We will take Votes 41 and 42 together. Witnesses should be made aware that they do not enjoy absolute privilege and I want to appraise them of the following. Members' and witnesses' attention is drawn to the fact that as and from 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privilege and Immunity of Witnesses) Act, 1997, grants certain rights to persons who are identified in the course of the committee's proceedings. Notwithstanding this provision in legislation, I remind members of the long standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside of the House or an official either by name or in such a way as to make him or her identifiable. Mr.Furlong, will you introduce your officials please?
2000 Annual Report of the Comptroller and Auditor General and Appropriation Accounts.
Vote 41 - Arts Council.
Vote 42 - Department of Arts, Heritage, Gaeltacht and the Islands.
Mr. Philip Furlong
Thank you, Chairman. I am accompanied by Mr. Michael Canny, Assistant Secretary, head of Dúchas; Mr. Michael Conroy, head of our finance unit; Mr. Sean Ó Cofaigh, head of corporate services and of the Gaeltacht and the islands section, and Ms Patricia Quinn, director of the Arts Council.
Paragraph 39 of the Report of the Comptroller and Auditor General reads:
Accounting Officers are required to sign and present Appropriation Accounts for their Votes to me before 1 April of the year following that to which the account relates. The Appropriation Account for Vote 42 for the year ended 31 December 2000 submitted for audit had not been signed by the Accounting Officer, because of his absence from the office at the time due to illness. The Account therefore did not conform to the statutory requirements and was regarded as a draft account for audit purposes.
While audit work commenced on the draft Account, preliminary audit tests disclosed that the Department had been unable to reconcile its accounting records with those records maintained on its behalf by the Paymaster General (PMG) - effectively the Department's banking records. In addition, discrepancies which had come to light during attempted reconciliation exercises in respect of this accounting period had not been resolved.
The Department did not have a fixed asset register. The maintenance of an asset register is a requirement under Department of Finance rules issued in 1995. As a result the statement of capital assets presented by the Department in its draft account was based on accounting records only. Difficulties in maintaining these records resulted in their being unreliable.
Assets and Stock, transferred to Waterways Ireland with effect from 1 April 2000, were recorded in the accounts of the Department at 31 December 2000.
Receipts collected by Waterways Ireland were incorrectly accounted for by the Department.
Certain suspense balances used in the reconciliation of the Vote's liability to the Exchequer had not been included in the account submitted.
Information on accruals and prepayments by the Department which are required to be disclosed in the accounts were incomplete.
A receipt of £6million had been omitted from the account.
After being made aware of the difficulties arising on audit the Accounting Officer declined to formally sign a revised account until certain additional accounting and reconciliation work had been carried out.
Similar issues had arisen in the preceding year's account and were the subject of correspondence between my Office and the Department's Finance Division. These issues resulted in a material change to that account and in a significant increase in the Vote surrender to the Exchequer and necessitated the Accounting Officer re-signing the Account.
Following the suspension of the audit in June 2001, the Department undertook to rectify the errors and omissions, to reconcile the Department's records with those of the PMG and to present a signed Appropriation Account.
The Appropriation Account for the Vote for 2000 was signed by the Accounting Officer on 27 July 2001 and re-presented for audit.
As the audit findings and the late presentation of a signed Appropriation Account raised serious questions about the quality of the underlying accounting records and financial control framework of the Department I asked the Accounting Officer what remedial action was being taken.
The Accounting Officer informed me that on being made aware of the difficulties which had arisen, he took steps to ensure that action to resolve these was given absolute priority. He has also initiated a root and branch review of structure, staffing, expertise and experience in the Accounts Branch and assured me that necessary changes arising therefrom would be implemented as a matter of urgency.
The Accounting Officer stated that the difficulties that were experienced during the preparation of the 2000 Appropriation Account had reinforced the need for detailed procedure manuals to be drafted by the Finance Branch. These manuals would document established procedures and outline the steps that would have to be carried out on a daily, monthly or annual basis, with particular emphasis on recording receipts and reconciling monthly with the PMG.
He also stated that the Department intended to provide any staff training necessary with regard to monthly reconciliation with the PMG. Responsibilities would be delegated for tasks, and these would be subject to monthly review by management. In this respect, external consultants would advise the Department on the most effective way of achieving this in the short to medium term.
The Accounting Officer indicated that the fixed asset recording system was being updated so that all additions for 2000 and 2001 would be in electronic format. Fixed asset management software would be installed by the Department in the near future to ensure that adequate systems of control were maintained over all assets. He also said that the possibility of appointing additional staff in this area was being examined.
The Department is also seeking to make improvements in its present accounts system ahead of the introduction of the Management Information Framework. However, he suggested that because of the age of the existing system, - it was 'inherited' from Office of Public Works and is over sixteen years old - opportunities for significant improvement could be limited.
The Accounting Officer stated that a full review of the issues raised by my Office during the 2000 audit was being carried out with each issue being identified and the necessary steps being taken to ensure that the errors would not recur. Additional staff resources had been allocated to Accounts Branch and the Department was seeking the approval of the Department of Finance for further appointments.
Finally, the Accounting Officer stated that a detailed review of the procedures involved in preparing the annual Appropriation Account was being undertaken so that a framework could be established within the timeframe necessary to present a signed Appropriation Account to my Office before the statutory deadline. He also said that the Department's efforts to complete the Appropriation Account process continued to be hindered by the late receipt of information on receipts from the PMG. This was a particular problem at year-end, but the Department was seeking to resolve it.
Does the Comptroller and Auditor General want to deal with both Votes?
Mr. Purcell
Yes. Thank you, Chairman. On Votes 41 and 42, there is one section of my report which deals with those and in particular Vote 42, that is paragraph 39, which sets out the difficulties encountered in the preparation of the appropriation account of the Department which resulted in the late submission of a signed account.
For a number of years there have been problems with the accounting system of the Department and in that time we have communicated our concern to the Department in regard to the quality of the information presented for audit arising from the identified deficiencies. These were compounded by a lack of continuing expertise in accounting matters within the Department and the combined effect culminated in an unacceptable risk of an incorrect appropriation account.
Unfortunately, that is exactly what happened in 2001 when the final audit of the appropriation accounts for 2000 was undertaken. Basic reconciliations, which underpin the completeness and accuracy of the account, had not been done and at an early stage it became clear that the figures presented were not sustainable. My staff withdrew from the audit to give the Department an opportunity to rectify matters and at the end of July, that is four months after the statutory date for the submission of the appropriation accounts, the account was represented for audit.
Not to put a tooth in it, the accounts function and the system in the Department were a bit of a mess and to be fair to the Accounting Officer, he acknowledged the position once it was brought to his attention and he set about resolving the matter in so far as that was possible in the short-term. He initiated a root and branch review of the structure, staffing, expertise and experience in the accounts branch. Preparations were made for the production of procedures manuals for the provision of staff training and the improvement of the antiquated computer system. A firm of consultants was appointed to advise the Department in relation to these tasks.
The Accounting Officer has furnished a comprehensive opening statement, which is before the committee, which analyses the problems and details the measures being taken to rectify the position so I would expect to see a considerable improvement by the time we audit the appropriation account for 2001.
Mr. Furlong, you have given a comprehensive statement. The objective of looking for the comprehensive statement for the members is that we could go straight into the business. Given that it is so comprehensive perhaps you could provide the committee with a condensed version.
Mr. Furlong
I will try to do so and I am grateful, Chairman, for the opportunity to make that statement. There is nobody more dismayed or disappointed than myself at the shortcoming in the Department's accounting procedures to which the Comptroller and Auditor General has drawn attention. I want to make it clear that I accept totally the thrust of the criticisms contained in his report and do not intend to take issue with any of them. My entire focus has been and will continue to be on addressing the systemic weaknesses to ensure the Department's accounting procedures will stand comparison with the highest standards for the future.
Major changes have already been made and more will follow. I have outlined some of them in my statement. I have identified one of our difficulties. Although the Department of Arts, Heritage, Gaeltacht and the Islands exists as a separate corporate entity only for the past four years, it will be recalled that it was formed in 1997 by bringing together sections from other Departments and agencies with different practices and cultures. One of our tasks was to try to align the various practices, co-ordinate them and deliver a corporate governance system for the Department that would be cohesive, effective and reliable. We have been trying to do this in the past few years and have achieved significant progress in some areas. Regrettably, in the case of the finances we have been unable to make the progress the committee is entitled to expect.
Perhaps one of the reasons some of the problems have arisen is a conscious decision was made a few years ago that when some of the issues to which the Comptroller and Auditor General has referred were highlighted there was a recognition that we were already committed to the introduction, under the strategic management initiative, of the new financial information system. That project has been launched in the Department. We were reluctant, wrongly as it turned out, to divert significant IT resources away from the major project to deal with the weaknesses in our existing system. Again, as the Comptroller and Auditor General said, this year we have effectively seen the consequences of this.
Since the particular shortcomings were brought to my attention we have given a huge amount of management time to dealing with them, addressed staffing of the accounts functions from top to bottom and dealt with the issue in so far as we can in relation to reconciliation of our Vote system with the PMG. I would be hugely disappointed if we are not able to provide satisfaction on that score next year. The committee will be glad to hear that the process of balancing has been operating on a month by month basis with the Paymaster General's Office in the current year and not thrown up any problems.
We have begun the process of providing detailed manuals, are addressing staff training and on the point of making an investment to establish an IT based system for maintaining our fixed assets register on which I hope to be able to report significant progress next year. Other issues deal with points of detail on which I will not elaborate unless the committee wishes me to.
On the question of the formal signature of the account, at the time of the statutory date for submission I was absent from the office through illness. In the circumstances I agreed that to enable the work begin on auditing the account it might be sent in draft to the Comptroller and Auditor General's office. I would not wish to give the impression that at any stage I had refused to sign the account. If I had been in the office on 31 March, I would have signed it, perhaps at that stage unaware of the problems that subsequently emerged.
I have strengthened considerably the internal audit function in the Department. One of the projects it is undertaking is carrying out a detailed risk analysis project, looking at everything the Department does, and trying, in so far as humanly possible, to minimise risk wherever it exists. We have also been given approval by the Department of Finance to recruit external professional accounting expertise to assist us in getting over our skill deficiencies. We have somebody on contract for six months which we now have approval from the Department of Finance to extend.
Perhaps I should stop at that point, but I would not wish to finish without expressing my gratitude for the co-operation of the Comptroller and Auditor General's office, especially the audit team, in dealing with the important issues raised. They were as helpful, supportive and understanding as it was possible for them to be within the constraints imposed by their role and I am grateful to them for their forbearance. Yet again, I must apologise to the committee for the deficiencies highlighted. I have produced a detailed statement which is indicative of the seriousness with which I treat those matters. I do not attempt to excuse; I am simply providing explanations. The committee can be assured that it is my commitment and that of my management colleagues in the Department to ensure for the future the Department of Arts, Heritage, Gaeltacht and the Islands will have within its resources the provision of an efficient and effective accounting system as a priority objective.
Thank you, Mr. Furlong. We have had a number of opening statements from different Departments and I am aware of your apology for errors made. Members will be as surprised, indeed shocked, as I am because it gives the impression of sloppiness within the Department, especially on the financial side. I hope the situation will be redressed with the additional new appointments.
You mentioned that a large volume of receipts, in excess of 5,000 per annum, processed by the Department would equate to approximately £83 million. You have been unable to reconcile your records with the bank records and the reconciliation is more or less what the banks are telling you with regard to status.
Mr. Furlong
We were reconciling the bank with itself, so to speak.
Is that not remarkable?
Mr. Furlong
Yes.
No business would operate like that. Even those of us with current accounts would check our bank statements against cheque stubs, etc., to ensure there are no errors.
Mr. Furlong
I was as shocked as you when I discovered what had happened. There is no defence and it will not happen again.
Within that sector I presume the accounts section would deal with it.
Mr. Furlong
Yes.
Would stringent action have been taken within the accounts section on the basis of that type of situation?
Mr. Furlong
Yes, there have been very significant changes in personnel on the accounts side. New and additional staff have been put in place. Manuals have been produced. I can assure you that all concerned realise that what happened was unacceptable and should not happen again.
Cuirim fáilte roimh, Mr. Furlong, agus tá cúpla ceist agam. Despite Mr. Furlong's full and sincere acceptance of the criticism levelled in the Comptroller and Auditor General's report, it must be open to question because on the first page of his report the Comptroller and Auditor General highlights seven points. These refer to items such as incorrect accounting of receipts by the Department. They also refer to other statements in theC&AG's report. The manner in which the accounts were presented for the C&AG to present his report to us leaves a lot to be desired.
I have some questions on the Vote. A figure of £1.8 million in grants pertains to tithe Gaeltachta. Is that just for repairs to houses of householders in Gaeltacht areas?
Mr. Furlong
It is for a combination of repairs and building works. The actual figures were £660,000 on tithe nua and £1.282 million on feabhsúcháin, saoráidí sláintíochta, méidithe speisialta agus díonta tuí san áireamh.
Does the £1.282 million pertain to new houses?
Mr. Furlong
No, it pertains to improvements.
Was an analysis ever carried out on the value for money of improvement grants? In other words, are they solely to improve the life of houses for people living therein? Are other types of non-residential houses eligible for those grants? In terms of the £1.2 million spent on house repairs, what is the value for money of deontais Ghaeltachta?
Mr. Furlong
A review of the programme was carried out under the expenditure review programme, introduced several years ago. The purpose of that review was to give us a more focused approach. In other words, there were changes in the system of grants introduced, one of which I recall was to deny improvement grants to people who were building second houses in Gaeltacht areas. That issue was addressed in recent legislative changes.
Is grant aid available to non-residents for improvements to houses within the Gaeltacht areas?
Mr. Furlong
It is, but only if they are committed to living in the Gaeltacht. The grant, as I understand it, will be paid only when residence has been established.
If, for example, a person has a holiday home in the Gaeltacht and is resident at the time of receiving the grant, but not thereafter, is there any follow up or is that person eligible for a grant at all?
Mr. Furlong
My understanding is that such a person is not eligible for a grant for a holiday home.
Could Mr. Furlong give me the figure for expenditure in Gaeltacht areas in this accounting year under scéim na mbóithre áise with regard to small county roads and private roads?
Mr. Furlong
The figure is £1.221 million out of a total expenditure under subhead E - referring to scéimeanna feabhsúcháin - of £9.718 million.
What does the figure of £9.718 million cover?
Mr. Furlong
The largest single element covered concerns the bóithre strátéiseacha, the figure pertaining thereto being £5.4 million. Where the áiseanna feabhsaithe calaíochta are concerned, the figure is £1.5 million. For the bóithre áise, the figure is £1.2 million, £850,000 for community centres - coláistí Gaeilge - and £360,000 for minor local authority quays. A sum of £300,000 was set aside for harbour works at Baile Fuar Uisce, Contae Dhún na nGall.
Consider scéim na mbóithre áise under which minor roads into houses are improved. The allocation of money appears to be at the discretion of the Minister of the day. If that is not the case, it is the impression given. I am familiar with this from my own constituency, which has the largest Gaeltacht. Does the scheme achieve value for money in that one might invest £1,500 in a road in one area and the same somewhere else. Considering the movement of machinery etc. that is involved in this, does that type of ad hoc allocation lead to value for money? The figure of £1.2 million is quite large.
Mr. Furlong
I do not have the precise criteria at my disposal but there are criteria laid down. Again, my information is that this scheme is administered in consultation with the local authority. The funding for the bóithre áise matches a commitment by the local authority to invest in them.
Will Mr. Furlong furnish me with the criteria that are laid down because it sometimes puzzles me how roads to certain houses are improved and roads that I imagine would have a greater priority are not?
Mr. Furlong
I will arrange to have the criteria forwarded to the Deputy.
Page 2 of Vote 42 refers to a grant to RTE of £67 million. Is that the total grant because, further down, I see a figure of £14.029 million for RTE deontais áite teilifíse. Is that a combination of grants or are those grants divided between Raidió na Gaeltachta and TG4?
Mr. Furlong
In terms of funds, the £14 million to which the Deputy refers is funding that is channelled to TG4. That is quite separate. The other grant of £67 million is, in effect, the issuing from the Exchequer of the licence fee receipts to RTE. The licence fee is collected by An Post. It is brought into the Department's Vote as an appropriation in aid. Then the proceeds less the An Post collection fee are issued to RTE. That is what the figure of £67 million represents.
Cad faoin deontas £870,000 do TG4?
Mr. Furlong
This refers to minor capital expenditure by TG4. It provided for ongoing maintenance of the TG4 transmission network and improvements in the production facilities at the Baile na hAbhann headquarters. Although it is not actually reflected in the 2000 figures, approval has since been given for a programme of capital works at Baile na hAbhann costing about £3 million, which will entail expansion of the TG4 headquarters and production facilities.
Has that work been undertaken?
Mr. Furlong
It is under way at present. It will be carried out this year and next year. The estimated figure is just more than £3 million over a two year period, 2001-02.
What extra facilities will that give to TG4 at Ballynahown?
Mr. Furlong
We are told it will give increased production facilities. I am not sure of the nature of those facilities.
If it is capital expenditure, it must be expenditure on some planned building. What extra facilities will that give?
Mr. Furlong
Increased production and studio space. As I understand it, it needs additional space for storage of archival material. As TG4 has been around for a relatively short period, it is still building up archival material. There is also a need, in common with most television stations, to update the technology, so there would an element of investment in IT in that.
The aid for national monuments and historic properties came to almost £32 million. Where and how was that money spent? Is there a breakdown on how that was spent?
Mr. Furlong
It encompasses a broad area. We spent about £13 million on the conservation and maintenance of 700 national monuments and historic properties, and that £13 million would obviously include the 430 industrial staff. Some £1.2 million was spent on the archaeological survey and archaeological research excavations, £12.9 million on special tourism related programmes and other capital works, £1.9 million on the guide service at visitor centres, £1.3 million on the purchase of sites and £300,000 on the purchase of vehicles and plants. Miscellaneous other items account for the balance of £1.5 million.
What is the difference between a national monument and a historic building?
Mr. Furlong
Could I defer on that one, if the Deputy does not mind, to my colleague, Mr. Canny, who would be better able to answer that?
Yes.
Mr. Canny
A national monument would be as defined under the National Monuments Acts. A historic property would not necessarily be a national monument, although many of them are, but it would not have the status under the National Monuments Acts.
Is there scope for giving grant aid for the retention, refurbishment or making safe of historic buildings apart from national monuments?
Mr. Furlong
Not directly through the Department. The Department's spending is on the maintenance and conservation of properties already in State ownership. There is, however, limited support, and I acknowledge it is limited, available through the Heritage Council which has a fund of several million pounds annually for allocation to works to preserve or restore properties of particular interest from a heritage point of view.
What is done where a historic building is in private ownership and the owner cannot obtain permission to demolish what is an unsafe building to which the public has access nor obtain insurance to cover himself against any injury to a person because of that building nor obtain grant aid from the Department for making the building safe? Where does that person turn to?
Mr. Furlong
The responsibility for the protection of monuments and historic properties has devolved under planning law to local authorities. They are responsible and any works which have to be done to a property to make it safe obviously have to be approved by them and by——
Does the planning authority have to consult the Department in such an application?
Mr. Furlong
Yes, it does.
When permission is not forthcoming to demolish a very dangerous building and no one else will take responsibility for giving grant aid to make such a building safe, how can such responsibility be then thrown back on the owner of the land on which the building is located?
Mr. Furlong
Ownership carries responsibility and one cannot turn to the State in all circumstances and expect it to pick up the tab for maintenance of properties. Otherwise, one would require practically——
How can the Department, through the local authority, refuse permission to allow a man demolish an unsafe building, such as a castle on his land to which the public have access, when no grant aid is available to him to make the building safe? Who is responsible if it falls down on a crowd of children playing around it?
Mr. Furlong
If buildings are in a dangerous condition, one would expect that there would be an obligation on the owners to ensure they are sufficiently fenced off to prevent access to them. It is perhaps regrettable but the State is certainly not in a position to provide the resources to step in immediately to purchase or renovate buildings that are in a dangerous condition.
That is a good way of solving the problem, but it cannot be fenced off if it adjoins a public road or if a public road runs through it.
Mr. Furlong
I suppose I am in difficulty with this one in that we are getting down to what are almost individual circumstances.
I will bring the case to Mr. Furlong's attention later.
That would be good. Does the Secretary General have any objection to a member of the press getting a copy of his opening statement?
Mr. Furlong
No.
As a member of this committee with 12 years' experience, the report of the Comptroller and Auditor General's report on this occasion is the most damning I have seen in that time. Mr. Furlong has accepted on behalf of the Department that his report is correct and that there was a need for root and branch changes to the systems in operation. Is Mr. Furlong satisfied there was no loss to the State due to the non-existence of systems and controls in the period dealt with by the report?
Mr. Furlong
Yes, that was uppermost in my mind. In the exhaustive checking, we came across inefficiencies but no question of fraud or anything like that.
With regard to subhead L, which is a payment to An Post for broadcasting licence fees, is An Post paid a percentage of what it collects or is it a flat fee?
Mr. Furlong
At a certain point up to a few years ago, it was a percentage of what was collected, but latterly the fee has been negotiated by An Post with RTE and the Minister formally approves that arrangement. That is the basis on which the payment is made.
With regard to subhead S, there is less than provided and the explanation is that the shortfall is due to under-spending of the provision for SAC compensation payments and delays in the commencement of certain projects. Will Mr. Furlong explain the compensation payments in regard to special areas of conservation?
Mr. Furlong
A sum of £1.45 million of the shortfall related to underspending on the provision made for SAC compensation payments. Compensation is payable to land owners where restrictions arising from the designation of SACs under the habitats directive result in a loss of income to the land owner. Farmers can obtain compensation by either joining REPS, administered by the Department of Agriculture, Food and Rural Development, or by claiming directly from Dúchas, the heritage service of my own Department, for actual losses arising. Compensation costs are particularly difficult to estimate and provision has to be made for restrictions on land use. Actual losses can vary from land holding to land holding. Because there can be significant time lags between the provision of an agreed compensation scheme and the take-up of the scheme, there can be underspending of that kind.
If a SAC is in an area adjacent to a town is compensation based on the agricultural income rather than a development income?
Mr. Furlong
Subject to what Mr. Canny may say, as this is compensation in relation to the future of agricultural land, it is agricultural value that would apply.
Right. Deputy McCormack brought up the issue of heritage buildings. Can a building be designated a heritage building at any time?
Mr. Furlong
Yes. I suppose the way it might happen is that it would come to our notice in the context of the preparation of the national inventory of architectural heritage, the NIAH. That is an ongoing compilation of lists on a county by county basis throughout the State. Archaeological surveys also bring buildings to our notice. The NIAH is a systematic survey of the built heritage of the State.
Is the list updated over time?
Mr. Furlong
Yes. The intention is to have the survey completed by 2012. It is a time consuming exercise. Based on the data generated by the surveys the Minister may make recommendations to the planning authorities that specific properties be included in their record of projected structures. To date something in the order of 2,250 such ministerial recommendations have been made.
Thank you.
Will you clarify one thing for me in relation to planning? Nowadays planning is almost like an obstacle race even for people building one-off bungalows. A new restriction has crept in recently where a fairy fort happens to be near a proposed development. The person involved has to employ an archaeologist during the project. For example, if a person was building an agricultural road into a farm and it was near a fairy fort he would have to employ an archaeologist. That would increase the cost of the project. How near would a fairy fort have to be to a project to make it necessary to employ an archaeologist?
Mr. Furlong
It would depend on the significance of the particular monument.
Fairy forts proliferate Ireland.
Mr. Furlong
Some of them are significant and others not. I was asked this question recently and my recollection is that the distance between a development and a significant fort should be 50 metres.
Is it possible that the distance might be less where the professional archaeological view was that the mound was not of any great significance?
Mr. Furlong
That is my understanding. I will check that and let the committee know if I am incorrect.
Possibly one of your officials might have an observation to it.
Mr. Canny
I cannot add a lot, Chairman. My understanding is that it requires an assessment. The assessment by the professional archaeologist might then say that work could be done within a certain distance. It is almost on a case by case basis. It is important to have a criterion which leads us to carry out an assessment.
Are there any criteria laid down as to distances?
Mr. Canny
I am sorry but I do not know that off the top of my head.
Perhaps you might find out. Increasingly now planning conditions issued by the county council compel people to employ an archaeologist and in many cases this adds a prohibitive cost to a development. The fairy forts exist on old ordnance survey documentation and it is often a point of argument as to whether they have any historical or other significance. Those of us who come across this would like some consideration because we can find ourselves at loggerheads with planning officials on the issue.
Mr. Canny
Our problem is that there is a heritage feature there whether it is visible or not. It is important to assess it before any decision is taken which may destroy it. It is a fairly reasonable precaution and we try to encourage reasonable archaeological assessment. We do not want to prosecute.
I am not saying that a person would wipe out a fairy fort in order to facilitate a development. In rural Ireland people would actually be very much afraid to do away with one. What I am trying to establish is some guidance in regard to how close to a fairy fort a planned development can proceed.
Mr. Furlong
I am reasonably certain that the figure of 50 metres is a guide and a lesser distance would be accepted if, as Mr. Canny has indicated, investigation shows that the feature is not as significant as was assumed at the outset.
It appears that the Department operated differently from other Departments. It seems to have used fairly archaic accounts methods. Is there a historical reason for this? I appreciate that it was put together from bits and pieces. Why was it so far behind the times?
Mr. Furlong
Your question has, in a sense, answered itself. It was largely inherited from the Office of Public Works which had a particular relationship with the Central Bank on which information on receipts was forwarded on a daily basis making it possible to reconcile receipts manually each day. I referred to this in the more detailed statement which I did not read out. The PMG system now operates on a monthly basis. Unfortunately this year the fact that our system was manual put more pressure on it with the consequences outlined by the Comptroller and Auditor General. We were aware that these difficulties existed a few years ago. We were committed at that stage to the installation of the new financial information system under the strategic management initiative. That project is under way in the Department. I believe the priority was to invest resources for developing the new system while at the same time maintaining the existing system, defective as it was, to generate the information required until such times as we had the financial information system in place. This year showed that it was wrong to do that.
Will the strategic management system solve all of the accounting problems or is a separate system needed to be break routine work down into daily and monthly returns? The Department of Finance gave sanction for staff but is there sanction for FIS for all of your needs?
Mr. Furlong
Yes, it has. The financial information system will eventually provide us, in common with all Government Departments, with a modern IT driven system capable of generating information, including accounts information akin to normal commercial operations, which is the object of the exercise. It will provide more quantified information on outputs from expenditure programmes. In the meantime, recognising that the problems with the existing system generated the difficulties highlighted, we are allocating additional personnel to ensure that those operating the existing system are trained, understand what needs to be done and have up to date procedures to assist them if there is doubt on any issue. We intend to invest, in advance of the financial information system, in an IT system to give us better control of our fixed asset register. We have, I think, 70 separate properties. That we do not have such a register indicates our problem in maintaining a reliable asset register and we hope that it will have solved that problem by next year.
The public perception of the Office of Public Works, and the Civil Service generally, is that everything is done by the book. However, there does not appear to be a book or operating manual. Training people can be a waste of time if there is no properly laid out procedure for every aspect of work because the modern trend of staff turnover means that trained people move on. Will that be allowed for?
Mr. Furlong
Rapid turnover of staff is a fact of life. For example, students may work as clerical officers over the summer but return to college in the autumn. There were procedural manuals but they were not comprehensive and we are rectifying that. The professional expertise that we brought in to assist us is involved in writing new manuals, which will be ready in months and will assist staff if there are any difficulties.
I am glad to hear that. Is there not a dependence on IT and a presumption that a new system will work? However, the system is only as good as what is fed into it. The work of the various sections promoted a culture of that kind of thinking rather than modern methods of accounting. This is a damning report and change is needed. Mr. Furlong is taking the right approach. Would he comment on the £6 million received by the Chester Beatty Library which, as the Comptroller and Auditor General pointed out, went unrecorded?
Mr. Furlong
The money was recorded. It came in as an Exchequer extra receipt which went directly into the Department of Finance, not into our departmental Vote. It was not the case that we had the money but were ignoring it. We were required to acknowledge it by way of a footnote to the effect that it did come in as an Exchequer extra receipt. What was overlooked was the insertion of the footnote in the Vote, but the money was taken into account.
The good news in the Vote is that where the Office of Public Works is now providing public facilities, the outturns are up. Is that correct or are there loss makers? In the three or four I looked at the outturns are up by 25% at least in public subscriptions for visits.
Mr. Furlong
Yes. My recollection is that receipts which come into the major national cultural institutions amounted to £700,000 in total, although the 1999 figure was slightly higher. If discussing the appropriations in aid, the Deputy's point is correct. The Dúchas visitor centres are becoming more popular with tourists. In the year under review, 2.3 million people visited these centres. Regrettably, in view of this year's events, we will not have similar numbers in 2001. During the foot and mouth crisis, the closure of the centres impacted on local economies, as will be revealed in next year's accounts.
It may also mean that business people in an area will appreciate how much they depend on these centres. Could Mr. Furlong comment on Waterways Ireland?
Mr. Furlong
Waterways Ireland is one of seven cross-Border bodies established under the Belfast Agreement and was responsible initially for the Barrow, Grand and Royal Canals and the Shannon-Erne system, but now also for investigating the feasibility of the significant Ulster Canal project. It is responsible throughout the island for maintaining locks and providing slipways and moorings. It is an important body with a spend of £12.5 million. If the Ulster Canal proceeds, it will be even more significant. There are 1,000 kilometres of waterways with approximately 850 kilometres in this jurisdiction. Waterways Ireland's funding by our Government and the northern Executive reflects that, in other words, 85% comes from this State for running expenses. In relation to capital spending, the rule, which has not been tested, is that if capital spending occurs in a particular jurisdiction then that jurisdiction is responsible for the funding.
There is huge potential in that area and I am glad it is going so successfully. What service does it provide to the ESB? I appreciate that there would be a number of low level services but what is the main thing they provide?
Mr. Ó Cofaigh
There is an understanding with the ESB on the levels in the Shannon and in particular on Lough Allen. The ESB commits itself to paying an amount of money for the benefit of the waterways. The ESB decided to wrap up a ten year debt to Waterways Ireland by paying an amount in 2000. There was some confusion about how this money should be reported. That is resolved now. Waterways Ireland looks after the water levels at Lough Allen for the ESB from approximately April to October. For this, the ESB provides funding for Lough Allen and some other places.
Are the rest of our waterways looked after by the Department of the Marine and Natural Resources?
Mr. Ó Cofaigh
When we use the word "waterways" we mean navigable waterways. Waterways Ireland should really be named "Navigable Waterways Ireland". The rivers, streams and lakes not used by Waterways Ireland would for the most part be the responsibility of local authorities who look after water quality. The Department of the Marine and Natural Resources has a responsibility in terms of safety and making sure that proper facilities are available for lifesaving. That is roughly the breakdown of responsibility.
What about the fisheries boards?
Mr. Ó Cofaigh
They are responsible for fish.
The impact of SACs on local development and the need for SACs to marry into the plan rather than conflicting with it is a matter that has concerned me for some time. The European Courts have taken action on the non-implementation of SACs and I would like further information about the matter. Members representing constituencies often have difficulty with members of the public regarding implementation of SACs. Some people deem that they are not always treated in the correct fashion or in accordance with their constitutional rights.
The situation in relation to the restoration and protection of heritage sites such as houses, buildings, mounds, ring forts, etc., is one that I have never got to grips with. I agree with the necessity for the protection of such heritage but I would like to know more about it. I have repeatedly tried to get answers in relation to the excavation of many of these sites. They would be very beneficial from an educational and tourism point of view. I once visited the rock of Masada, a site some way from here and one which has been considerably excavated for the benefit of tourists, educationalists and students. There are thousands of ring forts in Ireland that could be excavated and made accessible without damaging their heritage value. The reverse would be the case. How much further have we proceeded along those lines?
I was born in the west of Ireland where there are countless stone forts, easy to excavate. As a child, I often climbed into them although it was dangerous to do so. There is a huge responsibility on the authorities to develop these and other sites for the benefit of this and future generations. They were there when I came on the scene and will be there when I and many others are gone, but I have never been able to walk around them as I would wish. I would like to know more about them and would like Irish children to know more also. Tourists to Ireland would willingly pay to see these sites.
The sensitivity of modern development adjacent to heritage locations is another important matter that needs attention. Development should take place in the region of such sites. The 50 metre distance in relation to ring forts is fine. However, the development should not be at variance with the historical nature of the nearby location. There is a castle - I believe it is in Limerick, possibly it is Barrington's Castle - where a huge glass front has been added.
It is King John's Castle.
I hate to comment on it.
Shannon Development will be here shortly. You will have an opportunity to comment then. This features in the report.
I know that. It is in that context that I wish to refer to the castle. The glass front represents the clash of cultures. I do not know why it was done that way. I presume it was to emphasise the clash of cultures as it is not complementary in any way.
There are a number of other historical sites throughout the country where there have been modern restoration and improvements to safety. I seriously doubt whether this restoration represents any improvement to what the location represents. I do not want to mention particular locations but I have seen additions to historical heritage centres, locations and houses. When I see them I ask what is that doing there or what does it tell the student of what the location represents. The answer is nothing. It merely shows a clash of cultures; a modern response to an ancient monument. It adds nothing and money should not be spent in this way. We should restore buildings as best we can in the way they originally were. This will present to the new generation something representative of what they were when in use. To do otherwise, using plastic, glass or steel, is totally incompatible with what was before. I am sorry if I am going on about this matter but it has concerned me for some time.
Many people share your concern, and that was expressed at the time of the restoration of King John's Castle.
I was not aware of that, but felt I had to speak after seeing the castle.
You are very observant. Are you finished, Deputy?
I am sorry, Chairman. Those are the four points.
Mr. Furlong
Does the Chairman wish me to respond?
Yes.
Mr. Furlong
The judgments in the SAC court cases relate to actions initiated several years ago by the European Union and were in the context of the habitats directive which originally required member states to have formally proposed their list of candidate special areas of conservation by May 1995. It was quickly recognised that this was not a realistic date and the critical date became February 1998. By that stage the Government had committed itself to a process, which in hindsight was a very wise one, of not rushing into selecting designated sites, sending them to Brussels and then sitting back and waiting for the roof to fall in.
There was a formal process of site designation based exclusively on the scientific criteria set out in the habitats directive. The landowners affected by SAC designation were formally given notice to that effect and given an opportunity of appealing to an appeals board chaired by the former Ombudsman, Mr. Michael Mills. This meant that we were later than most other member states in getting notification to Brussels, but by the second half of last year we completed our notifications and gave formal notification to Brussels of 362 candidate SACs, equivalent to approximately 14% of the State's land area. Later this year or, more likely than not, early next year there will be a stocktaking process whereby the designations of individual member states will be examined to assess whether they are adequate to protect the species or habitats at risk. That in essence is what the SAC issue is about. We are no longer at odds with the Commission on the failure to comply with the habitats directive.
The suggestion has been made that perhaps the European Union wants to make this country one large SAC.
Mr. Furlong
It is perhaps indicative of the growing diversity of opinion that a strong NGO sector has developed which examines EU legislation such as the habitats directive and looks to the State to be more assertive in its implementation. That will always be a source of conflict. It has direct access to the European Union and makes its complaints to it. The European Union, in turn, initiates proceedings against the Government to which we have to answer.
Members of national parliaments are directly accountable to the people also. There is a belief that many of those who voted against the Nice treaty did so on the basis of the perceived intrusiveness of European institutions in the fashion just referred to. It is unfortunate that members of national parliaments have to face the music in that situation, not the NGOs.
Is the figure of 14% of land designated as SACs equivalent to that in other countries of Europe?
Mr. Furlong
The European average is 13%.
Do they include Denmark which is surrounded by water?
Mr. Furlong
We also have significant marine SACs. When I say that our SACs are equivalent in area to 14% of the land mass I am including the areas comprehended as marine SACs for the purposes of calculation.
On the question of the perennial conflict between development and conservation, I find myself very much in sympathy with a great deal of what Deputy Durkan said. The issue of archaeology almost fell into disrepute because issues affecting it appeared to be raised only at the point where a contractor was about to move on site. Last year, in a groundbreaking move, the Department negotiated a code of practice on archaeology with the National Roads Authority. This involves a process of advance planning for archaeology whereby the roads authority arranges for archaeological investigations to be carried out by its archaeologists and for the results to be notified to the Department. In doing so it was effectively avoiding many of the last minute delays by means of people slapping on injunctions or appealing directly to the European Union. The code of practice has been in operation for about one year and, although there are flaws, is working quite well. The NRA would like it to be a little more generous, but we intend to sit down with it to try to iron out any wrinkles. We are looking at extending the process to other sectors also.
The so-called restorations to which the Deputy referred are also anathema to the Department. There is no question of Dúchas having any hand, act or part in the restoration of an historic building which would destroy its character. Our conservation architects have very strong conservation values. I can say with a degree of pride that their standards are probably second to none.
You said Dúchas would not get involved in anything that would be a travesty of preservation, but I put it to you that some of the work it has carried out would raise questions in that regard.
Mr. Furlong
I would be happy to deal with that matter on a case by case basis, but as a general principle we are quite happy that our conservation values are robust and that the conservation architects would have nothing to do with patchwork restoration, the effect of which, as the Deputy said, would be to destroy the character of an historical building.
May I suggest that it should be generally recognised throughout the entire system that additions to existing heritage properties should have a degree of authenticity? What is the point in adding glass or steel to reflect light? I will certainly mention some locations to you afterwards.
Vote 42 includes an amount of £411,486 for costs connected with the Spanish Armada Streedagh case. Although the State was successful in both the High Court and the Supreme Court, an award of costs was made to the plaintiff by the trial judge who took account of the public interest factor and awarded £362,381 plus interest of £49,105. The loss to the Department was £411,486, even though the High Court and the Supreme Court found in your favour. Can you explain the background and how it happened that way?
Mr. Furlong
Do you not have information on it? The Blaskets case——
We are aware of the Blaskets case. I would have thought that was a question you would have anticipated because there is a substantial sum of money involved. I am surprised that one of your officials does not have the information.
Mr. Furlong
We might have won our case, but legal costs were awarded against us.
Who were the plaintiffs?
Mr. Furlong
I might ask Mr. Ó Cofaigh to respond.
Mr. Ó Cofaigh
As far as I can recall - from memory rather than what it is written down - the problem was that we sought to identify the Streedagh case which dates back to the formation of the Department. We prevented the people who were seeking to dive to the Streedagh boats or ships and they brought a case against us. As I understand it, the State ultimately won the case, but for whatever reason costs were awarded by the court to the plaintiff, in this case, as I understand it, divers from the United Kingdom.
A group of divers from the United Kingdom.
Mr. Ó Cofaigh
A group of divers who were stopped in the course of their work. When we stopped them legally they brought the State to court to seek the right to dive. In the event the court decided that that they should be awarded costs.
They were a group of divers. Were they working for a specific company?
Mr. Ó Cofaigh
No, they were working for themselves.
Collectively, they were prepared to take on the State——
Mr. Ó Cofaigh
Correct.
——in the High Court and the Supreme Court.
Mr. Ó Cofaigh
As far as I can recall, they were challenging the right of the State to stop them from carrying out this activity.
In this case, diving——
Mr. Ó Cofaigh
To the bottom, to the wrecks of the ships and the scattered artefacts. Apart from the fact they were off-shore, I do not know much about it. Their case was that the State did not have the right to stop them. The court found that the State, through the Minister, did have such a right.
Legal costs were awarded in their favour.
Mr. Ó Cofaigh
That is my understanding.
Given that it could have gone against them, and with costs of £400,000, it is remarkable that a group of private individuals, divers, could go ahead with a case of that magnitude. They must have had some solid foundation for believing they would win.
Mr. Ó Cofaigh
I presume that whoever gave them legal advice held out a high probability of success, but it was not to be.
Has it created a precedent with regard to sunken vessels, that divers have the right to dive?
Mr. Ó Cofaigh
No, it created the precedent in the case of sunken vessels that one does not have such a right as long as the material is identified as being archaeological.
When you say archaeological——
Mr. Ó Cofaigh
What I am trying to say is if I go back in history to the time the Kowloon Bridge went down, it would not have been considered to be an archaeological vessel in that sense. There were other considerations such as pollution control. What I am trying to say is that where a modern ship goes down, presumably it is not considered to be such a vessel. If a ship went down 40 or 50 years ago, I presume there might be an issue which I would not want to define in a legal way. There might be an issue that it is of archaeological value.
Mr. Furlong
Perhaps, Chairman, I can respond. I understand one of the unique features of this case is that the divers actually found the wreck. When found it was designated as a national monument. The judgment upheld that designation. Who can anticipate the view courts will take, but it may well be the case that they found the site——
The State won the case, but lost financially.
Mr. Furlong
Yes.
In other words, the State had to provide the money - £411,000.
Mr. Furlong
A pyrrhic victory, perhaps.
Considerable costs were involved.
What is to stop another group of divers from arriving next week and surreptitiously undertaking a dive? It is not possible to supervise such activity to the extent one may wish. Why does the State not recover items of historical or archaeological value to preserve them for the future because they will disappear eventually as has happened in many other jurisdictions? In Ireland we have the notion that if it is under ground or under water, we will protect and preserve it to the best of our ability, but keep it there. The question has to be asked whether such items can be made available for the benefit of the public. There have been countless dives to Armada vessels and artefacts brought ashore many times, but in all cases not in this jurisdiction.
Mr. Furlong
One of the issues for us has been that in the past our archaeologists did that work and carried out excavations. Now there are so many demands on the archaeological services of the State and so much development taking place that they no longer have the resources to do so. That is not an answer to the Deputy's question, but an explanation of where we are.
It is the key at last.
I thank Mr. Furlong and his officials for coming before the committee. As you are aware, in his report the Comptroller and Auditor General raised serious questions about the quality of the underlying accounting records and financial control framework of your Department. You have come and admitted this and stated, accordingly, that you have taken remedial action to rectify the matter. On the next occasion we look forward to not receiving such a comprehensive opening statement, but a one page statement indicating that everything in that direction is okay. We note paragraph 42.
While an opening statement has been submitted, do members of the committee wish to say anything about the Arts Council?
This is the report for 1999. In the area of staffing, has the gender balance improved in the meantime? I note that the art form department has a staff of 23 females and two males; the central executive committee has 13 females and three males; the auditorial staff comprise two females and one male while the others, with the exception of Arts Council staff, have two females and no male. In senior management there is a ratio of 50-50. There is also a good balance in council membership, eight to nine, which was probably helped by some Minister.
A male Minister.
We often complain about this issue in different fora. Was there a particular reason for the imbalance in the art form department.
It is the woman vote.
I wonder who appointed the people concerned. If it was the reverse, I am sure there would be an outcry. There are 23 females to two males. There is a total imbalance. Is there a policy to improve that as was the case in other Departments?
Mr. Furlong
Perhaps I should defer to the Director of the Arts Council. The Department is not responsible for appointments. That is not to say what was done was anything but appropriate.
It sticks out like a sore thumb.
Is the granting of major capital grants carried out by an advisory body? Can someone say, for example, "Do not give it to the Cork Opera House on this occasion, give it to Mayo or Limerick"?
Mr. Furlong
Yes, if the Deputy is talking about grants that come under the direct control of the Department. If he is talking about grants announced under the access scheme a couple of months ago, there is a committee set up to evaluate the applications. There were more than 180 applicants for assistance under the access scheme. These applications were evaluated by an independent committee, chaired by a senior official of the Department, consisting of representatives of the Arts Council, local authorities and the Heritage Council. They made recommendations to the Minister based on criteria agreed in advance and known to all concerned. The grant announcements followed those criteria.
I accept one cannot win them all. The obvious question is who selected the committee? Was it a departmental process to decide who would do the vetting?
Mr. Furlong
The Minister accepted the Department's recommendation on the composition of the committee. We were, in effect, repeating the structure which had proven itself in the context of the precursor to the ACCESS scheme, that is, the cultural, development and investment scheme where an independent entity evaluated and the Minister accepted the recommendations of that independent entity.
We have struggled nationally to get the private sector involved in sponsoring and in getting the local authorities involved. I respectfully suggest that Cork Corporation has given a lead in this regard, on which the figures exist. With the exception of Belfast, they are the leading sponsors of any area. They nearly lost the Opera House a few years ago to a supermarket-type development or bowling alley. Cork Corporation has made huge contributions which were raised locally. There is a sense of disappointment that this independently-minded body could decide that kind of local government and public involvement in Cork did not deserve support from the State in a far more tangible way than was the case. This will hit future contributions. Other local authorities may ask why they should contribute £1 million if the State will then say they neither need nor deserve it. I have not examined what criteria they use. However, I will not have another opportunity to meet the people with all the available information. I stress that I believe this will have a huge negative impact. Cork was very proud that Cork Corporation and Cork County Council contributed at least £1 million to the project.
Mr. Furlong
Given that there were 180 applications, perhaps that was four or five times the amount of money available. Effectively, approximately 20% to 25% of projects were approved. Geographic spread was an issue and Cork was given some support. However, that is a separate point. The news on the cultural front for Cork has not been entirely bad. Cork is likely to be selected European capital of culture 2005.
Perhaps that does not suggest that it will in any way colour the judgment of the vetting panel on providing capital.
Mr. Furlong
There is no connection between the two. Perhaps it was the coincidence of——
Perhaps Mr. Furlong could speak to people for the future. I have a declaration of interest. I am no longer a director of the Opera House but I was when it was needed. When things were bad I was one of the people appointed by Cork Corporation to represent its interest. It appears if one gets a contribution, which would be considered co-funding in other areas, and a local authority is willing to contribute, someone else will say they are looked after from local funds. This is a danger for the future but the decision is now made.
Mr. Furlong
Local authorities support is a positive factor, not a negative factor across the board. If a local authority is prepared to support a project, it gives a very clear indication that when that project materialises there will be local authority support behind it to meet running expenses.
It did not seem to work in our case. I am sure we will have another opportunity to work on it.
I compliment the Arts Council on its work. It is a growing part of our culture for which we have become internationally recognised. All forms of art should be encouraged, which the council has done so far. I hope there will be a greater emphasis on the concept of the arts in the future because it is one of the issues that attracts people to this country. The arts tells people something about the country.
The 2000 report which was signed in August by the Comptroller and Auditor General has not yet been laid before the House. I am aware it does not have to be laid before the House until 9 November. However, it would have been nice to be dealing with the 1999-2000 accounts today. While the Comptroller and Auditor General has a copy of the 2000 report, I have not seen it. It is much changed from the original one. I do not know whether that was to save costs. It has not been embellished with all the staff members. Is that because the gender balance has gone so far in the other direction with 42 females and nine males - the 80%-20% factor in favour of females? Is that the reason they did not appear in this year's edition?
Ms Quinn
A couple of things drove the change in format. The reaction from people is that they want reports like this to communicate simply and directly to people who may not be interested in the great detail of the works of the Arts Council but who want to get a general understanding of what we do; therefore, we wanted a simpler presentation. We are also using our website much more to communicate information. The website currently gets approximately 10,000 hits per day. We find that is how the public is increasingly accessing detailed information.
On the gender balance in the organisation, this is an issue about which we are very conscious. Under the employment legislation, we are obliged to offer equal opportunities to everyone to work in the Arts Council. We are keenly aware of the imbalance and if there was anything we could do about it, short of surgery, we would do so.
Is it a historical issue or were the staff employed? It is a huge imbalance in any walk of life. A ratio of 23:2 in the general staff is massive. Is it historically a low paid job or what is the reason for the imbalance?
Ms Quinn
The balance used to be more equal. When I joined the organisation in the 1980s it was dominated by men. Women were in the minority in the officer roles. Over the years the post of officer has become relatively downgraded compared to the standards of pay available in roles of comparable responsibility within the arts sector. Because women in general are paid lower than men perhaps what we are finding is a function of that trend. There are discrepancies between the skills within the Arts Council and the growing demands of the roles.
Is it an objective to try to redress the gender balance in some way?
Ms Quinn
Yes, it is. However, it is a more fundamental issue than simply trying to adjust it at a superficial level.
Mr. Furlong
On a point of information, my understanding is - I am subject to correction on this - the accounts for the year 2000 were approved by Government and I am reasonably certain they were laid formally either late last week or the beginning of this week. I do not know if that can be confirmed independently.
I am surprised that, according to the clerk of the committee, we have no record of them having been laid. We will verify that afterwards and, if you are correct, we will acknowledge it. We note Vote 41, An Chomhairle Ealaíon, and we thank you for your attendance.
The witnesses withdrew.