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.