Oireachtas Joint and Select Committees
Thursday, 7 February 2019
Public Accounts Committee
2017 Annual Report of the Comptroller and Auditor General and Appropriation Accounts
Vote 1 - President's Establishment
Vote 2 - Department of the Taoiseach
In this session we will be examining the 2017 Appropriation Accounts for the President's Establishment, Vote 1, and the Department of the Taoiseach, Vote 2. We are joined from the Department of the Taoiseach by Mr. Martin Fraser, Secretary General; Mr. Denis Breen, head of corporate affairs; and Ms Geraldine Butler, finance officer. From the Department of Public Expenditure and Reform we are joined by Ms Victoria Cahill and Mr. Brian O'Malley.
I remind members, witnesses and those in the Visitors Gallery that all mobile phones must be switched off or switched to airplane mode. Leaving them in silent mode is not enough as they may still interfere with the recording and broadcasting systems.
By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to 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 asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person 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 policy or policies.
While we expect witnesses to answer questions put to them clearly and with candour, they 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:
The 2017 Appropriation Account for the President's Establishment, Vote 1, shows gross expenditure of €3.7 million, of which expenditure under the centenarian's bounty scheme accounted for €1.13 million. The balance, totalling €2.6 million, is related to expenses of the President's Establishment.
In addition to the direct charges on the Vote, other costs relating to the operation of the Presidency were charged to other Votes and to the Central Fund of the Exchequer. These amounted to an estimated €5 million in 2017. This includes €2.3 million spent by the OPW on maintaining the grounds and premises at Áras an Uachtaráin, the President’s official residence. A breakdown of the net allied expenditure is given in note 1.1 of the appropriation account.
Vote 2 provides for expenditure by the Department of the Taoiseach in support of the Taoiseach and the Cabinet. Gross expenditure in 2017 totalled €28.3 million. All the expenditure related to one programme, with a breakdown given in note 3. Administration costs, including salaries, totalled €15 million and accounted for 53% of the total spend. Almost €9 million was spent on various statutory inquiries. The National Economic and Social Council, NESC, is the only agency under the aegis of the Department of the Taoiseach. The council received €1.9 million in grants in 2017.
There was a significant underspend on the Vote in 2017, relative to the amount provided by the Oireachtas. As a result, just under €9.2 million was liable for surrender at the year end. Explanations for the variances are given in note 3.
Mr. Martin Fraser:
Good morning. I am attending at the request of the committee to assist in its examination of the 2017 appropriation accounts for the Department of the Taoiseach and the President’s Establishment. As the Chairman stated, I am accompanied by my colleagues, Mr. Denis Breen, head of corporate affairs, and Ms Geraldine Butler, finance officer. The committee will have received, in advance of this meeting, briefing documents detailing the 2017 expenditure and outturn of the Department of the Taoiseach and the President’s Establishment as set out in the 2017 appropriation accounts and other supporting documentation. I propose to briefly outline the role and structure of the Department of the Taoiseach and to give an overview of the Department’s 2017 appropriation account as well as an overview of the President’s Establishment appropriation account for 2017.
The Department of the Taoiseach’s work centres on supporting the work of the Taoiseach and the Government both at home and abroad. The core functions of the Department are delivering the Executive functions of the Taoiseach and the Government, providing the Government secretariat, supporting the Taoiseach in carrying out his duties as head of Government including in relation to the Oireachtas, constitutional issues, protocol, the European Council, the North-South Ministerial Council and the British-Irish Council, working with the Office of the President and with the Oireachtas and engaging with the formulation and implementation of Government policy mainly through the system of Cabinet committees, senior officials’ groups, the programme for Government office and the parliamentary liaison unit. The Department is responsible for the office of the Taoiseach, as well as providing some support for the Tánaiste and Independent Ministers in Government. The Department is also the site for the Office of the Government Chief Whip, who also has responsibility for the Central Statistics Office. We provide support for the Ministers of State assigned to the Department who have responsibility for Defence, European Affairs and for data protection. The Department also provides the Government Information Service, provides briefing and advice to the Taoiseach on the full range of domestic policy issues and on international affairs, including through the work of the NESC, to which the Comptroller and Auditor General referred earlier. The Department also supports the Government in the formulation and implementation of Ireland’s EU, Northern Ireland and international policies, including co-ordination across the whole of Government. We also deliver support services through our corporate affairs division which includes human resources, finance, ICT and other services.
In 2017, changes were made to the structure of the Department following the appointment of a new Taoiseach and Government. These included new Ministers of State, responsibility for Brexit co-ordination moving to the Tánaiste and Minister for Foreign Affairs and Trade and the establishment of new Cabinet committees. The Department supported the Taoiseach's intensive engagement and negotiations with EU leaders on a wide range of issues, including Brexit. Through the Cabinet committee structure, the Department engaged with other Departments on a wide range of national policy issues, as directed by the Taoiseach, such as housing and homelessness, climate change, health and justice reform, infrastructure planning and investment, gender equality and disability, economic planning and rural development.
In addition to the existing responsibilities, the Department undertook additional preparatory work during 2017 in the areas of pensions reform, Ireland's bio-economy, the national planning framework, the national development plan, Global Ireland - Ireland’s Global Footprint to 2025, and the establishment of the North East Inner City, NEIC, programme implementation board. Press and protocol support services continued to support the large programme of events including the state funeral of the late Taoiseach, Mr. Liam Cosgrave, and visits by Heads of State and senior EU officials. The Department was centrally involved in supporting the Taoiseach and the National Emergency Co-ordination Group in its response to Storm Ophelia in October 2017. Across all areas of the Department’s responsibility, considerable time and effort also went into answering parliamentary questions, preparing material for use in the Oireachtas, processing freedom of information, FOI, requests, answering letters and queries from the public, organising events, preparing speeches, and responding to media queries.
The outturn for the Department of the Taoiseach in 2017 was €27.58 million against an Estimate provision of €36.74 million. This lower than anticipated expenditure resulted in €9.16 million being surrendered back to the Exchequer at the end of December 2017. The significant variations in expenditure relate primarily to programme spending. Under subhead A4 -Tribunal of Inquiry - spending was €3.5 million less than estimated due to the number of legal cost claims settled in 2017 being lower than expected. Obviously, we have no control over third-party legal costs incurred by tribunals and it is impossible to predict the timing of settlement of third party costs or the level of costs falling due at any particular time. Under subhead A5 - Commissions of Investigation - spending was €2.4 million under estimate. The commissions are independent and their expenditure levels depend on the needs and requirements of their investigations.
Subhead A1 - Administration Pay - was also under estimate due to a significant turnover of staff and delays in filling posts at some grades during the year. Just over €15.3 million was expended on pay and administration in 2017, with the balance expended on programme expenditure. As the Comptroller and Auditor General pointed out, quite a lot of our spending is on investigations.
The Department’s 2017 appropriation account was audited by the Office of the Comptroller and Auditor General. In his report, the Comptroller and Auditor General noted that, in his opinion, the account properly presented the receipts and expenditure for the Department for the year ended 31 December 2017 and that it has been prepared in the form prescribed by the Minister for Public Expenditure and Reform. The Comptroller and Auditor General also stated that he had no matters to report with regard to the statement provided by me, as Accounting Officer, on internal financial control.
My role as Accounting Officer for Vote 1 is very different to that of Accounting Officers for other Votes. Generally, the Secretary General is the Accounting Officer for the Votes and also the administrative head of the Department and as such can answer for the actions of the Department. Although I am the Accounting Officer for Vote 1, I have no executive or operational responsibility for the Office of the President. This is entirely appropriate given the constitutional position of the President. As the committee is also aware, Article 13.8.1oof the Constitution states:
The President shall not be answerable to either House of the Oireachtas or to any court for the exercise and performance of the powers and functions of his office or for any act done or purporting to be done by him in the exercise and performance of these powers and functions.
As Accounting Officer, I obtain assurances that the office operates properly through my direct contact with the Secretary General to the President and from the audit performed by the Comptroller and Auditor General. The outturn for the President’s Establishment for 2017 was €3.6 million against an Estimate provision of €3.9 million. This lower than anticipated expenditure resulted in €294,236 liable to surrender back to the Exchequer. The account for the President’s Establishment was audited by the Office of the Comptroller and Auditor General. In his report the Comptroller and Auditor General noted that, in his opinion, the account properly presented the receipts and expenditure of the President’s Establishment for the year ended 31 December 2017 and the audit evidence obtained is sufficient and appropriate to provide a basis for that opinion.
That concludes my statement to the committee.
I thank Mr. Fraser. Before I call the first speaker, I acknowledge receipt of Mr. Fraser's opening statement, briefing note and the annual report for the Department of An Taoiseach for 2017. I also want to acknowledge receipt of information in respect of Vote 1, the President's Establishment and the opening statement in that regard. I further acknowledge receipt of the document, The Presidency in Review, 2011 - 2018, which was published towards the end of last year. That contains some financial information of which the public may not have been aware. It is welcome that its publication has been achieved. As a matter of course, the Committee of Public Accounts will be examining all Votes on a routine basis, which is what it should do. Today's meeting includes an examination of the Vote for the office of the President. Last year was the first time that we conducted such an examination but it will be a normal part of our work from now on. We also indicated earlier that we will be reviewing the accounts of the Comptroller and Auditor General's office. I do not know if any Committee of Public Accounts has done that before but we will be doing it. We will also be reviewing the accounts of the Houses of the Oireachtas Commission. I do not know when the commission was last before the Committee of Public Accounts. Every one of the Votes will be examined by this committee at some stage and there will be no exceptions from now on. I just wanted to put that on the public record in case people think we are picking and choosing particular items. Everything is on our agenda.
Deputy Aylward is first and he will have 20 minutes. Everyone else will have ten minutes because we will have a second session this afternoon and there will be a different main speaker at that stage. Speakers will be called in the following sequence: Deputy Aylward, Deputy Cullinane, Deputy Catherine Murphy, Deputy Connolly and Deputy MacSharry.
I welcome Mr. Fraser and all our other guests. I will begin with Vote 1, the President's Establishment. I note €3.7 million and then €2.6 million under various headings and then a sum €5 million. That comes to a total of €11.3 million in costs for the President's Establishment. Am I correct? I see €3.7 million in total gross expenditure and then on the next page, a sum of €2.6 million for allied service expenditure and then €5 million is mentioned for maintenance and other works. We are talking about a total of €11.3 million. Am I reading that correctly?
We will state it correctly. We have received a summary. Net voted expenditure in 2017 was €3.609 million. Allied services expenditure, including the amount from the Central Fund, was €5.039 million, thus giving total expenditure of €8.918 million. The figure includes the salary and pension payments of the President and the particular allowance referred to previously. The total is €8.918 million for the year under review.
The figure is approximately €9 million. That clarifies the matter.
I wish to clarify the position on the discretionary fund. I was looking at the documentation and the presentation submitted last night and could not see a reference to the €317,000 discretionary fund. Why is it not included in the report of the Comptroller and Auditor General?
The reason I am asking the question is it was controversial at the time. It was raised during the presidential election and we were all being told that it should not be debated in the Houses because of the sensitivity of the issue and so on. Now that the election is over and we have a new President in place, I am keen to know about the funding of €317,000 and accountability for it per annum. As it accumulates, it will come to big money over five, six or seven years, or whatever the term is. Why is the figure not included? It is not explained. Perhaps Mr. Fraser might add something to explain to the public the sum of €317,000. What explanation do we have for it? I simply wish to appease minds among the general public.
I will explain it for the benefit of the public because it relates to the President's Establishment. There is a payment of €894,000 from the Central Fund to the Vote. It includes the allowances for the President, pension payments to former office holders and what is called the 1938 allowance paid under a statutory instrument.
The figure of €894,000 includes the sum of €317,000. It is important to note that it is paid from the Central Fund by the Department of Finance. The Secretary General of the Department of Finance is the Accounting Officer for the Central Fund. Am I correct in saying he is the person responsible? The Secretary General of the Department of Finance will shortly be before the committee to deal with the Vote for the Department of Finance. We will put him on notice in that regard. We will ask him to answer the question as it relates to the Central Fund. Am I correct, Mr. McCarthy?
I know that I am not an auditor or anything like it - I am only a lay person - but I could not find it in the system. It should be explained to the public that the figure is included in the sum of €8.9 million.
I want to talk about the audit committee. It did not sit in 2017 and there was no chairman. That was also controversial at the time. Has the position changed? Is the audit committee now in place and has a chairman been appointed? Does it meet on a regular basis?
Mr. Martin Fraser:
The chairman is the former Secretary General of the Department that was responsible for community, rural and Gaeltacht affairs, Mr. Joe Hamill, who has been in place since well before our last conversation. I think the committee has had three or four meetings. Certainly, there were three meetings last year. That structure is in place. Committee members understand what happened before and the circumstances surrounding the chairman.
I will move on to other expenditure. There was expenditure on An Garda Síochána of €197,000 and €428,000 on security and defence. The figure for the Office of Public Works is €2.3 million and the Department of Foreign Affairs and Trade, €667,000. Will Mr. Fraser explain these figures? I am especially interested in the figure for the OPW of €2.3 million and for the Department of Foreign Affairs and Trade figure of €667,000.
Mr. Martin Fraser:
I had the details before me a few seconds ago. I do not know this stuff as well as I know the material for the Department of the Taoiseach. It comes under the heading of net allied services. The figure for pensions is among the main items. The biggest figure is for the OPW, as someone mentioned. The OPW does a great deal of work in the upkeep of Áras an Uachtaráin, the grounds and so on. That is the main item of expenditure. There is a little expended on shared services, of which every Department avails. The figure for An Garda Síochána is related to security. The figure for the Department of Foreign Affairs and Trade relates to foreign travel.
Mr. Martin Fraser:
It relates to state visits. It is not for airplane tickets but all of the facilities the Department of Foreign Affairs and Trade provides for the President, both at home and abroad. The briefing material provided for the committee states where the President visited in 2017. It is, of course, a matter of public record, but it is included in the briefing material somewhere. There were state visits to Cuba, Australia and New Zealand. The state visit to Australia and New Zealand was nearly one month long. There were then official visits to Colombia, Peru, Italy, Vatican City and Scotland.
Mr. Martin Fraser:
Obviously, the cost depends on where the President visits. When it comes to where the President visits, his personal wishes are important, but it is part of the diplomatic statecraft of the State. If countries offer the opportunity to make a state visit or if we offer people the opportunity to make a state visit, it is obviously based on whatever we think is in our national interests and where we want to deepen friendships. The obvious example is the President's visit to Britain a number of years ago. We see incoming and outgoing visits. Obviously, the farther away he goes, the longer he will be there and that will be reflected in the costs of the state visit. He was in Croatia and Greece last year. That would not have cost as much as visiting Africa, Australia or New Zealand. As committee members can see, the cost was a little higher in 2017 and 2016. The differences are in the region of hundreds of thousands of euro, depending on where he visited. It is included in the detail of the Department of Foreign Affairs and Trade figures. The figures for the Department Defence relate to Army services, including soldiers.
Mr. Martin Fraser:
There is also the Central Fund. I am keen to be helpful, Chairman, but I am not the Accounting Officer. It was mentioned that the President had published a document. I had no involvement in its preparation because, as I said, it is quite properly none of my business. He sets out in some detail in the report what he does and the fact that there are 20,000 visitors each year and 223 in-house events. I gather he will publish a report annually. I also understand he has set up an audit committee for the allowance and that he has refunded the surplus to the Exchequer. Again, these are not my responsibilities. I simply know this from my contacts with the other Accounting Officers.
Although, there were some complaints to the effect that the explanation provided was not detailed enough. I did not go there or even get into it, but there was a report in the newspapers which suggested it was not detailed enough. However, that is for someone else to decide, not me.
I will move on. I wish to ask two quick questions, the first of which is about procurement. There is reference in the document to one contract for €37,555. The figures are in compliance, bar that one. What goods and services does the contract cover?
Yes, to procurement compliance. It states: "The President's Establishment complied with the guidelines with the exception of one contract to the value of €37,555". Why were the guidelines not complied with in that case?
On Vote 2, I wish to hone in on the cost of the Government Information Service, GIS. The strategic communications unit, SCU, was established by the Taoiseach's office and the Government and in existence for a certain period before it was disbanded. How much did it cost to establish it? How many personnel were involved? Does Mr. Fraser know why it was disbanded? The Taoiseach reverted to using the existing communications units. The SCU was the subject of much public discussion. The public should be given an explanation as to why it was established and abandoned.
Mr. Martin Fraser:
It is a very long report, but, in summary, the SCU was taking away from the core priorities of the Department of the Taoiseach. We have many reasonably important things to do and people were talking about nothing other than the SCU. In addition, I was of the opinion that we were losing the trust of people who might need to trust the Civil Service in the future.
What benefit was provided by the SCU? The Taoiseach proposed its establishment and set it up. However, things went wrong and people did not like it. The unit got a kicking and was withdrawn on the basis of public opinion. Is that the case?
That is as good an answer as I will get on the issue.
On employee numbers, there were 228 staff at year-end in 2017 and 204 at year-end in 2016. What was the reason for the significant increase of 12% or 24 staff in 2017?
Mr. Martin Fraser:
Our staff numbers may fluctuate significantly year on year. As the Deputy is aware, ours is probably the smallest or second smallest Department. The SCU was the main reason for the increase. Some staff were assigned to data protection, justice reform, the north east inner city initiative and internal records management and data protection encompassing the GDPR and so on. Five staff were assigned to various support services such as HR, finance and private offices. That accounts for the 14 extra staff. The nature of the Department is that the amount of work for which we are responsible varies.
Mr. Martin Fraser:
They are civil servants, mainly permanent civil servants. A significant number of staff join on secondment for a few years and allow us to draw on their experience gained in other sections of the Civil Service and the public service. We have an above average percentage of staff on secondment, but they are all public servants, most of whom are civil servants. The work comes and goes. In 2018 there were changes to the Citizens' Assembly; the staffing level of the GIS was reduced and more staff were appointed to work on Brexit, justice reform and commissions of inquiry. It varies each year.
Mr. Martin Fraser:
We probably had more people working on Brexit in 2018. We have more commissions of inquiry and are doing some work on justice reform and reform of the Garda, for which a couple of staff are required. It has been recommended that the Department undertake several other projects in 2019 which will require more staff. It comes in phases. Sometimes we are told that it is a massive empire that needs to be cut down in size, while at other times we are told that we should take on more work.
The figure for pay and travel and subsistence amounted to €13.11 million out of a total administration spend of €15.32 million. There was non-compliant procurement expenditure of €698,754 in 2017. Will Mr. Fraser explain the reasons?
Mr. Martin Fraser:
The biggest by far is a contract with the company which designed and supplies the eCabinet system which was developed in the mid-2000s. It is proprietary software and it is the only company which can work on it. That accounts for most of the expenditure. Eir provides the switchboard in Government Buildings which is run by a couple of Eir telephonists who have been with us for a long time.
We have tendered for newspapers since, but it is very difficult to get value on them because they cost the same wherever they are bought. We buy them from a newsagent on Leeson Street. There was a company carrying out secretarial services for the Moriarty tribunal. Obviously, we do not decide on that. The Cregan commission employed an office equipment firm. The Moriarty tribunal also employed another company. I do not know what it was doing. We have to let the two tribunals and the commission do their thing.
My final question is on the disposal of capital assets. Does that refer to IT equipment? Why is that disposed of? Who is interested in buying it? Was that IT equipment out of date? I see that €321,000 was realised.
The Comptroller and Auditor General has given the Department a clean bill of health so I do not have anything else to say. I cannot find any loopholes here. The Department's representatives are free.
The centenarians' bounty is quite a large component of the Vote relating to the President's Establishment. Approximately 400 such bounties are paid each year, although, unfortunately, there were fewer last year. How much is that bounty per individual?
I am not but I chaired the Joint Committee on Finance and the Public Service when Charlie McCreevy was Minister and Deputy Noonan - another former Minister - was the main Opposition spokesperson. At that time, the bounty was £100. At the turn of the millennium, Deputy Noonan suggested that, because it was the year 2000, the bounty should be increased from £100 to £2,000. The then Minister accepted the proposal. It went through in the Finance Act and the amount has since been converted to euros. That is from where the figure came.
-----live to 100. That is a very positive development. The bounty comprises approximately one third of the Vote.
There was one contract that did not comply with procurement guidelines. It was a new contract awarded in 2018. Does Mr. Fraser know what that contract was for?
I completely accept that this Vote is different in terms of Mr. Fraser's responsibility. Does the OPW Vote cover things such as marquees for garden parties or is it purely responsible for matters such as keeping the house and grounds in good condition? Does the Vote stray into that other area?
Mr. Seamus McCarthy:
The staff number in the Vote refers to those whose salaries are charged to the Vote. These would be the administrative staff, whereas the household staff are an OPW expense and are counted on the OPW Vote rather than here. What is shown here is the charges on the OPW Vote that are associated with the costs of Áras an Uachtaráin.
There is quite a bit of crossover in this particular office. It involves the Department of Foreign Affairs and Trade and other Departments. That is understandable. To move on to the Department of the Taoiseach's Vote, I want to explore redundancy and severance. It has always been my understanding that a job is made redundant as opposed to an individual. Is it then accurate to count it as a redundancy if someone new is recruited because there is a different officeholder? Is it actually the job that is made redundant? What I am really trying to get at is whether there is the same number of people.
Mr. Martin Fraser:
There are rules and circulars around what severance and redundancy is payable. In the event that there is a change of administration those rules are applied to the individuals. The amounts can vary depending on service, salary and all sorts of things. We apply the rules. In 2016, as the Deputy can see, almost nothing was paid - €47,000. That looks to me as though one person got severance. To look at 2017, as the Deputy will know there is quite a lot of turnover when the Taoiseach changes, even if the party stays the same. Staff lose their jobs because the jobs go with the officeholder. They get paid in accordance with finance circulars.
Nobody would dispute that should occur and that people should be treated fairly, the issue at which I am trying to get is how it is described in terms of numbers. The numbers will not decrease but the personnel will be different.
Mr. Fraser already dealt with disposal of assets. I had picked some of the issues which he has already gone through. I will move onto the tribunals of inquiry. I understand that it cannot be predicted in advance but some of the legal costs arising from the Moriarty tribunal related to Deputy Lowry. Am I right on that? That was quite a long time ago. Does Mr. Fraser know the total cost of those tribunals as opposed to what is paid out each year?
Mr. Seamus McCarthy:
If I might interject, the Deputy will see note 6.1 on screen. This lists the payments per inquiry in 2016 and 2017, but also gives the cumulative figure or total cost incurred to the end of 2017. The figure for "Tribunal of Inquiry (payments to Messrs Haughey and Lowry)" is €61.3 million so far.
Mr. Martin Fraser:
As stated earlier, I cannot predict it. The Deputy is talking about the Moriarty tribunal. The McCracken tribunal, which was held previously, does not cost us money any more. Ultimately, we spent approximately €2 million on the Moriarty tribunal last year. That is up to €61.3 million. Although I am not aware of the details, there are outstanding claims. We have a figure in the Estimate of €4 million for this year.
Mr. Martin Fraser:
We cannot. As the Deputy knows, we gave back €9 million in the year we are talking about. It is very difficult because some of these claims are very big, and there could be a claim of several millions. The Department spend runs at €20 million a year and we then have these things hanging over us, which are nearly twice the size of the whole cost of the Department. We guessed €10 million in the 2017 Estimate and it ended up being €6.5 million. We guessed €4.5 million last year and it ended up being €2 million. There are claims out there that could be big but we do not know, and we are guessing €4 million for this year. We know who has not been paid yet, so we are guessing from there.
Can Mr. Fraser provide an indication of how old claims can be? We can see that this dates from 2011, which is when the tribunal concluded its work. It was going on for some years before that. I will use that as an example. Can claims be outstanding for 15 or 20 years? Is there a cut-off point or a statutory limit?
Mr. Martin Fraser:
The Comptroller and Auditor General might know. I write to the heads of these tribunals annually and ask them if they are nearly finished. They write back to me dutifully stating that they are not yet finished. The tribunal decides what the fees are and it goes to the Taxing Master; they sort it all out and we just get a letter saying what the amount is, and that is our only involvement. To say that I am unhappy to have this stuff on our Vote all these years-----
Mr. Seamus McCarthy:
If necessary, yes, but it will also be challenging and examining the bills. I think it has been discussed by the committee on a previous occasion with the State Claims Agency. It is undoubtedly a difficulty for Accounting Officers because of the independence of commissions and tribunals to provide that level of detail. We would certainly in the past have pressed for some estimate of what is the residual cost outstanding to try to include that. However, it is a very difficult matter. It may be that certain potential claimants have not even lodged a claim yet, so one cannot begin to estimate how much of that would survive through taxing and through challenge.
With regard to the Citizens' Assembly, the outturn was less than the estimate, so, obviously, there was some flexibility. That went on almost every weekend over 12 months and it was a forerunner to a number of successful referenda. I remember the first and second divorce referenda. Had we had something like the Citizens' Assembly in advance, we may well have ended up saving money by virtue of the fact we were spending on a useful initiative. I was on the Constitutional Convention, which was a forerunner to the Citizens' Assembly, and a number of referenda will happen as a consequence of that.
This is an historical figure. I presume it is because it is set up under the Department of the Taoiseach that this happens.
Mr. Martin Fraser:
They operate completely independently, although the Constitutional Convention and the Citizens' Assembly were both paid for from our Vote and substantially staffed by civil servants from the Department of the Taoiseach. The secretary of the convention and the secretary of the assembly would have been assigned by me, although, after that, I do not go near them because of the nature of their work. It was effectively civil servants from the Department of the Taoiseach who designed and ran both of those.
Mr. Martin Fraser:
Yes. What happens in general is that those reports are sent to the Oireachtas and the Government, and the Government responds to them. As the Deputy knows, the convention gave rise to two or three referenda, that on marriage equality being the one people remember best and one on how old the President could be was defeated, and there may have been others. We are going to have one in October on presidential voting rights which I believe dates back to the Constitutional Convention. The Government or the Oireachtas either go with these things or they do not. The assembly dealt with some policy matters, for example, on older people and climate change, and the one that is best known is the eighth amendment, which was the hardest piece of work done.
It is an example that reflects Deputy Aylward's point. I could be asked to set up a Citizens' Assembly from scratch and I might have to find six or seven people from nowhere and they have to be quite skilled people because these are very difficult and sensitive jobs. In this case, we have run the assembly since the arrival of the last Government. It is not in place at the moment but there is talk of having another one on a few issues.
Go raibh míle buíochas as ucht an t-eolais. I thank Mr. Fraser for all of the information. I note the Comptroller and Auditor General's report on both matters and I welcome that there are no issues arising.
In regard to the extract on the Presidency in the review on the 1938 allowance, to which the Chair referred, is that generally available and published?
That is fine. I welcome the clarification. We presume it comes under a separate Department.
With regard to the President's Establishment and the internal audit, Mr. Fraser has already clarified there was no change and the committee did not meet. Have provisions been put in place should a chair be sick in the future? Has it been pre-empted so it will never happen again that an audit committee will not meet?
The rest of my questions have already been answered. We will move on to the Department of the Taoiseach. I am not sure if Mr. Fraser answered on the contingent liability on page 19. Did my colleague address that? Could we deal with it? It is stated that an indemnity provided by the Department may generate costs. Can Mr. Fraser clarify the position in that regard? What is the nature of the indemnity? To whom was it given? What is the status of the litigation, if any?
Mr. Martin Fraser:
I was just checking with my colleague that it is what I think it is. That is an indemnity that was provided to a lawyer who conducted an inquiry. I want to be very careful. It is Sean Guerin, who conducted an inquiry into the Maurice McCabe situation. That is a subject of litigation between him and the former Minister for Justice. Anyone who has done an inquiry for the State is given an indemnity in respect of the work they do in that inquiry. That is the subject of litigation so there is every chance that it will give rise to costs, depending on the court's decision.
That is fine, I just wanted to clarify it. In respect of tribunals, these are the tribunals or commissions that come within the Department of the Taoiseach. Then there are others like the Grace inquiry and so on.
Yes. It would be nice to know that in respect of tribunals and commissions of inquiry. At the moment, how many are outstanding? We are going back to Lowry here and the other matter. I am sorry, I do not mean to mention names.
Mr. Seamus McCarthy:
Wherever there are expenses still outstanding, there should be an account of it in the relevant appropriation account. I think, though, to go back over a 15-year period, some might have existed for two or three years. They would not currently be reported. This note has been around for quite a while, at least ten years. For those who have a particular interest in it, it is possible to aggregate the figures going back through appropriation accounts for a decade, for example.
In respect of administration, I have one specific question about page 14 under subhead A1. It is stated that the underspend was due to a delay in the planned filling of vacancies due to lack of availability of panels and security vetting. Why was there a delay with security vetting?
Mr. Martin Fraser:
I would say it was the volume of work. From memory, the recruitment ban was lifted around this time in 2017 and the reversal of pay cuts began. There was a bit of a problem with ramping up and extra people coming in. That gave rise to delays, both on panels and in security vetting. It takes a while.
I thank the Accounting Officer for the comprehensive opening statement and briefing notes. There are no real issues with any of the accounts signed off on or the appropriation accounts. On the President's Vote, on page 3 of the appropriation accounts it is stated that there is one contract of €37,555 that has been rolled over for a number of years.
Perfect. I will go back over the Official Report. I thank Mr. Fraser. On page 7 of the appropriation account, the figures for Vote 28, Foreign Affairs and Trade, show a marked increase in expenditure from €241,000 to €667,000. Was that dealt with?
Mr. Martin Fraser:
It was but I am happy to answer on it again. It is not an enormous figure. It is a function of the extent and duration of the President's official visits. In the year in question there were quite a lot of State visits. There was one to Cuba and quite a long one to Australia and New Zealand. The further one goes and the longer one is away, the more expensive it is, including for the Department of Foreign Affairs and Trade, which has fewer people on the ground in some places. That figure fluctuates depending on the extent of diplomatic engagement.
Perfect. Mr. Fraser referred earlier to the core functions of the Department of the Taoiseach and, I suppose, of the Taoiseach. One of them is engaging with the formulation and implementation of Government policy. There is a focus at the moment on the relationship between different Departments, the Minister for Public Expenditure and Reform and the Taoiseach. I think the national children's hospital overspend is an obvious case where people became aware of it whenever they did. It is a very significant problem and is very much in the public domain at the moment. What would be the Taoiseach's role in that area apart from it being raised at Cabinet level? What would the reporting structures be? If a board identifies a problem, which then goes to the Department of Health, which then goes to the Minister for Health, at what point does it get to the Taoiseach? Is it only at Cabinet level that it would be brought to the Taoiseach's attention? If his role is to formulate and implement Government policy, and it is Government policy to build the national children's hospital, what would his role be in terms of oversight?
Moving on to the commissions of investigation and tribunals, obviously there is a cost to the State. The various tribunals and commissions and their cost are listed on page 19. A number of them are live. The Cregan commission - is that the one into the Irish Bank Resolution Corporation, IBRC?
Mr. Martin Fraser:
I do not have it to hand. The first thing to say is that we only pay for this. It is actually established by the Oireachtas. The terms of reference were set by the Oireachtas and changed by the Oireachtas. The Oireachtas legislated to give this commission of investigation extra powers. I have almost no influence over this other than that I have to pay the bills for it.
I am asking the question of Mr. Fraser in the Committee of Public Accounts. I am asking questions in regard to a commission of investigation. I am not doing so to trip up anybody. I am asking fair questions in regard to a commission that has been set up. Mr. Fraser is the Accounting Officer. The Taoiseach held a number of meetings with the Opposition to brief them on what are problems in this process. This is the place where we tease out those problems in terms of cost, in my view. What is the estimated cost of this commission and how much has been spent thus far? What is the anticipated overall cost as opposed to the initial estimation? I ask Mr. Fraser to talk us through those costs.
I am not saying that this is the fault of any one individual but it is reasonable for us to ask the question at this point. We have a commission that was established and given terms of reference for which the budget was an estimated cost of less than €5 million. The estimated cost is now €20 million, which indicates to me that there is a problem. I attended one meeting and I can have my own perspective and others will have theirs but from Mr. Fraser's perspective, as the Accounting Officer for the Department of the Taoiseach, how have we arrived at a situation where the cost has increased from less than €5 million to €20 million?
Surely, there has to be more to it. It cannot just be that it is taking far longer because we are talking about a cost that is four times the initial cost. I would like a little more detail as to why the cost has increased from €5 million to €20 million.
I ask Mr. Fraser to bear with me for a minute. On any issue that comes before the Committee of Public Accounts, there will have been a lot of meetings, public commentary and Dáil proceedings. I am not asking about them. I am asking Mr. Fraser questions. Whatever was discussed at previous meetings with my party leader or any other party leader is a matter for those meetings. Mr. Fraser is here today as the Accounting Officer. My question is if any representations were made to the Department in regard to the cost of legal fees? Mr. Fraser has acknowledged such representations were made.
I will put my questions through the Chair, and in a different way. The Taoiseach can consult on any matter with whomever he wants. On this issue, he consulted with party leaders and so on, but the Department and the Taoiseach sign off on any decisions that are made. That is what happens. The Taoiseach may have the consent or the support, or not, of individual members of the Opposition but that is neither here nor there. The Taoiseach's Department signs off on it.
The Government brings it forward. We are dancing on the head of a pin which is unnecessary because I am not suggesting anybody is culpable or responsible. I am trying to get answers on behalf of the taxpayers who will have to foot this bill. The cost has increased from less than €5 million to €20 million. I am not saying that is the fault of the Department, the Taoiseach, the Opposition or everybody here. Rather, I am saying it has happened and cost is an ongoing issue. Is it possible the cost could go north of €20 million?
There is an issue here. The Oireachtas committed initially to writing a cheque for less than €5 million. The cost has now increased to €20 million. I appreciate the point that is being made by the Accounting Officer, that there has been consultation with Oireachtas Members and Opposition leaders, but people will be concerned about the fact that costs have increased from €5 million to €20 million and, possibly, €20 million plus. Mr. Fraser, as the Accounting Officer, will have to sign off on the cheque. As of yet, we have no indication of when a report will issue from this commission. Was an interim report sought?
To be clear, there was a meeting with the Opposition and there was agreement to an extension until March. That means it either has to be extended again or a decision has to be made to do something else. Is that Mr. Fraser's understanding?
Mr. Martin Fraser:
To be clear, I have no knowledge - no one here has in the sense of administrative oversight of this - of what that commission is doing, nor should I. I would imagine the third party costs are going to be the largest part of the bill. Insofar as it has been going on since 2015, I would say that third party costs are fairly hefty already.
The Department of Public Expenditure and Reform must have some idea of how the costs are going.
If it has no idea, this is a bigger issue because it would mean there is a blank cheque. What information does the Department have? Someone must have some idea. If the position is that no one has any idea what the cost of the commission of investigation will be, then the commission should be stopped. Can the Department be helpful to the committee in this regard?
Mr. Brian O'Malley:
I will try to assist the committee where I can. The Department of Public Expenditure and Reform arranges for an informal collection of data on costs on a quarterly basis for commissions of investigation, tribunals of inquiry, commissions to inquire into matters and various reports, for example, the Ferns report. Those are the four key headings. We write to the Departments on an administrative basis quarterly to get that information so we can see what the actual costs are.
Mr. Brian O'Malley:
It is the overall cost. We have the cumulative costs, the name of the commission, the topic of investigation, the status of the investigation - whether it is ongoing or if the tribunal or commission has concluded its work - and the cumulative costs to date. Where possible, we try to break that information down between administrative costs, legal costs and third party costs. If the Chairman will allow us to check the information, we will look to send it on to the secretariat.
We would be worried if there was no mechanism in place. I understand that the Department cannot estimate the third party costs until some of the figures come in, but there are daily rates and legal costs. In advance of this afternoon's session, will the witness indicate who sets the daily rate or who agrees the hourly rate on behalf of the State? Is the Department involved in that?
Given that we have an afternoon session with the three legal offices, will the witnesses indicate who sets the rates? Is it the Office of the Attorney General, the Office of the Chief State Solicitor or the State Claims Agency? Who clears or signs off on the rates?
Has the Department of Public Expenditure and Reform sought to have a standing commission or commission of inquiry established? Have other methods of doing inquiries been considered? Inquiries will always be needed. Have alternatives means of inquiring, for example, those used in other countries, been considered that would achieve the same results without incurring the same costs?
Mr. Brian O'Malley:
The commissions and tribunals are established and their terms of reference set by the Oireachtas. As Mr. Fraser said earlier and previously, we have looked at commissions of investigation as being a speedier and more cost-effective mechanism for dealing with these issues than the previous tribunals of inquiry might have previously been. As the Deputy will see, some of the costs referenced here are significantly lower for commissions of investigation vis-à-vistribunals of inquiry. That mechanism is one that is being implemented going forward. Just to be clear, the Department's role in this process is to collate the data from the relevant Departments on a quarterly basis. We will try to furnish the committee with that information if we can.
Mr. O'Malley might also give us the provisional estimate for each of the Departments for 2019. The Department obviously had the figures, even if they may not have been approved. I am asking for the most up-to-date figures. I accept the 2019 figure will be an estimate. At this stage, we can park this issue and consider it again when we receive that information.
We need Mr. Fraser to do a little bit more than speak generally because we focused heavily on this matter the last time. The unit was to be disbanded and according to various media reports, it has not really been disbanded. Mr. Fraser believes staff numbers are higher than in 2016 and, presumably, we had procured additional people to look after the strategic communications unit. What is going on?
Mr. Martin Fraser:
I know. The recommendations were that the unit should be wound down, which it was; the traditional GIS should take over some of its functions while others should be devolved to line Departments; there should be a transition period that ended in July, which it did; the budget should be reduced by 50%, which it was. In fact, we reduced the Estimate in the Revised Estimates.
We no longer use the term "strategic communications unit". It only spent €2 million out of a potential €5 million, which was cut from €5 million to €2.5 million. There is no specific budget this year and, instead of 21 people, there are only 16 or 17 people devoted to communications.
Mr. Martin Fraser:
It was recommended that the staff be put under the management of the assistant secretary for corporate affairs, which was done. There should be no new national campaigns run by the unit. Where expenditure was committed but not yet spent, it should be redirected to non-contentious campaigns like Healthy Ireland or Brexit preparation, which has been done. The Government Information Service, GIS, should continue to have a co-ordinating and supporting role for national cross-government communications, as has always been the case, but campaigns should be led and funded by the relevant line Departments, which is being done. Project Ireland 2040 should be the responsibility of the Project Ireland 2040 delivery board, which is outside our Department. That was done. International communications - Global Ireland, the Security Council campaign and the diaspora work - should be led by the Department of Foreign Affairs and Trade. All other activities should continue as before, including www.merrionstreet.ie, central support services, providing services to the media, managing media events and producing communication material across all platforms.
The committee endorsed these recommendations, which also called for us to continue the streamlining work, the capacity building work, the continuing professional development work, the single Government identity project, which members will see being rolled out, the www.gov.ieproject, which we are doing, and efficiency measures, for example, rationalisation and consolidated buying. It was also recommended that the research survey proceed, but that has not gone ahead yet. All my recommendations, which the committee endorsed, have happened.
It does not seem clear to me. Let me move on, as this is obscure and I do not believe we will get the kind of breakdown we are seeking. There are still many people involved in communications in the Department.
It has no involvement in other Departments. Mr. Fraser stated that the strategic communications unit covered other programmes and so on and that they have been pushed back to their line Departments.
What Government communications are there, then? If the Government wants to say something, this is confusing. It looks like smoke and mirrors. The same people are involved, they are not allowed to speak about X and they should speak about Y. They comprise the Government communications unit, yet there will be no more communications. The perception is that, while the €5 million might be gone, this unit still exists and all communication is being streamlined through it, with many of its people still on staff.
It will be on the record and I can check. Will Mr. Fraser provide a breakdown of everyone involved in communications, including when they were employed and the salary scales appropriate to them? He can send that information to the committee at another time.
Give us a specific breakdown of what those people do. The term "Government communications" is very general. If Department X wants to put a good spin on something but feels it is a bit light on the communications side, can it lift the phone to the GIS and ask how the something can be turned into a Government of Ireland announcement? The perception out there is that nothing has changed.
I appreciate that, so what I want is the proof, as Mr. Fraser has not been convincing. He has told us that there were eight, six, four or five, he was not sure, he does not know and, generally speaking-----
It must have been buried in some document or other.
I will address the President's Establishment. The audit committee is now meeting. How were its members recruited? I noticed in the accounts that the audit function for the Department of the Taoiseach is the same audit function for the President's Establishment.
We have a new chair. I was watching on the monitor when Mr. Fraser stated that the committee had met several times and was going through everything in question. Was the 1938 Act specific in excluding the President's Establishment from being audited by the Comptroller and Auditor General?
Mr. McCarthy might also supply a note on what would need to happen if the Oireachtas decided to include it. Would it require a statutory instrument, an amendment to the primary legislation or just political will, for want of a better expression?
Probably. If Mr. McCarthy supplies a note on it, we will know for certain. No one is saying anything about misappropriation or the like and did not the last time we discussed this matter either, but it is appropriate that moneys be audited. We learned that these moneys had not been audited. How this Vote is laid out is general. There are broad headings, which probably do not provide the level of explanation that people expect or to which they are entitled. Obviously, there are costs involved in running the Presidency. That is important, as no one wants him to be cycling a bike or staying in a Best Western. Does the €317,000 include wardrobe, for example?
I am talking about the President's Establishment. Mr. Fraser mentioned the word "President". There was an account published, which is not an audited account and which is not a detailed explanation of what the breakdown is. This is not about the current President. For the record, I voted for the President and my party campaigned for him. However, just because it is the President, do not drag an individual into what is taxpayers' money and the expenditure of it. There may need to be adjustments. I have asked for an explanation for the 1938 Act. Perhaps the President should be given more money in terms of this allowance. A refund was given, which is great, but it is about appropriate oversight. I am just asking a basic question, which is whether it includes wardrobe.
That is grand. What I am most respectfully asking Mr. Fraser is whether he can give us a breakdown, without the amounts necessarily, because it is perfectly legitimate that it might include wardrobe. Mr. Fraser might inquire from the Accounting Officer, with whom he obviously has a relationship. If it is the same audit function between one and the other, I am sure it is not rocket science to ask the question. Can we get a broader list of what kind of things it includes and whether it includes things like wardrobe? I am just interested to know. It is perfectly appropriate that it might. I just want to know and the public might be entitled to that too.
I am going to ask the Comptroller and Auditor General to help as we are on unusual ground. The payment of €318,000 is paid from the Central Fund and the person responsible for the Central Fund is the Secretary General of the Department of Finance. Am I correct so far?
The payment out is under the functions of the Secretary General of the Department of Finance and not of Mr. Fraser. The Department of Finance will be here in a couple of weeks and is on notice that we will ask about this payment being made from the Central Fund, as other payments from the Central Fund get made. We can ask that Secretary General whether there is a mechanism for accounting for that onward payment. That is something we will tease out. The public sees it very simply. There was expenditure at June 2017 of €8.648 million for the President's Establishment and most of it was Voted expenditure while €317,000 was not. The public will ask why, if the Comptroller and Auditor General can audit €8.3 million of the €8.6 million, someone cannot audit the other €317,000. Of the fund, 95% is audited by the Comptroller and Auditor General. From a layperson's point of view, it is not unreasonable to ask why that is not 100%. That is another day's work and probably a matter for policy or legislation.
I am not talking about the President at all. I am talking about public funds. I have an issue with things being misrepresented and the phrase "We can't talk about that because...". I am sorry, but we can. The people's representatives can talk about the people's money - end of story. Some of it is not audited and the Chairman has quite reasonably said that some of us think that perhaps it could be. As I have said ad nauseam, nobody is saying anything about misrepresentation or anything like that.
That is great. I am interested to see if reputational damage for the Department itself is on its own risk register, the rating it is given from one to three and how it is defined in the context of the Department itself.
It is every Department. We have had the HSE give us its quarterly risk. It does a quarterly update and it is voluminous. The HSE is the biggest State body out there. Every Department has a risk register and all we are asking for is a copy of the most recent one. When we see that, we will see what is in it. It is probably subject to freedom of information, if it comes to that.
I will conclude this part of the meeting. I thank Mr. Fraser and staff from the Department of the Taoiseach and the Department of Public Expenditure and Reform. Before they leave, are any of Mr. O'Malley's colleagues here this afternoon with the other three organisations?
I want Mr. O'Malley to take them the message that the Committee of Public Expenditure expects to have representatives from the Department of Public Expenditure and Reform here when it is talking about Votes. That is normal. We are dealing with three Votes this afternoon and no representative from the Department will be present to answer any questions. Take the message back.
I am disappointed to hear that we do not have representatives. Mr. O'Malley was helpful today on the issue we spoke about. His intervention was helpful today but this afternoon no one from the Department will be here to help. Take that message back. At 2 p.m., we will resume in public session to deal with the Votes of the Office of the Attorney General, the Office of the Director of Public Prosecutions and the Office of the Chief State Solicitor. We will allow the witnesses to exit the room but the members should remain for the private session now.