Trevor Ó Clochartaigh (Sinn Fein)
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Cuirim fáilte roimh an Aire. Tá mé thar a bheith buíoch go bhfuil sí tar éis an t-am a thógáil leis an gceist seo a fhreagairt.

I welcome the Minister for Children and Youth Affairs, Deputy Frances Fitzgerald, and thank her for coming in to take this issue. I raise an issue around the child care facility based in Tiernee, Lettermore, Naíolann na nOileán, which is under the auspices of Muintearas Teo. Muintearas Teo is a full subsidiary of Údarás na Gaeltachta. As I understand it, the three board members are employees of Údarás na Gaeltachta so it is fully under the control of Údarás na Gaeltachta. I understand all its programmes are State funded.

I raise this issue on foot of a report I received from the Minister's office, for which I thank her, which related to an audit conducted by Pobal in respect of the child care facility for the period 1 September 2010 to 31 August 2011. According to the report, in June Pobal visited the service operated by Muintearas to verify that the community child care subvention, CCS, programme was operating in accordance with the terms and conditions. I am informed that the facility had been visited previously in 2010 and at that time and was found to be non-compliant with CCS as it was not adhering to the approved fee policy. The report states that the service was again non-compliant as it was not adhering to the approved fee policy. On foot of that, there was an investigation visit by Pobal in October 2011 to conduct a more thorough investigation of the attendance records. It took a detailed record of the actual attendance at the service. This was compiled in order to ascertain the correct record for children registered and attending regularly. The report found that there were significant differences in the attendance patterns of the children attending the service from the attendance information submitted to the Department of Children and Youth Affairs by the service. That resulted in children attending the facility for significantly less time than had been indicated in the service's submission to the Department of Children and Youth Affairs and that there were significant differences in the numbers of children attending the service from those listed in the parental returns submitted to the Department of Children and Youth Affairs by the service.

Moreover, this resulted in significantly fewer children attending the service than had been indicated in the service's submission. The investigation further concluded that the community childcare subvention, CCS, programme is not being implemented in line with the requirements of the scheme and this resulted in a financial loss to the service. To put it in a nutshell, it is fair to state the report's finding was that children were mentioned on the list who were not attending the actual service itself. Moreover, while an application was made for funding to the Department of Children and Youth Affairs via Pobal, and while €197,466 was approved in funding, after the audit was concluded it was found that the amount the service should have got in reality was €25,193. This left a sum of €124,598 to be repaid. To recap, misleading information was sent to the Department of Children and Youth Affairs or to Pobal, which was administering the funds on behalf of the Department, and on foot of this, €124,000 was received by this organisation that it is now being asked to repay. Three recommendations were made - namely, that the repayment plan of €124,000 be put in place to repay the moneys, that a written undertaking to comply with the terms and conditions of CCS in the future be made and that immediate changes be implemented to its operations to ensure future compliance. This obviously raises a number of serious issues and I wish to ascertain whether these recommendations have been complied with completely. In addition, what, if any, recommendations were made by Pobal or by the Department on whether this issue should have been forwarded to the Director of Public Prosecutions, DPP, or the Garda Síochána? This is based on the seriousness of an organisation receiving €124,598 that, according to Pobal, it should not have received, based on information that apparently was not fully truthful.

Frances Fitzgerald (Dublin Mid West, Fine Gael)
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I thank the Senator. The service referred to by the Senator is participating in the CCS programme, which is implemented by my Department. The objective of the subvention programme is to make child care accessible and affordable for disadvantaged and low-income families. Targeted payments are made to support parents who qualify on the basis of their social welfare status or income profile. Those who qualify for the maximum support under the programme can have a maximum of €95 deducted from the overall weekly charge for each eligible child. The balance of the weekly charge is expected to be contributed by the parent. The subvention payment and the parental contribution are intended to meet the overall cost of providing the service. To determine the level of subvention funding to be allocated to each service, parental returns are submitted annually following the commencement of the school year. It is important to point out that as the returns provide details of the PPS number of both the qualifying parent and the child enrolled in the service, these data are available as verification. These PPS numbers are verified by the Department of Social Protection to confirm the parent's and child's eligibility. If discrepancies arise at the verification stage, the issue is brought to the attention of the services and clarification is provided. Where no discrepancies arise, payments are made that reflect the level of service of which the child is availing and the profile of the parent. Obviously, there is considerable back-and-forth communication in this regard with many services during the course of the year.

To ensure the proper implementation of the child care support programmes, Pobal, which assists my Department with the implementation of the child care programmes, undertakes on-site compliance visits - inspections, really - with participating services. One objective of the visits is to ensure that eligible parents receive the correct cost reduction in their child care fees and that the terms and conditions that govern the child care programmes are adhered to. Pobal also provides support and guidance to the services to promote their sustainability.

As the Senator rightly stated, following a compliance visit by Pobal to the Muintearas service in 2010, the service was deemed to be non-compliant with the requirements of the subvention programme. In follow-up visits in 2011, Pobal investigated the attendance records and patterns at the service and subsequent to this, a detailed record of the actual attendance at the service was compiled to establish the correct record for children registered and regularly attending the service. When this record was checked against the information that had been returned to my Department by the service on the parental returns submitted, it was found that there was a significant discrepancy with regard to the actual profile of the children in attendance. It was clearly evident from the report that the subvention programme was not being implemented in accordance with the requirements. It was agreed, following discussions at that time in 2011 between my Department, Pobal and the management at the service, that the excess payments would have to be returned to the Department. A repayment plan was agreed whereby scheduled payments would be made to Pobal over a five-year period, ending in January 2016, with the annual repayment amount being transferred to Pobal in January of each year. Muintearas has been meeting the agreed timelines in the repayment plan.

In March this year, Muintearas approached Pobal to extend the period of the repayment plan to September 2016. The reason for this request is to ease the cashflow pressure on the service in the earlier months of the year and to spread the repayments more evenly over the year. Following consultation between Pobal and the Department, it has been agreed to permit this change to the repayment plan. This will see Muintearas making three equal payments each year in January, May and September to repay what it owes, as opposed to one larger annual payment in January of each year, which appears reasonable.

In response to the Senator's question on whether Muintearas is complying with the recommendations in the report, the answer is "Yes".

A key goal of my Department is to ensure that such community services remain sustainable in order that the local community has access to child care services. If issues can be dealt with, it is not the practice to refer matters to the Garda or the DPP. If, however, there were issues that it was thought warranted a Garda investigation or if there was a lack of co-operation with Pobal's actions, the matter would be looked at again. I am satisfied that Pobal's compliance activity continues to be an essential component of the operation of the child care schemes and that my Department and Pobal will continue to co-operate to ensure high standards of compliance and to support the sustainability of services, especially community services.

Trevor Ó Clochartaigh (Sinn Fein)
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I appreciate both the Minister's comprehensive response and its clarity. This is an extremely serious issue, as I am sure the Minister will agree. A service essentially applied for €197,000 on foot of information that was incorrect and was found to be so by Pobal when it conducted its audit. I appreciate that a repayment plan is in place, which I believe raises other questions for the board of Muintearas and even for Údarás na Gaeltachta as to where the money that was paid to Muintearas went - and how is it paying it back, if all of its funding is in fact State funding for the project. This is an issue for another day.

On the legal issue, I asked someone who has a legal background to consider this matter on my behalf and that person thinks it is extremely serious in its nature. The person concerned even stated that it appears there was deception for the purposes of causing a loss to the Exchequer, which could be an offence under the Criminal Justice (Theft and Fraud Offences) Act 2001. That is the reason I raised the issue of legality and the normal role of the auditor in this regard. Are auditors conducting an audit not legally obliged to report any wrongdoing that could be illegal to the relevant authorities? This does not appear to have happened in this case, but perhaps it should have for further investigation.

Pat O'Neill (Fine Gael)
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Does the Minister wish to reply?

Frances Fitzgerald (Dublin Mid West, Fine Gael)
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Just to make the point that at the time, the service argued that a substantial number of parents who had enrolled their children in the service did not adhere to their attendance schedule. Clearly, this can happen with services, and that is the reason we have oversight by Pobal and the reason we revert to services to ask them for greater details. At the time, in 2010 and 2011, there was no follow-up with parents who had agreed an attendance pattern but whose children had not attended. Consequently, there was no structure to the hours of operation, resulting in overstaffing if the service could not predict attendance on a regular basis. I wish to inform the Senator that it is not believed that the non-compliance of this service resulted in any personal financial gain to any member of the group, and the group has been co-operative in meeting the repayment schedules.

Pat O'Neill (Fine Gael)
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I thank the Minister, Deputy Fitzgerald, for dealing with this Adjournment matter and thank Senator Ó Clochartaigh for raising it.