Mr. Seamus McCarthy:

Gabhaim buíochas leis an Chathaoirleach.

The 2022 appropriation account for Vote 13, Office of Public Works, records gross expenditure of €541.8 million. Appropriations-in-aid of the vote amounted to €33.5 million.

The account is presented under two programme headings: almost €103 million, or 19% of the total, was spent on the flood risk management programme; and just under €439 million was spent on the estate management programme.

The OPW provides office and other types of accommodation to other central government Departments and offices, using a combination of leased and State-owned property. The associated costs are a direct charge to Programme B. This includes rent payments totalling €101 million; property maintenance and supply payments of almost €68 million; and public-private partnership unitary payments amounting to just under €24 million. Costs associated with the OPW's portfolio of heritage properties amounted to €49 million in 2022.

In parallel with routine management of its property portfolio, the OPW manages a large programme of new capital works, substantial building alterations and extensions. Under subhead B6, new works, alterations and additions, the OPW incurred expenditure of €115 million in 2022. A new subhead introduced in 2022, B12, national recovery and resilience plan, provided €64 million for the development of a new national data centre at Backweston and a major energy upgrade programme for State-owned office buildings located outside Dublin.

The account indicates there were delays with both those projects and the spending outturn was just €17.6 million in 2022. Separate from the building activity charged to Vote 13, the OPW also acts on an agency basis on behalf of other Government Departments and agencies. This mainly relates to the carrying out of major capital works and the leasing of accommodation. While the OPW typically contracts for the work, the expenditure associated with this agency activity is reflected in the appropriation accounts of the client Departments and agencies. As indicated in note 2.13, expenditure incurred by the OPW on an agency basis amounted to €192 million in 2022.

One example of this type of agency arrangement is the programme for provision of rapid-build residential accommodation for Ukrainian beneficiaries of temporary protection. The associated expenditure is charged to the Vote for the Department of Children, Equality, Disability, Integration and Youth, and amounted to €29 million in 2022. The financial commitment in respect of that programme, at the end of 2022, was €237 million. Even though the OPW is heavily involved in the delivery of the programme, neither the expenditure nor the commitment amount is disclosed in the OPW’s Vote. Taking all the new works, extensions and alteration activity together, the OPW’s programme of capital works led to expenditure of more than €325 million in 2022. The surplus on the Vote at the year-end was €93.8 million. Of this, unspent capital allocations for flood risk management, to the value of €27 million, were carried over to 2023. The balance of €66.8 million was surrendered back to the Exchequer.

I issued a clear audit opinion in relation to the appropriation account but drew attention to three matters disclosed by the Accounting Officer in the statement on internal financial control. First, procurements to the value of €12.9 million in 2022 were not compliant with public procurement rules. Second, the OPW made a payment of more than €677,000 to the Revenue Commissioners in relation to the underpayment of tax on expense claims over a four-year period. That payment included almost €111,000 in interest costs and a penalty of €16,500. Finally, the OPW made an advance payment of just less than €300,000 to a subcontractor in 2020, even though it did not have a contractual obligation to do so. The payment to the subcontractor was effectively a working capital loan. This transaction was not recorded as a debtor in the OPW’s appropriation accounts for 2020 or 2021, but it would have been appropriate to do so. The advance was repaid by the subcontractor in 2022. When the account was being signed off, the controls over authorisation and documentation of the advance were being examined by the OPW. The Accounting Officer may be able to update the committee in that regard.