Report on Value for Money Examination - Purchasing of Tyres by the Garda Síochána - Department of Justice, Equality and Law Reform.

Mr. T. Dalton (Secretary General, Department of Justice, Equality and Law Reform) called and examined.

I welcome Mr. Dalton and his officials. We will be dealing specifically with the VFM audit produced by the Comptroller and Auditor General. We will be returning to the other Votes and will arrange a meeting with the representatives at a later date to discuss them.

Witnesses should be aware that they do not enjoy absolute privilege. The attention of members and witnesses is drawn to the fact that, as and from 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act, 1997, grants certain rights to persons 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 they should not comment on, criticise or make charges against a person outside the House, or an official, either by name or in such a way as to make him or her identifiable. They are also reminded of the provisions of Standing Order 149 that the committee should refrain from inquiring into the merits of a policy or policies of the Government, or a Minister of the Government, or the merits of the objectives of such policy or policies.

I ask Mr. Dalton to introduce his officials.

Mr. Dalton

I am accompanied by Mr. Michael Culhane, director of finance, An Garda Síochána; Mr. Joe Egan, assistant commissioner, An Garda Síochána; Mr. Jimmy Martin, principal officer, Garda division, Department of Justice, Equality and Law Reform, and Mr. Ken Bruton, finance officer, Department of Justice, Equality and Law Reform.

Representatives of the Office of Public Works are also present.

Mr. Brian Murphy

I am chairman of the Office of Public Works. I am accompanied by Mr. Vincent Campbell, director of corporate services; Mr. Joe Farrell, controller, Government Supplies Agency; Mr. Jim Ryan, deputy controller,Government Supplies Agency, and Ms Lynda Hendley, press officer.

Mr. Egan

Two Garda representatives are with me.

Mr. Jim O’Farrell

I am principal officer, public expenditure division, Department of Finance.

Mr. Purcell

The report before the committee presents the results of an examination carried out by my staff of the arrangements for the purchasing of tyres by the Garda Síochána in the three year period, 1998 to 2000. The examination took place in the aftermath of allegations in a newspaper report that members of the transport section of the Garda Síochána had received all-expenses-paid trips abroad from the main supplier of tyres to the force, Advance Pitstop. There were also subsequent allegations by a former employee of that company that the Garda Síochána had been overcharged for tyres and extras in that period. The Minister for Justice, Equality and Law Reform was so concerned about the allegations that investigations by the Department's internal audit unit and by Garda management were instigated.

I commenced an in-depth examination of the arrangements for the purchasing of tyres from the point of view of both financial control and value for money, having discussed the matter with the accounting officer, the Secretary General of the Department. In considering my report it would be useful to briefly refer to the way in which tyres historically were supplied to the Garda. Prior to 1992 all tyres for the Garda fleet were purchased directly from the manufacturers and were delivered to the transport section workshops in the Phoenix Park. From there tyres were distributed as required to Garda district headquarters throughout the country. Tyres for vehicles based in Dublin districts and national units were fitted in the workshops, while outside Dublin the fitting of tyres was arranged locally. It was a cumbersome and costly exercise, often resulting in vehicles being out of service while awaiting replacement tyres. In an effort to tackle this problem, the tyre suppliers were asked in early 1992 to deliver tyres direct to all district headquarters outside Dublin. It soon became clear that this revised arrangement was not overcoming the problems associated with the previous practice.

A tender competition was organised for the supply of tyres to Departments and offices, including the Garda Síochána in 1993 by the Government Supplies Agency. Four companies were approved by the GSA as authorised tyre suppliers, three tyre manufacturers and Advance Pitstop. That company had already been in negotiation with the Garda Síochána about provision of a supply and fit service for Garda vehicles. Based on the 1993 tender prices, the Garda Síochána concluded that the Advance Pitstop proposals offered an opportunity of getting better service with the prospect of cost savings. In February 1994 the Garda entered into a pilot arrangement with the company in which selected Garda districts purchased their tyres from local Advance Pitstop depots and had them fitted there. In July 1994 that arrangement was extended to almost all districts and units.

In 1997 the Government Supplies Agency organised a fresh tender competition for the supply of tyres to central government agencies. The competition was designed to select companies for inclusion on a list of suppliers from which agencies, including the Garda Síochána, would purchase tyres as required. In the event all seven companies who tendered were approved as suppliers. The prices to be paid for tyres were the net prices based on discount rates and price lists submitted with the tender documents. Prior notification of the dates of any price variation was to be given to the GSA and the purchasing agencies, together with revised supplier price lists.

The 1997 competition did not change the pattern of purchase of tyres by the Garda. Advance Pitstop had been the main supplier of tyres since 1994 and as that company was again on the approved list in 1997 the existing supply and fit arrangement continued. In June 1998 a comparison of suppliers' prices, which showed Advance Pitstop as the cheapest supplier across a range of tyres, was prepared within the transport section. Our review showed that many of the prices attributed to Advance Pitstop in the price comparison document were substantially lower than those actually being paid to the company at the time and were also lower than the tender prices submitted by the company. In that sense they were presenting a misleading picture of comparative costs. If the correct tender prices had been used in the comparison, other suppliers would have come out cheaper for most of the tyre types examined.

The arrangement with Advance Pitstop continued without review until the media revelations in February 2001. During the three years 1998 to 2000 the Garda Síochána spent at least £2.4 million on the supply and fitting of tyres and extras, of which £2.1 million related to purchases from Advance Pitstop. No price increases were notified by the company in the period. By applying the tender prices to the purchases in that period, the examination showed that the Garda Síochána had overpaid an estimated £180,000 for tyres and £28,000 for extras, such as valves. After the media reports, the company, at a meeting with the Garda in May 2001, issued credit notes to a net value of £102,000, representing the company's calculation of the correction of discount deviations from actual tender terms. It is my understanding that the Garda considered that any decision to pursue the company for the balance rests with the Government Supplies Agency as the contracting authority. There was almost certainly a further loss of economy because other, cheaper, suppliers of tyres had not been used. A proper evaluation of the prices offered would have shown this up. In this connection, just recently other supply and fit tyre providers have been awarded contracts for 724 Garda vehicles.

The comparison of the prices paid by the Garda Síochána with those paid by the Defence Forces for the same types of tyres under the tender arrangement is instructive. We were able to identify a number of tyre types bought by both the Garda and the Defence Forces at around the same dates in 2000. In almost all cases examined the prices the Defence Forces paid for individual tyre types were significantly lower than those paid by the Garda. This was a comparison of tyre prices only, so the differential is not due to extra fitting or balancing charges paid by the Garda.

The failure to note that invoices were being presented and paid at prices higher than the tender prices reflects badly on the system of financial control exercised by the Garda Síochána in this area. District officers with responsibility for certifying invoices for payment did not have access to information about the prices they should expect to pay, the specification of tyres which should be fitted to vehicles in their charge or any policy guidance on the provision of extras. In these circumstances it was virtually impossible for those officers to verify that the amount invoiced was in order. Even where information was available, such as in the transport section, the general practice appears to have been not to check the amount invoiced against the approved prices. Apart from the inadequacy of the control system and its financial implications, the report also analysed tyre usage on Garda vehicles to establish if it was reasonable. The conclusion reached was that the average mileage per set of tyres was too low.

Following reservations expressed by the Garda Síochána about this finding we have re-examined the issue in considerable detail and have revised our figures upwards to about 16,000 miles per tyre or an average of 20,000 miles per set. In the light of the revised figures, tyre consumption for the fleet can be regarded as acceptable and I want to put that clearly on the record. The Garda have pointed out that this performance compares well with that achieved by police forces in the UK. The Garda have also inquired into all of the vehicles that were supplied with the highest number of tyres in the period 1998 to 2000 and are generally satisfied that the tyre usage in those cases was justified. They have since taken issue with a few other points in the report, in particular the fitting of new valves when tyres are being replaced and I am happy to accept the point they make. I partly accept their views on the level of consumption of tyre extras. In this regard my office received a letter from Garda management at 1 p.m. yesterday containing these reservations. I will respond in detail to the points made in the letter in due course.

These are the main points at issue. I am sure Garda management or the accounting officer will outline any others. There are other issues recorded in the report, such as an unplanned but significant shift in the brand of tyres bought and the unsuitability of the tender competition. I have talked for a little longer than usual already and it might be more convenient to deal with these and other points in the course of the discussion. In conclusion, the examination had to be carried out in a way that did not cut across other investigations, including a criminal investigation, and this factor impacted on the range of personnel we were able to interview. I regret the inaccuracies in the report that I referred to but I stress to the committee that they do not invalidate the findings of the report when set against the objectives of the examination. There was a proven loss of economy in the purchase of tyres, the tendering and procurement procedures did not accord with best practice and there was poor control over payment for tyres.

Mr. Dalton, I understand, has a report for us. While it is on the computer screens for members to follow as he presents it, does he mind if the opening statement is published?

Mr. Dalton

I have no problem with that.

Please proceed with the statement.

Mr. Dalton

The first thing I want to say about the purchasing of tyres is that at this point we do not have the full picture. When the full picture is available it will be different to the one that emerges now. By way of background - the C&AG said much of this already - after the newspaper article was published on 11 February alleging that various personnel attached to the transport section at Garda headquarters availed of trips abroad paid for by the main supplier of tyres, Advance Pitstop, I contacted a number of people and the Minister directed that the matter be investigated. I also contacted the Garda Commissioner, the Comptroller who was already working on it, the Public Offices Commission and the head of our own internal audit unit.

As regards the various inquiries that were launched at that time, the only exercise that has been completed is the C&AG's VFM report. That report points to serious shortcomings in the whole system of tyre procurement and rightly draws attention to the absence of checks to ensure compliance with fundamentally important matters such as tendered prices and tyre specifications. I can confirm that significant adjustments have taken place to address these problems and I will return to these later.

The C&AG has mentioned that some of the figures contained in the VFM report are in need of revision. The need for revision is supported by the analysis of particular aspects of the report which has been carried out by our own internal audit unit and by the Garda. This is something that is not in the statement but I accept what the C&AG says the variations do not invalidate the basic report. It is the case also that the report has been the subject of a response dated 12 September by Advance Pitstop and the C&AG will be better placed to comment on that.

With regard to the work that is being carried out by the internal audit unit, I should explain that it is partly focused on matters which were not the subject of examination by the C&AG, particularly on the role played by a named member of the Garda Síochána. We have been in contact with the Garda authorities about this and I can confirm that there have been two criminal investigations in respect of which papers have been referred to the DPP. Contact between the Garda and the DPP is continuing in this regard. The DPP is seeking more information and this is normal practice.

One of the matters referred to the DPP concerns material which was prepared which gave the impression that Advance Pitstop prices were lower than they actually were. This was a mistaken impression but it was given in a submission that was prepared. The other criminal investigation has to do with the circumstances in which the tyres specified were not actually the tyres that were supplied. In many cases more expensive tyres than were supplied were paid for. I cannot go into detail about the criminal investigations at this stage but I thought the committee should be aware that they are taking place, are being taken seriously and that the issues are being considered by the DPP.

The main point I want to make at this stage is that we do not have the full picture and indeed the C&AG has not pretended that the report presents the full picture. It will be difficult to get a precise figure on overpayments. The estimate in the VFM is based in part on the difference between the original tender price for tyres and the price actually paid by the Garda. There was effectively no ongoing check that the prices paid matched the tender prices nor to check that the tyres bought were those supplied. More expensive tyres were supplied than the tyres that were specified in many cases. There was provision for price increases in the original contract although with the proviso that, as the C&AG has said, the Garda and the Government Supplies Agency should be notified in advance.

The Department's internal audit unit has established that, in at least one instance, notification was sent to the Garda from Advance Pitstop. This could obviously have a bearing when it comes to assessing not so much the true amount of the overpayment but whether we can claim from the company. Obviously, they will point to the fact that they did at least follow procedure in part. We will be in further communication with Advance Pitstop about this although as the C&AG has said they have already offered a net credit note for £102,000. We have not accepted this pending the outcome of the full investigation of all the issues. The fitting of highly priced Continental tyres and other issues may influence the amount that will be sought in the end. I do not propose to go into the question of ancillary services that were provided while tyre fitting was taking place at this stage, such as wheel balancing, tracking and valve changes, some of which on the basis of the report - seem to be excessive.

This is another aspect of the report which may need to be revised because the Garda, as the C&AG pointed out, without having examined specific cases where the report identified a possible excess of ancillary services came to different conclusions. Some of the services, according to Garda examination, were not actually ancillary to tyre changes but had to do with car maintenance which would have been necessary in any event. This is something which will need to be examined in greater detail in the context of assessing what overpayment was involved. Again, I make the point that while this is true, we are not suggesting it invalidates the report. These are points of detail which need to be corrected rather than something fundamental to the points made in the report.

With regard to trips abroad this is a matter which did not fall to be dealt with in the VFM report and will be referred to in the internal audit report. I have some information for the committee in that regard if members would like later. Apart from trips abroad it appears there were two payments each of £3,000 made to the Garda boat club by Advance Pitstop. This is another matter which will be dealt with by the internal audit report. I want to say that there is no question but that gifts should not have been accepted. I have spoken about this matter to the Garda Commissioner who advises that it will be one of the matters to be looked at in the context of his examination of certain aspects of the case as a whole. He believes it would be right to await the decision of the DPP before he makes any decisions in that regard. This is in line with normal practice. Whatever about the outcome of the separate inquiries it must be stated categorically that the acceptance of these trips abroad was wrong.

The only other thing I want to do by way of preliminary observation is say something about the actions that have been taken to ensure that proper standards and procedures are followed in future in the purchase of tyres by an Garda Síochána. The processing, certification and payment of invoices from Advance Pitstop has been transferred to the finance director at Garda headquarters. Payments for all vehicle repairs in excess of £250 are also channelled through the finance section. The finance section has more expertise in procurement and financial matters generally and the involvement of that section ensures that decisions on the purchase of tyres and so on will involve more than one section thus reducing the possibility of abuse.

A value for money desk is being established which will be staffed by a person with substantial mechanical knowledge. Prior to ordering tyre replacements, the Garda station concerned will be required to contact this desk to get advice and to obtain an official order number. The tyre companies will supply invoice data in electronic format for inputting into the Garda computer system. This will facilitate the checking of prices and ensure the current registration numbers and mileage are always used. The computer system will then be used to create monthly management reports which will detail tyre consumption as well other reports detailing petrol consumption, maintenance reports etc. It is intended that maintenance reports will be issued at district level so that local superintendents will be aware of all the costs concerning the district fleet.

I can say that tyres are now being purchased more extensively from other suppliers where the prices are lower. It will, however, remain necessary to purchase some specialist tyres from Advance Pitstop as well as standard tyres in some geographical locations, in both cases subject to the controls I have just mentioned. Finally, I should mention that a new tender competition more specifically focused on Garda requirements is being arranged by the GSA.

I am pleased that Mr. Dalton has accepted the findings of the C&AG and that he has already taken action to change procedures.

Can I confirm with the Secretary General that he accepts the fundamentals of the report but suggests that when other factors are taken into consideration a picture other than that in the VFM report will emerge?

Mr. Dalton

Fundamentally the criticisms were valid. There were no systematic checks. Tyres were fitted that were not the tyres that were ordered. It is the case that, according to the report, the Defence Forces were paying lower prices for tyres. These are all valid comments and we must take them on board and accept them.

Was the overseas trip mentioned accepted by the individuals involved prior to the awarding of the contract? This is an important point of clarity that I have not seen addressed in the media or elsewhere.

Mr. Dalton

I have some details of the trips and maybe the best thing is to give them to the Deputy. The trips stretched over a period. I think the initial one may have been after the awarding of the contract but I am not certain, I need to check it. However, the trips were as follows: for four people who travelled to Manchester from 26 to 28 November 1997; for six people who travelled to Marbella in Spain from 4 to 8 October 1998; for five people who travelled to Rome from 26 to 30 September 1999; and for five people who travelled to the Algarve in Portugal from 30 September to 5 October 2000; in other words, a trip every year for different numbers.

They were made mostly after the awarding of the contract. Is that right?

Mr. Dalton

I am not sure about the 1997 trip, but I think they were all made after the contract was awarded.

They were fundamentally golfing trips?

Mr. Dalton

I do not have an indication as to what the people concerned were travelling for. Various reasons have been advanced. This is part of the matter that will be looked at in the course of the internal audit report. The trip to Manchester probably had more to do with football. I think the others were probably - ostensibly, at least - golfing trips, but other reasons may have been advanced.

In relation to your reference to the Office of Public Works, it is important that you have had a response from the company from which we received, after a considerable delay - this is one of the reasons we had such a strong meeting beforehand in private session - a report or document which appears to rebut virtually everything the Comptroller and Auditor General has said. It suggests fundamental questions about his conclusions, whereas you mention more pragmatic variations which you say will emerge at a later stage.

We had a long discussion on this issue before the public meeting. The report, as the Deputy is well aware, was sent in anonymously. It was also clarified that the company had stated that it was not as such a submission to the committee. It is probably wrong to bounce it off Mr. Dalton——

To make matters absolutely clear, he refers to it directly in his submission. It is, therefore, valid to refer to it as it is part of his response.

I know. Did he refer to it as part of the same documents we received on 12 December?

I presume it is the same, but let us clarify the matter. I can display it.

Mr. Dalton

That is the only document I have. We got a copy of it.

This is the document. While it is not signed, it is from the company. It is the same document.

On a point of order, I wish to clarify whether, in the event of our pursuing this line of questioning, the committee will find itself in contempt of court or facing proceedings in the courts as a result of the discussion of a document which was submitted belatedly and not in due order. It may also happen that a discussion will take place during which a company will be identified - I refer to the usual warning given to the committee. I seek clarification of this matter before proceeding with further questioning.

As a committee, we are primarily concerned with the Comptroller and Auditor General's report, the administrative controls and whether there was value for money. That is our concern on which I ask members to concentrate and focus. There is much to discuss within the report. While the Deputy's advice is worthwhile, I ask members to restrict themselves to discussion of the report.

I am putting the question to the Secretary General who stated, on page 1 of his opening statement, "It is the case also of course that the report has been the subject of a response, dated 12 December last, by the company concerned, Advance Pitstop." Is it the case that he shares some of the concerns about Advance Pitstop? What is the meaning of the reference to it?

Mr. Dalton

The position is this, we got a copy of the document sent to the Comptroller and Auditor General directly from the company. It is exactly the same document and also unsigned. I was merely making the point that it was in existence and that the Comptroller and Auditor General would be in a position to comment on it. However, that is entirely a matter for him.

I will ask the Comptroller and Auditor General to comment, but it was specifically stated that the accompanying document to which the Deputy refers was not a submission to the Committee of Public Accounts. That was stated in the covering letter we received, even though it was not signed by a specific person within the company. I ask the Comptroller and Auditor General to come in at this point.

Mr. Purcell

To reiterate something I said in private session, it was my intention, as I indicated in acknowledging receipt of the submission from the company, to review the document, which we have reviewed in great detail. We will be responding in detail to it directly to the company.

Mr. Dalton

To clarify matters, I am not vouching, or anything like it, for the document on which I have no comment to make. I am merely stating as a matter of fact that it is in existence. It is entirely a matter for the Comptroller and Auditor General to decide whether to comment.

We accept that parts of the document have already been in the public domain - in the media - as you know.

Mr. Dalton

Yes.

Mr. Dalton has examined the document and presumably has differences with it.

Mr. Dalton

I have not come here armed with a view on the document. I am merely saying it exists. The only points I wanted to make about the report were not drawn from the document. It was just to say our own internal audit unit identified some areas where, in its view, the document needs to be revised. However, I am also saying that while that is the case, I am not in any way trying to undermine the Comptroller and Auditor General's document or to say it is fundamentally flawed. For example, there is one point on which——

Are you saying there are inaccuracies in the report of the Comptroller and Auditor General which you believe should be revised?

Mr. Dalton

Yes, but they are not so fundamental as to invalidate the thrust of the report.

Of course. What are they, roughly, from your point of view?

Mr. Dalton

Some are still being looked at by the internal audit unit, of which one is the point the Comptroller and Auditor General made about the average mileage for tyres; another is the suggestion - I cannot quote it because I do not know in what part of the document it is contained - that an average mileage of 15,000-20,000 miles might have been more reasonable for Garda cars. The preliminary investigations or inquiries being carried out by the Garda suggest a much lower mileage would apply in the case of the United Kingdom. In other words, if the same fleet had been working in the United Kingdom - on the basis of preliminary inquiries - tyres would have cost a lot more than they cost here, even with all the defects identified, because in the United Kingdom very many more tyres would have been supplied over the period.

I understand a patrol car in the United Kingdom has a tyre change after 8,000-12,000 miles. The report suggests a figure of 15,000-20,000 miles here. Again, I do not want to make a big issue out of this for the simple reason that these are preliminary inquiries, but I am saying that maybe this aspect should be looked at again. Overall, it may be the case that because of the tyre change policy operated, defective and all as it was, taxpayers paid a hell of a lot less for tyres here than they would have had the same cars been used in the United Kingdom.

I wish to clarify that the VFM report is as the Comptroller and Auditor General has presented it. You have accepted its substantial findings. The Comptroller and Auditor General does not have the right to go to a company to find out its points. His analysis was of what was happening in the Department, which is his normal function. There are bound to be little technical aspects where there will be a variation from what the experts say, for example, about mileage, the experience in the United Kingdom and so on. He did not go into those details. We should return to the main thrust and findings of the report on which I ask Deputies to focus.

I am focused on them and trying to draw out the Secretary General on his specific reservations about the Comptroller and Auditor General's report, the parts he believes will have to be revised or revisited. There is the issue of mileage. He also refers to issues to do with ancillary services. Will he explain this in plain English? He places some emphasis, on page 3 of the report, on the internal reports, including that of the Garda, coming to different conclusions about ancillary services. Will he explain what the ancillary services are in the context of the contract and the reason he is, in effect, taking a different position from that contained in the report?

Mr. Dalton

Again, Chairman, I want to emphasise that I am not taking a position that is so different that it undermines the report. However, according to the analysis carried out by the internal audit unit and, principally, the Garda some of the services categorised in the Comptroller and Auditor General's report as ancillary were not ancillary services. Again, I am not saying this to undermine the report. For example, ancillary services in the fitting of tyres would normally be taken to be things like valve changes, tracking and wheel balancing. These are what are described as ancillary services. According to the information I have, some of the services that were classed as ancillary were things like battery changes and other items that do not have any connection with tyres. What is suggested is that some of the expenditure which has been classed as ancillary expenditure is not ancillary expenditure. These are expenses that would have arisen in any case.

The essential point is that batteries are included, therefore there is a potential for overspending on these contracts. The Comptroller and Auditor General's report is flawed to the extent that if batteries are included, the price appears to be higher than it actually is.

Mr. Dalton

That is the point. We will have to wait until I have clear statements from our internal audit unit before I consider it. This is on the basis of analysis to date. None of it affects the fundamental drift of this report which is that tyres were supplied, they were overpriced, the wrong prices were quoted, more expensive tyres were provided and there was no checking. I am not disputing any of that.

That is very good. The other point I wanted to clarify is in relation to the internal audit report. Is it possible that we will get sight of that or will it be included at a later stage in your reports to this committee?

Mr. Dalton

We will supply that. My intention would be to make it available. However, it may be made available with a health warning because some of it will probably cover matters that are covered in the criminal investigation. If the committee wants reports on financial matters, I will supply them. However, as regards the use that might be made of it, until criminal prosecutions are out of the way, it might be necessary to be cautious in case a criminal prosecution is inadvertently thwarted by that process.

At what stage is the internal audit report? Is it nearing completion?

Mr. Dalton

It is. I expect to have it within the next month or two.

Part of that will form the basis of any criminal investigation that is undertaken. Material in it relates to pricing, ancillary services and such issues. Could it be made available to the committee?

Mr. Dalton

Yes, it could. I do not see any reason the report could not be made available to the committee. However, the use that is made of such a report could be relevant when it comes to mounting a criminal prosecution. The defence could claim that it had been prejudiced by the publication of the report. That arises in all cases of criminal proceedings.

I am sure the Chairman and his committee staff will exercise due caution in that regard. On the issue of the trips abroad, I had not seen the reference to the £3,000 made payable to the Garda Boat Club by Advance Pitstop. To what does that refer? We have heard about the golfing and football trips abroad.

Mr. Dalton

It simply is a matter of the information that has been made available to me. I am providing the same information to the committee, that two payments of £3,000 each were made to the Garda Boat Club. I am not suggesting that there is anything improper in that but I am obliged to tell the committee, as a matter of information, that it happened.

The successful tenderer here made a contribution to the boat club.

Mr. Dalton

That is all.

The Garda investigation concluded that it was unacceptable to accept these trips abroad.

Mr. Dalton

That is the conclusion which I am stating objectively now.

Is this the first time you have said this?

Mr. Dalton

The acceptance of any gifts by public servants, where it might give rise to public doubt about the basis for business contracts, is wrong in principle.

You are not suggesting that——

Mr. Dalton

That it is criminally wrong.

Yes, that there was impropriety.

Mr. Dalton

No, I am not suggesting that. It is common practice in the private sector, and those in the public sector know that. It is not unusual for private sector companies to make offers of that kind of hospitality. It is normal. In many cases, people would have accepted that hospitality without any malign intent being involved. People simply accept a gift that is on offer. However, due to the way the world has changed and the way these matters are viewed today, it is unacceptable for public servants to accept gifts of that kind. These are not small gifts, they are substantial.

Are there guidelines in place in relation to the Department and the Garda covering the acceptance of what is essentially free travel or what is called corporate entertainment in the private sector? How does the Department of Justice, Equality and Law Reform reach a conclusion that it was inappropriate in this case? Is it founded on guidelines?

Mr. Dalton

The Department of Finance may be better able to deal with that because it would issue central guidelines on this issue.

Mr. O’Farrell

I am not familiar with them.

There are no guidelines?

Mr. O’Farrell

No, I would not say that. They would not be in the public expenditure area with which I am familiar. I expect there are general guidelines about the acceptance of gifts. I could find that out and send a copy of relevant circulars to the committee.

I am amazed. We have strict guidelines as practising politicians.

Mr. O’Farrell

I am sure there are guidelines but not on my——

It is not on your watch.

Mr. O’Farrell

No, it would be on the personnel side. I will get in contact with those in personnel and forward any circular to the committee.

Mr. J. Purcell

Under the Ethics in Public Office Act, there are designated positions which include senior positions and sensitive positions, particularly those relating to procurement and so on. There are rules laid down regarding acceptance of gifts and the declaration of such gifts, which are similar to those that apply to Members and office holders.

Are the members of the force who accepted these gifts covered by those guidelines?

Mr. Dalton

The superintendent in the transport section would be covered but there are other provisions which applied before the 1997 Act. Under the Prevention of Corruption Acts, 1889 to 1916, where it is proved that money, gifts or other consideration has been received by a person holding an office, remunerated out of the central fund or by moneys provided by the Oireachtas, from a person holding or seeking to obtain a contract from a Department, the same shall be deemed to have been received corruptly unless the contrary is proved. That does not mean it is corrupt but thatprima facie it is corrupt. The Garda Síochána discipline regulations of 1989 and the Garda Code set out the position regarding acceptance of gifts. Except in specified circumstances such as retirement, a member should not accept any gratuity, present, subscription or testimonial without the consent of the Commissioner. The Garda authorities are currently in the process of drawing together all the relevant sections of the code into a single set of guidelines which will incorporate best practice worldwide. This will also be thorough, comprehensive and transparent. When I used the expression “wrong”, I was not talking legally but just as a matter of principle. It is not right because apart from anything else, it shakes public confidence in the system by which contracts are awarded.

Mr. Dalton is just talking about best practice. I wish to clarify whether these guidelines are widely used. Perhaps the assistant commissioner has a view as to whether these guidelines are widely in circulation and people involved in accepting such hospitality were aware of them at the time. Are officers in the purchasing area routinely reminded that these rules apply? Not to pre-empt what the assistant commissioner will say, it seems extraordinary that somebody would lightly accept such hospitality if there was an environment in the force that people were reminded constantly, when they took up their positions, that this kind of hospitality may be deemed inappropriate at a later stage. Were people aware of this?

Mr. Egan

Two issues arise here. Each and every member of the force is issued with the Garda code and regulations. The issues the Deputy raised are covered in them as outlined by the Secretary General. The second issue is that the superintendent of traffic based at transport is subject to the Ethics in Public Office Act as outlined by the Comptroller and Auditor General.

Under the GSA tender conditions there is an item in section 21 which refers to corrupt gifts to persons in the Government service. Perhaps Mr. Murphy will expand on that.

Mr. Murphy

We govern our actions within the Office of Public Works through our own internal circulars on the same basis as outlined in the Ethics in Public Office Act and the Prevention of Corruption Acts. These are issued annually and staff are reminded of their duties under these Acts. The net point as far as the Office of Public Works is concerned is that entertainment of that kind cannot be accepted. We would not accept gifts or inducements of any kind from a supplier. The occasions or the kinds of occasions on which an Office of Public Works official can even go to lunch with a firm that might be in a tendering situation or has a contract with the Office of Public Works are extremely rare.

Thank you for that clarification.

The Comptroller and Auditor General has referred to the data that has been presented as slightly misleading. The Secretary General said that the term slightly misleading gave the wrong impression. Will Mr. Dalton expand on that? The Comptroller and Auditor General referred to the underlying data that was made available for the evaluation of the tender and said that some of this documentation may have been flawed.

Mr. Dalton

Yes, I think I referred to that. That is correct.

So you referred to it as well?

Mr. Dalton

Yes, I did. The point here is that information was sent to the Garda transport section about the price of Advance Pitstop tyres, as it was in the case of other tyres. Calculations were made because a discount applies being a State purchaser and it turned out that these were incorrect. This gave the impression to people at a higher level who were making the decisions that a lower price applied than was actually the case.

Mr. Dalton says that the price was sent to the transport section, but was it sent from Advance Pitstop or elsewhere?

Mr. Dalton

I said earlier that legal proceedings might take place——

Of course, and that is——

Mr. Dalton

That is one of the reasons that prices which were relied upon to be the true prices were not so. The true prices were not properly checked subsequently, which is part of the problem, but that impression was given. I do not suggest that was by Advance Pitstop or any member of the Garda because these are issues which will come up for consideration. I am not saying how it happened, I am just saying it happened.

En route to the transport section.

Mr. Dalton

The bottom line was that the decisions to award the contract to Advance Pitstop were made on the basis of tyre prices which were not the actual prices being charged by Advance Pitstop. How that came about is the subject of a criminal investigation.

That is an internal aspect which we cannot go into here for obvious reasons.

Mr. Dalton

Yes.

That really is the nub of the matter. When one examines Mr. Dalton's opening statement one sees that the full picture cannot emerge in terms of the value gained and we still have an open question as to whether it was because we do not know how the prices were fed through the contract and what has been clawed back. Is that correct?

Mr. Dalton

What I mean by the full picture not emerging is that, in one sense, the full picture might be worse and in another it might not be so bad. It might be worse if what turned out happened to be criminal practice. If it turns out that it was administrative inefficiency, that is something that can happen in any organisation and something we are addressing. The possibility of criminality cannot be ruled out in this case at this point. It may turn out to be better because, inadvertently or otherwise, the taxpayers are actually paying less for tyres than they should if proper tyre change policies were in place.

There are three distinct scenarios. There could be a criminal aspect, there could be what is known in the vernacular as an administrative cock-up or it could be that inadvertently we got better prices.

Mr. Dalton

No, not better prices, but better value for tyres in the sense that tyres were on cars longer than they should have been.

That is health and safety——

Mr. Dalton

We have had no case of an accident involving gardaí where tyres were the problem.

The Comptroller and Auditor General may find differently later in a more detailed analysis or we may find in comparison with the British that we have the international best practice in terms of tyres, or we may find that we are not changing tyres often enough or not spending enough on them. It does not relate to the issues in the report.

It appears the report is incomplete because it is time based. Is that correct?

I would like the Comptroller and Auditor General to come in on the points that were made on the report.

Mr. Purcell

I cannot totally accept the argument that we may end up spending less than we should have. We may do so because of a particular policy or lack of policy as the case may be. What is clear to me is that we have overpaid, but whether that is £100,000 or £200,000 more than we should have, I do not know. We have also overpaid an undetermined amount where we have used a particular supplier as against a cheaper supplier. I take the point of the Accounting Officer that in looking at it in the round and making comparisons with other jurisdictions we may be spending less on tyres - we should be paying even less if we did things right.

Mr. Dalton

I accept that. What I am saying is that we paid too much for what we got. The point is did we get enough?

Is it fair to conclude from the internal audit report that the Department has decided, in conjunction with the Garda Síochána authorities and senior management, that our tyres cost less per mile than those in the UK? Is that the nub of what Mr. Dalton has stated.

Mr. Dalton

No, what I am saying is that we got more miles from tyres which cost too much.

We are getting better value for money than the UK

Mr. Dalton

Overall, not because we paid less for the tyres but because we had them on the cars longer than we possibly should have.

I hope they are not all going around on bald tyres at this stage. What kind of advertisement is placed or does one tender for products such as tyres and other material for Departments?

Mr. Dalton

The GSA does that.

Mr. Murphy

I wish to pick up on that question. The GSA has the job of supplying tyres and many other requirements such as the paper the members have in front of them. Most of these supplies are made through drawdown contracts. The GSA is part of the Office of Public Works and it tenders a range of products from tyres to cars, which is done through the official journal, the EU journal, the Irish newspapers and so on. It is a competitive tender process in the normal way. At the end of the process we can tell the customer, who is the consumer of these products, the price he or she should pay and the suppliers to go to. That is done regularly for all supplies.

Was that done in this case? I presume the usual procedures applied.

Mr. Murphy

Yes. We put an advertisement in the official journal and in the newspapers in the normal way for a competitive tendering process.

Was the quality of the materials to be supplied specified?

Mr. Murphy

Yes, there was a set of criteria referring to the various types of tyres and so on and the prices were expressed to us in terms of a discount on a set of base prices.

I presume the normal procedure is that the supplier would have regard to the information published with the tender notice. Is that correct?

Mr. Murphy

Yes, of course.

It then comes to a conclusion in respect of costs and so on?

Mr. Murphy

Yes.

Would there then be an opportunity to evaluate one against the other?

Mr. Murphy

Exactly. However, in this case - this applies to some of the drawdowns - we were approving suppliers - plural. In other words we were proving certain tenderers to be capable of supplying tyres to a particular standard and at a particular price.

I would like to hear more about that because I would have presumed that the manufacturer would be the only person qualified, strictly speaking, to identify the quality of a particular tyre. After all, the supplier buys from the manufacturer. I am a little concerned about this. Perhaps Mr. Murphy will tell us a little more about it because I have a follow-up question about the degree to which the procedure is being vetted on an ongoing basis. I presume there is also a checking and balancing system - not on the wheels of the cars, of course.

Mr. Murphy

In the case of the tender competition, it was open to anyone to tender for the supply of tyres. Seven companies, whose names I do not have in front of me, tendered and were able to supply tyres to a particular standard. We have continuous vetting - in this case the vetting process was that the prices were notified to the customers who were going to use the suppliers and we had to be notified of any change in these prices. The system worked perfectly well for the Department of Defence and for the Revenue Commissioners, and we have had no problems whatsoever with the operation of this contract with these clients.

Are the contracts, supplies or costs vetted and evaluated on an ongoing basis for all three areas - the Revenue Commissioners, the Department of Defence and the Garda?

For this contract, because it is one of the first drawdowns we have had, the vetting has been on a more sporadic basis. Virtually all our supplies are now on drawdown and the vetting arrangements being put in place will be on a much more regular basis. I can confirm that the prices we are getting as of today, for example, under these contracts are competitive.

Has Mr. Martin any difficulty with the prices charged at any time in the course of the period covered by the Comptroller and Auditor General's report?

No, the prices have been very keen.

What is meant by very keen? For example, the Comptroller and Auditor General's report seems to raise some questions about possible costs to the taxpayer. Does Mr. Martin see any difference in the three Departments? Are they following the normal patterns expected?

Mr. Murphy

Without answering for the Comptroller and Auditor General, I think he was making the point that there was a difference in price from the different suppliers and that it would have been possible, in certain cases, for the Garda to have obtained the tyres more cheaply from a supplier other than Advance Pitstop. I think that is the point that was being made, not that the tyres were expensive, which they are not.

Will Mr. Martin explain how he can say that he placed a public advertisement in the newspaper to tender for the fitting or supplying of a particular product and then say that the Comptroller and Auditor General suggests that it could be possible to buy the product more cheaply elsewhere, after the tendering process had taken place? Can I presume that there is some comparison between Departments by his Department in the normal course of events, for the sake of checks and balances?

Mr. Murphy

I should explain that the reason for having a list of approved suppliers in this case is that the demand for these tyres will not be in one location, it will be around the country.

In the original tender, the actual cost does not arise.

Mr. Murphy

It does. There is a starting price for all these suppliers.

Is there a stopping price?

Mr. Murphy

The starting price cannot be varied without notification to the Government supplies agency.

Following from that, any change or variation between Departments would be automatically spotted by the agency which handles the tenders in the first place. Is that true?

Mr. Murphy

No, we did not keep that check. At that stage - it was one of the first of the drawdown contracts - we left it to the purchasing officers in the client Departments to make sure that the prices we had agreed were the ones that were being applied.

The ones that were tendered for in the first place?

Mr. Murphy

Absolutely. In the case of Revenue and the Department of Defence, that worked perfectly well for us.

It was on a supply-only and bulk basis, was it not?

That was partly the case, yes.

One must consider the myriad of Garda stations around the country and the locations to which you refer. You are not comparing like with like when you speak of perfection.

Mr. Murphy

The two other clients were capable of looking at the list of suppliers and choosing where the price benefit was best for them.

I am a little at a loss. I do not fully understand. It seems there were three Departments to be supplied with much the same product, all of which products were tendered for in the first instance and all of whose suppliers quoted a particular baseline price for supply, fitting and so on, yet it appears from what Mr. Martin is saying that one Department ran ahead of the other in terms of unit cost.

This is the nub of the problem as far as the Garda is concerned, but the Secretary General has just said that there is an issue concerning how the prices were notified within the Garda Síochána.

If this had not come into the public arena we might still be ignorant of it. If we had relied on Mr. Martin's vetting procedure we might not know that there was a difference and that one graph was rising dramatically while the other two were remaining firm.

I accept that and that is what I have said, that we did not have a central vetting system, having notified prices and discounts.

When was it decided to put in place a central vetting system?

When we went for drawdown contracts for virtually all our supplies in addition to tyres.

When was that?

In the past two or three years. In other words, what has been seen over the past two or three years is the abandonment of Government warehousing. The Deputy may remember the old stationery office. All those warehouses are gone and we get supplies of virtually all our material directly from the manufacturers or from the suppliers.

The glitch in the system that could have allowed something like this to happen unnoticed has been attended to.

Mr. Murphy

A central glitch has certainly been attended to.

What do you mean by central glitch? Either it is a glitch or it is not. What is the difference between a central glitch and an ordinary glitch?

Mr. Murphy

The ordinary glitch is that I would expect the local purchasing officer to compare the price on his invoice with the prices notified by us.

Why would you expect him to do that if he had not been doing it before?

Mr. Murphy

Because he is paying for it.

We also paid for it before. At least somebody paid for it.

Mr. Murphy

That is true but in this case the payment goes from the Garda direct to the suppliers. In the past the Office of Public Works paid for most items, stored them and then charged them out to various Departments.

Was that a better idea?

Mr. Murphy

It certainly was not. It led to much more waste, as the Comptroller and Auditor General knows. The present system is a much more efficient and a more cost-effective one.

In regard to the Government Supplies Agency, when you looked for a tender in 1997-98, you categorised 6,840 tyres. How many were for commercial vehicles, cars, four by four vehicles and so on? Did you not have an annualised tendering policy or did you just accept that you got the tender, handed it over to the Garda and left it to the Garda to implement afterwards, regardless of whether it ranad infinitum. In other words, would it not be normal policy that you would look for a tender every first or second year?

Mr. Murphy

Yes, I fully accept that. We were happy, on the information we had, that the prices were reasonable because we had no notification.

Who was giving you the information?

Mr. Murphy

On the basis of our first tendering in 1997.

Mr. Murphy

There was no notification of any price increase since. Of course we were happy with the price that was in place, but I take your point fully.

There was a price increase. Is that not the whole purpose of the report?

Mr. Murphy

It was not notified to us. I do not want to go into the criminal aspect of this. It is not our business here. If a price increase was not notified to us, none should have been paid.

Would it be protocol to notify you as well as the Garda authorities.

Mr. Murphy

It is not so much protocol, it is part of the contract.

I was going to conclude on the aspect referred to by the Chairman. There is still a problem in that if someone from Revenue, the Defence Forces and the Garda decides to get a set of tyres and drives up to a supplier, which has been approved previously by tender and has the imprimatur of your Department, what procedures are in operation to ensure that each is treated according to the rules and without fear or favour? I am not sure that it has been adequately explained .

Mr. Murphy

We will do that now. The Chairman raised this point. We will go out to tender for tyres again, and we have said this because we have to renew this particular process.

How often?

Mr. Murphy

We are going to do it now. The advertisement will be in the EU journal before the end of this month.

Is it normal to do that once a year, once a week, once every two years or once every three years?

Mr. Murphy

We are instituting a two year contract period. During the two year period we will go for a fixed price, not simply a base-line price with variations. The new tender will be a fixed price for two years and the system that we will have in place - it is in place for all our drawdowns now - is that when the Garda or anyone else orders something, a copy of that order and the response by the supplying agency is sent to us. We monitor the prices in addition to any monitoring that is done by the purchasing officer in the client Department.

When did that procedure start?

Mr. Murphy

It is in place for the drawdowns that we have.

It has not started yet.

Mr. Murphy

No, it is in place for the drawdowns that we have other than tyres.

It has not been applied heretofore and is about to be applied?

Mr. Murphy

On the tyre contract.

It applies to other contracts.

Mr. Murphy

It does, of course, yes.

Was there any particular reason it was more beneficial not to have it apply to the tyre contract?

Mr. Murphy

The tyre contract was one of the first, if not the first, in which we had to a drawdown contract. I would plead that we were starting on the drawdown road at that point.

One would assume that bulk-buying is obviously beneficial to any Department or agency, private or public. Is that correct?

Mr. Murphy

Yes. What we offer through this draw-down form of contract is the benefit of bulk buying, cheaper prices. We also look after the compliances centrally. In other words, the Office of Public Works looks after EU tendering rules and domestic tendering rules. Every Department does not have to go through the same process. It speeds up the whole thing.

The obvious benefit from the point of view of the Exchequer would be that the supplier provides storage space and at all times has a ready supply on tap to be supplied to the State at an agreed price per unit.

Mr. Murphy

That is absolutely true. In fact the surrender of storage space by the Office of Public Works has saved us about £25 million in storage space alone.

What is wrong with having an annual tendering process?

Mr. Murphy

I just feel that it is slightly short. We could do it annually but that is a very short period. I would prefer to guarantee supply to the Garda and the Army over a longer period at a known price.

On the question of the use of tyres, how long the tyre is left on the vehicle and whether a garda might suggest that his tyres need to be changed - I note previous references to the situation - what is the optimum in terms of safety on the road and so on? I presume there are international standards. It is not just something that you can pluck off the top of your head. There must be internationally laid down standards.

Mr. Dalton

I do not have a figure. All I am saying is that if the amount of miles which the Garda got out of tyres is compared with the amount of miles which they get out of tyres in the UK, the Garda got a lot more miles. That does not mean that the UK is right, nor that the Garda is right. It just means that there is a substantial difference on the basis of preliminary investigations. The point I was making is that from the point of view of Jack Citizen looking at all this there is no doubting what the Comptroller and Auditor General says. Too much was paid for the tyres. If we followed the UK practice the taxpayer might end up paying a lot more for tyres. Admittedly, more tyres were purchased but the overall cost to the taxpayer might be greater. That is the only point I am making. It is not an issue that is addressed in the Comptroller and Auditor General's report but it is a valid consideration.

You paid too much for too few tyres?

Mr. Dalton

Absolutely.

The corollary of that is that if sufficient tyres were supplied at the higher price it would not necessarily give the taxpayer an injection of comfort.

Mr. Dalton

Absolutely not.

There are two sides to that argument. I would not presume to advise an eminent person such as Mr. Dalton, but it would be a difficult defence.

Mr. Dalton

I agree.

In the period 1998 to 2000 there was a significant drift in both the size and the performance rating of tyres bought from a particular supplier. How did the change in the size and performance of the tyres happen? I presume they were all cross-ply tyres.

Mr. Dalton

The size of the tyres has to do with higher performance cars. Apparently, generally speaking, they need larger, better tyres. The drift in terms of the quality of tyres provided is a core issue in the Comptroller and Auditor General's report. Why were higher quality tyres provided than the Garda sought or needed? That is one of the issues that is the subject of a criminal investigation.

Yes. One of the things I noticed in the report is that there was a new supply of vehicles. When was the last year there was a new supply of vehicles?

Mr. Dalton

There is a new supply of vehicles every year.

Mr. Dalton

Three hundred or 400, I do not have a precise figure.

Is it true that the first set of tyres on a vehicle will last longer than the second and third sets?

Mr. Dalton

I am advised that the first set normally lasts longer.

That is right. What is the normal life expectancy of the first set of tyres on an ordinary car, driven hard and with good treads remaining at the end?

Mr. Dalton

I do not know exactly. Perhaps the Comptroller and Auditor General knows. Some 30,000 miles was a suggestion, or perhaps it was lower than that.

Mr. Purcell

The term "driven hard" makes it difficult to quantify. I have already had my fingers burnt in this area so I will leave it to the experts.

I suggest that there is a huge difference in the performance of tyres.

Mr. Dalton

Yes.

There is a massive difference. I presume that has been borne in mind by the people who vet tenders and it is generally known what is the performance. It is also generally known that different vehicles have vastly different performance in terms of the number of miles per set of tyres.

Mr. Dalton

I have been given a table, which might be useful, on the mileage expected in the UK from different cars. The top of the range car mentioned is a Volvo T5 estate with 8,000 miles average, whereas a Honda Civic CD is 25,000 miles, so the Deputy is right, there is a big variation. It depends on the power and the type of car one is talking about.

I cannot understand how anyone can get the tread off a tyre, if it is good quality, at 8,000 miles.

Mr. Dalton

I suppose it depends on who is driving it and the circumstances in which they drive.

I do not care what way they drive. I have driven many different cars since 1964, doing an average of 60,000 miles a year and I cannot understand how anyone can get the treads off a tyre in 8,000 miles if it is a good quality tyre. I do not care what country it is in.

Mr. Dalton

I am glad to say that this is one for the British police to explain.

Tell us more about our own situation. We must have corresponding figures. Let us move across to this side of the water.

Mr. Dalton

Our average is about 12,000 miles. That is the point I am making. The average here is higher - 12,000 to 16,000 - as against the UK average. I am not saying that they are right and we are wrong orvice versa. It is simply a fact that there is a variation.

I think it is possible to get 30,000 miles from a set of good quality tyres as the first set on a vehicle. What is the average mileage of a Garda car in a year?

Mr. Dalton

I do not have an overall average. It depends on the type of car. There are different cars such as patrol cars and special branch cars. Some have very high mileage, others do not. The higher mileage cars would be 40,000 to 50,000 per year but I do not have an overall average.

The average person driving ordinary mileage in an ordinary private car would drive more than that. It is not impossible for Members of the Houses to drive 60,000, 65,000 or even 70,000 miles in a year.

Mr. Dalton

I will have to get a figure.

That would be of some interest. To evaluate in its entirety what was happening at this time and to ensure that we are in possession of the full knowledge, one would need to know the average number of miles per vehicle. The same applies to the Revenue Commissioners and the Defence Forces. One can make many comparisons. For example, if one has a particular brand name tyre on a vehicle of a particular vintage for a period of time, one must get reasonably consistent wear, usage and value for that vehicle when that tyre goes onto a vehicle in the Revenue Commissioners or the Defence Forces. It is not sufficient to suggest that there will be particular vehicles that will have to drive on footpaths and cross kerbs and so on. That will reduce average wear but there must be some general area within which one can operate.

When did the question of payments to the Garda Boat Club come to the attention of the authorities?

Mr. Dalton

I only discovered it when the internal auditor reported it to me, which was a few weeks ago. I do not think we ever knew that there was an issue to be raised in relation to tyres until we saw the newspaper article. We did not know about trips abroad. We did not know anything about any of that. A person probably spoke to a reporter and that is how it all came out. We did not know about it before that. Since that time, we have known about it and have been investigating it. That is how the auditor——

Something that was always a matter of contention when I was on a health board was that we must have the economies of scale associated with bulk buying, and suppliers who did not abide by this were not used. Is the normal process not to ensure that a supplier which has a substantial contract with any Department, private agency or health board is not giving or receiving special favours? The Defence Forces could have been given a contribution for some recreational facilities. Maybe something else happened that we do not know about. What vetting procedure exists within the Department to ensure it is not embarrassed by a newspaper article which constitutes a problem?

Mr. Dalton

The purpose of the internal audit unit is to check on things like that. The problem is that the number of contracts is enormous and the number of issues one can check in any year is highly limited. The internal audit unit has picked up a number of things that have been wrong over the years. It is part of the purpose of the office to check these things. I could not say with my hand on my heart that there are no issues in the Garda Síochána, the prisons or elsewhere. It is impossible to say with the thousands of contracts that are in place.

There is a checking system in place. If we had many more people in place to check these things we would pick up faster. It is not a question of nobody caring, it is a question of having the resources to look at the existing contracts. This particular contract was for about £3.7 million but there are much larger contracts in the prisons and the Garda Síochána. I am not saying the size of the contract means one should not check it but we did not get around to this one and it was not checked. We were depending too much on the people directly involved to check basic things, for example, that the price you are paying is the price you are contracted to pay. On top of the fact that there are no checks, if it turns out there is an element of criminality, no matter what system one has, these things will tend to happen. I accept that checking would have picked it up faster but it may be that there was an element of criminality involved in this case.

Does Mr. Dalton think that, for instance, he can detect irregularities or glitches in the system without reference from outside, like a newspaper notice or a debate?

Mr. Dalton

All the time the system of checking in all these contracts is improving, mainly because of technology. For example, in the case of tyres - that is not the only transport item - much of the information is computerised so it will come out more quickly if something is going wrong. I would be foolish to say there is no contract anywhere else which is not going wrong.

Are we sure that the tendering system which exists and procedures such as the drawdown system which is now operational apply to all Departments for all products that are used and that these procedures will identify all types of irregularities?

Mr. Murphy

It will be a great addition to have the central checking we are introducing, which will be in addition to any checking that the purchasing officer in the Garda or the Army is doing locally. There will be a double look at everything that is happening.

To hark back to something the Deputy asked earlier, the question of technical advice on the kinds of tyres and so on, that advice will be supplied from March onwards from the GSA. The tender will be out in the next few days, looking for an adviser on transport matters so that we will be able to give the advice people want on things like tyres and vehicles. The kinds of organisations that can meet that demand are the AA, the RAC or any of the big motor organisations.

Mr. Dalton

I wish to comment on the question I was asked about systems changing. In the justice system, for example, the annual amount of money spent is about £1.3 billion. It is only in recent years in the public service generally that the idea has caught on that professional experts are needed to handle expenditure of that kind. It is required that they be present. It is only in recent years, for example, that there has been a person in the position of director of finance in the Garda Síochána. All that is fairly new and this is possibly surprising but it is only in recent times that that kind of expertise has been brought into the public service in a wider way. That will be relevant in terms of checks and accountable finance in the future.

I will address my question to Assistant Commissioner Egan. Did the Garda give full and adequate co-operation to the Comptroller and Auditor General in compiling this report?

Mr. Egan

I can answer that. I had numerous meetings at the early stages and all the documentation and facilities required were made available to him.

Mr. J. Purcell

I can confirm that Assistant Commissioner Egan was involved in a very active and visible way in liaising and that the new director of finance has also been of great assistance in this matter. I said in my opening remarks that the fact that there were simultaneous Garda investigations of some of the issues which are referred to in the report circumscribed the type of access we would normally have, but that is understandable.

One of the things of which the committee will be aware is that it is normal, before I issue a report, to give a copy of that report, and even before that, drafts of certain sections of a report, through the Accounting Officer, to the Department and thence to the Garda. I went through that process. That is why I was somewhat surprised, after the report was published, that certain problems with some of the findings emerged. However, I understand from listening to the Accounting Officer that the problem is rather that the level of analysis was not finalised or was not perhaps as far advanced as our own work at the time. That must have been the reason these matters were not brought to my attention prior to the publication of the report. However, I reiterate what the assistant commissioner said, on a day-to-day basis there was excellent co-operation.

One of the conclusions in the Comptroller and Auditor General's report, on page 37, was that in regard to the purchase of tyres - the parameters for the Department of Defence, which fits its own tyres, may be different due to their being supplied in bulk - the Department should look for a tender, not alone for supply but for supply and fit for Garda cars. Is there any merit in this?

Mr. Murphy

We are going slightly beyond that. I have the details of the new tender that will go out shortly and we will be looking for a number of prices within that tender. There will be supply of tyres only and there will also be supply, fit and balance - the full package. Finally, people will be allowed to price for other services that might be available. We will have a complete, comprehensive package.

I presume the number of tyres purchased by the Garda has increased dramatically compared to the quantities specified in the tender process for 1997-98.

Mr. Murphy

It has increased but we need to get a better handle on the extent to which it has increased because there is some debate within the papers we have about what that increase is. However, we will get that settled before we go out to tender.

We welcome the fact that Mr. Dalton has already taken remedial action within the Department. A process has been put in place whereby much responsibility has been taken out of the transport section for processing, certification and invoicing. He spoke of a value for money desk. The processing, certification and payment of invoices from Advance Pitstop have been transferred to the finance directorate at Garda headquarters. Would the same parameters apply to other companies which may tender for tyres? Does it apply to everyone?

Mr. Dalton

It will apply to all.

The responsibility of the finance section and the value for money desk obviously relate to tyres. Substantial mechanical knowledge was mentioned. Do you see that expanding into other areas within the Department?

Mr. Dalton

Yes, I can. The basic idea is to try to improve the quality of information we have about material being supplied, to ensure that the people at the coalface buttressing these things know what they are doing and what they are supposed to be paying and to ensure that there is checking right through the system. The great value of the support is that it alerted us to the need for more controls on the purchasing of large amounts of expensive equipment.

Can you see civilians with professional expertise filling a share of these positions?

Mr. Dalton

Yes, I think so. That is the way of the future. As I said, it is only in recent years that the idea of having civilians with expertise in senior positions has become more common in the public service. It applies in the case of prisons, for example, with us it applies in the case of the Garda Síochána and it will apply in other areas as well. That is the way forward.

All members have spoken. We thank you for your frankness, Mr. Murphy. We have had a far-ranging discussion on this issue. You have promised that you will circulate a copy of your internal audit to the members. As I mentioned earlier, we will be returning to the other Votes and will possibly return to the Justice, Equality and Law Reform Vote some time in March. It will give us a chance, as the internal audit will have been concluded, to return to this subject and see how the pieces of the jigsaw fit, comparing the internal audit and the Comptroller and Auditor General's report. Our next meeting will be on 15 January 2002 and we will deal with the 2000 report of the Comptroller and Auditor General and Appropriation Accounts on the office of the Minister for Education and Science - Vote 26, First-Level Education, Vote 27, Second-Level and Further Education, Vote 28 - Third Level and Further Education and Vote 29.

The witnesses withdrew.

The committee adjourned at 5 p.m. until 2 p.m. on Tuesday, 15 January 2002.