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.