COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 1 Apr 2004

2002 Annual Report of the Comptroller and Auditor General and Appropriation Accounts.

Vote 35 — Department of Arts, Sport and Tourism.

Chairman

Members should be aware that they do not enjoy absolute privilege and be apprised as follows. Witnesses' attention is drawn to the fact that, on 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act 1997, granting certain rights to persons identified in the course of a committee's proceedings, came into force. Those rights include the right to give evidence, to produce or send documents to the committee, the right to appear before the committee, either in person or through a representative, the right to make a written and oral submission, the right to request a committee to direct the attendance of witnesses and the production of documents, and the right to cross-examine witnesses. For the most part, those rights may only be exercised with the consent of the committee. Persons being invited before the committee are made aware of those rights, and any person identified in the course of proceedings who is not present may have to be made aware of those rights and provided with a transcript of the relevant part of the committee's proceedings if the committee considers it appropriate in the interests of justice.

Notwithstanding the provisions of that legislation, I remind members of the long-standing parliamentary practice that members 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. Members are also reminded of the provision in Standing Order 156 that the committee should also 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 policies.

I apologise for the delay this morning and welcome everyone. I will ask Mr. Michael Foley, the acting chief executive of Bord na gCon, to introduce his officials.

Mr. Michael Foley

I am the financial controller for Bord na gCon, as well as acting chief executive in the absence of a permanent appointment. On my right is Ms Deirdre Roche, who is senior accountant for Bord na gCon. On my left is Mr. Daniel O'Leary, the head of regulation.

Mr. Philip Furlong

I am Secretary General of the Department of Arts, Sport and Tourism. On my right I have Mr. Joe Timbs, the financial officer of the Department, and Mr. Con Haugh, the assistant secretary. On my left is Mr. Barry Murphy, who deals with the arts side of the Department.

Mr. Dermot Quigley

I am from the public expenditure division of the Department of Finance. On my left is my colleague, Mr. Dave Hurley, who is on the organisation management and training side of the Department.

Chairman

Thank you, Mr. Quigley. I call on Mr. Purcell to introduce the Bord na gCon accounts.

Mr. John Purcell

Bord na gCon, which was established pursuant to legislation passed in 1958, is the body responsible for the control and development of the greyhound industry in Ireland. It has wide powers to regulate all aspects of greyhound racing including the licensing of tracks, the issuing of permits to officials, bookmakers and trainers and the implementation of the rules of racing. The board has licensed a total of 17 tracks in the State, nine of which it owns and controls. The remainder are owned and operated by private enterprise.

The board operates tote facilities at all greyhound tracks and applies an on-course levy on all bookmaker betting. The net revenue generated by these activities enables the board to contribute to prize money and to provide grant assistance to the industry. In the period 1999 to 2001 it sold off some assets to fund investment in the industry. These moneys are supplemented by the Exchequer from a proportion of the excise duty on off-course betting, which is channelled through the horse and greyhound racing fund, established by an Act passed in 2001. In this regard the State has provided €18.1 million in 2001, €13.6 million in 2002 and €12.8 million last year. In recent years the board has developed facilities at its own tracks to a high standard and grant-aided improvements to private tracks. This, together with innovative marketing, has led to an upsurge in attendances and increases in betting turnover. Much higher prize money has broadened the base of greyhound ownership, with positive repercussions for breeders.

The corporate structure to support these activities is Bord na gCon, which is headquartered in Limerick, and subsidiary companies which manage the nine tracks operated by the board. That includes Shelbourne Park and Harold's Cross in Dublin as well as Cork. There is also a subsidiary company called Abergrove Limited, which was used in connection with the development of the Cork track. With the passing of the 2001 Act, I took over responsibility for the audit of these accounts, from private sector auditors. As a consequence, Bord na gCon came under the remit of this committee.

The 2002 accounts before the committee today comprise the group profit and loss account, balance sheet and cash flow statement. The set also includes the balance sheet for Bord na gCon. Separate accounts for each of the subsidiaries are not included, but the results are consolidated in the group accounts. The committee will note that I was in a position to give a clear audit report on the 2002 accounts, as was the case for 2001. That is not to say that it was all plain sailing. In performing my audit I take into account the special considerations which attach to State bodies as regards their management and operations. This includes adherence to a code of corporate governance laid down by the Minister for Finance and in particular provisions relating to procurement and taxation requirements. We came upon some problems in this regard on the audits and we communicated our concerns to the board in management letters and at meetings. The board accepted matters needed to be tightened up and has indicated that revised procedures have been put in place. We are reviewing progress as part of our current audit of the board's accounts. That is all I wish to say for now.

Chairman

Thank you, Mr. Purcell. I call on Mr. Foley to make an opening statement.

Mr. Michael Foley

Following the advice of the report of the advisory committee on the greyhound industry in 1952, a separate statutory body to run and control racing was established under the Greyhound Industry Act. This effectively transferred control of greyhound racing from the Irish Coursing Club to the newly established Bord na gCon. The Act empowered the board to establish a management structure to control, regulate and develop the industry. The board's responsibilities have expanded through the acquisition of one part-owned and eight wholly-owned subsidiaries. The industry continues to provide important full-time and part-time employment, particularly in rural communities, where the racing and breeding of greyhounds provides important supplementary income. It is estimated that it employs some 3,000 persons and generates annual revenues exceeding €250 million.

The industry experienced significant decline between 1987 and 1995. The appointment of Mr. Paschal Taggart as chairman heralded a revitalised focus and rejuvenation. The key statistics testify to that rejuvenation. In 1995 totalisator betting was €6.5 million. In 2004 it is estimated to exceed €50 million. Bookmaker betting was €22.2 million in 1995 and is expected to achieve €90 million in the current year. Attendances in 1995 were 586,000. We expect 1.4 million in 2004. Sponsorship was approximately €500,000 in 1995. In 2004 it will be €1.3 million. The redistribution of prize money to owners was €2.4 million in 1995 and is expected to be approximately €9.5 million in 2004.

The key elements of the strategic redevelopment of the industry involved a number of factors: the redevelopment of modern luxurious facilities; the provision of high quality dining for which Dobbins at the Cross and Kingsley at Curraheen Park are noted, with bookings up to three months in advance; the focus on achieving cash flow growth through totalisator betting; maintaining a price competitive advantage as a night-time entertainment venue; profiling and branding the industry on completion of the capital development programme and the introduction of new betting products and technologies.

The funding of the redevelopment programme was principally achieved through the sweating of assets where planning was obtained for 80 houses in Harold's Cross and 100 apartments in Shelbourne Park, which generated in excess of €22 million. The sale of Western Road, Cork generated a further €3.4 million. The redevelopment programme was supported through Government capital contributions. The Horse and Greyhound Act 2001 provided a direct correlation between off-course bookmakers and the funding of horse and greyhound racing industries. This funding arrangement is consistent with how industries are funded in other jurisdictions.

The capital development programme has seen the completion of the Kingdom greyhound stadium in Tralee in 1997 at a cost of €4 million; Thurles, 1998 — €1.75 million; Curraheen Park, 2000 — €11 million; Harold's Cross, Dublin, 2000 — €10 million; Shelbourne Park, Dublin, 2001 — €13 million; Kilcohan Park, Waterford, 2002 — €3.5 million; Mullingar, 2002 — €4 million; Newbridge, 2002 — €3.4 million; Galway, 2003 — €6 million; Lifford, 2003 — €11 million; and Dundalk, 2003 — €11million.

As regards Dundalk and Lifford, the board put in approximately €5 million of its own funds and the balance was invested by private enterprise. As a regulatory body the board's focus has been orientated towards ensuring the integrity of the sport and improving animal welfare and health. It has standardised its racing surfaces to sand and seen enhancements in traps, hare and camera systems. It employs veterinary professionals at all race meetings. The board operates a specific control department which employs 25 full-time staff and a number of part-time employees are involved in sample testing. It operates a laboratory with the highest international accreditation, ISO 7025, under the direction of Dr. Jim Healy. The sampling of greyhound racing has increased by 246% since 1999.

The board has established a retired greyhound trust with a specific focus on improving animal welfare, which receives funding of approximately €250,000 on an annual basis. This trust involves joint representation from the Irish Greyhound Owners and Breeders Federation and liaises closely with representative welfare bodies under the direction of the Dogs Trust and representative veterinary associations. The board has recognised the potential for expanding its product base and introduced intertrack betting in 2001. In 2004 this product will generate approximately €7 million in turnover growth and result in a net contribution of around €750,000. It will continue to seek alternative markets for its product.

In 2003 the board introduced a website which has experienced over 200,000 hits per day on average. This allows for access to all race history, extended pedigree searches and all forthcoming race cards. It provides a platform for the introduction of a free of charge text messaging service to advise interested parties of race entries and results. Totalisator growth in 2004 has increased by 46% on 2003 levels. This is attributed to core turnover at existing facilities of approximately 10%, intertrack growth and new facilities at Dundalk, Lifford and Galway.

The board's primary focus will continue to be focused on ensuring the integrity of the industry while the confidence of the industry is reflected in the strong betting growth. The completion of the board's capital development programme will involve new facilities at Limerick, Enniscorthy and Kilkenny and further improvements at Thurles and Clonmel. In the past, greyhound racing was perceived as the poor relation of horse racing. The board's ambitious plans are that its attendances at 1.4 million and on-course totalisator betting of €50 million will exceed that of the horse racing industry in 2004.

Chairman

Mr. Foley, can we publish your statement?

Mr. Foley

Yes.

Chairman

In the last three years, €40 million has been invested by the State while the sale of assets would be approximately €25 million, giving a total of €65 million. The current level of borrowing in the board's accounts is huge and it appears to be increasing. The figures for 2002 indicate a borrowing of €5 million. Could Mr. Foley explain the cash flow, especially given that the level of borrowing and the indebtedness of the company is increasing?

Mr. Foley

The board has expended over €75 million on the capital development programme to date. As the Chairman has said, it has been part-funded by two factors. These are, first, the sweating of its own assets, which has generated €25 million, with the balance coming from Government funds.

On the level of the debt, debt is a normal part of any commercial enterprise and business. The most important thing with debt is the ability of a group to repay it. The board's borrowing has been approved by the Department of Arts, Sport and Tourism and the Department of Finance. We are happy that the level of debt is reasonable. It will grow further in 2003 and 2004 but we anticipate it will reduce from 2005 or 2006 onwards once the full capital development programme is completed.

Chairman

Has the board got the figure for 2003?

Mr. Foley

The total level of bank debt at the end of 2003 was €12 million. We anticipate that it will increase up to around €17 million by 2005 following which it will reduce significantly between 2005 and 2008. We anticipate that by 2009 the board will be in a positive cash position.

Chairman

Given the profitability of the board and that State funding finishes on December 2004, with no commitment to continue with a State subvention beyond 2004, how can the board be so reassured that it can pay the bank borrowings?

Mr. Foley

We have secured the debt against assets of the group. There is an anticipation and expectation that the current existing funding arrangements will continue. That is a matter for Government, but it has approved the level of borrowing that the board anticipates it will incur.

Chairman

The board's internal auditor conducted a review of the effectiveness of the internal control system. As the findings are not disclosed in the board's financial statements, what was the auditor's findings?

Mr. Foley

The board came under the code of corporate governance in 2001. It appointed a full time internal auditor to monitor compliance with the code. There were certain elements which the internal auditor and the external auditor would have addressed to us internally. We have addressed all of those matters in the meantime. On the 2003 issues that closed with that audit, it is fair to say that the Comptroller and Auditor General's office would be satisfied that any of the deficiencies it had previously noted to the board would have been largely corrected by 2003.

Chairman

Was there a published report of the internal audit and, if so, is it available?

Mr. Foley

The internal auditor completes two to three reports on every enterprise and subsidiary company on an annual basis. They are reviewed by an internal sub-committee of the board and by senior management, and we act on those reports. These reports are not publicly available.

Chairman

I have looked at the board's balance sheets, cash flow and projections of its ability to pay on the indebtedness, which I am surprised to note is rising. I would like the meeting to explore further the question of the capital investment and the board's ability to repay.

Deputy J. Higgins

What is Mr. Foley's history with Bord na gCon? Has he been Accounting Officer for long?

Mr. Foley

I am a chartered accountant by profession. I trained with KPMG and worked with Barlow plc for a number of years, both in Ireland and abroad and I joined the board in 1999.

Deputy J. Higgins

In what capacity?

Mr. Foley

As financial controller.

Deputy J. Higgins

As acting chief executive office, Mr. Foley is the Accounting Officer for Bord na gCon. He will understand that the role of the members of the Committee of Public Accounts is to hold Accounting Officers responsible for the safe-guarding of public funds and property under their control, including the efficiency and economy of administration and so on.

This is the first time that Bord na gCon and Mr. Foley have appeared before this committee.

Mr. Foley

That is correct.

Deputy J. Higgins

For that reason, I have many issues to raise. I will go through them quickly, and signal the main issues on which I have questions. Other members of the committee will follow.

In terms of public funding of Bord na gCon, in 2001 Government grants amounted to just over €18 million while the board's turnover on its activities was €30.3 million. That means that Government funding amounted to 60% of the activities generated by the track and related events. In 2002, €13.6 million was given as Government funding, and €41.5 million was generated in turnover on the track and related activities. Thus, Government funding in 2002 was equal to 32% of what was generated on track. Does Mr. Foley agree that this is a huge amount of public funding?

Mr. Foley

It is, and the reason it is significant is that the board is investing very highly in its capital development programme. Looking forward through the figures for 2004, we anticipate group revenues approximating to between €60 million and €70 million with a contribution from State funds of approximately €13 million. As a percentage, that contribution is significantly reducing.

Deputy J. Higgins

What about the absolute amount contributed by taxpayers?

Mr. Foley

It will be less than a fifth, at approximately 25%.

Deputy J. Higgins

Can Mr. Foley tell us what was the surplus of the overall account in 2001 and 2002?

Mr. Foley

What, specifically, does the Deputy wish to know about it?

Deputy J. Higgins

In terms of the profit and loss, what was the bottom line at the end of 2001, and the end of 2002?

Mr. Foley

In 2002, there was a surplus for the year of €1,998,000. In the 2001 accounts the figure was €15,823,000. There are two reasons for that. The first is that the level of Oireachtas funding was significantly higher in 2001 and, second, the sale of assets resulted in an exceptional gain of €8.2 million. That related to the disposal of a site at Shelbourne Park for which the board had secured planning permission for 100 apartments.

Deputy J. Higgins

How much did the board receive for that site?

Mr. Foley

We received €8.3 million.

Deputy J. Higgins

Leaving that aside, there is still a surplus of about €7.5 million in 2001, dropping to €1 million in 2002. That is very significant.

Mr. Foley

It dropped principally because the funds are effectively allocated to a capital reserve below the line. From the capital reserve the funds are paid to private tracks and to other tracks run by the board.

Deputy J. Higgins

How can Mr. Foley explain such a fall in the surplus, given that turnover increased from €30.3 million in 2001 to €41.5 million in 2002? There must have been a huge increase in costs from 2001 to 2002.

Mr. Foley

The movement in costs is specifically identified in the appendix to the accounts.

Deputy J. Higgins

What is the main element in the cost increase?

Mr. Foley

Some of the costs have increased due to increased turnover. The tote dividend pay-out increased by €7.3 million. This is a distribution back from the retention. Increased dog sales also increased costs by €750,000. Prize money increased by more than €1 million and salaries increased by €1.3 million. Part of the salary increase reflected the fact that some parts of the business were closed for a portion of 2001, therefore, there was a 24% increase in meetings in 2002. Other increases were as a result of specific policy decisions by the board. For example, the increased marketing costs from a weekly review programme funded by the board are approximately €510,000 per annum. Depreciation, given the increased assets base, has increased by €369,000 and insurance has increased by €135,000. These are the significant cost increases.

Deputy J. Higgins

The grant in the 2001 Act is capped at €254 million between the two industries, of which Bord na gCon is entitled to €50.8 million. What is the total amount drawn down from the entitlement of €50.8 million between 2001 and 2004?

Mr. Foley

The total funding in 2001 was €18.1 million, in 2002 it was €13.6 million, in 2003 it was €12.8 million. In the current year the Department has indicated a funding level of €13.3 million.

Deputy J. Higgins

That brings the board way over the ceiling.

Mr. Foley

That is the level of funding which the Department has allocated in its budget.

Deputy J. Higgins

However, the legislation has not been changed.

Mr. Foley

There is an on-going review of the legislation and a submission has been prepared by the Department on the continuation of that funding. It is a matter for the Government.

Deputy J. Higgins

It is indeed. Is Mr. Foley saying that the Government has indicated to him that it will change the legislation and change the cap?

Mr. Foley

What I am saying is that the Department of Arts, Sport and Tourism has made a submission to the Department of Finance on the continuation of the fund. We anticipate that the fund will be continued and we have included a figure of €13.3 million in our budgets on the advice of the Department that it is the expected fund we will receive this year.

Deputy J. Higgins

We, the representatives of the tax-payers, have heard nothing about this. We have been relying on the legislation and the figures that we received.

Turning to the profit and loss situation of the subsidiary companies, am I correct in stating that there are about ten of these companies?

Mr. Foley

Yes

Deputy J. Higgins

Each race track is more or less a subsidiary.

Mr. Foley

We have one or two companies that are not race tracks.

Deputy J. Higgins

Can Mr. Foley inform the committee of the profit and loss situation of these subsidiaries?

Mr. Foley

The board's main income stream is from its totalisator This operates at each of the subsidiary companies and is legally owned by the board. However, we do not generate our revenues from the tote in complete isolation from the tracks. It is very much part and parcel of the activity that happens locally at the track. The statutory accounts do not include the tote revenue, yet they are the biggest part of income generation in our business and they are located at the track.

Deputy J. Higgins

The tote is accounted for in the overall financing, not in the subsidiary companies.

Mr. Foley

That is correct.

Deputy J. Higgins

Can Mr. Foley therefore inform the committee of the profit and loss situation of the subsidiaries?

Mr. Foley

The subsidiaries recorded a loss of €680,000 in 2001, which decreased in 2002 to €418,000. The subsidiaries recorded a profit of €339,000 in 2003 and this year we anticipate that the aggregate profits will be between €750,000 and €1 million.

Deputy J. Higgins

Most of the subsidiaries recorded a loss in 2001 and 2002.

Mr. Foley

Some of them recorded a loss, others recorded a profit. The board took a strategic view on its marketing spend. It had invested very heavily in facilities in 2000-02 and as a result it decided to spend significantly on its marketing to put its new facilities in the public domain. It absorbed many one-off costs in 2001-02, the benefits of which are only coming through in the past two years. For example, the management accounts for the statutory operation in the first two months of 2004 showed €113,000 in profits.

A track can be run at a loss and people can be brought in free, as is done in the United States, as long as they bet on the tote and a revenue stream is generated from it. The fact that it is legally owned by a separate entity should not affect the decisions made at a statutory level on the income generation stream. The total contribution to prize money generated from the individual tracks, when the tote income is taken into account, was €1.4 million in 2001, €2.6 million in 2002, €3.5 million in 2003, €811,000 in the first two months of this year, and we anticipate that to be between €5 million and €6 million for all of 2004. The capital spend in terms of growth and contributions from operations is significantly increasing, as are the results from the statutory accounts.

Deputy J. Higgins

What was the position of Shelbourne Park in 2001 and 2002?

Mr. Foley

In 2001, the statutory accounts of Shelbourne Park showed losses of €235,000, in 2002 there was a profit of €183,000 and in 2003 there was a profit of €469,000.

Deputy J. Higgins

Did the board need to call in PricewaterhouseCoopers to investigate matters in Shelbourne Park?

Mr. Foley

Yes. The board, as part of its internal procedures, noted a specific requirement in an element of its building programme where it felt there was impropriety. Following that it took legal advice from Holmes O'Malley Sexton and appointed PricewaterhouseCoopers to investigate an alleged impropriety in Shelbourne Park. The board was cognisant of the need for appropriate governance in this matter — it took its advice and that has resulted in a formal investigation.

Deputy J. Higgins

What conclusions did PricewaterhouseCoopers reach?

Mr. Foley

It is not appropriate for me to discuss the conclusions or the detail of the investigation to this committee.

Deputy J. Higgins

Sorry Mr. Foley, but anything that relates to public funding is the property of the Committee of Public Accounts.

Mr. Foley

These are matters that may go in front of the judicial system and I would not like to prejudice the findings or anything that might result from them.

Deputy J. Higgins

Neither would I but we must be told in general what was the problem.

Mr. Foley

The board requested an investigation because it noted that one item of equipment that was purchased and reported to be new in the capital development programme appeared not to be new. Arising from that we appointed our legal advisors and PricewaterhouseCoopers to conduct an investigation into how and why that occurred and who was responsible for it.

Deputy J. Higgins

How did this come to the attention of the board?

Mr. Foley

It came to our attention through an internal review by a manager within our own business.

Deputy J. Higgins

Did it come from the board investigating?

Mr. Foley

It came from within the board.

Deputy J. Higgins

What was the item and what contract amount was assigned to it?

Mr. Foley

It was a generator.

Deputy J. Higgins

What was the generator worth?

Mr. Foley

I do not have the detail with me but I understand the total contract sum for that element was between €100,000 and €140,000.

Deputy J. Higgins

Was that the only item about which there were questions or was the investigation concerned about any other items?

Mr. Foley

That was the only specific item which the board had any evidence to suggest there may have been impropriety. Until the final report from PricewaterhouseCoopers is considered by the legal advisors, I would not like to comment any further.

Deputy J. Higgins

Can Mr. Foley tell the committee if the PricewaterhouseCoopers report found issues of concern about other items related to the capital spend in Shelbourne Park other than this generator?

Mr. Foley

The PricewaterhouseCoopers report has not been formally issued to the board. The investigation is ongoing.

Deputy J. Higgins

The report has not been placed before the board?

Mr. Foley

No.

Deputy J. Higgins

Why is that?

Mr. Foley

PricewaterhouseCoopers is continuing to conduct investigations into the matter.

Deputy J. Higgins

The board of Bord na gCon is responsible for the good governance of the industry. It should be axiomatic that a report on alleged impropriety should be laid before the board at the earliest possible opportunity.

Mr. Foley

Absolutely and of course it will.

Deputy J. Higgins

How long has the board had the report?

Mr. Foley

It has not been concluded.

Deputy J. Higgins

Does the board have an interim report?

Mr. Foley

No interim report has been issued.

Deputy. J. Higgins

When did this investigation start?

Mr. Foley

I am not sure of the precise date, it was some time in 2002.

Deputy J. Higgins

Early 2002 perhaps?

Mr. Foley

I am not sure, it may have been 2001. I am not sure of the exact date.

Deputy J. Higgins

Is Mr. Foley telling me that two or even three years later there is no report? It is not a tribunal in Dublin Castle, one item is being investigated.

Mr. Foley

Absolutely. The board empowered its legal advisors to conduct this investigation and they independently appointed PricewaterhouseCoopers. From the board's point of view, I have written to the board's legal advisors on two or three separate occasions during 2003 in my role as acting CEO to inquire into the status of the investigation and to request that it be completed as quickly as possible. As I am not party to the investigation and have not been advised about the reasons for the delay, I am not in a position to advise this committee as to the reasons.

Deputy J. Higgins

Mr. Foley is the acting chief executive, not the Law Library, of Bord na gCon. It beggars belief that he comes to this committee to tell us that he is not aware of the substance of what PricewaterhouseCoopers has found.

Mr. Foley

I am not aware of the substance because its investigation is not complete, it has not issued an interim report and until it issues its report, neither the board nor I are aware of the contents of the report. I understand the report will be issued but——

Deputy J. Higgins

To whom does PricewaterhouseCoopers report on the board?

Mr. Foley

PricewaterhouseCoopers does not report directly to the board. On legal advice, to keep the separation of the function of the investigation appropriate, we were advised that the matter should be reported directly to the legal advisors of the board.

Deputy J. Higgins

I find this incredible.

Mr. Foley

The board acted with complete propriety once it was aware of the issue. It sought legal advice and the advisors engaged PricewaterhouseCoopers to conduct the review. Unfortunately that review has not been completed. Perhaps it has a problem talking to certain individuals but I do not know if that is the case because I have not been specifically advised.

Deputy J. Higgins

Does PricewaterhouseCoopers speak only to the legal representatives?

Mr. Foley

PricewaterhouseCoopers reports directly to the legal representatives and in the investigation it is empowered to carry out any review it considers appropriate and can talk with any member of the staff or the board.

Deputy J. Higgins

Is the chairman of Bord na gCon aware of the conclusions to date of the PricewaterhouseCoopers report?

Mr. Foley

He cannot be if the report has not been issued.

Deputy J. Higgins

Is he aware of an interim finding or what the scale of the finding is?

Mr. Foley

I have already said there has not been an interim finding in respect of the report.

Deputy J. Higgins

Has the chairman of Bord na gCon discussed this matter with PricewaterhouseCoopers?

Mr. Foley

With respect, I am not the chairman of Bord na gCon. It would be more appropriate to put a question directly to the chairman as to whether the chairman has spoken with PricewaterhouseCoopers.

Deputy J. Higgins

Mr. Foley, I appreciate you are in the greyhound industry. I will not pursue this issue as if I was the hound chasing a hare with which I cannot keep up, around one of your tracks. You are obliged to give accurate and full answers. It beggars belief that an investigation into an impropriety involving taxpayers' funds three years down the road——

Chairman

Deputy, the chairman is Mr. McEntaggart.

Deputy J. Higgins

He is the accounting officer.

Chairman

Like everybody he cannot answer for the chairman.

Deputy J. Higgins

What does Mr. Foley know? What other items, apart from a generator, did PricewaterhouseCoopers look at where there may have been problems?

Mr. Foley

That is the only item with which the board had any significant concern in regard to its total capital development programme.

Deputy J. Higgins

Do you know of any other issues of concern?

Mr. Foley

No. I know of no other issue of concern.

Deputy J. Higgins

When will PricewaterhouseCoopers report?

Mr. Foley

I have written to our legal advisers on two or three separate occasions. As accounting officer I am anxious that a report is formally issued and that the board can take appropriate action arising from that report. Unfortunately, I am not in a position to complete the report.

Deputy J. Higgins

You are in a position to demand an immediate interim report at this time or at any time.

Mr. Foley

I have asked our legal advisers through correspondence and suggested to them that they should seek an interim report. I have done that in the past year in my role as——

Deputy J. Higgins

In the past year?

Mr. Foley

Yes.

Deputy J. Higgins

How long more are you prepared to wait?

Mr. Foley

The committee has been independently appointed by the board's legal advisers. Because of the independence function of the board's legal advisers, all I can do is specifically request our legal advisers to instruct PricewaterhouseCoopers to issue that interim report, which I have done.

Deputy J. Higgins

How much has PricewaterhouseCoopers been paid for the investigation so far?

Mr. Foley

We do not have that detail with us.

Deputy J. Higgins

Can you make it available to the committee by correspondence?

Mr. Foley

Yes.

Deputy J. Higgins

I have to move on quickly. That is completely unsatisfactory. It beggars belief. I will raise these issues, perhaps, in shorthand. In regard to grants for private tracks, will Mr. Foley name out for 2001 and 2002 the main grants to the main private tracks?

Mr. Foley

In 2001 the grants were as follows: Dundalk, €361,000; Kilkenny, €4,000; Lifford €134,000; Longford, €191,000; Newbridge, €1.9 million; Thurles, €155,000. In 2002 the grants were: Dundalk, €328,000; Kilkenny, €2,000; Lifford, €3 million; Longford, €2,000; Newbridge, €544,000 and Thurles, €131,000.

Deputy J. Higgins

What were the main grants for 2003?

Mr. Foley

In 2003 the grants were: Dundalk, €3.9 million, nearly, €4 million; Enniscorthy, €33,000; Kilkenny, €14,000; Lifford, €1.6 million; Longford, €9,000; Newbridge, €118,000 and Thurles, €42,000.

Deputy J. Higgins

These are staggering amounts of taxpayers' funds to invest in private tracks. How is the taxpayers' interest guarded in respect of these grants?

Mr. Foley

We have a very specific security arrangement which is supported by registered charges against the assets of the enterprises, in particular, in respect of the larger ones, Dundalk and Lifford, the board enters a detailed letter of grant with the entities. Part of that letter of grant is the repayment of funds if the entities are to cease trading and part of that letter is the requirement for an appropriate security mechanism to be put in place. That security mechanism normally takes the form of a registered charge against the assets so that the board has a physical charge against the assets which would be registered with the Companies Office.

Deputy J. Higgins

Is all the funding secured?

Mr. Foley

It would depend on the level. Certainly on all major projects the funding would be secured by way of registration of charges. Obviously if one is giving €2,000 or €3,000 to Longford the cost of the development of the charge structure could potentially outweigh what is being given.

Deputy J. Higgins

Let us take Lifford as it appears to have got the biggest grant. What is the total grant to Lifford?

Mr. Foley

The total grant was approximately €5.1 million approved by the board.

Deputy J. Higgins

Is that €5.1 million absolutely secure in the event that the track went out of business or something happened?

Mr. Foley

Yes. There is a charge secured on the property to the value of the board. In terms of the agreement the board has with them, the level of the recovery reduces over time. The reason that is so, is that the board runs a totalisator at the individual track. A track such as Dundalk is expected to do €5 million in tote revenues — certainly in the first full year, €4 million to €5 million. After operating costs, the board will have a net income from its operation of the tote from that enterprise of between €400,000 and €500,000. After a period of approximately ten years, the total level of cost put into that enterprise will have been regenerated back through the net income from the tote.

Deputy J. Higgins

Suppose there was aprecipitative collapse, are the taxpayers' funds absolutely guaranteed?

Mr. Foley

They are guaranteed. For the first three years 100% of the grant aid moneys is secured.

Deputy J. Higgins

Did you take steps to ensure, for example, that if the biggest track collapses within three years the full €5.1 million is available to be taken back by the taxpayer?

Mr. Foley

It is secured against the asset values of the facility.

Deputy J. Higgins

If the track fails, the asset may not be worth anything or very little.

Mr. Foley

That is the case but much of the facility and much of the underlying values are the specific land values within the geographical location. We have seen that, in particular, in Shelbourne and Harold's Cross.

Deputy J. Higgins

With respect, Lifford is not Shelbourne or Harold's Cross with regard to land prices.

Mr. Foley

That is true.

Deputy J. Higgins

The reality is that the taxpayer could lose a substantial amount of grants to private tracks in the event of difficulties.

Mr. Foley

There is some element of potential for risk but in all business and all capital investment, no matter what the nature of business one goes into, there is an element of risk. What is important from the board's point of view is that it can develop the industry on a national basis, mitigating that risk to the maximum possible extent. The only way to remove risk completely is not to operate. If we have a responsibility for the development of the industry as a whole, then taking some risk is important. However, what is clearly important is that this risk is minimised through the security arrangements put in place and the formal registration of the charges against assets.

Deputy J. Higgins

The point is that there is a difference between putting taxpayers' funds into publicly owned companies or tracks and giving huge amounts to private tracks. The taxpayer's interest is not secured satisfactorily. The board is putting half the funding into Lifford and another €6 million will be invested by private interests. Is it part of the agreement that the €5 million is contingent on €5 million or €6 million from the private investors?

Mr. Foley

When the project was put before the board, the board agreed it on the basis that it was a £10 million or £11 million job.

Deputy J. Higgins

Was it pound for pound? Was that the arrangement?

Mr. Foley

No. In general terms, the board agreed up to 80% capital funding. In the likes of Lifford in Dundalk, where there are significantly big investments, the total level of spend was necessarily pound for pound, but it ended up such that the board's funding was 40% and the private investors' funding was approximately 60%.

Deputy J. Higgins

Has that funding by the private investors been made available already?

Mr. Foley

Absolutely, we had a QS. Within the letter of agreement, we have the ability to appoint our own quantity surveyor to attend and monitor all the costings involved.

Deputy J. Higgins

By the time this is finished, will Mr. Foley be able to say the €5.1 million will have been absolutely matched by——

Mr. Foley

In both Lifford and Dundalk it will have been more than matched by their own funds.

Deputy J. Higgins

Will the board take a shareholding as part of the agreement because it is funding in the order of 50%?

Mr. Foley

No, the board does not take a shareholding within the entities.

Deputy J. Higgins

Has the board done so in any private firm?

Mr. Foley

We wanted to develop the industry. In certain scenarios and companies, the private investor has not been able to come up with the finances to meet the 20% or 30% requirement of the board, particularly in Mullingar. In Mullingar, the board took a 51% equity within the business and bought a controlling shareholding within the business.

Deputy J. Higgins

Why was that not done for Lifford?

Mr. Foley

In Lifford the situation was completely different. The private investor was prepared to come up with 50% to 60% of the funds.

Deputy J. Higgins

If one invests €5 million of taxpayers' funds in a private track, it should be automatic that one takes a 50% stake for the taxpayer.

Mr. Foley

If one understands the revenue generation model from the tracks, one will note that most of the income generated form the operations comes from the tote. In the case in question, private investors are investing €6 million in an €11 million project — the board invests €5 million. The key income-generating stream from that operation will be from the tote. The board owns and runs the tote and will generate net profits of approximately €400,000 per year in the likes of Dundalk. This is a very competitive yield on a €5 million investment. It is an 8% or 9% yield, which is very strong. I certainly believe the Government is getting an extremely good yield from the investment it makes. On securities, we have been very cognisant of the need to secure the investment the board has made. We cannot minimise risk completely, and nobody has done so.

Deputy J. Higgins

Yes, but will the grants come back? The tote is a separate issue. I do not believe——

Chairman

Deputy Higgins, other Deputies are offering.

Deputy J. Higgins

I will be brief. We remember a big promotion by Bord na gCon through a dog called Late Late Show, associated with RTE's Pat Kenny. Will Mr. Foley tell us about the gifting of dogs to people by Bord na gCon?

Mr. Foley

Principally, it is to profile our business at low cost. That is the key principle. It was an idea promulgated by the marketing department and based on the board's providing a greyhound to run in the name of a celebrity with any prize money generated going to a charity fund. The dog referred to by the Deputy cost €5,000. For that level of cost, the board achieved an absolutely amazing profile. It is something that stuck in the hearts and minds of the public. From our point of view, we would love to be in a position to have more high-profile people taking greyhounds and achieving the level of publicity we achieved in respect of the example referred to.

Deputy J. Higgins

How many greyhounds have you gifted in since 2001?

Mr. Foley

I do not have the number off hand but I estimate that it is between two and four greyhounds per year.

Deputy J. Higgins

Who makes the decision to gift?

Mr. Foley

Principally, it is a decision on the part of the marketing person in Bord na gCon, who has responsibility for marketing and profiling the industry. All credit should be afforded to the individual concerned. He has done an exceptionally good job.

Deputy J. Higgins

Does each proposal come before the board?

Mr. Foley

No. Each proposal would not necessarily come before the board.

Deputy J. Higgins

Does Bord na gCon pay for the upkeep of the greyhounds?

Mr. Foley

The purchase and training cost for greyhounds in 2001 was €15,000. In 2002 it was €19,000. This is an exceptionally low cost given the profile generated.

Deputy J. Higgins

Is that for all of them?

Mr. Foley

That is for all of them.

Deputy J. Higgins

Where does the prize money go?

Mr. Foley

The prize money is generally allocated to charities chosen by the celebrity?

Deputy J. Higgins

As a matter of interest, how much prize money was generated by Late Late Show?

Mr. Foley

I believe it generated €218,000.

Deputy J. Higgins

Has all of this been allocated to charity?

Mr. Foley

My understanding is that all of it is being allocated — I do not know whether it has all been spent — but the principle is that all this money is being allocated to charity.

Deputy J. Higgins

Have any politicians been gifted?

Deputy B. O’Keeffe

Would Mr. Foley be considering Deputy Joe Higgins as the next high-profile owner?

Mr. Foley

It depends on the publicity he gets from this meeting.

Deputy J. Higgins

Have any politicians been gifted?

Mr. Foley

No, I am not aware of any.

Deputy J. Higgins

Have any persons connected to politicians been gifted?

Mr. Foley

No, I am not aware of any such persons.

Deputy B. O’Keeffe

Has the board considered the committee?

Mr. Foley

We might if we are given a good report.

Deputy J. Higgins

Is Mr. Foley aware of a greyhound called Zagato?

Mr. Foley

Yes.

Deputy J. Higgins

Who was it gifted to?

Mr. Foley

I do not believe it was gifted to anybody. As far as I am aware, it was owned by a syndicate that involved a Minister.

Deputy J. Higgins

Will Mr. Foley tell me how expenses for board members are organised and accounted for?

Mr. Foley

The board is constituted of a chairman and six members. The aggregate level of expense in 2001 was €34,000 and it was €40,000 in 2002. Given the profile of the areas where the 17 tracks are located and given that the board generates significant funding in sponsorship, it is important from the point of view of the executive and the board that we are in a position to entertain our sponsors. Members are entitled to expenses when they perform specific functions for the board. The average level of expenses of members is exceptionally low, some €33,000 divided by seven, which is a small level of expenses. I noted people in the public domain spoke of the expenses of certain members being €100,000 or €200,000, but that is complete and utter hearsay. The figure for 2002 is less than €41,000 and the figure for 2001 is €34,000.

Deputy J. Higgins

Do board members get expenses from the subsidiaries?

Mr. Foley

No, all board members' costsin regard to their functions are paid only through the board. Individual members of subsidiaries are entitled to claim expenses simply and solely for attending directors' meetings. We might have 50 or 60 subsidiary company directors, but only five or six of those would avail of that, and the expenses of an individual in that respect would not amount to more than €300, €400 or €500 a year. That is a small level of expenses. There is a misconception in the public domain regarding the aggregate level of expenses. I am glad of this opportunity to put the record straight.

Deputy J. Higgins

Therefore, the expenses of members of the Bord na gCon are only those Mr. Foley named. They do not qualify for expenses from subsidiaries.

Mr. Foley

They do not and are not paid expenses from subsidiaries.

Deputy J. Higgins

In the case of entertaining, who can entertain and who decides who entertains whom?

Mr. Foley

We are in a marketing and entertaining type of business. Our sponsors will contribute €1.3 million this year. It is important in our type of business to treat our sponsors appropriately relative to the contribution they make to our business.

In respect of the Deputy's specific question, there are four members in the senior executive — currently there are only three — who travel probably two, three or four nights a week to ensure our sponsors are properly looked after. That is an onerous and burdensome task on members who fulfil their daily functions. For this reason, we utilise main board directors to entertain sponsors. That is an important part of what we do. Board members can, at their discretion, entertain sponsors.

In regard to the aggregate cost of meals and entertainment for our group, these are the 2002 figures which include items such as the derby and an annual award. These are two high profile events to which we invite many Ministers and high profile people. The total cost of those in 2002 was €168,000. The view articulated to me by certain sponsors was that, given that they are the people putting in the money for our gain, we were not doing enough relative to how they are treated in other industries. As acting chief executive officer, I have asked our promotions manager to examine exactly how we are treating the sponsors and to check if we are looking after and dealing with them appropriately.

Deputy J. Higgins

The board decides in advance who will be invited. Can a board member decide to invite in five people who will then be catered for?

Mr. Foley

We give board members discretion principally and solely because, as members of the executive, it is impossible to deal with that. We have 17 tracks and good facilities around the country and we are now in a position to entertain people compared with three or four years ago when, unfortunately, we were not.

Deputy J. Higgins

Members can bring in their friends or business associates and entertain them and there is no check on that.

Mr. Foley

Individual members of the board deal with sponsorship. We are delighted that they are good enough to give of their time to entertain sponsors.

Deputy J. Higgins

I am touched by that, but can a board member, whether he or she be the chairperson or any other member, decide on a Friday or Monday night or some other night when there is a race at a track, to wine and dine ten people, some of whom are business associates and not necessarily sponsors, at the taxpayer's expense? Is there no check on that?

Mr. Foley

There is. Board members sign expense claims and generally note whom they entertained and those claims are reviewed when received in head office. In any review I have carried out, they appeared very appropriate.

Deputy J. Higgins

It sounds like a carte blanche to me.

Chairman

I call Deputy McGuinness and note Deputies Noonan, Connaughton and Batt O'Keeffe are offering.

Deputy McGuinness

The arrival of Bord na gCon at this meeting of the Committee of Public Accounts was well explained. We received much correspondence regarding the affairs of the board and it received much media coverage which gave us some insight, be it right or wrong, into its operations. Judging from the volume of material we received, if one were to note only half of it, there would be a good book in it.

I want to deal with the accounts, refer to the legal aspect and cast the corporate governance against the backdrop of what I consider as being the accounts, in spite of Mr. Foley's earlier explanations to Deputy Joe Higgins. To understand the period under consideration, it appears from correspondence we received that a great deal of money was lost in respect of the various tracks in the period from 1996 to 2002. The only glitch in the losses was in respect of the sale of six acres in Harold's Cross in 1999, the sale of the Western Road properties in Cork and the sale of an asset of Shelbourne Park in 2001. The proceeds of the sales of assets are shown in the accounts which show a profit for those respective years but, in the following years, the accounts move dramatically back into the red. For the period from 1996 onwards, with the exception of the introduction of moneys from the proceeds of the sales of those assets, the tracks in Cork, Shelbourne Park, Harold's Cross, Youghal, Waterford, Tralee and Limerick all show major losses. Such losses include €144,000 in 2002 in the case of Waterford. Tralee made some money that year, but the track at Limerick suffered a loss of €123,000. We have been told that these figures are taken from the company's accounts. We must note the profit or loss figure having removed the proceeds of the sale of an asset. The accounts reveal a staggering loss by every track for that period. Mr. Foley said that he included the totalisator figure. Is that correct?

Mr. Foley

Yes.

Deputy McGuinness

The profit from the tote goes to Bord na gCon and that is covered by licence and legislation. Therefore, it should not be factored into the profit and loss accounts. We need to see whether the various tracks are making or losing money. Discounting the totalisator figure and the millions raised in the three cases I mentioned, the accounts show that the tracks are losing money. According to some observers, the cost of running Bord na gCon was €29 million in 2000, €39 million in 2001 and €50 million in 2002.

The second figure in which I am interested was that referred to by Mr. Foley. He has stated the total debt last year amounted to €6 million, that this year it will be €12 million and that it will increase to €15 million. These are the figures given the history of losses. I should probably highlight the fact that in regard to Harold's Cross, a sum of €9.9 million is being factored in to the accounts, while a sum of €2.721 million is being factored in to the 2000 accounts in regard to Cork and approximately €8 million in respect of 2001 in regard to Shelbourne.

In 2002 while turnover from facilities increased by approximately €11.2 million, operating and administration costs actually increased by €11.8 million. Therefore, while turnover showed a significant increase of €11 million, costs have increased by nearly €12 million. Why did costs increase by this amount? Mr. Foley said extra race meetings were held and so on but why have costs increased? When will the operations be self-financing? Were operating losses being stemmed in 2003? What measures have been or are being taken by Mr. Foley to cut costs? Is there a detailed breakdown of costs available? Will Mr. Foley explain this because many figures and percentages have been thrown out here this morning and one could get lost in the maze. If we stick to basics, we might begin to understand what is going on.

The cash flow reconciliation states the debt increased by €4 million to €5 million in 2002. From where does this figure come? In regard to costs — I will conclude on this point to hear the response before I continue on the legal and corporate governance aspects and employees' remuneration, which will help us understand what is happening with the accounts — while wage costs have increased significantly, staff numbers have not. For the group overall, costs rose by €1.3 million at 24%. When this figure is examined, average wage costs per employee rose by 20% while wage costs for the board rose by 29%, giving an average increase per employee of 27%. There have been enormous increases in costs and a continuation of losses in the accounts.

Mr. Foley spoke about looking after his sponsors but we are here to look after the taxpayer and ensure he or she gets a good deal for his or her euro. That is what I am examining but Mr. Foley's explanations to Deputy Higgins who is not present were not that clear in terms of the deal for the taxpayer. This is an opportunity for Mr. Foley to explain some of the myths, as he calls them, but for those of us who deal in hard facts, his explanations will have to be more detailed. I ask him to deal with these questions first before I put the next two questions I want to ask.

Mr. Foley

The first question the Deputy asked was related to the statutory losses of the entities concerned. I have explained to the committee previously the difference between the statutory situation and the management accounts. In that regard, tote income does not stand in isolation. The committee should examine how income is generated, never mind how it is legally structured.

Deputy McGuinness

I promise Mr. Foley that I will examine it but I ask him to explain the figures for losses at all tracks.

Mr. Foley

Before we take into account tote income, in 2001 the tracks lost €680,000.

Deputy McGuinness

All tracks.

Mr. Foley

Yes, all eight. In 2002 they lost €418,000.

The Deputy specifically asked what we were doing about the matter and how the position was changing. In that respect, the audit figures for 2003 show a figure of €339,000 plus. There have been profits of €96,000 generated in the first two months of this year. The first two months of the year, January and February, are the worst two. We anticipate the tracks to generate between €750,000 and €1 million in the current year. However, certain tracks will continue to lose money, Limerick, in particular, a facility which is undeveloped and which we believe will lose between €120,000 and €150,000 this year. I anticipate that all of the other subsidiaries will make a positive contribution as stand-alone, statutory entities. A total of €750,000 to €1 million will be generated by them in 2004. When I take the tote into account, it will add a further €5 million.

On costs being absorbed by the group, the Deputy must remember that the board has a statutory remit covering the industry as a whole. We are absorbing regulatory costs of €1.5 million as well as costs in respect of marketing the industry as a whole. Some of the benefits and turnover are generated by the board while others are generated outside it. In excess of 3,000 people earn a livelihood from racing. The general upswing in the industry is having a positive effect in terms of their ability to earn a livelihood and generate an income from it. In that respect, we believe the aggregate turnover of the industry is between €250 million and €300 million a year. There is a significant number of dogs in training, trainers and staff working with them. They give employment in particular black spots in country areas, which it is important to recognise when we look at the accounts.

We are absorbing costs in the board accounts with the industry as a whole gaining many of the benefits. We estimate export sales in greyhounds amount to between €37 million and €45 million a year, money which is going principally into the pockets of farmers and others in the rural community and not reflected in the accounts. To the extent that we can create more interest in greyhound racing, we create more demand for dogs and raise prices with the result that all those breeding, either on a part-time or full-time basis, earn a livelihood from the industry.

We have taken the necessary corrective action. We lost out significantly in 2001 as a result of foot and mouth disease. As a consequence we had to absorb significant costs. In 2002 we took strategic decisions at board level to spend heavily on marketing to try to promote the industry. This is only now having a positive effect. We anticipate the increased revenues, €750,000 in 2004, to continue and get better as time passes. People are now familiar with our uniform product. It is a good night's entertainment. We are getting the numbers through the gates but had to absorb costs in promoting it initially.

Deputy McGuinness

On the disposal of assets in Harold's Cross, Cork and Shelbourne, would Mr. Foley accept that the money, totalling €20 million, was ploughed back into the accounts?

Mr. Foley

It has been ploughed back into the development of the industry.

Deputy McGuinness

I am talking about the losses.

Mr. Foley

If one considers the aggregate losses and the anticipated profit at the end of this year, there will be a net profit over the four years, 2001 to 2004.

Deputy McGuinness

I will move on.

Mr. Foley

The Deputy posed a number of other specific questions. The significant movement in the debtor amount relates to debtors on the capital side of the business. The bank debt has arisen principally because the board is contributing significantly more to capital projects than it is obtaining from its income streams. This will continue until 2005 when we anticipate the aggregate level of debt will be approximately €14 million to €15 million. This will be significantly reduced in the period to 2008 as the projects begin to come on stream and generate revenues for the board. Debt is an essential or vital part of any growing business. It is difficult to grow one's business expeditiously unless one borrows. What is important is that the board has the ability to repay. According to the financial statements, it has an asset base with a gross asset value of €63 million. It is, therefore, well protected in its ability to pay its debts.

Deputy McGuinness

The capital reserve went from being positive to negative. Was this as a result of the grants paid out?

Mr. Foley

It reflects the movement in the bank debt in the sense that the board has paid out more for capital projects than it has received in income. This movement in the capital reserve is effectively funded by the board's debt.

Deputy McGuinness

The board has paid out more in grants than its reserves could cover.

Mr. Foley

Yes.

Deputy McGuinness

This has been dealt with by means of a debt with the bank.

Mr. Foley

Yes.

Deputy McGuinness

The board became overdrawn at the bank in order to pay out grants. Does that make sense?

Mr. Foley

It does.

Deputy McGuinness

That is fine.

I read all of the documentation we received and it is sprinkled, from start to finish, with details about one legal action after another. I do not want details of the individual cases involved. However, I want to know the amount paid from the board's accounts and insurance cover in the year in question in respect of settlement and legal costs.

Mr. Foley

The amount physically paid out.

Deputy McGuinness

Yes. I presume that if a settlement was reached in respect of any issue that arose with Bord na gCon, insurance cover would have been used or the board would have been obliged to pay out from other funds. What was the overall figure for settlements with third parties and what were the board's legal costs for the year in question?

Mr. Foley

Any settlements the board reached in third party disputes would principally be bound by confidentiality clauses. I would not like to be in a position where I might breach a confidentiality clause or contract into which the board had entered with regard to termination of employment or any other issue.

Deputy McGuinness

Perhaps Mr. Foley might provide a ballpark figure for the total number of settlements.

Mr. Foley

The aggregate pay-out on legal settlements with employees——

Deputy McGuinness

Or anybody else.

Mr. Foley

I will deal with that matter first and then go through the other figures. The aggregate pay-out on legal settlements with employees was €154,000.

Deputy McGuinness

And others.

Mr. Foley

There were other redundancies or early retirement schemes which the board introduced as part of its rationalisation programme. A total of €176,000 was paid out which did not arise from any legal actions but which related to rationalisation of the business. Other costs and fees physically paid out in 2002 amounted to an additional €59,000.

Deputy McGuinness

Was any case settled with moneys provided from funds outside those of the board?

Mr. Foley

No. There would have been additional amounts, as accrued, but they would not have been physically paid in 2002. The amount paid in legal fees in 2002 was €59,000. There would have been certain other amounts accrued in the accounts.

Any business like ours, with 1.2 million or 1.3 million involved, would have public liability insurance. There would be cases on an ongoing basis regarding falls, slips and various matters of that nature. These would be covered by our insurance. I would not have the detail of what our insurers have paid out in respect of such cases. As a board, we have been conscious of the rise in insurance premia. We have put in place a full-time health and safety officer to try to minimise public liability issues within the group.

Deputy McGuinness

I wish to ask about two other matters. First, what is the arrangement regarding bingo at Shelbourne? Have the societies promised funding from that source of activity been paid? The second matter on which I would like Mr. Foley to elaborate is the Euro off-track partnership.

Mr. Foley

The arrangement regarding bingo probably dates back to 2000 or 2001 when the Shelbourne facility was leased out to generate additional income. The board was cognisant at the time that it needed to do more in terms of animal welfare issues. It established a trust and Shelbourne received approximately £50,000 to £60,000 per year from its bingo operations. The trust was established in 1999 or 2000 but nothing was done with it. The revenues from the bingo were paid to the board and the cost relating to welfare issues dealt with specifically from its accounts.

The board has moved on in respect of this issue and been extremely cognisant of the nature of the needs of and the relationships with the animal rights and welfare groups. It established the trust on a formal basis in 2002. The board and greyhound owners contribute money under the trust specifically in respect of animal welfare issues which in the current year will amount to approximately €250,000. In establishing the trust in 2001 the board made an up-front payment of €212,000. In 2002 it invested €92,000. In 2004 the payment is expected to be approximately €125,000. Total funding of the retired greyhound trust on an annual basis will amount to €250,000.

The trust is made up of representatives of owners and greyhound breeders associations and has a close relationship with animal welfare groups in Ireland and the United Kingdom. We take on board their concerns because they are also our concerns.

The second matter to which the Deputy referred was the Euro Offtrack contract. For a long time the board had received demands from owners and breeders that they would love to be in a position to see racing at Shelbourne and Harold's Cross but unfortunately they would have to travel to Dublin. They are premier racing facilities with the best racing in the world. Therefore, as part of our strategy to increase turnover, we looked at whether we would be in a position to show racing at Shelbourne and Harold's Cross live and distribute the feed to our subsidiary tracks to increase attendances and thus increase turnover because of increased betting.

When we looked at this, the cost in satellite charges would have amounted to between €350,000 and €500,000 per year. At the time the board was not in a position to do this as one would have to achieve a certain level of turnover in the inter-track product. As it was not in a position to take the risk, it decided to seek partners who would absorb the cost of providing satellites and putting the infrastructure in place to use the signal to take bets from outside the jurisdiction. A number of companies applied and the preferred bidder was Euro Offtrack, a joint venture between Betinternet.com in the Isle of Man and US Offtrack, a US company with vast experience in satellite signal distribution and protocols for interfaces of tote systems.

Given the commercial risk, there was an out clause in the contract for the company which wanted to use the signal outside Ireland, principally in the United States, and for Internet purposes. It met the costs mentioned while the board met other costs and put infrastructure in place at local level to receive the signal. We made arrangements to allow the betting protocols and tote systems to communicate with each other, arising from which the board will generate €7 million in turnover in the current year which, after all costs, will probably amount to €750,000 net.

After two years of the agreement Euro Offtrack found that it was not able to generate the turnover it believed would make the project commercially viable. It was about to pull the plug on the contract which it was perfectly entitled to do but we encouraged it to stay. We said we were prepared to meet an element of the cost for a period and asked if it would bear with us which it did but towards the end of last year when it was unable to achieve revenue growth to make the project commercial, it pulled the plug. The board then decided that as we had a product capable of pulling in thousands of people to watch racing at local tracks and which generated €7 million in revenue, we could more than pay to run the business ourselves. From our point of view, it was an exceptionally good agreement which allowed us to work out protocols with little or no commercial risk. It has worked out very well for us.

Deputy McGuinness

Has it cost the board anything?

Mr. Foley

Yes. As I said, we paid a certain amount when Euro Offtrack was going to pull the plug. We met one third of the costs. If we had not done so, we would have been looking at meeting all of the costs.

Deputy McGuinness

How much was paid?

Mr. Foley

We paid €150,000 over the duration of the contract. From a commercial point of view, it was better to meet one third of the costs for a short period. We have now absorbed all of the costs.

Deputy McGuinness

On corporate governance, under ethics legislation, Bord na gCon and its subsidiaries have to return statements, all of which have to be sent to the Minister for Finance, on some of the board's undertakings. I presume all of the information is available and up to date. Also, in respect of the various subsidiaries and divisions, I presume there is a clear division between executive and non-executive functions? Have all of the various groups been formed?

Mr. Foley

Within the code on corporate governance, the requirement to set out the specific functions of the board and executive has clearly been met. The specific sub-committees have been formed in accordance with the code.

Deputy McGuinness

What Mr. Foley is saying is the board is fully compliant when it comes to its members and corporate governance.

Mr. Foley

We are now fully compliant.

Deputy McGuinness

When was it not?

Mr. Foley

Initially, when the code was issued in 2001, there was a huge amount of work to be done. The code is onerous in some respects. In a certain period in 2002 we would have been putting the process in place. We would have appointed a full-time internal auditor. On compliance and the Prompt Payment of Accounts Act, all of our subsidiaries know what their responsibilities are. In high volume business, while we may not have had every invoice paid within 30 days, we achieved a level of compliance of between 99% and 100%, although from time to time there is inadvertent non-compliance. I have taken this matter very much on board as acting CEO.

Deputy Noonan

I would like to explore the board's drugs policy. Mr. Foley said the incidence of testing had gone up dramatically in recent years. Can he take me through the testing policy at individual tracks?

Mr. Foley

I will give a broad outline and then hand over to Mr. Daniel O'Leary who is probably more familiar with the detail. The board is very cognisant of the need for integrity in sport, an integral part of forming a betting market. One will not have a strong betting market in any industry unless there is integrity. The betting figures are indicative of the confidence the betting market has generated in the greyhound game. It was a matter of concern to the board, so much so that in 2002 we employed a part-time regulatory manager to deal with the matter. We now have a full-time manager. We have also increased the level of testing significantly — by 250% — in the last four or five years. We have 25 people employed full-time in the control function and spend €1.5 million a year. We take samples at all premier events and there are control stewards at the tracks who take samples nightly. Mr. O'Leary will take the Deputy through the finer points of the policy.

Mr. Daniel O’Leary

I joined the board 18 months ago as head of regulation and control for the industry. I am a lawyer and barrister. I have worked as a lawyer in both Ireland and the United States and have an extensive background in complex legal matters.

Since joining the board I have undertaken a complete review of the regulatory and control function.

This involved a complete review of training and analysis of all aspects of the control function from an integrity perspective. As the chief executive said, we now ensure testing at all meetings each night on a random sampling basis. This involves a random draw. At least two samples are taken each night. The process is very meticulous and detailed to ensure all samples are brought safely to our laboratory in Limerick. Mr. Foley indicated the very high international standard at which the board's laboratory is accredited. In 2000 we took 991 samples throughout the year. In 2003 this number had increased to 3,437. This reflects the philosophy and policy of the board in ensuring as far as possible the optimum level of integrity across the business.

Deputy Noonan

Did Mr. O'Leary say two samples per night on average or two samples per race per night on average are taken?

Mr. O’Leary

Two samples per night on average. In addition, we have what might be termed "flying squads", squads headed by our stipendiary stewards who appear unannounced at tracks throughout the year and take multiple samples from all dogs in three, four or five races. We also take samples from all dogs in four to five races at all major and final events. This happens approximately twice a week. We utilise to a great extent our stipendiary stewards, control stewards and other part-time staff in the testing process. The laboratory screens all of the samples and will ultimately issue a report certificate in respect of each one, whether negative or positive.

Deputy Noonan

How many of the 3,437 cases in 2003 tested positive?

Mr. O’Leary

Seventy nine.

Deputy Noonan

What is the procedure when there is a positive result?

Mr. O’Leary

Within my section everything is back-tracked in regard to the procedures adopted by the laboratory to ensure everyone is certain the result is positive. The control section will then send a letter marked "private and confidential" to the person responsible for handling the greyhound.

Deputy Noonan

Is that the trainer or the owner?

Mr. O’Leary

It could be either. If the dog is registered to a trainer, he or she is the person responsible. There are many owner-trained greyhounds in the industry. However, there will be a mix of trainers and owners. They will be sent a letter with the certificate advising them of the findings of the laboratory. They will also be advised that the control steward for the track in question will contact them to arrange a steward's inquiry to seek an explanation for the presence of the substance involved. The meeting which will be confidential will be held at the track by arrangement in private and will be run by the control steward. It will also involve the racing manager and another steward at the meeting.

The control steward will send a report on the meeting to the control section in Henry Street, Limerick. The report will trigger a reference to the control committee set up pursuant to the Greyhound Race Track Regulations 1993 and which comprises ex officio the chairman, chief executive and three board members. A quorum of three is required. The committee sits from time to time to hear and deliberate on cases which come before it by way of letter, typically issued by me to either the trainer or owner responsible advising them of the positive result and that the committee will sit the next day. It will also advise them that they are entitled to legal representation, if they so wish. Depending on the substance involved, it will further request that they accept the findings of the laboratory.

There are certain minor cases that may be determined in the absence of the owner or trainer. Some matters involve what might be termed more serious prohibitive substances which arise very infrequently such as drivers amphetamines which require the presence of the owner or trainer. There will be an agenda for the day on which cases which will be heard in either Dublin or Limerick. They will be heard immediately. The owner-trainer will present their explanation, whether by themselves or through legal representatives. The head of the laboratory and other necessary witnesses will also be present. In most cases the committee will in absentia review what has been heard, make a determination and so advise the owner-trainer involved.

In regard to serious cases involving what might be described as drivers or stoppers, or matters which might tend to bring the industry into disrepute, it is the policy of the board to publish them. I brought this policy before the board in February last year and it was approved in March. This is generally the chain of events.

Deputy Noonan

Of the 79 cases which tested positive, how many were referred to the control committee?

Mr. O’Leary

Approximately half of the 2003 cases have been deliberated upon. The committee is appointed on an annual basis. For particular reasons, the 2004 committee was appointed yesterday at a board meeting. We expect to deliberate on the outstanding 2003 cases in the near future.

Deputy Noonan

Is Mr. O'Leary saying the 79 cases which tested positive in 2003 have not yet been dealt with?

Mr. O’Leary

A substantial number of cases which have tested positive were referred to my section up to as recently as the middle of February. It may take more than one month to establish that a case has tested positive. One can determine whether a result is negative within two weeks. The laboratory process has to be very extensive to assure a case has tested positive. Rechecks are carried out frequently and it would not be unusual for it to take up to six weeks or two months to certify that a case has tested positive. We are cautious and careful in our procedures in such cases because the outcome of making a mistake could be damaging.

Deputy Noonan

The sample is taken on the night, deposited in the laboratory and tested the following morning.

Mr. O’Leary

Yes. A sample taken on a Friday or Saturday night would be sent for testing by registered post on the Monday or Tuesday.

Deputy Noonan

I presume the laboratory follows normal testing procedures such as in horse racing, athletics and so on?

Mr. O’Leary

Yes.

Deputy Noonan

The sample is split with one part being archived.

Mr. O’Leary

Correct.

Deputy Noonan

If the first sample comes up positive, the archived sample is used for the second test.

Mr. O’Leary

Yes.

Deputy Noonan

I cannot understand the reason, if the primary purpose is to maintain the confidence of the punter, cases which tested positive in 2003 remain undecided in 2004.

Mr. O’Leary

Cases remain undecided because the control committee has not yet deliberated upon them. As a body, it fell on 31 December 2003. The board must appoint——

Deputy Noonan

This is crucial. The approximately 1.3 million people who currently attend the track do so because they have confidence in the system.

Mr. O’Leary

Correct.

Deputy Noonan

If there is no confidence in the system, not only will betting decrease, so too will attendance numbers.

Mr. O’Leary

Yes.

Deputy Noonan

We have heard that 79 samples taken in 2003 tested positive. Mr. O'Leary has outlined the procedures involved and said cases which test positive are referred to the control committee. He also said no control committee had been in existence from January this year until last week.

Mr. O’Leary

The board appoints a control committee on an annual basis. The board met in February this year but for various reasons the matter was not reached. It was only reached yesterday and the committee was appointed. It will meet in a number of weeks and handle all outstanding cases from 2003.

Deputy Noonan

Yes but working on calendar years there has been no control committee in place since 1 December 2003.

Mr. O’Leary

That is correct but the committee would normally only meet about four times a year.

Deputy Noonan

That is not the issue. A committee cannot meet if it does not exist.

Mr. O’Leary

Yes.

Deputy Noonan

Mr. O'Leary has nailed his colours to the mast. This is a crucial matter. We now find that no control committee was in existence until yesterday. I presume it is a total coincidince that it came into being yesterday given that the matter was to be raised today.

Mr. O’Leary

No, yesterday's board meeting was scheduled to take place a number of weeks ago. The board met yesterday and appointed the members of the control committee for this year. The committee met on 8 and 15 December and would have deliberated on a number of outstanding matters. The control committee meets as and when necessary. I accept there has been a gap between the previous and current committees. I expect all outstanding matters will be dealt with shortly and that the processes in place which ensure a high standard of testing will continue.

Deputy Noonan

Fair enough. It appears the acting CEO's statement that this matter has priority is not shared at board level given that there was no control committee in place until 31 March 2004 but we will leave that matter aside. Mr. O'Leary has said 79 samples tested positive, approximately half of which were dealt with. What sanctions were imposed?

Mr. O’Leary

They ranged from the largest fine of €2,000 to fines of €50, forfeiture of prize money and publication of the details of the offences committed.

Deputy Noonan

Can Mr. O'Leary take me through the categories? Was there one fine of €2,000?

Mr. O’Leary

Yes.

Deputy Noonan

It has been suggested to me that most of the fines are between €20 and €100.

Mr. O’Leary

The minimum fine is €50 which typically arises in a case where ibuprofen is found in a sample. The more serious cases which attract fines ranging from €500 to €750 and €1,950 involve the presence of amphetamines.

Deputy Noonan

I understand the need to have a range of penalties to fit the transgressions. Mention has been made of approximately 40 cases. Can Mr. O'Leary give me a quick overview of the fines imposed in the 40 cases mentioned?

Mr. O’Leary

Yes. Of the 40 cases mentioned, approximately five involved serious transgressions involving amphetamine-type substances.

Deputy Noonan

They attracted fines of €800 or €900.

Mr. O’Leary

Yes. Three or four cases involved what might be termed abusive behaviour, disrespect towards stewards and failure to provide a sample. The fines imposed ranged from €200 to €500. Most of the other cases involved the use of ibuprofen and other substances which might be termed therapeutic medicines prescribed by a vet — the predominant prohibitive substances.

Deputy Noonan

Obviously, losers and winners are being tested. Do all winners lose their prize money or is this discretionary?

Mr. O’Leary

No, it is not discretionary. All winners lose their prize money.

Deputy Noonan

Of the 40 cases mentioned, how many lost prize money?

Mr. O’Leary

Approximately ten; prize money is lost irrespective of position. All greyhounds attract money in finals. The owner of the greyhound finishing sixth would forfeit the money won.

Deputy Noonan

As regards the 79 samples which tested positive, has Mr. O'Leary noticed a trend whereby the number of incidences would be higher on one track than another?

Mr. O’Leary

It is relatively balanced throughout the country but at Lifford a greater number of animals tested positive for the presence of amphetamines. I think there were three cases involved.

Deputy Noonan

I have heard of the cases at Lifford which is one of the reasons I raise this matter. It has been suggested to me that at tracks nearer the Border there is a higher level of cases which test positive. Is that true?

Mr. O’Leary

The board has no regulatory function in respect of tracks in Northern Ireland where it appears that, historically, there has been little or no testing. It is often the case that all greyhound samples end up in the same laboratory. In the past ten years, approximately three urine samples have been taken at the Northern Ireland tracks governed by the ICC. There appears to be a lack of understanding, education and appreciation in respect of the use of substances. In that regard, the board intends to publish shortly special educational aids for smaller owners, particularly those with only one or two greyhounds. The board intends to provide more education and information on matters such as that covered in a document I have here which provides guidelines on withdrawal times for therapeutic medicines. There is a need for greater education for people involved in the industry because they sometimes place too much reliance on the vet. There is a lack of appreciation for the fact that it is the person handling the greyhound who is responsible for whatever substance is found in the dog.

Deputy Noonan

I understand that aspect. However, can I have a breakdown, track by track, on the regional distribution of the 79 positive tests?

Mr. O’Leary

I am afraid I have not got that level of detail with me but I would be happy to provide it.

Deputy Noonan

Can it be sent to us?

Mr. O’Leary

Yes.

Deputy Noonan

How many cases have been published to date since the policy began in 2003?

Mr. O’Leary

We probably published approximately 30 cases in 2003.

Deputy Noonan

What is actually published?

Mr. O’Leary

We publish cases that involve what might be referred to in popular terms as "drivers" or "stoppers" or cases of such a serious nature as to bring the industry into disrepute.

Deputy Noonan

What is published? Is it the dog's name, the owner's name or the trainer's name?

Mr. O’Leary

It is the name of the person who is the handler of the greyhound. If a public or private trainer is responsible for the greyhound, that person's name is published. If an owner trains the greyhound, the owner's name is published.

Deputy Noonan

Does publication include the name of the track?

Mr. O’Leary

It includes the name of the greyhound, the date and place of the race, the nature of the substance detected and the determination of the committee. If there are other pertinent circumstances, such as an explanation offered or details of a relevant explanation, these are included. Publications are typically short, succinct and pertinent.

Deputy Noonan

Is a fine the only sanction or is anyone ever banned from racing dogs?

Mr. O’Leary

Since I took office we have not had occasion to ban anybody. However, under section 47 of the 1958 Act, the board has the power to sanction or approve an exclusion order against persons or greyhounds. The occasion has not arisen to date during my term of office to exercise that power.

Deputy Noonan

I will move on quickly to some issues dealt with by other members of the committee. With regard to the board's procedures, to what extent are exclusive arrangements made with persons or companies rather than all matters being the subject of public tender or auction? For example, were the sale of assets in Harold's Cross, Shelbourne Park and Cork by auction, public tender or private arrangement?

Mr. Foley

The sale in Harold's Cross for housing was by public auction and the other two were by public tender.

Deputy Noonan

Were they publicly advertised and did they follow normal procedures?

Mr. Foley

Yes.

Deputy Noonan

The board sponsors a programme on TG4, "Greyhound View". What are the arrangements in regard to that sponsorship?

Mr. Foley

The arrangement is that the board will seek tenders with regard to the production costs for the programme which goes out on a weekly basis on TG4 and three times a week on Sky Television. We see it as a facility which enables us to profile the industry at a cost of approximately €500,000 per year.

Deputy Noonan

Is that what Bord na nCon pays out on the programme?

Mr. Foley

Bord na nCon absorbs the full cost. In terms of marketing and profiling our business in the public domain, the programme offers more benefit than direct advertising spend on a go racing campaign on television or in the newspapers.

Deputy Noonan

Are TG4 or Sky Television directly involved or is it produced by a private company?

Mr. Foley

It is produced by a private production company from which TG4 and Sky Television take it. They are not directly involved.

Deputy Noonan

Is it correct that when the arrangement was originally made there was no public tender and that the public tender only arose in year two when the arrangement had already been made and the programme was a going concern?

Mr. Foley

That is correct.

Deputy Noonan

Is it correct that there was no tender in year one?

Mr. Foley

That is correct.

Deputy Noonan

Is it also the case that the board ratified the decision made by the chairman in August of that year at its meeting in September?

Mr. Foley

I do not have the detail of specific board meetings. I would need to refer to those meetings.

Deputy Noonan

That is not quite what I am asking. I have established that in year one no public tenders were requested for the production of the programme and that an arrangement was made with a particular private company, headed by a person I will not name, to produce the programme for TG4 and Sky Television. My question is: Was the arrangement in the first instance made by the chairman of the board and subsequently ratified by it?

Mr. Foley

My understanding is that the decision was made by the executives of the board.

Deputy Noonan

Can we have clarification on that?

Mr. Foley

I will have to look at it to clarify it for the Deputy.

Deputy Noonan

Can that be communicated to us?

Mr. Foley

Yes, there is no problem about that.

Deputy Noonan

The arrangement continues. Is it put up for tender on an annual basis?

Mr. Foley

Yes, on an annual basis. It is a subject of a tender process at the moment.

Deputy Noonan

Of course there is a company in situ.

Mr. Foley

The company in situ is a company which was successful in the tender process last year.

Deputy Noonan

I also have some questions about procedure in the Euro off-track partnership arrangement. Effectively, the board sells the visual and audio rights to greyhound racing at Harold's Cross and Shelbourne Park. Were there restrictions on that originally with regard to rebroadcasting into Ireland?

Mr. Foley

Yes, part of the reason we placed a restriction in the agreement was to protect our business. We did not want to sell the proprietary rights of our product to a third party which would then come in and put the product out over Sky Television and allow people to bet into that company's hub from home through a television or the Internet. The restriction was included to protect attendances at the tracks so that the television programme would not compete directly with the board's business in Ireland.

Deputy Noonan

Did the restrictions still allow for film to be drawn down at individual tracks around Ireland?

Mr. Foley

Yes. We wanted to take that benefit. This was our major benefit in two respects. It attracts more people into the track to see the Shelbourne and Harold's Cross racing and generates more revenue by offering people an additional ten races at every track. More people bet and more money is generated.

Deputy Noonan

I understand. This arrangement was made with the Euro off-track partnership which is based in the Isle of Man and registered in Guernsey. Is it correct that the board offered the audio and visual rights free for two years?

Mr. Foley

Yes, it was two or three years.

Deputy Noonan

Did the original contract agree that the board would get a percentage of the betting pool generated outside of the country?

Mr. Foley

The reason the board offered the rights at zero per cent was that it was aware of the risk involved for the joint venture party in making it successful from its point of view. Generally on international agreements such as this the margin is between 1% and 3%. However, prior to entering this arrangement the board was unable to generate the interest of any other party in the programme for distribution outside of Ireland. If it was going to be a success for us, it had to be a success for whomever took it. It was important for the outside company to recover its costs.

Deputy Noonan

I am not asking for Mr. Foley to justify the agreement. I simply want to establish the facts. The board entered into an arrangement with the company and for the first two years audio and visual rights were given to the company free of charge. The company was not charged anything by the board.

Mr. Foley

We did not charge the company but we got the benefit of the satellite, which generated our revenues.

Deputy Noonan

That caused extra numbers of people to come to the track and increased the betting pool. I accept that. When the two years were up, what exactly was the nature of the board's arrangement? Was it to receive a percentage?

Mr. Foley

We were to receive a percentage.

Deputy Noonan

Was that when the company pulled out?

Mr. Foley

If the Deputy allows me to check the date.

Deputy Noonan

The witness quoted dates. I am trying to establish if the expiry of the free run triggered the pull-out.

Mr. Foley

No. Two main factors triggered the pull-out. The company signed the contract with us to provide the uplink and downlink prior to it having all the interfaces in place for the communication between the United States into the Isle of Man hub and into Ireland. As there were different tote systems in place, the tote systems on an international basis were trying to commingle and generate a proper protocol. That took a significantly longer period of time than anticipated to make it effective. Even when it was effective, there were certain technical difficulties that our tote provider encountered in allowing the protocol to work effectively on a consistent basis. That, coupled with the factor that the company may not have got the revenue streams it originally anticipated, led it to make the decision to pull out of the contract.

Deputy Noonan

Did the company ever pay the board any revenue?

Mr. Foley

No, nor was it obliged to in accordance with the contract.

Deputy Noonan

I thought the contract stated it paid nothing for two years but that it was then to pay between 1% and 3% out of the pool of offshore betting.

Mr. Foley

It never paid any moneys to the board in respect of turnovers generated.

Deputy Noonan

The board is now doing that itself. To return to the point of the board providing the facility out of its own resources, and to granting the contract, I have been told that this was another bilateral arrangement without public tender, without other parties being invited.

Mr. Foley

Two or three parties submitted applications.

Deputy Noonan

The issue is whether those applications were submitted in response to a public tender.

Mr. Foley

I would say perhaps a public advertisement. I am not sure. I will have to check. I know that the board received a number of applications at the time; it was not just one application.

Deputy Noonan

So the industry was made aware that the board was looking for this facility.

Mr. Foley

Yes.

Deputy Noonan

People could offer to provide the facility——

Mr. Foley

Yes.

Deputy Noonan

——and make a submission. Was that the way it ran?

Mr. Foley

I do not remember the specifics of the advertisement or exactly what happened but I do know that more than one party made a submission to the board. I think perhaps three parties made submissions and we considered this to be the most advantageous submission.

Deputy Noonan

I am told it was not done by the board but by the chairman, the then director of Shelbourne Park and another director——

Mr. Foley

That is not correct.

Deputy Noonan

——of Harold's Cross track.

Mr. Foley

That is not correct.

Deputy Noonan

I accept what you say but I want to clarify it.

Mr. Foley

That is not correct.

Deputy Noonan

The witness will appreciate that an enormous amount of documentation has been provided to all members of the committee. We are not sure whether a lot of the allegations stand up or not.

Mr. Foley

Yes. That is not correct.

Deputy Noonan

We have to separate the chaff from the grain and that is why I am asking these questions.

Mr. Foley

The contract was agreed by me with our legal advisers on the authority of——

Deputy Noonan

By you and the legal advisers?

Mr. Foley

Yes.

Deputy Noonan

I will move on to the issue of state aid. What level of grant aid is provided from the Department in 2004? What is in the Book of Estimates?

Mr. Foley

We have included the sum of €13.4 million in our cash flows.

Deputy Noonan

The witness has stated there is no commitment that this will continue after December 2004.

Mr. Foley

No.

Deputy Noonan

Are you of the opinion it will?

Mr. Foley

Given the amount of employment within the industry, part of this tax and part of the regulation of the industry goes to support a large number of jobs on a regional basis in Lifford, in breeding activities and in rural areas. Given that we think that there is in excess of a turnover of €250 million a year generated within the industry and substantial employment, that level of support for the industry is important.

Deputy Noonan

I am not criticising the policy. I think this is a good idea so there is no problem there. As the board goes forward there is talk of going into profitability when the capital investment is finally made. It is anticipated that the board will be profitable by 2009 or thereabouts, the debt will start to decrease because the investment profile will be reducing and the board will clear its overdrafts at that point. That seems like a reasonable business plan. What I want to ascertain is whether the board's expectation of State funds continuing in 2005 is built on anything more than advocacy or has the board got a commitment?

Mr. Foley

No. We have not been given a commitment, no commitment whatsoever.

Deputy Noonan

Is the board aware that some of the private tracks in Northern Ireland would regard this as state aid which is putting them at a competitive disadvantage and that they are contemplating legal action? More important they are contemplating — if they have not already done so — complaining to Brussels that this is state aid to industry which is uncompetitive.

Mr. Foley

I would be aware of that fact.

Deputy Noonan

Has the board taken legal advice on whether it will be regarded in Brussels as state aid? Will the Department receive a directive from Brussels saying this cannot continue?

Mr. Foley

That is more an issue for the Department. It would be in a better position to deal with that question.

Deputy Noonan

Will Mr. Furlong deal with it?

Mr. Furlong

Yes.

Deputy Noonan

I am pursuing it, Mr. Furlong, because Mr. Foley's outline of the business plan for Bord na gCon up to 2009 indicates that one of the major planks is continuing Oireachtas grants and if that were at risk, the bottom falls out of the projections.

Mr. Furlong

To answer the question, a formal complaint was lodged and the Commission has raised it with the Department. The Department consulted with Bord na gCon and drafted a response in consultation with our own legal advisers. We are currently dealing with the Commission on the issue. It is by no means certain that there would be a determination from this process which would close it off. A restructuring of the aid may be required but it is still in the process. We are going back to the Commission within days with the departmental response. We have met with the Commission on several occasions and we have reason to believe that a restructuring of the aid would meet the concerns that the Commission raised with the Department. Until there is a determination I cannot be absolute in my reply.

Deputy Noonan

Would it be reasonable to ask Mr. Furlong to keep the committee informed?

Mr. Furlong

I will do that.

Deputy Noonan

I have a final question for Mr. Foley. Limerick is a disaster and that is where the Bord na gCon headquarters are situated. What is the latest on the Limerick track?

Mr. Foley

The board has established a sub-committee with the purpose of seeking tender applications for a public private partnership in respect of the building in Limerick on a similar framework to that which would have been in Dundalk or Lifford. Pending the determination of the Commission, the board is waiting to see the implications of the European decision in terms of how we structure that funding arrangement.

Deputy Noonan

Has a site been selected at this stage?

Mr. Foley

We have had difficulty securing a site. Last year we looked very closely at one particular site, which was the location of the old racecourse. Unfortunately, when we undertook detailed engineering works and a survey of it prior to contract we saw that the level of fill required was very significant and would have raised the cost of the development by approximately €1.5 million.

That was not the only factor in the board rejecting the site. In draft discussions with the vendor in respect of the site he sought two conditions which the sub-committee considered to be inappropriate. First, he wanted to effectively control the planning and, second, he wanted restricted user clauses inserted as a covenant to the contract which would prevent any incumbent doing anything other than greyhound racing with the site. We considered these would have deterred a potential private investor from embarking on a public private partnership arrangement.

Deputy Noonan

Has Bord na gCon carried out any evaluation on the site of the present track at the Market's Field? I understand legal difficulties may exist with the disposal of the site for anything other than green space or public play areas.

Mr. Foley

We have not got a formal valuation, but a number of parties have contacted us inquiring about the potential sale of the site. We anticipate that the sale will achieve between €3 million to €4 million. There is no zoning issue with the front of the site because that is effectively commercial anyway. We were not in a position to advance Limerick previously because we only physically acquired all of the site from the market trustees in Limerick in or around 2002. It was impossible for us to develop under a lease-own arrangement and they agreed to sell it for us. All of the funds we will achieve for that will be completely ring-fenced for reinvestment in Limerick. As members of the executive, we would be very hopeful and cognisant of the need to put a facility like we have in Galway or Cork in Limerick, where we are based. It is the priority project of the board.

Chairman

The documentation referred to by the Deputy was not circulated to the committee today. As it was circulated to each member separately, Mr. Foley may not have seen it.

Mr. Foley

No, I have not.

Deputy Connaughton

It would be no harm if Mr. Foley had a look at it.

Mr. Foley

I would say we could have a good guess as to who sent it.

Deputy Connaughton

Mr. Foley might think he had been here for a long time today. However by the time he would get through the volume of documentation I received, he would be here for a week.

Mr. Foley

In any business that has gone through such a fundamental transformation as ours and in particular a business that has had structural employment changes, there can be difficulties and those difficulties can be articulated in different forums.

Deputy Connaughton

There is no point in going over the ground we have been covering for the past three or four hours. I have a fundamental question, which I presume is in Mr. Foley's remit to answer. The greyhound industry has done very well — 1.3 million people voted with their feet by going to a greyhound track in 2003. While it may appear that the costs are too high and profitability should have been achieved somewhat more quickly, by and large Mr. Foley has put up a good show today on the basis of the facts. Given this, why have very negative reports of happenings at board level appeared in the press in recent years? Something must be wrong. If Bord na gCon wants to portray a good corporate image, such activity is not good.

It would be possible to glibly say that a bag of cats are cranky and a bag of greyhounds are even worse. However, according to what I have read here, the board meetings seem to take place in a very canine environment. It cannot be a very pleasant place to be, given all the litigation outlined here, if one is to take this at face value. Given that Bord na gCon has done so much good work at executive level and on the ground, why is the national image tarnished by the perception of infighting and — might I say — dog fighting?

Mr. Foley

Our role has been very challenging. Anybody who looks back four or five years and compares the situation then with now will recognise it is fundamentally transformed. Some €75 million has been invested in facilities. We are now as big and strong as HRI or any other body.

Deputy Connaughton

Those bodies have not received the bad publicity attendant on Bord na gCon.

Mr. Foley

That is true. From an executive point of view it is something with which we are very disappointed. One forum in one of the newspapers will always focus on the negatives and will put a particular slant, which may not represent the factual situation. Examples include reports of a missing painting and a donation on the retirement of a chief executive.

Deputy Connaughton

I am referring to one chairman in and another one out and a CEO who was supposedly appointed not having been appointed. These are not small matters.

Mr. Foley

The matter with the CEO was clear. The board appointed a sub-committee to select a CEO. The sub-committee was not unanimous in its decision and advised the board of this. The board advised that if the sub-committee was not unanimous, the position would be re-advertised. One board member took a view that the preferred position of the sub-committee should be accepted by the board. He took interlocutory proceedings against the board in the High Court. They subsequently failed and the board is now in a position to go ahead and recruit a chief executive.

Deputy Connaughton

I will believe that when I see it.

Mr. Foley

The advertisements will be out tomorrow.

Deputy Connaughton

The advertisements are one thing, but having a CEO in place is another.

Mr. Foley

From a commercial point of view, the position advertised is, as with all appointments to State boards, subject to one-year rolling contracts. The lack of security involved in those contracts makes it very difficult to attract individuals to organisations like semi-State bodies where change can be very difficult. Change in any organisation, especially of the fundamental kind we have undertaken, leaves negative vibes. It is unfortunate that certain elements of the media have focused on small negative elements rather than looking at what has been achieved in the industry as a whole. Arising from the last meeting the level of support and recognition for our chairman when he decided to step down was phenomenal.

Deputy Connaughton

I smiled when Mr. Foley mentioned to my colleague, Deputy Noonan, that he did not get around to talking about matters Mr. O'Leary had raised regarding dog testing at the last meeting. I would say it was more a case of committee member testing than anything else on that occasion.

Mr. Foley

Following a very progressive meeting yesterday, I think that the board has a very clear unity of purpose. I hope the media in general will give a fair and balanced representation. The fact that the board has borrowings or that it increases admission prices does not necessarily mean to say it is cash strapped. A certain media slant is very unfortunate. Without doubt it does the industry in general a disservice. That may arise because of personal differences between certain journalists and certain board members. Unfortunately, as members of the executive, we are left to pick up the pieces in that regard.

Deputy Connaughton

Is there an element of wanting to shoot the messenger in all this? The media would not report unless they had something on which to report. Perhaps I can put it another way. Like all members of the committee, I wish the industry well. It is hugely important to Ireland and it appears to be taking the right direction. However, it is extremely important for the board that it is seen to be unified and that it creates a corporate image for Ireland. That does not appear to be happening. How many people are on the board?

Mr. Foley

There are six members and one chairman.

Deputy Connaughton

I have been connected with a number of boards over the years. It was always said that a small board was more likely to succeed and a board cannot be much smaller than six or seven. There must be a culture of cliques in the board whereby, no matter what is to be done, they would hardly join each other in the rosary.

Mr. Foley

That would not be true, certainly in recent years. With the exception of a particularly difficult meeting on 18 February, there has generally been good unity of purpose between the board members. I doubt that what has been achieved could have been achieved if the board was at cross purposes. The one or two minor and isolated differences of opinion at board level——

Deputy Connaughton

Would Mr. Foley call it minor with all this going to the courts?

Mr. Foley

The court was clear. Certainly, the board was unanimous, with the exception of one dissension on the part of the person who took the action, that the matter had to be clearly defended in the High Court. The judgment by Mr. Justice Kelly advised the member who took the action that he had a thin case and that he was surprised he had even got an interim injunction.

Deputy Connaughton

Thank you. I wish the industry well.

Deputy B. O’Keeffe

What is bothering me is the old generator that Deputy Higgins has been stoking up for three years and has failed to ignite. What is the cost of it?

Mr. Foley

It is approximately €120,000 with the building of the shed and so forth. The generator may be €70,000. These are rough figures——

Deputy B. O’Keeffe

Is it possible that the cost of the famous investigation over three years by PricewaterhouseCoopers will be higher than the cost of the entity? Will it reach that ridiculous stage?

Mr. Foley

I do not think it will. From our point of view and from an executive point of view, it was extremely important that when we spotted what we felt was an impropriety, we got it formally and properly investigated.

Deputy B. O’Keeffe

I take issue with waiting three years for a report on an issue such as this and having it formally and properly investigated. I look forward to seeing the figure from PricewaterhouseCoopers. It is unsatisfactory and the board should immediately demand from the legal team that this matter be brought to a conclusion.

I wish to raise another issue. I am part of a syndicate which is involved in the ownership of four greyhounds. If the bitch we have at present is good for us, we will have more. The issue I wish to raise is doping and testing. I reckon that each week over 1,000 greyhounds are racing at the race tracks. On average, according to Mr. O'Leary, there are two tests per night. On average, 36 greyhounds are being sampled out of a total of 1,000. That is extremely unsatisfactory.

There are ten races per night, with six dogs per race. That is 60 dogs running at a race track. There are 16 race tracks so I estimate about 1,000 greyhounds are running per week. However, an average of only 36 are tested. Can that give one confidence in the industry or show that the board is serious about the industry? It is unsatisfactory that a board with responsibility for controlling the industry would sit four times per year to examine sampling results. As Deputy Noonan pointed out, there were 79 samples last year and half of them have still not been analysed. People have not been faced with a reckoning. Then the board asks the other greyhound owners to have confidence in a system that will take 36 samples from a total of 1,000 per week. Having carried out the sampling, a quarter of this year has passed without a day of reckoning for the people involved. That is most unsatisfactory and should not continue. The board should be far more forceful in ensuring the regulations are in place on a proper basis.

What is the board's relationship with the Irish Coursing Club? In 2003, an individual was found to have been involved in doping cases in the UK. He was banned from training in the UK, sought a licence from Bord na gCon and did not get it. However, he did receive a licence from the Irish Coursing Club. It was an ironic situation where the coursing club in Ireland gave the licence while Bord na gCon refused it. This individual was convicted on a number of occasions in the UK for those offences.

Mr. Foley

On that specific matter, our board was particularly disappointed. We understood there was a reciprocal arrangement between the licensing authorities in the UK and the coursing club in Ireland so that if any person was banned by one jurisdiction, the ban would remain in force in the other jurisdiction. Unfortunately, the ICC accepted an application from that individual and granted a licence even though he had been banned in the UK for a period of time. The board reviewed his application for a licence in Ireland and refused it. We were equally dissatisfied with the course of action taken by the ICC in that regard. We hope that, in future, it would honour the reciprocal arrangements which had, prior to that date, been honoured by all parties.

Deputy B. O’Keeffe

Are those arrangements in writing? Is it a written agreement between all bodies? All the bodies express the view that those regulations should be in place, should be honoured and that everybody should be committed to them. The coursing club is a 32 county entity. I was pleased to hear that the UK is involved in this arrangement as well. Can we expect a written agreement to be arrived at between all the bodies involved to prove to the punters, greyhound owners and trainers that everything is straightforward between all the groups and that they have a common stand on the regulations and on the enforcement of those regulations?

Mr. Foley

To date, it has been an arrangement in practice. The board, as a regulatory body, would have no difficulty entering into a formal arrangement with other parties. That is something we could bring to the board. We hope the ICC would see the value in doing this as well.

Deputy B. O’Keeffe

I have another question about sampling. Has there ever been, as was suggested in newspaper articles, a connection between the extra prize money and doping in the business?

Mr. Foley

We are not aware of any correlation between the two. One of the reasons is that all the major prize money events are tested. The risk to anybody doing something during a major prize money event is higher in terms of getting caught. The squads or teams are present at any major event.

Deputy B. O’Keeffe

Is Mr. Foley saying every sweepstake winner is sampled?

Mr. Foley

No, I am not. I am saying the major events are.

Mr. O’Leary

These are events in which first prize is of the order of €7,000 or more.

Deputy B. O’Keefe

Is that the Derby and the Oaks etc.?

Mr. O’Leary

No, I mean right down to the €7,000 final sweepstake at Kilcullen Park last Saturday week, or a similar event at Dundalk. To correct one point, the average sampling per week in 2003 was €70,000. It is probably approaching €100,000 this year. I accept the Deputy's point about the €36,000, but I record that the level of sampling is increasing and has increased substantially.

Deputy B. O’Keefe

Having been appointed head of regulation, is Mr O'Leary happy that he is regulating properly at this point? Does he accept the point Deputy Noonan and I were making about difficulties in terms of the confidence of the greyhound owners and others involved in the business and, certainly, the punters who pay money to access race tracks?

Mr. O’Leary

I accept that we have had an unfortunate two to three month time gap. That will be rectified very quickly. I am very clear in my leadership in this area that where cheating occurs, an appropriate sanction must follow. If we are back before the committee in a year, members will be happy to see the extent to which we have progressed in this area. I give that commitment.

Deputy B. O’Keeffe

I will hold Mr. O'Leary to that.

Deputy Rabbitte

I do not know anything about this business. Some of my colleagues might consider that I should not restrict my admission of ignorance to just this area. It would greatly enhance my knowledge if I had time to read all of the documents with which I have been furnished. They are very colourful and there are many of them. Deputy Connaughton made the point that there is no smoke without fire. What are we talking about? What is going on here? Is the net point being made that the chairman is running the show? If he is, is that a good thing?

Mr. Foley

The chairman, like any other, provides direction on strategy to the board. As with any other board, he is only one voting member of it. There will be things with which he agrees and disagrees. Our chairman has a very simple, clear business model for the industry. What has been done to date has proved how successful he has been. The support he generates from greyhound owners reflects their satisfaction with his strategy and the strategy which has been employed by the board to date.

Deputy Rabbitte

Is he a hands-on chairman? Is he doing a great deal more than one would expect from a non-executive chairman of a quango or State company?

Mr. Foley

All of the executive functions are, clearly, handled by the executive. Under the code of corporate governance, we set out, specifically, the matters we will refer to the board. As chairman, Pascal Taggart has a tremendous interest in the industry and he is an excellent motivator to us. However, he does not get involved in the executive functions. He is chairman of a number of other major public limited companies and he is quite clear that——

Deputy Rabbitte

Is there information to suggest that he signs contracts which might, in another organisation, be signed by the chief executive?

Mr. Foley

Physically, members may sign contracts because under the authority of the board it may be only them who can bind the board. For example, we might have used Mr. Bob Roberts, a local board member in Limerick, to sign numerous contracts as, under law, such contracts must be signed by a director or member of the board. That would be it.

Deputy Rabbitte

While this is a good thing, I am trying, like Deputy Connaughton, to understand it. Apart from the excellent qualities he possesses, is Mr. Foley saying that if Mr. Taggart were replaced in the morning, as it recently appeared he would be, another person in that position might adopt an entirely different approach?

Mr. Foley

If anyone replaced Pascal, he would examine what his predecessor had achieved and the manner in which he had done so. He would be a very foolish man if he adopted a completely different strategy. What Pascal and the board have achieved has been phenomenal. I would advise anyone who became chairman to take a clear look at the policies to date as they have been successful.

Deputy Rabbitte

I instance one case in which Mr. Taggart was signatory to a contract, which may have been entirely appropriate. Can Mr. Foley tell the committee what Euro off-track is?

Mr. Foley

I have explained that to the committee, though the Deputy may have been absent. For his benefit I can go through the issues again. Euro off-track is a joint venture company between betinternet.com in the Isle of Man and US off-track. I was the person involved with our legal advisors in the negotiation of the contract. I advised on and handled the negotiations on the finer detail of the commercial risk issues within the contract for the board. I apprised at all times the then chief executive of the board, Mr. Michael Field. The physical signing of the contract by the chairman was simply that.

Deputy Rabbitte

Roughly, what dividend returns to the board as a result of the contract?

Mr. Foley

As Euro off-track was taking on all of the risk, we wanted the contract to work for it. The company paid €300,000 to €500,000 per year to put up the signal and we were getting the benefit from inter-track betting and generation of revenues. We allowed the company a two to three year moratorium during which we would take no revenues from the bets it interfaced into our pools. We benefited from betting at local sites. This year, that will generate, after costs to us, €750,000.

Deputy Rabbitte

The board's share will be €750,000. Roughly, what will the share to the company be?

Mr. Foley

The contract fell as there was an out clause within it for Euro off-track. It appreciated that the contract contained significant risks for them. While it was being given the right to a proprietary product, it had to develop technical interfaces with the board's systems. Before that was finished, the company agreed to provide the board with the signal, which was costing it money. It was absorbing huge costs and the board was getting all the benefits. The company's hope was that it could achieve a turnover in the USA and from the website in the Isle of Man which would allow it to recover those costs. The costs and risks were absorbed up front. Unfortunately, the company failed to achieve the aggregate levels of turnover it thought it would under the contract. Certain technical issues arose at certain stages involving the communication of totalisator systems through international domains with each other. Quite rightly from its own point of view, the company pulled the plug on the contract. It was perfectly entitled to do so within the contract.

Deputy Rabbitte

Is there any other litigation extant or contemplated within the board?

Mr. Foley

As with any board, there is a significant number of public liability cases ongoing at any time. With regard to the recruitment of the chief executive, while the High Court lifted the injunction, the individual board member involved may yet seek a full hearing of the case. We find it difficult to understand what purpose he would have in seeking that as part and parcel of the injunction was to prevent the board from recruiting a chief executive officer. The board has now been allowed to proceed.

Deputy Rabbitte

Is there any other major issue or anything out of the ordinary?

Mr. Foley

Mr. Dermot Cross, our personnel and development manager, had a case of bullying and harassment against the board and, in particular, the chief executive. The case was referred to a rights commissioner who reviewed in full the detail of his 42 allegations.

Deputy Rabbitte

The human resources manager took a case to the rights commissioner.

Mr. Foley

Yes, and the rights commissioner stated that Mr. Cross did not have a case of bullying and harassment. Mr. Cross then referred the case to the Labour Court. Prior to its hearing of the case, he referred the matter to the High Court and the matter is now before that court.

Deputy Rabbitte

While I do not want to return to the issue of the generator in detail, I have never heard of a case in which an organisation employed PricewaterhouseCoopers without dictating the terms of its remit or waving it goodbye at the appropriate time. Surely the company was given a mandate when it was employed? Is it the case that somebody does not want PricewaterhouseCoopers to finish its investigation? The position does not make any sense.

Mr. Foley

That it not the case. PricewaterhouseCoopers company has had difficulty.

Deputy Rabbitte

What exactly is PricewaterhouseCoopers examining?

Mr. Foley

It must be able to meet the parties who had responsibility for the management of Shelbourne Park at the time and the project in question.

Deputy Rabbitte

What is the allegation? Is it fraud, cheating or something else?

Mr. Foley

The board believes that an item of equipment, which was purported to be new and purchased at a cost purported to reflect the new cost of the item of equipment, was second hand. As the board spotted this issue prior to paying its contractors, it only paid the value of the second hand generator.

Deputy Rabbitte

Does Mr. Foley mean this could have implications for a particular manager in the company?

Mr. Foley

As I must be careful in what I say, I do not want to get into detail. I understand from our legal advisors, however, that PricewaterhouseCoopers has had difficulty contacting certain individuals. I am not prepared to state whether the individuals in question are employed in house or out of house pertaining to the issue in question.

As acting chief executive, I wrote to our legal advisors stating that the Comptroller and Auditor General planned to come to my office specifically to inquire into the reason the investigation has not been completed, and asking them to ensure we receive a completed report. The last message I want to go into the public domain is that the board is sitting on or deferring the issuance of a report. It would be a serious matter if people believed this to be the case, but it is not.

Deputy Rabbitte

What does the equipment in question generate?

Mr. Foley

Shelbourne Park is the biggest part of our operation. If the electricity goes off on derby night or one of the other major nights of the year, the generator will kick in. We do not have a generator in any other track.

Deputy Rabbitte

Have you had resort to it since it was purchased?

Mr. Foley

I do not believe we have.

Deputy Rabbitte

Will it work if there is resort to it?

Mr. Foley

We are told by the builders, the quantity surveyors and the people who installed it that it is in operational order.

Deputy Rabbitte

Thank you, Mr. Foley.

Deputy Boyle

I am grateful that most fiduciary matters have already been addressed. I return to a question on regulation and licensing asked by Deputy Batt O'Keeffe, as it was only partially answered. What is the relationship between Bord na gCon and the Irish Coursing Club? Is there dual use of dogs in racing and coursing?

Mr. Foley

That is generally not the case. On occasion, a coursing dog will move on to track racing but generally the requirements for quality greyhounds differ in racing and coursing. As the breed of greyhound is different and different sires are used, they are generally quite different dogs and few coursing dogs would run on track.

Deputy Boyle

There is some cross-over, even if it is slight.

Mr. Foley

Yes, but it would be limited.

Deputy Boyle

There is a possibility that development money and prize money earned might be going to owners and trainers whose dogs use blooding, for instance, as a training method.

Mr. Foley

The board has not supported the Irish Coursing Club financially. If a greyhound which had previously been coursing ran at a greyhound track and was good enough to win, the owner would have an entitlement to prize money. The board, as a regulatory body, would not be in a position to regulate against owners running a greyhound, whether a coursing or racing greyhound, at a racing track. I believe it would be in serious legal difficulties if it tried to implement any such restrictions.

Deputy Boyle

The board does not have guidelines, such as those pertaining to doping, that blooding should not be used as a training method.

Mr. Foley

The board would not condone blooding.

Deputy Boyle

It could happen without its knowledge.

Mr. Foley

Anything can happen without one's knowledge but if the board became aware of blooding, it would view it as a very serious matter and refer it to the control committee for appropriate sanction.

Deputy Boyle

On the other side of that coin, Bord na gCon operates a trust which receives €250,000 every year. There is an ongoing problem with the export of old greyhounds to countries such as Spain. What type of role does Bord na gCon play in preventing or regulating this practice or ensuring that greyhounds remain here when they are retired from racing?

Mr. Foley

Bord na gCon is as concerned as the Deputy about the perceived lack of care of Spain's racing federations with regard to greyhounds, to the extent that our board felt that allowing Spain to continue as a member of the World Greyhound Federation was inappropriate for animal welfare reasons, given its lack of progress in racing welfare issues and that of certain members from other jurisdiction. Our board is confident and committed in this regard.

Deputy Boyle

The trust receives €250,000 from a turnover of €41 million in the most recent accounted year. How does that compare to money spent by other greyhound federations on animal welfare issues?

Mr. Foley

I do not have specific detail on expenditure in other jurisdictions. We have established a retired greyhound trust. This is an important issue and we liaise with animal welfare bodies here and in the United Kingdom and take direction and cognisance of their views. Welfare, homing and care of greyhounds is very important to us and if they are not carried out appropriately, we will not have an industry. This is the reason for our concern about this issue.

From a regulatory point of view, we have stipendiary stewards who check the licensing and quality of kennels to ensure the welfare of greyhounds in training is appropriate.

Deputy Boyle

I notice from the annual report that the board membership is entirely male. There are no pictures or names of any females.

Mr. Foley

There is one female constituent member. In the past there were up to three members at any one time.

Deputy Boyle

That was not the case when the report was being compiled.

Mr. Foley

Perhaps not, but at one stage there were three female members of a board of seven and the board currently has one female member.

Deputy J. Higgins

I wish to tidy up a few matters. Mr. Furlong, in terms of policy, €50 million in grants and €25 million in what are described in the report as "sweated assets"——

Chairman

I remind the Deputy that we must also open the Vote.

Deputy J. Higgins

This is really taxpayers' money because it derives from the sale of publicly owned assets. This figure of €75 million amounts to about four years of investment. Is that correct, Mr. Furlong?

Mr. Furlong

Yes.

Deputy J. Higgins

According to Mr. Foley's figures, 3,000 full-time equivalent jobs depend on the industry. Has the Department made a comparison with grants paid to manufacturing or computer industries? How does the figure of €75 million for the sustenance of 3,000 jobs over four years compare with that paid to other industries?

Mr. Furlong

Let me put the matter in context. We are dealing with a four year fund under the Horse and Greyhound Racing Act 2001. This is the final year of the fund and the Department must decide what happens next. We are seeking submissions from Bord na gCon and Horse Racing Ireland on the economic value of the industry as seen by them. We will then need to carry out an independent evaluation, taking on board some of the issues mentioned by the Deputy, following which we will advise the Minister who will determine, in line with the provisions of the Acts, what he intends to do about funding after this year. As I understand it, this will entail laying an order before the Houses of the Oireachtas. The issues the Deputy has raised are very much exercising us and will form part of the decision on the question of what happens after this year.

Deputy J. Higgins

I presume the Department will report publicly on its assessment.

Mr. Furlong

That is inevitable; the matter will ultimately have to be referred to the Oireachtas.

Deputy J. Higgins

Mr. Foley, if difficulties regarding a proper investigation into the matter of Shelbourne arise from someone being in purdah for three years, will the board send the Garda to investigate? Has the fraud squad been called in?

Mr. Foley

This is a matter for the board to consider following consideration of the report from PricewaterhouseCoopers. It is not for me to pre-empt what the board will do on the basis of the advice it receives from its legal advisers.

Deputy J. Higgins

Mr. Foley has essentially told me that the chairman or any member of the board is as free as an Arabian sheikh to bring anybody he or she wants into the tent for entertainment purposes.

Mr. Foley

I do not think that comment is appropriate. We have not said that. What I have said is that I review the level of expenditure through to the board and conclude it is a reasonable and balanced cost. I do not think the aggregate level of expenditure on meals and entertainment for our business as a whole — approximately €150,000 — is a significant cost. I think it is low. We are not yet doing enough for sponsors. I am glad that my directors can take responsibility from the executive to entertain sponsors, which is an important function.

Deputy J. Higgins

Does Mr. Foley think it is appropriate that a director or chairman can entertain at taxpayer's expense, completely oblivious as to whether it has anything to do with sponsorship?

Mr. Foley

I am not aware of any instances where people are entertained, unless there is potential for a business relationship with them.

Deputy J. Higgins

A potential relationship.

Mr. Foley

One does not always know what the outcome will be. One needs to show the product before people will invest money in sponsorship. It is important that we attract new people and wine and dine them in showing them what we have to offer. The aggregate level of expenditure, relative to the level of sponsorship, is low. As an organisation, we need to spend and do more for our sponsors.

Deputy J. Higgins

How much was spent on foreign travel by the board in 2001 and 2002?

Mr. Foley

I do not have the figures for specific board members. Therefore, the figure I have is an aggregate one for the group. Overseas travel expenses amounted to €56,000 in 2002.

Deputy J. Higgins

What was the figure for 2001?

Mr. Foley

I do not have that figure.

Deputy J. Higgins

Can Mr. Foley get it for us?

Mr. Foley

Yes.

Deputy J. Higgins

What is the purpose of foreign travel?

Mr. Foley

It depends on the individuals involved and the functions they are attending. There is an annual gaming conference in Tuscon, Arizona, to which we like to send one or two people. It is an important forum as it details all of the technological advances which have been made in gaming throughout the world.

After all costs, the inter-track product generates €750,000 per annum. People have travelled to see how this product and model works in the United States and Australia, have learned about the technical interface issues and met potential investment partners. As regards drugs and technology, we expect the head of our laboratory to attend international veterinary conferences. There is also travel to some of the major events at tracks in Britain in an attempt to persuade them to take our signal, watch how they distribute it and make the model work.

I do not think the level of expenditure is unreasonably high. I think the 2003 figure was significantly less than €56,000.

Deputy J. Higgins

Does the board own residential property?

Mr. Foley

Yes, it owns one residential property.

Deputy J. Higgins

For whose benefit?

Mr. Foley

For the benefit of staff who work in Dublin.

Deputy J. Higgins

How does this work?

Mr. Foley

The board has a property as part of the site. Given the cost of and difficulty in securing accommodation in Dublin, and because we have to train racing and assistant racing managers from across the country, we use it to accommodate them while they undertake training programmes in Dublin. Managers often undertake training programmes in the biggest establishments and stay in Dublin for six months or a year. Rather than pay overnight expenses of €115 for a hotel, the board felt it would be better to provide this facility. It is used principally for those involved in the racing function at stadia.

Deputy J. Higgins

Is it available to directors?

Mr. Foley

Not now.

Deputy J. Higgins

Was it available previously?

Mr. Foley

It was. When a director stayed in the house, there was no need to pay an overnight allowance rate. When he or she does not use the house, any member of the board is entitled to Civil Service mileage and overnight rates. The reason it is not used is a director can seek to stay in a hotel, which he or she is entitled to do.

Chairman

I ask the Deputy to conclude his questioning.

Deputy J. Higgins

We have a difficulty. We are either entitled to ask the questions we want to ask or we are not. Otherwise, we will have to adjourn.

Chairman

It is now 3.15 p.m. We have been here since 11 a.m.

Deputy J. Higgins

With due respect, that is not the way in which the matter should be approached. I will be brief. Mr. Foley, as a matter of policy, does the board make grants available to owners in Northern Ireland?

Mr. Foley

As a matter of policy, the board has not made grants available to owners in Northern Ireland in 2003 or 2004. It provided sponsorship for a number of tracks in Northern Ireland in 2000, 2001 and perhaps 2002.

Deputy J. Higgins

How much was granted?

Mr. Foley

In 2002, the year under review by the committee, €39,000 was given to stadia in Northern Ireland to sponsor particular events.

Deputy J. Higgins

How much was given in 2001?

Mr. Foley

In 2001 €223,000 was given to stadia in Northern Ireland.

Deputy J. Higgins

That is a substantial figure. Did the board decide on it?

Mr. Foley

It would have been a board policy decision.

Deputy J. Higgins

Why did the board pick up the legal costs when a board member allegedly defamed somebody?

Mr. Foley

I am not aware of the board picking up the legal costs for anybody. It has not picked up costs in any situation of which I am aware.

Mr. J. Higgins

Somebody took a case against a member of the board for alleged defamation.

Mr. Foley

In which jurisdiction?

Deputy J. Higgins

The alleged defamation took place in Northern Ireland. Is Mr. Foley aware of this?

Mr. Foley

Yes, I am.

Deputy J. Higgins

Is Mr. Foley saying the board did not allocate funds in that connection?

Mr. Foley

The board did not pick up any costs with regard to the action. I believe the action about which the Deputy is inquiring is the alleged defamation by Mr. Paddy Owens against Cathal Curley of Bord na gCon.

Mr. J. Higgins

Is it correct that no funds were paid, either in damages or legal expenses?

Mr. Foley

The board did not pick up any costs in that respect.

Deputy J. Higgins

We spoke about the gifting of greyhounds. We went through the prize money won by the greyhound, The Late Late Show. In other cases does the board insist that the prize money won by owners gifted greyhounds should go to charities? Is there accountability in this regard?

Mr. Foley

I am not specifically involved in the donation of greyhounds which comes within the marketing function and in respect of which there is a limited annual budget. I am not aware of the exact rules or criteria set down. All I am aware of is that major winners and high profile owners generally nominate a charity.

Deputy J. Higgins

Could Mr. Foley send us a copy of the policy?

Mr. Foley

I will.

Deputy J. Higgins

What can Mr. Foley tell us about litigation regarding catering contracts in counties Cork and Kerry?

Mr. Foley

There has been no litigation in respect of catering contracts in County Cork. Any matter of litigation regarding catering contracts in County Kerry predates my time and occurred before 1999. I am not aware of the detail of matters which predated my appointment to the board.

Deputy J. Higgins

Is Mr. Foley not aware——

Mr. Foley

From what is in the public domain, I am aware of matters regarding a catering tender in Tralee. However, I am not, nor could I be expected to be, aware of the details because it predates my appointment to the board.

Mr. Purcell

As the committee has covered most of the issues comprehensively, I will not go over them again. To put the issue in a nutshell, when we took over a couple of years ago, we found a "can do" philosophy in Bord na gCon which is reflected in how matters have improved, for example, in turnover and development. I alluded to teething problems at the beginning and a certain tension which is always to be expected with a can do attitude. At the same time, a public sector organisation must follow certain procedures, in respect of which some matters were touched on today.

Procedures must be followed, particularly in procurement. There was a learning process and a certain informality about how the board undertook this, for example, in catering, cleaning and security etc. Our suggestions have now been taken on board and feedback from the 2003 audit of the accounts shows that matters are more in line with what is expected in a public sector organisation, particularly with regard to the code of practice for semi-State bodies as promulgated by the Minister for Finance.

Chairman

We will now proceed to discuss the Vote.

Deputy Curran

I will be brief because we have been here for some time. It has been a long day for Mr. Furlong who has had to wait a long time for questions. I have some specific questions for him about a matter I raised in private session this morning. Does the Chairman expect we will close discussion of the Vote today? I doubt we will.

Chairman

It depends.

Deputy Curran

I will explain the matter I raised in private session as best I can. If Mr. Furlong has the answers, well and good but if not, perhaps he will forward them in due course. The matter has to do with Irish soccer. The Irish soccer team is doing well on the field, as evidenced by its performance last night. However, from an administration point of view, Irish football is not without its difficulties. While I appreciate that most of what happens in the FAI is of no concern to Mr. Furlong, there are one or two aspects which are.

Something published in the newspapers yesterday, as a result of the resignation earlier in the year of the director of the FAI, brought to mind one or two issues that I would like to explore and clarify with Mr. Furlong. I appreciate that he is being put on the spot and may not have the information to hand but the newspaper article brought information to light as a result of the resignation. One allegation is that the FAI may be in breach of the Companies Act in so far as it has failed to file any annual returns. Is Mr. Furlong aware of any information in this regard?

Mr. Furlong

No, nothing at all. Obviously, it is a matter for the Companies Registration Office.

Deputy Curran

In recent years the FAI has received considerable sums under the Sports Council grant schemes. Is that correct? Does Mr. Furlong have the figures with him?

Mr. Furlong

That is correct.

Deputy Curran

Does Mr. Furlong have the figures with him?

Mr. Furlong

I do not have the figures with me but will arrange to get them for the Deputy. From memory, the funding is for games development, not general administration. The FAI is not supported in any way in respect of its administration costs by the Sports Council.

Deputy Curran

To clarify the matter, is it correct that the moneys given to the FAI by the Sports Council were for a specific purpose?

Mr. Furlong

It is my understanding Sports Council money was given to the FAI for a specific purpose. I will get the details for the Deputy.

Deputy Curran

The money is given for specific programmes and projects. What evaluation or checks are carried out to ensure the moneys paid to the FAI for such projects are actually spent?

Mr. Furlong

On a point of information, the Department does not give the money. The Sports Council is allocated funding from the Department's Vote and does its own independent evaluation of whatever applications are made to it by sports bodies. It is on foot of these evaluations that it makes its decisions on the allocation of support.

Deputy Curran

How does somebody like me determine or find out if evaluations were made?

Mr. Furlong

Does the Sports Council come within the ambit of this committee?

Mr. Purcell

The Sports Council is subject to audit by me and its accounts come within the remit of this committee.

Mr. Furlong

An annual report is available. If Deputy Curran has not seen it, I will provide him with a copy. It will give him a sense of how the Sports Council spends its money. While it may not give him the detail he wants of its evaluation processes, it should give a fair idea of how it approaches its business.

Deputy Curran

While I do not want to be too critical of the FAI, there are allegations in the public domain from a general administration perspective. I am prepared to receive the information in private or by way of correspondence with the committee. I am concerned to ensure taxpayers' interests are protected. I appreciate that the Sports Council is separate but the issue surfaced in yesterday's newspapers. I would like Mr. Furlong to offer us clarification showing that the taxpayer's interests are being protected. The allegations are a cause of concern.

Mr. Furlong

I will certainly do that. I want to make a general observation that is not entirely unconnected with our earlier discussion. In the light of the Genesis report, the FAI has undergone horrendous organisational change in the past 12 to 18 months. Inevitably, some will be out of sympathy with the pace and direction of change and might, therefore, hold a particular opinion. This may be one of the issues that led to yesterday's media reports. However, it does not deny the point that the Deputy is entitled to receive the information.

Deputy Curran

While I do not want to do it in a way that harms the FAI, I do not want us to look back and feel we should have acted in a more timely manner. While I appreciate the FAI has charitable status, it is also a company and, therefore, has various legal responsibilities. I would appreciate if Mr. Furlong could look into the issue.

Mr. Furlong

From some of the reports I have seen, I understand lawyers may already be involved.

Deputy Curran

I am only concerned to ensure taxpayers' money goes where it is supposed to go.

I have a question regarding the Vote and the disbursement of national lottery funding. Lottery funding is always welcomed by a wide variety of clubs. The list supplied shows moneys that have been drawn down by organisations. It is a list of the moneys spent in 2002. Is that correct?

Mr. Furlong

It is the moneys drawn down.

Deputy Curran

Therefore, the organisations concerned have the money.

Mr. Furlong

Yes. It is issued under the subhead in the course of the year.

Deputy Curran

I have been involved with a GAA club and have seen the criteria assessed in the application. The application forms are quite detailed and seek to ascertain plans and who will benefit from the development. The allocation of €1.25 million to Shamrock Rovers, referred to on page 272, still niggles me. It is a significant grant by any standard. Using my local knowledge, I presumed this was for the development of the stadium in Tallaght.

Mr. Furlong

Correct.

Deputy Curran

The stadium is still not complete. I do not know if there is a completion date for it. Does Mr. Furlong have any knowledge on what is delaying the project?

Mr. Furlong

I do not know much more than the Deputy. We have been in touch with Shamrock Rovers repeatedly. We have also been in touch with the FAI. We have clearly expressed concerns that funding was made available for a project and it is about time the club showed cause. Having consulted our legal advisers, I can assure the Deputy that the funding given to the club has been more than adequately secured. In a doomsday scenario, we have a charge that would enable us to recover all of the funding provided but that is not the outcome we want. Shamrock Rovers is part of the history of Irish soccer. That the club has fallen on hard times does not necessarily mean that we should not go out of our way to help it. The recently appointed chief executive of the FAI is working with might and main to achieve an outcome that ensures the continuance of the club and the development of the project at Tallaght.

Deputy Curran

Is Mr. Furlong aware of the problem that has stopped completion of the project? Are the problems financial, legal or technical in nature?

Mr. Furlong

I am not aware of the nature of the problem. One of our problems is that we are not being given accurate and up-to-date information which we have been trying to get.

Deputy Curran

Having spent €1.25 million, I am sure the Department is less than satisfied with the outcome to date.

Mr. Furlong

We are very much on the club's case.

Deputy Noonan

Sports Campus Ireland was allocated €46.886 million under subhead C6 of the sports and recreation services Vote. Can Mr. Foley give us the total expenditure on a year-by-year basis since the project commenced? What is the 2004 allocation? I presume the bulk of the allocation is for the swimming pool. Can Mr. Foley fill us in on any other projects on site of which we are not aware?

Mr. Furlong

Of the amount spent in 2002, €43.441 million was spent on the construction of the National Aquatic Centre. Current spending amounted to €3.415 million on the administration of the project and ongoing costs associated with the CSID, including executive services, project management, consultancy costs and VAT payments. The centre was completed on time and within budget in March 2003. The budget was €71 million, including VAT. Generally the centre has been well received. This was the end of major spending on the project.

In the context of the decision to go ahead with the redevelopment of Lansdowne Road, the Government made a parallel decision to revisit elements of the sports campus. Sports Campus Ireland is in dialogue with the major sports bodies to establish where they stand on the possible use of facilities at Abbotstown.

Deputy Noonan

What was the outturn in 2003 and what is in the subhead amount for 2004?

Mr. Furlong

The figure for 2004 is €1.5 million. The Estimate figure for 2003 was €8.4 million.

Deputy Noonan

Does Mr. Furlong have information for the preceding years? Was the Vote in place in 2000?

Mr. Furlong

I do not have a figure for 2000. The Estimate figure for 2001 was €32 million which, I think, was for the aquatic centre.

Deputy Noonan

Has a separate Vote been opened for Lansdowne Road, or is the Department considering opening one?

Mr. Furlong

We are negotiating the detailed legal grant agreement with the FAI and the IRFU. However, the intention is that State payments will be made from the sports capital subhead in the Department's Vote. Obviously, we will provide separate information on instalment payments as they are made.

Deputy Noonan

Does Mr. Furlong think any payments will be made by 2005, or will a supplementary amount be included at the end of this year?

Mr. Furlong

I do not think there will be a supplementary sum paid at the end of this year. We anticipate there will be preliminary expenditure, probably of the order of approximately €5 million, for which we are allowing in the existing subhead allocation for 2004. For 2005, we have to establish cash flow requirements for the project and factor them into the Estimates negotiations.

Chairman

I have one question regarding appropriations-in-aid. There appears to be €9 million available from the European Social Fund as a result of a failure to submit applications. What are the possibilities of getting that €9 million?

Mr. Furlong

To be honest, I had hoped we would have received money by the end of 2003. We have done all of the certification work required. This will now be processed centrally by the EU section in the Department of Finance to claim the money. We believe we should achieve the outstanding grant by the end of 2004. However, I thought the same in 2003 and it did not happen.

Chairman

Is there a risk that it may not be paid?

Mr. Furlong

The short answer is no. There is a contingent risk that when the European Union evaluates the final accounts, it may wish to disqualify the application. That is its prerogative.

Chairman

Is that likely to happen?

Mr. Furlong

We do not think so but cannot be absolutely sure until the European Union carries out its audit which may not take place for a couple of years yet.

Chairman

What was the reason for the non-payment?

Mr. Furlong

The reason was the delay in the submission of the certification of expenditure from all of the agencies which benefited under the programme.

Chairman

Was it an internal delay?

Mr. Furlong

It involved State agencies as well as the Department.

Chairman

Does it constitute a loss for future development? Does not having this fund mean a loss to other agencies in their expenditure for this year?

Mr. Furlong

No. However, last year there was a shortfall. We had built a figure of €9 million into our Estimates for last year but actual receipts totalled €1.6 million. However, because we had made savings elsewhere in the Vote, we were able to manage the shortfall without the need for a Supplementary Estimate.

Chairman

On subhead C3 — grants for the provision and renovation of swimming pools — there is an allocation of €15 million but only an outturn of €3.8 million, despite the huge need for the upgrading of swimming pools.

Mr. Furlong

We have believed over the years that the take-up by local authorities is slow. However, the rhythm of activity has stepped up significantly in recent months. We have an allocation of €15 million in the current year which our cash flow projections show will be met in full, although there were concerns that some local authorities might have a difficulty in raising their overall share of the cost of a project. The State's contribution is capped at €3.8 million per swimming pool. As costs escalate, this will make it harder for local authorities to make up the balance. There was an issue concerning the borrowing capacity of local authorities but it has been sorted out. The allocation for swimming pools was €9 million last year which sum I am advised was drawn down in full.

Chairman

It is encouraging to hear that, given the huge requirement for swimming pools. I was concerned when I saw on the balance sheet that a sum of €12 million remained unspent. There is also an underspend under subhead E5 — cultural development. A sum of €16 million was allocated but less than €10 million has been spent.

Mr. Furlong

That is probably a first cousin to the problem we have encountered with local authorities in the case of swimming pools. The allocations under the action programme were made in 2001. The conditions attaching to the release of State funding require the promoters to show that they have generated the necessary funding and have satisfied planning and any other obligations laid down. Some of the project promoters find it difficult to raise their share but we are not prepared to release funding until we know there is enough of the balance available to ensure the project will be completed.

Chairman

From the point of view of working with local authorities, does the Department intend to put them on notice that the funding has been allocated but that it is up to them to comply with their responsibilities? It is a loss that so many of them do not comply. Provision should be made to overcome this. The problem regarding the ability of local authorities to match funds should not be insurmountable.

Mr. Furlong

I do not believe it ought to be. We certainly do not ration funding. In so far as a local authority is ready to go, funding will kick in immediately.

Chairman

My final question concerns the resignation of the chief executive of the Arts Council. What impact has this had on the organisation?

Mr. Furlong

Clearly, that is a matter that will give rise to difficulties within the organisation. To put the matter in context, the Government appointed a new Arts Council about a year ago. Under the Arts Act, the new council is independent of the Department in the manner in which it does its business. The Department has made no attempt to try to intervene in any way in the decision-making processes of the council. As a result of the downturn in the public finances, particularly in 2003, the council took an independent view that the third arts plan — a multi-annual plan presented by it in 2002 — and the yearly level of funding factored into it were no longer deliverable. I understand it took the view that it had to live in the real world and acknowledge that in a more constrained financial environment it needed to examine some of the assumptions underlying the plan. It is engaged in this process. It came as a surprise to me that the director had opted to resign as she had made a fantastic contribution over the years to the council.

Chairman

I endorse that. She is a huge loss. With regard to the allocation of funding for the arts, what sum will be paid from the Exchequer this year?

Mr. Furlong

The figure is €52.5 million which represents an increase of 19% on the allocation for 2003, a difficult year for the council. The difficulties made it clear that what was contained in the arts plan was no longer achievable.

Chairman

Department funds were used for the promotion and development of tourism, a generic product which brings huge benefits to the economy. Why would someone of that calibre resign on an issue concerning the prioritisation of funding within the Department? The Department has a huge budget, yet funds were diverted to promote tourism.

Mr. Furlong

I cannot think of a year in which one could make a worse case for resigning on grounds of financial stringency than this year because the budget for the Arts Council has been increased by 19% this year, by some margin, the largest single increase in the Department's overall budget.

Chairman

I am glad to hear that the arts are being acknowledged and that funding has been increased.

Mr. Furlong

It was acknowledged by the council at the time. While the arts community was understandably critical of the cutbacks in 2003, it generously acknowledged that for 2004 the Minister had in response moved a long way in dealing with the unfortunate situation which developed last year.

Chairman

I am glad to hear it. I propose to note the Bord na gCon accounts for 2002 and Vote 35. Is that agreed? Agreed.

I thank everyone who attended this extended but worthwhile meeting. Next week we will consider the Comptroller and Auditor General's value for money report on the evaluation of control activity in the Department of Social and Family Affairs.

Deputy J. Higgins

I have an issue I would like to raise. Will the meeting continue for a few minutes once the witnesses leave?

Chairman

No, I cannot allow the meeting to continue. Does the Deputy feel it necessary?

Deputy J. Higgins

Yes, I have an issue I wish to deal with.

The witnesses withdrew.

The committee went into private session and adjourned at 3.50 p.m. until 11 a.m. on Thursday, 8 April 2004.