Oireachtas Joint and Select Committees
Thursday, 12 July 2018
Public Accounts Committee
Business of Committee
We will now commence in public session. We are joined by the Comptroller and Auditor General, Mr. Seamus McCarthy, who is a permanent witness. He is joined by Paula O'Connor, senior auditor. Apologies have been received from Deputies Deering, MacSharry, Aylward and Cassells. Are the minutes of the meetings of 28 June and 5 July and the private meeting on 10 July agreed? We will not deal with matters arising because everything we could want to talk about-----
I put questions to the Department and the HSE about the deployment of a modular catheterisation laboratory in University Hospital Waterford. I asked for a detailed breakdown of the process and the timeframes and I would like to receive that as quickly as possible.
In the minutes, we record that we requested a note on the processes involved relating to the catheterisation laboratory regarding tendering, planning, project design work and construction and an update on the timeline expected for completion.
I put down a shedload of parliamentary questions on all of that - breaking down all those processes and asking which Department or State agency was responsible for each of the processes and how long it would take. The response I got was two lines. I am hoping to get a little more from the Department and Minister so I have gone back to the Ceann Comhairle to say that questions have not been answered but, in any event, I hope we do not get the same here. Have we followed it up? Have we asked him-----
The letter was only sent as a result of the meeting on the 5th so it is probably only gone ten days. On the day the HSE's representatives were here we wrote to them with 29 specific items and we wrote to the Department of Health with seven additional items.
It will. Your question is about whether it will be circulated or when we will see it. Before the day is out we will see if there is a mechanism for distributing correspondence because there is a two month period.
If a member has a specific request we will arrange to do it. However, we do not wish to issue all correspondence across the board until the next meeting of the committee and until we know what we are publishing.
Yes, the Pálás Cinema. I will not dwell on it but I just want to know the current position with the post-project review in the context of Galway 2020. Serious issues have arisen with regard to Galway 2020 and the use of public funds. The use of those funds is quite right, but there is also the monitoring and governance of that. I am just highlighting that it is something I will return to. I raised it on the day in terms of learning and how they were going to approach-----
You can double check with the secretariat afterwards but my recollection is there was a mention that all the costs are not in yet, it would be 2019 before they will all be in and the review will commence arising from that. I was conscious of that going to the meeting yesterday. The project started in 2006 but it will be 2019 before we can see its total cost. I did not specifically refer to it but I picked that up yesterday in preparing for yesterday's launch.
I will outline my concern about it. We have been through it and there is no need to go into it. There has been an investigation by the Charities Regulator as well. What have they learned from it and how is that being implemented now with regard to the European Capital of Culture 2020? The same headlines and issues are recurring in Galway. I am proud and delighted we are getting the European Capital of Culture 2020 but my worry is about the same type of thing - let us not rock the boat and let us not question.
I will try to avoid those words. I might use them elsewhere but not at the committee. However, there are certainly issues in that regard. Somebody has already resigned. I will not go into the details. It is simply that I have concerns, given that I sit on this committee and I sat on the local council. I see the same type of mantra being repeated. That is the issue for us. That is what happens and we end up looking at it retrospectively. However, I know that the push is: "Do not say too much. This is very important so do not question too much." There was the same mantra with regard to the Pálás Cinema which led to it going up to over €8 million instead of just over €6 million.
The next item is correspondence. There are three categories of correspondence and a number of items have been carried over from the last meeting. Members will have to bear with me because there is an amount of correspondence. We did not deal with quite as much on the last occasion and this is the last time we have an opportunity before we invite our witnesses in.
No. 1478A is from Mr. Conor O'Kelly, chief executive officer, CEO, of the National Treasury Management Agency, NTMA, providing a briefing and opening statement for today’s meeting. We will note and publish that.
Chairman, part of that briefing note was on the front page of the Irish Examiner, which is fair enough as obviously some member of the committee gave it to the newspaper. We cannot stop that. However, I was concerned about the headline. It has to be clarified for the public. I am not saying the headline is misleading but it can be interpreted in a number of ways. It comes from a briefing note for the Committee of Public Accounts so we have a responsibility to clarify it. The headline is "Cut-off for cancer payouts imposed" and it continues that the Committee of Public Accounts is to grill the State Claims Agency on the growing scale of the crisis. The article goes on to discuss the 40 cases which are before the courts. Further down it refers to the separate payment, the expenses, being given to these women. That was set up by the Taoiseach and the Minister for Health and covers approximately 2,500. The Taoiseach commented yesterday that there will be a cut-off for those payments. It is important for people to note that the cut-off in the headline is not referring to the court proceedings or any proceedings that might arise from court proceedings or the work of the State Claims Agency. That distinction must be made because that could be inferred from the headline. Given that it came from a committee briefing note - which it should not have but a member of the committee gave it to the reporter - that needs to be clarified.
Okay, that is fair comment. As Chairman, every Wednesday I receive a telephone call to confirm what the committee will discuss in the Thursday meeting and various journalists are able to read for me verbatim from the information circulated to committee members, some of which I have not even had an opportunity to read at that stage. There is a serial leaker in the committee, full stop. I do not know who it is and I am not suggesting who it is, but there is one. There has not yet been a week that a journalist did not telephone me to read out correspondence that had not yet come before the committee. It is remarkable. Yesterday, another committee launched reports and I asked the various chairmen how they dealt with their reports and draft reports. They told me they had never had an issue with leaks in the other committees so it is germane to some members of the Committee of Public Accounts. I am just making that general observation.
Sometimes I feel like I am back in school because usually the people who are present are not responsible for any of the leaks or what has happened, yet we are sitting here having to listen to it. I fully support you, but we are certainly not responsible for that, and we have read all our reports.
The more important point is that whatever about somebody leaking, and that is not right, there are headlines in newspapers arising from documents being given to us, on which we have an obligation to put questions to witnesses to ventilate the issues, and if the headlines could be misinterpreted it is important for us to correct them.
Okay. It is a recurring issue and we can come back to it.
The next correspondence is No. 1387 B, which is held over from the last meeting. It isfrom Mr. Seán Ó Foghlú, Secretary General, Department of Education and Skills, dated 12 June 2018 providing information requested by the committee at the meeting on 24 May 2018 regarding a protected disclosure to Cork Institute of Technology and a subsequent review which took place. The committee had raised concerns about how the terms of reference were set for this review. We dealt with this item in private on Tuesday and I just want to formally note and publish it. Is that agreed? Some concerns remain and it is a matter we may return to in our next periodic report. It was not just about who set the terms of reference to deal with the protected disclosure but arising from that an investigation was established and it was who set the terms of reference for that. We will note and publish it. We will return to the issue in the autumn.
Yes, the report is outstanding.
The next item is No. 1397 B from Mr. Robert Watt, Secretary General, Department of Public Expenditure and Reform, providing information requested by the committee on guidance provided by the Department to public bodies on the management of protected disclosures.
We dealt with this item in private session on Tuesday. I wish to formally note and publish it.
The following three items are updates requested by the committee on sale of Bord Gáis. Correspondence 1430 B is from Mr. Robert Watt, Secretary General, Department of Public Expenditure and Reform, and provides information requested. Correspondence No. 1443 B was held over from the last meeting. It is from Mr. Michael Goodwin, energy security division, Department of Communications, Climate Action and the Environment. It provides information requested by the committee on how it was intended to use the proceeds of the sale of Bord Gáis. Correspondence No.1445 B is from Mr. John McCarthy, Secretary General, Department of Housing, Planning and Local Government. It provides and notes information. We will note and publish these items. All three of these items are relevant to today's meeting with the National Treasury Management Agency because NewERA has a role relating to Bord Gáis. I have gone through that myself. All those items are relevant to today's meeting and we can discuss them during the course of the meeting. We will note and publish them.
Correspondence No. 1433 B was held over from the last meeting. It is from the Honourable John D. Cooke, sole member, commission of investigation, enclosing the second interim report of the Cooke commission of investigation. Members may wish to note that the timeframe for the commission's final report has been extended to 31 December 2018. I suggest we note and publish it but not comment on the work of the sole member lest it be interpreted as in some way trying to influence or criticise.
I wish to say one thing about this report. Obviously, the progress of the work depends on the material provided and the format of that material. This may be pertinent not only to this inquiry but to other inquiries in future. Page five of the statement refers to where NAMA has believed it has been unable to access and verify the completeness of relevant documentation. This could be pertinent to other inquiries. NAMA has taken the view that it has not been able to provide voluntary co-operation because of data protection and other considerations. This is relevant for statutory declarations to produce documents issued by the commission. This adds to the workload of the commission and it will be the same for others. This is something we need to consider if other commissions of investigation or tribunals are set up. There may be something to reconcile here.
That is something we will bear in mind. The Taoiseach raised this exact issue yesterday on the slides for CervicalCheck and the question of why the examination had not yet commenced by the college in the UK. The college has raised the issue of data protection and consent from each person before the reviewers look at the slides. It may be that several thousand are gone and the reviewers have to wait for consent from thousands of people before they can complete the process. I simply do not know how long that will take. It has added months. I am being pragmatic about it. Getting consent from thousands of people is going to add months to the process.
People should have their information protected. Data protection is in place for good reason. However, when it works against the common good or has the potential to work against the common good we need to consider it. If a process is not a public inquiry but rather a commission of investigation, we should question whether something needs to be looked at. There is a delay and potentially a value-for-money issue. Certainly, there is a process issue. I think we should note it and see what we can do about it. This should include a discussion with the Data Protection Commissioner on the process.
Arising from the document and what the Taoiseach said yesterday, I suggest we write to the Taoiseach and outline these two issues on the Committee of Public Accounts agenda. We are now aware that this issue has arisen. These issues should have been addressed in the terms of reference. Everyone knew this was coming. Maybe people do not want to get around the existing legislative protection, but the issue should have been dealt with comprehensively one way or the other before the terms of reference were set. Now that the terms of reference have been set, we can see the practical problems arising on how they will work. This is an issue. I think we will send this to the Taoiseach, as Head of Government. The Department of the Taoiseach is normally where terms of reference emanate. We should ask that the matter be considered. I am not suggesting what he should do but we need to highlight it.
That is a valid point. As you said, Deputy Murphy, it is not specific to the Cooke commission.
Correspondence No. 1435 B is from Mr. Niall Cody of the Revenue Commissioners. It provides information requested by the committee on the nursing homes support scheme. We will note and publish it. He has given details of loans extended and collecting money in cases outstanding.
Correspondence No. 1436 B is from Ms Fiona Kenny, Nursing Homes Ireland. It provides information regarding the submission made by Nursing Homes Ireland in October 2016 on the National Treatment Purchase Fund and the agreement entered into by that organisation and the Competition and Consumer Protection Commission. We will note and publish that.
I recall we only dealt with this in private session in the past. However, since witnesses have been before the committee in public session I want to go back to something. The Competition and Consumer Protection Commission examined allegations of price fixing and the issues contained in the leaked copy of the minutes of the meeting attended by the chairperson of HIQA.
I had put to the head of Nursing Homes Ireland that the Competition and Consumer Protection Commission said in the report that nothing happened. The report did not say issues were not discussed. In fact, the agreement signed by both parties states that all the stuff in the leaked minutes should not happen in future. It did not state the matters were never discussed. It simply said they should not happen in future. That was the point I made to Nursing Homes Ireland.
The commission was unable to penalise or sanction Nursing Homes Ireland for something that did not happen. We never said it happened because the CCPC received strong legal advice at all stages to the effect that it was crossing a line and had to stop. That was my reading of it.
All I am saying is that when the head of Nursing Homes Ireland was before the committee I thought he was rather evasive in answering the questions, to be frank. He has an entitlement to be, but he was simply not answering the questions put by a number of us. He simply stonewalled us. That was his right but he basically kept coming back to the report which vindicated that the issue never happened and that the word "boycott" was never used and so on. He would not answer a question about that when it was put to him. All I am saying is that the signed agreement by both parties essentially stated that all the issues of contention and concern to the committee in the memorandum should not happen in future. That tells me some of those issues probably were discussed at the meeting.
His line was that the Competition and Consumer Protection Commission essentially vindicated Nursing Homes Ireland. The position taken of "nothing to see here" was actually not accurate. The agreement contained a set of conditions, including that the organisation would not do any of the stuff that was discussed and that would be problematic. Those involved thought about doing it and talked about doing it, but did not do it and promised that they would not do it in future.
Nursing Homes Ireland signed up to it. Therefore, Nursing Homes Ireland, as a corporate body, agreed with the Competition and Consumer Protection Commission that it would not do any of that stuff. It was never clarified whether it was said, but it is implicit in the agreement. The agreement outlines all the issues that the Competition and Consumer Protection Commission probably thought had been discussed but were never actioned and, therefore, no wrongdoing occurred.
Let us ensure it does not happen in the future and lock it into an agreement.
We will note and publish that correspondence.
No. 1437 B is from Mr. Ger Casey, CEO, Grangegorman Development Agency, dated 27 June, regarding the Grangegorman public private partnership, PPP, project. Mr. Casey confirms that the financial close was achieved. The letter is about the cost overruns as a result of the delay. For the benefit of people watching, the preferred tender of the Grangegorman project was Eriugena Group. The second ranked tenderer initiated court proceedings challenging the authority's decision to appoint Eriugena as the preferred tenderer. The court case went on for some time and as a result of that, the matter is concluded. Section 4 of the reply deals with impact and costs. According to the CEO of the agency, that delay has added €45 million to the cost of the project. Work on the project has commenced but, according to Mr. Casey, final close of the project continues to represent value for money. We need clarification on that point. While a value for money exercise was done initially, we want to know if was it revisited as a result of the additional €45 million cost. That is the issue for this committee. We want to examine that process.
The letter states that the original tender process for the Grangegorman PPP project was completed at a time of historically low construction costs. It also references building inflation, particularly in the Dublin region. As I understand if there was a tender process, a price was agreed. Where does inflation come into an agreed price to the extent that has happened in this instance? I can understand that there may be contingencies and so on. Perhaps Mr. McCarthy would elaborate.
There is a different issue then that we potentially need to examine, namely, delays in the courts which have the potential to increase costs, which questions the robustness of the process to begin with. We have come across a few situations where the process around PPP projects was flawed. This may not be the case in this instance but we need to learn some lessons from this because it can end up costing us a lot of money.
It says that it found fully in favour of the State and the process. The original tenderer was awarded the job. The issue is that there is nothing stopping a bidder who does not win a contract taking a legal challenge. The issue is whether this could have been resolved through mediation. I am vaguely conscious of a situation arising between tenderers for one of the major projects on the M1 who negotiated a conclusion to work together on a the project.
The letter references delayed receipt of sale proceeds of existing DIT buildings at Kevin Street, Cathal Brugha Street, Rathmines and Sackville Place. There are other DIT buildings that I presume are to be sold as well. The buildings at Mountjoy Square and Aungier Street come to mind. Are all DIT buildings being closed and sold?
Officials from the NDFA, which forms part of the National Treasury Management Agency, will be before us this afternoon. We will put all of these questions to them then. The questions are valid for this afternoon's session when the witnesses are here. We will note and publish this letter in the interim. It is regrettable that a bill of €45 million must be paid by the taxpayer as a result of this delay.
Mr. Seamus McCarthy:
It underscores the importance of a good procurement process. If there was something wrong with the process the State would have lost and had to pay compensation as well the extra cost and delay. This has occurred. A number of years ago there was a sizeable settlement with an underbidder regarding a road project. The State at least has the satisfaction of having won the case. It is a poor comfort.
It is €45 million extra the taxpayer has to pay.
No. 1446 B is from Mr. Martin Fraser, Secretary General, Department of the Taoiseach, dated 28 June 2018, providing on Project Ireland 2040. We dealt with this as part of our periodic report. We will note and publish this correspondence.
No. 1450 B is from Ms Breda Rafter, Government accounting unit, Department of Public Expenditure and Reform, dated 29 June 2018, providing clarification and further information regarding government accounting arrangements. We will come back to this in the autumn as part of our review.
Mr. McCarthy might elaborate at this point on the two special reports he issued yesterday which we will deal within the autumn.
Mr. Seamus McCarthy:
The Chairman is correct. One of the reports is a further update on the timeliness of submission of financial statements. We have looked at 2014, 2015 and 2016. The timeliness of financial reporting has improved.
The second report is a special report setting out a framework to be used by public sector bodies to assess their own financial management capacity. Its purpose is to provide some kind of structure and a framework that bodies and boards of public sector bodies can use in preparing a self-assessment to identify if there are things they need to do to improve their financial management.
Mr. Seamus McCarthy:
It is a technical report. We tested it with Enterprise Ireland, which found it a useful exercise. The danger is that an organisation will concentrate on what it is good at and not see the gaps in the structure. The report is to provide some sort of a benchmark in that regard. The Office of the Comptroller and Auditor General is proposing to use it in carrying out a review of a number of education and training boards and financial management capacity therein. We are setting out the standards that we will look to see demonstrated in ETBs but it will be some time next year before that happens.
Correspondence No. 1456 is from Mr. Martin O'Brien, chief executive, Louth and Meath Education and Training Board, dated 3 July 2018 in response to concerns raised by the committee regarding invoice redirection fraud. Mr. O'Brien informs the committee that a Garda investigation is ongoing and states that he expects to recover a significant part of the amount while its insurance should cover the remainder. We will note and publish that and ask for a detailed report at the end of September. We wish to be kept updated on that issue.
Correspondence No. 1463 is from Mr. John McCarthy, Secretary General, Department of Housing, Planning and Local Government, in response to a committee request for further details in relation to evictions from local authority and Approved Housing Body, AHB, dwellings, which we will note and publish.
Correspondence No. 1465 is from Ms Brenda McVeigh, secretary to the Commissioner, Tax Appeals Commission, dated 29 June 2018, providing follow up information requested by the committee at our meeting on 28 June 2018. To get a response in 24 hours must be a record. The information includes a supplementary briefing note for the committee that outlines the commission’s request for resources and concerns it raised about the lack of resources in the period June 2017 to date and also an aged analysis of legacy appeals. We will note and publish this. It is clear from the response that the number of appeals going to the Tax Appeals Commission has gone from 174 in 2011 up to 400 in 2014 and 493 in 2015 and then 469. There has been a very significant rate of increase. It seems that those who provided the resources for this body did not anticipate that its very establishment would increase the number of appeals. It looks as though that was not taken into account.
The Chairman is correct about the 24 hour turnaround. It is a minor miracle, especially considering how stretched this organisation is. We wrote to the Department of Finance about the resourcing issue but we have not had a reply.
No, not yet. We will get that. Different views were expressed at the meeting and we wrote to the Minister.
Correspondence No. 1466 from Mr. Liam Sloyan, chief executive officer, National Treatment Purchase Fund, providing follow up information requested by the committee regarding expenditure and giving a breakdown of expenditure in particular categories. Ophthalmology was €10 million, orthopaedics was €8 million, general surgery was €2 million, cardiac was €3 million, ear, nose and throat was €3 million and smaller items in relation to urology, gynaecology, dental and non-cosmetic plastic surgery was €100,000, to total of almost €30 million in that area. We note and publish this. People will be interested in the breakdown of that funding.
Correspondence No. 1467 from Mr. Ray Mitchell, Health Service Executive, provides information to a the numbers of parliamentary questions dealt with by the Department of Health and HSE, which we noted and publish.
Correspondence No. 1468 from Ms Vivienne Flood, public affairs, RTÉ, enclosing a summary report requested by the committee from Eversheds Sutherland on the use of freelancers-contractors at RTÉ. RTÉ states it is committed to developing and implementing a new policy in relation to the engagement of freelancers-contractors. We note and publish that. We discussed this at length as part of the committee's report. RTÉ said it would complete this matter by the end of December. We will ask for a report in January on the implementation of the commitment given here.
It is important that we acknowledge the work done by RTÉ both on this issue and on that of gender pay. I think that is the second report. We had robust exchanges with the Accounting Officer and the director of human resources when they were before the committee but they seem to have taken the issue seriously. We have reports and recommendations which they say they accept and hopefully that will lead to changes.
The National Union of Journalists, NUJ, has called for the sectoral committee, namely, the Joint Committee on Employment Affairs and Social Protection, to look at its wider implications because it is not just prevalent in RTÉ but is rampant across several sectors. That would not be an issue for the Committee of Public Accounts because it relates to private organisations. We have looked at it and have produced our own periodic report. Could we send that report to the committee, referencing the Eversheds report? It will be up to the committee, but it might be an issue that it could explore.
Mr. Seamus McCarthy:
There is one aspect that falls within the remit of the committee, namely, pay related social insurance, PRSI, because the contribution rates would be different to the extent that people are misclassified, which would be of significance to the committee.
There are 109, certainly more than 100 contracts that will have to be reviewed. That could be a cost to RTÉ and, as a consequence, to the Exchequer. We will not know until that work has been done but it is something that we would return to.
Correspondence No. 1469 is from Mr. Ray Mitchell, Health Service Executive, dated 5 July 2018 enclosing the HSE protocol for release of patient slides which we note and publish. That is relevant to the discussion we have all had earlier. It is no harm that that protocol is now on the public record.
Correspondence No. 1471 from Ms Michelle O'Keeffe, Broadcasting Authority of Ireland, BAI, dated 6 July stating that to date BAI has not received a formal proposal regarding the establishment of RTE2+1 . We will note and publish that. We will come to the three or four items relating to this together. We have had success. They made an application the other day.
Correspondence No. 1472 is from Mr. Maurice Quinn, Secretary General of the Department of Defence, date 5 July 2018 providing a note on UN reimbursements. Only €3.4 million was outstanding at the end of 2017. We note and publish that.
Correspondence No. 1473 is from Mr. Robert Watt, Secretary General of Department of Public Expenditure and Reform, dated 5 July 2018 outlining the process involved in the review of the Protected Disclosures Act 2014 and also providing a copy of the review. That review is too large to get into today. We will consider the issue of how the State is dealing with protected disclosure. The report is there. I have looked at it. It is lovely in that if one reads it, one would almost think it was working well. I felt the report was missing testimonials from people who made protected disclosures. They seemed to have consulted with stakeholders but there is an absence of testimonials from the people who made the disclosures.
We will return to this issue in the autumn. We asked for one specific issue in our correspondence, namely, a list of people who made submissions. Chapter 5 of the review deals with the submissions. It gives an overview, the thematic issues raised and a consideration of those points. However, our first question was about who made submissions. That would normally be published. When someone makes a submission to a public body, the advertisement will say that the submission will be put on the website. I am shocked that we have not been given the names of that. We requested it at the previous meeting when protected disclosures arose. We had a letter telling us that this was under way. We were shocked to know it was under way as we did not seem to know about it. They say that Oireachtas Members were notified on the matter by email on 25 August 2017, and that there were advertisements in the newspaper in August 2017 and that the closing date for submission was 10 October. The submissions might be on their website.
Apart from discussion on this, I propose that we invite Transparency International Ireland, which sent us a report on this, before the committee, primarily because the Department's review relies heavily on Transparency International Ireland's own report. The Department's report includes several charts illustrating the finance of the survey which are reproduced with the permission of Transparency International Ireland. Since its report has had a significant input into that of the Department, it is important that we hear from it. We will have to organise the sequencing of the witnesses. It looks as though Transparency International Ireland got closer to the bone of the issue than the Department. Is it agreed that we include it? It would be in the autumn work programme.
I wish to agree with the Chairman on stakeholders. There is a certain mindset about stakeholders but whistleblowers are stakeholders.
Sometimes they are the real stakeholders in that they are looking after the public interest.
When the list of people who have made submissions is received, I will ask that it be immediately circulated to members of the committee. That is a simple question and could be answered in a moment, I suspect.
We will ask for it to be circulated today or tomorrow. Normally the names of the people who make submissions are up on the website somewhere. We are coming back to that issue because we said in private session the last day that we would bring in somebody who is a whistleblower to test the process of the public service and how it is actually dealing with those issues.
I wish to make one quick point. I have seen this over the years with different things. I note that that process was in August 2017. We are all human beings as well. It is a recess month. It is when people are likely to take holidays and maybe the scrutiny would not be there. I see controversial planning applications being submitted on the August bank holiday weekend and other stuff tied to the recess. It is not unfair for us to point out that the timing on these things is very important. Where the timing will exclude rather than include, the consultation process becomes less meaningful. That does not just relate to this thing, but timing is important for genuine consultation.
The Deputy is right. They say that they compiled the list of relevant stakeholders and contacted them directly by email about the review, including all Departments, prescribed bodies, local authorities and Oireachtas Members who were contacted on 25 August 2017. They knew well when they were doing that, smack bang in the middle of August. Somebody rushed this off before their holidays and said they would have responses when they came back. If they are not coming back, all the better. We have seen that in every walk of life in the public service. Maybe it happens in the private sector too.
The next item is correspondence from Ms Dee Forbes, director general of RTÉ dated 9 July 2018 about RTÉ’s appearance before the committee and inaccuracies concerning RTÉ2+1. I think we have made the point about the obligation on public bodies appearing before the committee to provide clear and accurate information, and speak with candour. I will not read the entire letter. It states:
We very much welcome the supportive remarks that you made in terms of our plans on this issue on the day, and I am happy to confirm that as of 25 June 2018, consistent with the intentions set out in our 5-Year strategy, we submitted our formal application to the DCCAE for RTÉ2+1 and an extension of the hours for RTÉ One+1 as required under ... the Broadcasting Act. Like you, we hope that the approval of our request will be forthcoming...
Therefore, it is done. We all look forward to watching that by the time the next World Cup comes around because it did not have the matches on RTÉ2+1 on this occasion.
Correspondence No. 1476 from Mr. Robert Watt, Secretary General of Department of Public Expenditure and Reform, dated 10 July 2018, provides a note on the reasons some accounts are exempt from the general requirement to present their financial statement for audit by the end of March. We note and publish that. We will deal with that when we are looking at a review of submission on public accounts in the autumn, and the Comptroller and Auditor General's report on the Department of Public Expenditure and Reform.
Correspondence No. 1477 from Mr. Niall Burgess, Secretary General of Department of Foreign Affairs and Trade, dated 9 July 2018, provides follow-up on a number of matters raised during its appearance before the committee. We note and publish that.
We come to correspondence in category C related to individuals and any other private organisations.
Correspondence Nos. 1342, 1355 (i) to (vi), and 1362 regarding wards of courts funds were held over from the last meeting. We agreed at our meeting on 28 June to request a recently published report on this matter from the Oireachtas Joint Committee on Justice and Equality. That committee has made a number of supportive recommendations. I propose that we write to the committee to keep us updated on the matter and for it to follow through on the recommendations. I propose we write to the individual to say that the Committee of Public Accounts cannot take up the matter separately given that the Oireachtas Joint Committee on Justice and Equality has produced a detailed report on the matter. Extensive documentation was supplied to that committee in preparing its very comprehensive report. Obviously, it would not be appropriate due to Oireachtas time to duplicate the work it has already done. We fully support that committee in its work. As the sectoral committee, it is best placed to deal with this matter at the moment.
Correspondence No. 1350, which was held over, was received from an individual regarding a submission to the committee on the management of protected disclosures. The committee discussed this matter in private session and has agreed to meet the individual to inform itself of matters that can be brought to the attention of the Irish Prison Service. The secretariat will make the necessary arrangements for a meeting following the recess. We note the correspondence for now.
Correspondence No. 1386, which was held over, is an anonymous letter requesting the committee to make inquiries with the Department of Employment Affairs and Social Protection from an individual who has made a protected disclosure over alleged wrongdoing in St. Munchin's community centre, Kileely, County Limerick. We discussed this in private on Tuesday and agree to write to the Department for a response. We now formally note this.
Correspondence No. 1429, which was held over, was received from Deputy Catherine Murphy, dated 26 June 2018, regarding the examination of the spending by EirGrid on a controversial wind-hub substation in County Laois. This matter is outside the remit of the committee. Does the Deputy wish to speak on it?
Generally, we need to look at the subsidies and the value for money. Some of it may come up in the context of this morning's discussion on green bonds. We all know we need to change over and there are costs in terms of potential fines for polluting where carbon is emitted. At the same time we need to ensure we get value for money for the clean energy that will replace it. I am not sure whether it should be done by this committee or the Joint Committee on Communications, Climate Action and Environment. We should not just gloss over it. There is the potential for a large amount of money being spent and then us doing a review after the fact rather than looking at it based on where we are at the moment.
This organisation, Wind Aware Ireland, submitted a detailed report that it had produced challenging the costs and the reduction in carbon emissions as a result of the current proposal. It is a counterargument to the general thinking that it is all efficient and is reducing our CO2 emissions. The report contains useful information on the substation in County Laois. The ESB and EirGrid are not audited by this committed. The Office of the Comptroller and Auditor General sent me a note on that which we will circulate. They are not audited by us and so are not under our remit. They are subject to appear before the Joint Committee on Communications, Climate Action and Environment. That committee considered this matter previously and decided not to take up the issue because it felt it was substantially a planning issue relating to the particular site.
However, I wrote to the Sustainability Energy Authority of Ireland asking if it had a role in it. It replied that it had none. That is in private correspondence to me. I propose that we formally write to the CRU, the Commission for Regulation of Utilities in Ireland, which was formerly the Commission for Energy Regulation, with that report asking for a detailed observation on the report and its views on any role or function it has regarding that electricity substation in County Laois. As the regulator, the CRU may have a role as it approves funding for capital projects, how much of those capital costs can be passed on to the customer and the financing of it. It has to give regulatory approval.
The regulator is our best option in this particular case, so we will do that and come back to the matter. It is mainly to the regulator we are writing, but we will also circulate the previous note prepared by the Comptroller and Auditor General's office regarding EirGrid and the ESB. It will be of benefit to the committee. We will come back to this.
Yes, exactly. That is going to the Commission for Energy Regulation, including the report it attached to that email to us.
Nos. 1440C and 1441C were held over from the previous meeting. They relate to HSE circulars not circulated or implemented and HSE employees who did not make the criteria in the first round of the regularisation process of the Haddington Road agreement. We noted both of these items last week. Shall we agree to advise the correspondent accordingly and send her a copy of the transcript? We discussed this matter in detail at our previous meeting. We will send a transcript and if the correspondent wants to follow up the matter, she can do so.
No. 1442C was also over from last week and relates to the lack of emergency cardiac services at University Hospital Waterford. We had a discussion on the matter last week and we will send a copy of the transcript to the person involved.
No. 1444C was held over from the previous meeting and relates to children's programming on RTÉ. This is a copy of an email sent to RTÉ. There is no specific request for the committee to deal with the matter. Besides, it does not fall not within the remit of the committee. I propose that we forward this to the Joint Committee on Communications, Climate Action and Environment in order to allow it to take whatever action it proposes as part of its work programme.
No. 1447C was held over from the previous meeting and concerns a previous decision on a request for the committee to investigate the transfer of corporate governance responsibilities arising from the Local Government Reform Act 2014. The matter does not fall within the remit of the committee because the changes referred to were the result of a policy decision and the implementation of the Local Government Reform Act 2014. The previous correspondent was advised accordingly. This current correspondence also asks the question, "Where did the funds held by the Association of Municipal Authorities go when it was dissolved?" In order to be helpful, the clerk has followed up this and it is understood that the funds mentioned, approximately €875,000, were transferred to the Association of Irish Local Government in 2014. The Association of Irish Local Government has provided a note to the clerk and I propose that we forward it to the individual. Is that agreed? Agreed.
No. 1455C, held over from Deputy Marc MacSharry, regarding the liquidation of the Irish Bank Resolution Corporation, IBRC. We had a discussion on this in private session at our meeting last Tuesday and we decided that we will write to the Department of Finance and the State Claims Agency regarding the status of a possible discontinuance of a High Court case regarding the matter. The issue of the High Court case prevented the committee from examining certain issues relating to IBRC when we met with its representatives last year, and we wish to ascertain whether these obstacles have been dealt with. We note this, but I again stress that the Committee of Public Accounts is in no way involved with any party in requesting any discontinuance of any court proceeding.
The next item, comprising No. 1461C(i) and (ii), is from Ms Moyagh Murdock, chief executive officer of the Road Safety Authority, RSA, and concerns issues raised regarding the business case for the public services card or any assessments that were undertaken for the project. Shall we note and publish the item? The RSA has requested that we not publish the business case because it contains sensitive commercial information, so we will publish the reply but not the business case. We can revisit this.
My concern was whether we got value for money in respect of the use of the public services card. I refer to the final page of the correspondence, on which it is stated, "Not all of these ... are now valid and for that reason we now propose to extend the NDLS Front Office contract for a further year up to February 2020. The €7 million annual cost reflects the approximate ... cost of the NDLS"-----
Yes. Essentially, €2 million was spent and now the RSA has reverted to a previous system because I do not think it had the power to use the public services card. Whether the €2 million was wasted is a matter at which, I believe, we like to look.
This issue of the public services card and the special report that was done has been huge. I do not know whether it was a special report but I have lost track of the cost of it. Was it €60 million?
Mr. Seamus McCarthy:
It is possibly a bit late to raise a new issue. If, however, the committee flags it to the Department, its representatives will inevitably be here and there may be an opportunity, if the committee so wishes, to put a number of questions to them asking for updates on issues raised previously .
Yes, and then we will also say we want an update on which public bodies do and do not have access. This issue could have arisen in other public bodies that are given money and get ready to use it and then find they have no statutory or data clearance to use it. The matter might not have been specific to this organisation, so we will try to get the fuller picture on it in the autumn.
No. 1470C is from Ms Oonagh McPhillips, acting Secretary General at the Department of Justice and Equality, and is dated 6 July 2018. We thank her for her work. She appeared before the committee as acting Secretary General and acting Accounting Officer. A new Secretary General has been appointed. We will not get into that controversial issue now. The matter was raised in the Chamber yesterday, I think. The correspondence concerns a report on the provision and operation of GoSafe for An Garda Síochána. We will note and publish this item of correspondence.
No. 1475C is from the Provost of Trinity College, Patrick Prendergast, dated 9 July 2018, providing further information on a cyberfraud relating to Trinity Foundation. I want to deal with this. As part of the financial statements we received, there was a reference to a loss to the foundation of €974,781.
I refer to the circumstances that gave rise to this incident. There was another occurrence of cyber-fraud in the Louth-Meath area. I think something happened in Meath County Council a few years ago.
Here are three examples of cyberfraud that we have spotted this year. That is an issue the Committee of Public Accounts certainly needs to come back to, because this is fraud targeting public expenditure, and represents a loss to the taxpayer. Cyberfraud and the associated public losses are another item for the work programme.
I refer to the circumstances that gave rise to this incident. I will not read all of the letter, but it states that in early 2017 unauthorised access by a third party to the email account of an employee of Trinity Foundation resulted in the authorisation of fraudulent payments to individuals unconnected to the Trinity College Dublin or Trinity Foundation. The letter goes on to say that the original amount defrauded was €217,000, which has since been recovered; that the remainder is subject to ongoing investigation inside and outside the State; and that the university is also pursuing the matter with its insurance providers. Moreover, at this stage, the loss, including the cost of investigation and other ancillary costs, amounts to €974,781.
The correspondence is to be noted and published. It states that Trinity College has now essentially transferred the processing of payments function from the Trinity Foundation to the university's financial services division. We will write to Trinity College seeking an update on this matter in the autumn. We will need an update. This issue and the resultant loss to the public is now starting to come before the Committee of Public Accounts. The loss in this instance was to the Trinity Foundation.
Mr. Seamus McCarthy:
It is the one college that has accepted that it controls its foundation. Even before this problem arose, this was accepted by Trinity. The university was fully consolidating the foundation in its financial statements. Usually in a situation where a foundation is operating, it receives moneys for specific purposes. It must deliver on those purposes because it has taken the money. The foundation had an obligation to protect that money until such time as it could be applied for the purposes. Therefore, the university has been obliged to find the funding from elsewhere in its resources to meet that loss.
That needs to be teased out. The university obviously has a surplus. It has money with which it can make up for the loss. All sorts of interesting issues arise here given that the universities claim to be struggling.
Mr. Seamus McCarthy:
The same kind of situation would have arisen if a different argument was used. If a foundation had lost the moneys, the project for which the moneys were contributed would still have to be delivered. There would be a reputational issue for a college if it did not meet the obligation. How would it approach another sponsor or donor having lost these funds?
I definitely think we should come back to this after the recess. May I see the previous document on the screen again? We should write to Trinity College and request a breakdown of the €974,781 figure. The letter refers to the cost of investigation, which I assume is an internal investigation.
As there is clearly a Garda investigation under way into this matter, the committee may well be limited in terms of what it can find out about the case until the investigation concludes. Irrespective of whether the foundation is consolidated, the same risk potentially applies to other universities. There is not much point in deriving some learning from this if we do not share it subsequently. Does the Higher Education Authority, HEA, assume that function? Who assumes the function of putting systems in place that are less likely to be attacked in the way this one was? The subject of this attack was one person, according to this letter. It was not a range of people. It seems as though there is a control issue here. I do not know how we should address this matter. Perhaps it should be done by a sectoral committee or by writing to the HEA. How do we deal with this issue? Obviously, if one college has had an incident of this profile, others will have had the same.
We will come back to this in our work programme. We need ask every Accounting Officer standard questions about cyberfraud in their organisation, specifically what measures they have in place and whether there have been any incidents of cyberfraud. Maybe there are incidents we do not hear about.
Mr. Seamus McCarthy:
Generally, if there is an incident like this, we will draw it to the committee's attention, and we have done so over the years. In the case of the university, I think the first set of lessons that have to be learned are within the institution as to what specific control weaknesses could have occurred that created an opportunity for this. There is also an important systemic learning. For instance, supplier fraud is something that we have come across, and we have attempted to alert others. We have written to public sector organisations telling them to be aware that this is a risk, outlining what it looks like and the things they need to do in order to mitigate any such risk.
One of the things that was happening was that public sector organisations were being contacted using what looked like official headed notepaper. The message purported to be from a service provider which was changing its bank account. It gave the details of a new bank account and payments were processed without an additional check being done. That is how a fraud has occurred in a number of situations.
Mr. Seamus McCarthy:
It is difficult to actually catch the people involved. Very often they are outside the jurisdiction. Moneys can be caught. In several situations, banks have noted large transfers, perhaps transfers of round sums that look a little bit out of pattern. In fact, I think that is what happened in the Trinity College case. A bank in Scotland identified movements that seemed odd.
There is a police investigation under way in Ireland, the UK and Germany. We will ask for a breakdown of the loss in the meantime. We will also put the issue on our agenda for the autumn.
No. 1480 is an anonymous item of correspondence regarding land in Ballsbridge which the correspondent states is owned by a particular developer in the National Asset Management Agency, NAMA. I have received a copy and I know some other members did. We have not circulated the correspondence electronically because it may be defamatory. However, it does raise several general questions that we should put to NAMA. The correspondence is to be noted, and the committee will write to NAMA concerning the issues raised, with anything potentially defamatory redacted. The same topic is addressed by an article on the front page of The Irish Times this morning.
I do not know which was the chicken and which was the egg. At this stage, I propose that we write to NAMA to seek a response to the issues raised.
However, we will not get into any matter that has the potential to be defamatory or anything of that nature. We will write to NAMA but we do not want to send this letter to NAMA in case it is defamatory. As this is the last meeting, I do not want to hold this over but it only arrived yesterday.
My point is that we need to be extra precious when it comes to correspondence that makes allegations against individuals that could be defamatory. If it ends up in the newspapers even before we get a chance to discuss it, it is not then accepted as Committee of Public Accounts correspondence. We had the dossier from Ms Skelly. Some of that ended up in the media. We need to be extra precious and cautious because it could land us in trouble at some point. I know there is nothing we can do about it but it is-----
It undermines us if we have to deal with it at some point. If, say, there are issues we cannot deal with it but others that we can deal with, members of the committee could compromise our work. I will leave it at that but it is happening now almost on a weekly basis.
Yes. That will be our first meeting. That is why I want this letter to go to NAMA. I am proposing that our first meeting in September will be with NAMA representatives. They have not been here since December 2016. It will be more than 20 months since they were before the committee.
They are long overdue a visit. One of the reasons I want to clear this, even though it came in to us at the last minute, is that we can send it to NAMA. We will then be able to deal with the general issues when NAMA comes in before us. I think we are agreed on that.
No. We are not publishing it. We are not circulating it, even to the members, because if we circulate it, it may have parliamentary privilege. Members can see it now and if they want to know more about it, they can get The Irish Times. I say that in jest.
Exactly. That deals with the correspondence.
Statements and accounts received since the last meeting are being put on the screen now. We will move through this quickly. The first item is the National University of Ireland Maynooth audit opinion. Deferred pensions is referred to and non-compliance with procurement. We will come back to the non-compliance with procurement issue in the autumn.
We then have the accounts from the National Treasury Management Agency, NTMA, and its administration account, and accounts in respect of the national debt of Ireland, the Post Office Savings Banks, the State Claims Agency, Dormant Accounts Fund, Ireland Strategic Investment Fund, National Pensions Reserve Fund, all of which come under the NTMA, whose representatives are before us today.
The National Treasury Management Agency; we were talking about NAMA a moment ago. All of those are the accounts of the NTMA, which we will deal with shortly. That is noted.
The next item is the Insolvency Service of Ireland, clear audit opinion. I think all of that is on today's list.
Yes, so the Deputy can read its financial report and see how it is doing.
On the last item, I want to have a brief discussion on the work programme for the autumn. We want to have meetings set up for the autumn. We are back on 20 September. I think the Dáil comes back on 18 September. On 20 September, the first day back, we have agreed already that we will have NAMA representatives before the committee. It is more than 20 months since they were here so they are long overdue a visit.
In terms of the following, we agreed last week that Ms Flannelly, the former clinical director of CervicalCheck, was not able to make the meeting last week. She has indicated she will come in at a suitable time. I think that because of her key role we should take up that offer and I suggest we have the meeting on that day. We will be dealing with CervicalCheck, the Health Service Executive, HSE, and the State Claims Agency, and we will probably have further information after the summer. Essentially, that will be at the end of September but all of that is to be confirmed.
In terms of the following week, 4 October, we did not bring in representatives of the Department of Public Expenditure and Reform, DPER, last year. I suggest we deal with that Department. The Comptroller and Auditor General's annual report will be out at that stage so we will deal with whatever chapter is in that report dealing with DPER. Two special reports were published yesterday. We will deal with all the DPER issues as best we can.
That will be the 2017 material. If there is anything to finalise in the 2016 material, well and good. We will be on the 2017 Appropriation Accounts principally and those other items.
On Thursday, 11 October, I suggest it is worth inviting in representatives of the Office of Public Works, which is a very interesting Department. They have not been before the committee in quite a while. That allows the secretariat to set up those meetings over the summer and ensures we do not come back without any meetings arranged.
We have many issues to go on the work programme. We mentioned cyber crime and procurement. Public private partnerships, PPPs, are on our work schedule for the autumn, as well as some of the education matters.
At this stage we might schedule in the Department of Housing, Planning and Local Government for the following week because housing is a big issue. We need exact figures now on actual construction by local authorities and approved housing bodies and approvals for money. We saw in a report yesterday that one third of the money allocated to approved housing bodies had not been utilised. There were planning issues. I refer to the number of houses built under the housing assistance payment, HAP, which are substantially transferred-----
We will deal with housing and if members want to raise specific topics, they should submit them to the secretariat so that the Department can get notification of them. I suggest we deal with housing specifically on that particular day as it is such a big issue. We will not complicate other issues in the Department; we will deal with housing only. There might be more information in the public arena by then. We will deal with housing on 18 October. That means when we come back on 20 September, five meetings will be organised. We have a schedule set up for the autumn and we will discuss that again on our first day back.
If there are no other items, we will suspend to allow our witnesses from the NTMA take their seats.