Oireachtas Joint and Select Committees
Thursday, 19 January 2023
Public Accounts Committee
Business of Committee
The business this afternoon is minutes, accounts and financial statements, correspondence, work programme, the Comptroller and Auditor General's section 2 report, and any other business. We will then go briefly into private session before adjourning until next Thursday, 26 January.
The minutes of our meeting on 15 December have been circulated. Do members wish to raise matters about them? I believe they are accurate. Are the minutes agreed? Agreed. As usual, they will be published on the committee's web page.
Accounts and financial statements are next. There are quite a few of these today. Thirty-six sets of accounts and financial statements were laid before the Houses between 12 December and 21 January. I ask Mr. McCarthy, the Comptroller and Auditor General, to address these before I open to the floor.
Mr. Seamus McCarthy:
As the Chair said, quite a few sets of accounts and statements were laid before the Houses during the recess period. No. 1 is St. Angela's College, Sligo, for 2021. It received a clear audit opinion, but I draw attention to the recognition of a deferred pension funding asset. The committee will hear me referring to this again today. It is standard for bodies with substantial non-State income, such as universities. No. 2 is the travellers' protection fund, travel agents and tour operators bond accounts for 2021, which received a clear audit opinion. No. 3 is the National Treatment Purchase Fund, NTPF, for 2021. This received a qualified audit opinion. In my opinion, the accounts give a true and fair view except that they account for the costs of retirement benefit entitlements of staff only as they become payable. This is standard for many health bodies at the direction of the Minister for Health. No. 4 is the Commission for Aviation Regulation for 2021, which received a clear audit opinion. Nos. 5 and 6 are group accounts - Sport Ireland for 2021 received a clear audit opinion and Sport Ireland Facilities Designated Activity Company, DAC, for 2021 also received a clear audit opinion.
The next four relate to the Credit Union Restructuring Board. The first is for the year of account 2018, which received a clear audit opinion. I draw attention to inadequate accounting records, which is the reason four sets of accounts are being done together. After the Credit Union Restructuring Board ended its active period, the members of the board left and responsibility passed over to the Department of Finance, there was effectively a falling down in its accounting records, and it took a considerable time to get that sorted. The board's 2019 accounts got a clear audit opinion, but there were inadequate accounting records. The board's 2020 accounts got a clear audit opinion, but attention was drawn to the inadequate accounting records. The board's 2021 accounts received a clear audit opinion. By then, the Department had got on top of the difficulty with the accounting records.
No. 11 relates to the Beaumont Hospital Board for the period of account 2020. It received a clear audit opinion, but I drew attention to a number of issues. The first was a series of governance issues, including the unscheduled resignation of the chairperson and the appointment of an interim chair, the audit committee lacking members to represent a quorum for a period, and considerable delays in the preparation of the annual financial statements. As a result, these accounts were certified on 21 October 2022. There was also a failure by the board to review the effectiveness of controls in 2020, as required by the code of practice for the governance of State bodies. There were breaches in controls resulting in payroll overpayments totalling €294,000 between 2019 and 2021. There was also non-compliant procurement totalling €16.9 million in 2020.
This represented approximately 11% of non-pay expenditure. That was up from 8% of non-pay expenditure in 2019. I should say that the 2021 accounts for Beaumont Hospital were signed by me on 21 December 2022. We were able to get in quickly enough and complete the 2021 financial statements but they have not been presented. They will be presented in due course.
No. 12 is Microfinance Ireland for 2021. It received a clear audit opinion. However, I draw attention to non-compliance with European guarantee fund conditions which reduced the amount that Microfinance Ireland could potentially draw down under the funding guarantee by an estimated €968,000. There is a process ongoing whereby it may be able to rectify the paperwork. It may reduce the amount from the €968,000 but we will obviously have an update on that in regard to 2022.
No. 13 is the Educational Research Centre. It received a clear audit opinion but in this case I am drawing attention to the recognition of a deferred pension funding asset. Again it is standard for bodies with substantial non-State income.
No. 14 is the Sustainable Energy Authority of Ireland for 2021. It received a clear audit opinion. In this case, I draw attention to the fact that I signed off on the account on 30 June 2022. There was a delay in presentation. In line with the committee’s standard procedure, it may want to follow up with the authority to get an explanation on that.
No. 15 is the sundry moneys account for 2021. That received a clear audit opinion.
No. 16 is the Grangegorman Development Agency for 2021. That received a clear audit opinion.
No. 17 is the Oberstown Children Detention Campus for 2021. That received a clear audit opinion.
No. 18 is a special account, the hepatitis C insurance scheme for 2021. That received a clear audit opinion.
No. 19 is Dublin City University for 2020-21. That received a clear audit opinion. Again, I draw attention to the recognition of a deferred pension funding asset.
No. 20 is University College Dublin for the year of account 2020-21. That received a clear audit opinion. Again, I draw attention to the assumptions underpinning the recognition of a deferred pension funding asset. I am also drawing attention in UCD’s case to a significant level of procurement non-compliance. The figure was around €6.6 million which is quite sizeable.
No. 21 is the Institute of Public Administration for 2021. That received a clear audit opinion.
No. 22 is Children’s Health Ireland for 2021. That received a qualified audit opinion. As I mentioned previously in relation to a health body, the accounts give a true and fair view except that they account for the costs of retirement benefit entitlements of staff only as they become payable. I also draw attention to the disclosure of a significant level of non-compliant procurement, in this case approximately €2.2 million.
Mr. Seamus McCarthy:
The figure is €6.6 million in that case.
No. 23 is the National Council for Special Education for 2021. That received a clear audit opinion.
No. 24 is the Digital Hub Development Agency for 2021. That received a clear audit opinion but I draw attention to note 6 to the financial statements which discloses that the agency incurred expenditure of €227,500 in respect of 2021 as a result of a vacant site levy charge imposed by the local authority. That was possibly the third year in which such a fine had been incurred. Again, in this case the account was signed off on 20 June 2022 so there has been a delay in submission which the committee may want to follow up on.
Next we come to Horse Racing Ireland, the group accounts, and then the next nine are subsidiaries of Horse Racing Ireland. They all relate to 2021 and all received a clear audit opinion. However, I draw attention to a further loss of €1.3 million in 2021 related to Horse Racing Ireland's investment in an associate company, Curragh Racecourse Limited. The cumulative loss on the investment to the end of 2021 was €7.7 million. I do not propose to read out the names of all the subsidiaries. They will be on the list.
No. 35 is the Louth and Meath Education and Training Board for the period of account 2020. That received a clear audit opinion. However, I draw attention to cost overruns on two school extension projects and to a settlement related to VAT of €300,000 due for the period 2015 to 2021 resulting in interest and penalty charges totalling €98,000.
Finally, No. 36 is Tourism Ireland, which is one of the North-South bodies, for 2021. That received a clear audit opinion.
I thank Mr. McCarthy for that report. In regard to the Beaumont Hospital audit, obviously it is not just one issue. There is a range of issues there. As a committee we should correspond with it to find out what it has done to address the four issues. On the governance issue, does it have a permanent chair now? How soon will it have a permanent chair? On the failure of the board to review the effectiveness of controls as required by the code of practice, is it now actively doing that? On the breaches in controls regarding the payroll overpayment, what steps has it taken to prevent that from happening? The non-compliant procurement is fairly significant. It is almost €17 million, or 11% of non-pay expenditure. I propose that we should write to the board in regard to those four matters because it seems that a number of issues there are not as tidy as they should be and need to be addressed. Actions need to be taken. We should ask in correspondence for them to address these matters and come back to us in a timely manner on what measures it is taking in regard to each one.
That is one point that has been addressed. We could ask what it is doing in regard to the other three points. Hopefully the new chairperson will oversee some of this. Does any other member wish to come in?
It has a big budget, at €505 million. It is a centre of excellence as well. It is the one that jumps out from the list. I agree we should write and look for that information but we may consider at some point in the future bringing in this hospital and others that follow it in the remit. We might put it down tentatively but I do not think it would be enough on its own. It may well be that we might have a look at some of the issues and whether there are similar issues in other locations and sectors. The university sector stands out. I cannot recall from previous reports for the hospitals that come under the remit of the Comptroller and Auditor General whether similar issues arose. Let us mark that one out.
We will request to know the steps that have been taken to safeguard and ensure that, from Beaumont Hospital's point of view, these matters are being addressed effectively and that measures are in place to ensure they are compliant. Does anybody want to raise any of the other financial statements?
Yes. I refer to Horse Racing Ireland, No. 25, where attention is drawn to a further loss of €1.3 million. I know there was underinvestment, so there was a need for investment into the racecourse, which by the way is in County Kildare but is not in my constituency, for what it is worth. On the further loss, who picks up that loss and how is it paid for? Does it come out of the public purse?
Mr. Seamus McCarthy:
It is a joint venture. There were other investors in the redevelopment of the racecourse. The equity that was put in has effectively been eroded. It resulted, in 2020 I think, in an additional resource - a loan, in effect - being made available to the company, Curragh Racecourse Limited. From memory, the amount on the State's side was about €9 million, or perhaps a little bit more, but the other investors had to put in an equivalent amount. If the loan has not been repaid by the end of January 2024, it will be converted to equity. Further resources have gone in to meet that loss.
That is social housing.
Can we agree and note the listing of accounts and financial statements? Agreed. As usual, the list of accounts and financial statements will be published as part of the minutes.
Members will be aware that the Comptroller and Auditor General presented a report, prepared in accordance with the provisions under section 2(7) of the Comptroller and Auditor General (Amendment) Act 1993, to the Dáil on 21 December in relation to an unauthorised release of funds from the Central Fund of the Exchequer. This is on our agenda for discussions after correspondence and the work programme. I suggest, if people are happy to do so, we will leave dealing with it until then.
We will move on to correspondence. As previously agreed, items that are not items of discussion for this meeting will continue to be dealt with in accordance with the proposed actions that have been circulated. Decisions taken by the committee on the correspondence will be recorded on the minutes of the committee's meetings and published on the web page.
The first category which members have flagged is category B - correspondence from Accounting Officers and Ministers as a follow-up to committee meetings. I propose to deal with these items today, one way or another, because we do not want correspondence being pushed out for a number of weeks. They were held over from our meeting on 15 December 2022.
No. R1621B from Mr. Ray Mitchell, assistant national director of the HSE, dated 12 December 2022, provides information requested by the committee arising from our consideration of the report entitled Funding and Deficit Challenges in Voluntary Disability Services Agencies. Members will recall that this concerns section 38 and section 39 organisations. It was flagged for discussion at our meeting on 15 December by Deputies Catherine Murphy, Munster and Carthy but was held over to allow members more time to review it. It has not been flagged for discussion at today's meeting. I propose to note and publish this correspondence. Is that agreed? Agreed. Do members want to add the funding of voluntary disability services agencies to the agenda at one of our forthcoming meetings with the HSE? Let us be mindful of our previous conversations with the HSE. It is such a big outfit, covering so many different areas, that we found in the past when trying to deal with everything that we did not do so effectively. We decided during discussions of the committee that in future, we would try to narrow our engagements and get a focus. Allowing some leeway, perhaps we will pencil in one of those visits by the HSE.
I support that proposal. We need to have quite an in-depth discussion with the HSE on disability services. One of the things about which we could correspond with the HSE beforehand is the level of services provided by comparison with the level of funding provided for each region. For example, in the community healthcare organisation, CHO, that my constituency falls under, I am aware that different criteria apply in the availability of respite care for children with disabilities. In Cavan and Monaghan, and I think in Donegal, there is a very high threshold, which means that many families that are desperately in need of such respite care cannot avail of it regardless of their circumstances if their child has been adjudged not to have a disability that is severe enough. If the same child were in a different county, he or she would be able to avail of respite services. That is unacceptable. I see nothing in terms of financial allocation that would result in such a disparity whereby some counties have fewer supports and services available. If we are bringing in the HSE on that issue, we should include that as a matter for consideration. I am told that across the State, on a macro level, the disparities are stark. Children and their families are being discriminated against in respect of the types of services available to them simply based on where they live, which is something we cannot tolerate in our health services.
But here it is actually blatant. The policy prevents some children from applying. There will always be disparities with waiting lists and the timeframe within which services are delivered, but here we have a situation where policy is discriminating against children depending on where they live.
It certainly is a postcode lottery. It does not matter if there is disparity in polices; if the funding is not there, people are not going to get the services. The CHO area where I live and which I represent, CHO 7, is twice the size of some of the other CHOs. It is in a rapidly growing area, and is playing catch-up the whole time. When we have our annual meeting with them, we are told that they have historically been poorly funded in this regard. We might have one single HSE but we do not have one HSE standard. Whether it is caused by policies or funding, it is a postcode lottery for people. We have to get to grips with that because we are failing people who are not getting even the limited supports that they should be getting in comparison to other areas. How do we address that? We have to look at the policies but also the funding. We could narrow it down to disability supports, as the Deputy said. Many organisations that deliver disability supports are not directly provided by the HSE but they are outsourced to them, which is another aspect that could further complicate matters. We have to be very specific. One nearly needs to have the briefing from the HSE and have a discussion on it before representatives are called in to get a benefit from it.
There are multiple issues involved. How can we resolve them?
A number of matters have been raised. We will put them in our programme for future consideration.
No. 1620B from Mr. David Moloney, Secretary General of the Department of Public Expenditure and Reform, dated 12 December, providing information requested by the committee at our meeting with the Department on 20 October. It is proposed to note and publish this correspondence. Is that agreed? Agreed. Deputies Catherine Murphy and Carthy flagged this issue.
There are two matters I wish to raise, one of which relates to the delivery of temporary modular homes. I want to ask the Department about the cost per unit. I know there is a 60-year lifespan on these, which is very good. Does the cost include the connection to the services? How many are on order? What is the lead time for delivery? Is fire certification included in that? Does certification happen afterwards? Is that included in the cost? That is the first matter I wish to raise.
With regard to Benefacts, which is the final item referred to in this correspondence, I understand there is a further response pending from the Department of Public Expenditure and Reform. I presume that will come up next week. I will come back to the matter at that stage, but I may well refer to this correspondence.
No, I have nothing. I had questions in respect of the Department of Housing, Heritage and Local Government. Its officials are appearing before the committee next week, however, so I will leave it there.
That is fine. We have proposed and accepted that we are going to note and publish that item.
No. 1625B from Mr. David Moloney, Secretary General of the Department of Public Expenditure and Reform, dated 6 December, providing information requested by the committee regarding the accumulated pension liabilities of the Office of the Regulator of the National Lottery. This arose over recent meetings. It is proposed to note and publish this correspondence. Is that agreed? Agreed.
This matter arose in terms of the regulator, particularly upon the privatisation of the lottery when matters relating to the pensions of previous workers who transferred were not resolved in advance. There are other areas where this has become an issue. Can the Comptroller and Auditor General explain how these anomalies arise?
Mr. Seamus McCarthy:
It is not related to the privatisation of the lottery; it relates to the establishment of the regulator. The regulator took on staff from the public service who had already earned pension entitlements. Effectively, because they came into the organisation with an entitlement to future pensions arising from their previous service, the question was who was going to pay. Was it going to be the regulator and the national lottery fund or was the public service, that is, the Department of Public Expenditure and Reform or Department of Finance, going to pick up the tab? That was really where the question lay. The regulator has not been providing or, if you like, taking on the liability for periods prior to their establishment. It was, therefore, really a question of who was going to take responsibility for it. I have drawn attention to it for a number of years because it has been dragging on since at least 2015 when a proposal was put to the Department of Public Expenditure and Reform. I am glad to see that it is now moving towards a resolution.
I know it has been in the news for other reasons, but am I correct in saying there have been similar issues with Coillte where people have gone from the Department of Agriculture, Food and the Marine? Is that something with which Mr. McCarthy is familiar?
Perhaps we could write to the Department of Agriculture, Food and the Marine to get clarification on whether there was any transfer of employees from the Department to a semi-State body, and, in that regard, on who takes on the burden of pension entitlements.
While we are talking about the lottery, the Chairman will recall that we had a number of engagements with its representatives before Christmas. I think "unsatisfactory" would be a term on which we could all agree. We did agree some follow-up correspondence. Perhaps I missed it. Could we get confirmation that the correspondence was sent in terms of additional questions to the regulator and whether a response was issued?
There has been no response to date. The Deputy should bear in mind the timelines and that people are on holidays, not just here but also within the regulator and the national lottery. We will keep an eye on that, however. We hope to have something in the next week or two. If we have not, we need to revert to the regulator.
Again, it is a matter of where the committee wants to slot it in. We have a fairly extensive list of requests for people from different bodies to come in this year. If members wish to put it in, however, we can do so.
Absolutely. It is important that we have a long list. Deputies know themselves how it works. Issues come up across maybe three or four different bodies that are big spenders where there is an urgency. It can move things around for us and priorities can change. What we do in that regard is in the hands of committee members. It is a meeting we should pencil in for the future, however.
No. 1631B from Mr. Mark Griffin, Secretary General of the Department of the Environment, Climate and Communications, dated 16 November, providing information we requested regarding a report on climate action targets. It is proposed to note and publish this item of correspondence. Is that agreed? Agreed. Deputy Carthy raised this item.
Yes. There is not much content-wise although it is a long enough letter. It goes through the Common Agricultural Policy, CAP, funding until 2027 and references 2028 to 2030 as being unknown due, obviously, to the next United Nations Forum on Forests, UNFF, covering that period. It would be useful if we could get clarification from the Department of the Environment, Climate and Communications on whether there has been engagement with either the Department of Finance or Department of Agriculture, Food and the Marine regarding the suggestion from within the European Commission that a larger CAP should be delivered in 2024 to assist the delivery of our climate action plan targets.
Second, it would be useful if we could get a sense from the Department, in terms of the climate action plan, on whether it plans to provide additional funding to the delivery of emissions reductions within the agriculture sector specifically or how it intends to operate that.
One thing is not clear from reading the correspondence. I noted a piece when I was going through the letter that comes under the subheading, "Electricity and power generation (particularly in relation to back up capacity and energy security)". The letter states: "I am advised that the figure of €1bn for backup capacity within the larger €33-€37bn electricity sector figure consists primarily of incremental battery storage." There is very little detail. It goes on to state, "will predominantly be used to manage solar power on an intra-day basis." I presume it is talking about power that is generated today and used tomorrow. I would like a little bit of detail about that. Wearing a different hat, maybe Deputy Carthy or somebody else here can explain that. Are we talking about some of the finance that will go to farmers for anaerobic digestion or for solar that can be stored by means of batteries?
What are we talking about in this regard? I do not know. Is anyone on the committee aware of what that is about?
In the third paragraph on page 2, on electricity and power generation, there is a figure of €1 billion "for backup capacity". It is for the agricultural sector. What is the best use for that money? How is it going to be used? There seems to be very little information to tell us that.
There is very little information within the sector either. Part of the problem has been that many of the areas where the agriculture sector, that is, farmers, can play a proactive role in emission reduction targets actually affect other sectors within the climate action plan. Renewable energy generation falls under the energy category. Likewise anaerobic digestion and solar power and forestry, where there has been a lot of debate that it actually falls under the land use, land use change and forestry, LULUCF, category. There is a lack of joined-up thinking as to how we can use measures adopted on farms that affect other categories to be part of the holistic response to reducing emissions. Part of that is going to be budgetary, I agree.
We should ask for clarification regarding this and specifically what measures are in place for farmers to get directly involved and what assistance is available to them. They are being told to scale down in relation to dairy or beef production. This was the one thing that was held up as being an income generator for farmers to make up for that loss. We will seek that information from the Department.
On the second page at the top, under the heading, "Land-use and forestry", it states "The Forestry Division of the Department of Agriculture Food and the Marine recently received sanction of €1.318 billion for the next Forestry Programme (2023-2027) from the Department of Public Expenditure and Reform." Can we ask the exact date on which this sanction was granted? Were the Departments of Public Expenditure and Reform and the Environment, Climate and Communications fully briefed? Regarding the Gresham House investment when did they come into play in this regard? Was that before or after the sanction? I am not quite sure where that is at presently.
I will make a suggestion. It is a major initiative in respect of the forestry programme and as we will be dealing with the 2021 accounts of the Department, I suggest that we bring in the Department to talk about forestry and carbon sequestration specifically within the next months.
There is more than one Department involved. The Department of Public Expenditure and Reform has a role as does the Department of Agriculture, Food and the Marine. It may be that the Department of the Environment, Climate and Communications has a role as well. It quite difficult to see where this lands or where the buck stops. To be perfectly honest, in the case of most of us, our jaws are still not quite settled after hearing about the Gresham House investment or even where that is at. Can we ask questions in advance and then I would be very happy that we invite them in?
What I suggest is that we ask those questions but I strongly suggest that we put this on to the work programme as well. The Deputy is correct; it will involve other Departments but the key player is the Department of Agriculture, Food and the Marine, so we will request that information.
Moving on to No. 1633B, it is from Mr. Ray Mitchell, assistant national director of the HSE, is dated 20 December 2022 and is providing further information that we requested arising from a meeting with the HSE on 6 October 2022. It is proposed to note and publish this item of the correspondence. Is that agreed? Agreed.
Deputy Munster flagged it but she is not here. Does any member wishes to raise anything? In view of the fact that she is not here and unless there is a compelling reason to hold it back until next week, I suggest that we move ahead. Are members happy to have it disposed of today? Okay, I take that as agreed.
No. 1638B is from Mr. Ken Spratt, Secretary General of the Department of Transport, dated 20 December 2022, providing information the committee requested regarding the DART+ West project from Kilcock to Kildare. It is proposed to note and publish this item of the correspondence. Is that agreed? Agreed.
The DART+ West programme is going to be very disruptive while it is under way but it will be hugely beneficial. The railway order has gone in on it. It says that it goes west of Maynooth. In fact it will go 350 m from the railway station in Kilcock but will not terminate in Kilcock and there will be no opportunity for people to board the train in Kilcock. Consequently, the DART will be in Kilcock but people will not be able to board it. It is one of those low-hanging fruit things.
I think there is a process. The last time the National Transport Authority, NTA, or Transport Infrastructure Ireland, TII, I am not sure which, was in, its representatives said a separate process would be required but it could possibly be bolted on to this in terms of the delivery. It is very frustrating to see that a new process is required but one cannot see where that process is going to commence. I know it is part of the transport strategy, which I think was approved by the Cabinet this week. The absence of that approval was part of the reason this did not happen. It looks like madness in the context of this being a growing area.
The letter states that turnback facilities and the layout of the existing train station at Kilcock would require reconstruction to facilitate the turnback capacity. The Deputy has more information on this than I do.
Eight railway sheds are being built and construction will be going on 24-7 just 350 m from the station. At the very least, they should allow people to board the DART from that station. This is mad stuff.
The next one is No. 1640B, which is from Mr. Mark Griffin, Secretary General of the Department of the Environment, Climate and Communications, dated 21 December 2022, providing information the committee requested regarding the ownership of National Broadband Ireland and an update regarding the national broadband plan. It is proposed to note and publish it. Is that agreed? Agreed.
Deputy Munster wanted to discuss this and I suggest that we hold this item back because there have been significant changes at National Broadband Ireland with new owners and changes in the board structure, as members can see this in the letter. Is that agreed? Agreed.
We will move on to No. 1642B, which is from Mr. David Gunning, chief executive of the National Paediatric Hospital Development Board, dated 22 December 2022, providing an update on the implementation of recommendations made by the Committee of Public Accounts to the board following the committee's engagement on 9 February and 13 July 2021. It is proposed to note and publish it. Deputy and Munster and I have flagged this item. It raises as many questions as it answers in some ways. Some of the figures jumped out at me. At the end of November 2022, there were 1,764 claims notified for determination. The figure for substantiated claims was 1,450. The figure for claims determined by the employer's representative, ER, was 1,250. The contractor's value on those is just over half a billion euro at €507 million. The value of the ER-determined claims that are disputed and referred to the project board, conciliation and to the High Court is €480 million.
There is a very small amount no longer in dispute management. There is only just €1.4 billion. The sheer volume of claims being substantiated, which is at 1,440 currently, is astronomical. Perhaps the Comptroller and Auditor General could answer this question. There is a moratorium on claims, and it is referred to in this letter again. I remember us discussing this last year. Where stands that in regard to this matter? I take "moratorium" to mean that no new claims were allowed after a certain period.
Mr. Seamus McCarthy:
That is what I understood from the meeting we had but, subsequently, it was suggested that there was a moratorium on processing the claims, as opposed to a moratorium on submitting the claims. That is where we ended up in that regard. What difference does it make? It just means that there is an overhang of contingent liability on the project.
There is literally a parallel industry of claims. Being reasonable and practical about it, all of us would accept that with such a large project there would be a large number of claims but we are looking at numbers in the region of just over 1,000.
Mr. Seamus McCarthy:
There is a small number of very high-value claims and the ones that are of particularly high value are ones related to delay, who is taking responsibility for delays and if the State pays for the delay. There is a large number of smaller claims but any of them could be valued at €1 million, €2 million or €10 million.
The issue is that if a bill of quantity is submitted and the item is not in the bill of quantity on day one when the tender documents were put out there, then it is an additional cost and it is always a nightmare. The problem with this project is that because it is so complex - we are talking about 6,000 rooms and all sorts of different complexities - then we are more likely to have such a situation. I remember dealing with a contract which had a value of only £1 million, and the claims were more than £500,000 at the time. This was with a local authority, which had not put all its eggs in the basket as regards what it wanted, and it kept changing what it wanted as well.
The Deputy is correct. We had the board in before. If the tender is not nailed down and all of the work is not done in advance, there is a greater chance of then receiving claims afterwards. That is very much where we go back to in terms of where the fault lies. I have continuously raised the delays because the contractor was criticised for not having enough people on site and other such issues. If I recall correctly, because contracts are two-way, the evaluations will not be made until the end of the contract. The amount of substantiated claims is almost on a par with the original estimate for building the hospital, which was an underestimate, but at the same time it just shows the magnitude of what we are talking about here. Nobody doubts that this hospital is needed and that it will be very good when it is opened but we must ask whether it had to be that expensive.
I have a concern with the financing of the project, which I think will manifest this year. A certain amount has been agreed and allocated by the Government. We will have agreed that. If some of these claims are paid, we will get to a point where the hospital board will run out of money and if that is the case, I presume there will be a requirement for a Supplementary Estimate. Then we start getting into the territory where we have been given a date for completion. Will that be a date for opening if the funding is not available and the claims are still in dispute? There is a multiplicity of things with which we need to concern ourselves in regard to that as well. Some of that will manifest itself this year, given the amount of money that is left.
There is probably sufficient money there for 2023. The problem will arise when all of the additional claims are put in. That is when the source of the additional money that is required will be clarified. That is where the difficulty will arise. I do not think the problem will arise in 2023 but it could arise in 2024.
We should ask as well whether there are legal implications in terms of the handover. When a contractor goes on site to build a house or whatever else, there comes a point when there is a handover. The question is whether legal issues arise if there are still several hundred claims in dispute, if not all of them have been resolved and some of them are before the courts, and if there are implications in terms of a delayed handover. We will ask the secretariat to follow up on that for us.
Normally, there would not be a difficulty in the handover because the claims are still not finally settled. There is a process for dealing with claims. Following the initial process, there is a right of appeal and taking it further. I do not think that would in any way affect the handover.
Mr. Seamus McCarthy:
That may be more about decanting from other services. My understanding is that the contract should have been set up in such a way that it is in nobody's interest to prolong the substantial completion and the handing over and commissioning of the hospital. I would certainly hope that is the case.
One other advantage - whether we criticise the cost and everything else – is that we are very lucky that a significant amount of the work was done prior to the real inflation period hitting it last year. If we were only starting the project last year, the price would have gone completely through the roof. That is important as well.
We will see where this goes. We will seek clarification. If the price of glass has gone up, and there is high inflation on glass, which I think there is, that would certainly make it a lot more expensive than what it costs because there is a lot of glass.
Mr. Seamus McCarthy:
The way the pricing was structured was based on indices, not on the actual price of the products, so the longer it continues, the more we are still exposed to construction price inflation.
I have cleared the 2021 financial statements for signing but there is still a process going on. I am still waiting for the final accounts so I would expect in the next weeks to be signing off on the 2021 financial statements. It is probably in the best interests of the committee for it to engage with the board publicly when it has the financial statements.
We could get the board in. I will not say what we can do, based on the previous discussion.
No. 1643B is from Mr. Graham Doyle, Secretary General, Department of Housing, Local Government and Heritage. It is dated 22 December 2022 - we had them all very busy in the week before Christmas - and provides information requested by the committee regarding reviewing planning permissions granted by An Bord Pleanála for telecommunications masts. It is proposed to note and publish this correspondence. Is that agreed? Agreed. Deputy Carthy, who raised the matter, is not here. Does Deputy Murphy wish to speak to that correspondence?
The last paragraph in the response pretty much says that people can take a judicial review if they wish. Nobody takes a judicial review lightly. We know that one of the people who made the decisions has at least the prospect of a criminal prosecution hanging over him. We do not want to prejudge what the courts will do, or even whether the matter will go to the courts, but in these situations, would it change the scenario in relation to an overall review if the board took the initiative and examined these decisions to ensure they are solid and do not end up in the courts? That would appear to be a far better approach than pointing people towards the courts.
It is a chicken and egg situation because the process of putting the masts in place could pass out the legal system. In other words, if matters wind up in the courts and during that time planning permission is granted for a large number of these masts in places that are being disputed, the masts could be put in place. That is my understanding of the position.
-----in view of the fact that until matters regarding the legal process have been concluded to some extent, there would be a pause.
The next category of correspondence is correspondence from and related to private individuals and any other correspondence. The following items have been held over from previous meetings and we will take them together. The first is No. 1574C from Deputy Neasa Hourigan, dated 11 November 2022, the second is No. 1577C from a former member of the committee, Deputy Jennifer Carroll MacNeill, and the third is one from Deputy Matt Carthy, dated 15 November 2022. They concern the Charities Regulator and the alleged operation of a body as a charity that is not registered as such. I understand the same matter was raised at a meeting of the previous Committee of Public Accounts in November 2019 and it is referred to in both items of correspondence. I ask members to keep in mind the long-standing parliamentary practice that they should not comment on, criticise or make charges against a person outside the House or by name or in such a way as to make him or her identifiable. At our meeting on 24 November, we agreed to request the Charities Regulator to respond to the matter. This letter issued before the recess but unfortunately the individual to whom it was sent no longer works for the Charities Regulator. The secretariat is following this up with the Charities Regulator. I propose to hold over the matter again until the response is received. Is that agreed? Agreed.
No. 1584C, dated 19 November 2022, was received from an individual and was also held over. It is a press release regarding Horse Sport Ireland and the role of the Department of Agriculture, Food and the Marine. It is also proposed to note and publish another item of correspondence held over from the meeting of 15 December 2022. This correspondence was flagged for discussion at the meeting of 15 December by Deputy Carthy but has not been flagged for discussion at today's meeting. In the meantime, further correspondence on the same matter, No. 1647C dated 31 December 2022, has been received from the same individual. It encloses a copy of correspondence to the Minister for Agriculture, Food and the Marine regarding the procurement process for the horse and pony studbook. It is proposed to note this correspondence and write to the Department of Agriculture, Food and the Marine to request further information regarding the matters raised. Are members happy enough with that? Obviously, Horse Sport Ireland is not accountable to the committee. We will note and publish this correspondence.
No. 1639C, dated 21 December 2022, is from Deputy Catherine Murphy and is a proposal regarding the committee's work programme. It is proposed to note this correspondence. With the Deputy's agreement, we will consider this when we discuss the work programme. That concludes the consideration of correspondence for this week.
We will move to the work programme. At our meeting on 15 December last, we agreed our work programme for January and February as follows. On 26 January, we will engage with the Department of Housing, Local Government and Heritage to examine the appropriation accounts and three chapters from the Comptroller and Auditor General's 2021 report, including chapter 7 which we examined earlier today. It will be open to members to discuss any matters arising from our engagement today. On 2 February, we will engage with the HSE to resume our examination of the 2021 financial statements, with a focus on expenditure on disability services, including the provision of disability services by outside agencies, that is, section 38 and 39 organisations; emergency care; and measures to tackle waiting lists.
An issue arose over the Christmas period. The out-of-hours GP service in the midlands region collapsed and the HSE, according to the best information available to me, had very little warning of this. The service was provided by a private company. It sought more money in November, which it received, and the HSE looked for some evidence of the company's accounts and expenditure as justification for granting it more money. I want to be careful in what I am saying but that information may not have been forthcoming. While the HSE was awaiting a response, the company, on 23 or 24 December, notified the HSE that it was pulling the service across the midlands counties, not just counties Laois and Offaly but also the other midland counties, from midnight on new year's night. The HSE put a temporary solution in place to carry over until 15 January. That expired on Sunday night and the latest update, as of yesterday, was that the HSE is still trying to put an interim solution in place for a number of months to get over that. Meanwhile, there is a complexity involved in how this service is provided across the State. There are a number of different models and a whole range of providers. With the permission of members, I ask that we add this to our work programme. I am reluctant to add anything given the importance of focusing on the matters before us but out-of-hours services are basic services where life and death situations arise. Members will have seen all the reports in the media over Christmas and since about accident and emergency departments being overwhelmed. Part of that problem is caused by the absence of out-of-hours GP services and difficulties accessing them. I am sure these issues are arising in the areas all members represent. Last year, the committee discussed the withdrawal of SouthDoc services.
I ask, with the perseverance of the committee, that we would add that to it.
The routine that I now hear of is that people cannot even get onto GP lists. In relation to the out-of-hours service, if someone is in Kildare who came from Dublin, he or she cannot get the Kildare out-of-hours service because his or her GP is not in the area. There is a problem generally. Is that an operational issue? Where would our remit come into it?
It is being funded directly by the HSE. The HSE provides funding for ancillary staff and buildings. To be honest, it has been a bit of eye-opener to see how it operates. There is a systemic problem because a number of different models are being used and are being provided by a whole range of providers. The HSE on this occasion was held over a barrel in trying to respond to this and put something in place.
In some areas, they are having difficulties getting GPs to work nights and weekends. In fairness, these are all people who are working from 8 a.m. to 5 p.m. or 6 p.m. Then, they would have to face another 12 hours of being on call. That is one of the difficulties we are having in many areas.
There is another problem that was raised by the Irish College of General Practitioners, which was before the health committee recently. There is now a huge number of general practitioners who are over 60 years of age, and they are going to retire in the next five to six years. The question is how we meet that challenge. The Irish College of General Practitioners has now started training of non-Irish doctors who want to practise here as GPs. They are providing a two-year training process for them. There is a challenge in this whole area.
Many GPs did not come out well from this with the funding provision in Laois, Offaly and the other midlands counties. Deputy Burke is correct that GPs are under significant pressure, but they did not benefit in any way from this. The bottom line is that significant funding is going into the provision of our services. The problem is, as the Deputy outlined, that the services are patchy or there are difficulties in accessing them. In this case, on Christmas Eve, we ended up in a situation where there was a week’s notice this service would be gone. That was the first public heard about it. Meanwhile, the HSE has been scrambling since then. In fairness to the regional management in the HSE, it is my sense that they have been doing their very best to fill this gap, first on an interim basis to tide it over until 15 January. Now, they are in the process of trying to extend that by a couple of months. Beyond that, there is another-----
I ask that we look at this strategically and we ask the HSE for a briefing on this, in advance of its representatives coming in so that we try to get an overview of the amount of money going into it and where the gaps are. I completely accept the point about people who are going to retire. Primary care is where the future is, and we need to resource it. We cannot have people going to accident and emergency departments because they cannot get a GP. There are all sorts of other knock-on consequences. If we are to look at this, let us ask the HSE for a briefing in advance specifically on GP services, both out-of-hours and where there are shortfalls, what money goes into it, where the gaps are and what the HSE is doing about it.
I would add to that what staff the HSE is providing and what buildings it is providing. The problem is that while the HSE seems to be providing a lot, the key part of it is the GP provision, which is in many cases administered by a private company. If the private company decides to cease trading, for want of a better term, at a certain date, it will cease trading. That is what happened, and we have been left in a situation-----
Following up on what Deputy Catherine Murphy said about young people not being able to get access to GPs, I know of one company that, because its employees were having difficulty in getting GPs, decided to employ its own GP on a full-time basis. This is going to happen more, where a company that has young employees who cannot get access to GPs will have a full contract with a GP who will be working just with it and no one else.
There is a mathematical issue. We all know we have slightly more than half the number of GPs we need in the State. It should be one per every 1,100 people the population. I looked at the figures for our region which show it is at more than 2,000. That is the basis of the problem.
Yes, and I can understand why that is the case, given the growth in the area and all the rest. We have to be careful about our remit. We can look at this strategically and we can look at specific areas in the context of taking a more strategic approach. It is a matter of the remit of the Committee of Public Accounts in relation to this, staying within that and dealing with the issue in that context.
We have spoken about the finance that is going to the HSE and about the services at the other end. We have looked at mental health. Primary care is the most important of it and there seems to be a complete breakdown between the budget that is going in and what is happening at the far end in services. It is in that space-----
We will look for that prior to the meeting. Are we agreed that we will add that to the meeting? Agreed.
I want to flag to members that the President of the European Parliament, Ms Roberta Metsola, will address a joint sitting of the Dáil and Seanad on 2 February from 2 p.m. until approximately 3.45 p.m. or 4 p.m. Previously, when Ursula von der Leyen addressed the sitting of the Dáil and the Seanad at 2 p.m. on 1 December 2022, the committee met from 9.30 a.m. until 12.30 p.m. It had a ten-minute break and it reconvened to consider committee business until approximately 1.45 p.m. It is up to the committee members how they want to proceed here. The other thing we could do is come back to the subject of the business of the committee, or we can miss it for that week if the committee members want.
It will be on 2 February. We should bear in mind that we will not have a small session in the morning. The HSE and the Department of Health will be before the committee. It will be a big morning and it will probably run over. I will certainly not be doing anything to cut it off directly at 12:30 p.m. We should bear that in mind. If the President of the European Parliament will be here in the afternoon at 2 p.m. and if members wish to be in the Chamber for that, which I presume most will, we should put back the business of the committee part of our meeting until the following week and we should defer it.
If it were the case that there was a smaller engagement that morning, perhaps we could do that. However, in the case of the HSE, it is normally a full schedule. Okay, we will do that.
On 9 February, we will engage with the Department of Health regarding the 2021 appropriation accounts as well as chapter 12 of the Report on the Accounts of the Public Services 2021, which relates to the financial impact of the cyberattack. We have advised the Department that a specific area of interest is expenditure on emergency departments.
On 16 February, we will resume our engagement with the Department of Children, Equality, Disability, Integration and Youth, with a specific focus on direct provision expenditure, international protection and emergency accommodation. I also flag that we should also mention in the invitation the issue of the provision of modular units.
On 23 February, we were planning to engage with An Bord Pleanála’s financial statements. At our meeting on 24 November, we agreed to postpone this meeting until the 2021 financial statements are available for the committee to examine. I understand the 2021 financial statements have not yet been laid and the Department of Housing, Local Government and Heritage has until the end of March to do so. That could potentially push that out nearer to June. The 2021 financial statements were already examined at the meeting on 14 July. We have done those. Considering the risk that the 2021 statements might not be ready by 23 February, how do the members wish to proceed?
We will be bringing the representatives in without those statements being ready. Have members any views on that?
Okay. We will see how we can work this. We agreed some time back to include the Central Bank and the Office of the Revenue Commissioners in our work programme with a view to examining chapter 14 of the Report on the Accounts of the Public Services 2021. That chapter concerns the assessment and collection of insurance compensation fund levies. Since 2018, the fund has been maintained and administered by the Central Bank and is financed by a levy collected by Revenue. Deputy Murphy proposed we bring this meeting forward and include the Department of Finance in it. Does the Deputy want to come in on that?
I know that, but it is different if the Central Bank representatives are the primary people and then we have somebody from Revenue, in the same way as we had the Department and the Housing Agency today.
Rather than bringing them in as a double-header, we could do that. It would be a better way of doing it. Is that agreed? Agreed. Does any member wish to raise any other matter in relation to the work programme? I mentioned the Department of Agriculture, Food and the Marine and other Departments may have their finger in the pie of the forestry programme and the performance of it.
There is a multiplicity of Departments. We have to be careful about asking for representation from the other appropriate Departments. Agriculture is the primary one but the Department of Public Expenditure and Reform has a role.
We will look for that at the end of what is scheduled here. We will flag it up with those three Departments that two will be represented but the primary one will be agriculture, in the same way we did with housing.
That concludes consideration of the work programme. I confirm for the secretariat that Revenue will come in on 23 February in the same way we had the Department in today, in an assistance role, not as the primary witnesses.
We move on to No. 5, the Comptroller and Auditor General’s recently published section 2 report. Members will be aware the Comptroller and Auditor General published a report prepared in accordance with the provisions of section 2(7) of the Comptroller and Auditor General (Amendment) Act 1993 and presented to the Dáil on 21 December relating to the unauthorised release of funds from the Central Fund of the Exchequer. The report details an occurrence whereby there was a failure of controls over the withdrawal of money from the Central Fund on 28 October 2022, when the Central Bank issued to the Minister for Finance €738 million more than the amount of credit available to him to fund the delivery of supply services. We could add that to the agenda for an engagement. There are a number of hoops that had to go through and it did not go through the crucial one. Will Mr. McCarthy comment on it?
Mr. Seamus McCarthy:
The Chair has summarised it very well. I am not aware we have ever reported before on a matter like this. I certainly am not aware of it in 30 years. It is important the control of funds coming out of the Central Fund of the Exchequer is strong and that it is only done in accordance with law. Effectively, the Oireachtas controls the funds in the Central Fund. They can only be released if there is a legal basis for it. It was an oversight and it is accepted by the Department of Finance and the Central Bank that the control should have been stronger and it should have been stopped. The Department of Finance would have been able to get an extension of its credit so there is no breach of the law in terms of the moneys required for spending, but it is a concern that it was not stopped. The control should have been stronger.
I suggest we write to the Central Bank and Department of Finance and ask them to clarify for the committee's benefit what happened and what safeguards have been put in place. Would members be happy with that?
If we have them in, we should address this issue. The fact is it has happened. They have taken the appropriate steps, or we hope they have, but the uniqueness of it merits us having some engagement with them. When you find a failure, it is about the possibility of it being replicated.
Mr. Seamus McCarthy:
The Constitution requires me, as Comptroller and Auditor General, to control all issues of funds from the Central Fund of the Exchequer. If there is not a mechanism in place that works, then I cannot do that. That is why the 1993 Act requires me to report to the Oireachtas when the system does not work as the Oireachtas has designed it.
Okay. We will have the Central Bank in at the end of February, we hope, and we can finalise that. Do members wish to raise anything else? That is the last one. We will move into private session briefly before adjourning until 9.30 a.m. next Thursday, 26 January. Go raibh maith agaibh.