Seán Fleming (Laois, Fianna Fail)
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We are dealing today with the 2016 annual report of the Comptroller and Auditor General, chapter 7, Dormant Accounts Fund, under the aegis of the Department of Rural and Community Development. We are joined by officials from the Department of Rural and Community Development, Mr. Kevin McCarthy, Secretary General, Mr. Fergal Costello, principal officer, Mr. Kenneth Jordan, principal officer and Mr. Eddie Forsyth, assistant principal officer. From the Department of Children and Youth Affairs we are joined by Mr. Conor Rowley, principal officer. From the Department of Justice and Equality we are joined by Mr. Deaglán Ó Briain, principal officer and from the Department of Health we are joined by Mr. Colm Desmond. From the National Treasury Management Agency, NTMA, we are joined by Mr. Dave McEvoy, deputy director of funding, and Mr. Stephen Judge.

I remind members and those in the Public Gallery to switch off mobile phones or to put them into aeroplane mode.

I draw the attention of witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable. Members are reminded of Standing Order 186, that the committee shall refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government, or the merits of the objectives of such policy.

I call on the Comptroller and Auditor General to make his opening statement.

Mr. Seamus McCarthy:

The report before the committee today was compiled to provide an overview of the operation of the Dormant Accounts Fund and of the disbursements from the fund.

The Dormant Accounts Acts provides for a scheme to transfer dormant funds in banks, building societies, life assurance companies and State savings schemes to a State–controlled Dormant Accounts Fund, and to allow the use of those funds to help the personal, social and educational development of disadvantaged people, and to help people with disabilities. The Dormant Accounts Fund is managed by the National Treasury Management Agency, NTMA, which collects the dormant balances from the institutions. The holders or beneficiaries of accounts that have been declared dormant have the right subsequently to reclaim their money at any time and the NTMA repays funds as required from reserves. Responsibility for disbursements from the fund transferred to the Minister for Rural and Community Development in July 2017 from the then Minister for Arts, Heritage, Regional, Rural and Gaeltacht Affairs. Prior to June 2016, responsibility for the disbursement system was with the then Department of the Environment, Community and Local Government.

Figure 1 in the report document shows the movements in the Dormant Accounts Fund since it commenced operations in 2003. There was an initial transfer into the fund of €172 million. Net transfers to the fund were an average of almost €26 million a year between 2004 and 2016. What is perhaps most striking is the trend increase in the fund’s net assets position, which increased from €132 million at the end of 2010 to €259 million at the end of 2016. Net assets include an amount set aside in a reserve fund to meet potential future claims for repayment of balances in dormant accounts; the provision was just over €76 million at the end of 2016. Figure 1 shows the increase that has occurred since 2010 in the net assets figure.

Amendments made to the dormant accounts legislation in 2012 require the relevant Minister to set up a disbursement scheme for a period of up to three years. The scheme must be laid before the Houses of the Oireachtas. A disbursement scheme covering the period December 2013 to November 2016 was approved by Government in December 2013. The scheme set out guiding principles and the priority areas for disbursements. A statutory review of the disbursement scheme was due within three years of the scheme being adopted, that is, by December 2016. This review had not been carried out at the time of the examination. Also under the Acts, annual action plans for the disbursement of funds must be presented to the Houses of the Oireachtas indicating the spending Departments, the proposed recipients of grant funding, the programmes or projects to be supported and the proposed amounts of funding. While action plans were presented for 2014 and 2016, no plan was presented for 2015.

Expenditure of funding allocated to Dormant Accounts Fund measures may be made over one or more years. Planned expenditure for a given year is provided for in the relevant Department's annual Estimates. The examination found that implementing Departments significantly underspent on programmes relative to what was planned. In total, they incurred dormant accounts programme expenditure of just under €29 million for the period 2012 to 2016. This represented only 44% of the total amount made available for spending in the relevant estimates for the same period. The level of underspend for all implementing Departments ranged from 5% to 94%, as shown in Figure 2 in the report document. In Figure 2, for each of the implementing Departments there are two bars. The lighter coloured one is the amount provided in the Estimate and the darker one is the amount that was actually spent. It also indicates the percentage of total funding made available but not spent.

A lack of preparedness appears to have been the main factor causing the underspending. Delays in implementing projects and delays in having a disbursement scheme or action plan in place were cited by Departments as the main reasons for this. A low level of uptake for some schemes was another cause cited for the underspend. The report provides further detail on the pattern of underspending on a Department-by-Department basis.

Pobal manages certain Dormant Accounts Fund measures on behalf of some Departments.

In the period from 2012 to 2016 Pobal administered 29 measures, disbursing a total of €10.2 million. It received fees of €2.55 million in the same period for providing this service, the cost of which was met from the fund under the terms of the legislation. The fee expense was equivalent to 27% of the amount disbursed. The National Treasury Management Agency and Departments administering their own measures bear the administration costs in their own budgets.

Seán Fleming (Laois, Fianna Fail)
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I thank Mr. McCarthy. I call on Mr. Kevin McCarthy to make his opening statement.

Mr. Kevin McCarthy:

I thank the Chairman and committee members for inviting us. I am joined by my colleagues from the Department, Mr. Fergal Costello, principal officer, finance unit; Mr. Kenneth Jordan, principal officer; and Mr. Eddie Forsyth, assistant principal officer, rural strategy division. Also in attendance are Ms Deirdre Kearney, community and voluntary supports division, and Mr. William Hughes, finance unit.

As the committee is aware, the Department of Rural and Community Development was established in July 2017. Statutory responsibility for the Dormant Accounts Fund was transferred to the Minister for Rural and Community Development at the time. The legislation governing the Dormant Accounts Fund provides a framework for the disbursement of funds for measures targeted at socially, economically and educationally disadvantaged persons and people with a disability. Under the Dormant Accounts Act 2012 and following the transfer of functions, the Minister for Rural and Community Development is responsible for the administration of the processes by which the Government approves programmes and projects to which funding may be disbursed from the Dormant Accounts Fund. In real terms, this involves the development of three-year disbursement schemes and the subsequent preparation of annual action plans to give effect to the disbursement scheme.

Under the 2012 Act, the Minister is required to make a disbursement scheme for a period not exceeding three years. The disbursement scheme sets out guiding principles for disbursements and specifies priority areas under the aforementioned headings of economic and social disadvantage, educational disadvantage and persons with a disability. The 2012 Act also provides that the Minister shall prepare an action plan at least once a year to give effect to the disbursement scheme. Actions plans contain details of programmes and projects to be funded under the scheme and set out the maximum amount proposed for disbursement to each programme or project set out in the action plan. There is also a further requirement in the 2012 Act that the Minister shall prepare an annual report on the disbursement of moneys from the Dormant Accounts Fund.

Since its inception in 2001, the fund has seen a number of transfers of responsibility. Most recently, in 2012 the Dormant Accounts Board was dissolved and its statutory functions were transferred to the Minister for the Environment, Community and Local Government. In 2016 these functions transferred again to the then Minster for Arts, Heritage, Regional, Rural and Gaeltacht Affairs. As I noted, the functions transferred to the Minister for Rural and Community Development in July 2017. The Department of Rural and Community Development is, therefore, now responsible for co-ordinating the preparation and administration of the disbursement scheme and the annual action plans across government. In undertaking these functions the Department fully recognises the importance of the Dormant Accounts Fund to the provision of programmes and projects aimed at disadvantaged groups. For example, the 2017 action plan commits funding to support youth and community projects through the Department of Children and Youth Affairs and to invest in community sport and physical activity hubs through the Department of Transport, Tourism and Sport. We want to ensure disbursement schemes and action plans are progressed in an efficient and effective manner and that we maximise the positive social impact of the fund.

With direct regard to the report of the Comptroller and Auditor General, it raises a number of issues relating to the operation of the scheme, including levels of disbursement and compliance with statutory requirements. It recommends that the statutory review of the 2013 disbursement scheme be carried out to identify how well the scheme was implemented and how future disbursement schemes can be designed to ensure the objectives set out for the fund are met. The report states the review should consider the reasons for the low level of disbursements; whether allocating funds to measures which do not fully use the resources prevent other programmes from being funded; and how the available funding can best be applied. The response of the Department of Rural and Community Development provided in September 2017 states the Department is committed to reviewing all aspects of the administration of the dormant accounts disbursement scheme as part of its forthcoming work programme and that the review will consider the issues detailed in the report.

Based on the findings of the Comptroller and Auditor General's report, it is clear that the scheme is not operating in a manner which maximises the impact of the fund for those groups at which the funding is targeted. We are fully committed to completing the planned review in 2018. The review which is commencing will analyse the issues raised in the report, identify the administrative and other changes necessary to ensure more efficient and effective operation of the scheme and make proposals for how the changes will be implemented on completion of the review. We have provided a copy of the draft terms of reference in the briefing material circulated to members.

I look forward to assisting the committee in its detailed examination of the Comptroller and Auditor General's report.

Seán Fleming (Laois, Fianna Fail)
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I thank Mr. McCarthy. Before I call Deputy Catherine Murphy, I must express disappointment with the opening statement. We have received a 20-page report from the Comptroller and Auditor General detailing the underspend under the Dormant Accounts Fund area by area, including charts that show commitments, including one where 95% of the money had not been drawn down. Despite this, Mr. McCarthy did not refer to any figure and the document does not feature a single euro symbol. It refers only to reviews and what the Comptroller and Auditor General said.

As to the reasons for the underspend, pages 1 and 2 of the briefing note circulated to the committee do not make reference to them; instead they set out the historical background to the issue. Page 3 addresses the recommendations made in the report of the Comptroller and Auditor General which members have read and which has been available since September 2017, while page 4 refers to a draft proposed report on the review. Again, there is no reference to figures or money, although I note there is a reference to money towards the end of page 5 when a figure of €40 million is mentioned. The committee had hoped to be presented with more details on underspending, given that this was the essence of the report. We will now go through that issue.

Catherine Murphy (Kildare North, Social Democrats)
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One of the things I noted, one to which Mr. Kevin McCarthy drew attention, is that statutory responsibility for the Dormant Accounts Fund was transferred to the Department when it was established. Since the fund was created, this function has been transferred a number of times. When the Department assumed statutory responsibility for the fund, what explanation was it given for the absence of a review in advance of the transfer of this function to the new Department?

Mr. Kevin McCarthy:

There was a review of sorts. It was a consultation with other the Departments involved before the subsequent disbursement scheme was put in place. It was not a full impact review, as would have been envisaged and required, I think, under the legislation. The Comptroller and Auditor General, quite rightly, pointed to the fact that a full impact review had not been undertaken. I think that at the time there was probably a view that, in consulting the other Departments involved, this was sufficient in meeting the requirements of reviewing the experience of the first disbursement scheme.

Catherine Murphy (Kildare North, Social Democrats)
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Is that a box-ticking type of approach to compliance? A statutory review means just that. A review of sorts is not a statutory review. Did the Department not insist on the Department from which the function was being transferred carrying out the review?

Mr. Kevin McCarthy:

I think that at that point the responsibility had transferred to us as a Department; therefore, it became our responsibility to meet whatever statutory requirements were in place. We may have had a view on whether something that had not happened in the past should have happened, but certainly it was our responsibility from that point.

Catherine Murphy (Kildare North, Social Democrats)
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It is striking that most of the years in question - from 2012 to 2016 - were among the tightest the country had experienced money-wise. Some of the groups identified as disadvantaged would have been doubly disadvantaged by virtue of the significant cutbacks introduced in those years and the money from the Dormant Accounts Fund became all the more important as a consequence. I find it very hard to get my head around this.

Looking at the Comptroller and Auditor General's report I am struck by the amount of money that is identified for particular projects for various Departments, sometimes for very specific projects, and then not drawn down. It is a quite sizeable amount of money. It just did not seem to be a priority. The witnesses are taking responsibility now, but we cannot talk to the people who formally had the responsibility, under whose watch it happened. I want to raise several questions.

The very fact that no review took place is very significant, because it meant that the very sizeable underspends could not be quickly reassigned to other projects if it was not possible to deliver on the initial ones. The largest is in the Department of the Housing, Planning, Community and Local Government, where there was a 64% underspend. The Department of Children and Youth Affairs had a 51% underspend. There is a 94% underspend recorded for the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs, but that is a smaller amount of money. Apart from the review, what measures are the witnesses going to put in place to get this money spent appropriately?

Mr. Kevin McCarthy:

We have already commenced preparations for the 2018 action plan. One of the things we are doing as part of that is to look at decommitals. Part of the experience here in recent years was that a number of measures never really got off the ground. They still stand as commitments under the fund, and there is a need to look seriously at whether the intention is to proceed with these. Some commitments may prevent us from making new commitments and undertaking new measures as part of the 2018 action plan-----

Catherine Murphy (Kildare North, Social Democrats)
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There is some navel-gazing going on, given the timelines we are talking about here. I refer to one in particular, where a programme seems to have been replaced. The area-based childhood, ABC, programme was abandoned, and then a new programme was initiated. There is obviously a very significant underspend on that particular scheme. For example, matching funds were supposed to be forthcoming from Atlantic Philanthropies. Will those funds be available with the replacement programme, the quality and capacity building initiative? Will that programme be rolled out? How close is that programme to being finalised?

Mr. Kevin McCarthy:

I will ask my colleague from the Department of Children and Youth Affairs to comment on the specific project. By way of a general comment however, one of the reasons for underspend that we have noticed is that action plans identify measures that are at a very early stage of conception. It is probably part of the nature of the scheme itself; one of its principles is that it should support additional measures to what is supported by the Department Vote. There has been a tendency towards identifying things that are new and innovative, perhaps pathfinder projects. That in turn has led to a natural lead-in time before a project can get off the ground.

Catherine Murphy (Kildare North, Social Democrats)
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I ask all of the witnesses to be very concise in their replies, because we have quite limited time. I would like to hear more on that particular programme from Mr. Rowley.

Mr. Conor Rowley:

I will start with where we are now. There is full spend envisaged for this year, and we will be commencing with it in the coming weeks. There has been a protracted period of development for that programme. It is envisaged as an extension of the ABC programme by 12 different sites. It is confusing in its read. There is an existing ABC programme, which is co-funded by the Government and Atlantic Philanthropies. That has continued, and we have extended that programme. When we looked at the ABC programme, we discussed it with the Department of Communications, Climate Action and Environment. In light of the fact that it was subject to ongoing evaluation, and our concerns about readiness to implement an extension to more sites, we decided to change the focus but not to lose the specific impact. As such, the ABC programme has continued, and the quality and capacity building initiative is focused on incorporating learning, prevention and early intervention into the system.

Catherine Murphy (Kildare North, Social Democrats)
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No money was lost from Atlantic Philanthropies' contribution, then?

Mr. Conor Rowley:

No money was lost. However, Atlantic Philanthropies has wound up its investments, so it is left to the State to fund the programme. We have secured funding and extended it over the last several years.

Catherine Murphy (Kildare North, Social Democrats)
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I wish to raise the issue of Pobal. What is the cost of administration, compared to the funds for which Pobal is responsible? Perhaps a witness could describe that body's role to me, and outline the ratio of operating expenses to the amount Pobal administers?

Mr. Kevin McCarthy:

Pobal carries out roles on behalf of a number of Departments in respect of their dormant account funds. For example, it works with Departments to scope out some of the measures included in action plans in order to identify the objectives and outcomes. Pobal also puts application processes in place for Departments. That body has developed an online application system to provide the Departments with a more efficient applications operation.

Pobal also engages with the applicants themselves, both successful and unsuccessful, to ensure they can satisfy all of the pre-contract conditions and so on.

Catherine Murphy (Kildare North, Social Democrats)
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When somebody makes an application for these funds, how project-ready do they have to be before they make it through the process? If there are time lags, that may well be a reason. Has any review shown up anything hinting at deficiencies in spending money on very worthwhile projects?

Mr. Kevin McCarthy:

There are two parts to that. When Departments put measures forward for inclusion in action plans, they are not necessarily at a mature stage. In fact, experience shows that they tend to be at a much earlier stage of development, and the project that we have spoken about is an example of that. Departments put forward ideas for measures, and a degree of development work is involved in bringing it to a stage where Pobal is ready to seek applications under a scheme.

At the point when Pobal seeks applications, the applicants should be ready. From that point on, the process should move fairly quickly. The delays have occurred in reaching that stage.

Catherine Murphy (Kildare North, Social Democrats)
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It is difficult not to feel that this is a scheme that no Department really wanted. It has been transferred a few times. If one applied to a Department for funding for a road or a school, one has to go through a process before the project makes it into a budget for the year. This does not appear to meet that criterion. It is very loose, and yet, it is not as if there is a lack of worthwhile projects on which money could be spent. I refer to intervention training for youth justice workers, or victims of crime. There are other projects involving training support for home carers, or community-based models of support for people with dementia.

Regarding training support for home carers, there is an action plan of €500,000 and not a penny of it has been drawn down, yet this is a group that is very deficient in the supports it receives. Is it not within the ability of the Department of Employment Affairs and Social Protection, for example, to devise a scheme for home carers such that the money can be drawn down? It beggars belief, particularly given the years involved.

Mr. Kevin McCarthy:

It is probably important to point out that when something features in an action plan for the year, it will not necessarily follow - this is a feature of the scheme - that the spend will materialise in that year because the allocations are not time-bound in that sense. It is not the sort of normal Vote allocation process whereby money is voted-----

Catherine Murphy (Kildare North, Social Democrats)
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Presumably, the expectation would be that the money would be used within, say, the three-year window.

Mr. Kevin McCarthy:

Yes, and one of the things we need to address now in terms of how the scheme operates is the information flows and the level of monitoring and oversight of progress on projects that we, as the lead Department with overall responsibility for the scheme, ensure happens. The Deputy describes what has been happening as very loose. In some ways the scheme is not very loose but rather quite tight and quite rigid in terms of the criteria and how Departments can deploy the funding and so on once the commitments are made.

Catherine Murphy (Kildare North, Social Democrats)
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What changes would Mr. McCarthy propose that would make the scheme more flexible and yet allow the money to be spent appropriately?

Mr. Kevin McCarthy:

One thing we need to look at is the criteria that are laid down in the disbursement schemes themselves and whether their effect is too narrow. We certainly need to look at the administrative procedures surrounding the operation of the scheme and the degree of complexity that is involved for Departments. We will need to look at the ongoing monitoring of spend and delivery, and the timelines and project plans surrounding measures that are put forward. We need to hold Departments to account to a greater extent in respect of their position in this regard. As I said, the allocations have not been time-bound, there has not been a sunset clause in place where measures enter into an action plan and there has not been a proactive approach to decommitting funding that is not used in order to allow it to be redeployed for other uses within the scheme. These are all some of the things we need to address-----

Catherine Murphy (Kildare North, Social Democrats)
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How many people does the Department have dedicated to monitoring and reviewing this? How is it being reviewed? Is it being reviewed within the Department? Can Mr. McCarthy talk me through that very briefly?

Mr. Kevin McCarthy:

Yes. We are still in set-up mode to some extent as a Department but we are certainly identifying this as a work priority for the first half of the year both to complete the review and to engage with Departments in a process of identifying previous commitments, what is still live and what is not, and potential measures for the 2018 scheme. We have a small number of dedicated staff around this who have a range of other responsibilities, to be fair, but we are certainly prioritising this as a work area, given the scale of what is involved and the importance of the recommendations and the issues that have been identified in the C&AG's report.

Catherine Murphy (Kildare North, Social Democrats)
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What kind of time and what kind of numbers of people are going to-----

Mr. Kevin McCarthy:

We have a principal officer and an assistant principal officer with policy responsibility-----

Catherine Murphy (Kildare North, Social Democrats)
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I refer to people dedicated to this.

Mr. Kevin McCarthy:

They are not dedicated full-time to the matter. These are people with many other responsibilities but they will prioritise this work.

Catherine Murphy (Kildare North, Social Democrats)
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It is a matter of the outcomes, really. If the work is going to be almost exclusively on, for example, carrying out the review, as opposed to ensuring that the projects are up and running and the money is appropriately spent, to what does the Department give priority?

Mr. Kevin McCarthy:

In a sense, it is important we conclude the review quickly and identify from it the lessons regarding spend, performance and so on for Departments. From some of the initial discussions we have had about this, and we have had initial discussions even this week with Departments about the issues Mr. McEvoy encountered, I think we can begin to identify immediately some of the things we need to do not only in terms of the preparation of the 2018 action plan, but also in terms of looking back and identifying the issues that arose.

Catherine Murphy (Kildare North, Social Democrats)
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I want to go through one or two items to flesh the matter out a little. In the Department of Justice and Equality the largest underspend occurred in 2015 on the Garda youth diversion project, which is a very worthwhile programme within the Garda. For this project there was an allocation of just under €500 million - sorry, it was €500,000. I wish it were €500 million. There was a delay in implementing the programme. Has that been addressed at this stage? What were the implementation delays referred to by the Accounting Officer?

Mr. Deaglán Ó Briain:

The Deputy mentioned victims of crime and Cosc as well, so if I address-----

Catherine Murphy (Kildare North, Social Democrats)
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Yes, please do.

Mr. Deaglán Ó Briain:

I will do so as concisely as I can but I want to make a few general points. There is an issue about the alignment of dormant accounts allocations with the annual Estimates. They are not the same. Getting a commitment for an amount under the dormant accounts heading does not mean one gets the money in a particular year's allocation. It does not involve an implication or an expectation that all the money will be spent in that year. For example, we got a commitment in December 2014 for Garda youth diversion projects, and clearly it would have been impossible to spend any of that money in December 2014. We work in partnership with non-governmental organisations, NGOs, which means we have a choice between expanding existing services, giving additional funding to NGOs with which we are already partnered and, alternatively, going out and inviting expressions of interest. Whatever we choose to do, we have a duty to assess applications properly and make sure we are getting value for money. When we got the commitment in December 2014, that was the first possible moment at which we could start having a dialogue with NGOs. From our point of view, it-----

Catherine Murphy (Kildare North, Social Democrats)
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The Department got the money and then had the dialogue.

Mr. Deaglán Ó Briain:

It would have been impossible to start inviting NGOs to submit applications when the Department had no commitment to funding.

Catherine Murphy (Kildare North, Social Democrats)
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Does Mr. Ó Briain have a piece of advice as to how this should change?

Mr. Deaglán Ó Briain:

I am not sure it can change. If we had done it in a different way, we would be here having a very different discussion and I would be much less comfortable. There are obligations on us in terms of transparency and objectivity and making sure that when we invite expressions of interest it is done so in an open way and that the selection of projects and so on is based on evidence.

Catherine Murphy (Kildare North, Social Democrats)
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Is the underspend addressed now-----

Mr. Deaglán Ó Briain:

It is, and I will come to that. It took most of 2015 to get projects up and running. We were able to partner with existing projects and give them funding for extra workers. We set up ten new projects. We set up three of them on the basis that there was a neighbouring project run by an NGO that could do the job for us. The remaining seven started to come on stream from about September 2015, so it took a long time. This is inevitable and there is no way around it. For now, I can give the Deputy some figures. Even in 2016, the projects which had started to commence in 2015 and into 2016 could not draw down the full funding. As we move into 2017 and 2018, that changes. We have an allocation of €6.34 million from dormant accounts in the 2017-18 action plan. We have already spend €3.3 million of that in 2017, with an allocation in the 2018 Estimates of €3.5 million.

Catherine Murphy (Kildare North, Social Democrats)
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Does Mr. Ó Briain think that will be fully spent?

Mr. Deaglán Ó Briain:

Most of it will be fully spent. The two figures do not add up. They add up to slightly more than the allocation-----

Catherine Murphy (Kildare North, Social Democrats)
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Yes, I was going to say that.

Mr. Deaglán Ó Briain:

-----but we are now spending what we have been allocated on the Garda youth diversion projects. Inevitably, it takes time to get to that position.

Catherine Murphy (Kildare North, Social Democrats)
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Does the Department make assumptions now that those projects are up and running and that they will continue to be funded from the same source?

Mr. Deaglán Ó Briain:

They will continue to be funded, subject to our obligations to review funding periodically. Whether it is from the same source or Exchequer funding or other sources of funding depends on future dormant accounts action plans, but they will continue to be funded, subject to the periodic renewal processes.

The Deputy mentioned Cosc as well. Again, there is an issue about the alignment of the annual Estimates and the dormant accounts.

There was no underspend of the funding allocated for support for victims of crime. The money was spent over two years and not one. In respect of inviting applications and making sure that beneficiaries do not have unexpended balances at the end of the year, which is also a very strict rule, it was inevitable that money would not be spent in one year but it has all been spent. Those projects are continuing and additional funding has been committed. At the start there was an allocation in a dormant account action plan and all of that was spent but not in one year.

Catherine Murphy (Kildare North, Social Democrats)
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A total of €200,000 was allocated for awareness raising of domestic and sexual violence and €70,000 was drawn down.

Mr. Deaglán Ó Briain:

That has all been spent and it is managed by the same office, COSC, and the same issue arose, it was not expected that money would be spent in one financial year but it has all been spent.

Catherine Murphy (Kildare North, Social Democrats)
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The report was to be laid before the Houses of the Oireachtas in 2015. Why was that not done?

Mr. Kevin McCarthy:

It appears to be the case that the 2014 action plan, which I think has already been referred to, was produced quite late in 2014 and a view appears to have been formed that it was too soon to produce another action plan because the 2014 action plan continued to be relevant. That should not have happened. The statutory requirement was and is that there should be an action plan in each year. Action plans have been produced for 2016 and 2017 and we will continue to ensure that an action plan is produced for each year.

Catherine Murphy (Kildare North, Social Democrats)
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I may come back to flesh out the individual ones with the underspend.

Peter Burke (Longford-Westmeath, Fine Gael)
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The witnesses can understand why people get frustrated at the level of underspend presented to us, especially when one takes a snapshot of the crisis period we have just come out of. In 2011 the State was spending 50% more than it was taking in, it could not borrow on open markets and gaps in our society became even bigger which the State could not cover. I see the dormant accounts fitting into these gaps which would benefit from allocations that need to be made.

I am very concerned to see two major problems in the audit: allocation of funds and each Department's spending of funds. The summary shows that very well. Can Mr. McCarthy tell me what was the budget for the Department, not the Dormant Account Fund, in 2017?

Mr. Kevin McCarthy:

The Revised Estimate for the current year is €232 million but the provisional gross outturn for 2017 is €136 million.

Peter Burke (Longford-Westmeath, Fine Gael)
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It is €136 million for 2017 and Mr. McCarthy is now being asked to manage a fund that had a value of €259 million at the end of 2016.

Mr. Kevin McCarthy:

The overall value of the Dormant Account Fund is €259 million. The fund is managed by the NTMA.

Peter Burke (Longford-Westmeath, Fine Gael)
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Mr. McCarthy's job is to come up with conditions for the allocation of this money and what Departments it should go to, not the management of the funds. Is that correct?

Mr. Kevin McCarthy:

Yes, that is correct. It is important to be clear that the level of disbursements that we would commit to in a given year would not necessarily relate to the overall value of the fund. The fund is there as a liability. Account holders have a right to reclaim and so on.

Peter Burke (Longford-Westmeath, Fine Gael)
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Nevertheless, the Department is responsible for the conditions which facilitate the allocation to different Departments.

Mr. Kevin McCarthy:

That is right.

Peter Burke (Longford-Westmeath, Fine Gael)
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Have the staff who were working on the Dormant Account Fund from 2012, in the Department of the Environment, Community and Local Government as it was then, been transferred to the Department of Community and Rural Development?

Mr. Kevin McCarthy:

I am not certain. Some of the staff who were involved in previous Departments would be with the Department of Community and Rural Development.

Peter Burke (Longford-Westmeath, Fine Gael)
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Mr. McCarthy cannot answer that very important question. I want to find out where responsibility lies. Very vulnerable people in RAPID areas, children and adolescents who would benefit from counselling, were not getting key intervention because the State could not allocate and spend money on their behalf. I expect Mr. McCarthy to be very clear about the people who worked to allocate this money in that litany of Departments from 2015, ending with the Department of Community and Rural Development in 2017. Are the staff with responsibility being transferred to each Department?

Mr. Kevin McCarthy:

Not necessarily because when functions transfer they do not always transfer with the staff involved. Sometimes the staff numbers involved will transfer, instead of the actual staff.

Peter Burke (Longford-Westmeath, Fine Gael)
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They either did or did not.

Mr. Kevin McCarthy:

Responsibility for it has changed a couple of times. It went from the Department of the Environment, Community and Local Government, as it was, to our territory.

Peter Burke (Longford-Westmeath, Fine Gael)
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I know that but I need to know about the people in the headline Department working to put the conditions in place for where this money is being allocated.

Mr. Kevin McCarthy:

One higher executive officer, HEO, I understand, would have been involved under previous departmental configurations. The people I mentioned earlier at principal officer and assistant principal officer level, who will be leading now on what we need to do, are new to this.

Peter Burke (Longford-Westmeath, Fine Gael)
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How many people within the Department work to put the conditions together to administer this fund?

Mr. Kevin McCarthy:

On this fund specifically, there is a principal officer, with an assistant principal officer, who has overall responsibility for the administration of the fund.

Peter Burke (Longford-Westmeath, Fine Gael)
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The principal officer cannot just work on his own.

Mr. Kevin McCarthy:

There is also an assistant principal officer and one HEO.

Peter Burke (Longford-Westmeath, Fine Gael)
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There is a gross fund of €259 million and there are three people in a Department putting the conditions together to allocate that to various other Departments.

Mr. Kevin McCarthy:

Yes that is the resource behind drawing up the disbursement schemes. We will have to examine our internal resources because we need to step up our role and interaction with other Departments, and will seek to put in place stronger information flows.

Peter Burke (Longford-Westmeath, Fine Gael)
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The Department underspent its own budget, is that correct?

Mr. Kevin McCarthy:

There was an underspend in 2017.

Peter Burke (Longford-Westmeath, Fine Gael)
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The Department is now being asked to manage a fund which traditionally has significant underspends and lack of allocations. Would Mr. McCarthy accept that it is failure within the Department?

Mr. Kevin McCarthy:

I would not accept that it is a failure within the Department.

Peter Burke (Longford-Westmeath, Fine Gael)
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Is Mr. McCarthy happy that there are three people in the Department who are coming up with the conditions, which is an onerous responsibility in respect of a fund with a gross value of €259 million? I imagine that each of the Departments which will benefit from this fund will have to make a submission to the Department of Community and Rural Development in order to get an allocation for that year.

Mr. Kevin McCarthy:

There is a level of policy leadership in an area of responsibility like this when it comes to designing a scheme and designing the criteria and so on. I am not sure it would require more than the three people to do that, to identify the issues that will be considered as part of this review, the recommendations that will flow from that, the changes that we need to implement in the administration of the scheme. Policy leadership is required to identify that.

Peter Burke (Longford-Westmeath, Fine Gael)
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That goes back to the Government and the Minister. We are saying the reason this has not been allocated is policy leadership.

Mr. Kevin McCarthy:

That is not what we are saying. There are issues around how the scheme is administered and designed and we need to identify them as part of the review into why there has been a slowness in spend.

Peter Burke (Longford-Westmeath, Fine Gael)
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Mr. McCarthy is talking about the review that has not happened yet.

Mr. Kevin McCarthy:

It is commencing at the moment.

Peter Burke (Longford-Westmeath, Fine Gael)
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Again, this is in breach of the Department's statutory requirements.

Mr. Kevin McCarthy:

That is right and we have acknowledged that the review should have happened before now. There are issues related to the timelines for producing action plans and around the misalignment of action plan provisions with Vote provisions.

Peter Burke (Longford-Westmeath, Fine Gael)
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It is easy to identify issues. Members are frustrated because we meet the affected organisations on a weekly basis and they have revealed gaps in whom the State funds. This has been going on over a protracted period of time and it is totally inefficient that there is a fund which cannot be allocated to the most vulnerable people in our society. Can Mr. McCarthy take responsibility for this? It is his job to ensure a review is carried out on a timely basis, that it is adequately staffed by his Department and that allocations are made in a timely manner. He also needs to hold to account the Departments responsible for spending it. The table we have looked at shows that some Departments seem to be incapable of spending the money, with some underspends as high as 80%. One would not want to give them a significant portion of money again. I do not see a plan here. Mr. McCarthy said he is identifying problems but how are we going to change the situation?

Mr. Kevin McCarthy:

The Deputy is quite right. We are committed to completing this review within the first half of the year and we will resource it to ensure it happens. We will also ensure we take action in respect of any issues identified in the review.

Peter Burke (Longford-Westmeath, Fine Gael)
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The administration costs per annum for Pobal seem to have dropped down to €200,000 from €750,000. What is the reason for that reduction? Over a 13-year period there was €15 million, which would be approximately €1.15 million per annum, so why did it suddenly drop in 2016?

Mr. Kevin McCarthy:

It relates to the level of Pobal activity in a given year.

Peter Burke (Longford-Westmeath, Fine Gael)
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Does it mean nothing is being done?

Mr. Kevin McCarthy:

It relates to the volume of application processing and the follow-on to that, as well as auditing.

Peter Burke (Longford-Westmeath, Fine Gael)
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This is not adding up at all. Demand is growing and communities are crying out for this money but the Department is spending less on getting the money to Departments. The figure must have been over €1 million in some years.

Mr. Kevin McCarthy:

There were exceptional increases in some years, such as when they were developing the online application platform, and these increases distort the trend to some extent.

Peter Burke (Longford-Westmeath, Fine Gael)
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Does Mr. McCarthy think Pobal is doing a good job?

Mr. Kevin McCarthy:

Overall, yes. We can look at this as part of the review into the overall administration, however.

Peter Burke (Longford-Westmeath, Fine Gael)
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Can Mr. McCarthy briefly summarise Pobal's place in this jigsaw?

Mr. Kevin McCarthy:

It serves as an interface between Departments allocating funds and the groups seeking those funds. It provides information to potential applicants and explains the requirements for funding, as well as carrying out audit checks.

Peter Burke (Longford-Westmeath, Fine Gael)
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The money comes to Mr. McCarthy's Department, then there is Pobal and the Department to which the money is being allocated. There is layer upon layer before it gets to the people in the community who need it.

Mr. Kevin McCarthy:

I accept that there is a degree of complexity around this.

Peter Burke (Longford-Westmeath, Fine Gael)
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"Complexity" is putting it mildly. It is not working.

Mr. Kevin McCarthy:

The other piece of this jigsaw is Vote provision in a given year. Departments have to provide for dormant account spend as part of their Vote, bringing Vote sections and the Department of Public Expenditure and Reform into the mix in terms of agreeing amounts within overall expenditure ceilings. References were made to the tightness of spend in the period from 2012 to 2016.

Peter Burke (Longford-Westmeath, Fine Gael)
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Does Mr. McCarthy think the system is working?

Mr. Kevin McCarthy:

It is not working as well as it could work.

Peter Burke (Longford-Westmeath, Fine Gael)
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That is an understatement. It is not working and it is an absolute disgrace.

Mr. Kevin McCarthy:

Overall disbursement activity across Departments has been increasing in recent years. In the period of the report of the Comptroller and Auditor General, that is, 2016, disbursement levels reached €12 million.

Peter Burke (Longford-Westmeath, Fine Gael)
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The figure from 2012 to 2016 was €28 million, when people were crying out for the money. Some Departments failed in their duty. Demand was massive at that time.

Mr. Kevin McCarthy:

I accept that point but the fund is not all available for spend.

Peter Burke (Longford-Westmeath, Fine Gael)
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I know that.

Mr. Kevin McCarthy:

Departments also have to negotiate within expenditure ceilings in a given year, which affects their capacity to deliver. While it is ultimately Exchequer-neutral because it comes back in as an appropriation-in-aid, Departments must provide for it within their expenditure ceiling. There were constraints on overall spend levels in the 2012-16 period, which forms part of the complexity. It also feeds into calculations about the levels of Government debt.

In 2013 and 2014, disbursement levels were down at €1.4 million and €1.9 million, respectively, while the figure rose to €8.9 million in 2015, €12 million in 2016 and €16 million in 2017, so the trajectory has been upwards. This has been partly because of slowness in getting measures off the ground but, while there have been long lead-in times, they are beginning to gather momentum. There are other areas, however, where momentum has not been gathering and we need to look at the continuing relevance of those measures.

Peter Burke (Longford-Westmeath, Fine Gael)
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Is the Department working on how we can simplify this process? The figures Mr. McCarthy gives make it look even worse, because societal demands were increasing in the period to which he referred, that is, from 2011 onwards. There are three people in the Department working on it but can Mr. McCarthy give me any confidence that the money will be allocated better and that the red tape around it will be reduced?

Mr. Kevin McCarthy:

It is our determination that it will. We will look at how we can simplify processes and procedures and it may bring us back to legislative proposals.

Peter Burke (Longford-Westmeath, Fine Gael)
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The Department is not implementing the legislation it has at the moment so I would not bother with that part of it.

Mr. Kevin McCarthy:

My point is some issues may be identified as potential ways forward that will bring us back into the legislative space. Within the current legislative provisions, there is also capacity to see how we can simplify and improve things.

Peter Burke (Longford-Westmeath, Fine Gael)
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What is the precise reason for the reduction of €200,000 in Pobal's administration fees?

Mr. Kevin McCarthy:

It relates to the level of activity in a year.

Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source

That does not mean anything to me.

Mr. Kevin McCarthy:

In the prior year, 2015-----

Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It was €750,000.

Mr. Kevin McCarthy:

Yes. That included the exceptional technical costs of developing the new online portal. It is not a reflection of additional activity in 2015.

Peter Burke (Longford-Westmeath, Fine Gael)
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Leaving aside 2015, if one takes a look at a 14-year period, there seems to be significantly more than €200,000 per year to Pobal, so Mr. McCarthy has not answered my question. Pobal would have had not far off €1 million in some of those years.

Mr. Kevin McCarthy:

It was €750,000 in 2012, €645,000 in 2013, €400,000 in 2014 and €750,000 in 2015.

Peter Burke (Longford-Westmeath, Fine Gael)
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There is something desperately wrong there.

Mr. Kevin McCarthy:

It was €200,000 in 2016 and €425,000 in 2017.

Peter Burke (Longford-Westmeath, Fine Gael)
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What is driving that seesaw? How are we monitoring what Pobal is spending here? Why is it going up and down so much without any value getting to people on the ground?

Mr. Kevin McCarthy:

There is value in terms of the actual spend under measures in delivery on the ground. Pobal's role, as I say, is-----

Peter Burke (Longford-Westmeath, Fine Gael)
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No, no. In terms of the checks and balance of the Department vis-à-visPobal, I merely want to know why is the budget doubling some years, drastically going down or going back up when I cannot see in the figures that activity on the ground, in terms of money going out to communities, is increasing. Why is that happening?

Mr. Kevin McCarthy:

It would relate to the varying nature of measures that are being implemented in a given year. Some measures, for example, might be more wide-scale in terms of the volume of activity that would be required of Pobal in terms of the volume of applications that might be involved in a particular measure.

Peter Burke (Longford-Westmeath, Fine Gael)
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Has the Department a service level agreement with Pobal?

Mr. Kevin McCarthy:

We have an overall framework agreement as a Department-----

Peter Burke (Longford-Westmeath, Fine Gael)
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A framework agreement. Would Mr. McCarthy expand on that?

Mr. Kevin McCarthy:

-----and then there are individual service agreements around different areas of Pobal activity. Pobal enters into agreements with individual Departments, say, in respect of what it does on dormant accounts for those individual Departments.

Peter Burke (Longford-Westmeath, Fine Gael)
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In terms of the moneys, is the Department responsible for paying Pobal that administration fee?

Mr. Kevin McCarthy:

We are.

Peter Burke (Longford-Westmeath, Fine Gael)
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Is there a service level agreement between the Department and Pobal for that, in terms of how it is monitored and measured and in respect of the way in which activity is quantified?

Mr. Kevin McCarthy:

There is an agreement in place with Pobal.

Peter Burke (Longford-Westmeath, Fine Gael)
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Does that agreement stipulate how much? Is there a rate per application? How is activity driven through that agreement?

Mr. Kevin McCarthy:

It relates to the level of activity on a particular programme that is run and then there is a separate service fee as well.

Peter Burke (Longford-Westmeath, Fine Gael)
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Is the service fee a flat fee?

Mr. Kevin McCarthy:

That is a flat fee of €184,000.

Peter Burke (Longford-Westmeath, Fine Gael)
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There is a flat-rate fee of €184,000 and the balance is based on activity. That means Pobal did nothing last year, if we are saying €200,00 is for administration.

Mr. Kevin McCarthy:

It got €425,000 in 2017.

Peter Burke (Longford-Westmeath, Fine Gael)
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No, no. I just want to get this right here now. We are saying €200,000 was the administration fee. Mr. McCarthy stated €184,000 is the flat-rate service level agreement fee and the balance is on activity, am I correct?

Mr. Kevin McCarthy:

It is a combination, yes.

Peter Burke (Longford-Westmeath, Fine Gael)
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That means, in 2016, if €200,000 was the allocation, Pobal did nothing for the year.

Mr. Kevin McCarthy:

We would have to look back-----

Peter Burke (Longford-Westmeath, Fine Gael)
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Does Mr. McCarthy accept that?

Mr. Kevin McCarthy:

That would suggest there was clearly a lower level of activity in 2016.

Peter Burke (Longford-Westmeath, Fine Gael)
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Clearly, there was no activity. I would have serious reservations.

Mr. Kevin McCarthy:

To be clear, Pobal's activity does not necessarily relate to the overall level of activity on the fund.

Peter Burke (Longford-Westmeath, Fine Gael)
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Is it correct that these community groups are going to Pobal getting information in terms of applications for various different funding streams?

Mr. Kevin McCarthy:

Yes.

Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Therefore, it does relate to activity.

Mr. Kenneth Jordan:

We ourselves are getting to grips with this.

Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It sounds like it.

Mr. Kenneth Jordan:

To clarify, Pobal only runs those schemes when a Department asks it to run them. They ran a social enterprise measure for us, which was €1.64 million.

Peter Burke (Longford-Westmeath, Fine Gael)
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Why has the Department a flat fee of €184,000 then, if Pobal only runs schemes when the Department runs them? If the Department decides to run no measures, does that mean Pobal still gets €184,000?

Mr. Kenneth Jordan:

According to the memorandum of understanding, MOU, in place now, that is the case.

Peter Burke (Longford-Westmeath, Fine Gael)
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This is incredible stuff.

Mr. Kenneth Jordan:

The MOU expired in December. We will be going back on this.

Peter Burke (Longford-Westmeath, Fine Gael)
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The service level agreement or MOU, call it what you will, under which the Department is operating has expired.

Mr. Kenneth Jordan:

That is my understanding, yes.

Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source

This is terrible. When one talks about communities on the ground, this is very serious.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I must take the others. We will come back to it.

Mr. Kenneth Jordan:

Can I clarify one point?

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It is worse it is getting. I was not happy with the opening statement and it has gone seriously downhill the longer the meeting has gone on.

Peter Burke (Longford-Westmeath, Fine Gael)
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That is what is frustrating me. As I say, this is not personal. Community groups are coming to us where there are gaps that have not got funding in a very difficult time and yet we see that the Department provides a flat-rate fee, it has no service level agreement in place and activity outside of that seems to have been non-existent last year. The Department has no chargeable policy for activity outside of the €184,000 now because it has expired, or I do not know how the Department charges it.

Seán Fleming (Laois, Fianna Fail)
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I must move on to Deputy Connolly. Is that okay with Mr. McCarthy?

Mr. Kevin McCarthy:

Just to add, while there might be application activity or the application activity in a given period could fall off, Pobal would still be required to do the follow-on checks, etc., and all of those other services that it has entered into as part of the MOU.

Peter Burke (Longford-Westmeath, Fine Gael)
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They are not prepared to do it now, if the Department does not have any agreement with them.

Mr. Kevin McCarthy:

No, but I suppose the flat service-level fee would cover some of that activity.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I call Deputy Connolly. I thank Deputy Burke.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Cheap mé go raibh muid ag déanamh dul chun cinn maidir le cothromaíocht inscne. An tseachtain seo caite, ghabh mé mo bhuíochas as an gcothromaíocht inscne a bhí i gceist ach táimid ar ais arís. Níl an locht ar na finnéithe ach ní féidir gan rud a rá. Last week, I welcomed the gender equality. It was wonderful. We had finally got all women. Now we are back to all men, with one woman behind who I welcome. I could not let it go without making a comment on it. It is startling.

I found this fascinating reading, and a good news story with a significant amount of money available for disbursement. I am not sure how it has become a bad news story.

The amount transferred to the fund between 2003 and 2016 - it is presumably more since - was €842 million, some of which is for disbursement. It is a wonderful good news story. The net transfers were €549 million and we are averaging a payout every year of €27 million.

First, let me get some critical points correct. Each Department is faced with a dilemma because Departments do not get this money upfront and the Department of Community and Rural Development must take the money out of its Vote. Is that correct?

Mr. Kevin McCarthy:

Yes.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Subsequently, the Department gets it back from the Dormant Accounts Fund, which is managed by the NTMA. The NTMA manages the money, invests the money and looks after the interest rates. Each Department has to take money from its voted budget to give out.

Mr. Kevin McCarthy:

That is right.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Then the Department of Community and Rural Development gets it back from the Dormant Accounts Fund.

Mr. Kevin McCarthy:

That is right.

Catherine Connolly (Galway West, Independent)
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The next issue then is the significant underpayment going out. I do not wish to be too critical because it should be a wonderful story. We heard an opening statement. The Chair has already referred to it and I myself had it marked. Mr. McCarthy spent most of the opening statement telling us what we know and not dealing with the issues that were raised by the Comptroller and Auditor General. These were practical issues, with one recommendation. For the future, in an opening statement we do not need the background because we have it. I got it in the briefing document and read it. I got it in the chapter and read it. I got it in just about all the other documents I have read. I needed Mr. McCarthy to deal with the issues raised - one, two, three, four, five.

On the statutory review, the Department has broken the law. Is it correct that the Department has not complied with its obligations under the law to carry out a review?

Mr. Kevin McCarthy:

That is correct.

Catherine Connolly (Galway West, Independent)
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I appreciate that the Department has come on this late. I want to say that on the record. In July last year, the responsibilities were transferred to the Department.

Mr. Kevin McCarthy:

That is correct.

Catherine Connolly (Galway West, Independent)
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Prior to that, there were I do not know how many different Departments.

There was a dormant accounts board. Would someone tell me was it functioning well originally? This scheme was set up in 2003. It was managed by a dormant fund account, is that right?

Mr. Kevin McCarthy:

That is correct.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Was it working well?

Mr. Kevin McCarthy:

It was abolished in-----

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

No, no. Was it working well?

Mr. Kevin McCarthy:

I am not in a position to offer a view on that.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Is anyone here in a position to tell me was the dormant funds board working well and if so, why was it abolished?

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is there anyone present who dealt with the dormant accounts board over the years?

Mr. Kevin McCarthy:

To be fair, it was a Government decision of the time to move away from the dormant accounts board structure and to bring the responsibility back in to Departments. I am not fully au faitwith the thinking at the time. There was a move, for example, to reduce the number of agencies-----

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

If Mr. McCarthy has no opinion, that is okay.

Mr. Kevin McCarthy:

-----and bodies out there and it was certainly part of that.

Catherine Connolly (Galway West, Independent)
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If it does not come within Mr. McCarthy's remit, that is okay. However, it is important to say there was a board there.

Mr. Kevin McCarthy:

That is right.

Catherine Connolly (Galway West, Independent)
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I see no evidence before me that that board was not working properly and we needed a new system.

What I see before me is not the Department's fault. It has gone from Department to Department, with serious underspend of money that is urgently needed.

That is a question I am going to take up. What review was taken of the dormant funds account at the time? Why was there a need for a change? What lessons were learned? Now that we have gone forward, the Department is not complying with its obligation under the legislation. Did the previous Department not comply with that obligation as well? That review was due within three years.

Mr. Kevin McCarthy:

Yes, it should have been concluded by December 2016.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Okay.

Mr. Kevin McCarthy:

It should have been concluded within three years of the-----

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

When should it have been commenced?

Mr. Kevin McCarthy:

Within three years of the commencement-----

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

I know. When should it have been commenced?

Mr. Kevin McCarthy:

I think the legislation sets down when it should be concluded-----

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

I know that.

Mr. Kevin McCarthy:

-----rather than when it should be commenced.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

I understand that. The Department has checked this out. When should that-----

Mr. Kevin McCarthy:

Ideally, we would expect-----

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

I do not want to hear about "ideally". Under the legislation, what was the final date by which this review had to start?

Mr. Kevin McCarthy:

December 2016.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

It had to start by December 2016.

Mr. Kevin McCarthy:

No, it had to conclude-----

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

When did it have to start?

Mr. Kevin McCarthy:

The legislation is silent on when it needs to start.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Right. That is a little gap, is it?

Mr. Kevin McCarthy:

Not necessarily.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

It is, because there is no review now. Stick with me for a second - I am asking very specific questions.

Mr. Kevin McCarthy:

I know. If a piece of legislation sets down when a review should be concluded by, I suppose it becomes imperative to identify the requirements in terms of the review.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Okay. It should have been concluded by December 2016-----

Mr. Kevin McCarthy:

Yes.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

-----and we are now in February 2018.

Mr. Kevin McCarthy:

That is right.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Why has the review not started and been completed?

Mr. Kevin McCarthy:

Well-----

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Just a simple answer now.

Mr. Kevin McCarthy:

Yes. We are moving-----

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

No.

Mr. Kevin McCarthy:

-----to commence a review now.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

No. Why has the review not commenced? I do not wish to place blame. I simply wish to find out the reason. Was there a shortage of staff? I am not giving answers. I would like Mr. McCarthy to give me the answer. Why was it not completed?

Mr. Kevin McCarthy:

I can only speak for where we are at the moment.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Okay.

Mr. Kevin McCarthy:

Certainly, the review should have happened in line with the statutory requirement.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Why did it not happen? My question is "why?". If Mr. McCarthy cannot answer-----

Mr. Kevin McCarthy:

I cannot say why it did not happen before December 2016. I can say that the Department which had this responsibility at the time consulted other Departments in drawing up a new scheme. It may have formed the view that this was sufficient to meet the requirement.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

No, just a second, there is something seriously wrong here. This has been the Department's responsibility since last July. One of my colleagues asked about the problems that were identified during the handover. Did the officials in the outgoing Department say that this was at the top of the list? Was that said?

Mr. Kevin McCarthy:

I am-----

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Was this at the top of the list when Mr. McCarthy and his colleagues took over this responsibility? Were these problems highlighted?

Mr. Kevin McCarthy:

Certainly for me, the Comptroller and Auditor General's report would have highlighted it.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

That is not my question. Were these serious issues of underspend highlighted when responsibility for this area was handed over?

Mr. Kevin McCarthy:

I do not know-----

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Okay.

Mr. Kevin McCarthy:

-----what was highlighted as part of the handover discussions.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

All right.

Mr. Kevin McCarthy:

I am simply not in a position to comment on that.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

That is fine. The Comptroller and Auditor General came along then. The Department has accepted his major recommendation. I suggest it is not really a recommendation - it is an obligation under legislation. When is the date for that to be completed? Who is carrying it out?

Mr. Kevin McCarthy:

A first meeting has been established for 21 February.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

The first meeting is going to take place on 21 February. With whom?

Mr. Kevin McCarthy:

With the Departments that will be parties to the review. The NTMA will also be invited to participate.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Who is carrying out the review? When is it going to be completed?

Mr. Kevin McCarthy:

As a Department, we will be leading on that review.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Yes.

Mr. Kevin McCarthy:

We will be conducting the review with the involvement of each of the Departments that have an interest in it.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

What is the date of completion?

Mr. Kevin McCarthy:

The second quarter.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Sorry, what does that mean?

Mr. Kevin McCarthy:

By June.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Why was there no action plan? Maybe the answer will be the same. There were no action plans in 2015 or 2016 because-----

Mr. Kevin McCarthy:

2015.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

2015. The previous one in 2014 was late and it was felt that there was no need for one in 2015.

Mr. Kevin McCarthy:

Again, I am speculating.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Okay.

Mr. Kevin McCarthy:

That seems to have been the reason behind it.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

All right.

Mr. Kevin McCarthy:

Certainly, there should have been an action plan.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

There was no such plan.

Mr. Kevin McCarthy:

We have said that there should have been an action plan.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Without an action plan, one cannot see what projects are identified. Is that not right?

Mr. Kevin McCarthy:

Except that the Departments were still operating off the 2014 action plan at that point, given the lateness of the production of that plan. I think it is an issue generally in terms of the calendar activity. It is an issue that individual Departments have identified-----

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Okay.

Mr. Kevin McCarthy:

-----as a factor in the underspend.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

These issues are coming to our attention because of the Comptroller and Auditor General's report. They are not coming to our attention proactively from the various Departments. This is extremely worrying because there should be an inbuilt review of what is going on to facilitate the distribution of this money. I would like to clarify something. If an account pertaining to the list of the various institutions is dormant for 15 years, that money goes into the dormant accounts fund, but the owner is allowed to retrieve it at any point.

Mr. Kevin McCarthy:

That is correct.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Okay. The credit unions have never come into this.

Mr. Kevin McCarthy:

No.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Mr. McCarthy has no view on that because it is a policy decision.

Mr. Kevin McCarthy:

That is a policy matter for the Government.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

That is okay. How much of the money that goes in has to be kept in reserve in case people come back in the future?

Mr. Kevin McCarthy:

My colleagues from the NTMA might want to comment on that.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Yes.

Mr. Kevin McCarthy:

The current value of the reserve is €80 million.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

I know what the current value is.

Mr. Kevin McCarthy:

Yes.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

I just want to know what has to be kept in reserve. How much money would be available for disbursement if there was a full team disbursing the money?

Mr. Stephen Judge:

I will provide some background information. As Mr. McCarthy has said, there was €217 million in the fund at the end of last year and there was a reserve fund of approximately €80 million. That really represents the reserve fund for potential future reclaims.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

The NTMA has a formula for coming up with-----

Mr. Stephen Judge:

Yes. It is roughly-----

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

It is okay. I just want to know the mechanics. The NTMA keeps that much in reserve and everything else can be given out.

Mr. Stephen Judge:

Everything else is in what is called an investments and disbursements fund for investment and disbursement.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

That money can be given out by the various Departments if they are able to do so. Some €80 million is kept in reserve.

Mr. Stephen Judge:

Yes.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

I will move on to the social enterprise schemes. I would like to put this in perspective. Last night, I took a phone call from an organisation in Connemara, Teagmháil na nÓg, which has just received a letter from the local ETB - I keep calling it the VEC - to tell it that it is going to close. This is a special centre for children who drop out of school and it has been told it is going to close. I am looking at massive amounts of funds here. I just heard about it last night and I am going to get more details on it. Last year, all the politicians in Galway were called to a meeting because the youth federation, or an organisation like that, was about to close due to a lack of money. Two weeks ago, we got a call about an essential service where access takes place in time. It is about to close at the end of March. Various social enterprise ideas are coming forward. One example involves repairing bicycles. It cannot get a leg in to get help. That is just the background. I have mentioned a minute sample. Comhlachas na gComharchumainn, which represents all the co-operatives in the Gaeltachts and islands throughout Ireland, has made presentations to all of us. It is struggling to exist. There is something seriously wrong here. I do not wish to blame Mr. McCarthy individually. Is there any feedback? Is there any mechanism? We will take the co-operative movement. Has the Department engaged with Comhlachas na gComharchumainn? When its representatives were in Buswells Hotel and in the Dáil, they told us that a tiny amount of money would make such a difference. Has the Department engaged with them in relation to the dormant accounts?

Mr. Kevin McCarthy:

I do not know what engagement there has been with specific named organisations, but I can certainly say that under our dormant accounts action plan, there is a measure that involves supporting social enterprise.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Yes.

Mr. Kevin McCarthy:

In the period under examination, the spend has been slow.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Yes.

Mr. Kevin McCarthy:

Over 2015 and 2016, some €974,000 was drawn down. There has been a gathering momentum under that. In February 2017, there was a separate call for proposals. As a result of that, €1.648 million was allocated in 2017 to 42 social enterprise projects around the country.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Okay. Has the Department developed its policy on social enterprise or is it still working on it?

Mr. Kevin McCarthy:

Yes. Just to complete it out, there is a separate current call-out for dormant account funding under Social Innovation Fund Ireland.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Yes.

Mr. Kevin McCarthy:

This is also to support social enterprise. That is a €1.6 million fund.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

There is a huge underspend on that as well.

Mr. Kevin McCarthy:

That is only out for an invitation of expressions at this point, under Social Innovation Fund Ireland.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Social Innovation Fund Ireland saw a huge underspend.

Mr. Kevin McCarthy:

That is right. It has been slow to get off the ground, but it has gathered momentum.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Okay.

Mr. Kevin McCarthy:

There was a significant increase in spending in 2017. It was over €2 million in 2017. To be fair, I would like to mention a particular feature of that.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Yes

Mr. Kevin McCarthy:

Social Innovation Fund Ireland is required to source matching funding from private philanthropists. That is a constraint on its capacity to gear up. We understand that at this point, it has identified a potential €10 million pipeline of private philanthropist donors. That will allow it to continue to gear up.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Okay.

Mr. Kevin McCarthy:

It is a new organisation that has been getting off the ground. It has staffed itself up. We expect it to have more activity.

Between the two social enterprise funds that are currently spending, there is a separate commitment to a further 2018 call under the social enterprise measure. As the Deputy indicated, we are developing an overall policy on social enterprise.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

When will that be ready? Who is developing it? Is it being developed in-house?

Mr. Kevin McCarthy:

It is in-house. We are relying on some of the same people to develop that as the managerial scheme.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

When will it be ready?

Mr. Kevin McCarthy:

That will be the end of quarter one. That is the target.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

The end of March.

Mr. Kevin McCarthy:

Yes.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

It will be available and we can see it.

Mr. Kevin McCarthy:

I speak in terms of the work done on it. Proposals will have to come to the Minister and so on in the usual way. It is certainly our intention to publish that in the early part of this year.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

When would it be, roughly?

Mr. Kevin McCarthy:

Our work will be concluded in quarter one, which is the end of March.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

All right.

Mr. Kevin McCarthy:

We have also taken on more responsibility for the community services scheme, as the Deputy probably knows.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

What is that?

Mr. Kevin McCarthy:

The community services scheme. Again, there is a social enterprise dimension to that and all of it will feed into the social enterprise policy. I am not familiar with the precise detail of the issues or needs of the individual organisations mentioned by the Deputy-----

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

They are not individual organisations.

Mr. Kevin McCarthy:

No, I know that.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

It is the representative organisation for the co-ops on the islands, Connemara and throughout the Gaeltachts. They set out very clearly what is necessary and I would have thought this would be the first point of engagement.

Mr. Kevin McCarthy:

We are happy to engage with them as an input to the development of the social enterprise policy. It is an area where we see significant potential to grow our activity.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

The Chairman is being very polite with me as I am sure my time has finished. It is essential that the review should look back and learn but it must also look forward and change the modus operandi. There must be a focused team with full-time employees looking at this. This money must be given out and it is clear the Department cannot do it, with the best will in the world. The two or three people identified are not assigned solely to this. It seems extraordinary that it takes the Comptroller and Auditor General's report to make the Department reflect on this. There is no sense of urgency and the response to the Comptroller and Auditor General's report is that this is part of the work programme rather than something that needed an urgent review in order to see where this was going. If I thought it would come from today's proceedings, I would be delighted. It would be worthwhile.

Mr. Kevin McCarthy:

I assure the Deputy that we recognise the importance and urgency of this. Even in preparing our 2018 action plan, we want to be able to draw on the lessons of what has worked and has not worked. We are exercised to do that.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

Pobal has an administrative role but does it have a feedback role for the Department? Does it indicate what is needed on the ground?

Mr. Kevin McCarthy:

It does. It produces reports on individual schemes.

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

No, that is not my question. Is there feedback generally on what is needed in an area? For example, would it indicate gaps or what is missing?

Mr. Kevin McCarthy:

Is that with regard to administration of schemes-----

Catherine Connolly (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

No, it is not with regard to schemes. Does it identify gaps and needs in an area or function outside the limited scheme being administered? Is it simply-----

Mr. Kevin McCarthy:

I am not sure that is a formal part of its responsibility. Certainly, in the dialogue with Pobal we would draw on its experience in managing schemes, the demand being presented and the unmet demand for schemes. That forms part of the dialogue with Pobal, as opposed to a formal feedback responsibility.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

You ran through some figures with Deputy Burke and I would like you to go through them again slowly. I would say you have the schedule for each year from 2012 to 2017, so what were the payments?

Mr. Kevin McCarthy:

What figures are they?

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

They are the payments out.

Mr. Kevin McCarthy:

How far back?

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It is to 2012.

Mr. Kevin McCarthy:

In 2012, it was €4.159 million.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It is approximately €4.2 million.

Mr. Kevin McCarthy:

In 2013, the figure was €1.486 million; in 2014, it was €1.989 million; in 2015, it was €8.939 million; in 2016, it was €12.041 million; and in 2017 it was €15.652 million. There are expenses and compliance costs in each year as well. Those figures relate to disbursements.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

What were the payments to Pobal for each of those years?

Mr. Kevin McCarthy:

In 2012, it €750,000; in 2013, it was €645,000; in 2014, it was €400,000; in 2015,,it was €750,000; in 2016, it was €200,000; and in 2017 it was €425,000.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It varies quite a bit in some years it can be 20% or 30% of payments referred to by the Comptroller and Auditor General. That excludes the costs of the Department and the National Treasury Management Agency.

Mr. Kevin McCarthy:

That is correct.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Last year approximately €16 million was paid out.

Mr. Kevin McCarthy:

Yes.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

What were the costs or expenses associated with that?

Mr. Kevin McCarthy:

The Chairman is referring to 2017.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Yes.

Mr. Kevin McCarthy:

There was €425,000 paid in respect of Pobal.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

That is fine.

Mr. Kevin McCarthy:

I should mention, for completeness, that there are other costs in a year. The total expenses and compliance cost in 2017 would have been €660,000, which includes the Pobal figure.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Okay. That is fine. There was a figure in the briefing material of committed funds to be distributed by the NTMA on foot of existing approvals. It is €70.86 million. Will the witnesses give a breakdown of that figure by scheme and county? It does not have to be now.

Mr. Kevin McCarthy:

We can seek to do that. We do not have it broken down in that way.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I did not expect it now. That is the amount committed based on plans, etc.

Mr. Kevin McCarthy:

It is based on commitments in annual action plans that have not yet been disbursed.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

How long is some of that in the system? How much of the amount might relate to an action plan not paid out for longer than four years, for example?

Mr. Kevin McCarthy:

It is one of the exercises we are attempting now in engaging with individual Departments.

Mr. Kenneth Jordan:

This is in the Comptroller and Auditor General's report, by and large. Currently, there are-----

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is this in the Comptroller and Auditor General's report?

Mr. Kenneth Jordan:

It is extracted from the report, as such.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Okay. We have that.

Mr. Kenneth Jordan:

I can summarise it for the committee. There is a €12.4 million underspend for the former Department of the Environment, Community and Local Government. Part of the issue in the 2018 action plan is to work out each of those schemes and draw a line under them if they are not going to progress. The Department dealing with housing has a €6 million underspend and the Department dealing with rural, regional and Gaeltacht affairs has an underspend of €3.8 million. Our Department has €11.5 million in its underspend. Much of that is the Social Innovation Fund Ireland, SIFI, and it is technically not an underspend as the €10 million commitment was planned over three years. The Department of Children and Youth Affairs has an underspend of €7.5 million, as does the Department of Justice and Equality. The Department of Health figure is €4.5 million. The other most significant figure is for the Department of Education and Skills at €3.4 million. The aggregate underspend in 2012 was €4 million and in 2013 it was €6.5 million.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

That is 2012. What is it in 2013?

Mr. Kenneth Jordan:

In 2013, I have an aggregate underspend of €6.5 million.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

That is money which is approved on foot of action plans but is not yet paid out.

Mr. Kenneth Jordan:

Exactly.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It is €4 million for anything before 2012.

Mr. Kenneth Jordan:

At the moment, because action plans were not in place before 2012, it was the disbursement board. We are left with a figure of €9 million in difference. There is €61 million for the action plans and €9 million-----

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Prior?

Mr. Kenneth Jordan:

-----outstanding prior to 2012.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

So how much is there pre-2012?

Mr. Kenneth Jordan:

Some €9 million. We have to go back over the detail of these figures but this is the initial take.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Would any of those files go back a decade at this stage? Do they exist?

Mr. Kenneth Jordan:

The most important thing for us is to get the commitment that this money is not required so that we can bring it forward to future action plans.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

If the Department gives a commitment in writing without a sunset clause, does it have an entitlement to withdraw the money? It is obvious that it is not happening but the Department does not have-----

Mr. Kevin McCarthy:

The reality is that it is more likely to relate to measures that never got off the ground rather than groups that were approved for funding not having got it. It may have been that a measure did not reach the level of activity that might have been originally projected. For example, either the level of demand or level of uptake did not reach the initial projected level or, in some cases, a measure simply did not get off the ground in the way that was originally planned.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

What was the figure in 2013?

Mr. Kenneth Jordan:

For underspend? Some €6.5 million.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

What was it in 2014?

Mr. Kenneth Jordan:

Some €4.3 million.

Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Approximately €25 million has been committed and has been sitting in an account for up to eight years while organisations cry out for this money. It gives a whole new meaning to "dormant". At least some people can get money out of that account even if they come back but this seems to be more dormant than the dormant account the National Treasury Management Agency, NTMA, manages. We will be doing a periodic report. I do not think this system works. I do not think it needs a review. There has been €25 million sitting there for years with nothing happening, with organisations crying out for it which serve the most deserving groups of people in society with regard to people with economic and social disadvantage, educational disadvantage and persons with disabilities. That €25 million has been sitting there for nine years and the witnesses do not even know its position. That is woeful.

One of the problems, though not caused by the witnesses since they are the people administering it, is that the chart from the Comptroller and Auditor General indicates that there are schemes being administered by ten different Departments. That is on page 105, chart 7.3 in the Comptroller and Auditor General's report. The Department of Environment, Community and Local Government had a major underspend, as did the Department of Children and Youth Affairs, the Department of Justice and Equality, the Department of Transport, Tourism and Sport, the Department of Health, the Department of Housing, Planning, Community and Local Government, the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs which spent only 6% of what was approved, the Department of Education and Skills which spent 25%, the Department of Employment Affairs and Social Protection which spent half of it, and the Prison Service which spent only a fraction of it. It is no wonder that this system does not work when it is spread across ten different Departments. There is a fund managed by the NTMA and it is a good idea to have it. The witnesses make a provision to have some money to go back. They engaged Pobal to administer it, having come up with the policy, and then there are different schemes across ten different Departments. How could anybody know where to go for this money? It is no wonder it is lost in the system.

I have to contrast this. How much has the Department of Rural and Community Development paid out over the years? Some €275 million. We have to look at this with regard to value for money and good public administration. We all look at what we call the sports capital programme. It hands out that type of money every time there is a round. The applicants know what to do. It is well publicised. They get their forms in. The level of detail they have to get in is extraordinary. There is a sunset clause and the Department, without having to go to Pobal or ten other Departments, is able to administer it, make sure it functions properly, get the documentation in after approval is given and pay for the works when they are done, subject to audit, verification and so on. That system works well. This system is not working at all. The Department would be better off asking the Department of Transport, Tourism and Sport if it would second half a dozen staff to the Department of Rural and Community Development, and getting rid of Pobal and the ten different Departments. It is not just a question of the three people. They are probably busy drawing up schemes and policy statements for ten different Departments, and ten Departments are drawing up schemes to implement it. It is the worst level of duplication across Departments that I have encountered in my time as Chairman here. None of it is the witnesses' fault. They inherited this last year. I would be of a mind, when we are issuing our interim report, to state that the system as it operates has to be called to a halt. It is not transparent. It is all over the place. Nobody can follow it. The Department even has trouble following it. There is money as much as nine years old with no sunset clause. We all have sight of one Department or another which would administer a scheme of this scale and nature with its hand tied.

Maybe people will utterly disagree with me but I am amazed at how poorly this system operates. I have no confidence that it will be any better next year. This matter of calling it a timing difference and aligning funding coming from the Dormant Account Fund versus the annual Estimates is, as just mentioned, something done by the Department I just mentioned. It gets an Estimate for a programme and we know it will be a couple of years before some of the funding will be drawn down for the sports capital programme. There is a prototype in the public service of how to administer a fund like this. One of our jobs is, when we find something working well, to try to replicate it in other areas which do similar work in a very cumbersome manner. This is designed to be cumbersome. It involves ten different Departments and ten different types of scheme and there is probably a variety of different schemes within those Departments. It would be impossible for people to deal with. Without going into further detail, I think the witnesses understand our frustration. Deputy Burke started on the matter and other people have spoken on it. I do not think this system is working well and the public service is capable of getting a far more streamlined and effective service to deliver the money. When we are back in our constituency clinics tomorrow, we will all have people from groups suffering from economic and social disadvantage, educational disadvantage, and persons with disability, coming to us to seek funds. If we tell them that there is €25 million which has not been spent for those years, they will give out to us and ask if we are not doing our job. Our job is to highlight when we see that a system is broken. It is almost irredeemable in its current format. I stress that it is not an issue for the NTMA side of the house. It is probably doing its end of it fine. The rest of the system is not working and there is a simple way to make it work in the interests of the citizens that we should be serving.

That was a bit of a speech as well as a question. I call Deputy Murphy.

Catherine Murphy (Kildare North, Social Democrats)
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The witnesses made a statement earlier that a scheme may never have got off the ground and never reached the level of activity or uptake envisaged. I think that goes to the heart of the matter. This is not designed for the kind of uptake and profile of how things happen at community level. My understanding is that it is so cumbersome to apply for that there are people and organisations that looked at it and simply dismissed it. These are not organisations that do not need money or where €1 million would not make a difference. There could be 25 such organisations around the country if that was the case. How many of the years we are talking about are years when the troika was here? We were told that we were bankrupt. People scrapped for every single shilling. Some of those communities were among the most impacted.

This is not designed for the people it is supposed to benefit. How many people from disadvantaged communities said this would work for them and this is what they needed? I am not saying there should not be oversight and good accounting for things. However, much of our community exists in a very informal way. Some organisations have to exist in that kind of informal environment, yet we are looking at a very rigid system where it is difficult to access funding for worthwhile things. Some of projects brought forward do not get the uptake because they are not what the community requires. If they were in place and the community required them, it would use them. It tells us something about who is designing the system for whom.

If there is going to be a redesign, the witnesses will have to engage the communities that are going to be the benefices of this scheme in that design. It has to be designed in such a way that it is flexible enough for people to engage with it and not spend a lot of administrative time they do not have applying for it or drawing it down. There is a big deficiency. I agree with the Chairman about it not just being a review but a redesign. I do not think Pobal can be blamed for administering a scheme it did not design. The administration of it should be flexible enough.

I want to ask about a few of the schemes. There was about €500,000 of an underspend in the community-based model for people with dementia. Has that been spent? In respect of training and support services for homecarers, there was €500,000 but up to 2016, nothing was spent. Has that been spent? On the Arts in Education initiative, €50,000 was drawn down from €280,000. Has the rest of it been drawn down?

I refer to €1 million allocated to establish a monitoring programme under the Department of Justice and Equality. A value of €798,000 was approved but nothing was drawn down by 2016. Have these all been drawn down now or is there outstanding money in those particular categories? If so, why is that the case?

Mr. Colm Desmond:

In respect of the dementia programme, all the funding has been drawn down, bar one particular project of the five. That project was a review built-in to assess how the other projects would be completed and how they had fared. However, the national strategy for dementia arrived and overtook it. That review is being done within the encompassment of that strategy. The answer is that project on dementia has been drawn down.

Catherine Murphy (Kildare North, Social Democrats)
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What was the outstanding amount?

Mr. Colm Desmond:

About €78,000.

Catherine Murphy (Kildare North, Social Democrats)
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The €78,000 was to do a review. That seems like an awful lot of money.

Mr. Colm Desmond:

I think perhaps it would have been used in that year for another project and, therefore, put to good effect. However, because the dementia strategy-----

Catherine Murphy (Kildare North, Social Democrats)
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Do not tell me it was used to good effect. I want to know for what it was used. Some €78,000 is a large amount of money. Is it more than a review? Has it been subsumed into another review taking place?

Mr. Colm Desmond:

No. The national dementia strategy would have allowed for overall review of spending in the dementia area. Therefore, it was logical that that was felt the most likely place to carry out assessment of dementia spending overall. Funding for the dementia project was one of three in the 2016 action plan. Many of these were multi-year projects. Funding was spent on establishing a mobile health screening unit and, separately, for an intercultural health project for refugees. The funding for the intercultural health project for refugees has largely been spent. The mobile screening unit is going on until 2019, so the dementia funding was transferred into that project.

Catherine Murphy (Kildare North, Social Democrats)
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Okay. Who would carry out a review for €78,000?

Mr. Colm Desmond:

I would have to check exactly what the plans were as I do not have those facts in front of me. I think a provision for that task would have allowed an outside amount for that. It would have been kept-----

Catherine Murphy (Kildare North, Social Democrats)
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A consultant.

Mr. Colm Desmond:

Not necessarily. I do not have the facts as to who was planned to do that review of the other projects. However, because the other projects were doing so well, and the dementia strategy was in place, it was felt that funding could be decommitted in favour of the other project.

Catherine Murphy (Kildare North, Social Democrats)
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Will Mr. Desmond come back to us and tell us who did the review?

Mr. Colm Desmond:

The amount was set aside to review the other projects and assess how well they were doing. When the dementia strategy was put in place there was a framework for assessing spending in that area. The review was not done in that context, therefore I will revert to the Deputy about the plans within the dementia strategy for reviewing dementia spending, which would encompass this.

Seán Fleming (Laois, Fianna Fail)
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The witness can send that the secretariat.

Mr. Colm Desmond:

I certainly will.

Catherine Murphy (Kildare North, Social Democrats)
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I referred to training services for homecarers and the Arts in Education initiative. Can somebody come back to me on those?

Mr. Kevin McCarthy:

We will get 2017 updates. We do not have representatives here from the Department.

Catherine Murphy (Kildare North, Social Democrats)
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Does Mr. McCarthy have any idea?

Mr. Kevin McCarthy:

I do not have that information in respect of 2017.

Catherine Murphy (Kildare North, Social Democrats)
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Would the witnesses have expected when they came here today that we would focus on underspends or where no money was drawn down? Why would the witnesses not have anticipated that one of the first questions we would have asked was whether that money had been spent?

Mr. Kevin McCarthy:

I accept we should have that information and I apologise that we do not have it for the Deputy today. We will get that information to her quickly.

Catherine Murphy (Kildare North, Social Democrats)
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What about the monitoring programme under the Department of Justice and Equality?

Mr. Deaglán Ó Briain:

It is part of the overall youth justice initiatives for which funding was being provided. We were given an allocation in December 2014. It took most of 2015 to get it up and running. The mentoring programmes were established in the course of 2016 and 2017. I gave figures earlier that we are now spending figures close to our full allocation under the Dormant Accounts Fund.

Catherine Murphy (Kildare North, Social Democrats)
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However, it was not spent up to the end of 2016; none of it.

Mr. Deaglán Ó Briain:

Some of it was spend in the course of 2016 but it takes time to get projects-----

Catherine Murphy (Kildare North, Social Democrats)
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I know but why would it not show up here as some money disbursed?

Mr. Deaglán Ó Briain:

The funding went to Garda youth diversion projects. We worked with particular projects that provided a mentoring service. It is part of that overall package of activity that we were working on. We are now, as I said, from 2017 onwards, spending the full allocation for Garda youth justice initiatives.

Catherine Murphy (Kildare North, Social Democrats)
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I understand funding was allocated in December 2014 and it was up and running in 2016. No money was disbursed in 2016. Is it paid in arrears?

Mr. Deaglán Ó Briain:

No. The mentoring programmes are run by individual Garda youth diversion projects, so it is part of the funding package that they get. We pay on a quarterly basis. We negotiate an annual business plan and an annual budget, and we keep that under review. Projects do not get funding if they cannot spend it. Conversely, if there is a need, and projects can demonstrate there is an increasing caseload or opportunities, they can get extra money.

From our point of view, it is part of the work of the Garda youth diversion projects. We have partnered with a number of projects to provide mentoring initiatives. We will be looking at those and reviewing where we go, starting from 2019, in terms of the type of work that is undertaken by the Garda youth diversion projects. Mentoring is potentially really important in combatting recidivism and-----

Catherine Murphy (Kildare North, Social Democrats)
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How is that evaluated? Is the review simply a monetary review or is it about outcomes? Who carries it out?

Mr. Deaglán Ó Briain:

It is for the future. I have recently taken responsibility for this and Minister of State, Deputy Stanton, is really interested in the area. We are proposing a review of the work we are doing in the course of 2018. The focus is very much on outcomes. It is challenging in terms of articulating how those are measured but clearly recidivism is a particular issue.

We do quite well in international comparisons. I do not have the precise figures before me, but the overall recidivism rate in terms of people coming back to projects is about 17%. There is a particular issue with burglary, so there is work to be done. The review of strategy and how the projects operate will take place in 2018, which the Minister of State, Deputy Stanton, announced at a recent event.

On the Irish Prison Service, clearly the system is cumbersome but I would not wish to give the impression that there has been an underspend on the Irish Prison Service initiatives. Taking the plans for 2014 and 2016 together, an allocation was committed from Dormant Accounts Fund of approximately €579,000. All that was spent in the 2015 to 2017 period. From our perspective, it is about the sequencing of approval and then the expenditure. There is an issue about alignment with the annual estimates process and the Dormant Accounts Fund but there is not an underspend.

Seán Fleming (Laois, Fianna Fail)
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Will Mr. Ó Briain send us a detailed note on this matter?

Mr. Deaglán Ó Briain:

I will do that.

Catherine Connolly (Galway West, Independent)
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I have one or two specific questions. I do not think that the Chairman meant it, but I do not think that the comment on Pobal - to get rid of it - is acceptable. It is doing considerable work on the ground. The questions are appropriate in terms of analysing what is happening but it is premature to make those kinds of comments.

Seán Fleming (Laois, Fianna Fail)
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It is the design.

Catherine Connolly (Galway West, Independent)
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No, but Pobal was mentioned and it is struggling. The difficulties it has experienced should be part of the analysis. If it is helping applicants and filling in application forms, as my colleague mentioned, it demonstrates that there is something wrong with the complexity of the thing. Pobal is key to asking about problems on the ground.

On Pobal, some of the moneys are administered directly from the Departments, and then Pobal administers a certain amount of the funds. What is the breakdown? How much of the funds does Pobal administer compared to the Department? What is the percentage?

Mr. Kevin McCarthy:

I am not sure that we have done that breakdown but we can seek that information from Pobal. Pobal may have given some detail on the funds that it administers as part of its own response to the Comptroller and Auditor General.

Catherine Connolly (Galway West, Independent)
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The witnesses would know that because they commented here that the Department administers it directly and then I think there was a figure of 29 in respect of the Dormant Accounts Fund. The Department must have a breakdown. Would Pobal do 50% of the work? Is it 30%?

Mr. Kevin McCarthy:

I will see if I can locate information on that.

Mr. Deaglán Ó Briain:

The Department of Justice and Equality manages all the initiatives directly with the exception of the initiative of migrant integration, so from our perspective, it is one thing out of the entire package. Pobal costs money and the costs are visible. I would make the point that it costs Departments money because we must employ staff to manage programmes and those costs are not visible, so we must be careful about comparing like with like.

Catherine Connolly (Galway West, Independent)
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I understand that and they have not been included. The Department bears its own costs.

Mr. Kevin McCarthy:

I have material before me which was generated by Pobal itself. It says that between 2005 and 2016, Pobal administered 42 Dormant Accounts Fund measures, 20 of which had multiple funding strands.

Catherine Connolly (Galway West, Independent)
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My question is how that compares with what the Department is doing.

Mr. Kevin McCarthy:

I am not sure that I have an overall figure. We will return to the Deputy with that information, if that is okay. I understand the question.

Catherine Connolly (Galway West, Independent)
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It is an important question.

Seán Fleming (Laois, Fianna Fail)
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Will Mr. McCarthy include not only the number of schemes but also their monetary value? Some are big and others are not.

Mr. Kevin McCarthy:

Yes, the value of the schemes administered by Pobal and those which it does not administer-----

Catherine Connolly (Galway West, Independent)
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Yes, please provide us with the number and the value for each year.

How many of the projects must struggle with matching funding? The area based childhood, ABC, project was mentioned earlier. In regard to the Department and Atlantic Philanthropies, I have difficulties with saying the word, perhaps it is an adverse reaction-----

Mr. Kevin McCarthy:

It is not a feature generally. It is not a requirement in the administration of the scheme. For example, Social Innovation Fund Ireland was established as a vehicle to try to encourage philanthropy. The commitment from Government was that it would 50:50 match philanthropic donations that Social Innovation Fund Ireland was in a position to generate. In that case, a 50:50 commitment is required and that has been a constraint.

Catherine Connolly (Galway West, Independent)
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It is not a general feature.

Mr. Kevin McCarthy:

No, it is not a general requirement.

Catherine Connolly (Galway West, Independent)
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It is only for specific projects on occasion.

Mr. Kevin McCarthy:

I am not sure. I cannot speak for all the measures as to whether a contribution is required.

Catherine Connolly (Galway West, Independent)
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Maybe we could get clarification on that too because it is also very important.

Specifically in regard to ABC, which subsequently became something else, I do not know why or what analysis was done. Later it became the QCBI, quality and capacity building initiative. Quality and capacity building is something that needs to be done to the Dormant Accounts Fund. What was the effect in regard to the philanthropic money? What was the breakdown for the ABC programme, in terms of the philanthropic money and the funds from the Dormant Accounts Fund? When the ABC programme changed, were there implications for the philanthropic funding?

Mr. Conor Rowley:

To clarify, the ABC funding did not come through Dormant Accounts Fund. It is mentioned in the report because the original pitch for funding referenced the ABC programme and a possible extension to 12 additional sites. The ABC programme has continued with joint funding until about 16 months ago, since then the Department has carried the cost of full State funding because of the cessation of Atlantic Philanthropies.

Catherine Connolly (Galway West, Independent)
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The ABC programme received no Dormant Accounts Fund funding

Mr. Conor Rowley:

No, and it is continuing as it is.

On the QCBI, over €200 million has gone into the children and youth sector in the last decade which was co-funded by Atlantic Philanthropies and Government. That is the prevention and early intervention programme-----

Catherine Connolly (Galway West, Independent)
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Is this voted money?

Mr. Conor Rowley:

No, it is co-funded money. Some is from the State under the ABC programme, the prevention and early intervention programme and the rest is from Atlantic Philanthropies. Considerable money went into the youth sector.

Catherine Murphy (Kildare North, Social Democrats)
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How much of that was from Atlantic Philanthropies?

Mr. Conor Rowley:

The majority of it was from Atlantic Philanthropies. I think the State would have paid between 30% to 40%. I will clarify those figures and come back to the Deputy with an answer.

Catherine Connolly (Galway West, Independent)
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Yes, do that, please. Has that funding stopped now?

Mr. Conor Rowley:

Yes, that funding has stopped. A considerable amount of money has gone into the children and youth section, into certain locations and certain parts. It has not had an equitable spread across the country.

The thinking around QCBI was to harness the things we have learned from the prevention and early intervention programmes, through very high-end research, very interesting community and voluntary services, learning about interventions and showcasing that, and try to bring it back to the system rather than continue to create parallel systems. That is where we are with the QCBI. It focuses on four areas: data; evidence knowledge; training capacity; and quality. It might seem as though we have taken a long time developing it but we have not been sitting on our hands. It has undergone a very thorough-going design process. It is different from the usual projects that are approved under the Dormant Accounts Fund. It should be recognised that the complexity of some of the projects require more design and development time. They are not shovel ready.

Regarding consultation on this, we have had EU peer review from ten member states, from the Commission stakeholders in Ireland. We have an open policy debate on it. Our Minister has been very involved and we have international experts. In addition, we have consulted and have input from 85 of our key structures and key groupings through the national advisory council for children and young people, the national steering group for young people service committees and so on.

Catherine Connolly (Galway West, Independent)
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Where does that relate to the Dormant Accounts Fund?

Mr. Conor Rowley:

That is what I am saying, that is, that the extended process of development is based on the thorough going consultation. As I told Deputy Catherine Murphy at the outset, we are now ready to expend the money we have for this year in coming weeks. That will take the form of an innovation fund that will be advertised and a number of projects which will be request for tender issues.

Catherine Connolly (Galway West, Independent)
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I do not think we need to jump into a solution but one needs to be found. The review is key to that as are its nature and time limits. It needs to dawn on people very soon that we need to communicate with the public and for there to be a strategy of saying that the State has money, and they ought to come forward, because we know they are struggling. That must be a huge part of it.

I regret that there has been change so often and that experience has been lost. Experience has been utterly lost along the line. I do not blame the witnesses for that. Decisions were made that resulted in a loss of experience.

Mr. Colm Desmond:

I wish to clarify the position on dementia for Deputy Catherine Murphy. The overall programme has about €1 million for a number of pilot projects, including Living Well with Dementia Stillorgan-Blackrock, Kinsale Community Response to Dementia, Community Action on Dementia Mayo, and assisted technology libraries. All of these have very substantial amounts of funding, in the region of €300,000 each. The Mayo programme receives €100,000. An evaluation of those pilots, costing €50,000, in respect of which I want to correct myself, was built in from the beginning to see how they would do, because of the nature of this particular measure.

The national dementia strategy is currently being evaluated. It was decided that the €50,000 was not needed and that the evaluation of the dementia strategy could cover the relevant pilot projects.

Catherine Murphy (Kildare North, Social Democrats)
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What happened to the €50,000?

Mr. Colm Desmond:

We allocated more funding to a very successful project, the mobile health screening unit for refugees and other new arrivals to the country. That is a multi-year project that is to continue until late 2019. Funding has been decommitted within our overall envelope - therefore, within our voted allocation - for that project. It was slightly late in starting due to the refurbishment of a mobile screening unit for the purpose of the project.

Seán Fleming (Laois, Fianna Fail)
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Do members agree to disposing with chapter 7 of the Comptroller and Auditor General's report for 2016? Agreed.

On behalf of the Committee of Public Accounts, I thank the witnesses from all the various Departments and the Comptroller and Auditor General for attending today and for the information supplied. We expect to see the follow-through on the few specifics. The secretariat will confirm the details for the witnesses.