Oireachtas Joint and Select Committees
Thursday, 22 November 2018
Public Accounts Committee
Business of Committee
We are joined by the Comptroller and Auditor General, Mr. Seamus McCarthy, as a permanent witness to the committee. He is joined by Ruth Foley, deputy director of audit. We will have a private session in the afternoon to review a discussion document. I propose that we use a relatively short period to deal with correspondence and then proceed to our engagement with the HSE and the Department of Health. We have received apologies from Deputies Pat Deering and Alan Kelly. We are holding over the minutes and will come back to them shortly. The next item I want to get clearance from the committee in connection with is No. 3, a motion on the second periodic report relating to NAMA. We discussed this at the last meeting. It relates to the terminal surplus and possible consideration of NAMA's activities after its wind-down. We agreed that we have to put a formal motion to the Dáil to discuss this matter. The clerk circulated wording last Friday regarding our recommendation for a Dáil debate on the wind-down of NAMA. The motion is:
That Dáil Éireann notes the report of the Committee of Public Accounts entitled Periodic Report No.2, November- December 2017, copies of which were laid before Dáil Éireann on 28 March 2018; and, in particular, the Committee’s recommendations that the Dáil should debate- the utilisation of NAMA’s projected terminal surplus and
- the orderly wind down of NAMA or the possible consideration of NAMA for other specific purposes
It is in my name as Chairman of the Committee of Public Accounts. Is it agreed to lay that before the Dáil? There will be a debate on it in the Dáil on a Thursday afternoon in the weeks ahead.
I am okay with that because it is neutral enough. The Taoiseach said in the Dáil yesterday that all of the NAMA surplus will be used to pay Government debt. That is the understanding of Government. I do not think it should be spent that way.
This goes back to the report that we issued on 28 March. We recommended that there should be a Dáil debate on the projected terminal surplus of NAMA on the basis that NAMA is so unique that there are no EU rules on it. There is no requirement in EU rules to pay down Government debt. It is a domestic political decision. We cannot prevent the Government from having a view but we did not make a formal decision either way because there could be mixed views on the final surplus. It could be used partially for debt and partially for investment, or whatever. Let us have a debate and present the committee's point of view. There is nothing preventing individual parties from coming back with their own motions but the committee, in our last report in March, did not say anything either way. We said there should be a Dáil debate because we feel that is lacking. We have an announcement from the Taoiseach on his views but there are other views that have not been discussed in the Dáil. This has never been debated on the floor of the Dáil and I think the committee-----
We are not recommending that. It is an open discussion on that. The thought that NAMA would be used for other purposes came from other sources. I think it came from the Government. We are not endorsing that but simply saying to discuss it.
Is that in the motion we are suggesting? I do not think one can amend the motion. I am trying to visualise what direction will come from the Dáil from that debate on either of those two things.
We cannot determine national policy on this. This is the wording we put in our report six months ago. We are now saying we should discuss the wording. It does not make a particular indication on the future use of NAMA's potential surplus because we have no authority to do so. We are saying that what needs to happen, which has not happened in Irish public life to date, is a Dáil debate on the matter. I might have a different view from the Deputy in the Dáil Chamber on the matter.
My view of what will happen is that this motion will appear on the Order Paper, the debate will be taken and the Government will have its amendment to it, which will probably say what the Government has already said, that the money will be used to pay down debt. We are all free to table amendments to say it can be done in a different way. There will then be a debate and an amendment will be agreed. I imagine that is how it will play out.
It will hardly be squeezed in in the next fortnight before Christmas. I expect this motion will be debated in early January. If the Government tables amendments, while it is going in as a Committee of Public Accounts document, it is a broader issue once it gets to the Dáil Chamber. We will have done our bit by initiating the debate. That is as far as we can take it. The outcome of the debate is for the Dáil to decide, not the Committee of Public Accounts. At least we are getting the matter in there and aired. We will have no problems if different people have different views on it once we get it to the Dáil Chamber. I will present it as is. I might express a personal view or members might express personal views. Is it agreed to present the motion to the Dáil? Agreed. The clerk will send the motion to the Journal Office with a view to having it added to the Order Paper.
There are three categories of correspondence. The first is category A, briefing documents and opening statements for today's meeting. Nos. 1730A and 1732A are from the HSE, enclosing opening statements and briefing documents, which we will note and publish. Nos. 1735A and 1736A are from the Department of Health for today's meeting and we will note and publish them.
We have a large pile of correspondence which we have been holding over for quite a while due to the sheer volume of it. I want to run through some today. We will not clear it all but I hope that, next week, we will clear anything we have not cleared today. They will be on the screens if members have not brought hard copies.
The first is No. 1482B. In our previous report we included the issue of prepayments and the risk associated with them arising from the lessons learned from the Dublin Institute of Technology which paid upfront for its library services and lost over €700,000. We asked the Department of Public Expenditure and Reform to look at that. It is now recommending that the Government accounting unit of the Department will work with the Office of Government Procurement to clarify the position on upfront payments for procured services as part of general procurement. The current rules did not prevent the current problem from happening but the Department will clarify the position for the future.
I know that the issue of upfront payments will come up again. We will note the correspondence and publish the response to it.
The next item is No. 1486 which is a brief note. The correspondence which we will note and publish is from the Department of Education and Skills and concerns the Thorn report on Kildare and Wicklow Education and Training Board. It was received during the summer. It is the intention of the Minister, once he has had an opportunity to consider the report fully, to arrange for its publication. While we have discussed the issue before, we have never noted it. It is an old letter.
We have talked about this issue before. A file has been sent to the Garda or the Director of Public Prosecutions. How do we separate the two things? We will need to know. Where does it come back in here?
Everybody knows that we will be coming back to the third level sector, whether it be the University of Limerick or the Higher Education Authority. It is not coming off our agenda, on which everybody is clear. We will keep it in our work programme and probably check on progress in January.
It is not my area, but it is particularly significant because so many issues were raised, one of which has been referred to the Director of Public Prosecutions. There is huge learning and the issue should be given priority. For example, somebody asked me a practical question. I understood from the discussion that the minutes of education and training board meetings were to be made public. Am I correct in saying that?
It was not happening and the Department has written to all of the ETBs. It is very good that the minutes are to be published. Do we know when that will happen? Is it happening at the Kildare and Wicklow Education and Training Board?
We will get the full list. We will note and publish the correspondence.
No. 1502 is correspondence received from the Department of Rural and Community Development with a date at the end of July. It concerns a statutory review of the Dormant Accounts Fund, an issue on which we made recommendations. It is an internal review the Department carried out. It was completed in July and covers the general policy in the years 2013 to 2016 and 2017 to 2019. We will note and publish the correspondence in order that anybody who has not seen the document will see it on our website. On page 47 there is a summary of the 15 recommendations made in the review. I will not read all of them. We have completed our review of the Dormant Accounts Fund. There will be a follow-through. We will receive the minutes from the Secretary General of the Department of Public Expenditure and Reform concerning our periodic report. It will make for interesting reading because it was one of the poorest areas in terms of the proper management of grant funding.
Like the Chairman, I followed up on the matter. I tried, but I found it difficult to read. I welcome the information provided and the review. That is the first point. It is important to try to understand it and explain it to people. The bottom line is that a sum in the millions is sitting in an account. Completely outside the obligation to hold onto a certain amount, there is other money that is not being used. I do not like to use the word "scandal", but it is not acceptable.
We included the issue in a periodic report. We have recently received a response to a periodic report from the Minister. We cleared two previous ones a couple of weeks ago and will clear this one next week when the topic will be discussed.
We will note that request straightaway.
No. 1513 is correspondence received from the State Claims Agency on non-cervical cancer screening. It is an old letter that was received in August. As we have discussed it, we will note and publish it. According to the schedule, it was held over.
No. 1526 is correspondence received from Mr. Ray Mitchell of the HSE providing follow-up information. There is so much in it that I will deal with the items one by one. We will note and publish the correspondence today. It is a voluminous document and I want people to be aware of what is contained in it. I will give a quick outline. At a meeting of the Committee of Public Accounts on 5 July we asked a series of questions to which we have now received written responses. Members should feel free to come back in on them. We could spend a day on this issue, but we will note and publish the correspondence and people can respond to it. I want them to know the issues about which we asked and on which we have received information. They include the cost variation by staff type and the reason agency staff cannot be recruited into the HSE. I will not get into the responses. I am letting people know that the responses contained in the letter will be published.
There is a response to the Hannaway report on HSE properties. Following completion of the Deloitte report on Government arrangements for section 38 and 39 agencies, the letter also includes a breakdown of how each agency was rated. Deloitte stated it was expected that the report would be finished in October 2018, at which stage, it would compile a composite report on the external reviews. We will ask the HSE for a copy as soon as it is available.
There is a note providing up-to-date information on community health organisation 4, about which somebody asked individually. There is also a note on psychiatric services in the south east and bed management and overcrowding in St. Luke's General Hospital in Kilkenny.
The next question we asked concerned the contract entered into with Deloitte to conduct the review. There is a note included on the matter. We also asked about the staffing of the national compliance unit, which is relatively new. There was a staff complement of 12.
There is a note on the number of planned and random audits in HSE agencies in 2018 to date. There were 11 planned audits and three random audits up to the date of receipt of the letter.
The next issue is important in the context of our ongoing work. We asked for a note on the introduction of a mandatory system of retraining and supervision following legal settlements without an admission of liability. It is very much what we are talking about today, that is, medical negligence, which will probably be the subject of a report of the committee in the spring. The first sentence states there is no mandatory retraining and supervision following legal settlements without an admission of liability, although retraining and supervision takes place. Enough has been said for now. It is what we all suspected and has been confirmed in writing.
The correspondence includes a note on the different categories of consultant in non-specialist positions who are not on the specialist register. There is a note on the process in respect of the cath lab at University Hospital Waterford.
There is a note on the assessment of needs and the provision of healthcare and plans to take steps to address the issue. Detailed information is given on a region by region basis. There is a detailed breakdown of the €50 million inpatient transport costs by area, including a breakdown of the type of transport used, including taxis, minibuses, private ambulances or other means.
There is a note on whether matters related to procurement compliance were included in the risk register. There is also a note on the section 38 and 39 agencies that have submitted their accounts. Last year 100% of accounts were submitted.
There is a note on whether matters associated with CervicalCheck were placed on the risk register in previous years. We know that they were not. That is something that will come up in discussions on medical negligence. There is a detailed history of the audit related to CervicalCheck with which we are dealing on an ongoing basis.
Then there is a note on the number of protected disclosures made to the HSE. It is indicated that 78 were received in 2017 and there is breakdown of the categories of those on page 20 of this 26-page letter. There is a note on the provision of a cardiac cath lab laboratory in Sligo; the figures and trends regarding moneys owed by health insurance companies, which is in the order of €300 million at the end of each calendar year to which we can come back; the different categories of agency staff; and the contract awarded to the private operator in Mount Carmel. I am reading out all these headings because people forget the volume of work we cover. I am not reading to members the responses. There are notes on the sale of a property in respect of Our Lady's Hospice, Harold's Cross, which is the subject to a Garda investigation and is an item on our correspondence list; the position regarding high-risk dental treatment patients; the number of unfilled posts in the HSE; the prompt payment interest and compensation paid during the course of the year; and the patient private property retained interest and where the money goes. We will not discuss the entire detail of this, Deputy Cullinane. I have given a sample of the 29 detailed questions we asked on the day. The responses are now on the public record, and they contain a lot of information. If members want to come back next week on any aspect of this or use this information, they should feel free to do so. They may choose to use it in any event because it is public now.
I do not want to refer to any of the detail but some of it relates to CervicalCheck. There is a lot of correspondence there, some of which concerns that issue. Can the Chairman clarify where we are with this? Two weeks ago we had a hearing on it. We dealt with a number of issues, including negligence, so it was wrapped up in that issue. Are we doing a separate report on CervicalCheck or will this be subsumed into a periodic report? My understanding was that we would do a separate report-----
Bear with me. I also understood we would work with the health committee to work out lines of demarcation, that is, what the committee is dealing with and what we are dealing with. I am just concerned this work is scattered at the moment. There is no cohesion to what we are doing.
This would be up to the committee to decide, but we need to do a report on the issue of medical negligence, which involves a bill of €2 billion facing the taxpayer. This bill goes up every year and no one pays a blind bit of heed to it. The Deputy will see in the correspondence that there is no mandatory training. CervicalCheck could certainly be a significant chapter in that report. We may do our own special report distinct from the periodic report on medical negligence after we complete-----
My point is more fundamental. When the scandal first broke, we had three or four hearings, and then when the Scally report was published, we had one hearing but we did not get into the report and the issues within it that relate to our work. I had sought a report or some sort of scoping exercise on what we will do and the areas of the Scally report we can deal with and then a comment from a process and procedural perspective or a systems failure perspective. I am a little concerned that we are dealing with the matter here and there but there is no coherence to what we are doing. I would prefer if we knew what we were doing, if there was a clear focus and if a report came through the other end of the process and was not subsumed into a periodic report or a report on negligence. That is part, but only a small part, of the CervicalCheck issue.
I will ask the secretariat to write a note because we are gathering information on it and touching on it every other meeting. We probably need an information note that pulls together precisely a suggested roadmap for us for completion of our work on the matter. We will come back and discuss that. I do not know the answer-----
That was just in respect of the two meetings that have been held in recent weeks in order that we did not overlap. We had touched on the issues previously. The work will be done in consultation with the health committee in order that there is no duplication and everything is covered. We will get that note for the members.
A couple of issues have been raised. We had been talking about the large contingent liability before the CervicalCheck cancer scandal broke. That was the work we were going to do. In many ways the two issues have become conflated but it has been a useful example to tease out with the likes of the State Claims Agency, SCA, the Department of Health and the HSE in seeking to understand exactly what the process is when a scandal happens. One of the areas we were going to examine was open disclosure and the possibility of reducing the liability by virtue of the fact that part of that liability is a legal cost liability and that if there were a different process, one could well end up with a smaller liability in some cases and still a reasonable outcome for people who have been damaged. By conflating the two, we have taken the focus away from where it should be. These are two very distinct issues.
There are many other issues, and we will deal with one later which is another example. What is obvious - and we have not reached this point - is that if one is damaged and wants to pursue something, one is almost required to go through the SCA. A mediated process is not available. We will never get to the point of open disclosure if the systems are not in place to allow for an alternative dispute resolution to take place. This is an aspect we must set apart from others and do something definitive about. We have to come back to it with the SCA. We have done some useful work on CervicalCheck. Perhaps that should be pulled together so we can see what we have that is distinct from the health committee.
I refer to process and value for money. We must put them into that category so we are properly within the remit of the committee. We wrote to the SCA last week about the "lack of candour", to use the Chairman's term, regarding giving us correct information. I have eight women telling me they still cannot get their slides. We have not received a reply yet. Why would it take a week to reply?
What will happen is the very thing we are trying to avoid. One of the solicitors will go to the High Court and demand the slides, and that will put people through more torture and will do exactly the opposite of what we are trying to achieve, which is the resolution of these issues without having to go the courts for the want of giving us correct information when the SCA comes before this committee. We should, therefore, make sure we receive a reply by next week, but it would not surprise me if the matter was dealt with in court before then.
I am guided by what the members want to do. Perhaps we need to have a discussion in private session next week. Let us hope we have that reply in the meantime. Both members are saying that perhaps we need to narrow our focus specifically on this matter. We will discuss that in private session so we know precisely where we are going on this issue rather than it morphing into other issues. The point is taken.
The next correspondence is No. 1528B from Ray Mitchell which was held over from a previous meeting. It is a note on the approach and the protocol in place for the return of the slides to the women affected. This is an historic one, obviously.
On the protocol, which we have here, Quest Diagnostics is one of the laboratories and it was providing slides until the protocol was put in place. It was told by the HSE to stop providing slides. There was then a dispute over the protocol. We are not getting clear information. A second protocol was to be considered after the engagement with the legal people. When we are looking for the reply, we must note that not only is there a failure to provide slides, but even when they are being provided where there is an urgency - and it is only in those very urgent cases that it is happening - they are not being provided with the laboratory report that should accompany them. It comes back to open disclosure and that piece of work and it will be important in that context. This is an example of that.
That is No. 1528. The next correspondence is No. 1530, a follow-up from Mr. Ray Mitchell. We note and publish that.
I refer back to No. 1528, attached to which is a letter dated 24 August 2018 in response to Committee of Public Accounts correspondence No. 1014 with the Department of Health seeking information following the appearance at the committee on 12 July 2018. It deals with a note on the expansion to 7-7 for general adult mental health services, a note on the cost of hiring private investigators, the process and safeguards in place on consultant-compliance contracts. Members might be interested in this. They have asked about the cost of hiring the private investigators and it states on page 2 of that letter that surveillance was a proportionate exercise and not indiscriminate, that three of the lead cases were ultimately the subject of surveillance and that the HSE advised that the cost was €117,853. I am just putting that on the public record as people were interested in the cost.
We also asked for a note on the reasons for the non-disclosure of information in the accounts under No. 62 in respect of legal costs. As a result of our letter and following consideration in the finalisation of the 2017 appropriation accounts in conjunction with the Comptroller and Auditor General in the context of the raising of the matter at the committee, the Department is now in a position to report in accordance with the relevant circular. It was not publishing legal costs. In the Department of Health in 2017, there were 70 cases totalling €5.699 million and the total in the previous year was €14.655 million for 138 cases. That is in the accounts for 2017. Following us pointing out the Government circular at the committee, information which was not clearly available is now there.
We asked for an explanatory note on the three different schemes available for treatment abroad and people will find that helpful. There is also reference to the European health insurance card and the cross-border directive. The public are a bit confused regarding the cross-border directive. We will recirculate it. I do not have the reference in front of me, but it was dated 24 August 2018 in reference to our correspondence No. 1014 or 1528, I am not sure. It is good to separate the issues as people are confused between the cross-border directive and the treatment abroad scheme. Table 6 is an up-to-date note on the national children's hospital funding and a review of the money owed by insurance companies, which I touched on earlier. We note and publish that.
The next correspondence, No. 1538, is also from the HSE. This is a short letter with a large appendix comprising hundreds of pages. It is a copy of the records relating to the quality assurance visits, to include minutes of discussions and final reports submitted following the tests. That relates to CervicalCheck. We discussed this at our previous meetings but we note formally and publish that substantial document even though we have referred to it before.
Next is No. 1561, correspondence from the Higher Education Authority, HEA, regarding the famous retirement event for the former President of CIT and the fact that the HEA is considering the most appropriate means to recuperate the money from the college, which was not approved. We have discussed this correspondence before but never noted and published it. I have a note that it is held over.
Then there is No. 1672, which is correspondence from Professor O hÓgartaigh of the NUI on the non-competitive procurement of €5.12 million. There is a detailed scheduled on the back of that providing the breakdown. For G4 security, it was €373,000, which was probably a roll-over of a contract. The full breakdown of the €5.12 million is there. There is an issue regarding the severance payment and out-of-office leave payroll costs of €91,000. We note and publish that and members will be free to use the information as best they can.
That is all I have from previous correspondence which we had not published to date and which has been sitting on our desks for the last while. We will try to deal with the last of the unpublished correspondence next week. I turn now to the correspondence received this week, of which there is not too much.
It is No. 1698. I welcome that we have a service level agreement finally, which was signed on 6 November 2018 between the Department and Galway 2020. I need a little advice on this from the Comptroller and Auditor General, and there are many questions which I will follow up on separately. I will not take up the committee's time on those as they are not relevant to this. However, I will ask various questions about an Irish language officer and a rebranding which resulted in Irish being diminished. I do not know whether the Office of the Comptroller and Auditor General examined the service level agreement, but I have a specific question on monitoring. I say this in a positive manner and welcome the agreement. There is a proposal to have quarterly monitoring meetings, which is positive, but it is proposed that someone from the Department will be on the board of Galway 2020 and then that there will be monitoring of meetings by the Department. How does that work? Where does the loyalty lie for a departmental official on the board of Galway 2020, which is being monitored by the Department? Can the Comptroller and Auditor General tease that out?
Mr. Seamus McCarthy:
I do not want to give a definitive view on the specific arrangement in place but the issue has come up previously. It came up in relation to the Dublin Docklands Development Authority where the Department had an assistant secretary on the board. The same person was then overseeing the effective governance and control of the authority. The relevant Department, which is now the Department of Housing, Planning and Local Government, made a change and the person representing it on the board was no longer involved in the oversight on behalf of the Department of the operation of the authority.
That has been established as a principle and it was accepted by the Department of Public Expenditure and Reform that it was a better arrangement. I do not have the detail of what has been put in place in respect of Galway 2020 but that is certainly a live issue and a matter of concern.
It is a welcome change that the same person is not doing it but it does not take away my concern that a Department is providing €15 million - which is very welcome - and then has to monitor that. This is the performance level agreement. It contains all sorts of conditions, which is to be welcomed. I am not sure whether the board of directors is subject to freedom of information legislation. I will have to check that. If somebody here knows I would be grateful for an answer.
There is a person from the Department on that board who, I presume, has a loyalty to the board. I have a difficulty around this. Perhaps the Comptroller and Auditor General might have a chance to look at it. I am not asking him to give a value judgment or anything in this regard but, having learned from the Pálas debacle, this is the first time the Department is putting in place a procedure in Galway, which is welcome. It is the time to do it right. Can we have any input to improve that performance level agreement?
My last point on this is that, interestingly enough, there is a role for the Comptroller and Auditor General mentioned on page 6. I will read the paragraph:
As the Department reports on all of its expenditure to the Public Accounts Committee and the Department's account is audited by the Comptroller and Auditor General, this agreement reserves the right and entitlement of the Comptroller and Auditor General to examine, query or audit the documentation of the expenditure of these funds at any time up to or after 2021.
That seems to be an open door up to and including 2021. It does not involve looking at something retrospectively. I invite Mr. McCarthy to look at that.
Mr. Seamus McCarthy:
It is obviously putting an arrangement in place. The principle that the Comptroller and Auditor General be given access to follow up on the expenditure of public funds if necessary was required in giving grants. It is a general provision. I welcome that it is in this agreement but it does not mean that I will be going down and vetting each decision as it is made.
I understand that and I am not asking for that. I am raising the fact that we, as a committee, can have an input in due course. I would like clarification on the monitoring arrangement and on where one's loyalty or duty lies as a representative on the board of Galway 2020 and a member of the Department.
I would like that point to be clarified somehow because there is a company and a board of directors on which a representative of the Department sits. It seems to me that the Department should take a hands-off approach, but I am no expert.
Mr. Seamus McCarthy:
If the committee has further queries, points to be clarified, or points of concern in respect of the Department arising from its review of the arrangement which has been put in place they could reasonably be put to the Department. The committee could query what something means or how a certain risk has been dealt with.
I will move on to the big question. The Comptroller and Auditor General is mentioned in this performance delivery agreement. If he feels it necessary or feels that there is good reason he has the right to examine documentation, although he would not do it as a matter of course. Does he have that right in the service level agreements between the HSE and section 38 and section 39 bodies?
Mr. Seamus McCarthy:
Yes, as they are grant recipients. I might also have that right by virtue of section 8 of the Comptroller and Auditor General (Amendment) Act 1993, which gives me the right of inspection where more than 50% of an organisation's income comes in the form of grants from State bodies.
I ask Mr. McCarthy to give us a note on the the right of access because many people felt that this body did not have access under section 38 and section 39 agreements in the past. If the Comptroller and Auditor General does have access it is within the remit of the Committee of Public Accounts to go there. If he goes there, we can go there. I am asking for a note because there has been a certain view generally. It looks as if he can reach into several organisations if he chooses and feels there is a need to do so. Does he know how many service level agreements give his office this right of access? Would he be made aware of each and every one of these as they arise?
Let us go to the sports capital grants. If an organisation gets a substantial grant through the Department, is the Comptroller and Auditor General saying that a condition of that grant would be that he could inspect if he feels it necessary?
Okay. It is probably news to many people that he has a greater right of inspection in respect of many organisations that receive public funding, many of which feel they are exclusively in the private sector or outside the public remit.
To be specific, this is called a performance delivery agreement. It is slightly different. It is about monitoring delivery. The Department's role is laid out on page 4 of the agreement, "The Department will appoint a representative of the Minister to serve on the Board". It is under "c" on page 4. Under "d" it is laid out that there will be bilateral meetings. I want to ask the Department to clarify that. Who will be appointed? How does that tie in with the Department's monitoring role?
The final thing for us on this committee is the monitoring. There will be quarterly monitoring reports in respect of the drawdown of the money. Can we ask the Department when the first quarterly monitoring meeting as set out under the agreement will take place? It was to take place within a certain time of the signing of the agreement.
Okay. I am moving on to correspondence received in the last seven days. There is not too much of it so it will not take too long. The first item is No. 1715B from the HSE regarding the transfer of properties from religious congregations to the HSE.
There are some very large amounts of money involved, the largest is nearly €5 million. Other amounts include €2 million and €1.1 million. I am concerned about how procurement was carried out. Was there just a list of contractors from which people were asked to do the work or was there a robust system? Can we write to the OPW, if we have not done so already-----
That is fine. The Deputy has sent us a letter, No. 1733 C. We were coming to it shortly. It is specifically about seeking a detailed note regarding the removal of the gates in the Phoenix Park and their repair, restoration and re-erection. It asks whether it had been discussed before it was known that there would be a papal visit. The correspondence also says "in view of the spreadsheet of costs supplied by the OPW, the Deputy wishes to explore the way in which some companies were selected to provide services and infrastructure, were correct tender protocols and procedures adhered to, was the competitiveness of the tendering robust and so on." We will inquire about all of that at the Deputy's request.
I will come to the letter in a moment. We will note and publish No. 1700B. We will also note and follow up on Deputy Murphy's request, No. 1733C.
No. 1715B is from Mr. Ray Mitchell, assistant national director, Health Service Executive, and is dated 12 November 2018. It deals with the transfer of properties from religious congregations to the HSE under the various agreements from 2002 and 2009. We are on the case. The Committee of Public Accounts will ensure progress is made. Progress was not made for years. Some of the properties fall under the remit of the HSE, which states that of the 2002 offers, there were two remaining properties, namely, the Sacred Heart centre in Waterford and a property in Cappoquin. The closing documents for the property in Cappoquin were received last week from the congregation's solicitor and similar documentation for the centre in Waterford is expected soon. It is hoped the transfers will be finalised in the next couple of months. We will ask the HSE to provide an update in January.
In 2009, six properties were offered, of which five were accepted by the HSE, only one of which has transferred. Four properties are outstanding. One is the St. Bernard's Group Homes in Fethard. The correspondence states that the transfer document has been competed and the consent of the Minister and the Charities Regulatory Authority have been received. The property is now being registered. That is fine. The contract documents for the Catherine McAuley centre in Kells have been received and signed, the Minister's consent has been requested and is awaited. The committee will write to the Minister asking that he give that consent as quickly as possible to allow this transfer to proceed.
With regard to a property on Gracepark Road, on 14 June last, the solicitors were advised by the congregation's solicitor that the contracts and title documents would issue shortly. The documents are awaited. The committee will write to the HSE to ask its solicitors to contact the congregation's solicitors forthwith in order that this can proceed.
On the National Rehabilitation Hospital property, the position appears a little complicated. HSE estates say it will reach a transfer and lease-back arrangement for the National Rehabilitation Hospital lands. This will result in a change to the National Rehabilitation Hospital Trust. The original trust owns the land and the new trust will be involved in the sale and lease-back. A due diligence process on the new trust has commenced and will have to be completed before the lands can be transferred. The target date for the completion of this process is the end of 2018. The committee will ask for a note to be provided on this issue in January. We will keep on top of that issue.
No. 1717B is from the Department of Communications, Climate Action and Environment regarding electricity interconnectors, the need for windmills or wind farms to produce surplus energy and what happens to this surplus. Some of it can be exported and the Department advises that in 2017 the rate of curtailment of available wind energy was 4%. The committee will send this detailed response on the utilisation and export of excess wind energy to the correspondent. It has been suggested that this excess is dumped at an uneconomic price to the UK. The reply will be of interest to many.
No. 1718B is from Mr. Seán Ó Foghlú, Secretary General, Department of Education and Skills, dated 12 November 201. It relates to seeking information on the powers of the Minister and the Higher Education Authority, HEA, to carry out different types of investigations. We can note and publish this correspondence, which makes some interesting points. It is the Department's view that the HEA has the power to review compliance with conditions when it is granting funding. The Department states it has received the advice of the Attorney General on this issue and it is being assessed by Department officials. A further update will be provided to the committee members as soon as possible, once the Department has finalised its assessment of the legal advice. That is important and we will monitor that. The letter refers to a timeline for a review of the HEA legislation and the results of a public consultation. The consultation took place during the summer and 14 submissions were received. A consultation forum will be held tomorrow in the Department to provide an update on the HEA legislation. All of those who made submissions are invited. This process will ultimately lead to heads of a Bill.
While the questions asked have been partially answered, the issue before the committee, namely, the Waterford Institute of Technology, WIT, report, has not been dealt with. It is fine that there will be a review of the 1971 Act. That was discussed when the witnesses were before the committee. Mr. Love was concerned about the Act and its limitations in the context of the HEA carrying out reviews. A review of that legislation would be welcome. It seems the Attorney General's advice has been received but we do not know what it is. The WIT report is wrapped up in all of this. There are a number of different options. I was not so much looking for information on what the HEA will do in respect of future reports, examinations and investigations. All future examinations may change as a result of the review of the legislation. There are options regarding the WIT draft report, which is in legal limbo. One option is to modify the existing report. Mr. Love told us it was his intention to publish the report but it may need to be modified. There were concerns as to whether that was possible given the Attorney General's advice and the limitations of the HEA's role in doing these reviews. The other option was a ministerial appointment. It could be the case that the Department would have to wait for an amendment to the Act, before starting again. My question was not less about where the process was that about what would be done with the WIT report. I want to get a response for once and for all because this issue has dragged on. At some point, somebody has to call it and decide what will happen with the draft report. Will the report be modified in some way or will we start again? If the latter is the case, what is the process for starting again? Can we get an answer to that once and for all?
I believe the Department is hiding behind the review of the legislation and the Attorney General's advice. While that is all well and good, it does not answer the fundamental question before us. A draft report has been in legal limbo for a year. Separate from that, we have the Comptroller and Auditor General's report which deals with one element of what would have been contained in the HEA report. This committee cannot follow up on that until we have some clarity on this matter.
I asked a question of the clerk, which I also raised at our previous meeting. It is fine that we now have clarity that the Attorney General's advice has been received and the Government intends to change the legislation. That is policy but what is happening with the WIT report?
The letter will be on one issue, namely, WIT.
No. 1719B is from the Higher Education Authority providing details of the employee assistance help lines, which we will note and publish.
No. 1721B is from the Housing Agency and follows up on our previous meeting. We will note and publish this correspondence, which provides very good information. I thank the agency for supplying it. It gives details, by local authority, of the provision of social housing, the number of offers made by NAMA and the 2,475 housing units that were taken up by local authorities as a result. It also provides details on the €70 million funding the agency has been provided with in respect of local authorities. It sets out details, by local authority, of the 818 houses and apartments that have been completed and bids that are in the process of being accepted. It gives specific information on the 478 units that have been acquired and completed as part of that process, broken down between two, three, four and five bedroom houses and one, two and three bedroom apartments.
That is No. 1721B. The Housing Agency has provided a good information note on the regulation of approved housing bodies, which is not statutory. It has also provided a good note on land management on the 600 acres and 83 sites it owns. It gives information on sites transferred and sites progressing where agreement to transfer is in place, and details on the various capital funding schemes to approved housing bodies and local authorities, such as the capital assistance scheme and the capital loan and subsidy scheme. It has technical information on payment and availability agreements to purchase, lease and construct properties and the capital advance leasing facility. For people who are following the housing debate, this is very good information.
That is great information. However, it is a pity the agency did not provide information on the one substantive, negative issue that we raised on the day and that I raised in particular. I asked for the locations and breakdown of the properties that had been offered to local authorities but not taken up. The Chairman alluded to section 2 and the 2,475 units that have been delivered, which is included in the breakdown in tabular form by county. It is a pity the Housing Agency did not provide in tabular form the location of the 2,424 properties which were deemed unsuitable by reference to location or sustainability issues. I consistently pressed the agency on the day on the so-called, to use its word, over-concentration of certain amounts of property which made them unsuitable. What is going on at the moment is a national scandal. It is something for all of us to press with our local authorities. On the day we had representatives of the Housing Agency and the Department here, I had answers from the Minister to parliamentary questions. They were all blaming each other. The Department jumped in to bail out the Housing Agency as well. It is unfortunate that although we have plenty of good information, we do not have it on the issue of the 2,424 properties that the Housing Agency considered unsuitable by reference to location or sustainability based on what it calls "an over-concentration". In some cases it was claimed there was no demand. There are 10,000 homeless but supposedly according to the Housing Agency there is no demand in some of these areas. It is a pity we do not have a table setting out the areas of "no demand" because it would be highly informative. It still rankles with me in terms of the ideological debate that certain phraseology and terms can be used. While I am on that issue, did the committee receive a response from the County and City Managers Association, CCMA, on when it will appear?
We sent the second letter over two weeks ago. In respect of the Deputy's point about the 2,224 houses referred to under schedule 2, the Housing Agency did not give a breakdown by local authority of those that were considered unsuitable by reference to location and sustainability. We will write back to the agency requesting that list. In addition, when we get that list we will write to the Department for a breakdown by local authority as to the reasons. In my local authority I have gone through the units that were not accepted and there were various issues. The issue could have been financial, for example, the price, or it may have been that it would have taken too long or there was an over-concentration in an area where there was already social housing. There may have been an offer of 50 houses in a local authority area where there was demand for only five houses. Those are the types of issues. We will get the list by local authority from the Housing Agency. We will ask it to send the list to the Department simultaneously and we want the Department to give us a breakdown. If it is a case of a local authority refusing 47 houses, we want to know where each of them was - there would probably be four or five different locations - and why each offer was rejected. That information is readily available in every local authority and should be readily available in the Department. I have seen it in my local authority and we will get it.
What was key on the day from NAMA's and Mr. McDonagh's point of view was NAMA's willingness to assist local authorities with the completion of housing projects if they had not been finished and so forth. He stressed that it was not a financial issue from NAMA's point of view.
I support that. We should have got that information. I have read and I welcome the documentation, which was very helpful apart from that. When we get that information we will be able to compare it with the existing policy of local authorities. For instance, in Galway there is a major housing crisis so the council is going back to local authority schemes and building infill houses. It does not see a difficulty with that. I want to see where the inconsistency is in terms of policies. It would be very helpful to have that information.
We will get the breakdown. We are asking the Department to get the information from each local authority. The local authorities have it, as I have seen myself, and we want it in here. The information from the Housing Agency was helpful but more is required. We will return to the housing issue. We had the first meeting on it last week. The housing assistance payment, HAP, and all the other issues will come up separately and we are coming-----
Maybe. We will deal with HAP to some extent next week as we will have representatives from the Departments of Housing, Planning and Local Government with Employment Affairs and Social Protection.
No. 1724B is from NAMA and provides information requested by the committee regarding the geographic location of purchasers of €24 billion of disposals by NAMA. That follows on from a previous letter. It indicates to us that in respect of the €24 billion of secured assets sold by NAMA-----
It is No. 1724B. It is only one page. NAMA had given us a breakdown of where the purchasers of NAMA property sold in Ireland were from and we asked for the breakdown of all secured assets worldwide. The letter indicates that the jurisdiction of the purchasers in respect of the €24 billion of secured assets, both Irish and foreign, is as follows: 33% of the purchasers were in Great Britain; 31% were in Ireland; 9% were in the USA; 5% were in Germany; and 22% were from "other", which figure relates to 45 individual purchasers in other countries. We will write back. What surprised me was the figure of only 9% for US companies. We want to know who was the ultimate owner. A US company might have set up a company in Ireland to buy assets. NAMA is telling us 31% of these assets were sold to Irish-based companies. I want to know if they were part of a group. This does not make sense to me. NAMA is playing games with the committee. It knows what we were looking for. We wanted to know the ultimate owner. The information provided does not tally with anybody's knowledge of these matters. We know many of these companies are controlled by American vulture funds. NAMA says only 9% of its sales are to US companies. There is a lack of candour in the answer and we want a full answer. We want to know the ultimate owners and NAMA has to know that. I am sure Cerberus alone accounts for more than 9% of NAMA sales. We want the full picture of the ultimate owners of the €24 billion of secured assets purchased from NAMA. I am finding that NAMA is not giving full answers. It probably hopes if we give it some information, we will accept that and move on but we will not. We have other correspondence on this.
Yes, we will have to bring this into that debate as well.
No. 1725B is in respect of information requested by the committee regarding structural assessments carried out in schools constructed by Western Building Systems. People will find this very interesting.
It is very detailed information on those schools that have been examined, those that have been reopened and those on which work remains to be done. A second schedule is provided regarding the schools delivered by that company and the overall procurement note. That is helpful. There is a third information note on the oversight and design and build programme, including Western Building Systems projects.
Most interestingly, we asked whether the company that got the projects was always the lowest bidder. I will give credit to the Department for providing us the full information. NAMA could follow its example. We will note and publish this interesting schedule. There are 42 schools. The note lists the top five or six tender prices, with the winning tender highlighted in red on the chart. People can print it off themselves, but it will be noted and published. In many cases, it is clear that the lowest bidder did not get the contract. A second ranking is called "Ranking of winning tenders following an EAT analysis". "EAT" means most economically advantageous tender, which is not necessarily the cheapest tender. It incorporates wider issues such as ability to deliver, track record and access to resources. According to this document, price accounted for approximately 40% of the score, not 60%. Some companies forfeited the job even though they were the lowest tender. Perhaps they had been granted four or five projects but, because they were unable to handle them all, the project fell to the next company on the list. Some companies had tendered for more than they were capable of handling.
We could discuss the 42 schools forever. Everyone has an interest in those in their own constituencies. For example, there is information relating to Portlaoise. We will note and publish the response, which contains good information on the issue. People are free to use the documentation as they see fit.
It is good information and I compliment the Department on providing such a comprehensive breakdown. The annexes that it attached are also helpful. We sought this information because so many schools had been affected. The impact on children was the main concern, but process was also an issue. The tendering process was one element of that, with oversight of the design and build programme another. Annex 3 is important from our perspective. It sets out who had oversight of what. It seems that responsibility for compliance with the projects rested with the contractor. Departmental personnel are involved in the pre-oversight arrangements. That is where we wanted to get under the bonnet. We requested this document in order to establish whether we would pursue and examine this matter. It was not just to get, publish and note the document. We wanted to get the information and then make a decision on whether to examine the tendering process, the design and build process, what compliance checks were in place and so on in order to learn from any mistake that was made. Was that not the reason? Now that we have the document, are we going to make that decision?
Now that it has been noted and published, it is out there for everyone to discuss as Deputies, parties and journalists. The committee can discuss it, but I advise people to make their comments. The committee has done its job by getting this amount of information. We can follow it through in further detail, but I expect that members will, based on this information, be raising the issue in their own right outside of today's meeting.
I accept that but, with respect, our job is not just to publish information. Our job is to try to understand whether the processes, including compliance systems, work once contracts are signed and contractors start building. It is fine for journalists and us to do what we want with the information that is published, but we sought it for a specific purpose, that being, to allow us to determine whether we would deal with it.
Signing off on a construction contract that costs a great deal of money might be within another committee's remit, but it is certainly within ours. The sign-off on payment for work down is a financial matter, full stop.
It is about the ability to challenge something that has gone wrong and determining whether the process for signing off needs to be challenged. We probably need to understand the situation. I am led to believe that there were people on site who signed off on the project.
No. We will make a specific note for this issue to be dealt with in the briefing material that we receive before the meeting.
The next correspondence is No. 1726B from the Department of Education and Skills regarding the transfer of properties from the religious congregations. This is connected with the correspondence from the HSE, which we did not take at the time. This gives a detailed report up to 17 October. The Secretary General writes:
... the consent of the Minister for Public Expenditure and Reform has been sought for the acceptance of three properties ... The properties in question are:- Former primary school in school at Ballyjamesduff ....
- McAuley Centre, Kells ...
- Former St. Patrick's Primary School, Westport ...It is hoped that the consent of the Minister will be given shortly.
The committee is writing to the Minister asking him to give his consent urgently and not to delay the matter any further. We will follow up on this.
Next is No. 1729B from the Department of Foreign Affairs and Trade relating to our periodic report and a request for information.
We will ensure that there is a nice photograph of the delegation in the report.
We are moving on to correspondence category C. A letter has been received from Deputy Wallace with a further query regarding Project Nantes. We forwarded correspondence received from NAMA to Deputy Wallace and he has reverted with queries. We decided last week to request further details from NAMA and we will include these queries in our request. This is about section 172, which the Deputy says should deal with associated directors of the company. Essentially, he is saying that NAMA's response to us was not broad enough and was too tight. The section requires no debtor involvement, but Deputy Wallace is saying that directors of the purchasing company were associated with the debtor. He believed that the situation should have come under the section 172 declaration. We will forward Deputy Wallace's correspondence to NAMA and ask for specific clarification on the matter.
We have received several pieces of correspondence on Project Nantes and we tried to address it when NAMA last appeared before us, but NAMA was not in a position to answer questions on it, or at least the questions that were being put. We are getting information. We cannot take all of it at face value, but many questions are being raised.
We were able to examine Project Eagle because the Comptroller and Auditor General did a special report. What was the genesis of that report? Why was Project Eagle picked out?
I would also like to ask about the Comptroller and Auditor General's work in terms of his engagement with NAMA, which he audits. Is Project Nantes something that he has on his radar for future work? We are getting bits and pieces here and there. We do not really know how to handle it. We are going over and back with NAMA. Then we have other people almost acting in between that by telling us we should not believe something else over here. I am trying to work out how we deal with it or do not deal with it. Is the Comptroller and Auditor General across some of these issues?
Mr. Seamus McCarthy:
People should note that Project Nantes is a 2012 disposal. Obviously, we audit the financial statements of NAMA each year. We did not examine Project Nantes in the course of the 2012 audit. However, it is certainly on my radar given the issues that have been raised. I have sought information from NAMA. I have not yet got all the information I sought. When I have it, I will consider whether any further work, including a section 9 value for money report, might be done in relation to Project Nantes.
Mr. Seamus McCarthy:
We had intended to include Project Eagle as part of the sample we were examining in the context of the section 226 report, which is a separate legislative requirement. The more we examined it, the more it seemed that there were concerns that needed to be looked at in further detail. I decided to concentrate on that by doing a value for money report on Project Eagle first. It was intended that the process we used in that case would subsequently be used to inform our examination of other loan sales.
I would like to follow up on that. When we looked at Project Eagle, we found that many issues arose with deviations from sales practices and the management of conflicts of interest, etc. It would be a bit naive of us to think that such issues did not arise in other loan sales. We are now getting information on a significant loan sale. If it is the case that the Comptroller and Auditor General is across it, that is where it needs to be done and I am happy enough that we may see something coming from that.
The Comptroller and Auditor General has said he will consider undertaking a potential section 9 report on this matter. For what it is worth, the committee should ask him to undertake such a report. I know it is not within our remit to do so.
I would be happy to wait for the Comptroller and Auditor General to come back after he gets further information to see what his viewpoint is at that stage. The committee can certainly have a role. NAMA was set up arising from a failure of governance and of regulation. When representatives of NAMA have come before us, we have expressed the most serious concerns about the lack of governance and so on in some instances. Is it not ironic that we are here in this position all over again now? We are struggling with an organisation that was ostensibly set up to deal with the outfall of the lack of governance, regulation, consensus and thought about things that were being done in a very wrong way. We are back struggling in a David and Goliath position. I have used that phrase fairly often. We are trying to deal with little bits of information. I do not know anything about Project Nantes other than what we have been told in the correspondence we have received. We are struggling to get something as basic as a section 172 declaration. Then it turns out that what we do get is not relevant and we are left in that position. I will finish on a point that relates to disclosure and upfrontness. There is a duty on NAMA to help us. It was set up as a public body with public duties. There is a bigger issue here for us.
Yes, there is. There will be a debate on NAMA's expected terminal surplus. The members of this committee will be able to raise those points in the Chamber as well as at this committee. The Comptroller and Auditor General is seeking information. We have gone back for further information. The Comptroller and Auditor General has raised the whole issue of the section 172 declarations. It does not seem to have been very well policed by NAMA. I will put it as gently as that. We will come back to this issue.
All of us have concerns about loans that were in NAMA. People seem to be back in control of assets that they have possibly gained by virtue of getting back into a position without appearing to have the ability to do that. That is the genesis of this. It is a concern for me. People were not supposed to be able to buy back their loans-----
-----unless they could buy something at par value. It may be anecdotal, but it appears that some people have been able to do this. What kind of follow-through is done by NAMA afterwards? There could be people fronting for other people and things like that.
The essence of the section 172 declaration is to ensure no person who is connected with the debtor is involved in buying back the same assets. The Comptroller and Auditor General has commented on that. We are back to that section 172-----
We will ask the internal parliamentary legal adviser to clarify the brief. This is an issue. We will try to move on.
The next item on the agenda is the financial statements and accounts that have been received since the committee met on 15 November last. The only such document to be considered relates to the National University of Ireland. The old NUI is nearly wound up now. Its turnover in the accounting period was just €3 million. Most of the universities are now-----
The witnesses are coming in. There is no change in the work programme. We can come back and discuss it next week. Our next meeting will be with representatives of the Department of Employment Affairs and Social Protection. There will be a long agenda. If there are any specific issues that members want to see dealt with in the opening statement or in the briefing material that is to be provided, I ask them to contact the secretariat to give an indication of those issues by tomorrow, if possible, and by Monday at the latest. The work programme is very extensive. It is probable that we will not complete all the chapters on the Department of Employment Affairs and Social Protection and the Vote. There are five chapters on the Department in the Comptroller and Auditor General's report. We will probably have to take a second bite at the Department. In the meantime, anyone who has specific issues to raise in respect of the Department should contact the secretariat to ensure there is as much advance notice as possible. Does anyone else want to come in before I suspend the sitting to allow the witnesses to come in?