Mr. Seamus McCarthy:

As members are aware, the remit of Inland Fisheries Ireland is to protect, manage and conserve Ireland’s inland fisheries and sea-angling resources. IFI’s income in 2023 amounted to €40.5 million. More than 90% of its income comes from State funding sources. Most of the remaining income is derived from fee income for permits, licences and fishery rates.

IFI’s expenditure in 2023 amounted to €41.2 million. More than 70% of the expenditure, or €29.3 million, was in respect of remuneration and other pay and pension costs. Some €9.9 million was spent on field operations, with €2.3 million spent on administration expenses.

I certified the 2023 financial statements on 13 December 2024 and issued a clear audit opinion. However, I drew attention in my audit report to issues of concern regarding IFI’s governance arrangements and the adequacy of its internal control systems that are dealt with in more detail in the special report that is before the committee this morning. I had drawn attention to some of the same concerns in my reports on the 2022 and 2021 audits, and because the matters remained ongoing, I felt a more in-depth examination was required.

The board of a State agency is the principal decision-making body in relation to the organisation’s strategic direction and oversees the performance of its operations. It is also responsible for ensuring the safeguarding of the assets it controls and compliance with governance norms. The chairperson of the IFI board resigned in April 2022. A new chairperson was appointed in May 2022 but resigned in January 2023. A further four resignations from the board occurred during 2022 and in January 2023. As a result, the board effectively became unable to reach the required quorum to meet and to make decisions, including approval of the annual financial statements.

In February 2023, the remaining board members were stood down by the then Minister for the Environment, Climate and Communications on a no-fault basis. Using statutory provisions in the relevant legislation, the Minister appointed two persons on a temporary basis to perform the functions of IFI. As well as day-to-day oversight, they commissioned an independent review of IFI’s governance, which resulted in a December 2023 report setting out recommendations for change. A new board commenced operations in January 2024.

The main reason IFI exists is to secure the protection and conservation of fisheries resources, including both fish stocks and their habitats. IFI’s capacity to achieve this through active patrolling on Irish waters diminished in 2019, when the number of staff qualified to lead such patrols dropped sharply due to a decrease in the number of staff trained to the required standard along with the retirement and departure of trained staff from the organisation. IFI’s capacity to undertake patrolling was gradually restored through training of additional personnel, and the fleet of 12 patrol boats was replaced at a cost of €3.5 million. By 2023, IFI was achieving around 81% of its target of 25 patrols per boat per year.

IFI has the power to initiate prosecutions for serious fisheries and environmental offences, including fish kills and water pollution. However, in March 2023, it discovered that formal delegated authority from the board allowing its officers to initiate these prosecutions was not in place. Because of that gap, IFI had to withdraw many live prosecution cases. This had a significant impact on IFI’s ability to carry out its protection role and created a risk of financial loss and additional legal costs for the organisation. Prosecutions recommenced in June 2023 when formal delegated sanction was put in place.

Between 2019 and 2021, IFI received around €1.2 million from the Dormant Accounts Fund.

There were weaknesses in how IFI managed this funding. Internal audit reviews commissioned by the board showed that, in some cases, it was not clear that the spending fully matched the purpose of the funding. As a result, IFI repaid over €28,000 to its parent Department in 2022.

IFI owns a substantial period property called Aasleagh Lodge adjacent to the Erriff river in County Mayo. The grounds of the lodge encompass two self-catering cottages and an IFI operations base, which limits the income potential of the property. Over several years, there were significant deficiencies in control over the letting and management of the lodge and cottages. This exposed IFI to unnecessary financial risk.

Between November 2021 and February 2023, the then CEO's work base was changed from IFI's headquarters at Citywest to the regional offices in Ballyshannon, County Donegal. There is no evidence that a proper analysis was carried out or a formal business case prepared to support this change, or that the change was properly authorised. During that period, the CEO received over €7,900 in subsistence expenses due to the change, of which €1,000 was repaid to IFI after the change was reversed.

The work carried out by IFI staff is mostly field based, with a range of vehicles needed to perform its statutory functions. Notwithstanding this, the vehicle fleet operated by IFI appears to have been excessive in scale when compared to the number of staff. There were also benefit-in-kind tax issues in respect of vehicles used by IFI staff, resulting in settlements with the Revenue Commissioners totalling around €296,000.

In addition, an administrative error in July 2021 led to some of IFI's vehicle fleet being uninsured for a period. This only came to light when one of the vehicles was involved in a road traffic accident. The direct costs incurred by IFI in relation to the road traffic accident totalled almost €230,000 by the end of 2023.

Taken together, the many issues raised in the report indicate the development of an inadequate and inappropriate system of control, which seriously undermines public confidence in IFI's ability to carry out the important functions with which it is charged. The findings from the audit by my office of the draft 2024 financial statements are currently being reviewed. I expect to complete the audit by the end of the year.