Professor Alan Barrett:

I am the director of the Economic and Social Research Institute and joined by Mr. Charles O’Regan, head of finance and company secretary. We have been asked to appear before the committee to explain why our draft 2017 accounts had not been presented to the Office of the Comptroller and Auditor General by 31 March. We are happy to have the opportunity to provide the explanation.

By way of context, I will provide a brief outline of how the ESRI is funded. It is a company established in the private sector. However, almost all of its funding comes from public sources. It receives an annual grant-in-aid from the Department of Public Expenditure and Reform. In 2018 the grant is €2.8 million. The institute receives additional funding from a range of other Departments and State agencies, for which it agrees to conduct research projects of particular interest to them. In total, it has an annual income of approximately €10 million. Given the public funds provided for it, the institute is committed to maintaining the highest standards of governance and financial management. We have worked closely during the years with our parent Department, originally the Department of Finance and now the Department of Public Expenditure and Reform, to ensure frameworks and processes whereby the funds provided for the institute are managed to the highest standards. One element of the overall framework has been the presence of a senior official from the Department of Finance and then the Department of Public Expenditure and Reform on the board of the institute. We operate under an oversight agreement with the Department of Public Expenditure and Reform which was provided for us in March 2017. We also liaise closely with the Office of the Comptroller and Auditor General. To my knowledge, we have always provided information for the Office of the Comptroller and Auditor General in a timely manner when requested by it.

I turn to the specific issue of the timing of the submission of our 2017 accounts. As the committee knows, in January we received the letter from the Chairman sent to all bodies audited by the Comptroller and Auditor General on the general requirement to produce annual accounts for audit within three months of the end of the financial year. Based on our interpretation of our ongoing interactions with the Office of the Comptroller and Auditor General, at the start of the year we expected the timing of the accounts process to run as in previous years. We planned to submit our accounts to our audit committee for review at its May meeting and subsequently send them to the Office of the Comptroller and Auditor General. At the time we received the Chairman's letter, our accounts department was under some pressure owing to staff absences related to sick leave. This meant that bringing forward the accounts would be challenging. Arising from this, we emailed the Office of the Comptroller and Auditor General on 2 February to seek clarity on the three-month requirement. The Office of the Comptroller and Auditor General in its response to our email did not specify that the ESRI was required to meet the three-month deadline. As the email went on to discuss the arrangements for the audit of the 2017 accounts without reference to the three-month deadline, we took this to mean that the deadline did not apply. On that basis, we continued with the previous schedule. The draft accounts were reviewed by the audit committee at its meeting on 8 May and sent to the Office of the Comptroller and Auditor General on 10 May.

On reflection, I regret that I did not seek further clarification from the Office of the Comptroller and Auditor General around the time of our correspondence related to the Chairman’s letter. I took the absence of a positive statement on our question as implying that the institute was not being asked to comply with the three-month deadline, but that was a mistake on my part. Looking ahead, the ESRI will, of course, meet the three-month deadline in the future.