Mr. Seamus McCarthy:

The Tax Appeals Commission was established on 21 March 2016, replacing the former Office of the Appeal Commissioners. The commission is an independent statutory body tasked with providing a modern and efficient appeals process for the hearing and adjudication of tax disputes. The 2016 appropriation account of the Tax Appeals Commission shows that the total spend by the commission in 2016 was €890,000. The amount provided for the commission for the year was €1.5 million. As a result, almost €600,000 was liable for surrender at the year end, reflecting delays in recruiting staff and underspending on the commission’s ICT system. The commission has been reliant on the Revenue Commissioners for many support services.

Chapter 9 is a short report examining progress by the commission in putting in place the necessary corporate governance arrangements and the management of overtime payments in 2016. While the commission was established formally in March 2016, we found that by September 2017 it was not yet fully compliant with its corporate governance obligations. The commission published a governance framework that outlined the proposed governance structures, including audit, assurance and compliance arrangements.

It had not, however, established an audit committee, did not have in place a formal risk management system, and had no formal risk management policy or risk register. An effective risk management process should assist the Tax Appeals Commission in achieving its objectives by allowing it to identify and manage threats to delivery in a timely and effective manner. The Accounting Officer will be able to update the committee on progress in developing its governance systems. We are examining them again in the context of the 2017 appropriation account.

The commission's 2016 Vote appropriation account records overtime payments of €65,400 to one employee, which was very substantial given the scale of the Vote. Because of the additional expense involved, Department of Public Expenditure and Reform guidelines require that overtime working does not occur unless it is both authorised and unavoidable. When the 2016 payments were examined by the audit, it was found that the records kept by the commission were not sufficient to substantiate the payments. The claims for payment of overtime went back a number of years and there was no record that the claimed overtime work had been authorised by a more senior official. The commission’s then head of administration was not involved in review or authorisation of the payments and only became aware of them when Revenue's payments section queried the amount of overtime being processed on behalf of the commission. Overall, the circumstances surrounding the overtime payments made in 2016 indicate a very weak control environment at the time.