Willie Penrose (Longford-Westmeath, Labour)

I thank Deputy Bannon for raising this matter, which I am taking on behalf of my colleague, the Minister for Social Protection, Deputy Joan Burton.

The community services programme is designed to address locally identified gaps in the provision of services to communities and exploit the potential of community assets and resources already in place in support of the delivery of services to improve community well-being. Responsibility for the programme transferred from the then Department of Community, Equality and Gaeltacht Affairs to the Department of Social Protection in September 2010. A core requirement of the programme is that each service provider generates a significant level of its financial needs from non-public revenue sources such as by charging fees for services delivered, trading or fund-raising. Service providers in contract with the programme must be not-for-profit, social enterprise or community business in nature. The approximately 445 service providers approved for support employ an estimated 2,700 men and women in full and part-time positions.

The day-to-day operational elements of the programme are managed by Pobal on contract from the Department. Pobal is a not-for-profit company that delivers a number of publicly and EU funded programmes on behalf of Departments. As part of the services contracted by the Department, Pobal operates an independent audit and verification function to provide assurance that public funding has been spent for the purposes intended and bodies in receipt of public funds are in compliance with public accountability requirements and EU regulations, as appropriate.

An essential requirement of the community services programme is that each contract holder operates to good practice norms in respect of corporate governance, financial management, employment practices and quality of services delivered to the public. Pobal conducted an audit of Lough Ree Development Co-operative Limited in early 2010. Significant issues were identified in the operations of the co-operative which drew into question a risk to public funds. The issues identified related to corporate governance, poor management practices, inadequate financial control, poor quality record keeping and reliability of reporting. The outcome of this audit was sent directly to board members of the co-operative for their input and comment prior to any decisions being made by Pobal on continuing support from the programme. Following consideration of the audit findings and the responses to it received from Lough Ree Development Co-operative, the board of Pobal determined that the contract should be terminated. Notice of this was issued to the co-operative and an opportunity afforded to have the decision reviewed. A review was subsequently requested and conducted by a board member of Pobal who was not involved in the previous decision. The conclusion of this review was that the decision to discontinue funding was found to be correct and fair and that the process had been properly observed. The board of Pobal subsequently accepted these findings and confirmed its decision to terminate the contract.

The Deputy will agree that it is necessary that the highest standards should apply in respect to how public funds are managed and applied. All parties involved in the finding process must play their part in giving assurances to this House and to members of the public that funds are being properly applied and value is being achieved in return. Failure to do so must have consequences and may ultimately lead to loss of support from this or any other publicly funded programme. I will pass on to the Minister the points raised by Deputy Bannon.

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