Oireachtas Joint and Select Committees
Thursday, 24 May 2018
Public Accounts Committee
Financial Statements 2016: Higher Education Authority, University College Cork and Cork Institute of Technology
9:00 am
Seán Fleming (Laois, Fianna Fail)
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We are joined today by the Comptroller and Auditor General, Mr. Seamus McCarthy, and Mr. Shane Carton, deputy director of audit. Apologies have been received from Deputies O'Connell and Catherine Murphy. We will deal with the business of the committee in the afternoon as we want to deal with the Higher Education Authority, University College Cork and Cork Institute of Technology this morning.
As I mentioned, we are dealing with the financial statements for 2016 for the Higher Education Authority, University College Cork and Cork Institute of Technology. Today we are returning to matters in the third level sector on which we reported in July last year. We are joined today from Higher Education Authority, HEA, by Dr. Graham Love, chief executive, as well as Ms Sheena Duffy, Mr. Stewart Roche, Mr. Tim Conlon and Mr. Neil McDermott. From the Department we have Mr. William Beausang, assistant secretary, and Mr. Tony Gaynor. From University College Cork, UCC, we are joined by Professor Patrick O’Shea, president, and by Mr. Diarmuid Collins and Mr. Cormac McSweeney. From Cork Institute of Technology we are joined by Dr. Barry O'Connor, president, and Mr. Paul Gallagher, Mr. John A. McCarthy, Ms Ellen Crowley and Mr. Jim O’Byrne. They are all very welcome to today's meeting.
I remind members, witnesses and those in the Gallery that all mobile phones must be switched off or into aeroplane mode, as putting them on silent mode is not adequate and they will still interfere with the recording system in the Oireachtas. I wish to advise the witnesses 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 this committee. If they are directed by the committee to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to a qualified privilege in respect of the evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or persons or entity, by name or in such a way as to make him, her or it identifiable.
Members are reminded of the provisions within Standing Orders that the committee shall also 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 policies. While we expect witnesses to answer questions put by the committee clearly and with candour, witnesses can and should expect to be treated fairly and with respect and consideration at all times, in accordance with the witness protocol. We will first take a short opening statement from the Comptroller and Auditor General.
Mr. Seamus McCarthy:
The Higher Education Authority is the statutory planning and policy development body for higher education and research in Ireland. In addition, it is the primary funding authority for Irish universities, institutes of technology, teacher training colleges and a number of other designated education bodies. Approximately 90% of the HEA's income in 2016 came directly from Vote 26, Education and Skills, with the balance, largely consisting of research funding, from Vote 32, Jobs, Enterprise and Innovation. The HEA had gross expenditure of €1.15 billion in 2016. The bulk of this comprised grants to higher education bodies for specified purposes, including current spending, research, and capital project funding. I issued a clear audit opinion in respect of the HEA's 2016 financial statements.
In 2015 and 2016, UCC recognised total income of €346 million. The university reported a modest surplus for the year of €562,000. As in prior years, my audit opinion in respect of the UCC financial statements was qualified in respect of the recognition of a portion of the future pension funding receivable from the State. The root of the issue is that UCC awards professional added years for pension purposes to certain academic staff members on a different basis to that approved by the Ministers for Education and Skills and Finance under relevant legislation enacted in 2009. As at 30 September 2016, the university was in disagreement with the Department of Education and Skills as to where responsibility lies for pension liabilities relating to transferred-in service. The university estimated the total future cost of the disputed pension benefits at €15.7 million and included this amount in its deferred pension funding asset. I concluded that the recognition of the €15.7 million asset as at the end of September 2016 was not in accordance with applicable accounting standards because of the disagreement with the Department at that date.
An agreement was subsequently reached between the university and the Higher Education Authority, HEA, on shared funding of the disputed future liabilities. This will be reflected in future financial statements.
The audit certificate draws attention to the non-consolidation of the results of Cork University Foundation DAC on the basis that the foundation is not controlled by the university. On 30 September 2016 the foundation had accumulated reserves of €4.1 million. Note 31 to the consolidated financial statements provides information on transactions between the university and the foundation. Members will recall that the university has recently informed the committee of its intention to provide a full set of the foundation's financial statements, with the consolidated financial statements in future years.
The audit certificate also draws attention to disclosures in the university's statement of governance and internal control of instances of non-compliance with national procurement guidelines. Reported non-compliant procurement to the value of €4.4 million comprised €3.9 million of spending identified by the university as being non-compliant and a further €500,000 identified through audit testing.
The financial statements for Cork Institute of Technology, CIT, for the year ending 31 August 2016 indicate that consolidated income for the year amounted to nearly €100 million. State grant funding accounted for over €38 million of this figure. The other major sources of income were tuition fees and research grants. Expenditure in the year was just over €99 million, nearly 70% of which was accounted for by staff costs. The net result for the year was a surplus of €721,000. Members will recall that there are two public private partnership, PPP, arrangements in place for buildings used by Cork Institute of Technology, namely, the Cork School of Music and the National Maritime College of Ireland. The annual payments made to the two PPP companies are a direct charge on Vote 26. They do not pass through the accounts of CIT.
My audit opinion for 2015-16 was unqualified. However, the audit certificate draws attention to the fact that the institute did not provide for accrued pension liabilities under either the single public service pension scheme or the education sector superannuation scheme 2015. The same was true of all other institutes of technology for 2015-16. The audit certificate also notes that the Department of Education and Skills sought legal advice on the matter. In October 2017 my office wrote to the presidents of all of the institutes of technology recommending that they commence accounting for pension liabilities in their financial statements for 2016-17. I understand the Technological Higher Education Association, the representative body for institutes of technology, has procured the services of an actuary to carry out the necessary calculations. It is expected that all 2016-17 financial statements will account in full for pension liabilities.
Seán Fleming (Laois, Fianna Fail)
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I thank the Comptroller and Auditor General. I invite Dr. Love, chief executive of the HEA, to make his opening statement.
Dr. Graham Love:
I thank the committee for the invitation to speak to it. I am accompanied by my colleagues, Mr. Tim Conlon, interim head of system development and performance management; Ms Sheena Duffy, interim head of system funding and governance; and Mr. Stewart Roche, management accountant.
Every year the Higher Education Authority, HEA, allocates and distributes over €1 billion in funding across a range of funding streams to the higher education sector. As this is a major responsibility for an agency likes ours, I am happy to note that the HEA's financial statements for 2016 were signed by the Comptroller and Auditor General in June 2017 with no issues arising. Our draft 2017 statements have also recently been audited by the Comptroller and Auditor General and we are addressing follow-up queries. Today the committee will also discuss CIT's and UCC's financial statements. Our briefing paper addresses several issues related to these two institutions. I will be happy to provide further details of the HEA's engagement on these matters. The briefing paper also sets out other developments related to the higher education sector that are of interest to the committee.
The HEA continues to monitor University of Limerick's implementation of the recommendations arising from the Thorn report. It also engages with the university on how it is demonstrating to its staff, students, stakeholders and wider community its commitment to learning from the report and its findings. The HEA continues to fulfil its governance role through its rolling governance reviews. The first such review dealt with procurement and resulted in positive engagement with the sector, as well as key stakeholders such as the Office of Government Procurement and the Education Procurement Service. It has culminated in annual higher education procurement summits, most recently last month, and the introduction of a corporate procurement plan pack for institutions to adapt.
The second review dealt with intellectual property policies and arose directly from the engagement of the Committee of Public Accounts with the HEA and the higher education sector. This has been a valuable exercise, with important recommendations being implemented. This year's rolling reviews will focus on staff remuneration and benefits, as well as student non-progression.
In 2017 the committee had a productive engagement with the higher education sector on the timeliness of financial reporting. A clear message was sent to the HEA and the institutions we fund on the importance of preparing and submitting financial statements promptly. Previous delays inevitably had a knock-on effect. However, the HEA notes the improvements made, as reflected in the Comptroller and Auditor General's most recent report on public sector financial reporting. I again acknowledge the constructive engagement we have had with the Office of the Comptroller and Auditor General on these matters.
Since the HEA last appeared before the committee there have been several important developments in the higher education sector. On an operational level, the review of the funding model for higher education institutions was published. It will introduce important changes to the way in which the HEA allocates funding and seeks to incentivise institutions to target growth areas such as STEM subjects, lifelong, part-time and flexible learning. It also proposes the introduction of a financial penalty for serious breaches of governance by institutions.
On a wider strategic level, earlier this year the system performance framework for the period 2018 to 2020 was launched, with its focus on six key system objectives, ranging from meeting Ireland's skills requirements, improving equality of opportunity and improvements in governance. A key element is the next cycle of strategic dialogue with higher education institutions, whereby institutions' performance will be measured against these key objectives for the higher education system.
This year has seen the passing into law of the technological universities legalisation. This is an exciting step in the future of higher education which builds on the strengths and original missions of institutes of technology and also enhances their regional, national and international impact.
I acknowledge the role of the Committee of Public Accounts in its scrutiny of higher education matters. Last year's meetings with the HEA and institutions were robust and frank but also useful in bringing matters to the fore. The HEA sees the committee not only, rightly, as a watchdog but also a partner in improving governance and accountability in the higher education sector. This is a relationship that I, as chief executive of the HEA, believe it is important to continue to develop.
Seán Fleming (Laois, Fianna Fail)
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We will take the opening statements of Professor Patrick O'Shea and Dr. Barry O'Connor as read. We had a late start and I understand they have commitments in the afternoon. They can refer to them, if they so wish during the session. All of the opening statements will be published, with the letter we received from Professor O'Shea on 9 May 2018.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I welcome the witnesses. Will Dr. Love explain the HEA's service level agreement with the Department of Education and Skills, what it entails and what responsibilities in terms of governance come with it?
Dr. Graham Love:
We have an annual service level agreement with the Department of Education and Skills, the essential element of which is our annual work plan, with its work streams, deliverables, etc, approved by the board.
That forms the core chapter. Then, sitting on top of that is the relationship that defines how we relate to each other, that is, the Department and the HEA, the various responsibilities that sit under that and the meetings that we have to check on the progress on the work plan. There are meetings a number of times a year between me and my team and Mr. William Beausang and his team, or, previously, Ms Mary Doyle, to track progress on the implementation of that work plan and other issues that are arising in the sphere of higher education.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Does the HEA have responsibility for the institutions all over the country on a weekly or monthly basis so that the HEA has a hands-on approach watching what goes on in each institution and how their business is being run? Is that part of the service level agreement?
Dr. Graham Love:
We have an oversight role but, to be clear, each of the institutions is an autonomous body with its own governing authority or governing body that runs that organisation. We then sit as a layer on top of that in our oversight role with regard to those institutions. Yes, matters do come up throughout the course of the year. We have just discussed in the private session earlier matters that would be part of that. That is the normal run of business.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I asked that because of the matters that came up that we discussed earlier. Must the HEA wait every year for the annual report from each institution before it can intervene if there is anything that the HEA needs to get involved in or is it done on an ongoing basis during the year?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I will move on to the pension funding both in UCC and CIT that the Comptroller and Auditor General mentioned. On UCC first, is this €15.7 million in shared funding the Comptroller and Auditor General mentioned a shortfall of moneys that is not there to cover future pension liabilities? My understanding of the Comptroller and Auditor General's report is that it will be a shared function now of both UCC and the taxpayer. Can someone answer me that?
Mr. Diarmuid Collins:
I will take that one. Deputy Aylward may recall last year a similar issue was raised. In the 2015 accounts, as part of our disclosure note when we were here back then, the Deputy may recall that we were taking a challenge against the State for the element of the liability that was in dispute. During 2016-17, the matter was resolved. When it comes to the €15.7 million, there is now an agreed sharing of that liability between the State and the university. We anticipate that when we are preparing the 2017 accounts - this is now our assumption as it will all be assessed and audited by the Comptroller and Auditor General - we anticipate that the qualification in the accounts, as a result of that agreement between the HEA representing the State and the university, will now lapse and fall away because there is now an agreed funding model in place between the university and the HEA on how that element of pension will be funded into the future.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Is this a 50:50 split?
Mr. Diarmuid Collins:
The agreement is on a 50:50 basis. There are other elements of it around an ongoing adjustment to the university's overall base funding. The amount will move every year. As people retire, the liability will fall. As there is an actuarial assessment, the overall liability will change every year as we go through the wind-down of those staff when they retire. Essentially, overall it is 50:50 on the funding of the pension liability, the future lump sums for those people and pensions, and an element of an increase in the overall base funding for the university.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Why must the State come in with 50% and why is UCC not able to fund its own pensions? Why is the State, which is basically taxpayers' money, being used to subsidise pension funding? Why is UCC not able to carry its own weight and fund its own pensions? I want to hear Mr. Collins' view on that.
Mr. Diarmuid Collins:
I will tell the Deputy about that. Back in 2010, the university, for these staff, had the liability and the asset. We had both the liability to pay lump sums and pensions and we had the asset. In 2010, the five universities that had that scheme transferred their pension asset of €1.2 billion to the State and with that came a commitment that when those people retired, the liability going with that asset would be underpinned by a State asset - if the university gave away the money, the State would pay for that.
When the people retired, there was a dispute subsequently about elements of added years. The Comptroller and Auditor General has pointed out in his opening statement how added years were assessed by the State differed from how the pension scheme, which was underpinned by statute, had operated in UCC and the commitment was given that people's entitlements would be honoured in return for the transfer of the asset. We had an assessment, and a view, that it was the State's liability to fund those people given that it took the fund. The State disputed that but, as we have said in the answer to the first part of the question, we have reached agreement on that. There is now a sharing accepted between both the State and the university on how that element of the liability is funded in future.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Is it the same in all universities or is this unique to UCC?
Mr. Diarmuid Collins:
All of us have similar pension schemes in statutes. I am not sure if the issue has yet manifested in other universities but for us, it came to a head as the staff, as they retired, were taking actions against the university for the shortfall in their pensions. Maybe we were ahead of other universities in this regard but I could not say for definite the situation in the others.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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In the future, will this be rectified?
Mr. Diarmuid Collins:
There are about 166 staff involved in this out of the 3,000. It is not an awful lot. As they retire, the liability will eventually be gone. In time, those people will have retired out of the system. On the liability there today of €15 million, as we now go through for the next number of years as they retire and they are paid, the liability will fall year on year. It will eventually wash out in time and go away.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I ask the Cork institute the same question. There seems to be a shortfall in deferred pension funding under the pension schemes. What is the situation in Cork Institute of Technology?
Mr. Paul Gallagher:
The situation in the institutes of technology is quite different in that the education superannuation scheme is already State administered and the institutes never had any liability and did not administer or pay those pensions. However, as a result of the single pension scheme, there are new requirements in terms of how future liabilities are calculated and where they are provided. We are just working through, with the Department and the Comptroller and Auditor General, how we incorporate that into our accounts. Essentially, they were never included in our accounts.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Has it a shortfall for future pension schemes as well?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I will return to the witnesses from UCC to ask about the report of the Comptroller and Auditor General on full consolidation of the foundation's account. What is that about? Could they explain the relationship with the foundation of UCC and the costs involved?
Mr. Diarmuid Collins:
The foundation is a fundraising arm, an entity that is a private company that raises funds for the university, from philanthropy, from donors and from alumni, which supports the university for students, for access and for capital. It is a separate legal entity. It is not part of the university and it is not consolidated with the financial statements. We gave a commitment last year, because a similar matter arose as part of the Comptroller and Auditor General's certification, that we would append those accounts going forward in order that when the accounts are laid before the Oireachtas they will have attached to them the financial statements for the Cork University Foundation.
In our president's briefing papers that we sent in last week, we have said that we are looking at a review of the foundation and the governance model and, pending that review, it may well change the accounting of the foundation. I do not want to predict the outcome of it but were it to be no longer a separate legal entity, it would then be consolidated as part of the university itself. For now, it is a separate entity. It does what it does and supports the university. Because it is a separate entity, it is disclosed in the accounts, under FRS 8, as a relationship under our disclosure note 31, but it is appended and it is not part of the consolidation. Because of that, it is referenced as part of the Comptroller and Auditor General's overall certification drawing attention to the matter that we have it. It is not consolidated but it is a separate entity.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Could we be provided with a figure for the cost of office accommodation, the use of equipment and administration services provided to the foundation? We have no record of that. What kind of costs are involved?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Will Mr. Collins be able to get that?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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In the future, will all the finances be reported together? I presume that is what consolidation means.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Why was the foundation set up separate from UCC?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Are they identified here?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I shall move on to procurement rules. Over €4.4 million went to 39 suppliers in respect of goods and services for which the procurement process did not comply with public procurement guidelines. Thirty-nine is a high number, as is €4.4 million.
Professor Patrick O'Shea:
The university obviously strives to achieve value and competitive pricing in all its activity. We are the only university in the country with ISO 9001 certification for procurement. That indicates we are totally compliant with EU directives. Although we are compliant with these directives, the audit identifies approximately 1.25% - pertaining to 35 suppliers and a value of €4.4 million - that was viewed as being non-compliant with the guidelines. We can explain that. One item was related to co-funding of sectoral purchasing arrangements. The university is a partner to another lead entity, which itself procured the service in a fully compliant manner. The university, through clerical error, inadvertently identified that as being non-compliant when in fact it was. That information has been shared with the Comptroller and Auditor General.
Additionally, there are extensions of service contracts, particularly related to ICT matters, that were originally awarded competitively but where the competitive contract has expired. We have not been able to re-compete them because we are working on the basis of a shared-services model with the HEA. That is still in operation so we have to continue with the existing contracts until there is agreement from the HEA as to which types of contracts and vendors we should opt for.
There is also emergency expenditure. I refer to priority issues related to blocked drains, safety issues and so on in respect of which we have an emergency arrangement to procure services on a short-term basis. The university endeavours at all times to ensure it is compliant with public procurement policy. It engages with the Office of Government Procurement, where appropriate. My colleague-----
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I understand procurement involves public tendering. In this case, it looks as if someone could cause sweet deals to be done, with only one individual. Is that the reason this is being mentioned here?
Mr. Cormac McSweeney:
No. Take the first example, of a co-funding and sectoral purchasing arrangement. The libraries are engaging in HEAnet, for example. That is done through one institution but we all effectively piggyback on the contract that was properly tendered for by that institution. Therefore, we are not non-compliant. The contract was procured properly by one institution on behalf of the sector. Inadvertently, through clerical error, it was recorded as being non-compliant.
With regard to the extension of service contracts, we have proprietary systems with certain providers. The contracts might have lapsed but one would be using those providers to do one’s maintenance. As the president said, there is a move towards a shared-services model in ICT. We were working with the HEA on that. One would not be going back out to engage in a procurement exercise regarding the contracts until that particular review is completed. It is not a matter of sweet deals per se; there are genuine reasons.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I am trying to identify what is happening.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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That is why I asked. A sum of €4.4 million is a lot of money.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I am sorry for going fast because my time is limited. With regard to income from student residences, the figure in 2015-16 was €7.72 million, up nearly €2 million on the figure for 2014-15. Why did rental income increase so much in one year?
Mr. Diarmuid Collins:
Our student rent price has not gone up but during that year we acquired additional student accommodation beds. We bought the Victoria Mills complex, which was privately owned. We had an opportunity to purchase it and did so during 2015-16. In that year, it added an extra 170 beds approximately. Therefore, we got 170 times the individual rent income extra in that year. Our income grew and there were more beds managed by the university.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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In what way are the rents set? Are they based on market values? Does the university have its own system in place?
Mr. Diarmuid Collins:
It is really about affordability for the students. We try to get the best deal we can in acquiring and developing the beds. A room without an en suite bathroom might be cheaper per week than one with an en suite bathroom. Typically, it would cost between €120 to €130 per week. We charge only for the academic year. We just charge for 37 weeks of the year. Other providers charge a higher weekly rental and charge for a longer period. We are trying to help the students as best we can and we understand they are under pressure. Our weekly rate is as competitive as we can make it, bearing in mind our commitments to run the facility, pay back loans and refurbish the rooms. At the same time, we just charge for the academic year.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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What percentage-----
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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What percentage of students are on campus?
Mr. Diarmuid Collins:
There are students in private student accommodation. We have approximately 1,500 bed spaces at this stage. They are adjacent to the campus and are within a walk of five to ten minutes. They are not specifically on the campus itself but they are very close to it. We manage 1,478 beds. We are developing the Crow’s Nest site, which will add an extra 450 beds in the coming years.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I want to ask about the shareholding in the spin-out company InfiniLED, associated with the Tyndall National Institute. Could the witnesses outline the process engaged in by the university to dispose of its shareholding? How did it get involved in the first instance? What kind of company is it? What is the set-up? I see the university still has not got all its moneys from the sell-off.
Mr. Diarmuid Collins:
As part of public policy on putting public research to work, we actually promote spin-outs where the university has developed intellectual property and patents. InfiniLED was a company spun out of the Tyndall National Research Institute. It was spun out by the university. As part of that spin-out, which happened in 2016, we got 15% equity for our share of the intellectual property going into the company. It was sold subsequently and purchased by Oculus, which is owned by Facebook. The company was bought for €30 million and, because of our shareholding, which had been slightly diluted to about 12.5%, the university got a share of the €30 million in income.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Was it a profitable return based on the investment?
Mr. Diarmuid Collins:
Yes. A contributing factor is that we made a surplus in the year in question. It was an element of why we made a surplus in 2015-16. We got about €1.6 million in that year. The Deputy is correct in that there is an element held in escrow pending performance of the technology. We gave warranties indicating that what was spun out would deliver what it said it would deliver. The 18 months are now up, in 2018. Therefore, there remains another €800,000 to come into the university this year. We got money in 2016, and 18 months later, this year, we are to get money. It is part of national policy and the document Putting Public Research to Work for Ireland, which was launched by the Minister in 2015.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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My last question, to the HEA, is on the technological university for the south east. What is the status of the initiative to merge Carlow and Waterford institutes of technology? How far has it advanced? When can we see some movement on it? I have to come back to that.
Seán Fleming (Laois, Fianna Fail)
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You will get a second chance afterwards, guaranteed.
Mr. Tim Conlon:
We met the consultant yesterday for an update. The two institutions are working very well together and we think the project is very much back on track. The indications we have are that we expect a technological university to make its application by September 2018 for likely designation, should the application be successful, towards September 2019.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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When will it actually be granted the status?
Mr. Tim Conlon:
That will be a matter for the Minister to decide, but normally an application would come in, we would put together an international assessment panel to assess the application, make recommendations to the Minister in fairly short order, and the Minister could then designate within the space of two months or so of the application arriving. It could stand designated as a technological university early in 2019 were the application to be successful, with the idea it would be recruiting students by September 2019.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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That is good news.
Seán Fleming (Laois, Fianna Fail)
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Deputy Kelly has 15 minutes.
Alan Kelly (Tipperary, Labour)
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I will jump around the place a little bit, and I would appreciate short sharp answers because I have so many questions across a range of issues. My first question is to CIT. How many protected disclosures are there within the college and when was the first?
Alan Kelly (Tipperary, Labour)
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What date was the first one?
Alan Kelly (Tipperary, Labour)
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Earlier this year.
Alan Kelly (Tipperary, Labour)
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So the first was in 2018.
Alan Kelly (Tipperary, Labour)
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No, I am just asking a question. I just want the facts.
Alan Kelly (Tipperary, Labour)
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My next question is more to the HEA than UCC. In some universities accommodation is provided on site for the president. Did the HEA sign off on expenses or costs of funding to provide accommodation for the current president?
Alan Kelly (Tipperary, Labour)
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In fairness, UL has a building on site. I am only trying to get to the facts and I am not making any accusations. Is there a cost to the college of providing accommodation for the president?
Alan Kelly (Tipperary, Labour)
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How much is that per month?
Alan Kelly (Tipperary, Labour)
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By the way, I do not want to know the location because I do not think that would be appropriate.
Alan Kelly (Tipperary, Labour)
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That will be an ongoing thing.
Alan Kelly (Tipperary, Labour)
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I appreciate that. I just want to get it out as an expenditure cost compared to other colleges, because it would be good to look at other costs across the board. It could be cheaper for all I know, comparatively, for the HEA if we look at all of the universities. That is €36,000 year.
Alan Kelly (Tipperary, Labour)
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Obviously it is rented somewhere. I genuinely do not want to know because I do not think that would be fair. It is €36,000 per year to pay for rent for the president. To the students and the public that might seem strange, but I think I have set it in the right context.
I wish to make a comment to UCC. We received its letter on the Opera House, and I know the Chairman has a similar opinion to me. The decision to do a deal with the Opera House was part of our findings with regard to the committee's interim report into the issue of non-taxpayer revenue being isolated as if it were a revenue in itself. The Committee of Public Accounts has stated quite clearly we do not buy that line. This is for all colleges, universities and third level institutes.
We have gone back and forward with UCC on number of occasions. The cost of €500,000 was stated as non-taxpayer revenue and this is reaffirmed in the letter, which states an own source of university income is supporting the partnership. It is not. Let us kill this right now for once and for all. It is not a distinguishable income. It all goes into the pot and the taxpayer is proportionately paying for signage over the Opera House. Our question is whether we feel this is a good use of public money. Personally, I do not think so. An alliance with Cork Opera House yes, but not paying for signage over it. Please do not ever write back again and state what was said here and repeat it in the press because we do not accept it. We cannot be any clearer. The college can argue it and that is fine, but with regard to what we have decided here, this is a use of taxpayers' money. If the college did not have the taxpayers' money in the first place it would not be in a position to do it and that is obvious. Let us nail that. That goes for all third level institutions, and UCC is not unique to be fair to it. This is just a comment and I do not want an answer.
I want to get onto the purchase of Grand Parade in Cork by CIT. When we were here before discussing this we were told it paid €1.25 million. On 17 June we were not told how much it would cost to upgrade the building, yet a few weeks later the scaffolding went up. I have pictures of it. Why at that committee meeting did CIT not tell us about the extra costs that would be part of doing up the building and bringing it up to a certain standard? The overall costs for this building are way in excess of what CIT paid and presumably it will come in at €2.5 million rather than €1 million. Why did it not reveal this information to us, considering the many companies that were on site down there in a matter of weeks? The contracts for those companies must have been signed before CIT appeared before the committee. Why was that information not given to us at that meeting?
Alan Kelly (Tipperary, Labour)
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Mr. Gallagher was there at the time.
Alan Kelly (Tipperary, Labour)
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Why did the college not tell the committee that information, of which it was aware? There is no way these five or six companies could have not been in discussions or not have had a contract signed at the time the college was here. I have the pictures on my phone of the building work being done a few weeks later.
Mr. Paul Gallagher:
We were asked specific questions on Grand Parade. One was to provide the valuation on which we based our decision on the price and that was supplied to the committee. There was also a question on the approval and governance of the procurement of the building, and we supplied the governing body minutes which made that approval. Subsequently, we provided all of the detail on the cost of the refurbishment.
Alan Kelly (Tipperary, Labour)
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Is it €2.5 million in total?
Alan Kelly (Tipperary, Labour)
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Can classes be conducted there?
Alan Kelly (Tipperary, Labour)
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So the health and safety issues have been dealt with.
Alan Kelly (Tipperary, Labour)
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It costs approximately €2.5 million.
Alan Kelly (Tipperary, Labour)
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But on 17 June the college was not able to tell us these contracts were signed and these costs would be incurred.
Alan Kelly (Tipperary, Labour)
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I want to get onto the costs of 46 Grand Parade. It was over the asking price, so obviously there were other bidders on it.
Alan Kelly (Tipperary, Labour)
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Did UCC bid on this building?
Alan Kelly (Tipperary, Labour)
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Let me get this right. CIT bought it and UCC bid on it and it cost a good bit in excess of the asking price.
Do the witnesses talk to each other? From a public point of view, for the taxpayers, it looks very strange. It is taxpayers' money.
Alan Kelly (Tipperary, Labour)
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I know that.
Alan Kelly (Tipperary, Labour)
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It is interesting. Obviously, they do not talk, or rather they do meet but they did not discuss this, which is fine but it is very strange. I know Cork well. I went to UCC for many years. It is a great college and probably created me, if that sounds right. I am sorry about that. My issue, however, is that there are two colleges bidding against each other. The asking price is €950,000 and they pay €1.25 million, which is €300,000 extra. For the taxpayers or the people watching as well as for the HEA and the Department, there is something strange there. The Department should be aware of these things so that they can be examined. It is certainly an issue.
Will the HEA officials tell us why the travel expenses in the accounts for two of the board members are higher than the others?
Alan Kelly (Tipperary, Labour)
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Yes, it is, and that is exactly what I am getting at. No. 9 in the Schedule to the Higher Education Authority Act states about people who are not resident in Ireland:
A member of An tÚdarás shall be disqualified from holding and shall cease to hold office if he is adjudged bankrupt or makes a composition or arrangement with creditors, or is sentenced by a court of competent jurisdiction to suffer imprisonment or penal servitude or ceases to be ordinarily resident in the State.
Why have we two board members who are not resident in the State?
Alan Kelly (Tipperary, Labour)
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I know that because I asked a parliamentary question on this. I think that is dancing on a pin. For me, if somebody is not resident in the State, in the spirit of the Act, they should cease to be on the board. There are additional costs on this. The HEA or the Department needs to examine this.
Dr. Graham Love:
I believe this was also answered in a parliamentary question in 2016. We believe that it is clear that somebody who was appointed and subsequently moves out of the country would cease to be eligible to be a HEA board member. I would add that it is very important for an organisation such as ours to benefit from international experience, although I know that is a separate point.
Alan Kelly (Tipperary, Labour)
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There are other ways of doing that. I disagree with the HEA's interpretation. I agree with it technically but I disagree with the spirit of the interpretation and think it should be re-examined.
Alan Kelly (Tipperary, Labour)
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There are additional expenses. The HEA is bringing in two people from outside the country.
Returning to the HEA, on the question that was asked previously about the retirement function for the previous president of Cork Institute of Technology, CIT, and the €13,000 about which we all know, the HEA requested that this €13,000 be paid back. Has it received this money back? Can we have an update on that?
Dr. Graham Love:
No, we have not requested that the €13,000 or €14,000 be repaid. We have conducted a review of the expenditure, line by line. We have concluded that about €6,000 or €7,000 was not in accordance with the institute's own policies on hospitality and so on. We have written to CIT to seek its response as to why and how it happened and what it has put in place to prevent it happening again. This has just happened in the last week. It has been to a subcommittee of our board and will be going to the full board for further consideration next week.
Alan Kelly (Tipperary, Labour)
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What is for consideration?
Alan Kelly (Tipperary, Labour)
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Are you happy?
Alan Kelly (Tipperary, Labour)
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Okay, but are you happy?
Alan Kelly (Tipperary, Labour)
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Potentially?
Alan Kelly (Tipperary, Labour)
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It is either acceptable or it is not. Dr. Love should give us his opinion.
Alan Kelly (Tipperary, Labour)
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The HEA might show that answer to the committee.
Alan Kelly (Tipperary, Labour)
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That is fine but that will be next week.
Seán Fleming (Laois, Fianna Fail)
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Has CIT not got a copy of that?
Alan Kelly (Tipperary, Labour)
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CIT can produce the document to the committee. Someone might give it to us while we are sitting there.
Seán Fleming (Laois, Fianna Fail)
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Can we get that? Is there anybody here who can supply that?
Alan Kelly (Tipperary, Labour)
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Is there anybody here who can supply us with that document now?
Seán Fleming (Laois, Fianna Fail)
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Has CIT submitted a document?
Dr. Barry O'Connor:
No, the HEA conducted its review based on the information that we sent it. It made its recommendation and asked that we bring it to our audit and risk committee as there might be changes in processes, and then to report back after it had been considered by the audit and risk committee.
Seán Fleming (Laois, Fianna Fail)
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I thought that Dr. Love said he had the answer and now Dr. O'Connor is saying something else.
Seán Fleming (Laois, Fianna Fail)
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It is not the final word?
Seán Fleming (Laois, Fianna Fail)
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Can we ask the Comptroller and Auditor General?
Alan Kelly (Tipperary, Labour)
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Can Dr. O'Connor ask somebody here to do it?
Seán Fleming (Laois, Fianna Fail)
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Can someone here make a phone call back to CIT and ask for it to be emailed to the committee secretariat? What is the most convenient way to do this before lunchtime?
Seán Fleming (Laois, Fianna Fail)
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It is in CIT's interest to try to conclude this matter here today in public session. That is all I would say.
Seán Fleming (Laois, Fianna Fail)
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If we go away with it-----
Seán Fleming (Laois, Fianna Fail)
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It is in CIT's interest not to leave it hanging.
Alan Kelly (Tipperary, Labour)
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Will the Chairman give me back my time, please?
Seán Fleming (Laois, Fianna Fail)
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It is 83 seconds.
Alan Kelly (Tipperary, Labour)
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It is a bit more than that. Following up on that, the HEA did write to this committee to say that it was not happy about the controls in place here, and was unhappy with the role and powers of the financial controller and the process by which they could write their own cheques. I looked at the board minutes of CIT from 2 February 2017. A Mr. O'Sullivan asked for an update on the appointment of an external member of the finance committee, which means there was no external person on the finance committee of CIT. It then says that Mr. Gallagher informed him that the position was advertised externally and the recommendation would come back to the finance committee which in turn would report to the governing body. Is it not alarming to the HEA that there has been no external person on the finance committee? I will put this to CIT in a moment.
Alan Kelly (Tipperary, Labour)
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I will put the question to Dr. Love again and he might answer it, please. Is that not alarming to the HEA that there was no external person on the finance committee up to 2017?
Alan Kelly (Tipperary, Labour)
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Does Dr. Love think it would be worth examining why that was the case?
Alan Kelly (Tipperary, Labour)
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No, I am thinking about the past, not the future.
Alan Kelly (Tipperary, Labour)
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On behalf of the Committee on Public Accounts, I am asking the HEA to do that and look into the activities and why it was the case that there was not an external member on the finance committee prior to 2017. I presume Mr. Gallagher wants to say what happened from 2017, from the time after that board meeting.
Mr. Paul Gallagher:
I wanted to clarify that the finance committee is the finance committee of the governing body. The members of the committee are governing body members who are external members. We felt the governing body members represented did not have enough financial qualification or experience. The committee's terms of reference allow it to co-opt an external member to provide specialist information.
That is what we did. The committee decided-----
Alan Kelly (Tipperary, Labour)
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Has the position been filled?
Alan Kelly (Tipperary, Labour)
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When was the position filled? I do not mean to be rude, but I do not have much time left.
Seán Fleming (Laois, Fianna Fail)
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The Deputy is well over time.
Alan Kelly (Tipperary, Labour)
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The Chairman took a few minutes of my time. I have two more questions.
Alan Kelly (Tipperary, Labour)
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Is Mr Gallagher on the executive of CIT?
Alan Kelly (Tipperary, Labour)
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Does Mr. Gallagher sit in at board meetings?
Alan Kelly (Tipperary, Labour)
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Mr. Gallagher attends but is not listed as being in attendance at board meetings.
Alan Kelly (Tipperary, Labour)
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Mr. Gallagher is not listed in the minutes as being in attendance at board meetings. Is that normal?
Alan Kelly (Tipperary, Labour)
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Does any staff or board member or member of the management team of CIT, current or retired, have any role in the two companies ENGIE and Focus Education?
Seán Fleming (Laois, Fianna Fail)
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We will come back to Deputy Alan Kelly, if we have time. Before Deputy David Cullinane begins, I have one quick follow-through question about CIT. The witnesses said that as the board lacked the financial competence to support the finance committee, a sub-committee of the board, an outsider had to be brought in. Is that right?
Mr. Paul Gallagher:
Yes. The governing body was established under the Act. External bodies make nominations to the governing body. The only member of the executive on the governing body is the president. There are two staff members from the academic community, one non-academic staff member and two student members. Everyone else on the governing body is external. Once the governing body is established - it was last done in March 2015 - committees are established of members of the governing body. A finance committee was established, but there was nobody on the governing body with an accounting qualification. Following a self-evaluation review, it was decided that the membership should be strengthened. There is provision in the terms of reference to co-opt someone with specialist skills onto the governing body. This is the first time we have done it, but I am aware that a number of institutes of technology have done it previously. We believe it is a matter of good practice and the committee undertook the process of advertising, short-listing and filling the position.
Seán Fleming (Laois, Fianna Fail)
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The finance committee.
Seán Fleming (Laois, Fianna Fail)
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I am going to make a comment on behalf of the Committee of Public Accounts. We are speaking specifically about CIT which has a turnover of €100 million per annum, but my comment applies to the third level sector generally. In the context of corporate governance, it is shocking that we have boards and governing bodies in place in the sector that do not have financial competence. That might be the fault of the legislation, but it is shocking. I am looking at the accounts of CIT which were signed by the then chairman and president. The accounts refer to their responsibility to select the accounting policies. This is an issue that deserves further scrutiny by the Comptroller and Auditor General too. It is extraordinary that we have chairmen and presidents of governing bodies which, by and large, do not have members with any financial competence who are putting their names to statements to the effect that they have selected suitable accounting policies; made judgments and estimates that are reasonable and prudent; prepared financial statements on a going concern basis, unless the principle is inappropriate; and disclosed and explained all material departures from acceptable accounting standards. I safely say, based on what the witnesses have said, that the people who signed such statements have no understanding whatsoever of what they have signed. In effect, they have signed a blank cheque, although I accept that the accounts are audited. I am not talking about the accuracy of the accounts because the Comptroller and Auditor General audits them. Yesterday we were discussing the issue of corporate governance, the submission of accounts and the fact that accounts were being submitted late. Now we are discussing the fact that we have governing bodies and boards of directors of State bodies, some of which have accounts running into the hundreds of millions of euro, which lack financial competence. I know that such competence can be hired in, but it should be part of the board.
Mr. Paul Gallagher:
We also have an audit and risk committee. The financial statements are approved through the audit and risk committee, on which there is financial expertise. We separated it out to ensure the audit and risk committee had a wider remit. We have a finance committee which is largely procedural, but all of the financial statements and so forth go through the audit and risk committee. The new code of governance requires that we conduct a matrix of skills analysis in the governing body. When it comes to nominations to that body, we have a hand in pointing to skills deficits.
Seán Fleming (Laois, Fianna Fail)
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I understand, but the audit committee does not sign the annual financial statements on behalf of the organisation. Who is going to sign the financial statements for last year on behalf of the board?
Seán Fleming (Laois, Fianna Fail)
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Who is the chairman of the governing body?
Seán Fleming (Laois, Fianna Fail)
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Does either Mr. O'Connor or Mr. Savage have a financial background?
Seán Fleming (Laois, Fianna Fail)
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I am not taking from it or Mr. O'Connor's ability. I am just saying the committee is being presented with accounts from an organisation which have been signed by people who do not have the skill set that allows them to do so. The committee will have to examine further the issue of the skills matrix on boards. I am not referring to the skills available to the finance committees or other sub-committees of boards but boards as a whole. We accept that we are talking about an educational establishment, but if €100 million or more is going through it, it is disappointing for us to see that there is not a level of financial competence built into the board structure. The institute is getting there, but I am sure Mr. O'Connor understands our concerns about what we are hearing.
Seán Fleming (Laois, Fianna Fail)
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I take that point. The accounts are audited and I am not saying there is an issue with them. I am just saying that, from the committee's point of view, in the context of the financial governance of any organisation, it is important to ensure the skills mix on boards includes financial expertise, notwithstanding the fact that an organisation might be educational. Does Mr. O'Connor understand the broad point I am making?
Seán Fleming (Laois, Fianna Fail)
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I am not suggesting there is anything wrong with the accounts which have been audited. I am referring to the board which should not be relying on others to tell it that everything is okay.
Seán Fleming (Laois, Fianna Fail)
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Does Mr. Love wish to comment?
Dr. Graham Love:
Yes. I wanted to make the same point about audit committees and levels of expertise, while accepting the Chairman's point. We would appreciate help in changing the legislation on the appointment of board members in order that we would be able to appoint people such as those mentioned by the Chairman.
Seán Fleming (Laois, Fianna Fail)
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We will park that issue for now, but we will come back to the broad issue when we review today's meeting in due course.
David Cullinane (Waterford, Sinn Fein)
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Will Mr. O'Connor tell us how many people have retired from CIT in the past five or six years?
David Cullinane (Waterford, Sinn Fein)
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Over five years, the number would be around 100.
David Cullinane (Waterford, Sinn Fein)
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Would many of them have had retirement parties?
David Cullinane (Waterford, Sinn Fein)
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What is the average spend on a retirement party? Would the institute have paid for each party?
David Cullinane (Waterford, Sinn Fein)
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Would it have paid for any of them?
David Cullinane (Waterford, Sinn Fein)
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Did it pay for any of them?
David Cullinane (Waterford, Sinn Fein)
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Why did it pay for that person's party? Why was the person so special that €13,000 had to be spent? If 100 people have retired from the organisation, why was one person singled out in paying the cost of a retirement party of €13,000?
David Cullinane (Waterford, Sinn Fein)
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I am not asking about the standard.
Facts are facts. A total of 100 people left the organisation. If there were retirement parties, 99 paid for their own retirement gig. A collection might have been made by staff members, as happens in any organisation, and there might have been a token gesture. However, of all those who retired, one person was singled out in holding a reception that cost €13,000. Why was that one person singled out and not the other 99? Would it be appropriate to do it for each person who retires? If the institution was to spend €13,000 on everyone who retired, would it be a good use of taxpayers' money?
David Cullinane (Waterford, Sinn Fein)
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Why was it a good use of taxpayers' money in doing it for one person?
David Cullinane (Waterford, Sinn Fein)
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Mr. Gallagher was there at the time, was he not?
David Cullinane (Waterford, Sinn Fein)
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That is an understatement. We can accept that. I am accepting that Dr. Love has examined the matter and produced a report. I accept fully that he should be given time to bring it to the board which will make a decision on what will happen then. Dr. Love has said €13,000 was spent, of which the HEA felt about €6,000 was outside the rules. Without pre-empting what the board might do, what options are open to it in respect of the sum of €6,000?
David Cullinane (Waterford, Sinn Fein)
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It would have no consequence whatsoever for the institute, given its budget. The bottom line is that the taxpayer paid for this €13,000 event, €6,000 of which was outside the rules. It does not matter. The money can be moved around from the HEA to an institute or a university, but the fact remains that €6,000 was spent in an inappropriate way. Is there any avenue open to the HEA to recoup the €6,000?
David Cullinane (Waterford, Sinn Fein)
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But not from the institute. Is there any way to ensure neither the taxpayer nor any public body will be liable for the €6,000?
David Cullinane (Waterford, Sinn Fein)
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That is my point. At the end of the day, it does not matter whether the HEA or the institute pays for it; a public body is still going to foot the bill, irrespective of what the board does. Is that correct?
David Cullinane (Waterford, Sinn Fein)
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Dr. Love is missing my point entirely. I think he understands what I am saying. It does not matter whether the HEA or the university pay for it. If a public body pays for it-----
David Cullinane (Waterford, Sinn Fein)
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It really is no sanction whatsoever. That is part of the problem in dealing with all of these issues. It might seem a little frivolous because in this case the amount is only €13,000. A report was produced and an examination carried out. It was found that €6,000 was outside the spending guidelines, but the taxpayer has to foot the bill anyway. There is no sanction for anyone in the institute or any of the universities. The €6,000 will make no difference whatsoever in coming out of a multi-million euro budget. There is nothing to stop anyone from doing this again.
Dr. Graham Love:
Reputationally, it is important for an institution and the HEA not to find itself in this space. We are a little ahead of ourselves, but if the final conclusion is that it was incorrect and should, for example, be deducted from the next grant, that, in itself, would be an important signal to send and sanction. I add that, as part of the funding model review, one of the implementation measures is a penalty system which is being worked through this year with the implementation group. It is generally concerned with what are regarded as serious and material breaches, but we will come back on that issue.
David Cullinane (Waterford, Sinn Fein)
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One of the things in the letter we have just received leads me on to my next set of questions. I approve of point 5, that in May 2018 potential cost savings in hosting events in-house are being reviewed. Doing more in-house and saving money is a good idea. We know from our own work that €150 million of taxpayers' money was spent on private consultant and legal fees over six years by higher education institutes. Is that right?
David Cullinane (Waterford, Sinn Fein)
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We found that to be an astounding figure. I will use Cork Institute of Technology as an example because we have a year by year breakdown of how that money was spent. In the spirit of doing more in-house, will Dr. O'Connor tell me what PR section, unit or body the institute has?
David Cullinane (Waterford, Sinn Fein)
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Is it just one person?
David Cullinane (Waterford, Sinn Fein)
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Is it a private company?
David Cullinane (Waterford, Sinn Fein)
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Therefore, there is nobody directly employed. The work is outsourced.
David Cullinane (Waterford, Sinn Fein)
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What type of HR unit does the institute have? How is it structured and how many people are in it?
David Cullinane (Waterford, Sinn Fein)
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Therefore, there is a head.
David Cullinane (Waterford, Sinn Fein)
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How many others are employed in the unit?
David Cullinane (Waterford, Sinn Fein)
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Is there an IT section?
David Cullinane (Waterford, Sinn Fein)
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How is it structured? Is there a head of IT services?
David Cullinane (Waterford, Sinn Fein)
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How many people are employed in the section?
David Cullinane (Waterford, Sinn Fein)
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I am looking at a breakdown for Cork Institute of Technology of money spent on outside consultants every year. It strikes me when I look at the figure of €150 million and the institute's spend on consultants that the institutes cannot open an envelope without asking an outside group to give an opinion. It is amazing on what the money is spent and the amount spent. That raises questions about what the hell the HEA is doing and what its role is in all of this. For example, there was a feasibility study of experimental sheep research for a project, at a cost of €131,000, for the academic year 2012-13. Other spending included a sum of €65,000 on PR for CIT. The word "medical" also appears a lot on the list and I am not sure what it means: "Medical - €61,000" and "medical - €19,000".
David Cullinane (Waterford, Sinn Fein)
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The consultant is obviously giving opinions on what it is doing. Is that it?
David Cullinane (Waterford, Sinn Fein)
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What is the reference to counselling about?
David Cullinane (Waterford, Sinn Fein)
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I am not going to name names, but in going through the list there is a reference to "counselling - €35,000", as well as to sums of €28,000, €25,000 and €12,000, all in the one year. Surely somebody could have looked at this issue and said it might be better to employ counsellors, that it would save money. The same is true of IT services. Although there is an IT section, for the academic year 2012-13 I see references to sums of €37,000 and €7,000 for IT support, as well as a reference to a sum of €12,000 for the management of websites. The same pattern appears for every other academic year. At what point does the HEA stop and recognise that the institute is spending all of this money on outside consultants? There are units in place in institutes with in-house experience. Why are they spending so much money in outsourcing and on outside reports when they could do more in-house and save the taxpayer money?
Dr. Barry O'Connor:
The Deputy mentioned counselling. It is a really serious matter. There is a constantly increasing demand for counselling. We had a number of in-house counsellors, but the demand from students, because of the way society is, means that we have six or eight counsellors coming in. We are looking at reviewing the matter.
David Cullinane (Waterford, Sinn Fein)
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To be clear, I absolutely understand that it is a big issue. Mental health well-being is a very big issue. I commend the fact that there are supports in place for students, but that is not my point. It is a really good initiative by universities and institutes of technology if that is what they are doing. However, we are looking at expenditure line by line and I see a pattern year on year that a lot of money is being spent on counsellors who work outside an institute. It is a huge amount of money. I imagine that money could be saved if more of the work was done in-house. The same is true for IT services. I do not understand why the institute would pay for website management if it has its own IT department. Why is that the case?
In terms of IT, we have experienced quite a high turnover of staff. That market is very buoyant. Some of those skills we are bringing in on a short-term basis just as cover. Some of the skills we are bringing in are specialist, for example, cloud computing and so on, so there is a variety of approach.
David Cullinane (Waterford, Sinn Fein)
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Can I just say-----
Seán Fleming (Laois, Fianna Fail)
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This is the Deputy's last question for the first round.
David Cullinane (Waterford, Sinn Fein)
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Okay.
David Cullinane (Waterford, Sinn Fein)
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Sure.
Dr. Graham Love:
I think it is important. There is quite a broad definition of consulting. We took the Deputy's question, went out to the institutions and went back to 2011, I think. This is a significant spend, as the Deputy mentioned, of €153 million. It is critical to see it in the context of the spend across the institutions over that seven or eight year period - not as a justification in itself, but if the Deputy remembers, the expenditure across the institutions over that period was probably somewhere between €12 billion and €15 billion.
At times they will need additional skill sets that are not available in their institution; we have just heard of an example. At times they may have some of those skill sets in their institution, but they need additional capacity for a period of time, such as the mental health services we just heard about. At times they might be doing a building project and need to bring in a specialist for a particular focused task, so it is important to see the consultancy spend in that kind of context. That is really important to stress here.
David Cullinane (Waterford, Sinn Fein)
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I appreciate that, but it is still a huge amount of money over a six year time period.
The final line item I have a query on certainly raised an eyebrow for me. In 2015-2016 there was payment of €10,500 for Cork IT to Brian Murray SC for legal opinion. It just says, "Legal opinion PAC". It should be borne in mind I put the question to a former president of Cork IT, when he was in before us, as to whether the then Accounting Officer had got PR training - in fact, he had got PR training - on how to appear before the Committee of Public Accounts. We made the point then that I hoped the PR training was about how to answer questions and not how to not answer questions. Leaving that to one side, why did Cork IT seek legal opinion over attending a meeting of the Committee of Public Accounts, which cost €10,500?
Mr. Paul Gallagher:
I will take that. This was in relation to a series of anonymous letters in which 196 allegations were being made against the institution. We have been through quite a bit of this, starting with December 2015 in the Committee of Public Accounts. There was a very significant amount of personal information contained in all of that, in terms of reports and so on. At the time we asked for some advice in terms of how we would treat that. Again that is an issue that is continuing to build for us with tomorrow, the GDPR and so on. It is a particular concern for us in that none of those allegations was substantiated, so it was not fair to be connecting individuals with those allegations. We have talked a lot about redactions and so on, but we needed to be sure we were protecting that personal information and we sought advice accordingly.
David Cullinane (Waterford, Sinn Fein)
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I am somewhat satisfied with that response. Did the allegations Mr. Gallagher mentioned specifically come through the Committee of Public Accounts?
Seán Fleming (Laois, Fianna Fail)
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I have to go to Deputy MacSharry. We will come back to Deputy Cullinane.
David Cullinane (Waterford, Sinn Fein)
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Thank you.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I thank all the witnesses for coming in. I will come back to the letter they submitted later, but I wish to make a few points first. My first question is for CIT. Deputy Kelly asked about protected disclosures. In June 2017, the then president and Mr. Gallagher appeared before the committee. It was said at that meeting that Cork IT had never received a protected disclosure. Is that still the case - at that stage it was June 2017?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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No. I am not referring to that. I am just asking the following. Is it the case that as of June 2017 Cork IT never received a disclosure or a protected disclosure?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Okay.
When did Cork IT put in place the disclosures policy in accordance with the 2014 Act?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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When? Was that in 2015?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Okay. Mr. Gallagher just mentioned that prior to that CIT had a draft disclosure policy. Is that not right?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Let us consider the policy it had in place before that. If, for example, a member of staff or somebody went to senior management to report a significant wrongdoing, would that have been regarded as a disclosure?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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So a member of staff came forward with concerns.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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What happened?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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How could Mr. Gallagher say in 2017 there were no disclosures?
Mr. Paul Gallagher:
The particular concerns that were brought to us were complicated in nature. They involved elements of grievance, elements of potential disclosure and so on. We engaged with the staff member to see how best to apply the policy structure that was in place. Both the grievance policy was provided and the protected disclosure policy - albeit in daft at that time - was provided. Neither of those policies or procedures was invoked.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Was that by CIT management or by the person?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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If somebody sent in a letter alleging issues, who decided that it was a disclosure or was not a disclosure?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Mr. Gallagher is one of those.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Okay. Did this letter come to Mr. Gallagher?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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To whom did it go first?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Okay and then it went to Mr. Gallagher.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I will list off a few things and then Mr. Gallagher can come back to me. Would it have related to issues such as: financial malpractice; impropriety or fraud; activities which involve or have the potential to involve bribery or corruption, failure to comply with a legal obligation; bullying; failure to comply with the institute's charter, statutes or regulations; endangering of health and safety; academic or professional malpractice; improper conduct or unethical behaviour; serious conflict of interest without disclosure; or attempts to conceal any of the above?
Mr. Paul Gallagher:
In response I would say that an individual came forward with a very significant list of issues. The institute engaged with that individual as best we could. The individual has subsequently taken a High Court action against the institute, which we are defending strongly. There was huge overlap in this whole area at the time between anonymous letters and a particular individual.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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This was not anonymous.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Therefore, Mr. Gallagher knew who this person was. It was a staff member who came forward. Mr. Gallagher said, "Look, this is the procedure if you want to take it further." If I am picking it up correctly, the person chose not to.
Mr. Paul Gallagher:
Yes. We provided a copy of the draft protected disclosure policy, which was largely as it is now and largely accords with the Act, although the Act was subsequent to it. We also offered to the individual that we would have a review of any evidential base that was in support of any of these allegations, but none of that was ever forthcoming.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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How many cases are there?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am just a bit confused. On 17 June, we had no cases. Mr. Gallagher is outlining what seems to be a very specific case of disclosure. He is saying that it is before the High Court. Given that CIT provided the disclosure policy it had at that time to the person involved, I do not understand how the person choosing not to invoke it is now before the High Court.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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What was made known to the institute?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Did I cover those issues in what I read out in that list?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I was quoting that from CIT's draft disclosure policy.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I think there are 12 definitions of malpractice, abuse or wrongdoing. I read out ten of them and Mr. Gallagher is saying yes, it would have related to those issues, so how is it not a disclosure?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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How did it end up before the High Court if the person did not engage?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Am I correct in stating that the case before the High Court does not have anything to do with the letter?
Seán Fleming (Laois, Fianna Fail)
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Be careful.
Seán Fleming (Laois, Fianna Fail)
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So there is no disclosure. As a matter of public record, who initiated the case? Was it CIT or the individual?
Seán Fleming (Laois, Fianna Fail)
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The individual initiated it.
Seán Fleming (Laois, Fianna Fail)
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Fine. That is a matter of public record in the court records.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is the Department represented here?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Mr. Beausang is from the Department. What is his view on this?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am not asking Mr. Beausang to name anyone. What we have here is a peculiar situation whereby a disclosures policy was in place and we have established that a number of the issues listed in that policy were mentioned in a letter written by a member of staff to Mr. Gallagher - one of the people to whom such matters should be addressed. Allegedly, the person did not engage and now the matter is before the High Court. We also have the president - Mr. Gallagher was president in June 2017 - saying, "No, we have received no disclosures at all." We are being, it seems to me, very selective about definitions and-----
Mr. William Beausang:
The protected disclosures legislation is complex. The reality is that when one looks at disclosures, it is only when a decision is made in a third-party process and someone has made a protected disclosure and is penalised on that basis that one formally knows that a protected disclosure has been made. All the public service policies are built around an assessment being carried out when the disclosure is made, whether it should be treated like a protected disclosure.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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That is decided-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Who decides that?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Who is an appropriate official?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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If that person were mentioned in the letter or disclosure or whatever, is he or she an appropriate person to take the decision?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Does it not?
Alan Kelly (Tipperary, Labour)
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Jesus, that is bad.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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That is very unusual, is it not?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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If I were to make a protected disclosure against Deputy Kelly and if he were to make the decision as to the validity or otherwise of that protected disclosure, would that be reasonable?
Mr. William Beausang:
The issue is that the protected disclosure legislation is there to provide redress for people who have been penalised for making protected disclosures. Once one makes what one believes to be a disclosure and meets the requirements of the legislation, if one believes one has penalised, one has legal rights. Therefore, the question of whether the institution decides it is a protected disclosure is important from the point of view of its follow-on action in potentially deciding to investigate the matter.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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It is a subjective approach that can be taken.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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One has the benefit of protections in terms of legal recourse-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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-----but as to who decides it is a protected disclosure, it now seems clear from what Mr. Beausang is saying that a person who could be implicated, or not, by that protected disclosure is the one who determines whether, in fact, it is a protected disclosure.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Let us say Deputy Kelly was the subject of a protected disclosure made by me and was the person who had to decide whether it was a protected disclosure-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Who is in the third-party process? Who refers the matter on?
Mr. William Beausang:
One brings a case to the Workplace Relations Commission or to the Circuit Court if one has been dismissed and one looks for relief or compensation for having made a protected disclosure. It is, therefore, the discloser who has those rights. Regarding what the institution does, there is no legal responsibility to investigate but, obviously, it is good practice that if one believes the issues are serious, one should have them investigated. Hence, it is not a question of any institution, entity or individual in the organisation that receives the disclosure making a legal determination that it is a protected disclosure. The point that is always made about protected disclosures is that one should forget about the legislation; if a concern is raised, the institution needs to satisfy itself as to the course of action that should be taken.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am using my colleague here as the example because I do not want to be personal. If I work for Deputy Alan Kelly and I make a protected disclosure that involves him, how is it appropriate for him to decide unilaterally that there is nothing in the disclosure?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Absolutely. That is exactly what I am asking Mr. Beausang about. How can an institution have any input into the validity or otherwise of, or the processes around, the assessment and investigation?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Would Mr. Beausang not do so?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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In the interests of the institution.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Let us go back through this case. First, we have what seems to correspond with the 2012 draft disclosures policy in CIT. We have established that a letter was received and that it was not seen as a disclosure. The president, on 17 June last year, said, "No, we never received any disclosures." Mr. Gallagher has said that was the case. He has said it here again. However, now we see something that could be a disclosure. Then we have the process, whereby the institution then decides there are certainly some things in this that it may or may not need to investigate. The institution refers the matter to the Department and the HEA. The HEA sends it back and suggests that the institution put together the terms of reference and manage the process. How is that good governance? Even if everyone acted appropriately and were second-guessing themselves and were happy to investigate themselves, how would it be good governance to ask the fox to design the security system for the henhouse?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am speaking generally. To be honest, this is a new disclosure. I did not know anything about this disclosure until today.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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However, how appropriate is it for it to make accusations against the people who are running it?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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In fairness to Mr. Beausang, who has a corporate governance structure that could be identified as such and that allows the body to have plenipotentiary status over accusations against itself?
Seán Fleming (Laois, Fianna Fail)
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I call Mr. Gallagher because we must move on.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I do not know the subject of any of these things.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Would that have been the case with the anonymous letter as well?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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How independent was that process?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Was it given back to CIT to investigate?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is Mr. Gallagher on the audit committee?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Arthur Cox wrote to Mr. Gallagher in replying to that. Why did it do that if it is an independent committee?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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That means it is not independent. Arthur Cox was asked for advice and it wrote to Mr. Gallagher to pass it on to the audit committee. Surely that contaminates the process, without prejudice to Mr. Gallagher.
Mr. Paul Gallagher:
The initial engagement was directly with the audit committee and the chair of the committee with Arthur Cox. Arthur Cox directly advised the audit committee that it felt an investigation was warranted. Arthur Cox drew up the terms of reference for that investigation. It engaged independently, through a procurement piece, KPMG, to conduct that investigation. At that point, we had to give management responses and we engaged fully with that investigation. Of the 196 allegations made, none were upheld.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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So, I believe. The audit committee met with KPMG before it commenced its work. Is that correct?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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In correspondence the committee has, it was stated the audit committee met with KPMG in December 2014, before it commenced its work. Was Mr. Gallagher at that meeting as a facilitator or anything?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Does the Chairman want to move on?
Seán Fleming (Laois, Fianna Fail)
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I want to move on. We can come back to this. The only reason I let the Deputy go beyond his time was because he was on the one exact topic, namely, the protected disclosure.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I have more to do on it.
Seán Fleming (Laois, Fianna Fail)
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I call Deputy Connolly.
Catherine Connolly (Galway West, Independent)
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Cuirim fáilte roimh uachtarán Choláiste na hOllscoile Corcaigh. Tá súil agam go leanfaidh sé ar aghaidh lena chuid Gaeilge.
Catherine Connolly (Galway West, Independent)
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Bhí an-suim ag an Ollamh O'Shea sa Ghaeilge an uair dheireanach a bhí sé os comhair an choiste.
Catherine Connolly (Galway West, Independent)
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In July 2017, the committee published a report on several public bodies and issues arising with procurement and governance. In addition, we addressed the various spin-off companies. The committee recommended, "that third-level institutions should report annually to the Higher Education Authority on the engagement and associated costs of external consultancy firms contracted to carry out investigations and enquiries on internal matters". Did that happen at the end of July 2017? Was the recommendation complied with?
Catherine Connolly (Galway West, Independent)
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We asked specifically on the one issue of the consultancy firms, the costs and a report. That was July 2017. At the end of 2017, did the HEA get a report from the institutions?
Dr. Graham Love:
No, we got individual information on the consultancy arrangements as we have seen and discussed already here. That was the immediate response. To put a system response into this recommendation and others, we have placed in our annual governance statement a request for every higher education institution to return this data to us on an annual basis. That was last summer. The first of those governance statements will be coming in around now.
Catherine Connolly (Galway West, Independent)
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They will give complete detail on consultancy firms.
Catherine Connolly (Galway West, Independent)
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Will that happen every year?
Catherine Connolly (Galway West, Independent)
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After the report was published, did the HEA write to all the institutions and got some information?
Catherine Connolly (Galway West, Independent)
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Did the institutions come back in response?
Catherine Connolly (Galway West, Independent)
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The second recommendation concerned a review of the corporate relationships between CIT and other corporate entities. Can Dr. Love update the committee on the status of this? When did it start? Who is doing it? What are its terms of reference and what does it cover?
Catherine Connolly (Galway West, Independent)
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I am asking this in public session because it is a public report.
Dr. Graham Love:
We are nearly finished this review. On foot of the recommendation from the Committee of Public Accounts report, we defined terms of reference, we ran a competitive process and we engaged Mazars. It is looking at the relationship between the various entities as per the recommendation. That is in the final stages.
Catherine Connolly (Galway West, Independent)
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When did that start? When will it be completed? What will it cost?
Catherine Connolly (Galway West, Independent)
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There must be a time within the terms of reference.
Ms Sheena Duffy:
There was a time within the terms of reference. We had hoped to have a report by the end of May. However, there have been issues around availability of sourcing of private data from joint ventures which is tied up with the GDPR issue. We have had to go back to provide assurances to the joint ventures. Work is recommencing and we hope to have a report by the end of the summer.
Catherine Connolly (Galway West, Independent)
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When? Summer is a moveable feast.
Catherine Connolly (Galway West, Independent)
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Will that be made public?
Catherine Connolly (Galway West, Independent)
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What will it cost?
Catherine Connolly (Galway West, Independent)
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I thank UCC for its opening statement and clarifying that 23% of university participants there are either mature students, students with disabilities or non-traditional. What does "non-traditional" mean?
Catherine Connolly (Galway West, Independent)
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They are totally separate from foreign students. What is the percentage of non-Irish students?
Catherine Connolly (Galway West, Independent)
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Coming back to the 23% figure, is that a final target?
Catherine Connolly (Galway West, Independent)
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UCC received an Athena SWAN award for promoting gender equality. There are gold, silver and bronze categories. What did UCC receive?
Catherine Connolly (Galway West, Independent)
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Will UCC clarify that for me in writing?
Catherine Connolly (Galway West, Independent)
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Did the witnesses from UCC read our report published in July 2017?
Catherine Connolly (Galway West, Independent)
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Good. On page 39, it referred to CIT and UCC and other bodies. We were not satisfied that there was sufficient clarity between the university and various entities. What was Professor O'Shea's reaction to that? What steps did UCC take in this regard?
Catherine Connolly (Galway West, Independent)
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We referred to IMERC, which I understand has since been dissolved. Some of these relate to CIT, such as GAC Training and Services Solutions.
UCC sold its interest in Infini-LED. We were making the general point that when we looked at the accounts that it was difficult for us to follow what return there was for the public, what governance structures were in place and who from the university was on the companies. What did Professor O'Shea think when he read that?
Catherine Connolly (Galway West, Independent)
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I am disappointed with the witness's opening statement. I am happy with the general gist of it, but it says on page 2 that "during 2016, UCC also sold its equity interest in a former spinout company, Infini-LED". We are given two sentences. It is not placed in context-----
Catherine Connolly (Galway West, Independent)
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I would have liked it placed in context in the witness's opening statement because it uses up time and it is a serious issue - not just for UCC but across the board with every institution that comes before us. I refer to spinout companies and the use of public facilities, public land and university resources. What is the return? Bald statements are being made that it is good for the taxpayer but I do not know that. I see that the share was sold off. I would like it in context please.
Catherine Connolly (Galway West, Independent)
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It came from the Tyndall National Institute.
Catherine Connolly (Galway West, Independent)
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Is that a public body?
Catherine Connolly (Galway West, Independent)
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Is that on the campus in Cork?
Catherine Connolly (Galway West, Independent)
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That is a 100% fully funded public body.
Catherine Connolly (Galway West, Independent)
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Did it set up a company?
Catherine Connolly (Galway West, Independent)
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Lovely, and-----
Catherine Connolly (Galway West, Independent)
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It was sold to a company called Oculus.
Catherine Connolly (Galway West, Independent)
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Oculus is owned by Facebook.
Catherine Connolly (Galway West, Independent)
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I know. UCC sold its share.
Catherine Connolly (Galway West, Independent)
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How was it decided to sell then? What was the process and what oversight was there that it was the right time to sell and get a good return?
Catherine Connolly (Galway West, Independent)
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It was about 12%.
Catherine Connolly (Galway West, Independent)
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Who were the other shareholders?
Mr. Diarmuid Collins:
We do not have that information with us but I will follow up and get it for the Deputy. Ultimately, we were a minority shareholder, and the majority wanted to sell - it was on the market before but the sale did not go through - as the company needed further funding to support it. The sale was a real opportunity to put that company on a solid footing with 100 jobs and further research coming back into UCC. It was a real return.
Catherine Connolly (Galway West, Independent)
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I do not think we are going to get anywhere today. What I mean is Mr. Collins is saying something and at this point I have to accept it at face value. However, I do not. I want evidence that there is a return for the taxpayer in respect of spinout companies. I am not just referring to UCC and these witnesses. Everybody who has come before us has reassured us. However, when we went through this in detail, we could not see the evidence. We have asked the HEA to-----
Catherine Connolly (Galway West, Independent)
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Yes, there is a disclosure to tell us what it was sold for. However, in the context of what came back and what was sold in the first place, it was set up with 100% of public moneys under the Tyndall National Institute. The intellectual property - whatever that is - is developed and then it is sold on. We are then told it is a marvellous story, there was this return and 100 jobs. I do not know. I am concerned that public institutions throughout the country are being used in a particular way. Then I see that UCC also got the most money from research and development. It was €10 million. Was that in one year?
Catherine Connolly (Galway West, Independent)
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Who was the biggest owner of that €10 million?
Catherine Connolly (Galway West, Independent)
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There was nobody in particular.
Catherine Connolly (Galway West, Independent)
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Have they shares in that spinout company that is being sold off?
Catherine Connolly (Galway West, Independent)
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There is no connection between the research and development.
Catherine Connolly (Galway West, Independent)
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In my limited time, I want to turn to Cork Institute of Technology. There are a number of spinout companies there as well. The first one is Infinite Designated Activity Company, DAC. That was apparently set up in December 2015. Is that trading?
Catherine Connolly (Galway West, Independent)
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Why not?
Catherine Connolly (Galway West, Independent)
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CIT has a 50% share in two other joint venture companies. What are they?
Catherine Connolly (Galway West, Independent)
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Is that GAC Training and Service Solutions, GTSS?
Catherine Connolly (Galway West, Independent)
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GTSS is for training in the maritime areas of oil, gas and minerals and so on?
Catherine Connolly (Galway West, Independent)
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CIT has a 50% share in SNO as well.
Catherine Connolly (Galway West, Independent)
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Are members of CIT directors in these companies?
Catherine Connolly (Galway West, Independent)
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Are audited accounts available for these companies?
Catherine Connolly (Galway West, Independent)
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They are consolidated into the accounts of CIT.
Catherine Connolly (Galway West, Independent)
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Are the directors remunerated?
Catherine Connolly (Galway West, Independent)
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No remuneration. That is fine. I think I have gone over my time.
Seán Fleming (Laois, Fianna Fail)
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We are moving on in the same sequence, just over the time. Deputy Alan Kelly will be next for ten minutes and then Deputy David Cullinane and Deputy Marc MacSharry on the same sequence. I call Deputy Kelly.
Alan Kelly (Tipperary, Labour)
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That is fine.
Seán Fleming (Laois, Fianna Fail)
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We are into ten minute slots and there might even be another few minutes.
Alan Kelly (Tipperary, Labour)
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To clarify, is it me first?
Seán Fleming (Laois, Fianna Fail)
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Yes, I call Deputy Alan Kelly.
Alan Kelly (Tipperary, Labour)
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This the quick fire question round again. I have a question for UCC. The corporate secretary - whom I will not name but the witnesses know who I am referring to - recently retired. The witnesses gave details to this committee of the pension, substantial lump sum etc. There was also a request for the cost of his retirement do but that was not provided. How much was it?
Alan Kelly (Tipperary, Labour)
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Just tell us how much it was.
Alan Kelly (Tipperary, Labour)
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It was €2,400. That cost was paid by the individuals attending.
Alan Kelly (Tipperary, Labour)
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What was the cost of the event?
Alan Kelly (Tipperary, Labour)
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Hold on. Did the people who were attending pay for it themselves or did the college pick up the tab?
Alan Kelly (Tipperary, Labour)
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Not the gift.
Alan Kelly (Tipperary, Labour)
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For clarity, the €2,496 was paid by the college and the €56 was paid for by the staff or the people close to him? Fair play to him, he had a long career etc. What is he doing now?
Alan Kelly (Tipperary, Labour)
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He is not working for the Irish Management Institute, IMI.
Alan Kelly (Tipperary, Labour)
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Is he working under a contract or is he an employee?
Alan Kelly (Tipperary, Labour)
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He is an employee and not on a contract.
Alan Kelly (Tipperary, Labour)
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Are the employees of IMI on the same payscales as those in UCC?
Alan Kelly (Tipperary, Labour)
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The IMI has six appointees to UCC's board, its programmes are accredited by UCC and the students are referred to as UCC students. Are the payscales higher or lower than those in UCC?
Alan Kelly (Tipperary, Labour)
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Will the witness do a piece of work for us? Will Mr. Collins do an analysis and come back to us?
Alan Kelly (Tipperary, Labour)
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There is concern that there are differences.
Alan Kelly (Tipperary, Labour)
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It is that gap that is the concern. How much money has UCC spent on its staff participating in the IMI 'Aspiring Leaders' programme?
Alan Kelly (Tipperary, Labour)
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Will the witnesses do that this week?
Alan Kelly (Tipperary, Labour)
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I ask because there is a concern cross-subsidisation is going on. That would be deeply worrying and alarming for me as a member of this committee. That is why I want that information. I presume there is not cross-subsidisation.
However, if there is-----
Alan Kelly (Tipperary, Labour)
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I presume that there was tendering process for the provision of such service, and that the IMI won it.
Alan Kelly (Tipperary, Labour)
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If it was not, I think there is an issue around procurement laws. Maybe the Department and the Higher Education Authority, HEA, should look at that. How can UCC staff be part of IMI, and how can IMI, which is a subsidiary of UCC, be used, if UCC has not tendered for the work in the first place?
Alan Kelly (Tipperary, Labour)
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Is it part of UCC?
Alan Kelly (Tipperary, Labour)
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I think Mr. Collins needs to check that this is within procurement guidelines.
This is the last question on the IMI. I presume that no student fees or payments from the State are being used in any way to pay back Ulster Bank for the purchase of IMI properties, or to pay the release charges on IMI properties to AIB?
Mr. Diarmuid Collins:
The last time we were here, we sent a letter to the committee which showed how the borrowings that the university took on to finance the IMI, to fund the IMI campus, were paid. We have a sale and lease back arrangement. The lease payment from the IMI back to the university, together with accreditation income, services the loan.
Alan Kelly (Tipperary, Labour)
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The witness is just saying no.
Alan Kelly (Tipperary, Labour)
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Fine. Mr. Collins appreciates the time pressure.
I will now address the Cork Institute of Technology, CIT. The pension paid by the student services company is obviously used by those who work there. Are there any people outside of that who have any benefit from the pension scheme? Is there anyone else in the college, on the board or anyone whatsoever outside of those directly involved in the company?
Alan Kelly (Tipperary, Labour)
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Dr. O'Connor might check it and come back.
Alan Kelly (Tipperary, Labour)
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I have a really puzzling query here about the Munster Technological University. The query concerns costs. The HEA might want to have a look at this. A letter was written to the Committee for Public Accounts on 23 March 2018. It stated that the costs of the merger to date were a total of €571,803. Yet a letter to the committee dated 27 May stated that the costs were €752,186. How can it be that the costs were €752,186 in 2015, but went down to €571,803 in 2018?
Alan Kelly (Tipperary, Labour)
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I looked at that. I do not think that adds up.
Alan Kelly (Tipperary, Labour)
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I checked that. I do not think those figures add up.
Alan Kelly (Tipperary, Labour)
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Can Mr. Conlon do so pretty quickly? It seems hilarious that two letters were written to the committee three years apart, indicating that the costs were over €752,000 three years ago, and are now €571,000. Two years have passed and the costs have decreased. Apples with apples, oranges with oranges is the argument. However, I have checked that out, and even allowing for that the figures do not add up. This is a pretty urgent thing, given the fact-----
Alan Kelly (Tipperary, Labour)
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I know. I have added those in. We have public information on those. They still do not add up. I would like this information presented in a table. The witnesses might come back to us next week.
Regarding the Department, obviously its officials have great respect for the HEA and all of that. They accept that the HEA has a significant role to play. I take that as given. I wish to raise the issue of the merger, or the Munster Technological University, particularly the famous minutes that never existed but did exist. I had to make them public through this process, which is absolutely infuriating and wrong in the first place. I had to ask for minutes from the HEA, which were never meant to become public, to be made public. The excuse given was not acceptable nor do I accept it. These minutes said that the absolute overwhelming majority opinion, the almost unanimous view, was that this should not go ahead. Policy is a matter for the Government and for Ministers. That is fine. As a former Minister I understand that. However, viewing this matter from the perspective of the Department, I presume its officials basically just dismiss the HEA when they do not agree with it.
Alan Kelly (Tipperary, Labour)
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Can Mr. Beausang explain to me what the Department did when it found out about these minutes and what the HEA board had recommended?
Alan Kelly (Tipperary, Labour)
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Very well, perhaps the next witness can answer.
Alan Kelly (Tipperary, Labour)
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We have two people here who have no standing whatsoever to answer questions.
Alan Kelly (Tipperary, Labour)
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Answer the question then.
Alan Kelly (Tipperary, Labour)
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Excuse me. Mr. Beausang is here to represent the Department. He is here to answer questions. With all due respect, he should not be here if he is not capable of answering the questions or does not have the capacity to do so. His Secretary General or somebody else should be here. With all due respect, it is actually disingenuous to the Committee of Public Accounts for the Department to send people who cannot answer questions. This is a fairly basic question. All this information was revealed in the last committee hearing. It is not as though we were not going to follow up on it. Can Mr. Beausang answer my question now?
Alan Kelly (Tipperary, Labour)
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Effectively, we may note that the Department is incapable of answering the question.
Alan Kelly (Tipperary, Labour)
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No, I do not want a written answer. The point of public hearings is that the witnesses are asked questions in order to provide answers in public, in camera, for the people outside watching. It is an indictment of the Department of Education and Skills that it did not have the capacity to send anybody here to answer questions, with full knowledge of the fact that these issues have been aired numerous times before. The facts are that are minutes of the HEA board showing that the board recommended almost unanimously that this should not happen. The policy decision of the Department was to go ahead. As we heard, it will probably start later on this year. The issue here is this. I asked a direct question. In that scenario, the Department dismissed the HEA.
Alan Kelly (Tipperary, Labour)
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Fine. I think I have outlined the point. I have another question for CIT. A company called KONE provides services and courses in CIT. Are any former CIT employees directors of this company, or anyone who is formerly on the management team a director of this company? Can the witnesses come back to us in writing on that? Are any former employees or members of the management team directors of this company which is employed by CIT?
The final question is to the Department. It is based on Mr. Gallagher's evidence. Earlier, he said there were no protected disclosures prior to 2018. That is the evidence that was given here by Mr. Gallagher and his president.
Alan Kelly (Tipperary, Labour)
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This my last point. Obviously, when the draft policy was in place, which Deputy MacSharry examined in detail, it was never used for any cases. That is because there were no disclosures before 2018, so there were no disclosures during the period of the draft policy. Is that right?
Alan Kelly (Tipperary, Labour)
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There were no disclosures when there was a draft policy, there was no agreement on a disclosure when there was a draft policy, and there were no disclosures when there was a policy in place. We have agreed that. Is that correct?
Alan Kelly (Tipperary, Labour)
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Apologies. I am referring to pre-2018 all the time. For clarity, there were no disclosures when there was a draft policy in place or a full policy in place, pre-2018 and so on. I respectfully ask the Department, through the Higher Education Authority, HEA, or whatever process, to investigate this matter. I had not intended to ask this question at all, but based on the evidence heard today, there appears to be a serious issue about the clarity required on whether there were any forms of disclosure in 2018 in the formal or in the draft policy. I am formally asking the Department to investigate issue with regard to the Cork Institute of Technology. Whether this is done through the HEA or directly through the Department is the Department's own business, but I ask it, please, to look into it. This is necessary based on the evidence given here today because there seems to be a certain amount of confusion and information that needs to be looked into. This is a request.
David Cullinane (Waterford, Sinn Fein)
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Mr. Gallagher spoke about the information that came forward from whistleblowers and that in his opinion there was no substance to the allegations that were made. Is that correct?
David Cullinane (Waterford, Sinn Fein)
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Then there was a subsequent KPMG review. Was this review looking at those allegations and other allegations or was it specifically around the allegations we are referring to?
David Cullinane (Waterford, Sinn Fein)
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Did they publish their report?
David Cullinane (Waterford, Sinn Fein)
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Then there was a separate report on risk management, or a review of risk management activities in October 2016. Is this correct?
David Cullinane (Waterford, Sinn Fein)
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The Cork Institute of Technology review of risk management activities.
David Cullinane (Waterford, Sinn Fein)
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Was that carried out by PricewaterhouseCoopers?
David Cullinane (Waterford, Sinn Fein)
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This review showed there were difficulties around the risk strategy not being defined, inadequate governance and assurance of risk management activities and inadequate risk identification, monitoring and reporting. There was also detail on the rating and implication, grade 2, that the risk strategy or risk appetite of the institute was not well understood and that decision-making may have been suboptimal. The review said that the institute could take on excessive risk to the detriment of the achievement of its long-term strategic goals. It said that irregular review of the risk management framework set up by the governing body did not create a stable risk landscape and that it was without focus from the top in terms of risk management, including maintaining the risk register, overseeing progress of remedial actions and reporting to the governing body. It made an interesting point that insufficient feedback from the governing body and a lack of awareness within the institute of the purpose of the risk register could result in a lack of buy-in. The review also said that without capture of assurance of peak controls, the executive audit committee and governing body were not provided with adequate assurance as to whether risks were adequately managed.
I read the KPMG report, which is heavily redacted for us so it is difficult to get a full capture of its contents, something we discussed this before. Notwithstanding what that report said and the witnesses' view, there was the subsequent review in 2016 by PricewaterhouseCoopers that identified failings in risk management. Is this correct?
Mr. Paul Gallagher:
I accept that risk management policy and procedure within Cork Institute of Technology is based on a sectoral policy. We fed back into that policy piece and a new risk management policy has just issued, which is being implemented in CIT. I accept that risk management as a methodology within CIT is not that well-developed at this stage. We have an institutional risk register but we have not embedded risk management down further into the organisation. There is quite a bit of work to do around this.
David Cullinane (Waterford, Sinn Fein)
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The report said that there is currently no defined risk strategy setting out CIT's risk appetite, risk objectives or the alignment between risk and the overall strategics plan.
David Cullinane (Waterford, Sinn Fein)
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Some of the allegations that were made at the time were to do with expenses of senior management and issues around paintings. Were all of the key individuals who were involved in the decision-making on these matters consulted directly as part of any internal examination of these issues by the institute or by KPMG? Was it the case that they went solely to higher management to seek a view or did they, as we described earlier, do a deeper dive to speak to people beyond senior management?
David Cullinane (Waterford, Sinn Fein)
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Desktop reviews do not always give us the answers that we need. I believe that when substantial allegations are made, a desktop review is unlikely to recover anything of substance.
David Cullinane (Waterford, Sinn Fein)
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We will never know because it was a desktop review. We will deal presently with a separate line of questioning that I have with regard to a different institute where there was a much more extensive examination of issues, beyond desktop reviews that were previously done, which showed up issues that the other reports did not show up. Desktop reviews do not always capture the full extent of what is happening.
David Cullinane (Waterford, Sinn Fein)
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I have two issues to put to Mr. Love, one of which we discussed while in private session. Perhaps he will respond as best he can while we are in public session. It concerns a draft report sitting with the HEA about Waterford Institute of Technology and intellectual property. The HEA furnished the committee with a more global examination of intellectual property, which we will get to at some point. Will Mr. Love explain to the committee when the report on intellectual property and Waterford Institute of Technology was to be completed, when the draft report was given to the HEA, how long it has been with the HEA and what the difficulties are with regard to publishing that report?
Dr. Graham Love:
The report kicked off last summer and I believe its original target date for completion was November, and if that was not possible it was to provide an interim report, which we received thereabouts or shortly afterwards. I will update the committee on this while we are in public session. We have hit a number of difficulties with the report, including significant legal issues. We have subsequently sent a version of the report to a number of individuals for feedback and a right of reply type process. We have a number of legal objections to elements of the report. I do not want to go into more detail than that here. We have recently received details of those objections and inputs. These are with our legal team at the moment.
David Cullinane (Waterford, Sinn Fein)
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I accept that due diligence is important, especially from a legal perspective, and that the HEA must do this. The report was due in November and the Committee of Public Accounts is still waiting for the report as we go into June. Does Mr. Love accept that a seven-month time gap is more than late? Does he see this as acceptable from the committee's perspective? We focused on this issue and we asked for an independent examination. A report was done and someone obviously did a huge piece of work on it. The report was submitted to the HEA, and while I understand that due diligence must be followed, we are seven months down the road and we still do not have that report. It must also be borne in mind that this committee was hoping to use the report as an opportunity to explore the wider issue. This situation is holding up the committee's work, and if an independent report is done, it must be published so we can see exactly what the problems were, if there were problems.
Dr. Graham Love:
I accept that it is deeply frustrating for the committee. It is frustrating for the HEA also. As I explained in private session earlier, it is essential that we perform due diligence correctly or we could expose the HEA and the taxpayer to significant expense.
We have to be careful of that. We are focused on getting this done and I want to assure the committee of that.
David Cullinane (Waterford, Sinn Fein)
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Information was provided to this committee on a variance in spend in respect of the amalgamation of institutes of technology and the technological university process. Can Dr. Love give us an overview of why there was a variance in spend among the different consortia?
David Cullinane (Waterford, Sinn Fein)
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There were a number of different mergers and there were different processes at different stages. Each incurred a cost as part of the merger process and with all the associated work to transition into a technological university but there were big gaps between them in what was spent. I am trying to find out the reason for this.
Mr. Tim Conlon:
There were different consortia and institutions coming together in different parts of the country, with different trajectories in terms of their past. For example, some would have had significant research endeavours and, therefore, would have more PSG numbers to meet the criteria, while others had to work harder to meet the criteria. There were four projects with different historical backgrounds moving towards meeting a set of criteria set down in law to become a technological university.
David Cullinane (Waterford, Sinn Fein)
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Where does the Waterford-Carlow merger sit in the context of the process?
Mr. Tim Conlon:
The HEA and a subcommittee of our board met them in recent days to talk about the funding allocations they are looking for in order to build the project. They assure us they are in very good stead and we think they are in a good position. We expect they will be in a position to make a formal application by September 2018, looking towards assessment and likely designation some time in 2019. Their intention is to be functioning as a technical university and enrolling students in September 2019.
David Cullinane (Waterford, Sinn Fein)
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One of the witnesses said earlier that the technological universities were an exciting prospect. I am personally supportive of the Carlow-Waterford one, even though there are reservations and genuine concerns within the institutes. One of these is whether the technological universities will be on a par with existing universities. An example would concern the ability to borrow money and any investment in research and development baseline funding. Does Dr. Love have any idea what the relationship will be and what ability the technological universities will have to borrow money in this way? I understand the institutes of technology cannot borrow money.
David Cullinane (Waterford, Sinn Fein)
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Will technological universities be able to borrow money?
David Cullinane (Waterford, Sinn Fein)
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Why is there no provision?
David Cullinane (Waterford, Sinn Fein)
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Sought by whom?
David Cullinane (Waterford, Sinn Fein)
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This is a key issue. One of the strengths of a university is that it has autonomy and is able to borrow and invest. If existing universities can borrow while technological universities cannot borrow, we do not have a level playing field. That feeds into the concerns that those who are against technological universities have. They may have other reasons too. I want to see it happen but I have a concern about technological universities not being on a par with existing universities. Is baseline funding for research and development in the legislation?
Seán Fleming (Laois, Fianna Fail)
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We have to move on, Deputy.
David Cullinane (Waterford, Sinn Fein)
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Other people got a bit of latitude.
David Cullinane (Waterford, Sinn Fein)
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I seek the permission of the Chairman to ask for a note from the HEA showing what the current situation is for institutes of technology as regards borrowing money and baseline funding for research and development, and how that will change, if at all, when they transition into a technological university and how they will differ from existing universities. I ask for a detailed note to be forwarded to the committee on these points.
Seán Fleming (Laois, Fianna Fail)
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That is fine, Deputy.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I second Deputy Kelly's proposal to ask the Department to investigate and respond, because there is confusion now about the number of disclosures pre-2017. I will go back to my previous line on the anonymous disclosure. All reports were heavily redacted but did the disclosure make allegations against members of the executive?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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That would include the executive. Did it include the previous president?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is the anonymous letter the subject of a High Court case?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am talking about the one the KPMG report was about. Is that now the subject of a High Court case?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am not interested in individual allegations. I am just interested in the scope of inclusion in terms of people. I understand that there were allegations against the president. Was Mr. Gallagher the subject of allegations?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Including yourself?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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When Bob Savage refers to the executive, to whom is he referring?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Mr. Gallagher is included in that.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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The Comptroller and Auditor General gets the report and he forwards it to the Department and the HEA. Is that correct?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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The Department and the HEA sent it back to CIT telling it that it needed to look into it. Is that the case?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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You said, "Work away".
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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The Department and the HEA had seen the disclosure at that time and would have been aware of the individuals, the allegations, etc.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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You were happy with that.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Was the HEA happy that the people organising that process were the self-same people mentioned in the disclosure?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Who was that?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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That was not the case at that stage.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Who set the terms of reference?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Does Mr. Gallagher want to come in?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Your solicitors are O'Flynn Exhams.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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They were mentioned in the disclosure too.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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They provided advice to the audit committee on this matter.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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We are getting a picture here. An awful lot of the people who are the subject of false or negative allegations - I say that without prejudice - are the same people who designed and are operating much of the process. Is that not correct?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Tell me then. I am just adding up the answers Mr. Gallagher is giving me. That is what it amounts to.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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They wrote to Mr. Gallagher. He was the conduit for Arthur Cox.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Why did they not write to the chair of the audit committee, as opposed to Mr. Gallagher? Does Mr. Gallagher handle all of its correspondence?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Why did they write to Mr. Gallagher on that occasion?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Am I on a different planet here? If allegations are made about people, however false or negative they may be, is it not wholly inappropriate from the perspective of the HEA and the Department? I say without prejudice that it is just wrong. There is a conflict here. I am saying this without prejudice. I am not pointing any fingers. How in God's name can the executive and other people who were mentioned in these allegations, which may be false or true, be involved in the process? Is it the position of the HEA and the Department that this was good practice in handling disclosures?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Yes.
Dr. Graham Love:
The processes that have been laid out here show that the audit committee, which is a sub-committee of the board composed of independent members, designed a process that engaged a separate legal firm from the one that provided services to the committee to set the terms of reference and conduct a process that further engaged-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Okay. We are saying that Arthur Cox designed the terms of reference. Is that the position?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Do we have those terms of reference?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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They can be sent on. We do not need to go into them now.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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To be honest, I think it is-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Of course. Go on.
Dr. Graham Love:
I made this important point last year. When allegations or matters are raised, it is very important that each institution has the capacity to carry out a good governance process, which can properly be viewed as independent, to help the institution to reach a satisfactory conclusion. If all allegations like this have to be outsourced to an independent body - ourselves or some other body - the process of self-investigation will not develop within institutions and this will affect their competence to regulate and govern themselves. An outside body or a set of outside bodies should be able to go a step further when that is needed. When allegations like these are raised, I would be concerned if the institution could simply step back and say it has to be tossed over to somebody else.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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It was not tossed over to somebody else.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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It is about getting these things investigated. To repeat an analogy that I feel bound to use without prejudice, if somebody burgles a house we do not ask the burglar to investigate how it was done. Why is this process not managed by the HEA or the Department? They could say they are going to have a look at this, they are going to have a competitive tendering process and they are going to set the terms of reference.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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No, sorry. I am talking about the anonymous one. We know it was a protected disclosure. We asked the Department to investigate whether other ones existed prior to 2017. The executive has told us that there was none.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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What section of the Act is that guidance in?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I see. The Act allows the Department to issue its own guidance. It has decided that the best people to investigate an alleged problem are those who are the subjects of the allegation.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is that the case?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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It cannot investigate itself. Is any of us alive to what has been going on-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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-----in Ireland for the past ten years?
Mr. William Beausang:
In this instance, I do not think Cork Institute of Technology has represented it as a self-investigatory process. It has referred to the role of its audit committee and the role of Arthur Cox, the conduct of which would obviously be subject to professional regulatory requirements if it were allowing itself to be unduly influenced by institutions that ask it to work with them. I absolutely understand the point the Deputy is making and the complexity that can arise in these kinds of cases.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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There is no complexity. It is black and white. If there is an allegation against me, I need to be 100 miles away from the investigation other than when the independent investigator comes to me to ask me questions about it. Why did KPMG consult the executive only? Why did it not conduct wholesale interviews across a random selection of staff to see if any of these things stands up? It did not do so. According to a letter on this issue that was sent by Bob Savage after the draft report, KPMG undertook further review work and consulted the executive for a number of weeks. The executive is telling us it was the subject of numerous allegations. This entire process is flawed. I suggest to the HEA and the Department that they should tear up the flawed guidance they have because it asks the fox to investigate the incident that resulted in the chickens being eaten. That is not real, appropriate, authentic or credible. In fact, it makes clowns out of everybody associated with this process, including those of us who are trying to ask questions. This is not personal and it is without prejudice. Maybe all of these allegations were totally vexatious. The credible and professional names that are associated with the report which has been carried out - I refer to KPMG, legal firms and so on - are selling themselves short by being associated with a process that was such as shambles. I suggest to the HEA and the Department that their guidance is laughable and wide open to accusations of containment and of enabling the process to be internally managed to ensure the truth is suppressed in the interests of protecting an individual, a group of individuals or an institution. Frankly, it plays completely into the credible accusation, which this committee has seen more than most, that those who want to be whistleblowers need to be prepared to be portrayed as villains and crooks and to be thrown under the bus. It is laughable and comical to suggest that the process of allowing institutions to investigate themselves is independent.
Seán Fleming (Laois, Fianna Fail)
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Okay. The Deputy's time is up.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Will I be able to come in again?
Seán Fleming (Laois, Fianna Fail)
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Yes. I think our general point is one we have made here before. The protected disclosures legislation is relatively new. I think most people share the view that it has not yet been fully embraced. It is not operating as originally intended. I am not talking about this case. We are finding it everywhere. I could list ten organisations in which we have encountered this issue. I am not making excuses. When the freedom of information legislation was introduced some years ago, people struggled for a few years as they sought to handle it. They probably got the hang of it eventually. The protected disclosures legislation applies to the private sector as well as the public sector. It is very important. We are in a space where everybody is struggling. People have yet to get on top of the operation and spirit of the legislation. We are finding that at this committee all over the place. That is a general comment. I am not looking for a response. I will allow Dr. O'Connor to respond before I bring Deputy Connolly in.
Seán Fleming (Laois, Fianna Fail)
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I have made a broad comment rather than a specific one.
Dr. Barry O'Connor:
Sure. I would like to make some points of clarification about the way the institute and the governing body work. Apart from the internal members who were mentioned by Mr. Gallagher earlier, such as the staff and student representatives, all the members of the governing body are external members. The sub-committees of the governing body are serviced by the office of the vice president for finance and administration. All matters of human resources, personnel, finance and procurement go through one office. Anything to do with students, quality and examinations goes through the office of the vice president for academic affairs. We do not have a huge infrastructure there.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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On that point, what Dr. O'Connor has said-----
Seán Fleming (Laois, Fianna Fail)
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To an extent, the Department of Public Expenditure and Reform is not on top of this.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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-----would be perfectly reasonable if the same people were not parties or named players in a protected disclosure.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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They were, so it is not appropriate.
Seán Fleming (Laois, Fianna Fail)
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I would like to use a simple analogy before I bring in Deputy Connolly. This relates back to what all Deputies see when they are dealing with constituents. If somebody who has applied for social housing from his or her local authority does not get it and subsequently submits an appeal, good practice dictates that somebody outside the housing function, rather than somebody more senior in the housing section, should look at the appeal.
It is obvious that somebody utterly unconnected with the original decision should be looking at it. That is common sense. Mr. Gallagher has indicated.
Catherine Connolly (Galway West, Independent)
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I have three issues that I will deal with quickly. I thank Professor O'Shea for clarifying the foundation. UCC is in the ha'penny place compared with NUI Galway, which has huge reserves in its foundation. I welcome that UCC is looking at that. Do I understand it has a review of governance structures in place?
Catherine Connolly (Galway West, Independent)
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I ask Professor O'Shea to clarify that for me. Who is doing that and what is the timeframe?
Catherine Connolly (Galway West, Independent)
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Does Professor O'Shea sit on that foundation, as president, just as the president in NUI Galway does?
Catherine Connolly (Galway West, Independent)
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What are they looking at?
Mr. Diarmuid Collins:
We are looking at, as the Deputy pointed out, the performance of our foundation versus others. We are looking at whether we have the best model for success for the foundation. One of the options would be whether it would be best or achieve what we want it to achieve by it being done within the university and not separate from the university. We are looking at those options.
Catherine Connolly (Galway West, Independent)
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What does that mean? People donate money through a foundation. Is UCC looking to change that so that they would donate it directly to the college?
Catherine Connolly (Galway West, Independent)
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Obviously this is something we follow up here. I am concerned about various presidents of colleges with foundations repeatedly saying they do not control the foundation. What does the foundation control in terms of education and buildings? What power does it have regarding education? It is a very valid question, is it not?
Catherine Connolly (Galway West, Independent)
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In Galway, free office accommodation was provided to the foundation. When we asked about that, we were told that, of course, the college would provide free accommodation to the foundation. Is that also happening in Cork?
Mr. Diarmuid Collins:
We agreed, following one of the earlier questions, that we would give a report back on the costs of the development of an alumni office. It supports the foundation - we accept that - but it supports a lot of other activity that the foundation is not involved in. We will come back to the committee with the costs of that accommodation.
Catherine Connolly (Galway West, Independent)
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Are any specific conditions attached to money given to the foundation in terms of what goes on in the college, for example, the type of building or the type of research?
Catherine Connolly (Galway West, Independent)
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Who does the strategic plan?
Catherine Connolly (Galway West, Independent)
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UCC has a strategic plan and then the foundation will give money-----
Catherine Connolly (Galway West, Independent)
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Okay. The witnesses will come back to us on that.
Catherine Connolly (Galway West, Independent)
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I have two other matters. One is the practical matter of student accommodation. It is great to hear that UCC is doing it on a cost basis. It rings bells in my head for NUI Galway because there was a protest recently over a huge increase. UCC has 1,500 beds directly under its control.
Catherine Connolly (Galway West, Independent)
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What is the student population?
Catherine Connolly (Galway West, Independent)
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It is 20,000. The college has 1,500 beds with a proposal to get another 500 in the next few years.
Catherine Connolly (Galway West, Independent)
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Is that the college's maximum plan for student accommodation?
Mr. Diarmuid Collins:
If opportunities come up with sites that become available, we may look at trying to do a bit more. There are a number of private developments which are in place which is adding to the bed spaces that will become available from 2019 and 2020 onwards. If we can do more, we will do more - ourselves in the university.
Catherine Connolly (Galway West, Independent)
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It seems to be a fundamental part. One of the overall aims of the HEA, in addition to monitoring and ensuring policies are in place, is access to education. It is practically impossible to get access to universities if there is no accommodation. In Galway we are utterly reliant on the market, which is out of control.
Catherine Connolly (Galway West, Independent)
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There is just one other thing, IMERC, that I want to come back to and that is me finished.
Mr. Stewart Roche:
The HEA, working with the Department of Education and Skills, produced a report on student accommodation back in 2015. We identified a shortage countrywide of 25,000 bed spaces. The Department of Education and Skills produced a strategy on student accommodation in the middle of last year and we fed the research on the updated figures into that particular strategy. There is a student accommodation interdepartmental working group which monitors the whole student accommodation situation.
We are also stacking all of the projects that are ongoing - on site, plans granted, plans applied and potential. At the moment countrywide, taking it into account, there are circa 20,000 PBSA that should be built by 2024.
Catherine Connolly (Galway West, Independent)
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That lack of accommodation will make it impossible to have access to university for everybody.
Catherine Connolly (Galway West, Independent)
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The HEA did an analysis in 2015, so there is a completed study available.
Catherine Connolly (Galway West, Independent)
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That is fed into-----
Mr. Stewart Roche:
That was the first report which identified the problem. We worked with the Department on that. The Department of Education and Skills produced a strategy in July 2017 and we fed the updated research data into that and we are tracking all the development on student accommodation on a monthly basis which we report into the Department.
Catherine Connolly (Galway West, Independent)
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I welcome that. I know from Galway that we are actively adding to the crisis in the rental sector with the student population we have. Those students are in desperate accommodation and desperate situations. There has been no proactive programme in that regard. It has been obvious to everybody for the past ten years that we were going to be in crisis. However, I welcome what has been said.
My final point is on IMERC. I have listened to everything that has been said here today. Over two years we have listened. The debacle relating to IMERC does not really inspire confidence. Two third level institutions and the Naval Service set up IMERC. Looking at the document it refers to new governance arrangements emerging. It sets out all this flashy documentation and so on. My time is limited. I look at that and then I look at the review of Ireland's Maritime and Energy Resource Cluster dated May 2016. It is an indictment. I just have to put it on the record because I have taken the time to look at it and I have raised it previously. It is not my area, but it jumps out. We have to get an international panel of reviewers to look at this. They distinguish the university and CIT from the institution that was IMERC. Words fail me. The team identified a very significant weakness in the structure and operation of the institutional IMERC's governance and controls, and the absence of robust procurement, financial management and public relations. I will not quote the whole thing. The witnesses will accept it is a damning indictment of the new governance structures emerging. A structure was set up and it is allowed.
Dr. Barry O'Connor:
Could I come in? In terms of the Deputy's confidence, in terms of ourselves, UCC and the Irish Naval Service, our teaching, training, research and interaction are blossoming on a continual basis. What is referred to in the report as institutional IMERC was not an institution as such. The IMERC idea is an umbrella structure.
Catherine Connolly (Galway West, Independent)
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Just a minute, Dr. O'Connor. I accept that the three institutions were not damned in this report. What was set up with the full co-operation of the three institutions was this institution. This institution is the subject of a damning report by a panel of international experts. We have all this glossy stuff telling us about wonderful new governance. Dr. O'Connor accepts it is damning. It was confirmed when it was dissolved. As I understand, it was not dissolved from any internal recognition of problems. It was dissolved because of this review and because very good people in the institutions said it was not right.
Catherine Connolly (Galway West, Independent)
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It happened following significant pressure from various good people who said this is not working and went out on a limb at great cost to their professional and personal lives. I am not exaggerating here, am I, in respect of the people who came forward and suffered and tried to bring this to the establishment's attention? It is difficult to have confidence. I believe in the public service. I have said repeatedly that I want to support the public service. The witness talks about processes and putting procedures in place but it did not happen.
Dr. Barry O'Connor:
It is heartening that at the core business of teaching, education and research, the only two institutions in the State that won joint awards were ourselves together with UCC and the Naval Service, our co-operators at the Maritime College. The Deputy mentioned confidence at the beginning. D'fhéadfaí a bheith lán cinnte agus d'fhéadfadh lán muinín a bheith ag an gcoiste go mbeidh an obair seo ag dul ar aghaidh agus ag dul ar aghaidh go traon.
Catherine Connolly (Galway West, Independent)
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Ba mhaith liom é sin a chreidiúint ach tá deachrachtaí agam mar tharla sé seo agus bhí CIT páirteach san rud an t-am uilig agus an saghas bileog seo ag cur in iúl go bhfuil rud nua ag tarlú nuair nach raibh aon rud nua ag tarlú. Sean rud, cur i gcéill agus easpa monatóireachta atá i gceist.
Catherine Connolly (Galway West, Independent)
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When was it ultimately dissolved?
Catherine Connolly (Galway West, Independent)
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What came in?
Catherine Connolly (Galway West, Independent)
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I know that. When was it actually dissolved?
Catherine Connolly (Galway West, Independent)
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In December 2016 it was a non-entity. And the staff from it were redeployed?
Catherine Connolly (Galway West, Independent)
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I am not going to discuss staff issues but I understand that process was not clearcut either. I will leave that for a separate forum.
Seán Fleming (Laois, Fianna Fail)
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We are near the end. Deputy MacSharry has indicated. On the issue of protected disclosures, the point is very well made but we have a detailed item of correspondence to discuss when this part of the meeting is over in respect of the framework for receipt and investigation of protected disclosures, which just recently came into effect.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Who is it from?
Seán Fleming (Laois, Fianna Fail)
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It is from Paul Quinn, chief procurement officer in the Office of Government Procurement. This came into effect on 18 April. Essentially, the document says that the Department of Public Expenditure and Reform, DPER, has published guidance for assisting public service bodies in the performance of their functions under the Act. It summarises the key features and states that all public service bodies have the responsibility to have procedures in place and available to their employees for dealing with protected disclosures. It goes on to address the nature of my query. As we know, a lot of this has been outsourced to other organisations and we asked what the procedure was and whether everybody goes and does their own outsourcing. The Office of Government Procurement says it has a procurement framework which came into effect on 11 April this year, only the other day. That is now being sent to all Government bodies in respect of outsourcing of these issues.
There are three framework agreements that can be put in place. If the witnesses have not read the guidelines yet, they are on their way to them now. They should have read them last week. One framework agreement says that for the provision of third-party confidential recipient services pursuant to section 6 of the Protected Disclosures Act, an organisation that might not be big enough to have somebody independent internally can designate a third-party confidential recipient and there is a framework in place in respect of the procurement of that particular service.
There is a separate service that is provided for under this framework to say that an organisation can have a procurement service in respect of the full investigative services into an alleged wrongdoing purported to be disclosed under the Protected Disclosures Act including a review of such services. That allows an organisation to have a person not just act as a confidential recipient but also investigate the alleged wrongdoing independent of the organisation.
The third framework procurement contract that is now in place is for full investigative services of allegations of penalisation or adverse treatment as a result of having made a disclosure of wrongdoing, or where such a disclosure is purported to have been made, pursuant to the Act, and for review of such investigations. In the event that somebody feels they have been penalised as a result of making a disclosure or a purported disclosure - I stress that there is a presumption in the Act that a disclosure is a protected disclosure - this allows for a framework to be put in place and independently procured in line with Government procurement.
There are three separate contracts now available and that is part of the issue we have been processing here. We felt the thing was not working and were putting the onus on DPER. It is up to the Department at national level to get this protected disclosures legislation working across the board. We found on several occasions - I have two or three more examples on my desk - that the current arrangements have not been working. This framework is an acknowledgement that the system was not fully functional up to now. This letter was dated 11 May. It came to the committee within the last week and is due to be raised in correspondence.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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We did not get to raise it before today.
Seán Fleming (Laois, Fianna Fail)
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This morning we decided to go straight into this session and deal with correspondence later.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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From what you read of it, it is totally inadequate.
Seán Fleming (Laois, Fianna Fail)
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Fine. We will discuss that in a few minutes when the witnesses have left.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am not finished yet.
Seán Fleming (Laois, Fianna Fail)
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It is a broader issue.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I have other proposals that I would like to raise. Does Deputy Farrell want to speak?
Seán Fleming (Laois, Fianna Fail)
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I ask members to be conscious that we took this group early because all of the presidents and the HEA have a conference at 2 o'clock. We do not want them to be late.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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They are going to have plenty of time to get there. It is five past one.
Seán Fleming (Laois, Fianna Fail)
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I have a question or two to put to them at the end as well.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am sure they are not anxious for us to have another hearing on this. I note what the Chairman has read out. I note that it included words like "guidelines" and "internal, independent". If that is not an oxymoron I do not know what is. How can we have an internal independent person, without prejudice? It is an impossibility. Nobody internal can investigate or be part of the investigation of allegations against that institution - work colleagues, golf buddies, drinking buddies, friends. That is not there. Guidelines are optional, as we all know and have learned at our expense at different times.
I wish to make a proposal which will need a seconder. That will have to be the Chairman unless Deputy Alan Kelly wants to second it. I propose, whether it is a matter for the Department of Education and Skills in this instance or DPER in general, that we need a whole new set of guidelines. It is never acceptable to have an internal independent party because that is a conflict of interest in itself. Even if what the Chairman read out is now the gold standard that can prevent and give absolute confidence to whistleblowers, the public and everyone that everything is independent and there is going to be a full and complete investigation and consideration, it is not retrospective. In that context, there should be a re-investigation independently overseen by the Department of the anonymous disclosure that has been referred to, any letters that are judged to be disclosures or not pre-2017, and the ones currently before them.
I do not believe it is appropriate - without prejudice - for their own protection at a very minimum that executives, staff or certain people within the institution that is the subject of a protected disclosure are in any way associated with the management, oversight, facilitation or otherwise of a protected disclosure. I ask that we write to the Secretaries General or the Ministers at DPER and the Department of Education and Skills because it is in this context that there would be a re-investigation of this. I think I have proven beyond doubt this was not independent - again without prejudice - because of the involvement of people who were named in allegations, however false they may have been or vexatious. That is not transparent. It is not good governance and it is a clear conflict of interest. I formally propose that. I ask the Chairman to second it. I know the clerk is talking to him there.
Seán Fleming (Laois, Fianna Fail)
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I agree with the Deputy. Those two letters will go out.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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That is good. We might then move down the process.
Dr. Love and Department representatives said that it is important, from a governance evolution perspective, for an organisation to learn from its mistakes and I totally agree with that. However, the fact there is a procedure in place does not mean it is a good one or the right one; nor does it mean that it is going to lead to learning. If a truly independent, external body is involved in setting terms of reference and managing matters at arm's length, like the Department or the HEA, the results of that process can act as the learning catalyst in improving governance in an organisation, whether that be CIT, Sligo IT or any other State entity.
I have a concern about this letter and the issue of parties and entertainment. Dr. Love said that this had the potential to address the problem as he saw it. He said that it was a personal view but wanted to reserve the right of the board to take its own view. I am glad he so reserved because I cannot see how his board would be remotely happy with this. It is all about what is going to be done in the future as opposed to addressing what happened in the past. There is no sanction. There is an acknowledgement that €13,000 was dished out, that the person in charge of the money decided to spend it and that this was clearly condoned by others. The only suggestion is that for presidential or governing body expenditure in excess of €500, prior approval of the vice president of finance and administration is required but that is easily obtained. That is not a procedure. Where is the sanction?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I know but Dr. Love indicated that he felt that this was potentially good news.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I would say it is a pitiful response to a very serious-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am glad now that we have seen it. Dr. Love said that this was potentially good.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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He reserved the right of his board to take a final view and I welcome that. Before doing so, the board should bear in mind that this is all about how things are going to be managed in the future. All anyone has to do at the moment is get the permission of the vice president of finance to spend whatever he or she likes, which means this could happen again if the vice president of finance is disposed to agreeing to an ice sculpture, the hiring of a band and so forth. That is a problem. There is also no sanction. Where is the tangible sanction which demonstrates to every institution that the HEA condemns the use of €13,000 of taxpayers' money on this type of hospitality? Where is the condemnation of the use of public money for a portrait? The institute had so little confidence in its own art faculty that it did not even commission a student but paid €20,000 to an external person to do it. There should be no ambiguity here and there should be echoes of condemnation from the Department.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I appreciate that.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am giving my view. I am not inferring anything about Dr. Love's judgment. He gave a personal opinion. While I appreciate that the process is not finished, on 17 June it will be one year since we first discussed these matters and that is a problem. The echoes of condemnation should still be heard from 18 June, that public money cannot be spent in this way.
The CIT proposal relates to a procedure. We may be happy that a procedure will be put in place but not if the procedure is that the vice president of finance must say that it is okay whenever €20,000 is being dished out for a portrait or an ice sculpture because that is not good enough. I do not know how Dr. Love's board, when the time comes for its next meeting, could be remotely happy with this pitiful account of how taxpayers' money can be handled in the future. People will only need the permission of one person to dish out whatever they want. I expect to hear after that board meeting - albeit a year late - a loud chorus of condemnation and to see clear procedures laid out, rather than guidelines, on what people can and cannot do.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I hope my utterances here today can feed into that outcome.
Seán Fleming (Laois, Fianna Fail)
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Dr. O'Connor wants to comment.
Dr. Barry O'Connor:
I wish to make a small point about procedures to Deputy MacSharry. Back in October or November, the finance subcommittee of CIT's governing body also brought in another procedural check. Expenditure by the president's office must now be reported on an annual basis to that subcommittee. There is an added protection there from the point of view of the vice president of finance and administration.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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That is a good procedure but we do not want to see this kind of stuff reported to any finance subcommittee in the future. It was absolutely disgraceful. I am nearly finished-----
Seán Fleming (Laois, Fianna Fail)
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Our witnesses all have conferences to attend, so I ask the Deputy to be brief.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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In the course of previous deliberations with the Secretary General of the Department, we spoke about public private partnerships, PPPs and other matters. I made an assumption, as did other committee members, that a certain person was the contract manager on a PPP project all along. We had an entire discussion in the context of that incorrect assumption. Nobody corrected that and the person concerned suggested in correspondence that we could have asked. We were not corrected and did not know that we should ask because that was the information we were given at the time. I ask the witnesses to put it on the record that the person referred to at our previous meeting, who we are not naming today, was not the contract manager until such time as the operational phase of the PPP project began. Is that correct?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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In terms of people retiring today and returning on Monday, when that has happened in the past, was there public procurement to seek somebody to carry out those works?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Why would that have been so?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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No, that is a different issue. I am talking about people who are staff. I am finished with the issue of PPPs. If a staff member took early retirement today, could he or she come back in on Monday without a procurement process?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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The permission of the HEA and the Department is required. Is that the case?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is that permission supposed to be obtained in advance?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Why did the institute not do so?
Mr. Paul Gallagher:
At the time we were just starting to operate that employment control framework and there was some question as to what the process might involve. We felt, in this particular case, that we needed to put some succession planning in place to support the transfer of some of the duties of the individual who was retiring. We made informal inquiries but it was some months before we made a formal application.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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That was approved, retrospectively by the Department. Is that right?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is that person - or persons - still employed at the institute?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Do the persons involved have anything to do with the college now?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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What is a joint venture company?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Are these the spin off companies to which Deputy Catherine Connolly referred earlier?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Would there be directors in many of those companies?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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If one is a director, is that the same as being an employee of the company?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I know that but how is a director defined. Is a director defined as an employee, regardless of whether he or she is being remunerated? Perhaps the Comptroller and Auditor General-----
Dr. Barry O'Connor:
I am just trying to clarify the situation with regard to two retired staff members who are directors of one of the joint venture companies. They will continue to be directors until the AGM happens and then they will step down. They were retained because there was an ongoing judicial process.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Can I ask the Comptroller and Auditor General, if I am the non-executive director of a company, does that constitute my employment by that company, whether there is remuneration or not?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Could I be a non-executive director of a company but because I am paid nothing, I can say I am not an employee?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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What am I then if I am a non-executive director?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is the definition of employment that one has to be paid?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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There was other correspondence where someone said they were not unemployed.
Are we writing to call for an independent investigation?
Seán Fleming (Laois, Fianna Fail)
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No, we are writing to the Departments of Public Expenditure and Reform and Education and Skills regarding the whole question of the independence-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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We made another proposal about an independent investigation into these disclosures which were not independently investigated.
Seán Fleming (Laois, Fianna Fail)
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Members will have to agree to that.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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The members are here. We have a quorum.
Seán Fleming (Laois, Fianna Fail)
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We will have to consider it as part of our work programme.
Catherine Connolly (Galway West, Independent)
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I think we should finish with the Departments before us and then deal with whatever issues we decide. I do not think we should do business this way.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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What way should we do business then?
Catherine Connolly (Galway West, Independent)
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I think we should deal with asking questions and then proposals should be discussed with the committee afterwards, either in public or private. Public is my preference.
Seán Fleming (Laois, Fianna Fail)
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We will be reporting on this in our periodic report. We can make a clear straight recommendation on it.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Why delay the process if there is a formal proposal before the committee? Can it not be considered and a decision made on it?
Seán Fleming (Laois, Fianna Fail)
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Members will want to hold off discussing it until we consider it. We will do a report. I am happy, if members want, to have that as a recommendation in a report.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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That is a report down the line. We can act a lot quicker if we want.
Seán Fleming (Laois, Fianna Fail)
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I do not have sufficient numbers here to formally request an independent-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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What does Deputy Cullinane want to do?
Catherine Connolly (Galway West, Independent)
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On a point of order, I do not think this is an appropriate way to do business. Deputy MacSharry has no idea what Deputy Connolly wants. I am simply talking about the procedure. When the questioning is finished and the delegations have left, we can then make any decisions we like but not in this manner.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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That is a view. I have my one and I made a proposal.
Seán Fleming (Laois, Fianna Fail)
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We are here in public session in front of the witnesses. This is a matter the committee decides but not in the presence of external witnesses.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Where is that written in the procedures?
Seán Fleming (Laois, Fianna Fail)
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We can discuss it in five minutes in private session or in public session.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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If a simple proposal is made, I do not see what the problem is.
Seán Fleming (Laois, Fianna Fail)
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We will discuss it in five minutes.
David Cullinane (Waterford, Sinn Fein)
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Some members might not want to support it.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Members can go against it.
Seán Fleming (Laois, Fianna Fail)
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We are holding that over until the witnesses have left. They have commitments.
Will the HEA send the committee an update in writing on the various skills mixes of third level institutions' boards and governing bodies?
In UCC's 2016 financial statement, I was surprised to see it has 158 employees earning in excess of €100,000 per annum. I am sure the figure is higher now. People are staggered 158 employees are earning in excess of €100,000 per annum in one third level institute alone in Cork. The statement also states that 15 of those 158 are on salaries in excess of €200,000. People would be staggered by that too.
Mr. Diarmuid Collins:
Higher costs primarily relate to the fact we have a college of medicine and health with academic medical consultants, similar to consultants in the HSE.
Seán Fleming (Laois, Fianna Fail)
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The statement also refers to payments of €2.139 million to key management personnel. On the face of it, these look like high figures. Will UCC send us a detailed note on this? How many are involved in that category?
Seán Fleming (Laois, Fianna Fail)
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I thank our witnesses from UCC, CIT and the HEA. I also thank the staff from the Department and the Comptroller and Auditor General's office.