Oireachtas Joint and Select Committees

Thursday, 24 January 2019

Public Accounts Committee

Special Report No. 103 of the Comptroller and Auditor General: Remuneration of certain senior staff in the University of Limerick and Institute of Technology Sligo

Mr. Seán Ó Foghlú (Secretary General, Department of Education and Skills), Mr. Paul O'Toole(Chief Executive Officer, Higher Education Authority),Professor Desmond Fitzgerald (President, University of Limerick), and Dr. Brendan McCormack (President, Institute of Technology Sligo)called and examined.

9:00 am

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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In this session we will examine the Comptroller and Auditor General's special report No. 103 on the handling of remuneration for certain senior staff in the University of Limerick and Institute of Technology Sligo. We have also requested an update on the implementation of Dr. Thorn's Independent Review of Certain Matters and Allegations Relating to the University of Limerick. In the afternoon session we will examine the Comptroller and Auditor General's special report No. 104 on Waterford Institute of Technology regarding the development and disposal of intellectual property in FeedHenry.

We are joined from the Department of Education and Skills by Mr. Seán Ó Foghlú, Secretary General, Ms Deirdre McDonnell, Mr. William Beausang, Ms Tara Carton, Mr. Tony Gaynor and Ms Stephanie Goode; from the Higher Education Authority by Mr. Paul O'Toole, chief executive officer, Ms Mary Farrelly and Ms Orla Christle; from the University of Limerick by Professor Desmond Fitzgerald, president, Mr. Gerry O'Brien, deputy president; and from the Institute of Technology Sligo by Dr. Brendan McCormack, president.

I remind members, witnesses and those in the Public Gallery that all mobile phones must be switched off or set to airplane mode. Merely putting phones on silent mode may interfere with the recording system. Therefore, I ask that they be set to airplane mode.

I wish to advise the witnesses that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given, and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the provisions of Standing Order 186 that the committee shall refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits of the objectives of such policies.

While we expect witnesses to answer questions put to them clearly and with candour, witnesses can and should expect to be treated fairly and with respect and consideration at all times in accordance with the witness protocol. We will take the Comptroller and Auditor General's opening statement first.

Mr. Seamus McCarthy:

Third level institutions are obliged to comply with employee remuneration schemes approved by the Minister for Education and Skills and the Minister for Public Expenditure and Reform. Special Report No. 103 looks at a number of matters relating to the remuneration of certain senior staff members in University of Limerick, UL, and the Institute of Technology Sligo, where non-compliant remuneration arrangements were entered into. Some public sector pension schemes provide for the discretionary awarding of professional added years for pension purposes. These provisions are intended to compensate for the inability of certain professional or technical staff who, because qualifications or experience conditions applied at their recruitment, would be unable to qualify for a full pension before the mandatory retirement age. Since 2009, awards of professional added years in the five older universities have been approved on a case-by-case basis by the Minister for Education and Skills and the Minister for Public Expenditure and Reform. Until the end of April 2018, the newer universities, that is, Dublin City University and the University of Limerick, operated separate, independent frameworks for the award of professional added years.

We analysed the awards of professional added years in the two universities between 2012 and 2016 and found that the University of Limerick had awarded added years to more employees and with a higher average added value than was the case in Dublin City University. Awards in Dublin City University were made only to academic staff while in the University of Limerick, 18% of awards were to non-academic staff.

Following circulation of a draft of the special report, the Higher Education Authority directed both universities that all applications for professional added years awards from the end of April 2018 would be subject to approval by the pensions unit of the Department of Education and Skills.

In general, subsidiary companies are used by third level education institutions as a means of managing non-core functions in a manner that separates their business affairs from those of the institution. This allows the non-core functions to be run on commercial lines, and for subsidiary employees to be remunerated on competitive market terms. Subsidiary companies usually provide pension benefits for employees on a defined-contribution basis, and such employees are not counted as public sector workers.

In late 2012, the University of Limerick arranged for two senior executives employed by a subsidiary company of the university to be admitted to a university defined benefit pension scheme that was about to close for new entrants. This resulted in the two executives being granted significant additional pension benefits, including professional added years. Those additional benefits have been valued actuarially at over €1.2 million. Claims were advanced that the two executives had been promised pension benefits equivalent to those of employees recruited to the university at the same time, but these claims were not supported by appropriate contract documentation.

In November and December 2011, the University of Limerick agreed with two senior managers that their employment would cease on 29 February 2012 on a severance basis, and severance payments were made on that date. However, prior to their severance, arrangements were put in place with each of the senior managers to continue to make their services available to the university on a consultancy basis. Separate contracts for service were put in place between the university and limited liability companies owned by each senior manager. Evidence of work done in return for one of the consultancy contracts is limited. In that case in particular, it is difficult to see that the value obtained from the contract is commensurate with the payments made.

The combined severance and consultancy arrangements resulted in additional estimated costs of €310,000 in net present value terms, as compared to what the two managers would have received had they continued in employment to the standard minimum retirement age.

The process followed in implementing these two severance deals in the University of Limerick was reported on by me in a previous special report. In the course of the earlier examination, the university misrepresented the circumstances around the severance deals. In particular, it was represented that the severance payments were made because of unspecified performance issues, and the existence of the consultancy arrangements was not disclosed. This misrepresentation of the facts undermines the audit relationship, and is a serious governance failure.

A severance arrangement entered into by Institute of Technology Sligo with a senior manager in 2016 cost the institute over €202,000, when the sanction received from the Department of Education and Skills allowed for payments totalling just over €37,500. The actual expenditure included a sum of almost €108,000 incorrectly classified as payment related to sabbatical leave. The facts of the case did not conform to the circumstances in which sabbatical leave may be granted under the institute’s policy, and the related payment was not submitted, as required, to the institute’s governing body for approval.

It was noted that the institute’s policy on sabbaticals is based on a two-year pilot scheme for the award of sabbatical leave to academic staff issued by the Department of Education and Skills in 2004-2005.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will ask Mr. Ó Foghlú for his opening statement.

Mr. Seán Ó Foghlú:

Good morning, Chairman and members of the committee. I thank the committee for the invitation to be here this morning. I have a lengthy opening statement so I will not read it all but will summarise it.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Sorry for interrupting but can that be circulated so we can refer to it?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Thank you, Chairman.

Mr. Seán Ó Foghlú:

Before I comment specifically on the report, I would like to emphasise the seriousness with which the Department regards the types of governance issues that have been raised in it. I will identify briefly some of the measures that we, together with the Higher Education Authority, HEA, have taken.

We have been working together with the Higher Education Authority on developing and strengthening the governance framework for higher education over the past few years. Measures that have been taken include: the introduction of a new governance framework for the higher education system in 2015; reduced timelines for the submission of draft accounts for certification by the Comptroller and Auditor General and for the submission of annual governance statements to the HEA; the HEA to meet quarterly with the Comptroller and Auditor General to discuss the status of audits of financial statements and any issues arising; in 2016 the HEA commenced the introduction of a programme of rolling reviews on governance matters; and, in addition, the HEA ensures that codes of practice are in place in respect of the institutes of technology and the universities, and an updated code was put in place in January of last year in the institutes of technology and it is anticipated that there will be an updated one for the universities soon.

On the report and the professional added years awards for pension purposes, with effect from 30 April 2018 all applications for the award of professional added years must be submitted to the Department for approval. The Department is also undertaking a review of awards of added years made by UL to employees in the recent past.

On the admission of certain subsidiary company staff into the university pension scheme, the Department with the HEA is conducting a review of the circumstances surrounding the admission of the two individuals into the UL superannuation scheme. This review is examining the circumstances of their entry and any costs associated with the pension benefits and will identify any actions necessary to rectify the pension position if it is determined that they were incorrectly admitted to the scheme.

I refer to the severance payments to senior managers at UL and the Institute of Technology Sligo. On UL, the Department acknowledges the concerns of the Comptroller and Auditor General in respect of the instances of misrepresentation by the university with regard to the circumstances of the severance deals. From my perspective, as Accounting Officer, this is not acceptable practice for any higher education institution. In order to ensure that such misrepresentation is not a feature of the university’s future relationship with the Comptroller and Auditor General, the Department has communicated its serious concerns to the university and highlighted the importance of full disclosure and transparency in responding to all such requests. The university has confirmed to the Department that it has taken specific measures to ensure that all future interactions with the Comptroller and Auditor General are open and transparent.

On IT Sligo, in November 2018 the Department issued a circular to the sector providing guidance on the processing of severance payments in the public sector as well as a new guidance note to the sector in regard to reporting for and sanction of redundancy payments. The Department also agreed to issue guidance to the institutes of technology regarding sabbatical arrangements for academic staff. The guidance will be informed by the findings of the HEA’s third rolling review which is looking specifically at staff remuneration and benefits in higher education institutions, encompassing issues such as compliance with public sector policy on salary and remuneration, pensions, expenses and other related benefits such as sabbatical leave. The review will be completed and published in 2019.

The Department is committed to ensuring that the recommendations of the Comptroller and Auditor General's report are fully implemented and will liaise with the HEA and the institutions as appropriate to facilitate this. We are currently examining the matter of recoupment of funding from higher education institutions where governance breaches have been identified and considering the most appropriate options available to us in that respect.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I wish to put one point to Mr. Ó Foghlú before I take the next opening statement. He is aware that the committee has discussed financial statements in the third level sector at length. He has been involved in those discussions on several occasions. We issued a report on 11 July 2017 regarding the unacceptable delay in receiving accounts from the various institutions. Yesterday, I looked up the most recent set of financial statements published in respect of the three organisations being dealt with today. The most recent set of published audited accounts for the University of Limerick are for the period 1 October 2015 to 30 September 2016, two and a half years ago. I have not seen any published financial statements for the university since then. In his opening remarks, the Secretary General referred to accountability and control. Those remarks ring hollow given that we do not have audited accounts for the past two and a half years. The most recent published financial statements for IT Sligo and Waterford Institute of Technology cover the period 1 September 2015 to 31 August 2016. That is two and a half years ago and we have not received any published financial statements for them since then. We will proceed with the meeting but I cannot emphasise strongly enough to Mr. Ó Foghlú that the Committee of Public Accounts finds it utterly unacceptable for the Department to come before us and talk about control, monitoring and review while the financial statements covering the past two and a half years have not been laid before the Oireachtas. Does Mr. Ó Foghlú have the audited financial statements for the University of Limerick or IT Sligo signed off by the Comptroller and Auditor General and the relevant Accounting Officer or president of the institution?

Mr. Seán Ó Foghlú:

We received the accounts five weeks ago from-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That is a "Yes".

Mr. Seán Ó Foghlú:

Yes, we received them. We have three months to work through them. We must interrogate the accounts in partnership with the HEA and seek clarification on certain matters. We do not publish them immediately. Rather, we interrogate the accounts and then move to publication.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Mr Ó Foghlú is indicating that we can expect to wait three years from the end of the relevant financial year for the accounts to be published. As Accounting Officer, he must accept that is utterly unacceptable. This is all public money. We issued a special report in July 2017 specifically dealing with this issue and I am sure the Secretary General accepted the correctness of those recommendations. Waterford Institute of Technology has previously appeared before the committee on this issue. Here we go again. The last time it appeared, we threatened to send its representatives home because their accounts were two or three years out of date. We are back here two years later in exactly the same scenario.

Mr. Ó Foghlú stated it will take three months for the Department to publish the accounts. If I or a departmental official with a finance brief got those accounts, they could be gone through in a morning. I presume Mr. Ó Foghlú has tasked such officials to go through the accounts. Legally, the Department has three months to go through the accounts but it could do so in three hours if it so chose. The Department has the financial statements from each of the institutions for a certain period but it is not willing to publish them. Does the Department have a query regarding the audit of the Comptroller and Auditor General? I ask Mr. Ó Foghlú to explain this to the public. I do not understand the reason for the delay.

Mr. Seán Ó Foghlú:

It is not just a technical matter of double checking the accounts. There are matters on which we must engage with the HEA or the institutions. It is not a quick examination of the accounts. The Department and the HEA are carrying out our roles in this regard. I agree with the Chair's point that we need to get the accounts to the Comptroller and Auditor General as quickly as possible for audit and then publish them following oversight by the Department and the HEA. However, we must take our role in that process very seriously. It is not a box ticking exercise or a very quick examination. There are regularly matters on which we must seek clarification from the institutions involved.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The first task for the Department was to ensure that the institutions complied with their statutory duties rather than wait as long as two and a half years for the accounts to be submitted to the Department to allow it to begin its inquiries. Mr. Ó Foghlú is stating that the Department will now review the accounts for the period from 1 October 2016 to 30 September 2017, a year and a half ago, and possibly begin raising queries regarding what happened in 2016. It is a little late to be doing that now. The Department should have been doing so all along. A year and a half after year end, nothing should be arriving on Mr. Ó Foghlú's desk from any of these institutions about which he does not already know. What has been happening for the past year and a half such that the Department is now beginning to raise queries? The committee does not accept that there is adequate supervision by the Department if it is only now beginning to ask questions a year and a half after year end.

Mr. Seán Ó Foghlú:

If there were any major issues arising in the accounts, the Comptroller and Auditor General would have raised them with the HEA at their quarterly meetings to which I referred. The Department must go through the accounts when it receives them. It cannot be a case of receive and publish. We need to work through the accounts.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The three institutions appearing today will again come before the committee, along with representatives of the Department, as soon as the financial statements for the period ending September 2017 in the case of UL and 31 August 2017 in the cases of IT Sligo and Waterford Institute of Technology are finalised. We expect representatives of each of the institutions to appear, along with Mr. Ó Foghlú, because somebody must ensure this does not continue. There is no point in the public electing us to do our work on the Committee of Public Accounts, the committee making a recommendation a year and a half ago and life carrying on. That will not happen under my watch as Chair of the committee. We have done tremendous work in getting the education and training boards and other organisations to get their accounts up to scratch. I thought the institutes of technology and universities would be more efficient and effective because the ETBs went through significant restructuring through the years. We want the level of efficiency that is now in the ETB sector to be replicated in the institutes of technology and universities. As Accounting Officer, Mr. Ó Foghlú is primarily responsible for ensuring that the institutes of technology and universities do their job. His job is to ensure they do their job but that has not happened. We will proceed with the meeting but representatives of the three institutions, along with Mr. Ó Foghlú, as Accounting Officer for the Department, will appear before the committee in early course to discuss the financial statements for the periods I mentioned as well as the unaudited financial update covering since the period since year end. We will set a date for that meeting.

We will now move on to the opening statement of Mr. Paul O'Toole of the HEA.

Mr. Paul O'Toole:

I am joined by my colleagues, Ms Mary Farrelly, head of finance and system governance, and Ms Orla Christle, senior manager, system governance. We are pleased to assist the committee in its consideration of the two

special reports of the Comptroller and Auditor General, namely, the handling of remuneration for certain staff in the University of Limerick and the Institute of Technology Sligo, Special Report No. 103, and Waterford Institute of Technology - development and disposal of intellectual property in FeedHenry, Special Report No. 104. As I understand the committee is considering these reports separately, I can provide this opening statement in two parts at its discretion. I will deal with the University of Limerick this morning.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Does Mr. O'Toole have anything on IT Sligo?

Mr. Paul O'Toole:

I will refer to IT Sligo.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The committee has agreed to get all of the opening statements on the record at this point.

Mr. Paul O'Toole:

I will deal with the full statement.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes. We want to get it on the record.

Mr. Paul O'Toole:

In the first instance I would like to provide some general comments on the role of the Higher Education Authority in respect of sectoral governance. The HEA has a significant role in the governance and oversight of public funding provided to higher education institutions, HEIs.

In common with many areas of public administration, this role has evolved and continues to evolve, to ensure that taxpayers’ funds are utilised in a cost-effective and appropriate manner to deliver on the objectives of Government policy for the higher education sector. The HEA implements its responsibilities in this regard primarily through its governance framework for the higher education system. The framework incorporates a series of complementary measures and reports. This oversight function seeks to be respectful of institutional autonomy, but within an accountability framework.

An important development in the evolution of the HEA’s governance and oversight role and responsibilities will be the planned repeal and replacement of its foundation Act, the Higher Education Act 1971. It is expected that the new Act will provide greater clarity in respect of the extent and operation of the HEA’s responsibilities and those of the institutions themselves and the Minister for Education and Skills. Pending the enactment of the new legislation, the HEA will continue to refine and improve its system governance regime. Recent and planned actions include the development and implementation of revised codes of practice for universities and institutes of technology, the continuation of themed rolling reviews of the sector's institutions, and a follow-up report on the 2017 review of intellectual property management and conflicts of interest in partnership with Knowledge Transfer Ireland, KTI. It is important to emphasise that progress on improved governance is being achieved in conjunction with our stakeholders.

I will now refer to the handling of remuneration for certain staff in the University of Limerick and the Institute of Technology Sligo. In his response to chapter three of the Comptroller and Auditor General’s report, the Secretary General of the Department of Education and Skills indicated that the Department and the HEA will work together to examine the matters raised and will ensure corrective action is taken. The HEA is working with the Department in this regard and is continuing to engage with the University of Limerick on these matters. Further details can be provided to the committee as required.

Recommendation 5.2 was that, "The HEA should review payments described as sabbatical leave across the sector to ascertain if similar control weaknesses are happening elsewhere." As part of its governance framework for the higher education system, the HEA has commissioned a review of pay and related practices in higher education institutions ,HEIs, including the matter of sabbatical leave. The fieldwork in seven institutions is under way and a report is expected in the second quarter of this year. Based on this report, the HEA will consider the extension of this review to other institutions.

With regard to other matters in respect of the University of Limerick, UL, the HEA continues to monitor progress on the implementation by the university of the recommendations of the Thorn report. The latest report from UL in respect of the period ending 31 December 2018 indicates that the university has implemented nine of the ten recommendations, with the remaining recommendation in progress. The university has also reported that 35 of the 42 recommendations arising from its internal review of procedures are completed, with the remaining seven in progress. The HEA will continue to monitor the situation and, in conjunction with the annual governance statement of UL to be provided by 31 March of this year and the HEA’s rolling review programme, we will work with UL to ensure robust governance polices and practice are in place.

I will now move on to the issue of Waterford Institute of Technology and the development and disposal of intellectual property in FeedHenry. I will initially update the committee in respect of actions arising from the Comptroller and Auditor General’s report and then provide updates on the review being carried out by the HEA itself.

I will begin with progress on implementing the recommendations to the HEA in special report No. 104 of the Comptroller and Auditor General. Recommendation 2.2 was that "The HEA should require as part of the governance statements that HEIs submit a schedule of all their disposals and the consideration received." This recommendation has been implemented and the schedule is being sought from HEIs, commencing with the period 2017 to 2018.

Recommendation 3.4 was that "The HEA should ensure that HEIs have clear and consistent policies on when a full-time staff member at a HEI may directly receive equity from a spin-out." This recommendation has been incorporated into a new intellectual property protocol developed by KTI in consultation with the HEA. The new protocol is being submitted to the Minister for Business, Enterprise and Innovation for approval.

Recommendation 3.5 was that "The HEA should ensure that HEIs have policies in place to ensure that staff involved in negotiating the sale of valuable IP do not have a reporting relationship and are not subject to direction by an interested party." This recommendation is being incorporated into both the new IP protocol mentioned earlier and the revised annual governance statements to be completed by higher education institutions, HEIs.

Recommendation 4.3 was that "The HEA should ensure that HEIs’ policies on creator reward schemes take account of potential situations where HEI staff have a financial interest in a company acquiring IP." As with the earlier recommendations, this recommendation is being incorporated into both the new IP protocol and the revised annual governance statements to be completed by HEIs.

I will now move on to the independent review of the spin-out and sale of companies from the telecommunications software and systems group, TSSG, at Waterford Institute of Technology. This review has been discussed previously by the Committee of Public Accounts. Arising from this, the committee will be aware that the HEA commissioned this review and that a draft report was prepared. Subsequently, the HEA sought general legal advice as to its powers to conduct reviews of this nature. In turn, the Department of Education and Skills sought advice from the Attorney General on the general powers of the HEA in respect of conducting reviews on a broader basis. The Department of Education and Skills wrote to the committee on 18 December 2018 in this regard. On receipt of a letter from the Department of Education and Skills on 7 December 2018 in respect of the advice of the Attorney General, the HEA has in turn sought further legal advice. Our legal advisers considered the specific nature of the Waterford Institute of Technology review in light of the advice received from the Attorney General and the previous legal advice provided.

While this matter falls to be considered further by the board of the HEA at its meeting next week, it is important to take this opportunity to provide the committee with a summary of the advice received. In short, our legal advice is that the HEA does not have the power to conduct reviews or investigations of the specific nature of the one that was under way in respect of Waterford Institute of Technology. This is regrettable as the clear intent of the HEA, as stated in evidence to this committee, was to bring this review to a conclusion and publish its report. Nevertheless, the advice provided to the HEA makes it clear that this is not possible. As I have indicated, the matter will be considered at the meeting of the board of the HEA next week, including a consideration of the next steps. In this regard, it will be important to ensure that the HEA communicates with each of the approximately 50 people who contributed to the review and to whom we are grateful for their input.

Notwithstanding that this specific review cannot be completed, the HEA intends to continue its work with Knowledge Transfer Ireland and the higher education institutions to ensure that robust polices are in place and are being implemented. In line with the recommendations of the Comptroller and Auditor General, this work is well under way with specific new reporting requirements in place for HEIs reporting in their annual governance statements, a revised IP protocol at approval stage, and a review of the updated requirements for HEIs to be undertaken by the HEA in 2019.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Deputy Cullinane has a quick comment on the issues in respect of Waterford Institute of Technology. We do not normally take comments at this stage, but Mr. O'Toole has highlighted a very significant, major and substantial issue that will be before the committee and we want to deal with it immediately.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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First, I thank Mr. O'Toole for his opening statement. On the WIT report, representatives of the institute will be before us this afternoon but they will be here to deal with the special report of the Comptroller and Auditor General which dealt with only one small element of spin-outs, the issue of FeedHenry. As Mr. O'Toole will know, the HEA's report was much more substantial. The 50 whistleblowers are not looking for gratitude. That is the first point I will make. They will be thankful for any gratitude they are given, but that is not what they want. They have engaged in a process.

My question is both for Mr. O'Toole and for the Department. I know that the Secretary General is not in a position to respond so somebody else from the Department will have to. The legal advice is that the draft report which is in situcannot be published because it strayed outside the powers of the HEA. It is still unclear what that means. Was it the case that the conclusions which were drawn were so significant that they strayed outside those powers or was it an issue with the remit and terms of reference in the first instance? That has not been clarified for us. In any event, when Dr. Love was before the committee before the end of last year, he said that the facts are the same, that the facts established are not in question, and that rather it is a question of the powers.

The issue is what happens next. It should not be a matter of politely responding to the 50 people who engaged, thanking them very much, and giving them our gratitude, but a matter of deciding what to do now. Mr. Ó Foghlú or somebody else from the Department can respond to this. There is the potential for the Department to appoint a statutory inspector to examine this. That has happened in Waterford and other areas. Are we looking at a commission of inquiry?

What is the mechanism now to deal with these issues? Serious questions have been raised by whistleblowers. An additional whistleblower has come forward and will possibly be an aspect of whatever happens next. The HEA board will examine this but I do not know whether it has any authority to contact a Minister or look at other options. That probably falls to the Department. I will strongly state - I seek the support of the committee on this - that we certainly will not be letting this lie and that that will be the end of it because we overstepped the mark in the context of our powers. That might have been the case - and that is sloppy on the part of the HEA - but what happens next? Before the end of this meeting, I want the HEA and the Department to outline what are the options. We will certainly be following through on that.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Mr. O'Toole can answer briefly but it is really up to the Department. The HEA is outside its remit and off the pitch to an extent. There is a big issue that merited all of this. There is an issue of remit. It is certainly within the power of the Department to do something. Would Mr. O'Toole like to comment?

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Before that, may I ask one question?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I am not going to take general questions; this is the only specific question.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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What prompted the HEA to seek legal advice in retrospect? Was pressure coming from anywhere to seek that legal advice? We need to know what the drivers are here.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I am not taking any further questions. I will take a quick response and, if needs be, we will return to the matter. We were of the view that the process was there and now we are told it is not.

Mr. Paul O'Toole:

To address Deputy Cullinane's point, I referred to the 50 people who contributed to the review so that they will not be forgotten. Perhaps I could have phrased it differently but we are very conscious of the duty of care to the people who came forward as part of that review. It is important to stated that, within that group, there are people who made disclosures and individuals who contributed and had different views and believed that their actions were appropriate. There is a conflict and contradiction in that.

The fact that we do not have those specific powers that would allow us to close this specific report does not mean the issues have gone away. That is something I want to discuss with the board in the context of the appropriate next steps. The latter will involve a consideration of what powers we do possess. We have powers to form a view and to put that forward to the Minister for the governing authority. I am also aware that the Department has written to the governing body in some detail and that is going to be part of the mix. If I am in any way conveying that we simply see this as a chapter shut, that is the not the intention.

To answer Deputy Catherine Murphy's question about what prompted the legal advice, I understand this was given in evidence before the committee at some stage last year. As part of a drafting process, the draft was shared with people who would be, if you like, part of the findings which may have occurred. They submitted their views in respect of the draft report. My predecessor at that point took a view about the powers of the HEA which he shared with the committee. The Department sought clarification on that and got further advice from the Attorney General. I understand the Department has shared a summary of that advice with the committee. That advice stated that the HEA would need to take its own legal advice on the specifics of the matter and I was prompted to do that when I came into the role, and here we are today.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Does the Department want to make a brief comment?

Mr. William Beausang:

I hope it is clear to the Deputy and the committee that the Department is taking these issues seriously. The CEO of the HEA has already referenced the letter we issued to Waterford IT with the detailed set of questions that we have asked for responses to, but we are in a process with the HEA. There is a ministerial power, under section 20 of the Regional Technical Colleges Act, which allows the Minister to commission an investigation and appoint a reviewer to look at the performance of functions of any colleges or governing bodies. In light of what has transpired with the HEA review, it is important for us to be legally advised on the scope of that power. We are conscious that it is there and of the considerations that the CEO of the HEA has referenced, and the concerns raised or referenced in a wider context than the report of the Comptroller and Auditor General. We are conscious that the Comptroller and Auditor General has highlighted a set of issues in respect of which we need to bring closure and clarity. I cannot prejudge ministerial decision-making and, in light of the history of this issue, I am sure the Deputy will understand that it is important that we are seen to be approaching this without prejudice or bias.

The HEA board may, and probably will, decide to give advice to the Department. We are considering our assessment of the issues raised in the report. We are conscious of the concerns that have been raised by individuals that go wider than some of the issues in the report of the Comptroller and Auditor General. We will be taking all those issues into account in our assessment and advice to the Minister in due course in light of the information that we get back from the questions we have posed for Waterford IT.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I am going to close our discussion on this topic. It will be included in our work programme. We will be coming back to our guests and they will be coming back to us. This was unusual but the committee wanted to deal with this issue at this early stage of the meeting, rather than later on, because there is a separate issue from the Comptroller and Auditor General report.

I invite Dr. Ftizgerald, from the University of Limerick, to make his opening statement.

Professor Desmond Fitzgerald:

I am accompanied by Mr. Gerry O'Brien, deputy president, Mr. Liam O'Reilly, the head of IT, and Mr. Eamonn Moran, the director of strategy.

We have been asked to address issues relating to the report of the Comptroller and Auditor General and also to provide an update on the implementation of the recommendations in the Thorn report. To give some context to that, my first action, on 2 May 2017 - my first day as president of the university - was to ask the then Minister for Education and Skills for an independent investigation of the university and that led to the Thorn reports. The purpose of these reports, as with the investigation we did within the university and referred to as the Deloitte report, was to find out what had happened in the university over the previous years, to be completely transparent, to address the issues raised by whistleblowers, other members of staff and former members of staff and to guide reforms in the governance and management of the university.

At my previous appearance before the Committee of Public Accounts, the Comptroller and Auditor General informed me that there would be an investigation on matters relating to pensions. My concern with these reports is that the University of Limerick had, in the past, misrepresented facts to the Department of Education and Skills, the HEA, the Comptroller and Auditor General, the Committee of Public Accounts and the wider public. It was and is essential to regain the trust of those to whom we report and of the people we serve in Ireland, particularly in the mid-west region. I have done everything in my power to achieve this.

I have detailed to the committee in writing the steps taken by the university to put more robust management and governance systems in place. Prior to taking up the appointment as president, I had advised governing authority of the University of Limerick that a new management system was required in order to separate operational matters from academic functions and have a particular focus on corporate functions, including finance, HR, IT and registry. As a consequence, a chief operating officer and registrar was appointed who also holds the post of deputy president. Since then, the university has undertaken much work to address all issues raised by the reports. Progress has been made on a number of fronts to improve governance and controls and this includes independent advice which led to the establishment of a new governing authority with fewer members and with specialist expertise and experience. New senior management structures have been put in place, with several senior appointments made, including a director of human resources.

A number of reviews have underpinned the restructuring of the key functions such as HR and finance. There has been strict adherence to accurate reporting to the HEA, the Department and other regulatory bodies.

University of Limerick was named The Sunday TimesUniversity of the Year 2019. Student satisfaction rates, based on national surveys, have never been stronger. The University of Limerick has enviable graduate employability, with just 2% of our students seeking work 12 months after graduation. Employers repeatedly point to the quality of our graduates in their decision to establish and grow their companies in the region. The University of Limerick is undoubtedly making a unique contribution to the economic success of the mid-west, including the palpable resurgence of Limerick city. It has just announced the development of a Limerick city campus which will increase capacity by 2,000 students and focus on entrepreneurship and applications of technology in business and industry.

From the outset, my aim has been to be transparent and truthful, while ensuring the highest standards of excellence, integrity and public accountability are adhered to. It is in this spirit that I appear before the committee.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I thank Professor Fitzgerald for his opening statement. I invite Dr. Brendan McCormack to make his opening statement on behalf of IT Sligo.

Dr. Brendan McCormack:

I thank the Chairman and members for the invitation to appear before the committee. IT Sligo, formerly known as Sligo Regional Technical College, will have been in existence for 50 years in 2020. We have a strong track record of performance in the provision of education in the north west. This includes the provision of further education apprenticeship awards and higher education awards from level 6 to level 10. Much of this education is delivered online.

The institute is well managed and has never been in financial deficit. As part of our risk management policy, we have a requirement to put 3% of our annual revenue into our reserves and have done this consistently year on year. It has allowed us to invest €35 million of our own funds in new on-campus developments in the past ten years, in addition to €16 million in funding received from the Department in the same period.

The Comptroller and Auditor General carried out the review under consideration and completed the report in June 2018. The report examined whether the resources of the higher education institutes had been used and disposed of economically and efficiently and on the most favourable terms reasonably obtainable with respect to the remuneration of certain senior staff. Chapter 5 of the report deals with a single severance payment made by IT Sligo. It was a once-off payment related to one individual. It is not cyclical and has not been repeated by the institute.

In summary, a severance package was approved by the Department of Education and Skills for an employee whose five-year fixed term contract was set to expire in August 2015. At the end of the five-year contract, the institute offered the employee a new specific-purpose contract, pending the recruitment of a candidate as part of a proposed restructuring of management roles. Employment contractual issues and other matters with the employee developed soon afterwards. The institute was incurring ongoing legal fees in dealing with the individual's claim for permanency. It was also incurring ongoing legal costs to resolve other outstanding issues.

With the approval of the governing body, the president at the time engaged legal advisers to mediate to resolve matters with the employee, chaired by an accredited mediator. The negotiations, in which both sides were legally represented, resulted in a redundancy payment, supplemented by paid time off, which was agreed to be and characterised as a sabbatical, although it was not within the terms of the 2004 pilot project circular on sabbatical leave. On legal advice, the institute signed a confidentiality agreement on the termination of employment by reason of redundancy, with effect from February 2017. As a consequence, it became liable for a higher level of severance pay than originally approved by the Department. The institute acknowledges that such an agreement and the use of the sabbatical leave policy should not have been entered into without sanction from the Department.

The report makes one conclusion and three recommendations. The conclusion, as we have heard, is that IT Sligo entered into a settlement worth over €202,000 with a former employee when it only had sanction to pay just over €37,500. The recommendations have been referred to by the Comptroller and Auditor General, the Department and the HEA. The institute accepts the conclusion and agrees with the recommendations. It will no longer enter into sabbatical leave or confidentiality agreements that preclude the disclosure of details of the agreement reached in the financial statements, unless it obtains formal approval from the Department, or on foot of legal advice.

A new code of governance for institutes of technology has been adopted by the governing body. IT Sligo is striving to ensure ongoing compliance with the code and the necessary systems will be put in place to ensure approved processes are followed. The institute is compliant with the Civil Service and public service circular letters DPER 09/18 and Department of Education and Skills 66/18, as circulated in 2018. It is also amending its risk management policy to incorporate the requirements mentioned and the guidance included in the good practice framework on severance payments.

The agreement related to a single severance payment made by IT Sligo was based on legal advice to mitigate the ongoing financial exposure, given the circumstances. The institute acknowledges that it should have informed the Department of Education and Skills of the new severance arrangements agreed with the individual concerned and that it should not have used the sabbatical leave policy as a vehicle to enact the agreement. The conditions that led to the individual case will not arise again.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I thank Dr. McCormack. The first speaker is Deputy Connolly who is to be followed by Deputies Cullinane, MacSharry and Catherine Murphy. The first speaker has 20 minutes; the second will have 15, while all others will have ten. We should stick to the schedule, with a view to concluding this session before the votes are taken in the Dáil.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The delegates are all welcome. I thank Dr. Brendan McCormack, in particular, for dealing with the one issue brought up in the case of IT Sligo and using his opening statement to deal with it, rather than tell us how good the college is, which is not the issue before us. I welcome what he has done, in addition to coming with his hands up. I do not know whether I can continue to read the documentation we are receiving. I welcome all of the briefing papers and background material. In the period of just over two and a half years for which I have been a member of the committee I have found reading the Comptroller and Auditor General's report disturbing, particularly on the University of Limerick. I will come back to Professor Fitzgerald on the matter of whether he has read it and to hear his thoughts on the stark findings outlined. I have read all of the reports every single week and this one particularly drew my attention but I will leave the emotion aside. Reading about misrepresentation and non-disclosure in Limerick, as set out in the report, is truly disturbing. I will come back to that issue.

The report contains four chapters, in addition to the introduction. Chapter 2 refers to the added years. The University of Limerick distinguished itself by being more generous and rewarding more people with added years. It was one of two institutions, the other being in Dublin. I understand from the Department that this has now changed and the position is that all universities will have to report to it and receive permission. Is that now the position on added years in the receipt of pensions?

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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There is an ongoing review of added-on years in the past in the University of Limerick. Where is that at? Who is doing it?

Professor Desmond Fitzgerald:

Up until April---

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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No, I do not need the background. I only have a certain amount of time and any amount of questions. There is a review of added-on years in the past. Who is doing that review? Where is at? Is it the Department?

Mr. Seán Ó Foghlú:

The Department of Education and Skills is undertaking that review. We have received some information from the University of Limerick. We are working through it and seeking further information.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The Secretary General stated his Department has recently commenced a review of previous awards of professional added-on years in the University of Limerick. When did it start? Who is doing it? When will it be completed?

Mr. Seán Ó Foghlú:

It started in the autumn and has been undertaken by departmental staff. We are discussing the issues with staff in the Higher Education Authority, HEA, and the Department of Public Expenditure and Reform. We are seeking clarification from the University of Limerick on several cases. The time in which it will be completed will depend on the amount of time it takes to work through the detailed information. We are looking at all the cases where added years were awarded from 2012 onwards. We will make a decision on whether we have to look at further cases when we have completed that.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Why was 2012 picked?

Mr. Seán Ó Foghlú:

It was picked because it was highlighted in the Comptroller and Auditor General’s report.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Will the Department keep an open mind as to whether it will go back further?

Mr. Seán Ó Foghlú:

We will.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What figures are in question? What information has the Department got so far?

Mr. Seán Ó Foghlú:

We have looked at 27 cases so far. We are getting further information on the other cases in the report. Of the 27 so far, we have agreed in nine of the cases to the professional added years. We are getting more information on the rest of them.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Is the Department looking retrospectively at the number of people who had additional hours added on?

Mr. Seán Ó Foghlú:

We are looking retrospectively at decisions made by the University of Limerick to add years. In several of the cases, the people may not have retired. That is part of the process.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That started in August. It has been done internally. The Department does not know when it will be completed.

Mr. Seán Ó Foghlú:

It depends on the nature of the issues which arise.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Is the University of Limerick co-operating with this?

Mr. Seán Ó Foghlú:

Yes, it is.

Professor Desmond Fitzgerald:

We fully co-operate with the investigations and give full access to-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Is there any review by the university itself on the extra years added on?

Professor Desmond Fitzgerald:

No. We were informed by the Department that it was doing the review. We just made ourselves available to be able to help with that review.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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On chapter 3, two gentlemen were allowed to come from the subsidiary company into the university.

Mr. Seamus McCarthy:

It was two persons.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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It was two persons. Is it correct that they came through secondment and then direct transfer in order to benefit from the pensions scheme?

Professor Desmond Fitzgerald:

It arose from a commitment which was made by the two individuals. When the new head of finance came in, he was informed by the previous head of finance that there was a commitment that they would have the equivalent of a University of Limerick pension.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Did Professor Fitzgerald read this chapter?

Professor Desmond Fitzgerald:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Did he see any of the evidence that the Comptroller and Auditor General’s office found regarding this commitment?

Professor Desmond Fitzgerald:

There was no written evidence of the commitment.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Did Professor Fitzgerald see any evidence of that commitment?

Professor Desmond Fitzgerald:

No, I did not.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Based on a commitment given with no evidence to it, arrangements were made to allow two persons from a subsidiary company become employees of the University of Limerick and benefit from a package. Is that correct?

Professor Desmond Fitzgerald:

They were put on secondment to the University of Limerick and given a University of Limerick defined benefits pension.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What concerned Professor Fitzgerald when he read that chapter about these two persons and the process leading to giving them this benefit?

Professor Desmond Fitzgerald:

I was very concerned for a number of reasons. We guard the separation of our subsidiary companies from the university. There should not be any overlap of that kind. In addition, the rationale did not make sense because it changed on several occasions.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That is right.

Professor Desmond Fitzgerald:

The other issue was the increase in costs that could be borne by the university using public moneys. We can assure the committee that this will not happen. We will be using our commercial income to make up the difference.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I know Professor Fitzgerald is a new president and in his second year. I read the report. Is it correct that the narrative changed as to how this was facilitated?

Professor Desmond Fitzgerald:

It did. The approach which was taken would seem to have been to find a way to adhere to what apparently was a commitment to these two individuals, even though it was not written down.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Exactly. I agree with the first part of that. What comes across is that a way was found to facilitate the two persons at any cost. It did not matter. There were considerable gaps. It started in 2007 and went forward. There was a three and a half year gap to where it was discussed. When one reads the chapter on what happened from 2007 to 2012, the governance issue, namely who was monitoring this, beggars belief.

Professor Desmond Fitzgerald:

There were serious issues on the governance side in that this was never approved by the governing authority. As far as I can tell, it was not approved by the finance committee. It was brought to the university’s recruitment committee but was put forward as a cost-neutral transfer of the individuals’ pension rights.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Was it cost-neutral?

Professor Desmond Fitzgerald:

It was not. I said it was put forward as being cost-neutral.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Was it?

Professor Desmond Fitzgerald:

No. The Comptroller and Auditor General’s calculations show there is a difference between what the costs would have been if the individuals had remained in the Plassey Campus Centre, PCC, company compared to what the costs-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What was the difference? What was the cost to the public purse?

Professor Desmond Fitzgerald:

In total, in terms of lump sum, it was €1.2 million. In terms of the annual costs, it was over €400,000.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Has the revised code of governance been finalised?

Mr. Seán Ó Foghlú:

No, it is in the process of being finalised.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The report was published in August 2018 and the answer provided in it stated the code was being finalised. We are now in January. When will it be finalised?

Mr. Seán Ó Foghlú:

The report I think was published in November. Obviously, it came from the Comptroller and Auditor General to us in August. Together with the HEA, we are working that through with the universities and we hope to have it finalised in the near future.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Will it be this month or next month?

Ms Orla Christle:

I understand it is going to the presidents of the universities. Then it will be considered by the governing authorities of each university. Most of them will have signed off on it by February with the last one doing so in March. We expect it will be finalised by March.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The Comptroller and Auditor General recommended the university should examine all its subsidiary companies. The response to that was to be completed by the end of December 2018. Has that been completed?

Professor Desmond Fitzgerald:

Yes, we have reviewed all of our subsidiary-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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How many subsidiary companies?

Professor Desmond Fitzgerald:

Our Plassey campus company has two other subsidiaries, the Plassey arena and the university concert hall. They are the main companies.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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How many subsidiary companies have been reviewed?

Mr. Gerry O'Brien:

We reviewed all the subsidiary companies-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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How many? What is the number?

Mr. Gerry O'Brien:

Six. I understand the question. There was an issue in one company. It was the UCD alumni company which has four staff. There was no pension scheme in place for those staff. When we found that we put one in place and we provided employer contributions to those individuals from the date the university had that company.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I am sorry, but can the witness repeat that?

Mr. Gerry O'Brien:

When we looked at the UCD alumni there were four staff. There was no pension arrangement in place for those four staff so the university put a pension scheme in place. The university had taken over that company in 2013 so we backdated pension contributions from the university for those staff for that period to date.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Was UCD alumni a separate subsidiary company?

Mr. Gerry O'Brien:

Yes. Its purpose is to provide services to develop the alumni relations of our alumni around the world.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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What is the exact name of the company?

Mr. Gerry O'Brien:

UCD Alumni DAC.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The witness will have to help me with this. The university carried out a review of the subsidiaries, which total six.

Mr. Gerry O'Brien:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Is that the total number of subsidiaries?

Mr. Gerry O'Brien:

There are other subsidiaries that do not have any staff. The purpose of the recommendation was to look specifically at the issue-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Can the witnesses just answer my question? They are the experts. I have only limited time and limited knowledge.

Mr. Gerry O'Brien:

"Yes" is the answer to the question. All subsidiaries were reviewed.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The president talked about bringing back confidence, and that is exactly what we want. There were whistleblowers before the committee during the week. It is very difficult to hear about the ongoing pain and anguish of those whistleblowers. I cannot go into detail, and I do not wish to, but we have listened and read. When I ask a question on how many companies have been reviewed I expect an answer. The witness said the university has reviewed six. Then I asked if that was the total number of subsidiary companies.

Mr. Gerry O'Brien:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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A minute ago Mr. O'Brien said it was not and that there were other subsidiary companies with no staff.

Mr. Gerry O'Brien:

A number of the other subsidiary companies with no staff have been closed. Included in those, and I can list them for the Deputy-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Not now on my time. The witness can provide a note-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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In the financial statements there is a list of 12 companies that are subsidiaries.

Mr. Gerry O'Brien:

Some of those companies have been closed since then.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes, but they are in the financial statements as subsidiaries.

Mr. Gerry O'Brien:

Yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Can you give us a figure? Is it 12? The Deputy has asked how many there are three times but has not received an answer.

Mr. Gerry O'Brien:

I will refer back to you with the exact number.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It is in the financial statements.

Mr. Gerry O'Brien:

Yes, but those financial statements are out of date.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That is the biggest understatement of all time. We have just discussed it with the Secretary General and that is all we have in front of us. That says it all.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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There were issues with the alumni one-----

Mr. Gerry O'Brien:

That is right.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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As a subsidiary company provision was not made for pensions for those-----

Mr. Gerry O'Brien:

That is correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Is it correct that the university has taken over that responsibility?

Mr. Gerry O'Brien:

UCD Alumni DAC is funded from the university by a contribution to allow it to perform the services of alumni. The company had a statutory responsibility to provide a pension to the staff and when we found it had not provided it the university provided funding.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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If the company had a responsibility to provide pensions why did it not comply with that duty?

Mr. Gerry O'Brien:

I do not know.

Professor Desmond Fitzgerald:

We have been trying to address many issues in the subsidiary companies, particularly their codes of governance and making sure that they are properly aligned to the institution in respect of their structure and board members. We are working through all those issues to ensure the companies are functioning properly and are more aligned to what the university requires from them.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Does the witness know how that answer sounds to people listening to it? I am not blaming him, but how it sounds. We are dealing with subsidiary companies and spin-off companies, which we will reach later, that have huge implications for the public purse. In the case of the one we will discuss this afternoon a vast amount of money was made by a private company as a result of a previous subsidiary or spin-off company. Are there not huge implications here in terms of governance?

Professor Desmond Fitzgerald:

There are.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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At this point in time the university is looking back as a result of "Prime Time Investigates" and two reports from the Comptroller and Auditor General, one of which is before us and a more general one relating to severance payments, to which I will return. In addition, when I try to get my head around it, I have lost count of how many reports there are including from the Comptroller and Auditor General and Deloitte. I will come back to you, Chairman, to get a list of them over the last five to ten years; perhaps ten years. I refer to Deloitte, Howarth, which produced two reports relating to governance, Mazars, Thorn, mediators, investigators and Kieran Mulvey, and that is only touching on them. There are many other investigators or companies appointed to bring some type of accountability in respect of taxpayers' money to a system that should have its governance in place and should be working. On top of that we have the whistleblowers. This is to try to bring some level of accountability to an institution that is supposedly a third level institution that prides itself on its standards and open mind. Forgive my frustration, but that is where I am coming from.

I will return to specific questions on chapter 4 and severance payments to senior managers. Has Professor Fitzgerald read this chapter?

Professor Desmond Fitzgerald:

I have.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Does he wish to comment on it?

Professor Desmond Fitzgerald:

I will not go through the history of it. We had all that information through our internal audit, the Deloitte report, in August 2017.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Does Professor Fitzgerald know offhand how many times Deloitte has been employed by the university to carry out reports? How many reports are there? Professor Fitzgerald referred to one of them.

Professor Desmond Fitzgerald:

Deloitte is our internal auditor.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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It has been commissioned to do various reports.

Professor Desmond Fitzgerald:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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How many reports?

Professor Desmond Fitzgerald:

Since I have been there the only report we commissioned from it was the internal audit following the "Prime Time Investigates" television programme.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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From what I can see there are at least four or five others in the recent past.

Professor Desmond Fitzgerald:

I am referring to what I was asked-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Professor Fitzgerald does not know at this point how many reports it has done.

Professor Desmond Fitzgerald:

No, I know of other reports. We sent one in yesterday to the committee, which was the 2015 report on our information systems.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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How many reports has Deloitte done on different matters?

Professor Desmond Fitzgerald:

Over the last few years-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes.

Professor Desmond Fitzgerald:

-----they are the only two I am aware of but there may have been more reports.

Mr. Gerry O'Brien:

As the internal auditors it would do six or seven a year. The special reports were the Deloitte IT report and the one on the various irregularities that came up.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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There were only two special reports.

Professor Desmond Fitzgerald:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Okay. With regard to the severance payments, I asked Professor Fitzgerald if he had read the chapter and if he had a comment. This relates to two persons receiving a severance payment. Is that right?

Professor Desmond Fitzgerald:

Correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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They are re-employed.

Professor Desmond Fitzgerald:

That is correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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They were re-employed through two companies.

Professor Desmond Fitzgerald:

Yes, they were re-employed through two companies.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That is all arranged before they leave and the severance payments are given. Is that right?

Professor Desmond Fitzgerald:

Yes, in both cases.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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They were given advice with regard to the severance payment and the companies.

Professor Desmond Fitzgerald:

They were given advice by PwC at a cost of €6,000.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Who paid for that?

Professor Desmond Fitzgerald:

The university.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I hope I am not mixing up the two, and the Comptroller and Auditor General can correct me if I am. Were there issues relating to performance with these two people?

Professor Desmond Fitzgerald:

This has been raised a number of times as to why-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Just answer my question, please. Were there issues relating to performance?

Professor Desmond Fitzgerald:

According to the previous president, there were issues with one person and not with another.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Was that accurate?

Professor Desmond Fitzgerald:

Yes, that was accurate. I should add that on a number of occasions the regulatory bodies were giving different information.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Perhaps I am not being clear enough. Am I correct in saying that performance issues relating to one individual were highlighted?

Professor Desmond Fitzgerald:

There was no formal performance issue. What I was explaining was the rationale given by the former president but we could find no evidence of a performance issue.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I do not think there was any documentation or evidence concerning a performance issue. Was there any documentation or evidence to be seen?

Professor Desmond Fitzgerald:

There was no documentation.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Did Professor Fitzgerald read this chapter? I do not mean to put anybody on the spot but if one reads this chapter, one can see that it is difficult to read. In respect of conclusions and recommendations, it states the university withheld relevant and material from the Special Report No. 91, the examination team of the Comptroller and Auditor General. It withheld information from the Committee of Public Accounts, the Department of Education and Skills and the company it engaged for legal advice. The university withheld information.

Professor Desmond Fitzgerald:

I appreciate that my opening statement was broad because there was a lot of issues that were going to come up today. From the outset, I was very concerned-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I realise Professor Fitzgerald came in as a new person and put his hands up and that he is attempting to bring about a new culture in the university but for me to get reassurance about that, I just look at the reports, listen to the responses and try to see what changes the university has brought in. The starting point is the chapter of the Comptroller and Auditor General's report because he is highlighting the situation in stark terms.

Professor Desmond Fitzgerald:

I have responded to the various reports, including to the HEA, the Comptroller and Auditor General and the Committee of Public Accounts, to demonstrate that we are open to making sure the information we give to various regulatory bodies is correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Paragraph 4.7.1. states that the reasons the university has advanced for the severance deals are not credible. That is a very strong statement.

Professor Desmond Fitzgerald:

That is correct. I did not make that statement.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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If the university had made that statement, we would not be here because the university would have looked at and done something about it. We are here because this has come out as a result of the Comptroller and Auditor General's report, "RTE Investigates" and all the other reports. To that melee, we can add all the whistleblowers, who have suffered dreadfully, an issue we cannot go into today. They have drawn our attention to various issues. If this was the culture regarding severance payments - taking two persons from a subsidiary company and facilitating their pension - it begs the question of what the culture was regarding ordinary employees on the ground who came forward to highlight inconsistencies and questions about financial irregularities regarding receipts. Was it not very difficult for them?

Professor Desmond Fitzgerald:

It was very difficult. I have always said that I appreciated the fact that they came forward. That was why when I asked for the Thorn investigation, any staff member or former staff member was given the opportunity to talk to the report's authors without any confidentiality being imposed by the university. I have to agree with the Deputy that there was a culture where inaccurate information was provided. Information was misrepresented to the different bodies but this does not happen anymore. I have worked hard to make sure we put systems in place that will ensure that the committee can have confidence in the information we give it.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Paragraph 3.20 states that both senior executives are recorded in the company's board minutes as being in attendance at board meetings when the pensions matter was discussed. We are returning to the issue of pensions. When we go through that paragraph, we read that they absented themselves but it is not recorded that they did so. The university has stated that the practice is to show those present at a meeting and not to record those who absent themselves for certain periods. Is this not incredible?

Professor Desmond Fitzgerald:

It is.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Something very serious is being discussed, the two persons affected by it are in the room and the university says they are not there but there is no record to say they left. Has that changed?

Professor Desmond Fitzgerald:

It has changed. We produced two reports on the governance of the university that were the basis for restructuring the governing authority but also changing the way things were done at the different-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Has the practice changed to the effect that when people leave the room because of a conflict of interest, it is recorded?

Professor Desmond Fitzgerald:

It is recorded.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Is it not incredible that it took the Howard report to do that?

Professor Desmond Fitzgerald:

No, the Howard report was not just about that. It was a key issue that came up in the Deloitte report about how we were carrying out our business. I agree with the Deputy. There were things that needed to be changed and I can assure her that since I have assumed office, I have made those changes.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I will stick to my 15 minutes because I want to allow colleagues to come in and we have an afternoon session. I concur with Deputy Connolly when she rightly pointed out that Dr. McCormack's opening statement dealt conclusively with the issues. Sligo Institute of Technology was exemplary in how it responded to the Comptroller and Auditor General's report. If other institutions behaved in the same manner, they would not have to spend as much time before the committee so I commend Dr. McCormack first and foremost.

I return to some points made by Professor Fitzgerald in his opening statement. He said that when he assumed his role, he commissioned an independent report to examine issues raised by whistleblowers. I assume this was the Deloitte report. Is that correct?

Professor Desmond Fitzgerald:

No, that was the Thorn report.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Did a separate Deloitte report examine allegations made by whistleblowers?

Professor Desmond Fitzgerald:

The Deloitte report looked at four things: the further study policy, severance payments, conflicts of interest and, importantly, the reporting of what happened in the university to the different regulatory bodies.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Whistleblowers B and C, for example, did not feature in the Deloitte report. Did they feature in the Thorn report?

Professor Desmond Fitzgerald:

No, it was a separate type of report. The Deloitte report involved an internal audit to discover the specifics around what had happened with regard to the things highlighted in the edition of "RTE Investigates" broadcast on 25 May 2017.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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So Professor Fitzgerald is talking about the Thorn report.

Professor Desmond Fitzgerald:

The Deloitte report was the one related to "Prime Time Investigates".

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Professor Fitzgerald has clarified that. We will not go into issues raised by whistleblower G regarding his or her own personal circumstances, although perhaps we should do so at some point in private session. I wish to address a number of allegations made by whistleblower G relating to the student recording systems. An allegation was made that possibly hundreds and certainly a large number of students' grades and possibly even their degrees were understated. We must bear in mind that Dr. Thorn said that he believed that whistleblower G to be a very credible witness. What is the university doing about the concerns raised by this whistleblower regarding student data?

Professor Desmond Fitzgerald:

When I entered the university, one of the first things I did a few days after arriving was to meet with the head of IT to ask about our IT systems and information systems. This involved a special Deloitte report out of the two reports - there was no other report. He made me aware that a report had been produced that was critical of the systems. At that point, we put an additional amount into IT spending - about €2 million in the first year. We did that by stopping some other capital projects that were being planned. We then went out to tender to bring in a group of experts on our system. The initial tender, which was run before I got there, had failed but this tender managed to get a group called Clarion to come in and start looking at the systems.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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No, that was perhaps to improve the system. I refer to undertaking to look back on allegations or concerns raised by this whistleblower regarding degrees and grades which previous students were awarded that may have been understated and that it may have been the case that people were awarded results that were not correct. That is a very serious allegation which I put to the Comptroller and Auditor General prior to the meeting, although it is not a matter that would necessarily by captured in his examination as there is no immediate cost implication were this to be the case. However, if this did happen, there is a potential cost as the institution could be open to litigation. The whistleblower is saying that there was an attempt to do a trawl back but that it was stopped. Is that the case?

Professor Desmond Fitzgerald:

No, there was a trawl back. The reason for putting the investment in was to ensure that the system was working correctly. Within that, it was recommended that we do a trawl back, and we did so. The trawls are done in different ways. This one looked for anomalies in the scoring. It went very far back, to the 1980s. We found one student who had been given a score that would have given them a 2.2, that is, an honours degree, but that student should have been awarded a 2.1. That error was corrected, the student informed and a new script issued. We examined a large volume of past results - our head of IT is present and can provide members with the precise figures - but we found no other cases, with the exception of this one case.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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That is what Professor Fitzgerald is telling us, but we have been told things by the institution before which were not the case. I take what Professor Fitzgerald says at face value, that the trawl happened. However the whistleblower argued that it did not happen to the extent that it ought to have happened and that, rather than the single case which Professor Fitzgerald has identified, there are potentially dozens if not hundreds more. He may be right or he may be wrong. There are other issues raised by whistleblowers B and C which also deal with process. Therefore, in the context of those concerns which have been raised, does Professor Fitzgerald believe that further independent examination of these issues is necessary?

Professor Desmond Fitzgerald:

We are examining this.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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The university is examining it but I asked about an independent examination.

Professor Desmond Fitzgerald:

No, at this stage I do not believe there is a need for an independent examination. Let me explain why. External examiners review our examinations at all different stages up to examination boards where the external examiners will be present. We get external validation of what we do throughout the examination process. It is not one step. There are multiple steps. We are frequently asked by employers to provide them with the transcripts of our graduates. When we have done that and looked back on many thousands of transcripts, we have not seen any errors.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Perhaps when Professor Fitzgerald's work is done, we can return to this at a future date. I appreciate what he says, that the process must conclude-----

Professor Desmond Fitzgerald:

If I could say one other thing on this, there are articles in today's newspapers on this -----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I am not concerned about any articles in the newspapers.

Professor Desmond Fitzgerald:

I just want to reassure families and students that the information is accurate and that we will continue to improve the system. We have faced a huge growth in the number of students over the years and we must make changes in our systems to be able to accommodate that. It is a priority for me and the institution to make sure that those systems are accurate and robust.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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The problem when an institution has a credibility issue, through no one's fault but that of the institution, is that the Committee of Public Accounts has had before it Professor Fitzgerald's predecessor and others who said that information that was in the public domain was inaccurate and a misrepresentation when, in fact, it was not. In that respect, I refer to Professor Fitzgerald's opening statement. It referred to the report of the Comptroller and Auditor General and what it described as misrepresentation. I will go further as I think we must drop the niceties here and deal with straight language. It was not misrepresentation. I would argue that individuals and the institution as a corporate body effectively lied to the Office of the Comptroller and Auditor General, but they certainly gave inaccurate information, deliberately and purposely, and they intentionally backdated documents. Would that be Mr. McCarthy's understanding? Am I correct in my reading of his report that individuals and the institution as a corporate body - I used the word "lied" but perhaps we ought to say deliberately misled - the Office of the Comptroller and Auditor General?

Mr. Seamus McCarthy:

I do not want to speak in relation to individuals or actions -----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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As a corporate body.

Mr. Seamus McCarthy:

As a corporate body, I think that there was a deliberate attempt to mislead.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Anyone would describe that as lies. If we are dropping the niceties, that is how I would describe it.

Mr. Seamus McCarthy:

Were I managing a private audit practice, we would have walked away from this audit. However that option was not available to me.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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That makes perfect sense.

Mr. Seamus McCarthy:

I should say that I do accept Professor Fitzgerald's representations that this will not occur in the future.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I understand that, but it did happen, and the Comptroller and Auditor General will appreciate that this is very serious. As Mr. McCarthy says, he would have walked away were it in the private sector because other people would have been dealing with it. Is it also the case that documents were invented or misrepresented?

Mr. Seamus McCarthy:

Yes. It was represented to us that there were signed agreements with the two individuals who received the severance payments but that those agreements were not on file. Subsequently, after much pressure, where we told them they must find those documents and that we had to have sight of those agreements, a copy of one signed agreement was presented to us. It has since transpired that it was signed in 2015 but backdated to 2011.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Which is false and misleading.

Mr. Seamus McCarthy:

Which is misleading.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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It is false and misleading. Issues of bad performance, which was not the case, were also raised.

Mr. Seamus McCarthy:

That was the explanation given to us. However, at the time our interest was in the process and the documentation of the process. Therefore, we did not look into the specifics of the individual cases.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Am I correct in saying that those performance issues were an invention?

Mr. Seamus McCarthy:

It was represented to us that there were performance issues at the time. It has since been made clear that the university is satisfied that there were no performance issues.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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The conclusion I draw from that is that it was an invention, which is my point. The Comptroller and Auditor General cannot deal with individuals. However, I will put it to Professor Fitzgerald or Mr. Ó Foghlú. If there were individuals in the institution who deliberately misled the Comptroller and Auditor General, the Committee of Public Accounts, the Department of Education and Skills and, indeed, the institution itself, including the invention of the idea that there were questions relating to performance and backdating documents for the purpose of lying to, or misleading, the Comptroller and Auditor General, what disciplinary action, if any, has been taken against those individuals? I ask Professor Fitzgerald to answer first. How many disciplinary cases have arisen from the Comptroller and Auditor General's report?

Professor Desmond Fitzgerald:

Two people were primarily involved in this. One was the head of human resources, HR, who has now stepped down from that position, and the other was the head of finance, who has also stepped down from that position.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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When Professor Fitzgerald says "stepped down from their position", are they still working in the university?

Professor Desmond Fitzgerald:

This is the head of finance and the head of HR, respectively.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Are they gone from the university?

Professor Desmond Fitzgerald:

Sorry?

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Are they gone from the university?

Professor Desmond Fitzgerald:

No, they are not gone from the university.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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They are not gone from the university. The persons who intentionally backdated that letter remain in the university.

Professor Desmond Fitzgerald:

They have been seconded to one of our -----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Are they still in the university?

Professor Desmond Fitzgerald:

They are still employed by the university.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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They are still employed there. What sanction has been imposed on them for the actions of deliberately and intentionally misleading the Comptroller and Auditor General?

Professor Desmond Fitzgerald:

I will be careful here. The disciplinary action was taken in such a way that there was a very good process. There was good advice from legal advisers. We followed all the procedures to get to a point where we could reach an agreement on those involved stepping away from their positions and accepting responsibility, to an extent, for what happened.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Therefore, Professor Fitzgerald is telling me that the sanction against these individuals was that, in co-operation with the university, they would step away from their positions and take up other positions.

That is completely unacceptable.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Are they still on the same salary scale?

Professor Desmond Fitzgerald:

They are still on the same salary scale.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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As we are on the point of identifying individuals by their position, we will go into private session.

The committee went into private session at 12 noon and resumed in public session at 12.08 p.m.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will continue from where we were before the private session.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I am conscious there are individuals involved and I support the Chair's decision to go into private session. However, I want to strongly make the point that I have not identified any individuals, nor have I identified their positions. What I have identified are actions that are recorded in the Comptroller and Auditor General's report where there was a deliberate and intentional attempt to mislead or lie to the Comptroller and Auditor General, which potentially means - and, I would say, did mean - a cost was incurred by the State. Professor Fitzgerald responded to questions about disciplinary actions by saying his understanding was there was dialogue with the individuals involved and they were moved into different positions but on the same salary scales. I am saying that is completely unacceptable. No decision, no reference and no inference was made by the Comptroller and Auditor General because he cannot make such an inference about individuals and whether there were issues of fraud.

He cannot make that determination. Professor Fitzgerald should examine whether these issues should be referred elsewhere. The Comptroller and Auditor General said that if this was in the private sector, he would have walked away, and maybe other authorities, including law enforcement authorities, would be looking at it. That should apply to the public sector too.

Professor Fitzgerald referred to secondment earlier and the situation with two individuals. The overall cost of bringing them into the pension fund was €1.2 million but if they had worked out where they were, the additional cost would have been just under €500,000. That was Mr. McCarthy's finding, was it not?.

Mr. Seamus McCarthy:

No, my conclusion was that the additional benefit, actuarially assessed, was in the order of €1.2 million. That includes an actuarial assessment of all future pension payments that would be made if these conditions stand.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Given that the process that led to those conditions was flawed, will Professor Fitzgerald and Mr. Ó Foghlú answer how that money will be recouped?

Professor Desmond Fitzgerald:

We have responded to this in the question that came through-----

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Will Professor Fitzgerald respond again?

Professor Desmond Fitzgerald:

-----from the Higher Education Authority. We gave a detailed response.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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Professor Fitzgerald can give it to us here. I am asking now. It may have asked but I am asking today.

Professor Desmond Fitzgerald:

We have given a detailed response, so I would like Mr. O'Brien to go through that.

Mr. Gerry O'Brien:

The important part of the response is that the university has taken the view that the subsidiary has responsibility for the full funding of the pension cost of those staff members regardless of what happened in the process where they were admitted to the pension scheme. When writing to the Secretary General, the university undertook that that subsidiary would fully fund the entire cost of the pension for those two members of staff regardless of how it happened.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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I find that extraordinary as well but my time is up and I will leave it to others.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I welcome the witnesses. In June, the University of Limerick conferred an honorary doctorate on Vicky Phelan for her efforts. Professor Fitzgerald described her exceptional commitment to calling out wrongdoing, her "selfless commitment to public service", and how through "her courage, commitment and exceptional communication skills, she is highlighting a major issue". He stated "She is an inspiration to our students, our staff and our community, she has brought great honour to the university, and for this we have awarded Vicky Phelan an Honorary Doctor of Letters." The whole country would support Professor Fitzgerald's actions with regard to Vicky Phelan. Is there not irony and contradiction between that and his treatment of persons A, B, C, D, E, F and G?

Professor Desmond Fitzgerald:

The honorary doctorate system is similar to the system in many universities. It is on the basis of a nomination which is given to a nomination committee chaired by the chancellor. It can be by a member of staff or an external person.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I understand the process. Would it be fair for persons A to G, inclusive, and Y and Z as well, to expect Professor Fitzgerald to nominate them?

Professor Desmond Fitzgerald:

I do not nominate people for honorary doctorates.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Who does?

Professor Desmond Fitzgerald:

It can be members of staff or of the community. It is not up to the president to nominate somebody for an honorary doctorate. It is not awarded to current members of staff.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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The code of conduct which dates to 2009 states:

The University of Limerick values integrity, honesty and fairness and strives to integrate these values into its teaching, research and business practices. Adherence to [the code of conduct by employees] will aid the University in promoting its reputation and commitment to ethical behaviour.

We are prepared to acknowledge the exemplary actions of individuals, while effectively throwing the university's own staff to the wolves when the same is done in-house.

Professor Desmond Fitzgerald:

Nobody has been thrown to the wolves.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Have they not? We discovered earlier that two people heavily implicated in all of the reports are still on staff and have salaries. One of the whistleblowers that we had the pleasure of meeting the other day is in receipt of jobseeker's allowance, with young children. I do not think that person got a contract for consultancy after leaving.

Professor Desmond Fitzgerald:

Would the Deputy like me to respond?

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Certainly.

Professor Desmond Fitzgerald:

The two individuals, persons B and C, are currently-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I refer to person A.

Professor Desmond Fitzgerald:

We came to an agreement with person A, working through Kieran Mulvey, the former director general of the Workplace Relations Commission. She has allowed me to give the details. We have reached an agreement with her to give her an additional gratuity, which was approved by the Department of Education and Skills.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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How much was that?

Professor Desmond Fitzgerald:

It was €60,000, including an education fee.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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It is a total of €60,000, so approximately one third of the consultancy contracts given to the people on whom her actions have shone a light.

Professor Desmond Fitzgerald:

They are two different things.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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In the public interest, it is all taxpayers' money. While we hand out doctorates on one hand for people's exemplary actions in the public interest, we treat others very shabbily. I am gobsmacked that people who are implicated have been sidestepped into other roles within the broader University of Limerick family and are on the same salary scale. Why anybody would even read the code of conduct, fraud policy and protected disclosure policy and feel that they are even remotely protected is beyond me. They can look forward to those implicated being effectively rewarded or sustained and those who call it out being thrown under the bus. The facts tell us that.

Professor Desmond Fitzgerald:

In all cases, I have given people the opportunity to meet with Kieran Mulvey, the mediator.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am told that he met with them once each.

Professor Desmond Fitzgerald:

Which persons are we talking about?

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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How many disclosures are there?

Professor Desmond Fitzgerald:

We have entered into mediation with five people and made settlements with three people.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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How many have not made settlements?

Professor Desmond Fitzgerald:

There is one person whose process is ongoing and another whose mediation was discontinued.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is Mr. O'Brien financial director?

Mr. Gerry O'Brien:

Chief operating officer, so finance is in my remit.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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There was a problem with IT, records and such, which Deputy Cullinane alluded to earlier. A protected disclosure was made with regard to those matters. The disclosure was made to the vice-chancellor who was chair of the audit and risk committee, Mr. Houlihan. It was then given to two people who were the subject of the disclosure.

Professor Desmond Fitzgerald:

It was given to one person who was the subject of that disclosure, who then handed it back to Mr. Houlihan.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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After he read it, I am sure.

Professor Desmond Fitzgerald:

I do not know. This happened before my time. I do not know what the background was. The Deputy is referring to person G in the Thorn report, who came to talk to me about it.

I asked to get a legal opinion about how that protected disclosure was dealt with and they said it was dealt with appropriately.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Why is there is no chair of the audit and risk committee at present?

Professor Desmond Fitzgerald:

Sadly, Tom Considine, who was head of the committee, died just before Christmas. We are in the process of seeking nominations to head the audit and risk committee.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Returning to the IT issue for a second, as Professor Fitzgerald stated, Deloitte produced a report. Was that in Professor Fitzgerald's time?

Professor Desmond Fitzgerald:

No. It was done in 2015.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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That was before Professor Fitzgerald's time. Deloitte did not specifically request forensic verification.

Professor Desmond Fitzgerald:

It did.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Why has the University of Limerick not done that?

Professor Desmond Fitzgerald:

We started by looking back at a huge number of cases of previous graduates using a model where we were looking for anomalous results. As I said earlier on, looking back to the 1980s, we found one individual who, in 2008, was given a wrong score. We corrected that.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Was there only one?

Professor Desmond Fitzgerald:

One.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Who did the forensic verification?

Professor Desmond Fitzgerald:

We have not got to the point of doing it. To understand, we are doing a set of different analysis.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is it internally done or are independent people doing it?

Professor Desmond Fitzgerald:

This is done by the group of advisers that have been brought in to us.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Who are they?

Professor Desmond Fitzgerald:

Clarion.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is it an independent company in doing it?

Professor Desmond Fitzgerald:

They are independent.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Are they carrying out a forensic verification? I am not clear on that. Professor Fitzgerald is talking about reviews, analysis and processes.

Professor Desmond Fitzgerald:

Yes. Liam O'Reilly is the head of the programme and perhaps he can give the Deputy the detail of what we are doing.

Mr. Liam O'Reilly:

I am here since March 2016 and the Deloitte report the Deputy is referring to was previous to my involvement. Clarion was appointed and signed the contract in February this year to undertake the improvement work and the review work on the student records system.

The forensic audit or the review of historical record is one of the work streams within the programme of work that is under way. That work has commenced, in terms of planning.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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When will it be finished?

Mr. Liam O'Reilly:

We are targeting to have it scoped and approved by the governance committee that oversees it within a month.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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It has not started.

Mr. Liam O'Reilly:

The scoping of it to plan this-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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That is the scoping of what it will look-----

Mr. Liam O'Reilly:

No, that is the planning of it so that it is done properly.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is that the terms of reference, etc.?

Mr. Liam O'Reilly:

That is the terms of reference and the detail of how we would undertake the review.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Are they being internally set?

Mr. Liam O'Reilly:

No. They are being agreed, with internal contributions and with the-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Would Mr. O'Reilly not ask Deloitte to do them, considering it was the one that stated the university really needed to get forensic verification?

Mr. Liam O'Reilly:

Deloitte did not tender for the work. This was a public tender.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Had the university to tender for somebody to set the terms of reference?

Mr. Liam O'Reilly:

No. We tendered for a partner to undertake a significant investment in our student record system.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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In his opening statement, Professor Fitzgerald keeps using the word "grievance" rather than the word "disclosure" so that all these, A to Z, whoever they are, are people with grievances rather than people who are being of assistance in shining a light into dark corners? Why would Professor Fitzgerald not use the words "disclosure" and "assistance"? Why would we not be eternally grateful to these people for shining a light into an area that, effectively, has brought the potential perception of UL far from its academic prowess in terms of its administration and governance?

Professor Desmond Fitzgerald:

The idea with the Thorn report was the whistleblowers, as they are called, have a process whereby they can bring things forward. This was opened up in a much broader way, that anybody who had a difficulty with the institution could come forward to Richard Thorn. I cannot remember off-hand the numbers who spoke to Richard Thorn but I think it was certainly in the 40s.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Professor Fitzgerald also states in his opening-----

Professor Desmond Fitzgerald:

I should add - I am sorry to interrupt-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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That is all right, no problem.

Professor Desmond Fitzgerald:

-----we did have a settlement with a number of the people. Without getting into the names, letters or anything-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Sure.

Professor Desmond Fitzgerald:

-----in that settlement we did thank them for bringing these things to our attention. I have always felt that anybody who have brought these things for attention has done us a great service and I have said that a lot in public and in the institution.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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They do not feel that. So many reports later, from Mazars, Deloitte, Crowe Horwath, the Thorn report and internal audit investigation, why are we still here if the terms of reference for these reports were correct? Why are whistleblowers still coming to us stating they are not happy?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That will have to be the Deputy's last question.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Just one more after this and I will be finished. Is there not a basic fairness or justice issue when one looks at the packages provided for certain people who were exiting compared to those conscientious people who shone the light in the first place who are now on jobseeker's allowance? One more question, I promise.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I ask the Deputy to put the question because the other members want to get in.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I was here until 6.30 p.m. last week. I was cut short in the morning because members were rushing for votes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Okay, but there will be other opportunities.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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What is the Deputy's point? Is it that we are constantly not letting him in before lunch?

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I ask Deputy MacSharry to put his last question.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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What is the issue of before lunch?

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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We have a separate session in the afternoon.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Then we do not have enough time. There are far too many issues to be dealt with here.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We might be back after lunch at this session. There is no guarantee we will be finished before lunch.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Can I ask so, if the Chairman wants them logged together? I will come back in the afternoon without difficulty and stay until 7 p.m. when Deputy Catherine Murphy is down in Kildare, if the Chairman likes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Stop, let there be no personal back and forth.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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It should be put on the agenda again. I really take exception to that.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I ask Deputy MacSharry to put the question.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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What we need is a full day on Limerick, if not a second day.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I indicated at the commencement of the meeting when I see the financial statements are coming back promptly, that the University of Limerick will be back and so will the other two organisations.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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We established earlier on that the Comptroller and Auditor General did not tell Professor Fitzgerald that there was no instance of fraud because it would not be his function. That is a matter of criminal law. Before the Protected Disclosures Act 2014, there was the Criminal Justice Act 2011. I presume that all the University of Limerick's policies must reflect the law in terms of the Criminal Justice Act 2011.

Professor Desmond Fitzgerald:

I am sorry, could the Deputy say that again?

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am sure all the policies of the university have to be cognisant of the law of the land, in particular, the existence of the Criminal Justice Act 2011.

Professor Desmond Fitzgerald:

Yes. We did get legal advice.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is it correct that it was not from the Garda, funnily enough, just from retained paid legal advice?

Professor Desmond Fitzgerald:

Expert legal advice.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Okay, but not from the Garda.

Professor Desmond Fitzgerald:

We asked a question specifically on fraud and they said there was no evidence of fraud.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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That is the university's own legal adviser though and it is somewhat compromised when Professor Fitzgerald is doing the asking and it is his institution that could be guilty of it.

Professor Desmond Fitzgerald:

No. I asked a legal adviser what the process would be-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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All right.

Professor Desmond Fitzgerald:

-----should there be fraud and the reply was that there is no fraud.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Before I finish, I formally ask Professor Fitzgerald - in his capacity and following his stated commitment in his opening statement to making everything right - if he would, following this meeting, write to the Garda Commissioner, Mr. Harris, and ask the fraud department to examine the outcome of these reports with a view to holding a detailed investigation following which the law of the land and legal procedures can take their course?

Professor Desmond Fitzgerald:

I will do whatever is required.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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It is a yes or no. I am just interested. I am asking if Professor Fitzgerald would do that.

Professor Desmond Fitzgerald:

I cannot respond to that. I would do whatever is-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Why would Professor Fitzgerald not respond to that?

Professor Desmond Fitzgerald:

Because I do not know whether-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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It is not up to Professor Fitzgerald. I am here on the Committee of Public Accounts, just as a simple member. The committee may disagree with me but, as an individual, I am asking a basic question. Given all the reports and their conclusions, given what we know so far, given the fact that the Comptroller and Auditor General was able to qualify that, in fact, he did not tell Professor Fitzgerald this was not a question of fraud because it is not within his competence to decide whether it is or not, as an ordinary 5 ft 8 in public servant acting on behalf of the taxpayer. Will Professor Fitzgerald write to the Garda Commissioner after this meeting and ask that his organisation, specifically those with the expertise and investigative ability in fraud, would look at these matters?

Professor Desmond Fitzgerald:

I will take what Deputy MacSharry has said under advisement.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Deputy Catherine Murphy is next.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I will go back to Mr. O'Toole on what prompted the legal advice. They have expanded on that.

Obviously, the HEA initiated this review and had gone a sizeable way and had put funding into it, in staffing and expertise. There was an airing of a preliminary version of the report and then it took some further legal advice.

I asked what prompted the legal advice. Was the Higher Education Authority threatened in connection with the report and, if so, in what way? Was the matter taken any further?

Mr. Paul O'Toole:

In regard to Waterford Institute of Technology.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Yes.

Mr. Paul O'Toole:

A draft report was prepared at the time and circulated to a group of people who were part of the examination. They were asked for their comments on it. Six people submitted their comments and took issue with aspects of the draft report. At the time, my predecessor took advice on the general powers of the HEA in investigations of that nature. The advice she received was that while-----

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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We have a very short period of time and I have a lot of questions for the University of Limerick, but I want to dispose of this matter first. Was the nature of the communication with the HEA a "cease and desist" order?

Mr. Paul O'Toole:

To be clear, it was not communication with me.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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No but with the HEA.

Mr. Paul O'Toole:

The communication stated they took issue with the draft repot. They took issue with aspects of it which they believed were inaccurate and unfair to them.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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However, it was a case of "cease and desist" based on questioning the HEA's remit. It then took legal advice. Is that correct?

Mr. Paul O'Toole:

They did not question its remit at that stage. The feedback at the time prompted the then CEO to say she needed to check what our legal standing was.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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We might come back to this issue in the afternoon.

In regard to the University of Limerick, to many of us on the Committee of Public Accounts it seems as if we are playing a disproportionate role in institutional oversight. That is a criticism of the university, the HEA and the Department of Education and Skills. If these issues are to be caught early, where are the checks and balances in the university? What role does the governing body play? Does its remit include oversight, both financial and of processes? Has it been requesting reports? If reports have been requested, have they been provided on each of the occasions they have been asked for? Is it working differently from the way it was before? Can I have concise answers to those questions, please?

Professor Desmond Fitzgerald:

It is working differently from the way it was before in the sense that we put in place a governing body with a variety of sources of expertise, not solely academic but also people with a background in the public service, for example, or finance.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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We are very tight on time. Is the governing body requesting reports? My understanding is this situation may well continue. It may continue to be the case that the governing body is requesting reports and not receiving them. Is Professor Fitzgerald satisfied that this is not happening?

Professor Desmond Fitzgerald:

No, it is receiving reports. I report at every meeting of the governing authority which also receives detailed reports from the audit and risk committee, as well as from the finance, human resources and asset management committee. When issues such as the report of the Comptroller and Auditor General have arisen, the governing body has asked me to prepare reports on the findings of the Comptroller and Auditor General. It has also asked us to report back on a regular basis on the implementation of the recommendations made in any of the reports. The governing authority has been very active in overseeing the changes in governance within the institution. I can assure the committee that it plays an essential role in the governance of the University of Limerick.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I might come back to that issue, but there are a few other questions I want to ask. My next question is directed at the Comptroller and Auditor General. I have been attending this committee for about two years and do not recall the Comptroller and Auditor General ever saying anything similar to what he has said today, that is, that he would have walked away. I am paraphrasing what he said. Can he recall similar situations in recent years?

Mr. Seamus McCarthy:

No. This is exceptional.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Very well.

I refer to the disciplinary code. It sounds to me that it did not allow the University of Limerick to do what might have been done. Has that matter been reviewed? I would like a "Yes" or a "No" answer to that question.

Professor Desmond Fitzgerald:

As Dr. Richard Thorn pointed out in his report, there are deficiencies in the statute No. 4. We have implemented all ten recommendations. We are still working on statute No. 4 because it is something on which we have to negotiate with the unions.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I wish to come back to some of the points made. I refer to the university's handling of protected disclosures. Has it reviewed the matter? It should fall to someone a grade above the person making the complaint. In one instance the review was carried out by people several grades below the person making the complaint. From experiences here, it strikes me that one cohort of more powerful and better paid individuals in a higher grade received enhanced pensions and handshakes and been moved sideways. Another group have really been the heroes in all of this in the better functioning of the university into the future in terms of checks and balances, governance changes and all the rest. They have paid a very heavy price in sacrificing a career or losing out on future superannuation or pension payments. Let me ask Professor Fitzgerald about the apologies made? I understand apologies were made to some of the whistleblowers but they were made in private. In one instance it was accepted that the complaints were justified and not malicious, while in the other the whistleblowers were thanked for coming forward. Does Professor Fitzgerald have a problem with making the apologies in public?

Professor Desmond Fitzgerald:

The agreement we reached with them, on which they and their legal team signed off, was that the apologies would be made in private. Having to be told to make an apology completely undermines its value. I apologised to the whistleblowers twice; once when the suspension was lifted and then as part of the settlement we reached with them. By the way, I would like to comment on the commentary we hear time and again about the whistleblowers and how they have been handled. It is said I will not name them or give them letters. I would appreciate an opportunity to outline in detail what has been done to get the people concerned to come back to work to do the jobs that they-----

Photo of Jonathan O'BrienJonathan O'Brien (Cork North Central, Sinn Fein)
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We will do that next. We will deal with that matter in private sessin.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I will move to-----

Professor Desmond Fitzgerald:

The Deputy has raised a serious concern in the public's mind about protected disclosures within the university. In the last year, since the appointment of the new governing authority, a lot of work has been done to ensure we have in place within the univeristy a robust system for the making of protected disclosures. It has gone through the finance committee and the governing authority and is being implemented. The process does not involve people in the institution in the first phase. We have received very good legal advice on the matter and are making sure that if people want to make protected disclosures, there is a robust system in place to enable them to do so.

I want to move on. Obviously, there is the University of Limerick, which has elements like Plassey and Mary Immaculate College. There appears to be a facility to move people sideways. Are staff still moved sideways between these institutions?

Professor Desmond Fitzgerald:

I am not aware of any example where we have done that. We run programmes together. Our staff go over and teach in Mary Immaculate College and vice versa. We have one unit in the college, namely the National Institute for Studies in Education, which has common entry and which is jointly run.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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There was a problem with two projects. One was the boat house project, which was funded through a mortgage from the capitation grant for students into the future. The other was the President's House project. The same construction company and project managers were used and money had to be refunded because money that was to be spent on the boat house was spent on the President's House. Has that matter been concluded satisfactorily and are there other issues involving, for example, the concert hall? How does the concert hall fit into the University of Limerick? Is it part of the university, is it a separate company or is there some crossover?

Professor Desmond Fitzgerald:

University Concert Hall is a separate company. As I said earlier, it is one of the companies within the Plassey Campus Centre group. It has its own board and management team and members of the governing authority sit on the board.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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Is it separate from the university in that it is not using public funds or are public funds involved?

Mr. Gerry O'Brien:

We provide a small subvention. The company occupies a building owned by the university and runs the facility.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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What about the boat house project and President's House and the problem that arose there resulting in money having to be refunded to the boat house project? In hindsight, was it appropriate to have the same company and project management team doing both projects? Is that how the problem arose?

Professor Desmond Fitzgerald:

I have no information on that but we will come back with it.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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I will come back to the university on that separately. I will conclude for now and come back later.

Photo of Jonathan O'BrienJonathan O'Brien (Cork North Central, Sinn Fein)
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I refer to whistleblowers B and C who presented to us on Tuesday. I have a number of issues to put to Professor Fitzgerald but I would like to do so in private session, having consulted the whistleblowers this morning. I note from the professor's correspondence also that he wishes to discuss certain issues in private. I ask that the committee go into private session.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Is that agreed? Agreed.

The committee went into private session at 12.45 p.m., suspended at 1.05 p.m. and resumed at 2.20 p.m.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We will resume our discussion with representatives from the University of Limerick and Sligo Institute of Technology. Deputy Jonathan O'Brien was in possession before the break.

Photo of Jonathan O'BrienJonathan O'Brien (Cork North Central, Sinn Fein)
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I thank Professor Fitzgerald for his frank contribution during private session regarding persons B and C. I will follow up with the university in the next couple of days with correspondence on what I believe may be a resolution to a number of issues facing the university with regard to them. It will beyond my remit then to do any more about it. I hope Professor Fitzgerald will be able to act on and put in place with the Department some of the suggestions I will make.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Deputy Connolly has indicated. We will try to keep the slots to ten minutes because we have a major session to deal with as well. If possible, we will try to keep to ten-minute slots. I call Deputy Connolly and Deputy MacSharry, in that sequence, and I will have a few wrap-up questions.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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With regard to the Thorn report, is it correct that all the recommendations have been implemented bar one?

Professor Desmond Fitzgerald:

That is correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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That is with regard to statute 4.

Professor Desmond Fitzgerald:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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It was identified that the statute was problematic well before the Thorn report. With regard to that, what is happening and whose responsibility is it?

Professor Desmond Fitzgerald:

That sits with-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Will Professor Fitzgerald clarify what it is for?

Professor Desmond Fitzgerald:

I am sorry.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Will Professor Fitzgerald clarify what statute 4 is?

Professor Desmond Fitzgerald:

Statute 4 is the statute for disciplinary action within the university. It is the procedure we use for disciplinary action within the university.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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One of Thorn's findings was that it was used more than it should have been with respect to some of the severance payments.

Professor Desmond Fitzgerald:

The issue-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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And somewhat harshly. Is that correct?

Professor Desmond Fitzgerald:

The issue is not just what Dr. Richard Thorn said but our own legal advice is there is a problem around the definition of "misconduct" within statute 4.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Where are we at with it? What is happening with it? Is there a proposal to change it?

Professor Desmond Fitzgerald:

We had done work on changing the statute and received legal advice. There is a step we have to go through, which is to discuss this with the unions and agree it with the unions. Then it goes to our finance, HR and asset management committee before it goes to the governing authority.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The Department was following up on the two persons. It was looking back on that and what action it was going to take. What action has the Department taken and where is it with that?

Mr. Seán Ó Foghlú:

Which two persons?

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I refer to paragraph 2.25. I will just check it. At this point I am getting tired.

Mr. Seán Ó Foghlú:

Paragraph 2.25.

Mr. Seamus McCarthy:

Is that in my report?

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes.

Mr. Seán Ó Foghlú:

Paragraph 2.25 is on the review of the added years.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The added years. No, it was the separate one-----

Mr. Seán Ó Foghlú:

The Plassey two. Together with the HEA, we are following up with UL on those two.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What has the Department done so far?

Mr. Seán Ó Foghlú:

We have sought detailed information from them and they have provided us with some information. The HEA has written to UL in the past couple of days in response to the information to be provided seeking answers to further questions. We need to learn more about the possible solutions to the issues we have not concluded yet. We had an update in that regard from UL today about where it envisages this going but we have not concluded it with them.

We had an update on that from UL today in terms of where it envisages it going but we have not concluded with the university on it.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Is that because the Committee of Public Accounts was meeting?

Mr. Seán Ó Foghlú:

Not at all.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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There does not seem to be an urgency attached to it.

Mr. Seán Ó Foghlú:

This is both detailed and technical. We have been working through these issues relating to UL since the publication of the Thorn report. As the Comptroller and Auditor General's report has been drafted, we have been engaged with the HEA and with UL on a number of occasions. I have a list of the number of meetings I have had personally with UL, together with the HEA. We have been engaging in detail on this and are following up on the two who were referred to in the Comptroller and Auditor General's report as being seconded to UL and are working through the issues.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I wish to go back to the subsidiaries because I ran out of time on that issue earlier. There was an examination of the subsidiaries which has now been completed. When did it start and when did it finish?

Mr. Gerry O'Brien:

It started as soon as the report was in draft stage and the review was completed in November and the action to put in place the pension scheme took place after that.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The list contains six subsidiaries with staff.

Mr. Gerry O'Brien:

Can I correct the record? By the time we conducted the review, there were eight companies, three of which had staff. I also wish to correct the record-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I ask Mr. O'Brien to say that again.

Mr. Gerry O'Brien:

There were eight subsidiaries, three of which had staff employed. I also wish to correct the record on another matter. I thank the Comptroller and Auditor General for pointing out that I used the expression "UCD Alumni DAC". I worked for UCD for ten years and cannot get it out of my head. I apologise. I should have said "University of Limerick Alumni DAC".

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Of the three subsidiaries with staff, one-----

Mr. Gerry O'Brien:

Three without staff-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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There were three without staff and five with staff. Is that correct?

Mr. Gerry O'Brien:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Of the five with staff, Mr. O'Brien identified problems with one in terms of a lack of pension provision.

Mr. Gerry O'Brien:

Yes. That is correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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UL is taking that over. Is that correct?

Mr. Gerry O'Brien:

UL took it over a few years ago but did not put in place the necessary pension arrangements.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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UL took over the company-----

Mr. Gerry O'Brien:

That is right.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The staff in the company were subsumed back into UL. Is that right?

Mr. Gerry O'Brien:

They are still within the company. UL has ownership of the shares of the company. The pension arrangements should have been in place before UL took over the company. The law has been on the Statute Book for some time.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Why did that not happen?

Mr. Gerry O'Brien:

I do not know why it did not happen. I tried to find out why it did not happen but could not get an answer.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I ask Mr. O'Brien to elaborate on that. Did he carry out an examination?

Mr. Gerry O'Brien:

I did but when there is no information forthcoming, as with a number of other issues that we have encountered, one ends up facing a brick wall.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Mr. O'Brien only carried out this examination in the very recent past. Is that correct?

Mr. Gerry O'Brien:

I thought the question was why there was no pension scheme in place.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes but the examination to determine why was only carried out recently.

Mr. Gerry O'Brien:

It was done at the same time.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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When?

Mr. Gerry O'Brien:

In the period from when the report issued in August until November of last year.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Mr. O'Brien's examination was during that time. He was looking at the subsidiaries and most did not have any problem with regard to pensions.

Mr. Gerry O'Brien:

Yes.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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He just identified one that had a problem and then he tried to find out why. What were the blocks to finding out why?

Mr. Gerry O'Brien:

When I inquired of the people who should know, they did not know. They were not able to provide an explanation.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Is that acceptable?

Mr. Gerry O'Brien:

No, it is not a bit acceptable.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I thought everything had changed in the university and that there was now a culture of openness.

Mr. Seamus McCarthy:

I think Mr. O'Brien is referring to events in the past, where decisions were made not to put pension arrangements in place or the matter was overlooked. There is no evidence now. As with some of the other questions that we asked with regard to the two individuals, documentation was not in place. The point of the recommendation was that the university would look at the contracts of employment and the conditions of employment to ensure that, as far as possible, everything was regularised and everybody is clear on the employment conditions.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Mr. O'Brien said that he could not get the information, which leaves me a bit lost. He was asking for the information just a few months ago as to what happened but from whom was he seeking the information?

Mr. Gerry O'Brien:

From the managing director of the alumni company, the board of the company and from the person who had line responsibility for the company within UL.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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He could not get any information from those people-----

Mr. Gerry O'Brien:

The only information I got was that it was not known until very recently that there was an issue about which something had to be done. So I did something about it.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I thought Mr. McCarthy was going to jump in to help Mr. O'Brien.

Mr. Seamus McCarthy:

It is another example of how going back over the years, there is no record of certain matters that should be a matter of record and nobody can remember. It is an unsatisfactory situation, of course, but one cannot create a record now for an event in the past if nobody has any recollection of it or a reasoning for it. It is just not there. That is my interpretation of Mr. O'Brien's evidence.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I thank Mr. O'Brien. I started by saying that reading the chapter left me speechless. I am not going to get into the issue of the whistleblowers because I do not believe it is appropriate for me to do so. That said, it is on record that the first whistleblower was never facilitated with a return back. Would Professor Fitzpatrick accept that?

Professor Desmond Fitzgerald:

Yes, I accept that. I take it the Deputy is referring to person A.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes and that person was never facilitated in terms of coming back to the university. She has given her name openly. My understanding is that she was facilitated with sick leave and with leaving but was never given the option of coming back.

Professor Desmond Fitzgerald:

I understand the Deputy's frustration. We are very frustrated. We have a new team in place, trying to sort out a whole range of things that happened in the past but very often the information required is just not available. In the case of person A, I have gone through the file and I know what happened. She got a short-term gratuity. We went into mediation with her, despite the fact that she was not working there anymore, in order to try to correct that. We did everything we could to correct it. If the Deputy has spoken to person A, she will know that is the case.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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We have heard from her but separate from that, I have read everything and I understand it. I do not want to go into the minutiae of different members of staff. I am looking at it from an overall perspective. We are here today with all these reports because of the whistleblowers and their persistence. We are here because of the "Prime Time Investigates" programme and because of the reports of the Comptroller and Auditor General. We are here because of a lack of governance. Even where proper governance is in place in theory, it is not being implemented in practice. Mr. O'Brien was looking back but found no evidence at all in terms of what happened in the subsidiary companies.

Professor Desmond Fitzgerald:

As I said, I understand and do not think it is acceptable.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I wish to refer to the students now. I am no expert on this and have not had time to look at it closely. Professor Fitzgerald responded to one of my colleagues on the issue of student records. Different reports have been prepared on the student records and whether they are fit for purpose. Reports have been prepared on the system that is being used and I understand that the system in UL is unique.

Professor Desmond Fitzgerald:

No. The system is called Tribal and is used by approximately 70% of UK universities as well as several universities in Ireland.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Has that replaced another system that was unique to the university?

Professor Desmond Fitzgerald:

Did it replace something that was used in the past?

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Yes.

Professor Desmond Fitzgerald:

There was a system used previously, about which Mr. O'Reilly would have more information.

Mr. Liam O'Reilly:

The system is a Tribal product and has a large market presence in the UK. It has been in place in UL since it was procured in 1998. When it was originally procured, the motive for implementing the system was to solve the Y2K bug.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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So it has been there since 1998-----

Mr. Liam O'Reilly:

Implementation began in 1998 and it has been there in live production since the early 2000s.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Various analyses of the system have been conducted since then. Is that right?

Mr. Liam O'Reilly:

I took up my post at the end of March 2016 and very early in my tenure I became aware of the Deloitte report which was commenced in late 2014 and completed in early 2015, in February.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Was that examining a previous report?

Mr. Liam O'Reilly:

That took into account a previous report dating back to 2005.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Deloitte looked at a previous report and its 2015 report is the most recent one on the system.

Mr. Liam O'Reilly:

Correct.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Did that identify risks and problems?

Mr. Liam O'Reilly:

Yes, it did.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Were they serious risks?

Mr. Liam O'Reilly:

There were significant, very serious risks identified in the July report.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What were some of those risks?

Mr. Liam O'Reilly:

The review was broken into three areas. It looked at business processes, data - I am trying not to get technical, the Deputy must forgive me - and it looked at the systems and IT approach in terms of how the systems were managed.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Did it look at the memory of what the system was able to record and keep and whether data was being overridden as new input went into it?

Mr. Liam O'Reilly:

It did. Before I came into education I worked for 20 years in IT systems. When we go looking at systems in general in enterprises we will find problems with data. The degree of those problems can vary significantly. Would the Deputy mind repeating the question?

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The question was what risks were identified. Mr. O'Reilly said they were very serious.

Mr. Liam O'Reilly:

There were significant risks identified about all aspects to do with the data and the lack of full auditability.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Does Mr. O'Reilly mean the storage of data?

Mr. Liam O'Reilly:

There were various issues identified with the IT processes that were in place around the management of things like backups and system governance, and there were significant issues identified around some of the business processes with respect to the systems. The system was designed and implemented at a point in time with the volume of students in 1998 in mind. The university has grown significantly in student volume and numbers. Over that period there was, in my view and as was identified in the report, a significant under-investment in the mechanisms and resources required to sustain the system in terms of resources that use the system in the registry, that administer and run the business process side of things, the management of the data and the IT management and resources required to support it. That broadly covers it. I can attempt to go into more detail but they are broadly the issues. Since that report has issued significant actions have been taken to deal with aspects of the data issues and the specific focus on the process of active students to ensure integrity.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Was there a risk to the integrity of the system?

Mr. Liam O'Reilly:

The university uses part of its history in terms of continuous assessment, of which UL was probably one of the early adopters. They have a similar system in the US called grade point average. It is a weighted average calculation. Typically, undergraduates would start their degree in second year. They progress from first to second year and their final result will be based on their marks for second, third and fourth year. This weighted average calculation is called a quality credit average, QCA. In the Deloitte report following the review there were some challenges over the QCA identified and this was identified as a particularly high risk. Prior to my-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Were there challenges by students?

Mr. Liam O'Reilly:

No, it was identified by Deloitte that there were some concerns over how the calculation was working. In early 2015, the executive committee of the university undertook to take action to rewrite that part of the system. In parallel to that, they implemented a checking system that would check the output. It was to re-implement, write a detailed specification, agree the specification and implement the specification. In parallel, they commissioned a separate piece of work to check the outputs of the newly implemented system. That was implemented as the new part of the system in December 2015. It and the checker that goes along with it have been used to process all the semester results for every semester since 2015. Various measures have been taken and that is an example of one of the biggest measures to mitigate some of the risks.

Following that, there were multiple other risks identified with some of how the IT systems were managed and some of the business processes. The business process issues were mainly to do with the amount of manual intervention and checking that had to happen as opposed to just trusting the system output. Probably more staff than one might expect had to do more manual checks to check outputs. A budget was set aside and a project was envisaged to take a number of years to address these risks. In order to undertake that exercise, the university needed to scale up significantly on the resource side in terms of internal staff to be able to engage with the project and, additionally, it needed to be able to select an external party that would have expertise in the management of extensive projects. This was a large change programme. These projects are large in nature. They are expensive, take time and are complex.

A tender was run. The first tender did not yield any responses. It was run through the all-of-government framework. The tender was amended and tailored to get more interest in the market and was re-run. The second time it was run, seven or eight companies tendered for it. Four were shortlisted and went through a detailed, rigorous public sector procurement process that resulted in Clarion, which was mentioned earlier, winning the tender. Following contract negotiation, Clarion signed a contract with the University of Limerick in February of last year. We are engaged with Clarion on that project under a governance committee that has some of the most senior people across the university engaged in various projects that will deal with the risks identified in the report, including the detailed historical review of the records. There are multiple strands to the project. It is complex and large. We are under way and are engaged in it. It is not all planned out. It is complex and is going to cost a lot of money.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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How much money are we talking about?

Mr. Liam O'Reilly:

Until it is all fleshed out in detail it is hard to say. The initial budget that was set aside to deal with the initial set of work was about €3.7 million. My advice and guidance back to the executive committee is that I do not believe that will be sufficient to deal with the budget that is there. A lot of work has been done and money has already been spent. Further funds will have to be found to continue to evolve to get this to a-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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What would be a rough figure?

Mr. Liam O'Reilly:

The project is broken into three stages. The stage we are at is the de-risking stage of the system in terms of business processes, data clean-up and data into the future and improvements in the system itself to get more standard functionality so there will be less manual checking. That is work on the current system and that is with a view to potentially getting it ready to run a tender to replace the system in the long term. Multiple other institutions in Ireland are in the same boat. I would not get into the realm of speculation but we are going to be spending definitely more than another €2.5 million to €3 million, up to possibly maybe €5 million, over the next two to three years on addressing this system. On the long-term size of these projects to replace the system, Deloitte made a very rough order of magnitude estimate that it could cost €15 million to €20 million to replace a system of this critical nature. Across the sector, these types of projects are being approached by our peer institutions. They are all at various stages of either doing significant investment into their existing systems which, to use IT terminology, are legacy systems that were implanted a long time ago, or replacing those systems. The €15 million to €20 million that is mentioned in the report is not unreasonable as a figure.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Thank you, Chair.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Deputy MacSharry wants to come back in a second time.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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How many people implicated by the various disclosures and grievances are still on the staff? We came across the two earlier on and were a bit surprised about that. Are there many others?

Professor Desmond Fitzgerald:

Is this in respect of those who made protected disclosures?

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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No, that was answered earlier on. There was about eight, I think, is that right? How many

are there altogether?

Professor Desmond Fitzgerald:

Currently as I understand it there are four protected disclosures in the institution.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Does that include these ones going back to 2012?

Professor Desmond Fitzgerald:

No. The way it works is that under the new policy that we published recently, a protected disclosure group is established. As far as I am aware, there are two protected disclosure groups at the moment examining protected disclosures in the institution.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Are those four any of the A, B, C, D, E, F or G that we have hear about?

Professor Desmond Fitzgerald:

B and C have entered into the process of the procedure for protected disclosure.

At some point it would be determined whether it is a protected disclosure.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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The 2014 Act gave retrospective powers so have we not gone back to 2012 to look at all the grievances?

Professor Desmond Fitzgerald:

I am aware of the number of protected disclosures made by persons B and C. They were in the public domain, having gone to the Workplace Relations Commission, WRC. The other person who made a protected disclosure was spoken about earlier. That is person G in the Thorn report.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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That was to do with information technology and student records etc.

Professor Desmond Fitzgerald:

Yes.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Are there many who were implicated as a result of these various disclosures or grievances and who had any kind of sideways moves, as opposed to being managed out?

Professor Desmond Fitzgerald:

Again, a number of people left the institution, as indicated in the Thorn report. It criticised the application of statute 4. As far as I am aware, they have not made protected disclosures. The only people I am aware of currently who have done so are persons B and C, as well as person G. Person A brought our attention to a number of issues that were ongoing in the institution and that was before the enactment of the protected disclosures legislation in 2014.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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It has retrospective powers, does it not?

Professor Desmond Fitzgerald:

Sorry?

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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The Act is retrospective.

Professor Desmond Fitzgerald:

I would have to check but as far as I am aware, person A was no longer working in the institution and therefore did not bring a protected disclosure.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Right. Of the people implicated, for example, by the "RTÉ Investigates" programme, grievances, media and in the five reports of which we are so far aware, are many still on the staff? We know of the two from earlier.

Professor Desmond Fitzgerald:

I am not aware that the reports by Thorn, Deloitte and the Comptroller and Auditor General have implicated other people.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Just those two.

Professor Desmond Fitzgerald:

Yes, insofar as they were mentioned in the reports. They were mentioned in the Deloitte report and the report from the Comptroller and Auditor General.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Professor Fitzgerald may not have an answer to the following questions today. Five reports were done so will the witnesses send to the committee the cost of each of those?

Professor Desmond Fitzgerald:

The Thorn report was done by the Department and the HEA.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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They paid for it.

Professor Desmond Fitzgerald:

I would not know the cost.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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There is no problem. If the people in the room responsible for particular reports could give us the costs-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That is the Department, the HEA and the college.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Those who are responsible for the report can provide the answers. When the terms of reference were being drawn up for each of these five reports, was any contact made with the person making the grievance, the maker of the protected disclosure or the person citing issues to ensure the terms of reference were adequate in catching those issues?

Professor Desmond Fitzgerald:

I was not involved in the terms of reference for the Thorn report.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Who was involved?

Professor Desmond Fitzgerald:

The HEA was responsible.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Does Mr. O'Toole wish to tell us about his side?

Mr. Paul O'Toole:

I cannot answer the Deputy's specific question as to whether those people were contacted. I know the terms of reference for the Thorn report were discussed and agreed with the Department and ourselves at the time. I will find out for the Deputy.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I would appreciate it if Mr. O'Toole could do that. It occurred to me - perhaps it is not usually done although it seems to be good practice - to allow both sides of an arrangement to look at the terms of reference before something is undertaken. If terms of reference were set inadvertently or intentionally as too narrow or broad, we might not get anywhere near where the whistleblower might be looking to get in shining a light on an area.

Mr. Seán Ó Foghlú:

The terms of reference for the Mazars report - a HEA report - were to look at the adequacy of how the university had dealt with the complaints, grievances and disclosures. The terms of reference of the Thorn report were to look at existing complaints and those of anybody else who wished to come forward. One was looking at processes within UL and the second was very open in terms of allowing anybody to come forward with any complaints. As we can see from the report, Dr. Thorn worked through engagement with a number of different people and came to findings and recommendations in that regard.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Were any reports produced by internal auditors for UL from 2008 to date and could the committee have a list of those reports and who requested them? Were there any risk reports on fraud and internal audit? If there are such reports, could we have a list and, ideally, copies of them? The witnesses will not have them today but they could be sent to the committee. Does UL have a confidential whistleblowers' helpline?

Professor Desmond Fitzgerald:

No, not that I am aware of.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Will one be introduced?

Professor Desmond Fitzgerald:

We have a system for protected disclosures. Does the Deputy refer to assisting people who wish to make a disclosure?

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I understood that everybody would have one of these. Is that not the case?

Professor Desmond Fitzgerald:

I am not aware that we have ever thought of having one.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Does the Department have a view on this?

Mr. William Beausang:

As a point of information, it is open to any institution to draw on support in the operation and design of its protected disclosures regime but there is no requirement to establish a confidential helpline as such now. I know the Department of Public Expenditure and Reform has done much work with Transparency International Ireland in putting in place the free legal advice centre for people who wish to make a disclosure or raise concerns that might constitute protected disclosures. Financial support has been provided by the Department to Transparency International Ireland for that purpose.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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This is not part of our recommended best practice.

Mr. William Beausang:

A protected disclosure is always intended. There is statutory protection of the confidentiality of the discloser. The intention is that institution would take every necessary step to protect the identity of the discloser, and that corresponds with the operation of a sort of confidential helpline. Perhaps I am not clear on the function that the Deputy is seeing for the helpline?

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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The Samaritans operate in a certain way along with many other helplines, including those for rape crisis. There is the abortion helpline, for example. It seems to be self-explanatory.

Mr. William Beausang:

Every institution engaging with protected disclosures-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is there plenipotentiary status beyond what is defined literally in the Act to do whatever an institution likes with protected disclosures?

Mr. William Beausang:

I do not agree with that characterisation but it is not my policy area.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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All right. Does a section of the Department deal with it?

Mr. Seán Ó Foghlú:

There are statutory requirements and the Department has its own policy, which is in line with the guidelines of the Department of Public Expenditure and Reform. We must operate within the legislation and our guidelines in the Department. Likewise, institutions must operate within the legislation. There is, however, room within those arrangements as there is no prescribed set of arrangements put in place. As Mr. Beausang has described, we have engaged and all public bodies must give consideration to approaches for providing appropriate advice and support, and for access to employee assistance to workers who make disclosures. Exactly how they do it is a matter for them.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am thinking about the effectiveness of the protected disclosures legislation. Clearly there are differences in interpretations and the measures put in place. Have the Revenue Commissioners been asked to consider benefit-in-kind implications of the matters in the report?

We were talking about the Garda. I made a formal request that they be invited in to consider these matters and was told it would be taken on advisement. I look forward to following how that matter will be responded to. For me, it is not a case of advisement but a case of law or not law. The relevant legislation is section 19 of the Criminal Justice Act 2011. In the interest of the integrity of the college, it would serve the college very well by bringing in its representatives, if for nothing else than to clear its good name. If there are outstanding issues then we can deal with them using the full rigours of the law to cleanse any issues that there may be.

On the Revenue question, has Revenue been asked about the potential benefit-in-kind implications of the issues that have arisen?

Mr. Gerry O'Brien:

What issues, Deputy? There are a lot of reports. Maybe to help, the Revenue have been-----

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am not an investigator but-----

Mr. Gerry O'Brien:

No, but it is a broad question.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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-----it seems to me that there are a few questions flying around. It would seem to me that in the interest of completeness, while I have suggested the Garda involvement, I am sure that Revenue may have an interest if somebody was getting over and above what they should be getting, if they were having additional pay for doing a PhD. and all of this kind of thing, or were getting a contact to provide consultancy that may not have had actual work linked to it and being carried out. Again, I am not an accountant but it just occurred to me that maybe there are benefit-in-kind implications and that, perhaps, the Chairman of the Revenue Commissioners could also be contacted if for nothing else than to rule that everything is in the clear. I have one final question but I shall let Mr. O'Brien answer first.

Mr. Gerry O'Brien:

We have had a series of meetings with the Revenue. The Revenue have a preliminary stage to carrying out a full audit, which is a risk-based assessment. So we have been engaged with the Revenue for the past few months on that risk-based audit, and we are expecting it then to take a view on the level of audit that they will then carry on as a result of that but they have had audits in the past.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Yes.

Mr. Gerry O'Brien:

For instance, one of the issues in the audit report under consideration was that there was a particular payment made to one of the individuals who had the follow-on contracts. On the calculation of the severance amount, we were asked to raise it with the Revenue. We did raise it with the Revenue back in August and we are still waiting for a response from them.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Will Mr. O'Brien ask Revenue what the benefit-in-kind implications are, if any?

Mr. Gerry O'Brien:

Yes, certainly.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I noticed that Mr. O'Brien introduced Mr. Moran as the director of strategy. I also note that the university has a new role of director of strategic projects and transformation. What is the connection between the roles? Is there a connection or is it just a similarity in name? What is the new function?

Professor Desmond Fitzgerald:

In most of the UK universities now there is an office which would be involved in a continuing process called strategic planning. So, every year the strategic plan would be reviewed again. For example, the University of Bristol has somewhere like 35 people in that office.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Right. Is that university the benchmark?

Professor Desmond Fitzgerald:

No, I am just giving the Deputy an example. The reason for it is that the number of projects that are being run through a strategic plan for a university is very large.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Sure.

Professor Desmond Fitzgerald:

There are some key projects that we need to get done, which are right across the university. So there is a process of this strategic plan, which by legislation we have to have in place every five years.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Sure.

Professor Desmond Fitzgerald:

Then there is a process of implementation. They are the strategic projects. Those projects, and the reason it was called transformation, are intended to transform the institution. An example at the moment is our healthy campus initiative and there is a smoking ban in place.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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I get it. There would be a lot of different projects. Was that role fulfilled by the director of strategy beforehand or before we signed up?

Professor Desmond Fitzgerald:

No, it is quite different. We did not have anybody who was running that strategically.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Who did the strategic plan? Strategic plans have existed for a good while.

Professor Desmond Fitzgerald:

In the past the director of strategy would have been responsible for the strategic plan.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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What does Mr. Moran do now?

Mr. Eamonn Moran:

I do the drafting of the strategic plans.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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Right.

Mr. Eamonn Moran:

Dr. Fitzgerald is saying there is a difference between the production of plans and the implementation of those plans.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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So Mr. Moran produces the plans and then it goes over to the director of strategic projects and transformation, and they implement the plans.

Mr. Eamonn Moran:

Yes, correct.

Photo of Marc MacSharryMarc MacSharry (Sligo-Leitrim, Fianna Fail)
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All right. I thank the witnesses.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Before we conclude, and the next session will be with the Waterford Institute of Technology, I want to ask a few questions.

The issue of subsidiaries has been mentioned here a number of times. We want the organisations to immediately, and they should have no issue with doing so, send us the list of subsidiaries. It has been mentioned that there are employees in five of the subsidiaries. Approximately how many staff in total will be in these subsidiaries?

Mr. Gerry O'Brien:

Approximately, bearing in mind that there would be a number of part-time staff-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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And whole-time-----

Mr. Gerry O'Brien:

Over 200.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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There are 200 staff across the subsidiaries.

Mr. Gerry O'Brien:

Yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Wow.

Mr. Gerry O'Brien:

Bearing in mind we have things like swimming pools with lifeguards and temporary people with very short hours.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Right. Would some of those people, apart from being employees, be social employment workers, Tús workers or any of these in some of those types of areas?

Mr. Gerry O'Brien:Perhaps, yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Mr. O'Brien might give us the details of how many people work in those types of areas, other than the university's staff, if they come in under any State-supported funding scheme.

All of the university's subsidiaries are 100% controlled by the university. Is that right?

Mr. Gerry O'Brien:

That is correct.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I also want the university to give us, and the details are a matter of public record in any event but just make it easy for us, for all of the subsidiaries, the list of the board of directors in each of those subsidiaries. Please explain who are the directors in all of these companies. Are they all members of the governing body and senior staff? Just give me a pen picture and the details can be supplied later. What is the pen picture for a typical Plassey campus? How many of its directors come from the university directly? Are they senior staff or board members?

Professor Desmond Fitzgerald:

They would vary across them. Typically, there would be staff; there would be members of the governing authority on the board.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes.

Professor Desmond Fitzgerald:

In some cases, some of the management team would be on the board. There would be some external people on the board. We can get a breakdown for the Chairman of the board membership.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes, send that to us. I just asked for a pen picture. So my assumption is right, it is mainly dominated, and rightly so as a 100% subsidiary, by the main board or its employees or senior staff, generally.

Mr. O'Brien made a remark earlier that the amount, as a result of the pension issue, would be paid by the subsidiary. Which subsidiary are we talking about?

Mr. Gerry O'Brien:

PCC, the Plassey Campus Centre.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Right. So it will be paid by them. Please send us a copy of the financial statements for PCC as well.

Mr. Gerry O'Brien:

Yes.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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For a start, we should have access to them all if they are 100% subsidiaries of a university that is funded by the State. How much funding for the Plassey Campus Centre comes from the university? How much of it is their own resources that they raise from their own activities? Ballpark figures.

Mr. Gerry O'Brien:

None of the funding comes from the university.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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None of it?

Mr. Gerry O'Brien:

None of it.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That is good. In other words, if PCC is funding that pension issue that was mentioned it will not be coming through the backdoor from the universities.

Mr. Gerry O'Brien:

Yes, that is right.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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That is important. Just talk to me about the two people referred to, in the Comptroller and Auditor General's report, as AZ and BY, who got the consultancy contract. The first thing that I thought of when I heard about a consultancy contract was whether that contract for consultancy services was tendered publicly?

Professor Desmond Fitzgerald:

No, as it says in both reports actually, the Comptroller and Auditor General report and also in the Deloitte report, they were not tendered for. The contracts, which were the follow-on contracts, were the two, I believe,-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Yes, the follow-on contracts.

Professor Desmond Fitzgerald:

-----were not tendered for.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We know that they are just an arrangement. Not only did the Comptroller and Auditor General find a major problem that they were getting these payments, we now have a situation where it never went through procurement. If they were bona fide consultancy contracts, if one was hiring a consultant - and we have just heard about Deloitte, Clarion or the different companies that have been mentioned that all went through procurement to provide consultancy services - who made the decision that these consultancy contracts, which worked out at €189,000 for one person and €180,000 for another person, required no public procurement?

Professor Desmond Fitzgerald:

It is pretty clear that for some years the contracts were linked to the severance payments. I will have to confirm this, but it is my understanding that the decision was made by the then director of HR.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It was not an open tender, and there are issues about the contract, including whether it was signed and concerns about the specification of it. When do payments stop after those contracts?

Professor Desmond Fitzgerald:

Three years after the-----.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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They last for approximately three years.

Professor Desmond Fitzgerald:

They last for three years after they left the institution. They left about 2012.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Would it be accurate to describe them as "sham" contracts? We have heard about sham marriages, and this seems to me to be something similar. These were not consultancy contracts but was a made up job to ensure that a check would be paid. It sounds more and more like a sham marriage.

Professor Desmond Fitzgerald:

Ostensibly they were-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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We have not delved into this aspect of it. There was no procurement or no real value added to the organisation that Professor Fitzgerald can stand over, and it was a made up job when someone is going out the door to top up his pension. Professor Fitzgerald might not like my words but he will understand the substance what I mean. It seems to have been a sham.

Professor Desmond Fitzgerald:

I can only go on the reports that we received, namely the Deloitte report and the report from the Comptroller and Auditor General.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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What is the Comptroller and Auditor General's view? Was this a real contract?

Mr. Seamus McCarthy:

There is some evidence of some work having been done on one of the consultancies but the other one was limited to a six-month period, and after that we could not find evidence of work having been done. I would not go as far as to call them sham contracts. It was an arrangement.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It is close to what I mentioned earlier. The contracts involved payments from public funds which were based on misrepresentation, which is probably the mildest word used by officials here today. Professor Fitzgerald used the word. He referred to the information provided, which was the basis for this. Someone else used stronger words. Is it correct that the information provided was not truthful?

Professor Desmond Fitzgerald:

I used the word "misrepresentation" because it was the word used by the Comptroller and Auditor General.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I know that the Comptroller and Auditor General was very disappointed. He was told the information once, and he said that there was "a misrepresentation of the facts". He might not want to say "deliberate", but it obviously did not happen by accident.

Mr. Seamus McCarthy:

No, it did not happen by accident.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It was a deliberate misrepresentation.

Mr. Seamus McCarthy:

I cannot speculate-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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There is a shorter three-word letter for that, but I will not say it.

Mr. Seamus McCarthy:

-----as to what the motives were.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It was a deliberate misrepresentation of the facts, which resulted in a payment of €189,000 and €180,000 of taxpayer's money for no real purpose. The State is at a loss. What arrangements has Mr. Fitzgerald put in place to recoup that money since his appointment?

Professor Desmond Fitzgerald:

We looked through the Deloitte report. It was confirmed by the Comptroller and Auditor General's report that on at least one contract a certain amount of work was done. On the other contract, many of the invoiced did not have evidence of the work being done. That is all I can say. I cannot speculate as to what happened beyond that.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Professor Fitzgerald is saying that it was approved by a senior official in the organisation at the time.

Professor Desmond Fitzgerald:

That is correct.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The professor told us earlier that there are two senior officials. The official who signed off on this is still employed on the same salary scale, albeit in a different job.

Professor Desmond Fitzgerald:

That is correct.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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If Professor Fitzgerald can come before this committee and tell us that the information this individual provided misrepresented the situation and the Comptroller and Auditor General is satisfied that it was deliberately misrepresented, how can he have trust in people in his organisation? Is there not a case for the board to say that there has been an absolute breakdown of trust in respect of this employee? I do not want to know the person's title or name or where they are. This is the first time I have seen the Comptroller and Auditor General saying that this person deliberately misrepresented the facts. Professor Fitzgerald is saying that person misrepresented the facts. This has cost the State €350,000, yet this person is still employed. How can the employer have trust in that? Professor Fitzgerald can talk all he likes about the changes in culture, but if that person is still in the organisation at a high level and being paid a high salary, it puts to nought much of what we have been told. I do not understand how the governing body cannot have worked on this case in terms of an absolute breakdown of trust.

Professor Desmond Fitzgerald:

It is not for me to pre-empt the steps the institution will take. It is important that I stand back from making any judgement about this unless and until we go through a process in which we look at the conduct of individuals. As the Comptroller and Auditor General said at the outset of his report, he was not making a judgment about any individuals. It is up to the university to do that. At this moment I have to be cautious about what I say.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Is Professor Fitzgerald now indicating for the first time, after several hours of discussion, that there may be a process in place to deal with this situation because there was no suggestion of that earlier?

Professor Desmond Fitzgerald:

Absolutely, there are processes in place in the university. We received the final report in November.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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To what report does Professor Fitzgerald refer?

Professor Desmond Fitzgerald:

The report from the Comptroller and Auditor General.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The Comptroller and Auditor General is an external auditor. It is not up to him. The university is supposed to have its own internal audit, board and own governance structures. The Comptroller and Auditor General is not a crutch for any public body to do what it should be doing. He is the university's external auditor, and it should not rely on an external source to make recommendations. It might be of assistance, but this must be done internally.

Professor Desmond Fitzgerald:

With respect, as I said at the very start, we looked at most of the information in the Deloitte report, which was done during the summer of 2017, and we have acted on that. The Comptroller and Auditor General's report raises other questions. The report carried out in the summer of 2017 specifically dealt with the issues raised on the RTÉ "Prime Time Investigates" programme, as well as specifically looking at the reporting that was done. On the previous occasion I appeared before the committee, in June 2017, I said I was very concerned about reporting to the agencies and the accuracy of the reporting. We acted on the basis of what we had in the Deloitte report. The Comptroller and Auditor General's report is a different report. The Chairman asked me what are we going to do in terms of the findings of that report. I cannot pre-empt the investigation, because it would create huge difficulties for us if we did that.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The only observation I would make on that is that the UL has had the Comptroller and Auditor General's report since last August, which is quite a number of months ago. If there was a determination-----

Professor Desmond Fitzgerald:

As far as I remember, the final report was received in November 2017.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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No, it was August 2018.

Mr. Seamus McCarthy:

The report was published in November. It was completed in August and was sent-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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Did the Comptroller and Auditor General send drafts during the writing of the report?

Mr. Seamus McCarthy:

Absolutely. We sent drafts from about April.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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From about April last year until August, when the Comptroller and Auditor General finished his report, everything in his report was known to the university.

Professor Desmond Fitzgerald:

Again-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The Minister published it towards the end of last year.

Professor Desmond Fitzgerald:

I would be cautious up to the point of when the final, official report would have been received. At that point it was discussed at the governing authority in December.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I will ask a broad question. If the board of governors was satisfied that an individual at senior level in the employment of the university seriously misrepresented the facts, as stated by the Comptroller and Auditor General, to the board, the Comptroller and Auditor General, the Department of Education and the Committee on Public Accounts, would that individual merit a written warning or would that matter be recorded on the individual's personnel file?

I am speaking in general terms, not about this case. If a situation was to arise next week, for example, and it became clear to Professor Fitzgerald that a very senior official was deliberately misrepresenting information to him, the board and external organisations, should there not be action? I am speaking about a potential future event because I am interested in knowing the issues involved. Should it be recorded on the person's personnel file or should there be a disciplinary process? How would such an event be handled in the future?

Professor Desmond Fitzgerald:

In the future we will apply statute No. 4 and take an individual through a disciplinary process, but I would not move to it, unless there was an investigation within the institution. That is our legal advice. The Comptroller and Auditor General was very careful in saying they were not pointing at individuals. We do not use that as the basis for disciplinary action; we would be obliged to carry out an investigation. At that stage we would use it as the basis for a disciplinary action that might or might not be applied.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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These are very serious issues. At the end of whatever investigation the University of Limerick might choose to carry out we hope that if it is thought it was not appropriate to make the payments from public funds, the university would move to have the funds recouped to the taxpayer. We had it here with the Department, the Higher Education Authority and Cork Institute of Technology when funds were spent in a way that was not appropriate. Measures are put in place in that regard. We want to tell the people that if taxpayers' money is spent inappropriately in a State institution, moves will be made to recoup the money. Does Professor Fitzgerald understand the principle?

Professor Desmond Fitzgerald:

Absolutely, but I have learned in the short time I have been in the public sector that it is actually quite difficult to proceed with disciplinary action. Again, I will be very cautious in what I say ahead of entering into-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It is funny but twice today we have heard a remark on this issue. The Comptroller and Auditor General said that if it was to happen in the private sector and facts were misrepresented, there would be a resignation. Professor Fitzgerald has highlighted a second issue that because it has occurred in the public sector, it is, therefore, hard to deal with such issues. Two interesting comments have been made. Both witnesses have said in different ways that if this was to happen in the private sector, the auditor would take very definite action. There is a hint in what has been said that if this occurred in the private sector, there would have been action taken, but both witnesses have said that because it occurred in the public service, neither of them is free to act.

Mr. Seamus McCarthy:

The fact that I reported and my team stuck with the matter is evidence that we would deal with such an issue. In fact, I would nearly say the opposite is the case. If I was a private sector auditor, I could have walked away and forgotten about it.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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But in this case the law tells us that Mr. McCarthy could not do so.

Professor Desmond Fitzgerald:

It is not the difficulty that would prevent someone from acting, but it would make me act carefully.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It is public money and we do not want the witnesses to make a mistake that would prove costly.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Chairman-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The Deputy does not like the tone of my questioning.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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We should hold every institution to account. First, the private sector should not be elevated-----

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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It was just a comment on which the Deputy picked up.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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-----and, second, it was the university that represented what was going on. That matter needs to be teased out. We have the president before us. I am all for accountability, but certainly the university represented the information and stood over this activity.

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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The point is taken. I will put it this way - the comments were asides. We have had a detailed discussion on the issues before the committee. I apologise for the slightly late start and running into the afternoon. I have said previously that as soon as the accounts are approved by the Department of Education and Skills, we will arrange a return visit. As matters stand, the only accounts in front of the committee are two and half years old. There is no way we can conduct our business without reverting back to that fact.

I thank the witnesses from the University of Limerick and IT Sligo for their attendance and the material provided. I thank Mr. Ó Foghlú who may not be with us at the next meeting. The secretariat will be in touch with the witnesses to receive any information the committee has sought to make sure it is sent on to us in reasonable time.

The witnesses withdrew.

Sitting suspended at 3.25 p.m. and resumed at 3.35 p.m.