Written answers

Tuesday, 10 May 2011

Department of Environment, Community and Local Government

Dormant Accounts Fund

9:00 pm

Photo of Maureen O'SullivanMaureen O'Sullivan (Dublin Central, Independent)
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Question 259: To ask the Minister for the Environment, Community and Local Government if he will confirm the costs borne specifically by the Exchequer, and not by the fund itself arising from the operation of the Dormant Accounts Fund since it inception; and if he will make a statement on the matter. [10597/11]

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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The Dormant Accounts Acts provide for an annual transfer by credit institutions and insurance undertakings of monies in accounts determined to be dormant into the Dormant Accounts Fund (DAF). Since its establishment in April 2003 to the end of February 2011, the transfers to the DAF have totalled some €589m, which includes interest earned of some €35m. Funds reclaimed in that period by account holders amounted to approximately €208m. On 1 May 2011, the functions relating to Dormant Accounts, previously administered by the Department of Community, Equality and Gaeltacht Affairs, transferred to my Department.

A summary of the current status of the DAF is available on the website www.pobail.ie and I am arranging for a copy to be sent to the Deputy in the coming days. This provides a profile of the Fund showing yearly inflows, reclaims, disbursements, etc, from 2003 to the end of February 2011. Disbursements from the DA Fund are paid from the Votes of the relevant Departments which, in turn, are reimbursed from the Fund. Expenditure under the Fund is spread across some 10 Departments and Agencies.

Under the Government Accounting procedures, disbursements on dormant accounts measures are paid in the first instance "up front" from a Department's Vote in the same way as with any other spending programme. Therefore, Government Departments have to source funding for dormant accounts programmes from their Exchequer allocations. However, once expenditure takes place, either on administration of the measure, or by the project itself, it is reimbursed to the Exchequer from the Dormant Accounts Fund in accordance with the Dormant Accounts Acts, in the form of Appropriations-in-Aid payable through the relevant Department's Vote. In this way, the costs associated with dormant accounts measures are Exchequer neutral, though it should be noted that Government Departments cannot spend Appropriations-in-Aid directly themselves once they are reimbursed from the Fund. They are instead refunded to the central Exchequer.

Monies disbursed from the Fund increase Government debt levels as the money belongs to the account holder, who can reclaim it at any time, and not to the State. Consequently, every euro spent from the Fund is regarded in accounting terms as a potential Government liability.

Photo of Maureen O'SullivanMaureen O'Sullivan (Dublin Central, Independent)
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Question 260: To ask the Minister for the Environment, Community and Local Government if he will report on the projected savings to the Exchequer in the event of the Dormant Accounts Board being abolished, as recommended in the report of the special group on public service numbers and expenditure programmes; and if he will make a statement on the matter. [10598/11]

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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The Report of the Special Group on Public Service Numbers and Expenditure Programmes (The McCarthy Report) recommended the discontinuation of Dormant Accounts Board (the DAB), which has statutory functions relating to disbursements from the Dormant Accounts Fund. The Report stated that this would result in an annual saving to the Exchequer of €1.7m. It should be noted, however, that the majority of the administrative budget for DA is paid to Pobal, who administer my Department's and certain other Departments' DA Measures. The DAB receives only a small proportion of the overall administrative budget.

The annual expenses of the DAB for the year 2010 were €0.12m approximately. The 2010 figure compares with a corresponding figure of €0.21m for 2009 and €0.2m for 2008. Legislation is currently in preparation to dissolve the Dormant Accounts Board and introduce a revised disbursement process for Dormant Accounts Funding. The Bill is scheduled for publication in the current Dáil session.

Photo of Maureen O'SullivanMaureen O'Sullivan (Dublin Central, Independent)
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Question 261: To ask the Minister for the Environment, Community and Local Government if he is satisfied that the accounting procedures applicable to the Dormant Accounts Fund within both his own Department and within the Department of Finance are fully consistent with Part 6, section 41([i]a[/i]) of the Dormant Accounts Act 2001:

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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As regards the purposes for which dormant accounts funding may be spent, any measures approved for funding by the Government from the Dormant Accounts Fund fall under one of the three purposes listed in the Dormant Accounts Act 2001. I should add that expenditure by Departments from the Fund is subject to scrutiny by the Comptroller and Auditor General in the same way as other funding programmes.

Photo of Maureen O'SullivanMaureen O'Sullivan (Dublin Central, Independent)
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Question 262: To ask the Minister for the Environment, Community and Local Government if he is satisfied that the discretion of the Dormant Accounts Board has been applied consistently to investments and disbursements over the life of the Dormant Accounts Fund; if, over the remaining life of the board, he can confirm that moneys in the investment and disbursements account shall be applied on the direction of the Dormant Accounts Board, for as long as the board continues in existence; and if he will make a statement on the matter. [10600/11]

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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As regards the discretion of the Dormant Accounts Board, I am satisfied that disbursements approved by the Board have been properly and fairly applied. However, the statutory powers of the Dormant Accounts Board were substantially diminished by the Dormant Accounts Act, 2005, and, as a consequence, since then the Board has not been involved in approving specific dormant accounts disbursements.

Nonetheless, I can assure the Deputy that the Board will continue to be required to comply with its statutory obligations under the Dormant Accounts Acts, and provision is being made in the legislation in preparation to ensure that the Board is fully accountable up until its dissolution.

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