COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 5 May 2005

Vote 39 — International Co-operation.

Mr. Dermot Gallagher (Secretary General, Department of Foreign Affairs) called and examined.

Chairman

I welcome our visitors. In particular, I extend a warm welcome to the parliamentarians from the Isle of Man who are in the public gallery. The delegation is under the leadership of the Honourable Noel Cringle, President of the Tynwald. I trust the delegation's stay in Ireland will be useful and enjoyable.

There are a number of items of relevant correspondence between the committee and the Department concerning transport arrangements during Ireland's Presidency of the European Union. Witnesses should be aware that they do not enjoy absolute privilege. The attention of members and witnesses is drawn to the fact that, as and from 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act 1997 grants certain rights to persons identified in the course of the committee's proceedings. These rights include the right to give evidence, to produce or to send documents to the committee, to appear before the committee in person or through a representative, to make a written and oral submission, to request the committee to direct the attendance of witnesses and the production of documents and to cross examine witnesses. These rights may be exercised for the most part only with the consent of the committee.

Persons invited before the committee are made aware of these rights and any persons identified in the course of proceedings who are not present may have to be made aware of these 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 this provision in the legislation, I remind members of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside of the House or an official either by name or in such a way as to make him or her identifiable. Members are also reminded of the provisions in Standing Order 156 that the committee shall 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 welcome Mr. Gallagher. Perhaps he will introduce his officials.

Mr. Gallagher

I am accompanied by Mr. Tony Taafe, the financial controller in the development co-operation division; Mr. Frank Sheridan, who is in charge of the programmes in the various countries in that division; Mr. Brendan Rogers, assistant secretary, who is the deputy director-general of the division; Mr. Christy O'Shea, accounting officer and Mr. Karl Gardner and Ms Anne Barrington from the corporate affairs division.

Chairman

Will the Department of Finance officials introduce themselves?

Mr. Jim O’Farrell

I am principal officer, and with me are Ms Deirdre Hanlon, principal officer, public expenditure, and Ms Joan Daly, assistant principal officer, staffing.

Chairman

Thank you. Will Mr. Purcell introduce Votes 38 and 39?

Mr. John Purcell

The bulk of the Department of Foreign Affairs Vote goes towards meeting the administration costs of the mainstream activities of the Department. That amounted to almost €145 million in the year in question, with most of the balance accounted for by the €18.9 million in contributions to international organisations.

There are no significant appropriations-in-aid. Passport, visa and consular fees are collected by the Department and €28.8 million was paid in such fees to the Exchequer as extra receipts. This arrangement has changed with effect from 1 January 2004. Henceforth, passport, visa and consular fees will be treated as appropriations-in-aid of the Vote.

The committee might wish to note an exception to the general accounting policies in that for the purposes of the appropriation account, expenditure for Irish diplomatic missions is accounted for on a 1 October to 30 September basis, that is, three months in arrears. This arrangement goes back to a time when communications were not what they are today. It is probably time to bring these accounts into line with the calendar year so there can be a consistent basis for the Vote account.

With regard to Vote 39, despite not being mentioned in the ambit of the Vote, the international co-operation Vote covers the Department's costs of administering the development assistance programme, nearly €22 million in all. The other €350 million is used to fund the different channels of development aid. The Department's evaluation and audit unit keeps the bilateral aid expenditure under systematic review and its reports are available to my audit staff.

There were no issues arising on the audit of either Vote that, in my opinion, merit public accountability.

Mr. Dermot Gallagher

I join the chairman in welcoming the delegation from the Tynwald. I had the opportunity to have a discussion with the delegates earlier.

Before I give my opening statement, I wish to respond to what the Comptroller and Auditor General said, correctly, about the difference in the accounting years. At headquarters, it is on a calendar, 12 month basis but embassies are three months behind. The Comptroller and Auditor General has been pointing out this for a number of years and we decided we should act on it. We entered into negotiations with the Department of Finance and it has been agreed that from this year the two accounting systems will be merged and it will be the calendar year for embassies and diplomatic missions abroad as well as for headquarters. We are also grateful for the support and advice the team of the Comptroller and Auditor General gives to our audit personnel in the Department, particularly in the development co-operation division.

This is my first appearance before the committee and it is an honour to be here and to have the opportunity to account for the expenditure of the Department of Foreign Affairs. There are two Votes in question, Vote 38, Department of Foreign Affairs, and Vote 39, international co-operation. In 2003, the combined Votes of the Department amounted to a total of €563 million. The main part of that expenditure was for Vote 39 on development co-operation and I propose to focus on that area first.

Before doing so, I wish to underline my commitment and that of the Department to the principles of accountability, careful stewardship of public funds and ensuring value for taxpayers' money. These are the principles which have informed the Department in its work to deliver on policy priorities. The fact that the Department operates with 69, soon to be 74, offices abroad and that our work is at the edge of an ever changing and complex global and international environment poses its own challenges. Nonetheless, rigorous accountability for the public funds entrusted to the Department has been and will remain a key priority.

With a view to ensuring this accountability, I have been active in promoting the modernising changes recommended in the report on the accountability of Secretaries General and Accounting Officers, known as the Mullarkey report. I have fortnightly meetings with a view to driving forward that process. It is not an area in which I was previously an expert but I believe firmly in moving it forward and I hold fortnightly meetings with agendas.

In 2003, the expenditure for Vote 39 was €373 million. Together with expenditure by other Government Departments the total official development assistance amounted to €446 million. This represented 0.4% of GNP. The focus of our development programme is supporting poor countries to reduce poverty and to achieve sustainable economic growth. This is pursued through bilateral aid programmes in particular countries, emergency and humanitarian responses, assistance to non-governmental organisations, NGOs, multilateral agencies and other international organisations.

The Organisation for Economic Co-operation and Development, OECD, carried out a detailed peer review of the aid programme in 2003. The review strongly commended our development programme in 2003 on its quality and effectiveness. It also commended the programme on its sharp focus on poverty reduction.

Half of the programme allocation goes to countries ranked as least developed. This is the highest proportion of all the OECD donors. Our seven priority countries for bilateral assistance are Ethiopia, East Timor, Lesotho, Mozambique, Tanzania, Uganda and Zambia. All are categorised as least developed countries.

Non-governmental organisations, NGOs, play a critical role in development, often working with the poorest of the poor. The programme has been working in close partnership with Irish, international and local NGOs, including missionaries who during the years have done an extraordinary job at little administrative cost to assist in the alleviation of poverty.

In 2003 a significant development was the launch of a multi-year funding arrangement agreed with five Irish NGOs — Christian Aid, Concern, GOAL, Self-Help Development International and Trócaire. The Government is providing €117 million over three years to support the long-term development programmes of these agencies in some of the poorest countries of the world. Again, the focus is on poverty reduction. The NGOs concerned now have predictable budgetary frameworks to implement programmes to improve access to education, health, water, sanitation, food and shelter. It is fair to say this development has been widely welcomed.

Ireland has long supported the role of the United Nations in development, as it has in peacekeeping and other areas, and has demonstrated this support through its funding for UN bodies such as UNICEF, the United Nations Development Programme and the United Nations High Commission for Human Rights. In 2003 voluntary contributions of approximately €38 million were made to UN development agencies. One of the main criteria for allocating contributions is the poverty focus of the agencies concerned.

The recent tsunami brought home to many of us the scale of suffering arising from a natural disaster and the need to focus both on immediate needs and long-term development. In 2003 €36 million was allocated to meet the basic humanitarian and recovery needs of some of the poorest populations in the world, mostly in Africa. Some €9 million of this amount went to southern Africa as part of a successful effort to avert a full blown famine. In summary, 2003 saw the Irish aid programme continue to implement the recommendations in the Ireland aid review committee's report; continue the focus of the programme on poverty reduction in some of the poorest countries of the world; and consolidate and expand its programmes with its key development partners.

With regard to Vote 38 for the Department of Foreign Affairs, total expenditure was just over €172 million in 2003. More than 80% of this budget was allocated to meet administration costs. With these resources the Department participated in the detailed negotiations aimed at restoring the institutions and achieving the full implementation of the Good Friday Agreement. It also took a lead role in preparing for the commencement of the review of the operation of the Agreement.

As an aside, I read recently about the link between the Sunningdale and Good Friday Agreements. As the committee will be aware, the Good Friday Agreement was described by Mr. Séamus Mallon as "Sunningdale for slow learners". I think I am the only public servant in this country or the United Kingdom who was a member of the delegations both at Sunningdale and during the negotiations that led to the Good Friday Agreement. On the one hand, one could see this as encouraging while, on the other, there may be a discouraging or ominous dimension to it.

We continued our active participation in the European convention and the subsequent Intergovernmental Conference which led to the adoption of the European constitution during our Presidency in 2004. The Department was active in international fora, especially at the United Nations where, having just completed a successful two year term in the Security Council, we began a two year term in the Commission on Human Rights. We continued to promote Ireland's economic interests abroad, including working closely with other Departments and State agencies.

Demand for Irish passports is growing at an exceptional rate — about 33% between 2001 and 2004, an astonishing figure. Some 560,000 passports were issued in 2003. We also extended the passport express service to Northern Ireland. The service operates through post offices where one can purchase a prepaid envelope to apply for a passport which is supplied within ten days. The idea was initiated by one of my colleagues who recalled that a company in County Kerry had used a similar system for processing and delivering photographs.

We also advanced a major project to automate passport production. As members of the committee will be aware, we operate an emergency passport service at home and abroad, including evenings and weekends, in case of emergencies and difficulties. I would like to say how much I value the warm and generous words of appreciation from Deputies for the great work of our Passport Office staff at the coalface. The Passport Office is often the first contact most people have with the work of the Department of Foreign Affairs.

At the same time during 2003 major planning and preparation were under way in the Department for our upcoming Presidency of the Council of Ministers of the European Union. The Presidency is a major undertaking for any EU country's civil service. With the enlargement of the European Union and the increased number of policy areas, the scale and complexity of the undertaking have grown enormously. Planning and preparation for the 2004 Presidency began in 2001. It was my fourth Presidency — the first was when Dr. Garret FitzGerald was Minister, the second was under the aegis of Mr. Peter Barry and the third was with Mr. John Bruton as Taoiseach and Mr. Dick Spring as Minister for Foreign Affairs. All four Irish EU Presidencies were outstandingly successful. The preceding three were difficult and challenging but the fourth was probably the most complex, given the growth in the number of members states from 15 to 25. In fact, 28 states were involved because representatives of Romania, Bulgaria and Turkey also attended all the meetings. We aimed to conduct an efficient and effective Presidency, one that lived up to our proud record of excellence on previous occasions. For this purpose, €10 million was spent by the Department in 2003 and a further €21 million in 2004.

Looking back, it is fair to say the Department — indeed, the whole system because it was much broader than the Department of Foreign Affairs — did an exceptional job for Ireland and our international reputation in the most demanding and challenging of circumstances. The universal acclaim and appreciation that Ireland has received, including for brokering an agreement on the European constitution and the new President of the European Commission, demonstrate, as always, what a small country and a small service can achieve at the highest level in the most challenging and pressurised of circumstances.

I will do my best to answer any questions the committee may wish to put to me. My colleagues are also here to help and elaborate on points, as necessary and as the committee sees fit.

Chairman

I thank Mr. Gallagher. May we publish his opening statement?

Mr. Gallagher

Yes.

Deputy Ardagh

I join the Chairm an in welcoming our colleagues from Tynwald whom I had the opportunity of meeting last night. I also welcome Mr. Dermot Gallagher who is appearing at the committee for the first time as Secretary General. I wish him many successful years in the job to which he has been appointed.

I thank Mr. Gallagher and his Department for the assistance they afforded me in connection with the hearings at the Joint Committee on Justice, Equality, Defence and Women's Rights on the Dublin and Monaghan bombings. I also appreciate the Department's co-operation regarding the network of North-South relationships and in helping us with our work in that regard.

Members of the Dáil travel quite a bit and we are always amazed by, to quote Mr. Gallagher, "what a small country and a small service can achieve at the highest level in the most challenging and pressurised of circumstances". We acknowledge the great work that has been done, not only by the Department of Foreign Affairs generally but, in particular, by its Embassy staff abroad. Their help and co-operation are much appreciated.

The Minister for Foreign Affairs, Deputy Dermot Ahern, was recently appointed as a special envoy of the UN Secretary General — an event that received some mention. I do not know what he is doing. Will Mr. Gallagher comment on this briefly?

Mr. Gallagher

I will but before doing so, I thank the Deputy for his generous and warm words. The Department has a particular relationship with the Houses because of Members' travel. The entire Department and I have a particular respect for the work Deputies and Senators do which is reflected in the work our embassies and consulates do in support of visiting delegations. We are happy and proud to do this because I have and always will have a strong and abiding respect for the Houses and their Members.

On the envoy role, there are two elements. The United Nations has set out to reform itself and clearly needs reform to be more effective. Its best known element is the Security Council which came into being in 1945 at the end of the Second World War and reflected the reality of the time. In a whole host of areas the United Nations needs to reform itself. As the millennium development goals form part of the negotiations, there is a more focused and concentrated effort in responding to the needs of the Third World, an element of which is that countries should agree to the 0.7% of GNP target by 2015 and an interim target of 0.5% by 2009.

The negotiations are being conducted at the General Assembly of the United Nations in New York by the permanent representatives under the chair of the president of the assembly. They meet every week. The president of the assembly is hoping to produce a text at some stage. In addition, the Secretary General has selected five envoys because he believes the deal will not be done in New York and that at some stage there will be five, six or seven difficult and sensitive issues, as in all negotiations, which will reach a blockage and which the permanent representatives will not be able to resolve. He is hoping the five envoys, by travelling to key capitals, will be able to unblock them in order that the capitals will be able to come down from above and help to reach a consensus in New York.

Every country has its own dignity and sense of itself. The Minister will try to travel to every country in his region and talk to everybody. We are judging this as we go along but he will have to travel a second or third time to key swing countries which are leaders in their own area and will be crucial in unblocking the issues as the negotiations inevitably will become blocked. It will go down to the wire.

Ultimately, this will all be decided at a summit in New York from 14 to 16 September. The United Nations is a little like the European Union. If time is set aside for a deal to be done, it will be done the night before or on the morning of the deadline. Essentially, the Minister for Foreign Affairs is to sensitise countries and feed back to the UN Secretary General where countries have a particularly strong view on proposals. For instance, Ireland would agree to almost all the proposals but some countries will have strong views on some of them and the Minister is to feed this back in order that the United Nations can get a total picture. There is a war room in New York in order they can get a total picture of what are the six or seven issues involved and the key countries that need to be moved. I do not know if that makes sense.

Deputy Ardagh

That is fine. I am delighted Mr. Gallagher raised the question of overseas development aid targets. It is interesting that the United Nations has set an interim target of 0.5% of GNP by 2009 and 0.7% by 2015. Those are well behind Ireland's targets. One of the Ministers of State recently suggested Ireland would provide overseas development aid amounting to €1 billion in the not too distant future. That could happen within five years based on current economic growth. The Government will also set out the timescale for achieving the target and it was suggested that this would be done in April or May, although it may not be published until September. How close are we to achieving the target of 0.7% of GNP in overseas development aid?

Mr. Gallagher

We are at a figure of approximately 0.4%. The original target date was 2007 but it is clear that will not be achieved. To reach it by 2007 we would have to add €500 million. I would not anticipate a Government decision but my understanding is the Government intends to examine and decide on a date. I expect a decision to be made in the reasonably near future. The Government is committed to the 0.7% target but will go back to decide on a date by which it will reach that figure. The UN date is 2015 but whether the Government decides to reach it in advance of that date is the question. The Minister of State, Deputy Conor Lenihan, has indicated that in his view it should be reached by 2012 but clearly the Government will decide on a date. At this stage the NGOs would welcome a specific date with an interim date built in.

Deputy Ardagh

If 0.4% of GNP equated to €446 million in 2003, 0.7% would equate to more than €750 million in 2007.

Mr. Gallagher

I am sorry, I may have misled the Deputy. I meant an additional €500 million. To reach the figure of 0.7% by 2007, at current growth rates, we estimate, together with the Department of Finance, that it would cost €1.071 billion, whereas this year total ODA amounts to €545 million. Total ODA for 2007 is envisaged as €675 million if we continue as we are. The Minister for Finance agreed to a three year envelope and signalled in the last budget what the increases would be in 2005, 2006 and 2007.

Deputy Ardagh

What percentage of projected GNP will €675 million represent in 2007? Will it be greater or less than 0.4%?

Mr. Brendan Rogers

Over 0.4%. It will be approximately 0.44% or 0.45%.

Deputy Ardagh

Is that figure subject to change in the next few months?

Mr. Gallagher

I cannot anticipate a Government decision but if the Government decides on a target, say, by 2012, with an interim target, one will have to have planned increases every year leading to that figure rather than a mass of money at the end, which would not make any sense in terms of administration, development or otherwise.

Deputy Ardagh

I do not know if the Minister of State is a gambling man but what are the chances of achieving the target by 2012 rather than 2015, the UN target in the current discussions?

Mr. Gallagher

I am not bad on negotiations. However, strategy, policy development and accounts are not my strongest points. I have spent more time on negotiation, rightly so as it is important, since taking this office. It is a budgetary matter. There is a firm commitment on the part of the Government and all sides of the House to reach the 0.7% target as quickly as possible. Whether it will be achieved in 2012, 2013 or 2015, I cannot say. Our people are doing the sums and we are meeting the Department of the Taoiseach on the matter. Meetings are in the early stages of planning between the Department of Finance, the Department of Foreign Affairs and the Taoiseach. We are doing the homework. The date will be the subject of a political decision.

Deputy Ardagh

Is the Department putting plans and structures in place to enable it to efficiently spend, in terms of value for money, the figure of 0.7% by the year 2007, 2008 or 2009?

Mr. Gallagher

There is no doubt we would not be able to spend that amount now, although we have increased capacity significantly in recent years. With strong support from the Department of Finance which has been very helpful, last year or the previous year we recruited 30 new specialists. If there is a Government decision to achieve the target by 2012, it will present a challenge. We have always met such challenges. It will be up to us to obtain the additional resources. We have a very good team and a very good programme in place which was thought by the OECD in 2003 to be one of the best. We will roll up our sleeves and do the work. It will require clear, structured and strategic planning on a year by year basis. It will have to be done deliberately. However, we can do it.

Deputy Ardagh

It appears the Department does not have a plan to ensure if it happens, it will be able to spend the money. Effectively, at this point in time it would not be able to spend it because it would not be able to ensure full value for money or that the money would be spent in an effective manner.

Mr. Gallagher

I will not be facetious but totally up-front. We could always spend the money by giving it to international organisations. However, that is not what we are about. We give them a certain proportion but the substantial part of programme moneys is spent in priority countries and in working with NGOs. If we had over €1 billion now, I would not be comfortable with it. I am comfortable with what we have and that we could take on planned increases. However, if the increased amounts are to increase further, we must put the necessary structures in place. We need to strengthen our capacity. One of the things we are doing — we have an expert working on this — is looking at staffing capacity and resources. We are ready and will be able to move. The expertise is available to be brought in.

Deputy Ardagh

I will leave that issue because I am sure Deputy Boyle will return to it. I want to move on to an issue currently in the newspapers, Irish people in the United States illegally and the question of biometric driving licences. It appears from the media that a substantial number of Irish people need help and assistance to allow them to continue to work and live in the United States. What is being done to help or assist them? Must I ask what costs are involved in order to include this issue in the terms of reference?

Mr. Gallagher

No. As Deputies probably know, I was ambassador to the United States between 1991 and 1997. My predecessor, Mr. Paddy MacKernan, who did enormous work in this area, and I thought we had every undocumented Irish citizen who needed a visa covered with the Donnelly and Morrison visas and through the visa waiver concession. At one stage I went to the State Department which had received so many applications that I begged it not to destroy them. I said they would all be needed but it did not think so. I said many of the applications had come from discerning parents in Ireland who had seen an opportunity to get a green card but would not take them up. Anybody who applied at the time got a green card. Obviously, there are people who did not apply and never entered the system.

Since that time a number of people have travelled to the United States and stayed on. Their difficulty may be that their parents are elderly or that they want to come home for a funeral or wedding but cannot. Immigration is a very sensitive, thorny and difficult issue in the United States and there are trenchant views in Congress on the matter. The President is well disposed towards us and has suggested a system which would enable such persons to be considered"guest workers" for approximately four years after which they could apply for a green card. The important point regarding guest worker status is that it would enable the people concerned to return for funerals, weddings or family reunions, etc. This year the amount of money in support of Irish immigrants has been almost doubled to approximately €8 million. There is strong support for the immigration societies in Boston, New York and other cities. This is a difficult issue.

One of the problems with regard to the driving licence is that it serves as a form of ID in the United States and can be used to get insurance and open bank accounts, etc. If people do not have a driving licence, it will be difficult for them to operate. Many depend on the car to leave their children to school, etc. There is no easy answer to this problem. The President's focus is on pensions and social welfare. Therefore, if he introduces an initiative in this area, it will be towards the end of the year but it would be helpful.

A strong Fine Gael delegation was with my colleagues in New York yesterday. The Minister of State at the Department of Enterprise, Trade and Employment, Deputy Killeen, was also present. There is also a conference taking place in Washington. Despite the work of all parties, there is not a great atmosphere in Congress on the matter. It will take many battles and much lobbying to deal with it. If it was confined to Ireland only, it might not be a great problem but there are huge numbers from elsewhere involved. We will have to work in co-operation with Hispanic and other lobbies. It is not an easy situation.

Deputy Ardagh

Mr. Gallagher mentioned support for the Irish immigrant groups in Boston and other places in the United States. I know the amount for the support of such groups has increased significantly from less than €1 million not too long ago to over €8 million. We always imagine aid going to the United Kingdom where many Irish immigrants have hit hard times and do not think of money going to America. What is the breakdown? Where is the money going and to which groups? How does it help people and support Irish immigrant groups abroad?

Mr. Gallagher

I can supply the committee with the figures but 90% of the fund is going to Britain because that is where the most vulnerable people are to be found. Vulnerability in the United States is associated in recent times with the undocumented Irish with whom the immigrant societies are doing a lot of work. Those who are vulnerable in Britain have fallen through the cracks such as the older Irish in Manchester, Birmingham or London and must be supported. The funding is going to organisations working at the coalface with the marginalised, the unemployed and the vulnerable. It also helps to leverage money from the British authorities which have a very large responsibility to Irish citizens living in Britain who have made an enormous contribution during the years to its building and development.

Deputy Ardagh

With reference to the Vote, what money is due to the United Nations or to this country from the United Nations?

Mr. Gallagher

Ireland was paid €7 million last year for peacekeeping operations and is owed approximately €9.17 million. The situation is considerably better than it was.

Deputy Ardagh

How old is that debt?

Mr. Gallagher

That is a good question. It was due on 31 March 2005. Ireland was paid €6.96 million on 31 December 2004. Some of the money was in respect of Liberia, Ethiopia, Eritrea and the Lebanon. We are owed €9.17 million, of which €4.13 million is in respect of the Lebanon, €660,000 million in respect of Cyprus——

Deputy Ardagh

How old is the Lebanon debt?

Mr. Gallagher

It must be quite old.

Deputy Ardagh

When did we leave the Lebanon?

Mr. Gallagher

I will have to check that for the Deputy. I believe there are some observers in the Lebanon, perhaps two or three. The Lebanon debt must be a couple of years old and is significantly less than it was. We received €6.96 million last year and receive something every year but there is a sum of €9 million outstanding. We were owed very considerable amounts. I will send full details to the committee. It is a very perceptive and fair question. I may need to talk to the Department of Defence but will come back with a composite and clear answer for the committee.

Deputy Ardagh

In note R relating to Vote 38, statement of capital assets at 31 December 2003, under the heading of land and buildings, there is a cost evaluation of €57 million. Is this an up-to-date valuation of the property owned by the Government under the Department's control?

Mr. Gallagher

The Department owns 17 residences, four combined residences and chanceries and six chanceries, making a total of 27. It rents 88 properties. We have been talking to the Department of Finance with a view to purchasing morebecause clearly this makes good sense. Rental costs over ten years would buy a premises. Just as the ordinary individual takes out a mortgage, it seems to us to make good sense to buy. This has been encouraged from all sides. I can confirm that the valuation is up to date.

Deputy Ardagh

Are all of the valuations up to date?

Mr. Gallagher

For those we own, yes. I should clarify to the Deputy that is what we paid for them rather than the realisable value. We would probably get a lot more if they were sold.

Deputy Ardagh

Considerable amounts are being expended on improvements to embassies which are being maintained to a very high standard. It does not seem to make economic sense to expend this money on leased premises. The more that can be purchased, the better. It would be a little piece of Ireland in another state. I ask the Department, with the Department of Finance, to consider future purchase while the money is available. I suggest a loan from the national pensions fund.

Mr. Gallagher

We are talking to the National Development Finance Agency with the blessing of the Department of Finance. We have identified a number of properties which we regard as offering good value for purchase. The Department of Finance has been very helpful. It is a compelling point.

Deputy Ardagh

On the day that is in it, I must mention North-South relations and the general election in the North. It looks like matters will come to a head but I hope the situation will settle down. How does the Department regard the development of relationships in the resolution of the political problems in the North following the election?

Mr. Gallagher

There is no doubt that during the election people have distanced themselves from one another. Inevitably this happens during an election. There is a reality about Northern Ireland to which we will have to return after the election but this may take some time. For instance, if there was a very quiet summer and the marching season passed off quietly, if there was no criminality such as kneecapping for a number of months, it would be possible for the IMC to reflect and report on the situation. This would set the scene and create a good context for serious negotiations to begin again in the autumn. This is the time line I would envisage. People might begin to get together tentatively after the election or messages might be passed between them. A calm marching season and a summer without criminality would create the conditions for people to begin to talk seriously in the autumn to put back in place a powersharing Executive with an Irish dimension.

Deputy Boyle

I welcome Mr. Gallagher. On the subject of overseas development aid, he will realise the criteria for members of this committee preclude us from speaking about policy and policy-making and its implementation except in administrative terms.As he is the civil servant charged with administering this policy, I am curious to know how it is defined and in what circumstances it can be and is being changed.

The absolute commitment to reach a target of 0.7% was referred to by representatives of the Government at the UN millennium conference in New York in 2000. The Taoiseach repeated this commitment at the sustainable development summit in Johannesburg in 2002 when he said the global decline in ODA was shameful. He reiterated Ireland's commitment to that goal. Does changing a policy after those two international commitments and the subsequent inclusion of the 0.7% target in Sustaining Progress, which almost has a sacred context in terms of overall Government policy, cause difficulties internationally in terms of how the country is perceived?

Mr. Gallagher

Obviously, I cannot go down that route in any significant way. As somebody who for over 40 years has worked very closely with a whole range of Governments going back to when Frank Aiken was Minister for External Affairs, I can say there is a deep commitment on the part of everybody, a deep aspiration, to do the best one can and to contribute as generously as possible to ODA. That was reflected in the Taoiseach's speech. Like other party leaders, the man is deeply committed. It was not possible to achieve this but what was achieved, in fairness, was a very substantial sum by any standard and the putting in place of a very strong and active programme. I was there at the beginning of our aid programme in 1974 and 1975. It was very small but we built it up rapidly. Today, in many ways, it is a model and recognised as such.

As members of the committee who have been to New York will know, the greatest tribute is the respect in which Ireland is held which is reflected in the Minister for Foreign Affairs being asked by the UN Secretary General to be his special envoy. The commitment of Ireland — it is broader than just the Government — is very clear and recognised. The UN Secretary General praised the programme when he was here. If our international reputation had suffered in any way, I do not believe the Minister for Foreign Affairs would have been appointed envoy. We now need to go back and put a new commitment in place and deliver on it.

Deputy Boyle

In that regard, Mr. Gallagher will be aware that in recent weeks the coalition of development agencies, Dóchas, stated that if current spending trends were maintained on an annual basis, Ireland would meet the 0.7% target by 2028, which is nowhere near 2012 or 2015, as the United Nations has described in its most recent readjusted targets. Would Mr. Gallagher accept that figure?

Mr. Gallagher

I genuinely do not know the figure but if that is what Dóchas has stated, I believe it is a fair point to make. However, that is based on what we have, planned three year increases. I believe this year the increase was €75 million over last year and in the next two years will be €65 million each year. On that basis, Dóchas is probably right. It is a fair point. However, if a new target is to be put in place, there will have to be planned increases of a different nature in order to achieve it. That is the point I would make. If it is decided to go for 2012, 2013 or 2015, we will need to sit back and decide what this will require every year to achieve. Therefore, we would have to have a totally different set of increases on an annual basis. I do not believe there is any difference between Dóchas and me. It is just that the context would have changed radically.

Deputy Boyle

Could it be that part of the reason the targets have been readjusted and not met is an apparent inconsistency as to whether it is a cash amount on an annual basis or an attempt to meet the percentage increase every year? We appear to have heard excuses that economic performance both in good and bad terms allowed us to miss this target. I am not sure when there were economic bad times, it may relate to the economic downturn in 2002 and 2003. In most other years we have had average growth of approximately 6% in the economy. Has there been a reluctance to reach the levels our economic growth would have allowed us to achieve with the appropriate will?

Before I leave the development agencies, the Minister of State has gone on record as saying that in the spending of ODA he would like to see less emphasis on the work of such bodies, that he would rather spend the money in the area of advocacy. Regarding the money given since, has any mechanism been put in place? What controls, if any, have been introduced by the Department to achieve what the Minister of State wishes?

Mr. Gallagher

I take the point the Deputy made about the two sides. If economic growth is very low, it is possible to claim it is a difficult time whereas if growth is high, it can be claimed that the amount of money is enormous. Clearly, if the target was to be reached and there was a new target, we would need to stand back and decide what was needed every year. Now that the 2007 target is no more, obviously it is a case of negotiations in the context of the budget with the Department of Finance. We try — the Minister for Finance and his Department were very helpful — to get the maximum amount possible. A €75 million increase this year over last year is a solid performance. If there was no target, it would be seen as a superb performance. That said, I take the Deputy's point.

I have not been following advocacy to any significant degree. The Minister of State will sometimes say things with a light touch. With a light touch he said all of us needed to be accountable for all the money we received and spent. As somebody who has known the leaders of the aid agencies here for 30 years, been a great admirer of all of them and a personal friend to most of them, I have nothing but the highest regard for what they do. I have seen what they do on the ground, both 30 years ago and more recently when I travelled to some of the programme countries. However, I do not believe there was any criticism in what the Minister of State said. He was basically saying that all of us needed to look at the money we had available and see that it was spent in a way that gave good value for money. I know he is very committed and a strong admirer of the aid agencies.

Deputy Boyle

I will move on to the question of value for money in the ODA budget. In his opening contribution Mr. Gallagher listed the countries targeted. I understand the Department has a policy that aid should not be linked in any way with a political system in a given country or, as other countries do, trade issues. In terms of value for money, is Mr. Gallagher confident that what might be happening in some countries in terms of corruption or direct government involvement is either hindering or unnecessarily adding to the cost of direct aid in the projects we are trying to assist in several of the countries concerned?

Mr. Gallagher

The Deputy is right that we do not tie aid. We are one of the few who do not and I appreciate his words on that matter. Corruption is always a problem. When I took over this job, one of the first things I did — because John O'Shea happens to be a particular friend of mine for a long time — was to travel to Uganda and talk to the people on the ground. Risk is inherent in development aid. If there was no risk factor, we would probably not do anything. It is probably a higher risk than elsewhere.

We need to be as prudent as possible and put in place tracking devices both at headquarters and in missions and in co-operation with other donors on the ground. There are tracking audits in that respect. If a school has been built, one goes out to inspect the site and determine if the project represents value for money. One also examines the tenders. We have a very strong audit team which benefits from the advice of the staff of the Comptroller and Auditor General. A meeting will take place between the team and the Comptroller and Auditor General's officials on 17 May.

I wish to strengthen the structure. We have an audit committee exclusively staffed by external people whom I meet regularly. They have advised that our audit function which I consider to be a model needs to be further strengthened. We are, therefore, in the process of bringing in two further accountants. One tries to track everything at the level outlined as well as at the macro level. One tries to determine in the area of education, for example, whether one is making a difference and whether there are more primary school teachers and children attending schools. One seeks to ascertain how well teachers are trained and if there are school places for them. That is an example of the work we do.

Deputy Boyle

On the same subject, the Minister of State made the following statement recently to the Joint Committee on Foreign Affairs: "We alone do not know how to ensure that the best value is obtained for taxpayer's money." He subsequently said:

We must guarantee proper management of the programme as the aid budget grows. We must address, in an open and transparent manner, any issue of governance that might arise in our programme countries. We must be in a position to offer the public reassurance in terms of obtaining value for money as our budget expands. We must also examine the aid modalities we employ in our partner countries and ensure we find the right mix that corresponds to our expertise and guarantees value for money.

While he may have been speaking with his customary light touch, as Mr. Gallagher said, his comments indicate a degree of uncertainty about whether the current system can be improved. The audit section within the Department is quite small and has approximately three staff.

Mr. Gallagher

There are five.

Deputy Boyle

They receive approximately 200 reports each year from the aid programme and embassies and consulates around the world. The team carries out the only direct auditing of this budget, in respect of which the Office of the Comptroller and Auditor General has no particular role. To what extent can a team of that size follow audits with subsequent spot checks, given time management constraints and the ability to travel to far flung locations? There seem to be gaps in proper accountability.

Mr. Gallagher

The comments of the Minister of State were reflective and serious and I endorse them fully. Every system can be improved as no system is perfect. We have five members of staff in the independent audit unit which decides, depending on the flows of cash and projects, what it will audit. We are looking for two more accountants to join the team. In addition, we have accountants in our offices in each of the six programme countries, some of whom are audit specialists. The audit team is not alone in that we have people on the ground in audit units in embassies and aid offices. We work closely with the World Bank and other donors and occasionally carry out joint audits. Uniquely, in the past two weeks we have appointed Mr. Brendan Rogers as deputy head at assistant secretary level to strengthen the development co-operation division.

While we are determined to strengthen our structures, no one is perfect. We will try to improve matters as we progress. We are working closely with the audit committee, the members of which are external to the Department.

Deputy Boyle

The debate in the Dáil is moving faster than I would like and I will be among the next group of speakers. I will conclude, therefore, with a compendium of questions. I am curious about a number of aspects of the budget. There is a category in the Vote of actions consequent on Title V of the Treaty of the European Union. Will Mr. Gallagher explain what the money is used for and whether it is unique to the Department or if other Departments have similar budget headings?

Mr. Gallagher

Not to my knowledge as it relates to the ESDP.

Deputy Boyle

It is a common defence policy.

Mr. Gallagher

Yes. The heading relates to provisions of the Common Foreign and Security Policy and includes some mandatory contributions, one of which is to an EU institute for security studies in Paris. The heading deals with discretionary funding of activities in support of our CFSP objectives. To give a specific example, in recent years election monitors have been paid under this heading.

Deputy Boyle

Will Mr. Gallagher be in a position to provide a breakdown for the committee to let members see what is included in the category?

Mr. Gallagher

I will. I will send it to the secretariat.

Deputy Boyle

Is the exponential growth in the number of passports being sought the result of a bulge in the birth rate? Are people who have been living in the country for a considerable period applying for citizenship? Is it suddenly the case that the world is our oyster and everyone wants to live in Ireland?

Mr. Gallagher

I do not know. I suspect it is due to the sheer numbers who wish to travel who have not travelled before. The growth in the number of applications has been phenomenal. It surprised us as we thought it would pan out at some stage. It should be remembered that some years ago we moved from a five year to a ten year renewable passport which we thought would take pressure off the service. It has not.

Deputy Boyle

Does the Department keep statistics for the numbers of applicants born or resident in Ireland?

Mr. Gallagher

No. A certain percentage of passports are issued by missions abroad. We have a very large passport office in London, for example. There is a requirement on the application form to state one's country of birth. I suspect the new passport system we have introduced which is not fully operational will be able to provide at the press of a switch the breakdown the Deputy requested.

Deputy Boyle

Is the Department satisfied there are enough security features in the passport granting system? There was considerable controversy in the past about who had been given Irish passports and the manner in which documents had been used but one need not go back that far. I remember Colonel Oliver North using an Irish passport in Iran once upon a time.

Mr. Gallagher

I know. We never received a satisfactory answer. The new passport is very secure and has a digitised version of the photograph which can be seen on another part of the page. My daughter who travels a great deal was in a country recently where an immigration officer brought his colleagues over to see the document.

One of the questions which will arise in the near future will be whether to include a biometric chip in the passport. The three security elements to consider in that context are the shape of the face, fingerprints or the pattern of the iris. If we adopt a biometric chip, it will probably be based on the shape of the face. While the Americans say one will require such a document to continue to use the visa waiver with passports issued after October last, there are differing views on whether it is a necessary measure. Views differ in Congress, on the one hand, and the State Department and the Department of Homeland Security, on the other, as to whether a biometric chip will be required or whether a digital photograph is enough. We are trying to clarify the matter. While we have requested tenders on the inclusion in passports of biometric chips, we have not gone ahead nor will we until we are sure of the American position.

Deputy Boyle

My final question is disconnected from anything I have asked previously. It concerns a spouse allowance for consulate and embassy staff. Does the Department have a policy of encouraging representatives in embassies and consulates to be married? If so, is it regarded as a disincentive to single people?

Mr. Gallagher

I would not encourage anyone one way or the other. I have been very happily married for 34 years and can recommend it. It is a fair question to ask whether partners are recognised for foreign service allowances. Is that the Deputy's question?

Deputy Boyle

I am referring to the possibility of introducing changes in the diplomatic service to reflect society at large. How is the Department responding to this?

Mr. Gallagher

We engaged legal consultants, McCann Fitzgerald, to conduct an equality review to ensure our system of allowances in regard to non-marital partners complied with relevant equality and employment legislation. They concluded the system was in compliance. More recently, an equality case was taken against the Department to the Office of the Director of Equality Investigation and a hearing took place in December. The outcome is awaited and will be taken into account. The Department would like to be as forthcoming as possible but it is not always possible to do so. I would err on the side of trying to be as forthcoming as I could but we must also remain within the guidelines.

Deputy Boyle

I thank Mr. Gallagher.

Deputy Deasy

I welcome Mr. Gallagher. I concur with Deputy Ardagh's comments; my experience of the Department of Foreign Affairs and diplomatic service has been excellent. I have worked with a number of people involved in the diplomatic service, primarily in the United States, and, in general, they are a credit to the nation. As the Comptroller and Auditor General made clear, no outstanding issues arise with regard to the Votes. The committee should note this as it indicates a well run Department.

I apologise for missing some of Mr. Gallagher's response to Deputy Ardagh's questions on the plight of illegals in the United States. I note he stated the budget for this issue had almost doubled to €8 million. Mr. Gallagher who was our ambassador in Washington for six or seven years mentioned the efforts he had made with regard to the Donnelly and Morrison visas. I am also well aware of his efforts with regard to the tourist waiver programme, having worked with him on that project while employed in the United States Congress. Much of the success of the project was due to his abilities and the work he did in those years.

What is the nature of our ongoing lobbying efforts on Capitol Hill on the issue of illegal immigrants in the United States? The Bush Administration has indicated it is favourable towards easing restrictions on illegals in the United States, including Irish illegals. We all know Senators McCain and Kennedy plan to introduce legislation which would significantly ameliorate the problem. What efforts are we making on this issue, particularly as regards the House of Representatives? Are we engaged in talks with the judiciary committee of the House, specifically its chairman, Mr. Sensenbrenner? What contacts do we have with Mr. Hostettler, the chairman of the sub-committee on immigration, and ranking members of both committees?

A difficulty arises regarding the attitude of some Republican Party Members to what the Administration is trying to do, in consultation with Members of the Democratic Party, notably in the Senate. There appears to be some resistance to change in this area among Republican Members. What contracts have we made with Mr. Hastert, the Speaker of the House; Mr. Blunt, the majority Whip in the House, and Mr. DeLay, the House majority leader? Given that we are doubling our budget for this area, what efforts are we making?

Mr. Gallagher

I thank the Deputy for his warm and generous words which I reciprocate. The effectiveness of the embassy in Washington was due in significant part to the support, friends and, to use a strong word, solidarity we had on the Hill. The Deputy, although a young man at the time — he still is — enjoyed a great deal of respect and had exceptionally good contacts in the House and made these available. I appreciate the quality and substance of his advice at the time as it made a difference.

The money to the agencies in the United States is primarily intended to help them reach out to and support people with difficulties. We have also encouraged them to lobby. I am not sure about the number involved as there are differing views on the issue. GAA teams, always a good indicator of the position, are having problems in many cities. Sometimes this suggests a problem or else people have aged. During our time I believed we had reached everybody and few people were short of a green card.

As members will be aware, the atmosphere has changed since 11 September 2001. Immigration is now a very divisive issue in Congress, in which many lobbies operate, each of which watches the others. The Hispanic lobby, for example, watches us. The numbers on the Irish side are relatively small and people are well disposed to us. Having pushed this issue and tried to drive it, I wanted a comprehensive report from the ambassador in Washington with an input from all the consulates on the progress of lobbying and what were the prospects of moving the matter forward.

We have obviously spoken to the Speaker, Dennis Hastert, with whom the Taoiseach also spoke on St. Patrick's Day. We have also spoken many times to Senator Sensenbrenner. It is a question of timing for Senators McCain and Kennedy. If the President's Bill was introduced, it would alleviate matters considerably. I was in the Oval Office at the meeting on St. Patrick's Day and the President was exceptionally well disposed. For the first half of this year, he will concentrate on social security and pensions, which is a major issue. As I informed Deputy Ardagh, the President's Bill on what I call guest workers will be introduced towards the second half of the year for which he will need to secure support in Congress. We will come in behind it. Ideally, the Kennedy-McCain Bill should be introduced but if the President's was passed, it would ease matters considerably. People are anxious to be able to return to Ireland for funerals, weddings and other events.

I speak to the ambassador in Washington on this issue about twice a week when I ask for a comprehensive report covering every aspect of the issue and how we can best drive it forward. It is very helpful that the Minister of State, Deputy Killeen, and some of his colleagues, including Deputies Connaughton, McGinley, Ring and Coveney are there because it shows people on Capitol Hill that this is a priority issue about which there is deep concern.

Deputy Deasy

Mr. Gallagher can guess from where I am coming on this matter. He knows Capitol Hill intimately and has been involved in many Bills. I also know something about it and I am aware that one has to be aggressive and continually lobby the people on those committees. A day-to-day effort is required in terms of lobbying to change the minds of people sitting on these committees. Are we lobbying the members of the committees on the judiciary? Are we lobbying, in particular and on an ongoing basis, the members of the sub-committee on immigration? Have we talked to Orrin Hatch and others? Are we making a concerted effort to lobby individual committee members on Capitol Hill?

Mr. Gallagher

That is the clear direction and instruction and embassy staff have been told that this is the highest priority. I cannot give chapter and verse on it but before Easter I said that the Minister wants a comprehensive report on all aspects of this issue and on the way forward. There is no doubt it has the highest priority. I can go back and look at chapter and verse myself but I cannot say we met X on such a day and Y on another day. However, it is a continuing ongoing process.

Deputy Deasy

Does Mr. Gallagher understand the thrust of my question?

Mr. Gallagher

Of course I do.

Deputy Deasy

This matter has not arisen in the past couple of weeks. This has been going on for approximately five or six months.

Mr. Gallagher

There was much discussion on that matter at the highest level on St. Patrick's Day. A great deal of the discussion was on Northern Ireland and some of it was on the Chinese arms embargo, etc. Much of the discussion focused on immigration.

Deputy Deasy

I accept that and I know what happened. I know the lobbying that took place on St. Patrick's Day. However, that was only one day.

Mr. Gallagher

I accept that.

Deputy Deasy

What I am getting at is the kind of effort that is needed to change attitudes towards any legislation, whether it be the President's, Mr. McCain's, Mr. Kennedy's or mirroring legislation coming from the House. This has been an issue for quite some time, not just five or six months. I am wrong about that actually, it has been an issue for years. Are we investing the resources to make a concerted lobbying effort with all of those members on the particular committees that matter when it comes to these issues? Mr. Gallagher said that is in train at present and that it will be happening soon. That is the key issue as far as change is concerned with regard to Irish illegals.

Mr. Gallagher

That is a fair point. We both know Capitol Hill as we have worked there. The situation is difficult post-11 September 2001. I do not know how many Mexican illegals are in the United States but it could be in the region of 9 million and there is a very active Hispanic lobby watching every move we make.

Deputy Deasy

They have always watched us and we have always done our own thing.

Mr. Gallagher

I know. That was then and this is now. One of the questions I asked in seeking this comprehensive report was if there was any way we could skew it so that a Bill relating only to Ireland could get through. As the Deputy knows, that is what we did it on visa waivers. We did not quite qualify but we were moving in that direction. Ireland was not mentioned in the Bill but if one broke down the statistics, it was the only country that qualified under the system the legislation instigated. The Deputy is correct. That is one of the questions I asked but the context is vitriolic at present. I am glad the Deputy said it. I will go back with that thought. We might have a word about it.

Deputy Deasy

I thank Mr. Gallagher. He is probably aware of the Daniel O'Callaghan case. The latter was murdered in the Canaries a couple of years ago. We discussed the matter at the Joint Committee on European Affairs last week. I want to develop a general point that came up throughout that meeting. Dr. Maeve Pomeroy, Daniel's mother, raised the issue of a minimum standard of consulate help and consular assistance that would be provided to families who find themselves in that kind of situation. Reading between the lines of what Dr. Pomeroy said, I do not think the family was particularly happy with the level of assistance they received in Spain at the time of the murder or in the interim.

Mr. Gallagher probably saw the number of Irish people who travelled abroad last year. In the region of 5.4 million trips abroad were made by Irish people in 2004. That is a big increase on the 2003 figure. A total of 3 million people went on holidays, 670,000 people went on business trips and 1.3 million went to visit friends or relatives. Irish people are going abroad in greater numbers than was previously the case. Somebody referred to this as the "Ryanair effect". Is money being invested in our consulate services in proportion to the number of Irish people going abroad?

My experience has been good. By and large, the Department of Foreign Affairs has been excellent in any individual case with which I have dealt. However, a concern was raised at the meeting last week regarding the situation in which the Gallagher family found itself. It came down to issues of protocol in terms of minimum standards of assistance available to a family in such a situation.

Mr. Gallagher

We have a general protocol for how we assist people. Our great strength is that we are flexible. That is the minimum. I will return to the Dr. Pomeroy case in a moment. Following the tsunami in Thailand, diplomats visited temporary morgue after temporary morgue. They identified one person by——

Deputy Deasy

My experience with Dan Mulhall from the embassy was absolutely fantastic.

Mr. Gallagher

——a tattoo on the back. One cannot draw up instructions for everything. Embassies provide a 24-hour service. Although it is difficult, I have insisted that there be an emergency service in each embassy. In Prague, for example, every weekend at about 1 a.m. staff receive calls on their mobile phones from people who have had a few jars and who then hang up. It is right to provide the service because for everyone who misbehaves, there are genuine people who need support. I do not know if any other country provides a 24-hour service. We are a small country and it is right that we look after our own.

When I was in Nigeria some years ago, a priest came to me about an Irish woman and her two children who were thrown out in a shed with rats running over them. We got them 200 miles to Lagos where we fed them, obtained clothes for them, got them passports and got them through immigration in a way which was not prescribed by protocols. We got them home, otherwise they would have been dead. We do such things on an ongoing basis.

We draw up minimum rules but staff are told to use their common sense and to be generous and supportive. They are asked to stretch themselves. The Minister for Foreign Affairs is meeting Dr. Pomeroy this afternoon and the Taoiseach raised the matter with the Spanish Prime Minister. It is a sad case. We have an honorary consul in the Canaries. Consuls are usually solicitors. The embassy is in Madrid. Once we heard about this case, the honorary consul in Las Palmas flew out immediately to the bedside. His assistant attended the hospital to act as a translator and to provide general assistance to the family. Due to the fact that the boy was in intensive care, the ambassador in Madrid contacted the director of health services to ensure more extensive access to the intensive care unit for the family. Since then, we have continued our efforts, provided the names of English speaking lawyers, secured the full medical records and the embassy has maintained continuous links with the police. At some stage we are dependent on the local police to investigate but we exert as much pressure as possible. The Minister for Justice, Equality and Law Reform wrote to his opposite number and gardaí were sent out there.

If it was my child I would be extremely upset. I have absolute sympathy for the family. I do not take away from what was said but looking at the broader issue, we go to extraordinary lengths to help those in difficulty. That is always the ethos that motivates us. As head of the Department, I would be very unhappy if I thought no one responded to that call.

Deputy Deasy

The gardaí in question travelled to the jurisdiction and it is their firm belief that a reasonable investigation by the police did not take place. What is the Department doing to progress this matter? The Minister for Justice, Equality and Law Reform has made great efforts and tried hard to get some kind of reaction from the Spanish authorities, particularly those that have jurisdiction over the municipal police in the area. What effort is the Department of Foreign Affairs making with the Spanish authorities at this point?

Mr. Gallagher

I would be guided by the Garda, which has done a tremendous job in this. The best reflection of concern and effort to get movement is to raise the case at the highest level. The Taoiseach has raised it with the Spanish Prime Minister and a full investigation has been put in train. It is up to us now. The Minister for Foreign Affairs will meet Dr. Pomeroy this afternoon and we must ensure the pressure remains on and that we get regular updates on the investigation. The Garda will continue to work closely with the Spanish police. I am not involved in the detail, although I have huge sympathy for the family. The Spanish police have sent a series of requests to the Garda for information it possesses. There is some movement at least.

Deputy Deasy

The number of Irish people travelling is increasing. Do consulate services have the requisite resources globally?

Mr. Gallagher

Where we do not have an embassy, we have honorary consuls. We have appointed quite a few more of them and made it clear what we expect them to do. We look at the resources on a continuing basis. It is not easy because we had to lose a number of staff on the basis of the embargo. We are, however, opening five new missions.

Deputy Deasy

That is not what I am getting at.

Mr. Gallagher

It has not reached a stage where I am concerned but we are looking at missions such as Prague, where we can do the 24-hour job. Some people abuse the service but I do not mind that, it can happen anywhere and people are sorry the next morning. We are looking at a number of missions that we may need to strengthen. I am comfortable at present but I might need to consider matters in the next 12 months.

Deputy Curran

I want to refer to foreign aid, particularly emergency aid. After the tsunami, the Government, the Department and the Minister had to make a decision on the level of aid to be provided. During this entire episode, and in respect of previous disasters where different countries pledged money, it transpired that the pledges were not always honoured. What is the position in that regard in Ireland's case?

As the extent of the disaster unfolded, the response from the public and, subsequently, the Department grew in terms of monetary contributions. How did the Department decide the level of emergency funding that could be used appropriately? It reached the stage where Concern stated that it did not want any more donations because it could not use the money. What mechanisms are in place in the Department to deal with short-term immediate planning in the wake of disasters? What happened in this instance is not the same as what occurs with aid programmes that have been developed over a period. Decisions are made quickly for immediate relief. How did the Department determine the appropriate level of aid and ensure that the money was delivered to the target areas?

Mr. Gallagher

We have always met the pledges we have made in respect of humanitarian aid — be they for Afghanistan, Sierra Leone, Liberia, the earthquake in Iran or other areas — and we continue to meet them. We attach a great deal of importance to that and as a result of our initiative at the EU, delivery of pledges is now being monitored.

Deputy Curran is right about Concern stating it did not need any more money. The response was overwhelming to the request for assistance. The Irish public, as always, showed itself to be extraordinarily generous. How do we decide how much to give? Usually there is an international appeal for a certain amount and countries get together and discuss how much they will pledge. It may depend on the extent of the tragedy. Clearly, an earthquake that is localised is on a different scale from the tsunami that affected five different countries.

Mr. Rogers

I headed the unit — there is a humanitarian emergency unit based at the Department — that specifically responded to the tsunami. Unlike the tsunami, most of the emergencies do not occur overnight but build slowly. Famines in south and east Africa are prime examples. We have continuous channels of communication with all of the NGOs so we absorb all of the information being supplied to them on the ground.

As the Secretary General said, we monitor international appeals, such as the International Red Cross and the UN appeals, at all times. There is a consolidated appeals process where all of the UN agencies get together and look at the global situation to identify the gaps and the real needs. It is our policy to fill those gaps and meet those needs. We have a budget for the year and extra funding is available, if necessary. To the best of our abilities we plug those gaps.

We take decisions quickly. We met within six hours of the information reaching Ireland on the tsunami and delivered the first €1 million very quickly.

Deputy Curran

The question was by no means critical. Famine is a different matter where one has information and the time to respond and fill in the gaps. However, a tsunami or an earthquake is so sudden that planning is very difficult. Did the funding pledged by Ireland go into a global fund or was it delivered through various Irish-based aid agencies?

Mr. Rogers

The funding was delivered to several key NGO agencies, such as Concern, Trócaire, GOAL, Oxfam Ireland and Christian Aid Ireland, working on the ground. Certain agencies, such as the UN, have specialised expertise which we want to assist. We also want to assist the Red Cross because it has societies that can be on the scene of accidents and emergencies within several hours of their taking place. We want to ensure we get a cross-section to maximise the impact of the funding we deliver.

Deputy Curran

Is Mr. Rogers satisfied that it was maximised?

Mr. Rogers

Yes, it was. However, we will carry out an audit and evaluation of this in due course because there may be lessons to be learned.

Deputy Curran

I realise that there was other funding for long-term projects but I was more concerned about the immediate response because of the manner in which the incident occurred.

Mr. Gallagher

There are two stages of response. There is the immediate response of providing shelter, clean water and sanitation. Then there is the long-term response of putting money back into the affected economy through the provision of, for example, fishing boats. A former Deputy, Mr. Chris Flood, is the envoy and has visited the region on two occasions. Mr. Rogers has also been there.

Deputy Deasy referred to consular support. At midday on St. Stephen's Day, a full team was in place responding to the crisis. We received over 3,000 inquiries. In some states, parliamentary committees are investigating the inadequate response of some departments. Each of the 3,000 inquires was followed up and all people were traced. Gardaí drove down byroads in counties Leitrim, Cork and Kerry to inform families that relatives had been traced. All bodies of Irish victims of the disaster have been identified. The last body, that of Mr. Michael Murphy from Wexford — Lord have mercy on him — was returned to Ireland yesterday. Likewise, after the events of 11 September 2001, we received 5,000 queries. Each of these was followed up. Young people are often criticised but when we asked for volunteers from other Departments, it was mainly young people who volunteered. It was very traumatic for them and they needed counselling as well as those on the other end of the telephone. The volunteering gave me great confidence. Mr. Daniel Mulhall, although residing in Malaysia, was in Thailand where he put together a meitheal of the young Irish people there. He set up an office, got the word out and began to trace missing people.

Deputy Curran

There was much talk about the figure of 0.4% of GDP rising to 0.7%. It was indicated by the witnesses that a programme over several years would be needed to reach that target. This will mean a significant increase in actual funding. The witnesses stated that if we went from 0.4% to 0.7% overnight, they would not get the best value for money as the systems would not be in place. What steps are being taken for agencies that are receiving funding to reach this target?

Mr. Gallagher

We are conducting an audit of staff resources, capabilities and requirements so that we have a good sense of what we need to put in place.

Deputy Curran

Is that staff within the Department or the agencies?

Mr. Gallagher

That is staff within the Department. In my dealings with agencies during the past 30 years, I have always found that they can secure the capacity if funding is increased. They receive 24% of the total fund but they will build up their capacity, if required. The Minister of State came up with the idea of consulting various parties on the White Paper. By consulting people, one is selling the programme and people will get a sense of what is being done. I presume it will deal with the resources dimension.

Mr. Rogers

Yes. Meetings have been held in Limerick, Waterford, Athlone, Galway and several other towns. This ensures good participative dialogue and that people's ideas are taken on board in the deliberations on the White Paper during the coming months.

Deputy Curran

Am I correct in saying that additional funding has not yet been targeted to any specific project?

Mr. Gallagher

No, it has not. In the past year there has been a significant increase, approximately €75 million, in funding. The bulk of the programme goes to the bilateral activities in the priority countries and the remainder, approximately 24%, goes to the NGOs. The Minister of State has a feel for this area and has some good ideas. We are looking at ways of developing the programme. The core of the programme is working in partnership with the seven priority developing countries. It gives them a sense of ownership of the programme, which is what development is about.

Deputy Curran

Mr. Gallagher referred to the audit function. With this type of funding, there is an inherent risk that it may not go to where it was originally targeted. Have the seven priority countries carried out audits? Were there schemes that did not work out?

Mr. Gallagher

I do not think so. The most recent audit was in Afghanistan, where targets were met and exceeded. Some projects are more successful than others and some may take a long time to succeed. It is about good planning and preparation and not embarking on it until one is sure that it works. Safeguards and benchmarks must be built into projects. To date, we have not had any problems. Inevitably, however, we will encounter difficulties as the programme grows.

Deputy Curran

No audits have been conducted of the seven priority countries.

Mr. Gallagher

There have been audits and some are ongoing. Every year 12 audits are carried out.

Mr. Rogers

Yes. We also audit the audits. We look at the audits that other donors and governments have carried out so that we can extract lessons from them and bring them together in summary form. One of these reports has been sent to the Comptroller and Auditor General.

Deputy Curran

Mr. Gallagher is suggesting that while there is an element of risk, the evidence to date is that most of the funding is going to where it has been earmarked. Does Mr. Gallagher have evidence to suggest otherwise?

Mr. Gallagher

No, I have no evidence to suggest otherwise. However, I am not complacent because it is endemic in developing countries. One has to put as many safeguards in place as possible at the project level. One must consider the global aspect of this.

I mentioned education. In Uganda, the numbers attending primary school have increased from 3.5 million to 8 million. Such increases have occurred in many countries. One can look at the macro level and there are tracer audits at the project level. One can see that one's money is not being siphoned off, though one can never say someone will not siphon off a few shillings. One can say that one's money is going for the purpose for which it is intended.

At some stage one looks at the global figures to see if Ireland, together with the other 18 to 20 countries involved, is making a difference on that level. One then looks at the statistics to see, for example, how many thousand more health clinics there are, how many more people have access to clean water and if the percentage of people living in poverty has fallen. One also looks at the AIDS infection rate to see if it is still at 33% or if it has fallen. Those are the levels one checks. If a number of schools are built, one can see them and test the mortar, which some people do.

Chairman

There has been an exchange of correspondence between the committee and Mr. Gallagher on public procurement issues at the time of the Irish EU Presidency, with particular reference to the Department retaining the services of a transport company to transport the various ministerial delegations and other dignitaries who came to Ireland during that period. Will Mr. Gallagher again take us through the circumstances which led to him requesting the services of one particular company rather than using a more intensive tendering system, as would be the case in normal public procurement?

Mr. Gallagher

I would be happy to do so. The correspondence referred to has been very helpful to me. It is somewhat ironic that this matter has arisen in my time because I have quite a strong view about chauffeured cars. I do not use them. I use taxis or hackneys, buses or trains. In the past there may have been a tradition of ambassadors returning from abroad using chauffeured cars. I have stopped that. I do not believe in them. When I visit Áras an Uachtaráin to present credentials, I drive myself. I have never really used chauffeured cars except when dealing with Northern Ireland, when I was under threat and the Garda would not allow me to drive myself, to use the train or to stay in hotels.

There has been no real tender over the years leading to the Irish EU Presidency and I insisted that we must have a general tender at the time for a matter which will arise again next year. I have particular ideas about next year because tenders can sometimes be self-perpetuating as a result of there being one major company in the field. I am determined, before I leave the public service, to introduce a system whereby one might have a panel involved. Coming from where I do, I am sympathetic to the individual. Perhaps two or three individuals could get together. We will be organising a tender in September. I have given a lot of thought to it and feel strongly about it.

We are talking of a tender for transport during Ireland's EU Presidency. One of the difficulties was sponsorship. Sponsorship is a relatively recent phenomenon, and there were differing views as to whether we would recommend it. I was doubtful about it and not very keen on it, but I could be convinced otherwise. The Danish EU Presidency occurred in the second half of 2002. It had a good sponsorship model which it was developing. We decided to talk in detail to those developing it. Having done so, our people returned and said there were safeguards involved and rules which could be drawn up and that sponsorship would involve a significant saving to the Exchequer. I went along with that and we put a proposal to the Cabinet sub-committee which agreed that we should proceed. We then entered into negotiations which were complex and difficult and involved legal advice and registration. The latter, for example, related to how to register cars from Germany with left-hand drive.

I will give one example. We had an informal meeting of foreign ministers in July. ASEAN was having its annual meeting with us and said the level of representation from Europe was poor and that if we wanted their foreign ministers, we would need to raise the level of that representation. That was a challenge for us. We decided to hold the meeting back to back with the informal meeting of foreign ministers. That required 100 cars. At that stage, the negotiations on the sponsorship had not been completed. We had managed such events well in previous presidencies but Audi, for example, insisted that their cars only be driven by drivers going to and from meetings, despite the fact that we had Garda and Army drivers too, along with five armoured cars. We had to get transporters and store the Audi cars. That was difficult. We then decided to go for some kind of transport management, so we carried out the urgency procedure.

I have spent a great deal of time on this issue, as the Chairman would rightly expect me to do. I have talked to the people directly involved. There are a number of cars in question and I have pretty strong views about the entire matter. However, the tendering arrangements for the transport management were fair and honest. We used the urgency procedure. I do not think we had any other option. We asked a number of companies about the matter and interviewed representatives from two companies. The interview panel included a member of the Garda Síochána, a member of our corporate services division and a person from the protocol division. They emerged with a clear view.

No presidency is perfect and one learns all the time but I have no doubt that whatever about the implementation, the competition and the tendering arrangements were fair.

Chairman

To what extent did sponsorship apply?

Mr. Gallagher

It is difficult to give a figure. Two main companies offered car sponsorship. Audi was the major company involved. It supplied 30 vehicles of one model and 35 of another, as well as five armoured cars. There was a question about insurance and who should drive the cars. Overall, the sponsorship probably involved some €3.5 million or €4 million. The two big sponsors were Eircell and Audi. Smaller sponsors included Tipperary Water.

Chairman

The cars which were the subject of the correspondence between the committee and Mr. Gallagher were outside the sponsorship deal.

Mr. Gallagher

Yes. They were supplementary cars that were made available. Cars came from three or possibly five sources. There were Audi cars brought in from Germany. If a problem arose, Audi was prepared to supply up to 22 additional cars from its fleet in Ireland. J. J. Kavanagh provided buses. When one is integrating people into a motorcade, there might be ministerial or embassy cars. Essentially, that was the position. Supplementary cars were required and were provided by the transport company. That is where the problem arose.

Chairman

Is Mr. Gallagher saying that he used the urgency procedure because he expected that the sponsorship would cover all his transport needs initially?

Mr. Gallagher

No. If it was not for the sponsored cars, we might have gone. As late as the summer, we probably envisaged, as had previously been the case, doing it ourselves. The sponsored cars proved quite complicated, even though there was a significant saving. There was training for drivers and we had to find a place to store the cars. In addition, the cars had to be brought on transporters to places throughout the country. If there was an informal function in Galway, they could not be driven there and had to be moved by transporter. The matter was extremely complex. It would have been a risk to not have some kind of management in place and such a risk would not have been worth taking. People can only be pushed so far. During the Presidency, people were out on their feet.

Chairman

These figures would not include the Presidency, they relate to the period prior to it. Does the Comptroller and Auditor General feel that this is an ongoing issue?

Mr. Purcell

I can only speak from my own point of view. Presidency expenditure for 2003 was €10.7 million, with a further €21.37 million in 2004. That covers expenditure on the Presidency. Rather than doing these things in a piecemeal fashion, I decided to wait until 2004 to carry out an overall examination of expenditure for the Presidency. That is ongoing as part of the 2004 audit of the Department. Within that context, we would be looking at that contract to form an opinion on whether proper procedures were followed.

Chairman

Will that be covered in the 2004 report?

Mr. Purcell

If it is necessary. If I feel that there is an issue on which public accountability is required of the Accounting Officer, I will put a written audit query to him to which he must respond personally. Having considered all the facts, I must decide whether there is an issue that needs to be included in my 2004 report. Under existing legislation, I am required to present that to the Dáil by the end of September 2005.

Chairman

That is fair enough. We can move on from that issue today. There is one area I would like to explore with Mr. Gallagher. I am not clear on the mechanics of the auditing of the overseas development aid budget. As I understand it, some of the money would be spent directly by the Department. Another proportion of the money would go to NGOs or charities. In the bilateral aid programme, the Department would give money directly to governments which they would spend on agreed programmes. Is that correct?

Mr. Gallagher

Yes. It is called budget support.

Chairman

Can Mr. Gallagher give us a breakdown on the percentages?

Mr. Rogers

We spend in the region of €100 million per annum on NGOs, which is approximately 25% of the programme. We spend in the region of 12% to 13% on multilateral agencies such as the UN. We spend approximately €160 million on programme countries, which is in the region of 38%. The remainder of the funds go to other things such as emergencies for the Red Cross and so on. Other countries outside the programme countries receive funding as we carry out some assistance in those places as well. An example of this would be Liberia.

Chairman

What audit system is used when giving money to NGOs such as Concern and GOAL?

Mr. Rogers

As the Secretary General outlined earlier, we have endeavoured to establish a new partnership programme with the NGOs called the multi-annual programme scheme. It gives the NGOs consistent funding over three years. Each year they know they will receive funding the next year, so their projects are not time dependent. The first phase of the programme has ended and we are half way through a major evaluation of it. This would involve travelling to some of the countries where the NGOs are operating and visiting their headquarters. It would involve looking at the value for money of their programmes in terms of poverty reduction. It would also involve examining the financial aspects of the programmes and seeing whether they are spending the money the way they are supposed to be spending it.

Chairman

In effect, expenditure is matched to outputs.

Mr. Rogers

Yes.

Chairman

What about the budgetary support to sub-Saharan African countries? When we are being lobbied, the country that frequently arises is Uganda. Despite the progress that has been made there, charges are made that political life is a better career in sub-Saharan Africa than it is in Ireland. It also carries additional obligations to one's family and one's wider community, so self-enrichment goes with the territory.

Mr. Gallagher

Budgetary support is a new part of development activity. A certain amount is provided. I understand it is worth €7 million in Uganda. There are 19 countries that give budgetary support to Uganda. They get together with the Ugandan authorities and discuss the budget. They have an influence in the direction of that budget. There is a limit agreed on the amount that can be used for defence, which is just over 2%. We can get access to areas such as the president's establishment, the security services and so on. We even obtained classified defence documents, not that we want them, from Uganda. These show a certain justification for what they are doing. We can influence budgetary policy and we can see the outcome at the global level. We witnessed increases in the number of children at school, the number of schools, the number of teachers, the number of health clinics and so on. A slight comparison can be made with the EU money that was given to Ireland and which was spent as part of a Government programme.

We are doing this in three countries — Uganda, Mozambique and Tanzania — which is somewhat restricted. It gives us an influence and an input directly into the government policy of the country concerned.

Chairman

Does Mr. Gallagher see a set of books being provided by the Ugandan Government? Are there properly audited figures and has he had an opportunity to look behind what is being presented?

Mr. Gallagher

Yes, because they are all audited by the auditor general in the countries in question. Some of the donor countries have put people into the auditor's office to strengthen its capacity. Indeed we support it financially but not through the provision of personnel. Mr. Rogers might like to expand on this because he knows the details.

Mr. Rogers

At the technical end, there are a number of levels in which we evaluate budget support generally. If we take Uganda, for example, its auditor general carried out a public expenditure review of all of government funding. That is supervised by organisations such as the World Bank, ourselves, the United Nations agencies and all the donor partners involved in that type of support. We carry out case or tracer studies, where we pick on a particular area of support and follow it right down to the ground. If we take education or health, we follow it right into the school, into the teacher training college. Then we have what are called sentinel studies. We have people on area-based programmes that are away from the capital city. They see the funding coming into their local authorities and they check to see whether the schools are being built and the books prepared.

At the macro level we are working with other donors and looking at budget support over a number of countries' case studies to see whether initiatives are working and reducing poverty. All the books are available to us and our evaluating audit unit in Dublin has access to all of those. The unit in question can also carry out on-the-spot checks.

Chairman

A measurement of outputs of this nature obviously proves that a significant amount, perhaps all, of the money contributed is being spent. However, one can never be sure. Just counting the number of children at school or how many wells are safe to use is a rough and ready audit if €7 million is being invested in a particular country. It might indicate that a good deal is being spent but the figure could be €5 million or €6 million.

Mr. Rogers

National audited accounts are being produced——

Chairman

A total of €1 million could be skimmed. These are the types of allegations that are being made. Nobody is saying that it is all being taken.

Mr. Rogers

At the technical level, national sets of books are being produced, so we know, for example, that if 15 schools were to be built, they were built. The important thing is to follow that down. For example, in the Uganda area-based programmes, schools have to put up a signpost to say that they have received so much money to buy a certain number of books. The parents can check whether that number of books were bought for the school.

As the Secretary General said earlier, these are risky environments and we have to make balanced judgments based on all of the books that we see, including the outputs and the macro level of poverty. One has to make the judgments as one sees fit.

Chairman

Is the Department confident that moneys, particularly bilateral aid to the southern partner countries, are being spent properly?

Mr. Gallagher

When I took up my position, I had some hesitation about budget support. One of the first things I did was to go to Uganda and spend a week going through the books with the accountants there. I am confident of the position. If I was not, I would pull back from it and take the project route. If one is to make a difference on the ground, the ideal way is probably to get inside the government budget and be part of that. The projects may be done as well but I would say this is probably the best developmental route. It is a real partnership. However, my eyes are very wide open and I take the point the Chairman is making.

Mr. Purcell

To take up this point, from the perspective of this country's Comptroller and Auditor General, our focus would have to be on the systems in place within the Department to ensure that it is evaluating the effectiveness of the expenditure and so on. While I do not exclude the possibility of some of my staff visiting particular projects or programmes, it might not really be the best use of resources. I would have certain international commitments and in the past the Accounting Officer, in a previous capacity, would have enjoyed my presence — even for a day — in Washington, looking at the embassy accounts and doing some work, and also in the consular offices in New York, because there was so much money being collected in terms of passport fees. In that sense, if members of my staff happen to be away on international business for other reasons, if they have the time or if it is convenient, they will try to visit the local development office or whatever. However, there has been very little of that. There are dangers involved in doing a little instead of doing an adequate job.

On the broader scale, it is a terrible thought but there is almost an international brotherhood of comptrollers and auditors general. There is an international organisation. An arm of that organisation, the international development initiative, tries and succeeds, to a certain extent, to be involved in capacity building projects in Third World countries. We contribute in an indirect way to that. There is an annual subscription, of course, but there are also requests for contributions. This would include matters such as long-range training, that is, training the trainers in these countries, to build up the capacity of the auditor general's department in each case.

In order to mirror their approach, I am aware of moves within the so-called international brotherhood from the donor countries to combine the independent audit effort, as reflected by an auditor general's office, in examining the effectiveness of the measures on the ground to ensure that there is no overlap, displacement, duplication and so on. There is a great awareness now among the donor countries which do not all want to be doing the same thing. From my knowledge of this, up to now Ireland has held a particular niche and has done very well in terms of addressing the poorest and so on and in the context of becoming involved with projects on the ground. The budgetary support is a separate development. In the long term and structurally, some resources must be put into that. That in itself will demand a different approach on behalf of auditors general.

The tsunami was mentioned. Ireland's response, of course, was very generous in terms of the approach of both the public and the Government to that crisis. There was an enormous response all over the world. My Dutch colleague held an exploratory meeting, which I was not in a position to attend, about how the international body of auditors general should explore the possibility of making a combined approach — instead of intervening individually — to review whether the money had reached the targeted relief areas and to ascertain how well it was used. There was some concern at the beginning that there was a significant overlap. Much effort was expended in this regard but some of it was not to the best effect.

I will meet my counterparts next week and this is one of the issues on the agenda. Some of these matters normally operate at a level that is invisible and I am grateful for the opportunity to explain that we can come at this issue from different directions.

Chairman

This has been a very informative meeting and I thank Mr. Gallagher, Mr. O'Farrell and their colleagues. Is it agreed to note Votes 38 and 39? Agreed.

The agenda for the next meeting on Thursday, 12 May, includes the 2003 annual report of the Comptroller and Auditor General and appropriations accounts, Department of Defence, Vote 36 and Army pensions, Vote 37.

The committee adjourned at 2.30 p.m. until 11.15 a.m on Thursday, 12 May 2005.