COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 15 Jun 2006

Minute of the Minister for Finance on the Annual Report of the Committee of Public Accounts, 2001.

Mr. J. Purcell (An tArd Reachtaire Cúntas agus Ciste) called and examined.

Chairman

We will deal with the minute of the Department of Finance. Vote 25 relates to the Department of the Environment and Local Government. In chairing the meeting I will work from the checklist. The objective of our scrutiny is to note the position of the Department of Finance and we will seek further information from it, if required. As previously stated, it has accepted the recommendations in almost 90% of cases.

The first recommendation has been accepted by the Department of Finance and implemented. The headings "Accepted" and "Implemented" are evident on the document. Updated public procurement guidelines were issued in May 2004. The issue is, therefore, closed as the Department has accepted and implemented the recommendation. Is it agreed that we note this? Agreed.

It is recommended in recommendation No. 2 that land banks owned by local authorities should be recorded in their asset registers required with effect from 2004. This recommendation was accepted and has been implemented. Again, this is noted. Members are free to comment as we proceed.

Vote 42 relates to the Department of Arts, Heritage, Gaeltacht and the Islands and Dúchas, the heritage service. The relevant recommendation has been overtaken by the division of responsibility for heritage matters between the Department of the Environment, Heritage and Local Government and the Office of Public Works. The recommendation has been accepted and implemented. Again, this is noted.

The recommendation made to the Revenue Commissioners was that random audits should be reintroduced in 2005 when 400 random cases were selected. Again, the recommendation was accepted by the Department of Finance and the Revenue Commissioners and has been implemented. It is, therefore, a closed issue and is noted.

Section 10 relates to the in-depth examination of tax debt written off by the Revenue Commissioners. New powers of investigation were included in section 87 of the Finance Act 2004 and an enabling provision was included in the Finance Bill 2006. Our recommendation was accepted and implemented. The issue is, therefore, closed and is noted.

Mr. John Purcell

If members look at the second paragraph of the minute dealing with section 10 which refers to the six possible proposals specifically referred to in paragraph 10, subparagraph 4.1, of the Comptroller and Auditor General's 2001 report, it should read, "the committee's report". The committee did have six proposals which are not entirely reflected in the consultant's table. Some are at different stages. If the Chairman wishes, I can go through them.

Chairman

Yes, please.

Mr. Purcell

It is further stated in the paragraph that the first recommendation remains under consideration in consultation with the Department of Enterprise, Trade and Employment. The nature of that proposal was to restrict limited liability to make persons controlling companies responsible for the unpaid tax liabilities of those companies. This would only relate to fiduciary taxes taken by a company from an employee or VAT collected by the company which is, essentially, held in trust for Revenue. The proposal is still under consideration. In a sense, these are sub-recommendations which were not really addressed but I consider them to be important.

The second and third recommendations related to the operation of excise licences. As stated in the minute, Revenue was working on advancing both proposals in the context of an intoxicating liquor Bill. One recommendation was that excise licences should be dependent on the tax compliance of each business operating in the premises, not just the tax compliance of the person holding the licence.

The second recommendation, R2, dealing with excise licences was that the penalty for trading without an excise licence, €1,265 for an offence in any one year, should be changed to the maximum District Court penalty of €3,000 which would apply for each illegal trading detection during the year. In cases where there was continued illegal trading, mandatory seizure of stock and closure of premises should be considered. The committee felt strongly on these matters. The recommendations are being considered in the context of new legislation.

The Department considered the fourth proposal would not comply with the EU sixth VAT directive. The proposal was that section 4(a), currently an optional simplification measure, should be mandatory. As we are aware, the VAT issue is very complicated. This measure relates to the charging of VAT on the capitalisation of a long-term lease. In practically all cases the lessee is enabled to reclaim the tax. Because it could cause cash-flow problems for the lessee, Revenue decided as a concession and less bureaucratic way of doing things that it would be considered there was a nett nil gain in revenue. The committee felt this could be made mandatory to simplify VAT matters in such cases. While such an approach does not currently comply with the directive, the position is changing as some work has been done at European level in that regard. More progress has been made than is suggested in the minute.

The fifth proposal was that there should be grouping for the purposes of VAT of taxable persons in property companies where the same person was the principal behind them and where one of the companies had defaulted on VAT payments. The effect would be to allow a VAT repayment claim from a compliant company within the group to be offset against the liabilities of another company within the group. There was evidence, especially in the property area, that certain clients were minimising their VAT liability through a series of devices. This is being examined in the context of the review of VAT in property legislation generally because it is an exceedingly complex area. Something is happening but the matter has not been fully resolved. If it is seen as a loophole, it has not been closed off at this stage.

The last recommendation, that VAT repayments to property development companies would be conditional on certain information being provided on the development, who was behind it and financing it, has been implemented by Revenue. It has changed its procedures to receive that information in order that it can make an informed decision on the VAT arrangements and their legality.

I am sorry for going on at length but there were significant sub-recommendations that were not really addressed in the omnibus recommendations.

Chairman

I suggest that the Clerk to the committee write to the Department of Finance and raise in his letter the issue of the sub-recommendations, as just described. The Department should be asked where it stands on the matter.

Mr. Purcell

The minute addresses the issue but it makes an incorrect reference in that it refers to the report of the Comptroller and Auditor General rather than that of the Committee of Public Accounts. The recommendations are addressed but are not included in the consultant's summary checklist.

Mr. Curran

On the checklists.

Chairman

On the checklist we are saying the recommendations constitute a closed issue; they do not. Some of the issues involved are still open. We should, therefore, raise them again with the Department of Finance to see what progress is to be made. Is that agreed? Agreed.

On the second recommendation, R2, the CLRG made a similar recommendation to the Committee of Public Accounts. Consultations to include provisions in company law are ongoing. Is this one of Mr. Purcell's sub-issues?

Mr. Purcell

No, it is a separate matter which concerns the legislation providing for the furnishing of the PPS numbers of individuals behind company registrations. It has been progressed, subject to the Attorney General's view and data protection considerations. It might be no harm to look for an update on the exact stage of developments following receipt of the Attorney General's view.

Chairman

We will look for one.

No. 11 concerns VAT repayments to registered traders and dividend withholding taxes. According to Mr. Colm Dunne, the recommendation on phoenix companies, R1, was fully implemented, while the recommendation to use the PPSN on dividend withholding tax returns, R2, was not considered feasible. As an alternative, name and address matching will be introduced from this year. Does Mr. Purcell believe this to be a reasonable response?

Mr. Purcell

I consider it reasonable, yes.

Chairman

We will note both recommendations.

No. 12 concerns Vote 40 which pertains to the Department of Social and Family Affairs. On the first recommendation, R1, a change in legislation covering recovery of pension overpayments from the estate of a deceased pensioner is considered to be a policy matter. That is a reasonable response and is noted.

On the second recommendation, R2, phase 1 of the SDM for child benefit was successfully implemented and measurable efficiency gains were achieved. The Department accepted and implemented the recommendation and it seems to be working. This is noted. Does Mr. Purcell believe it is okay?

Mr. Purcell

Yes.

Chairman

On the third recommendation, R3, recommendations arising from a review of the SWAO have been wholly or partly implemented. An improvement in processing time has been recorded. Again, the recommendation has been accepted and partially implemented. This is noted.

Vote 31 concerns the Department of Agriculture and Food. On the first recommendation, R1, the amount of late payment interest has substantially reduced and tighter procedures have been put in place. The recommendation has been accepted and implemented. This is noted.

On the second recommendation, R2, procedures for the placing of insurance for intervention storage have been reviewed and appropriate steps taken. The recommendation has been accepted and implemented.

On the third recommendation, R3, a working group to increase the uptake of the school milk scheme in the wider context of nutrition has developed the product range with a view to an increased uptake in the 2006-07 school year. The recommendation has been accepted and implemented. Does Mr. Purcell have any comment on this? One does not see bottles around schoolyards. I am not sure how successful the programme is but our recommendation has certainly been addressed.

Let us consider Votes 26 to 29, inclusive, concerning the Department of Education and Science. On the first recommendation, R1, a critical review of the buildings unit has been completed and the unit restructured. A pilot inventory of school buildings was made, while criteria to prioritise school accommodation needs were revised in 2004. Our recommendations have been accepted and implemented. This is noted.

On the second recommendation, R2, implementation of the recommendation will be based on the introduction of the new financial management system. The financial accountability framework for schools is set out in section 18(1) of the Education Act 1998. Our recommendation has been accepted and implemented.

On the third recommendation, R3, the Department explained that underspending in the 2001 Vote was primarily in demand-led schemes that are difficult to predict. The availability of ICT courses for teachers has been expanded. The recommendation was accepted and implemented. This is noted.

On the recommendation concerning the Office of Public Works, R1, the principle of the recommendation was accepted and is implemented in a range of options on how to deal with planning issues in property transactions. This is noted.

On Vote 5 concerning the Central Statistics Office, the first recommendation, R1, states that, as a matter of policy, it is felt the full added value of the widespread and effective use of all statistical data far outweighs the immediate monetary gain from the sale of census products. Total five-year income, in the period 2000 to 2004, from the sale of census products was 2% of the census 2002 budget. This is noted.

On Vote 4 concerning Ordnance Survey Ireland, the first recommendation, R1, states the Department of Finance wrote to all Departments and offices in late 2004 to stress the importance of internal control at a time of transition to new financial systems. The recommendation was accepted and implemented. This is noted.

The second recommendation, R2, states new financial systems have a range of inherent internal control processes built in. The Department of Finance has advised all Departments and offices of the need to update their documentation. Since 2003 Secretaries General have been obliged to submit a statement on internal financial controls with the appropriation accounts. This recommendation has been accepted and implemented. Is Mr. Purcell happy with it?

Mr. Purcell

Yes. There is now much greater awareness of the importance of internal financial controls in Departments and, as one will see from the appropriation accounts, the Accounting Officer must sign up personally to these and also include a note on how he or she is enhancing the internal control framework in the Department. This blends in very much with the advent of the financial management system which I believe will be in place in all Departments by the end of this year.

Chairman

We will note it.

On the third recommendation, R3, concerning Ordinance Survey Ireland, no reference in the reply was made to updating the public financial procedures. What was the recommendation in this regard?

Mr. Purcell

The committee suggested the Blue Book, regarded as the Bible for public financial procedures, should be expanded to provide a full description of the expected standards of basic internal financial control to take account of the new management information framework being rolled out across the central government sector. The reply does not really advert to this recommendation. The other measures I mentioned in respect of submitting a statement on internal financial control and enhancing controls, etc., could certainly be seen as compensating for this.

Chairman

Will we just leave it?

Mr. Purcell

The Chairman might do so but it might be no harm to ask whether there are any proposals for updating public financial procedures to take into account the significant developments in this area in the past couple of years.

Chairman

Is that agreed? Agreed.

Mr. Purcell

That this was not done may just have been an oversight.

Chairman

No. 18 on our list concerns Garda Síochána and Prison Service overtime. On the first recommendation, R1, implementation of the proposal for organisational change in the Prison Service will eliminate the conventional overtime system and replace it with a new additional hours system. In so far as the prisons are concerned, the issue has been dealt with. The reforms will also lead to a reduction in sick leave levels. This is supported by a range of management measures and noted.

No. 19 concerns Garda Síochána and Army cash escorts. The first recommendation, R1, was accepted by both Departments, namely, the Department of Justice, Equality and Law Reform and the Department of Defence. As it is being implemented, the issue is, therefore, closed.

On the second recommendation, R2, from the outset the full costs of recovery were not sought. The banks contribute 85% of the costs incurred by the Garda Síochána. Who pays for the gardaí to escort money to and from banks around the country?

Mr. Purcell

As I understand it, the Garda Síochána has moved to getting 85% of its costs. The cost of the Army escorts can be taken up with the Accounting Officer who is coming before the committee. Subject to anything he might say, it recovers 85% of its cost but it has an agreement for full cost recovery in the next year or two. The Departments of Defence and Justice, Equality and Law Reform are pursuing the matter in accordance with the recommendations. We can ascertain the up-to-date position from the Accounting Officer.

Deputy Fleming

We often hear about major robberies from vans whose drivers park them to get a cup of coffee or whatever. While there is some private security, who decides whether the Army or the Garda accompany a vehicle? Millions of euro are transported without escorts which is one way to save costs but not a very clever way to do so.

Chairman

I understand that the financial institutions request the escort. Does Mr. Purcell know whether that is right?

Mr. Purcell

I am not quite sure. It was outlined to the committee but I cannot recall the detail. There may be a joint Army-Garda escort but the Garda Síochána decides on the basis of certain proposals. The Accounting Officer may be able to clarify the Army's involvement. Next week we will meet the Secretary General of the Department of Justice, Equality and Law Reform and we can ask him.

Chairman

We note No. 19. No. 20 refers to the Criminal Assets Bureau, accounts for 2001. "The Criminal Assets Bureau accepts the recommendation subject to the need to balance the requirements of confidentiality and optimum dissemination of information." That is a reasonable response and we will note it.

No. 21 refers to Vote 42, Arts, Heritage, Gaeltacht and the Islands, State-subsidised transport to the Aran Islands:

The Department is committed to the full implementation of the recommendations of the Comptroller and Auditor General and the PAC. Consultants are engaged to review existing arrangements and they made a number of worthwhile recommendations. Significant progress has been made.

Does Mr. Purcell wish to comment on that?

Mr. Purcell

No, in this case there was full acceptance of the recommendations that were implicit in my report and more explicitly stated in the PAC's recommendations. They have been 100% behind the recommendations and implementing them.

Chairman

"Service contracts now have a built-in provision for variation of the service level in line with changing patterns of consumer demand." They have accepted and implemented that recommendation. We will note No. 21.

We will proceed to non-voted accounts, beginning with the National Roads Authority, NRA, 2001 annual financial statements. The Minister agrees. According to this note, the financial management framework for public authorities engaged in capital investment has been significantly improved. "Early 2005 revised guidelines for the appraisal and management of capital expenditure proposals were produced and January 2006 circular to give effect to value for money measures on ICT projects and consultancies." Under the Government decision of 11 October 2005 the NRA has taken a range of measures to strengthen cost estimation and cost control measures. Results are flowing in from this too.

Deputy Boyle

Obviously the NRA has improved its initial estimates and the eventual overall cost but how is it doing in terms of cost per kilometre on motorways? Surely that is a better indicator of whether matters are being kept in check.

Mr. Purcell

There was always a problem and, as the Deputy suggests, ultimately this may be the performance indicator when all the other considerations are taken into account. It is clear that the NRA is happy that it is bringing in the projects on time and within budget. Whether we are still paying too much for these might be the basis for another study into the kinds of indicators the Deputy mentions such as cost per kilometre and so on. I could not say at this stage without addressing it in a new value for money report. It is using design and build contracts and there are various PPPs, each of which would have to be assessed in its own right to see how good a deal it is. Sometimes it is not possible to do that until we are further down the road, so to speak.

Deputy Curran

The reply has addressed the issues we addressed, in particular the design and build contracts where we were concerned about the transfer of risk. It largely addresses those issues.

Chairman

We will note it.

Deputy Hayes

The Mitchelstown-Cashel route is being constructed under a design and build contract but it is more difficult to change some of the issues that crop up on a daily basis because of the contract. Could we at some stage examine that issue?

Chairman

Is this the kind of situation in which a local farmer has a problem about which previously he could have done a deal for access but cannot now?

Deputy Hayes

Yes, there are several situations along that route that have caused serious difficulties but the NRA does not seem to be amenable to the people.

Mr. Purcell

Perhaps this is a consequence of the type of procedure I recommended because one of the major factors in the cost increases that we found was the degree of unprogrammed variation. That came in as a significant factor when we analysed the elements of the cost overruns. Trying to push that back may have had the unintended consequence of creating some small difficulties.

Deputy Hayes

In one case the road runs beside a house causing upset for the family living there. Everybody involved has seen and examined this problem but can do nothing about it but the NRA is constrained by the design and build regulations.

Chairman

Perhaps we will take that up with the NRA when it comes in.

Deputy Fleming

Entering into these contracts is a crunch issue. We saw it in respect of the computerised payroll service in the health services which had the choice of having a fixed contract with the consultants carrying the can to implement it, or paying for it as it went along and dealing with variations as they came up. The bottom line of the Comptroller and Auditor General's report was that it was not possible to specify every possible eventuality at such an early stage, to fix it up-front in a contract. There is an inherent risk in signing a contract up-front if one has not captured these problems because one is tied into the contract when it is signed. The fixed contract reduces flexibility in respect of improvements that might arise in the course of the work.

Chairman

If it is not in the contract at design stage it is not part of the design and build contract.

Deputy Boyle

Many of the NRA cost overruns came from its planning process, such as upgrading dual carriageways to motorways and changing the routes of roads. Most of the over-expenditure occurred at that stage rather than in the small regional variations on many of these roads.

Chairman

We might raise this again with the NRA.

Chairman

That is a matter that we might raise again with the NRA.

Mr. Purcell

Rarely in these cases is it black and white. I do not fully know this particular incident. One can have well-established change control procedures which are legitimate. In this case the feeling may be that if it is open for one, it is open for every small problem along the way. I would be amazed if there was not a system where there was some built-in element of flexibility, particularly where a matter is clearly wrong and will cost the State. This is apart from the inconvenience to the individual along the way. In most of these arrangements there can be some flexibility. For the purchaser of the services or works, the danger is that if that window of flexibility is left open, it takes over and the value of the fixed-price and the consequent transfer of the risks to the contractor is lost. It needs to be tweaked.

Chairman

Should a letter be written or will we wait until the NRA is before the committee?

Deputy Hayes

When will the NRA be before the committee?

Chairman

Not until the autumn. We will write a letter before then.

On recommendation No. 2, NRA expenditure in the BMW region is accelerating. The next national development plan will have an important focus on investment that promotes a balanced regional development. The recommendation was accepted and will be noted.

On recommendation No. 3, the Department of Transport is monitoring the impact of new contract provisions. It will be noted.

Recommendation No. 4 was not accepted. The Minister believes the Comptroller and Auditor General has powers under the current arrangements to examine changes in risks in public private partnerships projects from a public perspective. The issue of bringing the private element of PPPs under the scrutiny of the Committee of Public Accounts is not addressed.

Mr. Purcell

As far as I am concerned I have no problem with this. I have full access to all elements of PPP projects. I believe the Minister is stating that in my role as a channel for the committee's inquiries, it depends on whether I feel an issue must be raised. I would then bring that to the attention of the committee in a report which would enable it to pursue its inquiries with the relevant agencies and witnesses.

The Minister's note refers to the committee using its own powers to request documents from State authorities. That has been the traditional system. If the committee believes it wants to go further and get access to other documents it is still open to the committee to look for those documents. I have no doubt they will be furnished to it, maybe subject to certain confidentiality requirements because of the commercial sensitivity of such documents. The option is still open. Whether the private element of PPPs could be subject to the scrutiny of the committee in the way it foresaw seems not to be accepted.

Deputy Fleming

We cannot let this go. Accountability to the Comptroller and Auditor General is good but it is not democratic accountability. Members are democratically elected. PPPs are creeping into every local authority project, such as water and sewerage schemes and roads. There is little democratic accountability at local authority level. Perhaps some mechanism can be devised to allow the committee to examine private element contracts in a confidential way. I do not accept the principle that the Parliament cannot have access to how decisions are made on the spending of taxpayers' money.

Deputy Curran

It is not just a question of building roads. The committee is concerned with other performance criteria. The committee was fortunate that National Tolls Road attended the committee when requested to do so. It was a significant player in our investigation but there was no obligation on it to attend. If PPPs are the way various projects will be managed in the future, we need to be able to address issues other than the actual delivering of a project. In other jurisdictions, such as Australia, the private component of PPPs is subject to the scrutiny of their public accounts committees.

Chairman

We will send a strong letter. Is that agreed?

Deputy Fleming

The emphasis should be on the broader issue, not just the NRA element.

Chairman

Is that agreed? Agreed.

Recommendation No. 5 outlined the current arrangements for evaluating the national roads programme. It does not deal with the issue of a systematic rather than incremental updating of the road-building strategy. Again, we must raise that with the Minister. Is that agreed? Agreed.

For the National Treasury Management Agency, NTMA, and the National Pensions Reserve Fund, NPRF, 2001 accounts, the Minister points out that the NPRF commission is independent of the Government. He, however, noted that several public announcements, including press releases, were made concerning funding available for self-financing infrastructural projects. Does the Comptroller and Auditor General regard this matter as closed?

Mr. Purcell

Yes it is positive but there has been no uptake on it. At this stage, the NPRF is confined to financing successful bidders but does not get involved in the tendering process. Sometimes there can be a conflict of interest. On the one occasion it was involved, it was not part of the successful consortium. It feels it cannot compete with other players in this matter.

Chairman

It will be noted. From early 2006, a monthly profile of debt service expenditure was published.

Deputy Fleming

I have not seen it. Will the Comptroller and Auditor General inform us about it?

Mr. Purcell

Included with the figures now is the amount of money paid out on debt servicing as distinct from that which was budgeted. The figures are not expressed as savings. Whether they should be is another matter.

Deputy Fleming

We will accept and look forward to reviewing this at the end of the year.

Chairman

The level of new funding for small savings products was satisfactory between 2002 and 2005. The consultants' report on the levels of administrative fees and benchmarking to the NTMA's wholesale debt operations is being examined.

Mr. Purcell

It accepts the recommendation. There was a concern that the level of small savings suffered.

However, the evidence is that they have increased somewhat. Perhaps that has something to do with the SSIAs.

In particular, the problem related to whether the Post Office Savings Bank had generated satisfactory levels of new funding from small savings products. While it has done so, it is in continual competition. The NTMA engaged a consultant to carry out a review of the savings products, particularly with regard to the level of administration fees. It is well known that a conflict of opinion exists between An Post and the National Treasury Management Agency, NTMA, on the level of the service charge.

I am aware, from my audits, of much toing and froing and of the taking of hardline positions on both sides in this regard. There has been some reportage to the effect that An Post intends to enter into an arrangement to deliver financial products on behalf of another bank and on the conflict that such a move might cause in respect of its delivery of the traditional Post Office Savings Bank products. However, as there has been movement on all these matters, the recommendations have been taken on board.

Chairman

The committee will note it.

The next item concerns the 2001 financial statements for Teagasc. It is stated that the benefits from the disposal of Teagasc assets were retained to cover relocation, capital expenditure and a potential voluntary severance package, which was in line with the recommendations. The committee will note it.

The second Committee of Public Accounts recommendation was noted and passed onto Teagasc. What was it?

Mr. Purcell

The recommendation was that where possible, the rationalisation of operations in respect of the location of research facilities should favour small communities.

Chairman

Hence, although it is not known whether Teagasc will do anything about the recommendation, it has been passed on.

The next item refers to the City of Dublin Vocational Education Committee, CDVEC, accounts from 1998 to 2001. It is stated that agreement was reached for the adoption of the Rochford report recommendations, which are being implemented. Moreover, an internal audit unit has been established. While it has taken the recommendation on board, some issues are still outstanding.

Mr. Purcell

It has taken the recommendations on board and they have been almost fully implemented. I differ somewhat from the consultant in this respect. The CDVEC is in far better condition than it was a few years ago. It is no longer a problem area, whereas it was at one time. One should be satisfied with it.

Chairman

The committee will note it. As the second recommendation follows the first, the committee will also note it.

The comment on the third recommendation states that accounts will be prepared on an accrual basis from 2007 onwards, which is all right. That was the committee's recommendation, was it not?

Mr. Purcell

Yes.

Chairman

The next item refers to the Bord Iascaigh Mhara accounts for 2000 and 2001. It notes that the Minister fully accepts the recommendation and that the circumstances arose from a once-off policy decision. The committee may note the recommendation has been accepted.

As for the Midland Health Board's accounts for 2001, it is stated that the reporting arrangements for the internal auditor have changed due to the establishment of the Health Service Executive, HSE. Moreover, the internal auditor reports directly to the chairman of the audit committee. Hence, this issue is closed and the committee may note that.

In respect of the Western Health Board accounts for 2001 and 2002, it is stated that PricewaterhouseCoopers reviewed patient income collection and that a number of steps were taken to implement the recommendation. Is Mr. Purcell satisfied with this?

Mr. Purcell

Yes. The minute outlines the steps which have been taken. This is now standard procedure within the HSE. Obviously, organisational events have overtaken the health boards.

Chairman

The committee will note it.

Value for money report No. 41 pertains to planning appeals. It is stated that there are regular meetings between the representatives of the board and the inspectorate to assess the quality of inspectors' reports and to flag issues whereby the inspectors' reports are inconsistent with board or general planning policy. The committee's recommendations have been accepted.

Second, the Department has issued planning guidelines covering rural housing, wind farms and telecommunications masts. They are issued for public consultation and are sent to key stakeholders with whom meetings may be arranged. Hence, the recommendations have been partially accepted. The committee could spend the day discussing wind farms and the like.

Deputy Fleming

Apart from the Department's position in that regard, the reply should be accepted.

Chairman

The committee will note it.

Value for money report No. 42, refers to car parking at Beaumont Hospital. It is stated that guidelines on structured car parking facilities at acute hospitals were updated on foot of the Committee of Public Accounts hearing on this report. It is further stated that the National Development Finance Agency, NDFA, is not responsible for the cost-benefit analysis. The committee's recommendations have been implemented.

As for the second recommendation, it is stated that the revised guidelines on appraisal and management of capital expenditure proposals in the public service set out the roles of those involved and that a circular of 25 January 2006 strengthens the guidelines. Is Mr. Purcell satisfied in this regard?

Mr. Purcell

Yes.

Chairman

The committee will note it.

Value for money report No. 43, refers to the building maintenance service, BMS, of the Office of Public Works. It is stated that the commissioners agree that appropriate generally accepted accounting principles, GAAP, should guide the building maintenance service in the delivery and analysis of its functions. That is fair enough. It is further stated that the committee's recommendations on preparation of annual financial statements have been implemented. Moreover, the building maintenance service quotations are issued to Departments on request, which is the norm for all large-scale capital works. Does Mr. Purcell have any comments in this regard?

Mr. Purcell

This emanated from the value for money study of the building maintenance service. The BMS has certainly put measures in place to get its act together, to use a colloquialism.

Chairman

Special report No. 4 pertained to financial control and management of the Irish Blood Transfusion Service. It is stated that consideration will be given to interim payment arrangements. In the case of the Irish Blood Transfusion Service, a bank overdraft was used to fund an interim payment, and this incurred costs which would have been avoided, had the payment been made from State funds. Does this mean that the matter has been corrected?

Mr. Purcell

Yes, the Department of Health and Children now accepts that an interim payment may have been the more prudent option in this case. The Minister assures the committee that in future, when publically-funded bodies are faced with large payments pending recoupment of legal costs, consideration will be given to such interim payment arrangements by the relevant Department, in consultation with the Department of Finance. Hence, the recommendation has been accepted in full.

Chairman

The comment regarding the second recommendation states that since 14 April 2003, the audit committee has been separate from the finance committee. Hence, the committee may also note this point.

Special report No. 5 pertains to Garda interview recording systems. It is stated that updated public procurement guidelines for the public service were issued in May 2004. Revised public procurement arrangements have been introduced for the Garda Síochána. Hence, this recommendation has also been carried out.

The committee has now disposed of the Department of Finance minute and will issue some letters for further information. I reiterate that this was a reasonable response from the Minister for Finance and his Department. They accepted 85% to 90% of the recommendations of the committee and went on to implement them. Is that agreed? Agreed. The committee will move on to consideration of the Department of Defence.

Is it agreed the committee has completed its consideration of the minute? Agreed.