits.

In relation to personnel improvements, this involved strengthening the senior management team in the ETB sector; filling of critical vacancies; additional support for Mayo Sligo Leitrim ETB to enable it to catch up with the submission of accounts to the Comptroller and Auditor General; and close engagement with ETBI in relation to the phase two organisation design project which will provide a robust framework for assessing staffing requirements in the ETB sector over the short to medium term. Considerable work is being done by the Department, ETBI and at individual ETB level to ensure ETBs are better positioned to meet their statutory obligations in relation to the submission and completion of their annual accounts. I will be happy to discuss this in more detail as well as other queries the committee might have.