Mr. Stephen Kent:

I am joined by Ms Miriam Flynn, who is our chief schools officer, and Mr. Tom Delaney, our chief financial officer. They have joined me as part of a new senior management team at Bus Éireann. We are very pleased to be here to answer any questions and assist the examination of the findings of the Comptroller and Auditor General's report.

We have been operating the school transport scheme successfully for over 50 years. We do not exercise discretion on the policy and all applications are simply dealt with in accordance with the rules and guidelines. It is important to note at the outset that the delivery of our operation on the ground is highly complex and the scheme is administered by Bus Éireann on a cost recovery basis only.

The scheme has expanded dramatically in terms of vehicle numbers as the number of services provided under the scheme has increased from 1,700 contractor vehicles in 1998 to more than 4,500 now.

More than 460 new school transport services were approved by the Department and introduced by Bus Éireann in 2017. This year alone, another 300 new services are expected to be introduced by Bus Éireann on behalf of the Department. The vast majority of these will cater for children with special educational needs. All newly sanctioned services are opened to public tender by Bus Éireann.

With regard to the management of the overall network, 95% of Bus Éireann fleet operates two double trips daily, with the bus used for different school runs both morning and evening, comprising two return trips. More than 60% of contractors also operate double trips. It is important to note that 83% of the costs of the scheme comprise payments to contractors. Due to the nature of special educational needs routes, where the individual needs of a child are taken into account, many of these services are operated in single vehicles on a door-to-door basis.

On procurement, more than 90% of routes are subcontracted to private operators and 20% of these routes are tendered on an annual basis by Bus Éireann in compliance with EU guidelines on procurement. We welcome the finding of the Comptroller and Auditor General's report, which demonstrates that Bus Éireann is fully compliant with public procurement standards. This is testament to our stringent and equitable standards, which we apply to all our procedures and practices.

The Comptroller and Auditor General's report highlighted opportunities for improved governance and I will touch on those. There has been the introduction of a service level agreement, there are monthly operations meetings to review periodic financial and statistical reports and there are quarterly meetings with the chief executive and senior officials from the Department. I can provide some context in the information we cover in this regard. We provide a formal budget and projected costs for the financial year, which are agreed at the start of every year, and these consider both internal and external cost drivers, emerging trends, the anticipated level of demand and policy developments which may have a bearing on each of the cost headings each year. We prepare a schedule of monthly payments based on the number of school days each month, the mode of transport and the eligible children travelling. This is furnished to the Department at the beginning of each year, and it is designed to provide an estimate of the annual projected cost. These figures are reviewed at monthly meetings and amended as required. Sometimes there must be change, such as when there is a status red weather warning and costs have to be reviewed.

Individual statutory accounts are not produced for school transport as it is not structured as a separate company within Bus Éireann. However, all finances pertaining to school transport are audited and a separate statement of account for the school transport scheme is prepared as part of the company’s annual independent audit.

Bus Éireann is committed to providing the highest levels of transparency to the Department across all cost allocations. We have engaged specifically with the Department on allocations related to the indirect costs of staff, property and information technology, which account for nearly 85% of these indirect charges. Most recently, we are in joint agreement that all these costs are demonstrably related to school transport. A biannual review is in place to ensure that the basis for cost allocation is robust and transparent. Bus Éireann accounts are fully audited by Deloitte. An additional audit of all school transport activity is undertaken to comply with the summary of accounting arrangement in line with the 1975 agreement. This year and taking into account the comments of the Comptroller and Auditor General, Bus Éireann is in discussions with our auditors regarding a separate audit under general accepted accounting principles for the school transport part of our business.

Bus Éireann’s 2017 accounts noted that a €6.7 million ring-fenced surplus was held within its reserves on behalf of the Department to be used solely for future expenditure on school transport-related activities. In recent years, this has included spend on the creation of a new online ticketing system, an improved telephony and call management system and new school buses, all of which were authorised by the Department. Currently there is no surplus in reserve and our 2018 financial statements will support this position.

On the subject of the special needs scheme, it has evolved in recent years with a significant growth in the provision of transport for special educational needs children. This year, we received in excess of 3,000 new individual special educational needs applications or requests for amendments to services and this contributes to the growing cost of providing services. It is also worth noting that while the volume of work has increased because it is complex to deliver, there has not been a corresponding increase in the costs of administration associated with this.

We welcome the expansion of the scheme in recent years and we are conscious that we must also continue to strategically refine our own resources, processes, procedures and technology supports to ensure we meet its growing needs. We will do all that in close liaison with the Department of Education and Skills. We are committed to full transparency and to continuing this close co-operation as the scheme evolves. We fully enforce the rules of the scheme, comply with the performance requirements of the service level agreement and every day we try to deliver high standards of safety, consistency and reliability for all students who avail of the school transport scheme. We do this on behalf of the State. We have been operating the school transport scheme for over 50 years and we look forward to continuing to providing this vital service into the future.