Oireachtas Joint and Select Committees
Thursday, 22 September 2022
Public Accounts Committee
2020 Report of the Comptroller and Auditor General and Appropriation Accounts
Vote 33 - Tourism, Culture, Arts, Gaeltacht, Sport and Media
Horse Racing Ireland: Financial Statements 2020
9:30 am
Brian Stanley (Laois-Offaly, Sinn Fein)
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I welcome everyone to the meeting. Apologies have been received from Deputy Colm Burke. If attending from within the committee room or precincts of Leinster House, attendees are asked to exercise personal responsibility to protect themselves and others against the risk of contracting Covid-19. It is still with us, unfortunately. Members attending remotely must do so from within the precincts of the Parliament. This is due to the constitutional requirement that in order to participate in public meetings, members must be physically present within the confines of the place where the Parliament has chosen to sit.
The Comptroller and Auditor General, Mr. Seamus McCarthy, is a permanent witness to the committee and is accompanied this morning by Mr. Mark Brady, deputy director of audit at the Office of the Comptroller and Auditor General.
This morning, in our first engagement of the new Dáil term, we are meeting Horse Racing Ireland, HRI, to examine its 2020 financial statements. We are joined in the committee room by the following officials from HRI: Ms Suzanne Eade, chief executive; Mr. Roger Casey, chief financial officer; Mr. Jason Morris, director of racing and strategic projects; and Ms Claire Rudd, head of risk and compliance. We are also joined by the following officials from the Irish Horseracing Regulatory Board, IHRB: Mr. Darragh O’Loughlin, chief executive, and Mr. Donal O’Shea, head of finance. Finally, we are joined by the following officials from the Department of Agriculture, Food and the Marine: Mr. Martin Blake, assistant secretary, and Ms Caroline Ball, principal officer.
As usual, I remind all those in attendance to ensure their mobile phones are on silent mode or switched off. I will explain some limitations to parliamentary privilege and the practice of the Houses as regards reference attendees may make to other persons in their evidence. As witnesses are within the precincts of Leinster House, they are protected by absolute privilege in respect of the presentation they make to the committee. This means they have an absolute defence against any defamation action for anything they say at the meeting. However, witnesses are expected not to abuse this privilege and it is my duty as Cathaoirleach to ensure it is not abused. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with such directions.
Members are reminded of the provisions of Standing Order 218 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. Members are also reminded of the long-standing parliamentary practice that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.
I call the Comptroller and Auditor General to make his opening statement.
Mr. Seamus McCarthy:
As members are aware, Horse Racing Ireland was established to provide a statutory basis for the control, regulation and development of the horse racing industry in Ireland. In addition to its regulatory, funding and development activities, HRI operates a number of racecourses and runs a totaliser betting system. Organisationally, HRI’s activities are delivered through a group structure involving the statutory body and eight subsidiary companies. In addition, HRI has around a one-third shareholding in an associate company called Curragh Racecourse Limited.
HRI received State funding of €67.2 million in 2020 from the Vote for agriculture, food and the marine. This accounted for 71% of HRI’s income in the year. Its other main sources of income were contributions from horse owners and sponsors towards racing prize money totalling €16.3 million, sales of media rights to the value of €5 million, registration fee income of €2.2 million and thoroughbred industry contributions of €202,000.
HRI incurred a net loss of €904,000 from racing activities in 2020, on turnover of just under €59 million. This outcome was a reversal from the small surplus of €294,000 in 2019, on turnover of just under €73 million. The decline in turnover and the loss incurred reflect the net impact of Covid-19 restrictions on racing and race attendance, and of Covid financial supports provided.
HRI had exceptional income of €9.3 million in 2020, mainly arising from the profit on a sale of land in Ballyogan, Dublin, to the Department of Education. The group accounts include a charge of €1 million in relation to a special dividend payment made by HRI to the Exchequer from the sales proceeds, on the instructions of the Department of Public Expenditure and Reform.
On the expenditure side in 2020, HRI incurred costs totalling €86.7 million, including €51.6 million paid out in prize money. Expenditure of €11.9 million was incurred on integrity and racecourse services, mainly comprising grants to the Irish Horse Racing Regulatory Board. Overall, the HRI group recorded a retained surplus of €13.8 million for 2020. The 2020 financial statements received a clear audit opinion. However, without qualifying that opinion, my report drew attention to two matters related to HRI’s activity in the year.
First, I drew attention to a loss of €1.8 million incurred in 2020 related to HRI’s investment in Curragh Racecourse Limited. This followed a loss on the same investment of just over €2 million in 2019. HRI’s cumulative loss to end 2020 arising from the investment was €6.4 million, representing almost 28% of the amount invested by HRI in the associate company. HRI recognised an impairment charge of €6.4 million on its investment in the HRI statement of financial position for 2020.
Curragh Racecourse Limited is a company established to provide for the redevelopment and management of the Curragh racecourse. The redevelopment involved the construction of a new stand and other racing facilities, which opened in mid-2019. Ownership of the company is split between HRI, the private-membership Turf Club and a consortium of private investors.
Notes 37 and 39 of the group financial statements explain that HRI had contributed funding to Curragh Racecourse Limited totalling over €36 million up to the end of 2019. This comprised an investment of €23 million in return for a 35.29% economic interest in the company, grant funding of €12.5 million towards the cost of the construction project, the upfront payment of €500,000 for the right to use a hospitality suite at the racecourse for 30 years and a loan of €500,000 given during 2019 to fund additional works on the racecourse’s parade ring.
Note 39 to the financial statements further discloses that Horse Racing Ireland entered into an agreement in 2020 to provide a convertible loan of up to €9 million to Curragh Racecourse Limited. By 31 December 2020, €6.9 million of the loan facility had been transferred to the company. Under the terms of the loan agreement, any outstanding liability to Horse Racing Ireland on 31 January 2024 will automatically convert to shares in the associate company.
The second matter to which I drew attention is the disclosure in Note 15 (i) to the financial statements that HRI booked a loss of €105,000 on the disposal of around seven acres of land through a land swap deal undertaken by its subsidiary, the Tipperary Race Company plc. HRI acquired around 12 acres of land adjoining Tipperary racecourse in 2019 at a cost of €25,000 per acre. Part of the land acquired was swapped with a neighbouring landholder, but was now valued at €10,000 an acre. The result was a write-down of around €15,000 an acre in the carrying value for the land disposed of.
Certification of HRI’s 2020 group financial statements was delayed as we awaited further information from HRI on the valuation of the investment in Curragh Racecourse Limited. HRI’s group financial statements were certified by me on 28 April 2022 and we are currently engaged with HRI in the process of final clearance of the financial statements for 2021.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I thank Mr. McCarthy. Ms Eade is welcome to the meeting. I see from the letter of invitation that she has five minutes to give her opening statement.
Ms Suzanne Eade:
I am grateful to be given the opportunity to appear before the Committee of Public Accounts to assist with the examination of the 2020 financial statements of Horse Racing Ireland, HRI. I am the chief executive of HRI. I am joined by HRI’s chief financial officer, Mr. Roger Casey, director of racing and strategic projects, Mr. Jason Morris, and head of risk and compliance, Ms Claire Rudd.
As members will be aware, HRI is a commercial semi-State body responsible to the Minister for Agriculture, Food and the Marine, having been established under the Horse and Greyhound Racing Act 2001. HRI is responsible for the overall administration, governance, development and promotion of the Irish horse racing industry on an all-island basis. HRI operates a corporate structure that comprises the main body and nine subsidiaries, one of which is dormant. HRI’s functions are set out in legislation. The HRI board comprises a chair and 13 ordinary members who are a mixture of industry and ministerial nominees. HRI’s audit and risk committee is a statutory sub-committee of the board established to assist the board in fulfilling its oversight responsibilities. The audit and risk committee has its own charter, which outlines its purpose and key responsibilities. This committee meets at least four times annually to fulfil its duties to the board.
I apologise to the committee for the delay in the submission of HRI’s 2020 financial statements, which was driven by some additional technical clarifications required by the Comptroller and Auditor General in relation to the Curragh. This required both external advice and a full sign-off of the Curragh Racecourse 2020 financial statements in advance of clearing the HRI accounts. HRI’s group financial statements for 2021 will be submitted post approval at HRI’s board meeting on 10 October, subject to Comptroller and Auditor General clearance. We have provided the committee with briefing material in relation to the Curragh Racecourse Limited, but we will be happy to address questions members may have on any other matters related to the 2020 accounts or any other aspects of our finances.
The horse racing and breeding industries are significant across all of Ireland, producing more than €2 billion in total expenditure annually and supporting approximately 29,000 direct and indirect jobs. Supportive Government policy and legislation have put structures in place that have not only protected this vital industry but have allowed Ireland to compete at the highest level on the world stage, while enabling vital and sustainable rural-based employment throughout the country. HRI and the entire horse racing and breeding industries are very grateful to the Oireachtas for its continued support through the horse and greyhound fund. It means that HRI can promote an industry in which new entrants can thrive, and since 2020 we have seen many new faces. It is heartening to see 52 new trainers having their first winner since 2020 as well as hundreds of new racehorse owners every year. New owners and trainers typically mean more horses in training and our industry figures would back that up. Given the labour-intensive nature of the racing industry and the care horses need, that also means many more racing jobs in rural Ireland. This ensures that breeders all over the country can have a vibrant market for their young horses and only a competitive domestic racing environment, underpinned by appropriate prize money, can ensure that those who have invested at sales to prepare, train and improve young horses will see their investment and skills rewarded.
Like many other industries, Covid brought serious challenges to our industry, with racing staged behind closed doors, or with significantly reduced capacities, during 2020 and 2021. However, racecourses weathered the storm supported through Government and HRI schemes and strong media rights income. Together with the Irish Horseracing Regulatory Board, HRI provided a solution for point-to-point racing in the spring of 2021, allowing it to continue on the racecourse for a period and ensuring that the trade that trickles down to store sales and national hunt breeders continued to flow.
The industry statistics published in August for the first half of 2022 point to a resilient industry. The number of horses in training is up more than 15% on the last comparable year of 2019. This is a key figure when it comes to assessing total rural employment in the industry. In tandem with that, thousands of people are involved in horse ownership in Ireland, be it on their own or, indeed, the many who enjoy a low-cost racing ownership experience through syndicates or racing clubs. Attendances in the first half of 2022 were down 9%. We must view this dip in attendances through the prism of people being slow to attend crowded events post Covid, as well the current cost-of-living crisis, which has impacted every leisure and sporting arena in the world. That said, racing continues to deliver superb sporting occasions showcasing the best of our industry and sport. Despite these headwinds, a strong racing product here in Ireland continues to be consumed in growing numbers on television and on mobile devices, and there remains strong domestic and international confidence in the Irish thoroughbred, with bloodstock sales through public auction up 31% on 2019.
I welcome the appointment of Ms Anne Marie Caulfied as the new CEO designate of the gambling regulatory authority of Ireland. HRI, through its industry education and training department, Equuip, has long supported the funding of addiction services and the setting up of a gambling regulator in Ireland is very welcome. I look forward to working with the authority once it is fully operational.
Away from the racetrack, HRI has a number of strategic priorities, including equine welfare and sustainability. HRI has been instrumental in creating a business environment centred on the pre-eminent Irish-bred horse. The headlines of successes worldwide are underpinned by vigilance around care from people who are in contact with the horses on a daily basis and prioritise their care and welfare. The daily care of horses is the cornerstone of our horse welfare strategy of verifiable high standards of care for our population of horses. Included in these are improved traceability systems, such as the electronic passport issued to the 2021 foal crop and all subsequent crops, the welfare standards checklist published recently and safety nets supported by HRI, including the Treo Eile platform for retired racehorses.
We are very conscious of our responsibility under the Government’s climate action plan and we are very well advanced on a sustainability strategy for the organisation and for the wider breeding and racing industry. Over the past couple of months, we have engaged with our stakeholders and held focus groups with industry organisations and can report a huge sustainability ambition within racing and breeding. Our role is to lead by example as an advocate and champion of sustainability and to help the breeding and racing industry to increase its understanding of our responsibilities in this area, through education, increased awareness and financial supports.
I thank members for the invitation to discuss HRI’s 2020 accounts. We look forward to taking their questions on any other matters concerning the racing and breeding industry in Ireland.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I thank Ms Eade. Deputy Carthy is the first committee speaker. Each member has ten minutes, which will be followed by a second and third round of questions.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I thank all our guests for being here. I want to get some further clarification regarding the delay in submission of the financial statements. In essence, the rationale given is that issues pertaining to the Curragh Racecourse led to a delay in HRI submitting its accounts. Is that correct?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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At what point did HRI submit its accounts to the Department?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Okay.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Okay. Draft unaudited accounts were delivered on 23 March.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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When were the audited accounts submitted?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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There was quite a substantial delay on that. The unaudited accounts were furnished to the Department. Is that correct?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I ask the departmental officials when or if those unaudited accounts were laid before the Oireachtas.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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What did the Department do between receiving the unaudited accounts in March 2021 and receiving the audited accounts in May 2022? Did the Department take any measures or have any direct consultations with HRI in respect of that?
Mr. Martin Blake:
The Department has ongoing conversations with HRI, but in the context of the accounts specifically we await the outcome of the Comptroller and Auditor General's report before taking final positions on them.
We are aware of the issue. We had the accounts but we are not actioning anything specifically on them until we get the Comptroller and Auditor General's report.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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On the rationale that has been provided, does the Office of the Attorney General have concerns over what were failures to adhere to the relevant circulars? Is the Comptroller and Auditor General satisfied that there will not be repeats of issues in the future?
Mr. Seamus McCarthy:
Certainly, we obviously try to complete an audit and get the certificate to everybody as soon as possible. Once the accounts have been signed off on, there is an obligation to have them submitted – within three months is the standard – to the Oireachtas Library so they will be available to the committee. There was a bit of a delay, I think, over the summer in the submission of the audited accounts.
The point of draft unaudited accounts going to the Department is that the Department will be aware of the broad financial position of a State body at the earliest possible time. It is obviously subject to confirmation by the audit process. The delay we had was in relation to the accounting for the investment in Curragh Racecourse Limited. The loss, I think, was recognised in the draft financial statements. That information would have been available to the Department from the draft but we were not happy that it was properly accounted for. The technical advice had to be received by HRI to complete that process.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Before I move on to the Curragh, I wish to address a different subject. Could the Comptroller and Auditor General state whether his role in auditing the IHRB is the same as that for HRI?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I want to move on to the Curragh Racecourse. Ms Eade might explain briefly the current breakdown of shareholding for the racecourse.
Ms Suzanne Eade:
There is ownership and economic ownership. HRI has 33% of the voting shares, the Turf Club has 33% of the voting shares, and the private investors, including founder investors, have the remainder of the shares. The private investors comprise a group of different individuals across the bloodstock arena who invested in the-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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So that would be 34%?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Could Ms Eade explain to me the difference between the Turf Club and the IHRB?
Ms Suzanne Eade:
The Turf Club was the original body. It migrated after the Horse Racing Ireland Act 2016. There was a separation, which involved the setting up of the IHRB, which is purely a regulatory body. There may be somebody more technical able to explain the origins of the two, but that is effectively it. The IHRB runs the regulatory services for horse racing.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Is the Turf Club part of the IHRB or is it completely separate?
Mr. Darragh O'Loughlin:
The origins of the Turf Club go all the way back to the mists of time, to 1790, as a private members' club, but the IHRB, of which I am the chief executive, is a limited company, limited by guarantee. It was established by the Turf Club and the Irish National Hunt Steeplechase Committee in 2018 in order to stand independent of the clubs so as to perform the regulatory functions in Irish horse racing. Therefore, my employer is the IHRB as an entity; my employer is not the Turf Club.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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The Turf Club owns 33% of the Curragh Racecourse. How much money did it have to put towards that to get the 33% shareholding?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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It provided the land and essentially-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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It held on to its voting share.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Ms Eade has touched on this. It provided the land, the racecourse.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Who owns the racecourse, the land?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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So, the Department of Defence owns the land. The Turf Club has a lease, and that allowed it to get a 33% vote. That is a fairly good deal for it, I would have thought.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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In terms of the breakdown, it appears that somehow a very strong effort was made to ensure the ownership and voting structures meant the Curragh Racecourse would essentially not be accountable to the Comptroller and Auditor General, for example. The Department of Agriculture, Food and the Marine was part of all this and funded a lot of it through various means, so I wish to ask its representatives why that was the case.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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The 2016 Act.
Mr. Martin Blake:
Yes. It recognised the development of the IHRB as the regulatory body. It is funded through the HRI. This is the regulatory forum in which this happens. As part of the arrangement, it has voluntarily agreed to comply with the code of governance for State bodies, even though it is not a State body. Its rules and regulations and governance systems comply with the code. It has a service-level agreement with HRI in relation to providing the regulatory services.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I am talking specifically about Curragh Racecourse. Since the Department approved substantial capital expenditure on the racecourse, is there a reason that the Department, when engaging with all the parties, did not put in place a system whereby the racecourse would be a body that could be audited by the Comptroller and Auditor General?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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One which is predominantly funded by the Department of Agriculture, Food and the Marine.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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My question is whether there was a reason. Is it not true that capital grants were also provided by the Department?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Considering all that, the substantive amount of money invested in the project and the fact that the racecourse is built on public land, why is it that there is no public accountability mechanism for the racecourse?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Does Mr. Blake not accept that we are now in a convoluted situation? HRI is providing convertible loans that may in turn be converted into shares, which, according to the accounts we have seen, is likely to be the case. There is an exemption in relation to freedom of information requests because of the structure that has been put in place. Since that time, has either the Department of Agriculture, Food and the Marine or the Department of Public Expenditure and Reform carried out an analysis of whether mistakes have been made in terms of how the Curragh Racecourse was approached?
Mr. Martin Blake:
I think we have engaged in the process and evaluated it ourselves and with the Department of Public Expenditure and Reform. We also got some guidance from NewERA in the context of investment and how we actually work through this. The issue is ongoing. Our understanding is that at the end of 2014, the shareholding could increase.
Brian Stanley (Laois-Offaly, Sinn Fein)
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It is ongoing but, based on the answers to Deputy Carthy's questions, the State is in a weak position.
Verona Murphy (Wexford, Independent)
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I will pick it up there. Good morning to everybody. I congratulate Ms Eade. I cannot recall her being before the committee since her appointment.
Verona Murphy (Wexford, Independent)
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Mr. Kavanagh would have been with us.
I will go back to the matter Deputy Carthy raised. If I am correct, Mr. Blake was saying that the vast amount of public money the Department signed off on as an investment has gone wrong. Where is the accountability. Who is taking responsibility? Who decides that this was a good investment and when it goes wrong, who takes responsibility?
Verona Murphy (Wexford, Independent)
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On that point, has a review been done of how investments are made in a structure, as Deputy Carthy pointed out, where there is no accountability?
Verona Murphy (Wexford, Independent)
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Would it be a good idea to have one?
Verona Murphy (Wexford, Independent)
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Would it be a good idea for the former CEO of HRI to become the new chair of the Curragh Racecourse? Is that not something that concerns Mr. Blake?
Verona Murphy (Wexford, Independent)
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I understand and accept that but would it be cause for concern for the future of investments such as this? Does it not present some form of conflict?
Verona Murphy (Wexford, Independent)
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That is grand. Does Mr. Blake have a concern about the money that is left to be drawn down? Is it in the region of €9 million?
Verona Murphy (Wexford, Independent)
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Does the Department have oversight of that?
Verona Murphy (Wexford, Independent)
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Is there? Who has that concern or is it only one for the Committee of Public Accounts? Whose concern is it? It seems like a fierce sloppy transaction of public money to me.
Verona Murphy (Wexford, Independent)
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There does not appear to be any oversight following the Department's sanction. Would that be a fair statement?
Verona Murphy (Wexford, Independent)
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Did the Department engage with Ms Eade to tell her the accounts were late and ask where the issue was? Did somebody ask why? Ms Eade is the former financial officer of HRI. The accounts were late.
Verona Murphy (Wexford, Independent)
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Hold on a second. Before HRI wrote to the Department about the delay, was Ms Eade not concerned, having previously held the role of financial officer of HRI? Were they late when Ms Eade was financial officer?
Verona Murphy (Wexford, Independent)
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Sorry, Ms Eade was the financial officer at this time.
Verona Murphy (Wexford, Independent)
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Why could Ms Eade not get them on time?
Verona Murphy (Wexford, Independent)
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Ms Eade would not have known.
Verona Murphy (Wexford, Independent)
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Right.
Verona Murphy (Wexford, Independent)
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Whose responsibility was it?
Verona Murphy (Wexford, Independent)
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Ms Eade knew there was a problem.
Verona Murphy (Wexford, Independent)
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The loss was still a problem.
Verona Murphy (Wexford, Independent)
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I am not sure we knew the amount at the previous meeting. As regards where Mr. Kavanagh has moved on to, I would be concerned about that structure going forward. Someone who served on a board that deals with public funding is now in situ in a semi-private entity, or is it fully private?
Verona Murphy (Wexford, Independent)
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Somebody who knows all the goings-on in HRI is now in charge of a structure where HRI is part owner. I am not at all happy with that. That should be prevented by public servants, including me, for future positions to ensure there is transparency and full accountability.
Ms Suzanne Eade:
If I may come back to the Deputy on something she might have said to Mr. Blake, who would not have been involved with some of it, we did a post-appraisal - two, in fact - while the project was going on. We submitted that to the Department and we have to provide regular updates to the Minister on the performance of the Curragh. Mr. Blake may not have been aware of that.
Verona Murphy (Wexford, Independent)
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Can Ms Eade forward those appraisals to the Committee of Public Accounts?
Verona Murphy (Wexford, Independent)
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That is grand. How does Ms Eade feel HRI is performing on behalf of its patrons? Does it get many complaints? Have there been any issues?
Verona Murphy (Wexford, Independent)
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I am referring to complaints.
Verona Murphy (Wexford, Independent)
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Did HRI inform that there would be an increase in prize money and then withdraw that this year?
Verona Murphy (Wexford, Independent)
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What of the structure? If somebody wins something, how long does it take to pay out the money?
Verona Murphy (Wexford, Independent)
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It would not be seven months.
Verona Murphy (Wexford, Independent)
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There are never any issues.
Verona Murphy (Wexford, Independent)
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I have received a number of complaints from HRI's patrons. They vary. It would appear there has been a serious diminution of what is handed out by HRI.
Verona Murphy (Wexford, Independent)
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In different competitions, let us say, HRI's prize money may not have changed but how it is passing it out and all of that has. I will pass the complaints on to Ms Eade.
Verona Murphy (Wexford, Independent)
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I will be looking into it further because there seems to be a varied approach. We cannot forget that HRI is a structure to help the sector and regulate it but it cannot be all one-sided at the same time.
To go back to the disposal of lands, will Ms Eade explain that to the committee? On paper, this looks like another case of poor judgment.
Ms Suzanne Eade:
To be perfectly honest, it looks worse than it actually is in reality. Let me talk the Deputy through the process. We purchased a big portion of land, which is to do with the development in relation to Tipperary. At the onset, we knew that part of the process would require us to do a swap of some of that land to get the land that would allow us to widen the track. For us, this is of real strategic value. Also, when we went to do the swap, it was not really of high interest to the seller to do anything in particular in relation to the swap. We wanted that land for our overall development and it is of strategic high value to us to get that land. What happened was there was a book loss of €105,000 in relation to that project, in relation to the land itself, but there was no cash loss to HRI. That land is more important to us than it was. Where we probably got the oversight wrong is that we looked at the project as a swap and we did not look at it as a disposal and an acquisition. That is where we got it wrong. However, that land is worth more to us than what we gave away.
Verona Murphy (Wexford, Independent)
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Who valued the land?
Verona Murphy (Wexford, Independent)
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HRI got one valuation. Is that correct?
Verona Murphy (Wexford, Independent)
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HRI just got one valuation.
Verona Murphy (Wexford, Independent)
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Did Mr. Blake sign off on that?
Verona Murphy (Wexford, Independent)
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Mr. Blake is from the Department. Would Mr. Blake need to sign off on it?
Verona Murphy (Wexford, Independent)
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Only one valuation was done.
Verona Murphy (Wexford, Independent)
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When public money is being spent I would have thought that at least two valuations would have been done so that we would not have this issue. Is that how we have ended up with this issue? Was the valuation incorrect?
Verona Murphy (Wexford, Independent)
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I asked if the valuation was incorrect.
Verona Murphy (Wexford, Independent)
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Unfortunately, HRI did accept the valuation.
Alan Dillon (Mayo, Fine Gael)
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I welcome our guests. I will start with HRI's contribution to prize money. Did the €35 million allocated to HRI contribute to prize money in 2021? Are these Exchequer funds?
Ms Suzanne Eade:
We would use Exchequer funding. When we get our annual budget allocation from the Department it is broken down into revenue and capital expenditure. Of that revenue allocation, we are given the amount we are allowed to spend on prize money. Generally, that is up to 80% of our revenue allocation from the Department.
Alan Dillon (Mayo, Fine Gael)
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Does HRI prepare an analysis of the distribution of that prize money and where it contributes to the industry?
Alan Dillon (Mayo, Fine Gael)
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As regards the analysis that HRI prepared, will Ms Eade give an overview of what the results were from the distribution of Exchequer funds that were used as prize money?
Alan Dillon (Mayo, Fine Gael)
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I will ask the question a different way. In terms of the percentage of prize money that goes to the top five trainers in the country, does HRI prepare that type of analysis?
Alan Dillon (Mayo, Fine Gael)
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I ask Ms Eade to give us an understanding of the distribution. How was the €50 million paid in prize money for 2020 distributed? That would give us a bit of transparency on the use of Exchequer funds to fund prize money. It is difficult to process why we are using Exchequer funds and taxpayer money to fund the top five trainers in the industry. We need some visibility on that a rationale for it. We need information on how this is being distributed and improved over time.
Mr. Jason Morris:
In general terms, of some 4,900 owners, 3,600 won prize money. While the top trainers, owners and jockeys will earn more, it is spread among a large portion of those participating in the sport. We have high minimum values for our races in Ireland when compared with Britain. Our minimum value is €10,000, so we are conscious that our strap line is "Growing the grass roots, Winning the world over". That is the dual objective of our prize money strategy. We seek to ensure we continue to succeed internationally while, at the same time, growing the grassroots and helping those at the lower ranks that face challenges against some dominant stables.
Alan Dillon (Mayo, Fine Gael)
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What level of prize money was distributed across all trainers in 2020? Does HRI have that type of analysis?
Alan Dillon (Mayo, Fine Gael)
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Is HRI responsible for the publication of standards on equine welfare in Ireland?
Ms Suzanne Eade:
I am holding a copy of the book that was launched in Listowel this week. It outlines our principles of animal welfare. For those who work in the industry, this is stuff they already know but for us it was important to get something out there setting out the standards we are working to and what is important to us. It was launched on TG4 by Mr. Osborne during the week.
Alan Dillon (Mayo, Fine Gael)
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What are HRI's main concerns regarding equine welfare and what steps has it taken to address these?
Ms Suzanne Eade:
The issue for us is always people knowing what to do at the end of a racehorse's life. That is probably the area where we have stepped in most often. Education is another concern. Education and giving people the links they will need to be able to find somewhere for a horse after it has finished racing are the key areas. We are doing that quite successfully.
Alan Dillon (Mayo, Fine Gael)
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What analysis and research has the IHRB undertaken on the standards of equine welfare in Ireland?
Mr. Darragh O'Loughlin:
Equine welfare is at the core of everything the IHRB does in relation to integrity. We have a team of vets on our staff and no racing event, point-to-point, flat jump race, flat race or jump race occurs without IHRB vets being on site. Our vets are there to check the welfare of the horses before the race starts. They watch the race and they check the horses again after the race. Horses are trotted up and down to ensure they are not running lame. Even our equine anti-doping regime is designed with the welfare of the horse in mind. We are looking for prohibited substances at all times but we are also looking for the inappropriate use of other medication because no horse should be medicated, other than entirely appropriately and by a veterinary surgeon who is involved in the care and treatment of that horse.
When we receive concerns, as we sometimes do, about the condition of a particular horse or group of horses in a location, such as on a premises or in a field, if that information comes into us, as it frequently does, our veterinary officers treat that as the highest priority on the day. They drop what they are doing and go out and check on the horses. If the concerns prove to be justified, and unfortunately they sometimes are, we make immediate contact with the Department of Agriculture, Food and the Marine. We have officers who are authorised under the Animal Remedies Act 1993 and under animal welfare legislation. The Department then comes in and assists and participates closely if there are prosecutions to be brought in respect of the treatment of animals and it takes care of same. If there are rule breaches in the treatment or medication of animals or breaches under the rules of racing, we send those to referrals committees and impose sanctions.
Alan Dillon (Mayo, Fine Gael)
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In the past two years, how many fines or suspensions has the IHRB issued for breaches of welfare or anti-doping regulations?
Mr. Darragh O'Loughlin:
With regard to every adverse analytical finding and every case where we detected inappropriate use of a medicine in 2021 and in 2022 so far, whether that is a substance that is prohibited at all times or a medicine that should not have been in the horse on race day, all bar two of those have already come to hearing with sanctions handed down. We published those sanctions on our website and press statements go out which tend to be carried in the national press. We still have a small number of cases to hear but we anticipate having those heard by the end of this calendar year.
Alan Dillon (Mayo, Fine Gael)
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Has the IHRB made any recommendations to HRI on findings in recent times? Have these recommendations been implemented?
Mr. Darragh O'Loughlin:
Our chief veterinary officer works closely with the veterinary officer in the equine welfare unit in HRI so there is close collaboration on standards of equine welfare and on HRI understanding what the outcomes of our processes are. While cases are still in process and in that space between an adverse analytical finding and the committee finding a breach and handing down a sanction, that is essentially closed because we have to treat people as innocent until we have found them to have breached rules.
HRI is aware of all of that activity after the fact and as regards what proper equine welfare standards would be, what racecourses, stables and training for trainers and stable staff need to look like. HRI and the IHRB would work very closely on all of that.
Alan Dillon (Mayo, Fine Gael)
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Is the Department satisfied in terms of the analysis under way and the level of transparency on equine welfare?
Mr. Martin Blake:
All I can say is that over the past number of years, the relationship between the Department and the IHRB has been significantly enhanced and improved. There is very close collaboration, sharing of information and working together on cases where there may be breaches of our regulations and the rules of racing. There is a very close relationship so we are very pleased with it.
Catherine Murphy (Kildare North, Social Democrats)
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Regarding the breakdown of attendances, we know Covid impacted these significantly but is this something HRI monitors and does it monitor all the categories relating to attendances?
Ms Suzanne Eade:
We would not monitor individual categories of attendances. We get updates from the racecourses on their attendances overall but we would not get into the individual breakdowns. Within the racecourses that are part of our subsidiary group, we would get into more financial analysis of what is driving attendances and what is and is not working.
Catherine Murphy (Kildare North, Social Democrats)
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Would that be the case in the Curragh?
Catherine Murphy (Kildare North, Social Democrats)
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In that case, there is no issue with publishing the attendance figures.
Catherine Murphy (Kildare North, Social Democrats)
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Yes.
Catherine Murphy (Kildare North, Social Democrats)
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It is a big industry and attendances show the health of an industry. I know people will view a race meeting on television and so on but attendances will tell us something and we can monitor performance on the back of that. The ex-CEO Brian Kavanagh is now CEO of the Curragh Racecourse. Ms Eade may have responded to some of this already. Could she set out a timeline for Mr. Kavanagh's departure? Does she have that available?
Catherine Murphy (Kildare North, Social Democrats)
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Would Department officials have been made aware that he was taking up a post with the Curragh?
Ms Suzanne Eade:
If I look at the process, the appointment of the CEO for Curragh Racecourse Limited was a matter for the Curragh Racecourse Limited board. Having gone through a process, it was its board and chairman that would have recommended Mr. Kavanagh. That recommendation then came to the HRI board in June 2021 and was approved but HRI or the Department would not have been involved in the recruitment process or appointment.
Catherine Murphy (Kildare North, Social Democrats)
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I understand that. When was HRI made aware that Mr. Kavanagh was taking up the post? It would have received notice in advance.
Catherine Murphy (Kildare North, Social Democrats)
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HRI did not know until then.
Catherine Murphy (Kildare North, Social Democrats)
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Was that discussed with the risk and audit committee or would it have been just the board?
Catherine Murphy (Kildare North, Social Democrats)
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To follow on, and Ms Eade may have covered some of this, how did the investment of €9 million arise? Who came to whom? Who made the approach with regard to the investment of €9 million?
Ms Suzanne Eade:
To be honest, when I look back on the process, what we were doing was carrying out a post-appraisal of the project and the development. HRI had an evaluation team looking at the project and the development costs. HRI also put in a sub-committee of the board to evaluate the performance of the development. We could see that the project was costing more and having worked through the development, that there were losses accruing. It would have been through the sub-committee and the chair of HRI that we went out and said we felt that more funding was required. We would have instigated it to get funding from all the other parties so we drove the funding.
Catherine Murphy (Kildare North, Social Democrats)
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Who was on the sub-committee?
Catherine Murphy (Kildare North, Social Democrats)
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It then came back and said the project was at risk without an investment. Would that be how it transpired?
Ms Suzanne Eade:
The Curragh definitely had to be updated. It had seen no development since 1962 and had become uninsurable. When people look at it now, they need to look beyond the racecourse. It is a magnificent training facility as well for lots of trainers around the country, particularly those around the Curragh. Hundreds of horses are using this track every day. There are 80 miles of turf peat in all-weather gallops across 1,500 acres. It really is a strategic asset for Ireland. I know it is not performing financially the way we all want it to but it is important. It is the first time we have had a facility for flat racing to which we could comfortably welcome international visitors and consumers now have somewhere where they can go. It had a really tough start. Operating during development was a challenge. The opening in 2019 probably did not showcase it at its best. We had two years of Covid and now it is starting again. It has been tough. I am very interested in the commercial performance of the Curragh. I want it to improve. I wanted to see an increase in attendances. Things have been tried this year, some of which have worked while others have not. I will be all about bringing back the spirit to the Curragh because without that spirit, it is not what we want it to be.
Catherine Murphy (Kildare North, Social Democrats)
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I represent north Kildare, not south Kildare where the Curragh is located, but I am very familiar with the racecourse, some of the facilities adjacent to it and the importance of the equine sector to the county. It is important that it succeeds. I just wanted to get some sense of what this interaction was and why it was necessary. Has all this money been drawn down at this stage?
Ms Suzanne Eade:
No, I do not think so. We must look at the amount of private investment that went into this as well. There was €47 million from other investors plus another significant investment by another individual into the gallops themselves. We have definitely learned lessons for projects going forward.
We have applied those to our capital guidelines and we have applied them in particular to the work we are doing on Tipperary racecourse. There has also been a lot of good work done in the Curragh that is probably not very evident to people just yet. I hope they will start to see that by next year.
Catherine Murphy (Kildare North, Social Democrats)
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The former CEO of the IHRB, Mr. Denis Egan, stood down in 2021. Will Ms Eade detail whether an exit package was provided and, if so, what that was?
Catherine Murphy (Kildare North, Social Democrats)
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It has not been concluded is what Ms Eade is saying. When it is concluded will Ms Eade-----
Ms Suzanne Eade:
I expect over the next weeks there is work that Mr. O'Loughlin and I are working on to get that matter resolved. We are very supportive of the transformation project that the IHRB has gone through. Together, as two organisations, we will work very closely on delivering efficiencies for both organisations.
Catherine Murphy (Kildare North, Social Democrats)
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Okay. Will Ms Eade let us know when that happens? Was a non-disclosure agreement entered into?
Paul McAuliffe (Dublin North West, Fianna Fail)
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My apologies, I was attending a meeting next door. If more eager colleagues than I have asked some of my questions already, I apologise.
On the liquidation of Senaca, the 2019 accounts reported a cash loss of €389,000 but not a corresponding loss of State funding for the horse and greyhound racing fund. Will the witnesses update the committee on how that liquidation process has proceeded since the 2019 accounts?
Ms Suzanne Eade:
We finalised the settlement with the liquidator. I believe we got €120,000 back after fees. We are with a very different provider now. We have better systems with that provider. It is a bigger entity, which is safer for us, if you like. We do daily monitoring. The chief financial officer receives a monthly performance report on every aspect of how it is delivering for us. This is where that has ended up.
Paul McAuliffe (Dublin North West, Fianna Fail)
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Of the €389,000 loss, €120,000 was recovered.
Paul McAuliffe (Dublin North West, Fianna Fail)
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Ms Eade referred to fees. What were the fees connected with the recovery?
Paul McAuliffe (Dublin North West, Fianna Fail)
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Where they a significant multiple?
Paul McAuliffe (Dublin North West, Fianna Fail)
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The origin of the problem was the financial stability of the provider. What measures has Horse Racing Ireland put in place to source a new provider to ensure the financial stability of the provider? It is very difficult to completely eliminate the risk but has Horse Racing Ireland taken any measures in that regard?
Paul McAuliffe (Dublin North West, Fianna Fail)
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Were the criteria for that procurement process different from those used for the procurement of Senaca?
Paul McAuliffe (Dublin North West, Fianna Fail)
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Okay.
Paul McAuliffe (Dublin North West, Fianna Fail)
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Yes, perhaps Horse Racing Ireland could come back to the committee on that.
Paul McAuliffe (Dublin North West, Fianna Fail)
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Obviously, that was a learning and it would be disappointing if steps had not been put in place. Has Horse Racing Ireland exhausted the recovery process now?
Paul McAuliffe (Dublin North West, Fianna Fail)
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Will Ms Eade explain how the loss of €389,000 did not result in a loss to the horse and greyhound racing fund?
Paul McAuliffe (Dublin North West, Fianna Fail)
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There was no resulting draw on resources by those subsidiaries.
Paul McAuliffe (Dublin North West, Fianna Fail)
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One can imagine that while there was not an initial impact, over time, there may be an impact. For example, they may have required additional resources as a result of-----
Paul McAuliffe (Dublin North West, Fianna Fail)
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On the Tipperary racecourse site, I do not know if anybody else has covered this yet, but there was a loss of €105,000. Perhaps Ms Eade will bring us through that.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Yes.
Paul McAuliffe (Dublin North West, Fianna Fail)
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My apologies.
Ms Suzanne Eade:
That is fine. Effectively, what happened here was that we are hoping to redevelop the Tipperary course into an all-weather track. There were parcels of lands we wanted to procure. At the same time, we knew we would have to procure some and then swap some to get the width of the racetrack we desired. We acquired the first piece of land and then we got into a negotiation with another seller to swap that land. When we did that, we swapped at a deemed lower value than we had paid for the land. The land we had purchased was made up of-----
Paul McAuliffe (Dublin North West, Fianna Fail)
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Ms Eade used the word "deemed" deliberately. Why?
Paul McAuliffe (Dublin North West, Fianna Fail)
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When was the original site purchased?
Paul McAuliffe (Dublin North West, Fianna Fail)
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Does Ms Eade know the price paid for that?
Paul McAuliffe (Dublin North West, Fianna Fail)
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On the long-term objective of having that width or footprint, does Ms Eade envisage when we might see a realisation of that benefit?
Ms Suzanne Eade:
It definitely depends on the funding and the planning permission. We have received planning permission already but there is an appeal with An Bord Pleanála. We are hoping that if we have the funding in place to finish the project, we will be racing on an all-weather track in the first quarter of 2025.
Paul McAuliffe (Dublin North West, Fianna Fail)
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Was there a requirement to seek approval from the Department for the disposal of those assets?
Ms Suzanne Eade:
As it was a swap, it was not clear in the code of governance. Since we have reviewed the transaction, the Department has come back to say that on a going-forward basis, if such a transaction takes place, we will need to seek ministerial approval. It was not clear in the code and it was below a threshold of reporting. The threshold is €150,000.
Paul McAuliffe (Dublin North West, Fianna Fail)
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That is a very good synopsis from Horse Racing Ireland's perspective. Do the officials agree with that synopsis? Was it clear?
Mr. Martin Blake:
We came across this most visibly in the context of the Comptroller and Auditor General's report. That was the first time it became visible to us that this swap had actually taken place with a loss of money. Our view was that as a disposal and acquisition, it should have been notified in the Department. Having talked through the matter with HRI, it now acknowledges that this should have happened. We have recently engaged with it and written to it on that basis. Moving forward, we would expect that. As Ms Eade said, swaps were not specifically covered but it is an acquisition and disposal.
Paul McAuliffe (Dublin North West, Fianna Fail)
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The Comptroller and Auditor General's report is one place where we can find out the details of the sale but does the Department not have a responsibility to ensure a more hands-on approach is taken to making sure those responsibilities were better understood?
Does Mr. Blake believe the Department has done enough?
Mr. Martin Blake:
We have ongoing engagement but we must realise it is a commercial State body that has its own board and expertise in these matters. The code of practice for governance is there and visible to all. As Ms Eade has said, it does not mention swaps but it does include acquisitions and disposals.
Paul McAuliffe (Dublin North West, Fianna Fail)
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Is Mr Blake suggesting the capacity was there and the HRI should have known?
Paul McAuliffe (Dublin North West, Fianna Fail)
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I appreciate the answer.
Imelda Munster (Louth, Sinn Fein)
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My first question is for Mr. O'Loughlin and it is on CCTV footage. Horse Racing Ireland announced on its website in 2017 that CCTV was to be installed. The Irish Horseracing Regulatory Board diverted the funding in 2018. Last November, Mr. O'Loughlin told the committee that it would be done at the end of the year. In April, he said it would be done mid-autumn. We have received a response today that is detailed but extremely vague. Will Mr. O'Loughlin explain what first fixing is?
Mr. Darragh O'Loughlin:
It is the electrical and wiring work required. It is everything up to attaching the cameras. I acknowledge that the time lines the project has followed have not been the timelines the committee received a year ago. This is something that is deeply frustrating for all of us in the IHRB also. The procurement process commenced last winter. It took a couple of months, as these processes do. Then there was a legal challenge, or legal correspondence, from one of the unsuccessful bidders which delayed things further. Once the project got under way, we started making very good progress. There were some unanticipated delays at many racecourses. We now have cameras being put up in the stables at two racecourses. At another four racecourses all of the electrical work is complete and we are ready to hang cameras. We have first-fix electrical work in progress in another four racecourses. What we had not anticipated at the start of the project was that courses would require civil works, ground works and ducting. Some of the stable yards did not have electricity. The system will not work without adequate electricity. We had to put that in.
Imelda Munster (Louth, Sinn Fein)
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At this stage, five years on, how many or what percentage of the racecourses have the job done with cameras set up?
Imelda Munster (Louth, Sinn Fein)
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How many have the cameras up?
Imelda Munster (Louth, Sinn Fein)
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Only two out of the 25 have been done five years on.
Imelda Munster (Louth, Sinn Fein)
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People would be forgiven for having the impression that there is reluctance given the delay to have CCTV installed. Will Mr. O'Loughlin accept that? People might think that with a delay of five years. When I say there has been one excuse after another it speaks for itself. Dates have constantly been given. Mr. O'Loughlin said there is ducting to be done. In any job there is work to be done in advance. There was no preplanning. Every time we asked the date was put back. Either there is a question about competency or the situation is being purposely frustrated. What would Mr. O'Loughlin say to this? Does he accept that might be the perception? In fairness, people would imagine with various scandals and reports of malpractice that the body would be keen to get CCTV fitted as soon as possible and that it would want to protect the integrity of the sport. Outsiders would imagine that it would be the first thing to be made a priority. Five years on, we are still speaking about having only two cameras.
Imelda Munster (Louth, Sinn Fein)
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Why the stalling of CCTV?
Imelda Munster (Louth, Sinn Fein)
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There has been absolute stalling. There has been one excuse after another.
Imelda Munster (Louth, Sinn Fein)
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The funding meant for this project was diverted in 2018. Do not tell me there was priority on it or that the IHRB is eager to protect the integrity of the sport. The funding was there in 2017 and it was diverted in 2018. Every year since then, there has one excuse after another.
Mr. Darragh O'Loughlin:
The Deputy is better briefed than I am on what happened in the IHRB and its predecessor organisations in 2017 and 2018. All I can say is that in its current guise the project, which went to procurement only last winter, is being driven with determination as quickly as is practicable-----
Imelda Munster (Louth, Sinn Fein)
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Will Mr. O'Loughlin give us a date as to when-----
Imelda Munster (Louth, Sinn Fein)
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-----more than two of the 25 racecourses will have cameras up?
Mr. Darragh O'Loughlin:
I would hope to see the majority of those racecourses on the list having cameras up by the end of this year. Issues have arisen, up to and including a shortage of electronic components on the world market. We are progressing the project with a professional project manager as quickly as it can be done, having regard to the need to secure value for the public purse and assure the quality of the system. As far as reluctance to install the system goes, there is no reluctance on our part. We recognise that the CCTV system provides an additional layer of security for participants in racing.
Imelda Munster (Louth, Sinn Fein)
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There is no rush in getting it done. I have a question for Ms Eade. Does Horse Racing Ireland have concerns given that the funding has been in place since 2017? Does the Department have concerns that the job was not done? It is something that would ensure the protection of the integrity of the sport amid all of the scandals and accusations of malpractice. Is Horse Racing Ireland not concerned?
Imelda Munster (Louth, Sinn Fein)
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I have never heard of anybody fitting CCTV in a big large office building taking five years to do so.
Imelda Munster (Louth, Sinn Fein)
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Let us be realistic.
Imelda Munster (Louth, Sinn Fein)
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Time is of the essence. Is Ms Eade saying Horse Racing Ireland has no concerns about the delay in fitting the CCTV?
Imelda Munster (Louth, Sinn Fein)
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Ms Eade has no concerns.
Imelda Munster (Louth, Sinn Fein)
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What about the Department?
Imelda Munster (Louth, Sinn Fein)
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Exactly.
Imelda Munster (Louth, Sinn Fein)
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It is a slow pace. With regard to the Curragh Racecourse, earlier the Comptroller and Auditor General mentioned the percentage of vote shares if the loan converts. What percentage is this?
Imelda Munster (Louth, Sinn Fein)
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If Ms Eade has it, I would be grateful.
Imelda Munster (Louth, Sinn Fein)
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The State has provided just under half of the monetary investment. Private investment is making up the other half.
On the capital side, however, the State owns the land.
Imelda Munster (Louth, Sinn Fein)
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The racecourse is owned by the Turf Club, basically the IHRB, which is almost entirely State funded. Would it be fair to say therefore that the State interest in this company exceeds 50% when it is all combined? Can I put that question to the Comptroller and Auditor General?
Imelda Munster (Louth, Sinn Fein)
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Is the racecourse subject to freedom of information, FOI?
Imelda Munster (Louth, Sinn Fein)
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We have been through this with other issues previously. If anything is to come from today's meeting, it is that the committee could recommend reform of the rules relating to freedom of information and agencies being subject to audit, particularly when we consider that it is glaringly obvious that this is majority State financed.
Brian Stanley (Laois-Offaly, Sinn Fein)
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The Deputy's time is up. There will be a second round of questions.
Imelda Munster (Louth, Sinn Fein)
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Yes, we should propose reform to ensure that all public moneys invested, as opposed to those provided via the Exchequer, are actually-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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We will consider that for our report.
Imelda Munster (Louth, Sinn Fein)
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I thank the Chair. Is my time up? I have one more question.
Brian Stanley (Laois-Offaly, Sinn Fein)
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There will be a second round of questions.
Imelda Munster (Louth, Sinn Fein)
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It is a quick question.
Brian Stanley (Laois-Offaly, Sinn Fein)
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The Deputy should be very quick.
Imelda Munster (Louth, Sinn Fein)
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I understand Mr. O'Loughlin recently made his first appearance before the agriculture committee, at which he stated the IHRB would begin reporting the salary of the CEO in its financial statements. Is that correct and from what year does the IHRB intend to do that?
Mr. Darragh O'Loughlin:
I did not make that statement. I am even fresher than the Deputy realises. This is my first appearance before an Oireachtas committee in my current post. My salary was stated on that day when it was provided to the committee. In line with the code of governance for State bodies, with which my colleague from the Department of Agriculture, Food and the Marine said we are committed to aligning, the salary will be published in our annual statements. However, that will apply only from 2022 onwards because it relates to my salary, as opposed to the salary of the position going back.
Imelda Munster (Louth, Sinn Fein)
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Very briefly, Ms Eade stated that a payment had been made to the former CEO. I think she said it "had" been made.
Imelda Munster (Louth, Sinn Fein)
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Why can Ms Eade not tell us what that payment was, if it is done and dusted?
Imelda Munster (Louth, Sinn Fein)
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We are simply asking what the payment was. Why can Ms Eade not tell us what it was?
Imelda Munster (Louth, Sinn Fein)
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Right, but can Ms Eade disclose what that payment is?
Imelda Munster (Louth, Sinn Fein)
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I ask the Comptroller and Auditor General if there is anything-----
Imelda Munster (Louth, Sinn Fein)
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Is there anything precluding HRI from giving us information on the amount of the payment?
Brian Stanley (Laois-Offaly, Sinn Fein)
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To clarify, the payment has been agreed and paid.
Brian Stanley (Laois-Offaly, Sinn Fein)
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In the interests of transparency, could the HRI inform the committee of how much that payment was? It would be helpful to us.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Yes, we can do that after the break. We will suspend for a few minutes.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I call Deputy Verona Murphy for a second round of questions. We will take six minutes each and we will take it from there. I will have a number of questions after her.
Verona Murphy (Wexford, Independent)
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I want to address two issues. I may be wrong, but there will be a video record of the meeting. Earlier, I asked Ms Eade about the loss on paper, as we call it, relating to the lands in Tipperary. She said that the Department had signed off, but Mr. Blake told my colleague that the Department did not even have notice of that. Somebody needs to correct that. Mr. Blake said that he did not know about it until it had occurred, but Ms Eade said that the Department had signed off on it.
Verona Murphy (Wexford, Independent)
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Okay. This is to rectify that because people are watching and it will be brought to our attention. My other question relates to Ms Eade's comment that she had gotten one valuation. The committee has had experience of this where public funds are being expended in any area, regardless of whether it is a swap or not, that there would have been more than one valuation. I would have expected this from the Department. Maybe I am wrong but I ask Mr. Blake whether it would have been prudent for the Department to get its own valuation. How does it verify that the valuation is appropriate?
Verona Murphy (Wexford, Independent)
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But at the same time, if Mr. Blake is signing off on it, then this gives them the go ahead.
Verona Murphy (Wexford, Independent)
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Yes. Does Mr. Blake not feel that it would be more pertinent in the Department's defence against anything arising such as this, albeit that it is on paper, and that it would be covered from the point of view of looking after the public purse by getting its own valuation? I know that would involve expending a certain amount but at the same time, it is a matter of transparency, accountability and ensuring that public funds are spent properly.
Verona Murphy (Wexford, Independent)
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So there is no onus on the Department to verify a valuation. If a valuation came in that raised an eyebrow, what would Mr. Blake do? If that valuation had come in at €1 million, what would he do? How does he verify that?
Verona Murphy (Wexford, Independent)
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It would depend on where the land was, but I appreciate that it is in Tipperary. All Wexford land is probably worth approximately €30,000 per acre. I still think, however, that there has to be a better system. This could be a complete disaster. It could be cost a lot more money. From previous experience, in purchases by different entities, for instance, in the education sector, we all recommended that there should be more than one valuation. That is something to bear in mind going forward.
Mr. O'Loughlin is new to IHRB and I will have a certain level of forgiveness for him, but I have to agree with my colleague. I come from a county where and horse sport epitomises rural Ireland. It is the biggest part of it. The integrity of the sector is what drives it. I acknowledge that the tender process is a slow process, but we are approximately five years behind. This has all been said, but I expect that this time next year the 25 racecourses will be up and running with cameras. I do not want to have another scandal reported in the sector because the IHRB has not carried out its function. I will put that on Mr. O'Loughlin for next year. That is the timeline he is getting from me as a member of the Committee on Public Accounts. There should not be only two racecourses done. The last time we heard from the IHRB, there were still two, if not one. That is still not progress. I appreciate that while the first fix may be done, I want the final fix to be done in 12 months because that is value for money for the sector.
The other issue I want to raise I have raised previously. This sector is suffering greatly in respect of insurance costs. I asked Ms Eade's predecessor, who told me that he had made representations to different Departments regarding the insurance difficulties. Whilst this may not be the remit of HRI, I believe that it should be. If the sector does not survive, HRI will have no function. At the moment the industry is under such serious pressure securing insurance cover, particularly for point-to-point meetings. I want proof that there have been representations from HRI. I want to see who it is has written to, what the response was and the efforts it is making so that that sector survives and so that HRI's funding is worthwhile. It is paramount to the continuation of the sector, particularly in rural Ireland. A stakeholder group should be set up within HRI to look after these issues. I say this because it is not getting better, but worse. The sector is not functioning correctly without it.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I have some questions for Ms Eade regarding Tipperary and the location of the land. I believe that it is close to a station. How close is the Tipperary land to a railway station?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Is there a regular train service?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Is Ms Eade aware of the policy in the national development plan to concentrate housing developments close to transport hubs?
Brian Stanley (Laois-Offaly, Sinn Fein)
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The land was valued in 2018 with one valuation. Can we trace the chronology of events here? In what year was it purchased by HRI?
Brian Stanley (Laois-Offaly, Sinn Fein)
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When was the land swap done?
Brian Stanley (Laois-Offaly, Sinn Fein)
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The valuation, therefore, was two years old.
Brian Stanley (Laois-Offaly, Sinn Fein)
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The valuation was two years old. The witnesses will be aware that marginal land was making €10,000 an acre. Was the land zoned?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Had HRI carried out any work on the land?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Was there drainage or servicing of the land?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Did HRI therefore do some drainage works?
Brian Stanley (Laois-Offaly, Sinn Fein)
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How much has been spent on the drainage works?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Was the €38,000 for 7 acres?
Brian Stanley (Laois-Offaly, Sinn Fein)
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What did that leave the total cost at?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Plus €45,000.
Brian Stanley (Laois-Offaly, Sinn Fein)
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So the total price was €338,000.
Brian Stanley (Laois-Offaly, Sinn Fein)
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So 7 acres were swopped. Using the price paid for 12 acres then it cost nearly €30,000 an acre, between drainage and purchase or acquisition. Is that right? That is a rough figure.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Yes, €11.6 million roughly.
Brian Stanley (Laois-Offaly, Sinn Fein)
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The cost works out at almost €30,000 an acre but the 7 acres were swapped in a deal two years later for €10,000 an acre. That is a financial calamity if anyone buys property or land and sells it within two years but achieved a price or a value of one third of the original cost. Is Ms Eade aware that the price for agricultural land, not zoned land, dramatically increased between 2018 and 2020?
Brian Stanley (Laois-Offaly, Sinn Fein)
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I have asked the question. A few issues stand out. First, there was an old or outdated valuation; second, there was no second valuation; third, the land cost almost €30,000 an acre; fourth, 7 acres of land were swopped for only €10,000, which is almost one third of the original price of an acre; fifth, all this happened at the same time as land prices increased; and, sixth, there is location.
I do not know the exact location and I have not stood in the field but I am trying to draw a mental picture of it. Land adjacent to transport hubs has huge potential, particularly given Government policy, which correctly targets high-density developments, although sometimes too high for my liking, close to transport hubs. Ms Eades will be aware aware that there is a housing shortage and that the land is in close proximity to the third largest city in the State. Given those factors, does she not think that the outcome is awful in view of the use made of public moneys? Does she agree that there has not been a good outcome?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Can Ms Eade give me her initial response? I accept that land was needed to widen the track.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I understand the strategic need. Given the facts that we have established here this morning, does Ms Eade agree this is not a happy situation due to the way public moneys were spent by a public body or semi-State company like yourselves? Does she, as CEO, think that there has been a good outcome for the HRI?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Which one?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Which one of the facts that I have outlined is incorrect?
Brian Stanley (Laois-Offaly, Sinn Fein)
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I have asked Ms Eade to either clarify the points raised, disagree with them or challenge them and I have outlined six or seven facts. Taking those facts together, is she happy with the position that we have arrived at regarding this land deal?
Ms Suzanne Eade:
I am not happy with the way it turned out but I am happy that we have got the land that we need. I did not pay any additional funding. I did not pay anything for this land, got it swapped and we are ready to do what we need to do for the project. I accept the points made by the Chairman and will look back. I think that we should do a lookback, as a team, to see did we get this wrong. I will do that, yes.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I thank Ms Eade. Some of the CCTV issues has been addressed by members. Can Mr. O'Loughlin give the completion date for when the CCTV system will be operational?
Mr. Darragh O'Loughlin:
I cannot give an exact date but it is our intention to install cameras at all of the tracks that are in a position to have cameras installed. There are a couple of tracks around the country, not only in Tipperary, where redevelopment work is planned. Some of that redevelopment works will involve demolition, rebuilding and adjustments to stables. We are not going to spend taxpayers' money putting in a CCTV system in those circumstances.
Brian Stanley (Laois-Offaly, Sinn Fein)
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How many tracks require redevelopment works?
Brian Stanley (Laois-Offaly, Sinn Fein)
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So that leaves 22 tracks.
Mr. Darragh O'Loughlin:
Yes. There are two tracks, which takes the number down to 20, where some civil works are outstanding so we cannot start the camera installation until we get that done. We have 14 tracks where we are ready to install cameras and I hope to see those done very soon. We have four more where the electrical first fix is in progress and I anticipate getting those cameras up. There are 14 tracks that are ready for cameras, and another four tracks that are currently under way where we can have some visibility on a finish date. I would like to see all of that work done by the end of this year. I will not make any commitments regarding the last five because there are circumstances outside our control.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I understand. How many tracks have CCTV?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Is Mr. O'Loughlin saying that CCTV is not operational on any track at the moment?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Have the cameras been tested to check if they are operational?
Brian Stanley (Laois-Offaly, Sinn Fein)
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So two sites. How many cameras are at each yard or track?
Brian Stanley (Laois-Offaly, Sinn Fein)
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For the benefit of the committee, is it one camera at the gate or 20?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Are cameras located in stables?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Have cameras been installed in the sampling boxes?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Mr. O'Loughlin has said that the IHRB hopes to have all the cameras installed except at five tracks by the end of this year.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Earlier Mr. O'Loughlin mentioned redevelopment works for either three or five tracks.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Regarding the transfer of the loan facility to shares in the Curragh, on what date was the funding approved by the HRI?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Yes.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Is it correct that a subcommittee of three persons examined this matter?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Did a subcommittee of three persons from HRI examine this?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Who were the three persons on that?
Brian Stanley (Laois-Offaly, Sinn Fein)
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And Mr. Kavanagh.
Brian Stanley (Laois-Offaly, Sinn Fein)
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The Chairman of the board.
Brian Stanley (Laois-Offaly, Sinn Fein)
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What month in 2020 was that?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Yes. Come back to us with that timeline, please.
James O'Connor (Cork East, Fianna Fail)
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I welcome the representatives from the IHRB and HRI. I am interested in sport and I have met quite a few of the witnesses previously.
As a regular race attender, I know 2020 was a challenging year with Covid. I would like to address Ms Eade first regarding attendances at the Curragh Racecourse and its profitability. Significant money was expended renovating the course. They have been challenged to bring in crowds there. Ticket price has been identified as one major concern as well as the connectivity to the course. I understand 2020 was is a skewed year for profitability because we had lockdowns during the pandemic. Could Ms Eade or another HRI representative give me some insight into that?
Ms Suzanne Eade:
Obviously, 2020 and 2021 were tough in terms of attendances. However, one of the stronger points for racecourses during that period was the strength of the media rights, particularly streaming. When Ireland was the only team in town racing, that was very good for our racecourses, which upped their streaming. Apart from that, the Curragh management have been strong in reducing costs. They really went after that in the past year or two.
What concerns me for the Curragh and all racecourses going into the future is the cost of living and the cost of putting on the lights, heating and all that stuff. That will be a big drain as we approach 2023. The big hit for the Curragh at the moment is the depreciation, which is more than €4 million annually. They will have to get much more income other than racecourse attendances to fill that gap. This year they made a cash profit. Depending, again, on the fuel crisis for the remainder of the year, I would expect that they will hit their committed budget in 2022. As I said, I am concerned about the impact on the racecourse's energy bills next year, as I am for every racecourse.
James O'Connor (Cork East, Fianna Fail)
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My primary concern is the crowds coming in, because essentially the sustainability of a racecourse is about getting-----
Ms Suzanne Eade:
On attendances again, it is very hard. Some racecourses have done very well around their festivals. The Curragh went through a few years where it lost its connection, perhaps, with their fans. That is something management will have to work hard on going into 2023. They tried different things in 2022, such as with ticket prices, offerings, weekends in August and giving lots of tickets to people in the area to welcome them back. They will have to invest to grow back those attendances next year. HRI will definitely be there to help it get that back.
James O'Connor (Cork East, Fianna Fail)
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It is a shame given the funding that has been invested in that course. The overall cost of the project came in at more than the cost of the renovation of Longchamps. It was a significant investment and that needs to be looked at immediately and some solution found. I have a huge concern about that.
Connectivity is an issue as well. Investment in public transport is key. The racecourse sits on the Cork-Dublin line, which is one of the busiest train lines in the country. It would be good to adopt an approach to that. Has HRI tried to attract an Irish Rail service? That would be significant.
Mr. Jason Morris:
I wish to raise a couple of points. I used to be the Curragh manager. Back in 2000, there was a Curragh siding that was used for transport, particularly for people coming from Dublin. It certainly something the Curragh would be keen to try to reinstate if possible.
The Deputy mentioned Longchamps. When it started out, the project was mooted to be €108 million. It actually came in at approximately t €140 in terms of a total redevelopment of Longchamps. When Ascot was rebuilt in the early 2000s, it came in at £220 million. By comparison, our overall costs were just over €80 million. That is probably quite modest-----
James O'Connor (Cork East, Fianna Fail)
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I stand corrected. It is good to know.
James O'Connor (Cork East, Fianna Fail)
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Some €80 million.
James O'Connor (Cork East, Fianna Fail)
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A sum of €4 million is astronomical. I am not a structural engineer. Could the witnesses give an indication of what that depreciation relates to? Losing €4 million a year is worth asking about.
Ms Claire Rudd:
The depreciation covers, obviously, the building. The gallops land also is depreciated because the gallops need quite a bit of effort to maintain them to ensure they are suitable for the training schools. The building is highly technical. It has a lot of plant machinery within the building for its fixtures and fittings. It is the full remit.
James O'Connor (Cork East, Fianna Fail)
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I might just go over to Mr. O'Loughlin. I understand he came from the pharmaceutical industry to his current role. How much grant funding did the IHRB receive in 2020 from HRI to run the regulatory board? In addition, I would like a breakdown of full-time, part-time, casual and voluntary staff, such as stewards. It would be helpful to know that.
Mr. Darragh O'Loughlin:
Our grant to IHRB for integrity services in racing and integrity services in racing and point-to-points in the year 2020 was €8.3 million. In terms of the breakdown of full- and part-time staff, I do not have that level of detail with me. Overall, between the office and racing officials in the field, we had 106 staff on our accounts in 2020. As to how that breaks down between full and part time, I do not have the exact numbers.
James O'Connor (Cork East, Fianna Fail)
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Could Mr. O'Loughlin correspond with me about that following the meeting? If he could he check into that and refer back to me, I would appreciate it.
James O'Connor (Cork East, Fianna Fail)
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On the sum of €8.3 million, is it in and around the same annually?
James O'Connor (Cork East, Fianna Fail)
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What proportion of that funding goes to support the point-to-point industry?
James O'Connor (Cork East, Fianna Fail)
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Only €600,000.
James O'Connor (Cork East, Fianna Fail)
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Deputy Murphy touched on a serious issue. I am involved in point-to-point racing and disclosing that is important. The insurance costs in that are frightening. Different bodies within racing look after each aspect of it, but there is a collective need to seriously examine that problem. I am getting many calls from point-to-point committees, not only from within my constituency. There is a long affinity with racing in Cork East. In fact, the steeplechase originated in Doneraile in my constituency. What the committees are telling me is a huge concern. Many of them are worried about folding. Point-to-point committees have been impacted already. That has a knock-on impact for small breeders in particular. Racing is a valuable industry with many major players who have a lot of money. However, for smaller breeders involved in racing, of which there are hundreds of in my constituency, that is a huge concern. They want to put horses into training with local trainers. It keeps an ecosystem going. I know I am preaching almost to the converted. However, there is an aspect of concern when it comes to insurance that they have been left out on a limb and that has to be conveyed. We are all aware that there has been difficult litigation taken against some clubs.
That is a concern of mine. We could do a lot more to support that particular facet of the industry. If Mr. O'Loughlin and Ms Eade have anything to say in response that, I would appreciate it.
Mr. Darragh O'Loughlin:
We recognise that insurance for point-to-point is a real difficulty. Insurance costs across the economy have increased but insurance costs for point-to-point and local hunts have soared. We work closely with hunts to ensure they can get insurance. It is not our role to provide insurance for them but whether it concerns local hunts running point-to-points or ensuring jockeys can get insurance, we interact with insurers and help to define the risk and set out for insurers to understand the risk and the extent to which our integrity services are mitigating that risk. We do what we can to support the hunts and other participants to get their insurance. Ms Eade might want to talk more about the financial support HRI has provided to ensure that insurance can be put in place.
James O'Connor (Cork East, Fianna Fail)
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That would be helpful.
Ms Suzanne Eade:
We support point-to-points through their grants and prize money in HRI. Deputy Catherine Murphy recommended that we get a taskforce together on insurance matters, which is probably a bit overdue, because it is not just about point-to-point. We are seeing insurance providers being very selective about what they will insure across a range of areas that need to be insured and charging us more. Premiums and the excesses are going up. We are all having a tough time with insurance so we need support and a bit more competition in the market. We can only go to so many underwriters. Many of the underwriters for racing have been based in the UK and are now saying that as a result of Brexit, they do not need that risk in their profile anymore so that is a major issue for us.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Mr. Blake might remind us of how much was allocated to the horse and greyhound fund for this year.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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That is just the HRI element of it. How did the Department arrive at that figure as an appropriate allocation?
Mr. Martin Blake:
Ordinarily all the State bodies will make their pitches to the Department on a quantity of estimates position. Those are evaluated on the basis of priorities across all elements of the Department. Conversations are held with State bodies and the Department of Public Expenditure and Reform. On that basis, the whole horse and greyhound fund is agreed.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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This is a unique scenario in that two separate organisations have their financial allocations tied together because the horse and greyhound fund is approved on the back of a proposal by the Minister of Agriculture, Food and the Marine and his Department and is then divided 80:20 on an annual basis. Could the Comptroller and Auditor General tell me whether there is any other situation where State money is divided in that way to two organisations on a pro ratabasis?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Mr. Blake just spoke about how organisations make their financial pitch. On any given year, HRI might make a fantastic pitch that would warrant additional funding while in other year, Bord na gCon might do the same but either organisation will rise or fall on the back of what has happened somewhere else. It does not appear to be a very appropriate way of expending public money.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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But statute can be changed.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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It is further complicated by the fact that HRI gets an allocation and it is then a matter for HRI to make another allocation to the IHRB, which is a separate board. The body that is essentially being regulated is responsible for funding its regulator. Does Ms Eade see any difficulty in that scenario?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I am very short on time. Is Ms Eade saying that essentially what the IHRB gets is a proportion of HRI's budget?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Do we see a difficulty here? The regulatory body is dependent on the budget assigned to HRI on the strength of its business case, which in turn is linked to a separate organisation. Even if we look at the IHRB, which in itself is an amalgamated structure of the steeplechase and the Turf Club, which have their own issues, do the witnesses from the Department not see that there is a case for either the IHRB to become completely independent or to get rid of the pretence and amalgamate it into HRI?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Is it independent when it relies on the organisation it essentially regulates for its funding?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Generally it is from the line Department.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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But there is a lot of entanglement. If we look at the previous debate we had on the Curragh race course, your previous boss stood down and received a financial package the value of which we do not know. Why-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Yes.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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He did not receive a package?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Apologies to the Chair for that. He stood down and took on the role in the Curragh so HRI is negotiating with him according to Ms Eade's previous replies regarding the Curragh.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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HRI is in engagement with The Curragh Racecourse. That is what Ms Eade said regarding its financial prospects. Is that not true?
Ms Suzanne Eade:
In terms of expecting it to deliver against its financial targets - its budget comes to us and must get approved by HRI. That is part of the conditions of the sanction. We need to make sure it is delivering in line with its budget but we do not negotiate with the CEO of The Curragh Racecourse.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Who does HRI have the discussions with?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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If somebody is coming to me with a proposition for the financial year to come, and HRI is discussing and looking for improvements and possibly responses, would that not constitute negotiation?
Brian Stanley (Laois-Offaly, Sinn Fein)
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I will let Deputy Carthy in again. I call Deputy Catherine Murphy.
Catherine Murphy (Kildare North, Social Democrats)
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Mr. O'Loughlin has been answering queries about the long-running saga we have had here regarding CCTV so the buck stops with him regarding that. Am I correct in saying that?
Catherine Murphy (Kildare North, Social Democrats)
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So the buck would have stopped with Mr. O'Loughlin's predecessor. Is that correct?
Catherine Murphy (Kildare North, Social Democrats)
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I know but it would have been. I think Mr. O'Loughlin would have accepted that it should have stopped there. As this has been clarified for me, why on earth would an NDA be entered into? Where is the transparency? Why would an NDA be entered into regarding an exit package?
Catherine Murphy (Kildare North, Social Democrats)
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Yes.
Catherine Murphy (Kildare North, Social Democrats)
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If there is public money, we have to be able to see the public money. People could put non-disclosure agreements, NDAs, all over the place and we would then be guessing at things. There has to be some degree of transparency.
Catherine Murphy (Kildare North, Social Democrats)
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I am short on time. Did anybody else leave with a package at the same time as the former CEO?
Catherine Murphy (Kildare North, Social Democrats)
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Was there an NDA with that as well?
Catherine Murphy (Kildare North, Social Democrats)
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Mr. O’Loughlin said it was not moving at all when I asked where the buck stopped. Would he be critical of that? Should it have happened? Was it a significant issue when there was a handover? Why, when this has been going on since mid-2021, is there still an issue? That was mid-2021 and we are still not at a point where we know this is paid. Has the exit package been paid to the individual? What has not been transferred? I am confused. I thought Ms Eade said it was not paid but it seems to be that it was not transferred. Which is it?
Mr. Darragh O'Loughlin:
Because our funding comes from HRI, anything which the IHRB pays for is paid for out of funds transferred from our funder. In regard to the specifics on this, if I could beg the committee's indulgence, it will all be dealt with in the context of the audit of our 2021 financial statements, which are still between ourselves and the Office of the Comptroller and Auditor General.
Catherine Murphy (Kildare North, Social Democrats)
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The NDA will not apply because we will see it in the statements.
Catherine Murphy (Kildare North, Social Democrats)
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That is gobbledygook, to be honest.
Mr. Seamus McCarthy:
I might add something in this regard. Non-disclosure agreements are an absolute standard feature of settlements that are made around termination of employment or the ending of employment. We have seen this in other organisations as well. I have reported previously on severance deals and the use of NDAs. An NDA will typically be phrased in such a way that if there is a statutory obligation to disclose, that disclosure can be done, but for disclosures other than within a statutory structure like, for instance, the presentation of annual financial statements, there may be a difficulty around it. As the chief executive has said, we are looking at this in the context of the 2021 financial audit. I have not determined yet whether I will draw attention to any matter in regard to it or disclose anything.
Catherine Murphy (Kildare North, Social Democrats)
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Can I clarify if this amount has been paid to the individual?
Catherine Murphy (Kildare North, Social Democrats)
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When did that happen?
Catherine Murphy (Kildare North, Social Democrats)
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So it is a long time ago. It is 2021.
Catherine Murphy (Kildare North, Social Democrats)
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Why has it not been transferred between HRI and the IHRB? Is it between HRI and the IHRB that the transfer happens?
Mr. Darragh O'Loughlin:
The transfer has not taken place yet. This exit was part of a broader transformation and modernisation programme that the IHRB had resolved to engage in, which is the reason it recruited a new chief executive officer. We have not fully settled on what that means between ourselves and the HRI.
Catherine Murphy (Kildare North, Social Democrats)
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There were fairly high-profile articles in the newspapers earlier this year, and Paul Kimmage was the author of one very long article which related to a question mark about doping in the sport. Another Oireachtas committee looked at this and it had looked at it in advance. I know a report was done by Dr. Suann from New South Wales and recommendations were made. Have all of those recommendations been adopted? One of those recommendations was that CCTV cameras would be installed. What other recommendations are outstanding at this stage?
Catherine Murphy (Kildare North, Social Democrats)
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Can Mr. O’Loughlin give us a note on what is outstanding, what the recommendations are, what is being done, the timeline and the reason the other issues have not been dealt with? This is a big sport and, as we speak, the question of integrity is critical. It is very important, where there are recommendations to ensure integrity, that they are adopted and implemented.
Imelda Munster (Louth, Sinn Fein)
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Before the break, Ms Eade gave a commitment to let us know what was the payment made to the ex-CEO of the IHRB. Can she furnish us with that information?
Imelda Munster (Louth, Sinn Fein)
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Perhaps when Ms Eade can do it, we will be furnished with that.
Imelda Munster (Louth, Sinn Fein)
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Thank you. I am looking for clarity in regard to HRI. Can Ms Eade clarify that HRI was not in any way involved in the recruitment process for the CEO of the racecourse?
Imelda Munster (Louth, Sinn Fein)
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It did not facilitate advertising and did not make contact through the recruitment company or pay for any aspect of it.
Imelda Munster (Louth, Sinn Fein)
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Did HRI engage a company? Is that what Ms Eade is saying?
Imelda Munster (Louth, Sinn Fein)
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Other than that, HRI did not pay for anything with regard to the recruitment process.
Imelda Munster (Louth, Sinn Fein)
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Ms Eade is categorically stating there was nothing whatsoever.
James O'Connor (Cork East, Fianna Fail)
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I have a question for HRI on administration costs from 2019 into 2020. There is an increase from €7.83 million in 2019 to €8.423 million in 2020. I want to get a background on why that administration cost increase happened. I think it was related to labour costs but what are these labour costs? Will Ms Eade explain that?
Ms Suzanne Eade:
The main two drivers of the administrative change were the approximately €250,000 that related to the depreciation of HRI buildings and, concerning the salary-related costs, there was a global agreement on salary increases at that time of 3%. We also had some maternity backfills as part of that process. These were the main reasons for that movement. We did not avail of any Covid-19 supports in that time for permanent HRI roles because our funding was in place. It was not like we needed to go and look for-----
James O'Connor (Cork East, Fianna Fail)
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I understand there was a substantial rise in HRI's legal costs in 2020, so I ask the witnesses to comment on this.
Ms Claire Rudd:
There was an increase of just over €100,000 in legal costs from 2019 to 2020. This included several different elements, one of which was the funding round for the Curragh. Another significant element involved legal costs concerning the strategic alliance between Tote Ireland and Tote UK.
James O'Connor (Cork East, Fianna Fail)
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Okay. I would like the attendance figures for the Curragh. I understand HRI probably has those, although the witnesses might not have them with them. Could I be furnished with them, please? I would be interested to see them from a transparency perspective and as an indication of where things stand and what it is going to take to make things work to get a good return for the organisations and for the State in respect of its investment in this regard. Getting these figures would be helpful. I do not expect a response on this point.
A local issue raised on numerous occasions in Cork was the cancellation of point-to-point races at Kinsale. The IHRB ruled that point-to-point racing would not go into June. I do not know why that was advanced by the organisation. From a national hunt point of view, there is a mixed meeting in Galway in the summer. The point-to-point races at Kinsale were popular and many people in the racing industry, at grassroots level, loved going there. The event just seemed to be pulled and it is important to get an explanation for this. I ask the witnesses to comment.
Mr. Darragh O'Loughlin:
The point-to-point season, as defined, begins in October and concludes at the end of May. The season is significantly longer now than it was a couple of years ago, with a finite number of fixtures and ,therefore, the decision taken by the national hunt stewards was that the season should conclude at the end of May because to drag it out any longer would mean stretching the season and the people involved. Without the additional fixtures, there was not much extra benefit. Unfortunately, the bank holiday weekend in June falls after the end of May and, by definition, outside of the season as it is defined. My understanding, however, is that the organisers of that event in Kinsale were offered weekends in May when those races could be held and would be supported. Unfortunately, every sport has an end date on its season. We have even seen the GAA shortening the football and hurling seasons. Once a season has ended, no more fixtures can take place. There is additional risk involved in this case because the ground tends to get drier as the year progresses. Additional costs are also associated with watering that regard. For various reasons, therefore, the season is fixed-----
James O'Connor (Cork East, Fianna Fail)
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Mr. O'Loughlin should not worry; I am well in tune with this. I will not lie, however, as I do not necessarily agree. This is an issue. There is a need to engage with the point-to-point committee in Kinsale on this matter, because it is a bone of contention. Perhaps with costs, going into that time of year, there may be an issue with getting stewards, etc. I do not know but several issues have been raised with me in this context. Traditionally, this event was the final fixture of the season. I appreciate the insight and I will finish on this point.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Deputy Devlin has joined us online. He is trying to juggle other parliamentary duties this morning, so I ask him to use the raise hand function to signal that he wishes to contribute. Turning to the loan facility of €9 million, which will then be converted into shares, how much of that funding has been converted thus far? Is it just over €6 million?
Brian Stanley (Laois-Offaly, Sinn Fein)
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It is convertible.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Looking at the direction of travel, that seems to be where this is going. Is it correct at this point that it is most likely that this loan will be converted?
Brian Stanley (Laois-Offaly, Sinn Fein)
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A figure of €49 million was mentioned concerning private investors in the Curragh. Have any of them offered that kind of facility?
Brian Stanley (Laois-Offaly, Sinn Fein)
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In saying they have paid up, have they provided a loan facility that could be converted into shares?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Turning to the matter of the CEO, who was before us several times, on what date did he finally notify the board that he was stepping down from his role or when was the board made aware of this decision?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Sorry. On what date did the former CEO's time expire? When was the date that Mr. Kavanagh was stepping down first known?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Okay. On what date was the €9 million convertible loan facility approved by HRI?
Brian Stanley (Laois-Offaly, Sinn Fein)
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It was prior to Mr. Kavanagh's departure.
Brian Stanley (Laois-Offaly, Sinn Fein)
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It was approximately a year before his departure. As the CEO of HRI, can Ms Eade confirm she is happy there is no conflict of interest concerning the overlap between Mr. Kavanagh's previous role as CEO of HRI and the approval of the convertible loan to the Curragh?
Ms Suzanne Eade:
Yes. We had the protection of having a subcommittee work on all the financing for the Curragh. We had an evaluation. We also had independent advice on everything we did and we had to get sanction from the Department, which was obviously independent of Mr. Kavanagh, before anything was agreed or paid over. From my perspective as CEO, I have a strong chair who looks at these things strategically and in a measured way and it was ensured we did this in accordance with good governance.
Brian Stanley (Laois-Offaly, Sinn Fein)
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From the Department's point of view, is Mr. Blake happy there was scrutiny of that process and no conflict of interest or other issues arises?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Was the New Economy and Recovery Authority, NewERA, also involved?
Brian Stanley (Laois-Offaly, Sinn Fein)
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My hearing was worse a few months ago, but it has started to improve a bit. I must have been deaf in that ear for about three months. Hopefully, Mr. Blake's will come back as well. Regarding cash in transit, I am at a dead loss with this issue. It concerns a sum of €389,000 that had been collected from racecourses. A company called Senaca had this money in its possession, as I understand it, for two or three days.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Indeed, but I just wish to return to this particular case for a moment. It just happened that the company was liquidated within the time concerned. I am trying to understand this. It was not the company's money.
Brian Stanley (Laois-Offaly, Sinn Fein)
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This money should not have shown up on the balance sheet of that company because it was holding it in custody for HRI. How did that money become an asset of Senaca to be used in the liquidation process to pay off debts?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Ms Eade mentioned an investigation. What is the nature of that investigation?
Brian Stanley (Laois-Offaly, Sinn Fein)
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How much money was recovered?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Yes, but a sum of €270,000 has gone AWOL. Ms Eade said she was not sure about the Garda investigation. How long is the investigation going on?
Brian Stanley (Laois-Offaly, Sinn Fein)
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There has not been an update.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Yes, but if somebody had €270,000 of my money, I would look for an update.
Brian Stanley (Laois-Offaly, Sinn Fein)
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The Garda are investigating and I presume there is some liaison has taken place with An Garda Síochána. Can Ms Eade contact An Garda Síochána to inquire whether the investigation is still live and whether progress is expected?
Brian Stanley (Laois-Offaly, Sinn Fein)
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An Garda Síochána must be careful about what they do and say because of the potential implication for legal proceedings, and possible outcomes of legal or court proceedings. Can Ms Eade get confirmation on whether the investigation is still live into the €269,000 that has gone missing and not been recovered? Can she also find out whether the Garda is actively pursing the matter and what the is timescale for completion of the investigation? It would be great if we could have that information.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I recognise that was not taxpayers' money but we are talking about bodies that are funded by taxpayers.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Yes.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Please, and revert back to us. Did Deputy O'Connor get back in a second time?
James O'Connor (Cork East, Fianna Fail)
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Yes, but I have one other question.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Go ahead.
James O'Connor (Cork East, Fianna Fail)
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There are huge changes happening in the regulation of gambling. There are divergent views, which is the nature of this issue, and it is very problematic. One change that has been touted, and on which there has been some discussion, is the removal of ATMs from racecourses. What impact does Ms Eade think that change would have? I think that it would be detrimental to the economic environment for caterers, small bookmakers, etc. These are not the major conglomerate bookmarkers and removing ATMs would finish them. Has the HRI delegation a comment on the matter?
James O'Connor (Cork East, Fianna Fail)
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Has the matter been put to bed?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I would like to deal with the remuneration package for the CEO of HRI, starting with the Department.
The Department of Public Expenditure and Reform set in place new guidelines on the recommended salary scale for the position of CEO. The previous CEO of HRI was on an existing salary scale of €50,000 plus. When the previous CEO stood down and a new CEO joined, the salary changed following a business case being made by the board of HRI. Both the Department of Agriculture, Food and the Marine, and the Department of Public Expenditure and Reform, signed off the proposal so the new CEO could earn approximately €50,000 more than what was stated in the previous guidelines. Am I wrong in what I have said?
Mr. Martin Blake:
On the specific of the difference in salary, I just do not have it to hand. What I can say, in the context of the actual agreement and the proposed salary of the current CEO, that it is dealt with under the code of practice for the governance of State bodies. The process is that the board makes an application to the Department for approval to move forward with the appointment with a suggested salary scale. We would have gone through that and discussed it with DPER in the context of the actual value that was proposed. We agreed to it on the basis that it was not out of line with comparable organisations.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Ms Eade was the chief financial officer during this process. I understand that the business case that HRI provided to the Departments was based on a report by Marsh McLennan. Is that correct?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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In January 2019, March McLennan provided a provided a report to the HRI on the remuneration package for a CEO.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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On the position of the CEO. Was Ms Eade not aware of that?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Was Mr. Caseyin situat that point? I ask because he is the chief financial officer.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Ms Eade was the chief financial officer at the time.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Can anyone answer? The report was provided to HRI in January 2019.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Who commissioned the report?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I thank Mr. McCarthy.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Did Mr. McCarthy say the remuneration committee?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Does the chief financial officer not sit on that?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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It strikes me as strange that the HRI commissioned the report in 2019 considering there was no vacancy and the established position of the package for the then CEO was secure.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Yes, two years later.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I take it that nobody can answer whether the HRI examined whether it was possible to identify a candidate under the previously agreed DPER guidelines?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Has Ms Eade been in situas the chief executive since September of last year?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Is it correct, in terms of departmental approval, that the final salary position was not agreed until November of last year?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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When Ms Eade was going through the recruitment process, did she have any idea of the final salary for the position?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Would Ms Eade have accepted the previous salary scale that had been agreed?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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The DPER salary guidelines were in place.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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The HRI has cost us €50,000 a year.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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That is the position, which we have just heard. We have somebody who is eminently suitable for the role and she is on record as saying she was willing to accept a salary scale.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Which is it? Chair, I will leave my questions at that.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Does Deputy Murphy have a final question?
Brian Stanley (Laois-Offaly, Sinn Fein)
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The Deputy is happy.
Verona Murphy (Wexford, Independent)
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Yes, and we have set a bar for the next appearance.
Brian Stanley (Laois-Offaly, Sinn Fein)
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All members are happy. I thank the witnesses from the Department and from the two bodies for joining us today. I thank the staff of the HRI, the IHRB and the Department who were involved in preparing for this meeting.
I thank the Comptroller and Auditor General, his colleague, Mr. Brady, and his staff for assisting at today's meeting.
I also thank the Comptroller and Auditor General, Mr. McCarthy, Mr. Brady and their staff for assisting at today's meeting.
Is it agreed that the clerk to the committee will seek any follow-up information and carry out any agreed actions from this meeting? Agreed. Is it also agreed that we will note and publish the opening statements and briefings from today's meeting? Agreed.
We will break for lunch. The committee will resume in private session at 1.30 p.m. before moving to public session to deal with correspondence and other business.