Michael McGrath (Cork South Central, Fianna Fail)

It does not give me any pleasure to raise this issue, which can only be described as a humiliating schoolboy error committed by the Department of Finance in the calculation of Ireland's official debt figure, the general Government debt. Ordinary people can justifiably ask how the State authorities can make a mistake of the magnitude involved when calculating a figure of such importance as the official debt position of the country at the end of 2010. One question which immediately springs to mind is why a reconciliation was not done between the balance of the general government debt at the end of 2009 and 2010, respectively, as one would expect from the point of view of basic financial control. Why was an exercise not done showing the opening position, followed by all the movements over the period and arriving at the closing position? It is clear that such an exercise was not done in this case.

A more detailed examination of the figures highlights how grave the mistake was. The opening position as at the end of 2009 was a general Government debt of €105 billion. At the end of 2010 the equivalent and incorrect figure reported was €148 billion. This indicates a movement of €43 billion over the course of the year, of which €31 billion was accounted for by the promissory notes. The net movement, therefore, when one omits the value of the promissory notes, was an increase in general Government debt of only €12 billion. Given that the figure was overstated by €3.6 billion, the miscalculation accounted for approximately 40% of the net movement, which is an astounding error. It is especially astonishing when one considers that this is the standard measure of a country's indebtedness, the figure used across the European Union by investors when they are examining a country's total debt position as part of their investment decisions.

It is fortunate that the error in this case was favourable. While it is embarrassing, it would be much more difficult for the Government or anyone else to explain a scenario in which the total debt position had been understated by €3.6 billion at the end of 2010. Mistakes such as this undermine the credibility and integrity of information being provided by Government bodies on issues as sensitive as the debt position.

The explanation for the error has not been adequate and I hope the Minister will be able to shed further light on the matter. The National Treasury Management Agency stated it brought the matter to the attention of the Department of Finance on a number of occasions from the autumn of 2010 onwards. How many times did it raise the issue with the Department? Did it bring it to the attention of one official who then failed to act in an appropriate manner? It is important that the Minister sets out the chain of events, including the correspondence between the NTMA and Department on when the potential of double-counting the sum of €3.6 billion was first raised.

It is noteworthy that the NTMA included the incorrect figure in its own annual report and annual accounts published on 21 July 2011. If it had concerns about the figure, why did it include it in its official report and annual accounts which were signed off by the chief executive? The error also slipped passed the Comptroller and Auditor General. As the Minister indicated in his interview on "Morning Ireland" today, the accounts in question were signed off on 19 September last and included the incorrect figure. We need to know the precise chain of events, including the date on which the matter was first raised with the Department by the NTMA, the number of times the agency raised it, the reason the information was not acted on and when the Minister first found out the mistake was in the accounts.

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