COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 21 Jan 2010

Chapter 22 — International Co-operation, Official Development Assistance.

Mr. David Cooney (Secretary General, Department of Foreign Affairs) called and examined.

Chairman

I welcome everybody to the meeting. We will consider the 2008 annual report of the Comptroller and Auditor General: Vote 28 — foreign affairs; Vote 29 — international co-operation and chapter 22 — international co-operation, official development assistance.

I draw everyone's attention to the fact that while members of the committee enjoy absolute privilege, the same privilege does not apply to witnesses appearing before the committee which cannot guarantee any level of privilege to witnesses appearing before it. I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official, either by name or in such a way as to make him or her identifiable. They are also reminded of the provisions within Standing Order No. 158, that the committee shall refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits of the objectives of such policy or policies.

I welcome Mr. David Cooney, Secretary General, Department of Foreign Affairs. I congratulate him on his appointment and wish him a long and fruitful tenure in office. On behalf of members, I pay tribute to the outgoing Secretary General of the Department, Mr. Dermot Gallagher, who was a great public servant during the years as an ambassador and subsequently within the Department. I wish him a long and happy retirement. In his visits here he was always very open and I am sure that pattern will continue. I invite Mr. Cooney to introduce his officials.

Mr. David Cooney

I am accompanied by Mr. Ray Bassett, head of the consular and passport division; Mr. Barrie Robinson, head of corporate services, who has taken up this position more recently than I took up mine; Mr. Brendan Rogers, director general, head of the development co-operation division; Mr. William Carlos, head of the evaluation and audit unit; and Mr. Michael Gaffey, deputy director general, development co-operation division. Mr. Dermot Quigley from the Department of Finance is also present.

Chairman

I invite Mr. Quigley to introduce his colleagues.

Mr. Dermot Quigley

I am accompanied by my colleagues, Mr. Frank Griffin and Ms Joan Daly.

Chairman

The witnesses are all welcome. I ask Mr. Buckley to introduce the headings to which I referred, namely, Votes 28 and 29 and chapter 22. The full text of chapter 22 can be found in the annual report of the Comptroller and Auditor General or on the website of the Comptroller and Auditor General at www.audgen.gov.ie.

Mr. John Buckley

The committee is examining the appropriation accounts of the Department of Foreign Affairs and the Vote for international co-operation for the year ended 31 December 2008. The combined net outturn for the two Votes, both managed by the Department, was approximately €985 million. My annual report contains a chapter on official development aid — development assistance — which attempts to bring together the full expenditure on overseas development aid by Ireland in one statement. The chapter presents a brief description of each of the programmes and how they are managed.

The major portion of the amount spend on international co-operation, €529 million, funds bilateral aid programmes, including the provision of assistance for programme countries and other co-operation schemes. The figure for emergency humanitarian assistance, so tragically topical, amounted to €87 million in 2008, just below the Estimate provision of €90 million. A further €4.5 million was contributed to the rapid response initiative.

From the control and monitoring perspective, the Department has an evaluation and audit unit which monitors bilateral aid expenditure and its reports are examined in the course of audit. The Department also commissions external audits in programme countries which are undertaken by internationally recognised firms. All of the audit reports are submitted to the Department's audit committee which makes recommendations, where appropriate. The findings of the major programme reviews conducted in 2008 are outlined in my report.

Chairman

I invite Mr. Cooney to make his opening statement.

Mr. David Cooney

I am pleased to meet the committee to discuss the 2008 appropriation accounts for the Department of Foreign Affairs. I was appointed to the post of Secretary General of the Department a few days short of 12 months ago and this is my first time to appear before the committee as Accounting Officer. My predecessor as Secretary General, Mr. Dermot Gallagher, passed on a Department which was efficient in its operations, responsive to its customers and open to change. He was rigorous in matters of financial accountability and instilled within the Department a high appreciation of the need for full and open co-operation with the Comptroller and Auditor General and the Committee of Public Accounts. I am grateful to him and will seek to maintain his legacy. I also thank the Comptroller and Auditor General and his colleagues for their professionalism during the years in their dealings with the Department. Their constructive approach is of real benefit to us and, as a result, our customers.

In 2008 the Department operated within an overall budget of approximately €1 billion. About three quarters of this allocation was expended on overseas development by the Department's development co-operation division which operates externally as Irish Aid, with the balance being spent on the operation of the rest of the Department. Notwithstanding these substantial financial outlays, the most valuable resource of the Department is its staff who have a deserved reputation for professionalism and commitment which they display in many and varied locations and circumstances. I acknowledge their dedication to public service, even in these most difficult of times.

In 2008 the Department's total staff complement was 1,577. These were deployed within the State in Dublin, Cork, Balbriggan and, since the completion of decentralisation in 2008, Limerick; in one of the joint secretariats in Belfast and Armagh, or in one of our 75 overseas missions. Regardless of where they were employed, every one of these officers was working towards the delivery of the Department's high level goals, of which there are six which I will briefly summarise as follows: to contribute to international peace and security, promote conflict resolution, respect for human rights and the rule of law; to promote full implementation of the Good Friday Agreement; to deliver on the commitments in the White Paper on Irish Aid through reducing poverty and supporting sustainable development; to promote Ireland and its bilateral relations with other countries, advance our economic interests and enhance our cultural profile overseas; to secure Ireland's interests in the European Union and contribute fully to the Union's future development; and to provide a high quality passport and consular service for all Irish citizens and actively engage with the Irish community overseas. In pursuing these goals we co-operate closely with other Departments, State agencies and bodies. This enables us to achieve more, relative to our size, than might otherwise be possible. We also value very highly our relationship with Members of the Oireachtas, whether it is with individual Members or formations such as the Joint Committee on Foreign Affairs, the Joint Committee on European Affairs or the Committee of Public Accounts.

Of the many activities undertaken by the Department in 2008, I draw the committee's attention to three, in particular: the agreement forged in Croke Park under Ireland's chairmanship on an international convention on cluster munitions; the campaign in the aftermath of the first referendum on the Lisbon treaty to convey to our EU partners the concerns of the people which had caused them to reject the treaty and to convince our partners of the absolute necessity for the Union to act to allay these concerns if the people were to be asked to reconsider their position; the action taken in the latter half of the year to address the increasingly negative reporting of economic developments in Ireland and to promote awareness of the corrective action being taken to maintain Ireland's attractiveness as a business partner and investment location.

In 2008 Ireland's overseas development assistance figure reached €921 million. This represented 0.59% of GNP and placed Ireland as the sixth most generous donor within the OECD. The core of our aid programme is poverty reduction, with the emphasis on some of the poorest countries in Africa. This is reflected clearly in how funds are allocated.

In the social sectors health and education continued to receive special attention and absorbed approximately 25% of bilateral funding. In the education sector primary education was prioritised, with increasing attention given to the quality of education as measured by outcomes.

HIV-AIDS remains an enormous problem globally but especially in Africa. Over €100 million was expended on HIV-AIDS and other related communicable diseases. At last, there is real progress in terms of the numbers on anti-retrovirals and prevalence rates are falling in a number of countries.

The Department continued to channel very significant funds through non-governmental organisations to a greater extent than any other international donor. In 2008 the Government provided over €150 million for Irish NGOs alone.

In September 2008 the Government's hunger task force report was launched at the United Nations headquarters in New York. The task force was established to examine the alarming levels of world hunger and to make recommendations for action. Over 1 billion people still suffer from hunger. Establishing the hunger task force, publishing its report and committing to implement its recommendations have put Ireland at the forefront of the international fight against hunger.

In 2009 the OECD's development assistance committee published its peer review of Ireland, much of which was carried out in 2008. The OECD's DAC peer review is considered by all international donors to be the major benchmark by which the effectiveness and quality of aid programmes are measured. The review provided a very positive assessment of the direction and effectiveness of the Irish Aid programme and represented a strong international endorsement of Ireland's aid programme. Ireland's ODA programme was praised for its focus on poverty reduction and concentration on a few poor African countries, as well as for its role as a champion in making aid more effective. The report describes the programme as "cutting edge" and particularly welcomes the support provided to date in the fight against HIV-AIDS and Ireland's "intellectual leadership" in promoting gender equality.

Irish Aid is working in some of the most difficult environments in the world. I am satisfied that the robust procedures used by it in devising its strategies and planning its programmes, combined with its monitoring, audit and evaluation systems, serve to protect the funding provided and are in accordance with best international practice and highest standards in this area. This has been recognised by the OECD, as well as by the Department's independent audit committee.

Within our programme countries there are strong systems of checks and balances in place at country level that safeguard Irish taxpayers' money. For example, there is a dedicated team, including an internal auditor, in each of our programme country embassies which follows up on all accountability requirements. The Department has established procedures for reporting and addressing allegations of fraud. All issues of suspected fraud will continue to be addressed in a swift and efficient manner.

I have given a brief tour of the work of the Department in 2008. With your permission, Chairman, my colleagues and I are ready to answer any questions that you and other members of the committee may wish to put to us.

Chairman

I thank Mr. Cooney. May we publish his statement?

Mr. David Cooney

Yes, certainly.

Deputy Niall Collins

Do we have a presence in Haiti through the Department's network of missions? Do we have people on the ground there?

Mr. David Cooney

We do not have a mission in Haiti, as it is not one of our programme countries, but we do have a team there which arrived yesterday evening. It has set up at the airport. It is a Department of Foreign Affairs team of experts in emergencies who will be monitoring the situation and reporting back to Dublin with advice on how we can carry forward the next phase of our contribution. As members of the committee will have heard from media reports, the aircraft chartered by Irish Aid has arrived in the Dominican Republic. The goods have now been transferred to Haiti for distribution by GOAL and Concern. While we do not have a regular, full-time diplomatic and development presence, we do have people on the ground. Concern representatives are already in the country, as are Irish Aid personnel. There are a number of Irish citizens in Haiti, including missionaries and individuals working in the commercial sector who have all been accounted for. Unfortunately, one citizen who was working with the United Nations died. We very much regret Mr. Andrew Grene's passing.

Deputy Niall Collins

Mr. Cooney has said a delegation was sent to Haiti. How many staff does it include?

Mr. David Cooney

Four.

Mr. Brendan Rogers

We have three members from Irish Aid and a member of the Defence Forces.

Deputy Niall Collins

Mr. Cooney has mentioned that we have 75 overseas missions. In the context of Vote 28, is the Department of Foreign Affairs looking at the consolidation of these missions? The McCarthy report makes specific reference to this matter and recommends that the number of these missions should be reduced to 55 and that links to other Departments and to Bord Bia and Tourism Ireland should be created. Is the Department giving consideration to this recommendation?

Mr. David Cooney

Yes. Last year we carried out a review of our overseas missions in response to the McCarthy report. Not surprisingly, we do not agree with the findings of that report. We are of the view that our mission network has an essential role to play in the economic recovery of the country. This was borne out at the Farmleigh forum at which we were urged to expand rather than decrease the size of our international footprint.

Our missions do different work. We have embassies in every EU country. Those in the larger member states have a wider remit but all of them look towards protecting our interests within the European Union. We are reviewing our structures and considering introducing a lighter model in some EU states. Our officials in such states will focus on contact work with the host governments with a view to protecting Ireland's interests within the European Union. It must be borne in mind that an extraordinary amount of the legislation that applies in Ireland is determined by the EU in Brussels. Each of the other member states has a say in what happens in Ireland. We, therefore, consider it important to have in place in other member states people who are in a position to communicate with and influence host governments.

Some of our embassies in the larger EU member states have much greater responsibilities in respect of trade. I refer here, for example, to London, where the embassy liaises with local communities, etc. However, trade is a priority for our embassies everywhere.

Outside the EU our missions have three roles. These relate to trade promotion, the implementation of aid programmes and protection of and liaison with Irish communities.

The work of multilateral missions such as those relating to the UN in New York and Geneva, the OECD in Paris and the OSCE in Vienna is very much dedicated to the work of the organisations in question. The remainder of our missions have clear work profiles. To be frank, we do not believe we should be cutting back in the context of trying to promote trade. We will be carrying out a strategic review of missions this year. In this, we will be examining whether, in light of the resources available, the kind of deployment we are using is correct. Given that we are trying to extricate ourselves from an economic recession on the basis of export-led growth, in our view — I believe this is also the opinion of the Minister and the Government — this is not the time to be cutting back on our level of external representation.

Deputy Niall Collins

In light of the Lisbon treaty and the consolidation of the European Union, is it necessary to have an embassy in every member state? Are there other parts of the world where we do not have adequate representation and which we should target?

Mr. David Cooney

The Taoiseach has already announced our intention to open a consulate in Atlanta in the US. We are of the view that the southern states of America are a growth area and that they harbour great investment potential for Ireland. Our presence in south-east Asia could be greater. We do not, for example, have an embassy in Indonesia, which is the largest self-standing Muslim country in the world. We also need to consider the possibility of opening further consulates in China.

As already stated, we have, for the moment, decided against closing embassies in EU countries. We are considering the introduction of a much lighter model and this summer we will examine the possibility of reducing the size of and costs relating to some of our missions in EU member states. However, I also explained the importance of having someone present in these countries, particularly as each — by means of its position on the EU Council — has a direct say in what happens in Ireland with regard to the laws that apply here. We are, therefore, of the view that we need a presence in these countries in order that we might influence them. There are those who state that this could be done through Brussels but I do not accept that if one wants to influence Government policy or the Oireachtas, the best way to do so is to contact the Irish ambassador in Brussels. I am of the view that to exert such influence, it is necessary to have a presence within a country. That is why we are of the view that Ireland requires a presence in each EU capital. However, we are considering doing this in a more streamlined way.

Unfortunately, we are not doing this with any great expectation that, as a result, we will have additional funds to redeploy. Our administrative budget has dropped by approximately 22% in the past two years so we have been obliged to reduce expenditure. In the context of what it will be possible to do, we will be considering expanding into areas where real trade opportunities exist. Last year we opened a mission in Abu Dhabi, which is an extremely important centre for investment. Having an embassy there allows us to try to tap into such investment. We were supported and encouraged in this regard by the relevant agencies. The putting in place of this embassy has also allowed us to share out the secondary accreditations in the Gulf area in a more manageable way. Our missions in Riyadh and Abu Dhabi have now split the number of side accreditations — approximately seven — and are able to service them much more effectively.

I did not reply to the Deputy's questions regarding co-operation with other Government agencies. We have Ireland House arrangements in a number of locations, including New York, Madrid and a number of other cities. We seek to pursue such arrangements in every location possible. For one reason or another, it sometimes does not suit the agencies to operate on that basis. As far as we are concerned, however, we always seek to put such arrangements in place where possible. In Saudi Arabia, we have a much more closely integrated operation with people from the agencies and this brings them within the diplomatic cover. We are always seeking opportunities to establish Ireland House operations.

Deputy Niall Collins

The Estimate relating to wages, salaries and allowances in 2008 was €104 million but the actual outturn was €98 million. As a result, there was an underspend of approximately €6 million. What was the reason for this underspend?

Deputy Jim O’Keeffe

The Secretary General need not for apologise for the underspend.

Deputy Niall Collins

No, he need not. Reference is made to the foreign service allowance, which is not taxable nor subject to the pension or income levies. What percentage of total wage costs does this allowance represent? There was much discussion recently with regard to the non-payment of the pension levy by members of the Judiciary. Is there an arrangement, similar to that which applies in respect of judges, for a voluntary surrender of part of the foreign service allowance?

Mr. David Cooney

I am delighted the Deputy asked those questions because there is a need to put the record straight. The underspend on salaries came about as a result of currency fluctuations. The fact that the euro was strong at the time meant the amount we were paying in the form of the foreign service allowance and other allowances — those relating to rent for accommodation, etc. — was significantly lower. It worked in our favour, across the board, in respect of the various allowances. There is also the fact that we operate on a frugal basis. We have continually underspent in this area in recent years.

The allowances paid to foreign service officers are not in the nature of pay. Basically, the idea is that they go abroad on the same basis as working here. They are not paid anything extra. I do not know if there is another occupation, perhaps the priesthood, in which individuals would be sent abroad to serve without additional remuneration for that. We have a foreign service allowance, which has two elements. First, there is an element that compensates the officer for the additional cost of serving abroad. If one represents one's country abroad, one must be presentable and, therefore, one will spend more money on clothing. One must tog out smarter than one would if one was a civil servant operating here, no disrespect to colleagues at home, but, frankly, one must show a bit of form. There are, therefore, additional expenses of that nature. Living abroad costs more and officers will have family reunions and additional expenses to maintain a home capable of being used for entertainment purposes, which is why we pay for presentable accommodation abroad. An officer must make sure it is properly cleaned and maintained and, therefore, people have to be hired in. Additional out of pocket expenses arise from being abroad.

The other element of the allowance deals with postings where the cost of living is higher than in Ireland. That element has declined considerably over the years as Ireland has become a high cost place to live. It is based on the fact that they should not be better off abroad than at home. The allowance is calculated by identifying a certain element of post tax income that is likely to be spent abroad. When salaries go down at home, the level of the allowance goes down because the level of post tax salary is taken into account in calculating the amount one has to spend. Although the direct read across is not applied to the allowance, the fact that salaries have gone down at home is taken into account and, therefore, one of the consequences of what has happened here is that as take home salaries go down, the allowance goes down.

Chairman

Are the allowances reckonable for pension purposes?

Mr. David Cooney

No, they are not in the nature of pay. They are there to make sure that when one is serving abroad, one is no worse off than if one was at home, so that one does not have to put one's hand in one's pocket to subsidise one's work on behalf of the State in a foreign posting.

Deputy Niall Collins

What percentage of the €98 million is allocated for the foreign service allowance?

Mr. David Cooney

The allocation in 2008 was €7.9 million.

I refer to a number of other issues that have come under scrutiny in the nature of allowances. We have seen criticism in the media of the child education allowance. That is again to enable an officer to ensure his or her child can be educated in English or Irish to a reasonable level in the place he or she lives. It is not acceptable that an officer should go abroad and his or her child's education should suffer. His or her education will suffer. I have four children and their academic progress has been affected by the fact that they lived abroad. The least the Department can do is to make sure they are able to attend a decent school. I just came back from being ambassador in London. There is not the remotest possibility of turning up in London and having one's child accepted into the local school in the area the ambassador to London lives. The waiting lists are a mile long. We tried to get our daughter into the local state school and my wife was told by the admissions officer, who was an Irish woman, that she would not even bother to take her name. This is not an extravagance. It is the right of the child to be educated.

We also have rent allowances, which allow officers to live in a premises that is no more than adequate for the work they do and the kind of premises in which they are accommodated will depend on their job profile. If they are doing a job where they are expected to entertain at home, it must be of a standard in order that when people come along, they think it is reasonable and respectable. None of these allowances is in the nature of pay. None of them is intended to improve the living standards or the income of officers. They are not pensionable and there is no question of a voluntary surrender of the allowances because if an officer voluntarily surrendered a proportion of them, he or she would effectively be saying, "If I give up a certain proportion of those allowances, I am, therefore, going to be putting my hand in my pocket to compensate the State for that money". That is not reasonable.

Deputy Niall Collins

Mr. Cooney mentioned the allocation of €150 million to Irish NGOs in grant aid in 2008. How many NGOs benefitted? What percentage of this amount reached the end user? How much was expended on administration?

Mr. David Cooney

I might have to ask my colleagues for help on that. The number of NGOs that receive money is significant but most of our money goes to five core NGOs and the umbrella organisation covering the missionaries. In addition, we give funding to a number of smaller NGOs. Some are quite micro. They do work and there is often considerable pressure on us to help them out.

Mr. Brendan Rogers

As the Secretary General said, we have five major budget support donors and they get the vast majority of the money we give to civil society. However, there are more than 100 NGOs if all the missionary groups, micro projects and so on are included. The administrative costs depend on the size of the NGO. I spent 11 years in Africa. One cannot live there and deliver a programme without operating costs. NGOs and missionaries, in particular, have small operating costs, approximately 10% on average, which is low. They must have accommodation, communications, basic security and equipment for the projects.

On the question of whether the funding gets to the end user, having lived in Africa for 11 years, I have witnessed the incredible work of missionaries and the excellent work of NGOs and, overall, we get good value for money. However, we carry out strict evaluation and audit on most of the organisations, which sometimes operate in difficult environments. They are making a difference to the lives of people but we can all improve the way we work.

Chairman

Will Mr. Rogers list the five main beneficiaries and the amounts they are allocated? Perhaps he will seek out that information and supply it later in the meeting.

Mr. Brendan Rogers

Yes.

Mr. Michael Gaffey

To put matters in perspective, the first point I would make is that the OECD indicated last year that Ireland channels more money through NGOs — that is, the civil society sector — than any other major donor. This is due to the role Irish NGOs and missionaries have played in overseas development. We have a relationship with approximately 160 NGOs. Over 80% of the funding we provide is allocated to just 29 of these. It is clear, therefore, that we have a particular relationship with the larger NGOs. Over 50% of the total amount we provide under the multi-annual programme scheme goes to five NGOs. The latter scheme is designed to provide multi-annual funding — in respect of development activities — to NGOs in order to assist them in programming work and make a difference over a number of years.

The five NGOs to which I refer in this regard are Concern, Trócaire, GOAL, Self Help Africa and Christian Aid. Last year, Concern received approximately €20 million, Trócaire received €17 million, GOAL received €14 million and Self Help Africa and Christian Aid each received in the region of €3 million. This funding was provided on a multi-annual basis. In the agreements reached with these organisations in respect of the current four-year period, it was foreseen that there would be a gradual increase in their funding as time passed. As a result of the reductions that took place last year, however, funding has remained at the same level as that which obtained in 2008.

Chairman

I apologise to Deputy Jim O'Keeffe for intervening, but what funding has been set aside in respect of calamities such as that which recently occurred in Haiti? Has additional funding been allocated to some of the main players involved since the earthquake in Haiti?

Mr. Brendan Rogers

Mr. Gaffey was referring to long-term development funding, which has remained at a consistent level. NGOs also receive funding which is additional to this. In each of the past few years we have put aside €50 million to cater for emergencies such as the earthquake in Haiti, the Asian tsunami in 2004 and the earthquake in Bam. We are ready to respond within hours and the funding to which I refer is available immediately.

Chairman

How much additional money has been allocated to the main players such as GOAL, Concern, etc.?

Mr. Brendan Rogers

A couple of days ago, a C-130 aircraft carrying 83 metric tonnes of non-food items — tarpaulins, mosquito nets and medicines — supplied by us flew into the Santo Domingo. These items will be delivered, by road, to GOAL and Concern for distribution in Haiti. This is the largest consignment we have ever delivered in such a short period. We have put the lessons we learned as a result of the 2004 Asian tsunami into operation in respect of our relief effort for Haiti.

Chairman

How are decisions taken with regard to which NGOs should receive allocations? Are they given to those which already have a presence on the ground or to those which put people in place following a disaster?

Mr. Brendan Rogers

Best practice dictates that we work with a small number of key partners who are already on the ground in countries where disasters occur. These organisations will already have the necessary expertise, communications networks and security arrangements in place. Within a few hours of the earthquake in Haiti, we were in contact with the UN agencies and with a number of our NGOs in order to determine the nature of the presence on the ground and its capacity, where gaps might exist and what we might need to supply. That is how we operate.

Having said that, a number of NGOs will send staff with previous experience of dealing with disasters to places such as Haiti when calamities occur. We are of the view that these organisations have something to bring to the table. In general, however, best practice determines that it is necessary to work with those organisations with expertise on the ground because these can be active in an immediate sense.

When emergencies occur, most lives are saved within the first 24 hours by local people and organisations. The lesson we learned as a result of the tsunami was that we should preposition both money and supplies. For example, we have a special agreement with the International Federation of the Red Cross, IFRC, and the International Committee of the Red Cross, ICRC, which enables them to build up the capacity of their organisations across the globe but, in particular, in areas which are prone to emergencies. The IFRC and the ICRC train local staff and are in a position to respond within two to four hours. There is always a 12 to 24 hour delay with regard to the international response. We are, hopefully, putting into play all the lessons we learned from the tsunami.

Chairman

That is good to know.

Deputy Jim O’Keeffe

While we are dealing with Haiti, is it correct that €20 million has been made available?

Mr. Brendan Rogers

There are various figures in the ether in this regard. We are in the processing of delivering an additional €3 million to Haiti. However, we have given the UN——

Deputy Jim O’Keeffe

What does Mr. Rogers mean by an additional €3 million?

Mr. Brendan Rogers

That is new money. We have made a contribution to the United Nations Central Emergency Response Fund, which was established in the aftermath of the tsunami. One of the issues that arose in respect of the latter disaster was that money was not immediately available. When the tsunami hit in 2004, there was an unacceptable delay because UN agencies were obliged to approach donors in order to obtain pledges of funding before they could deliver aid. As a result of this, a special fund — the United Nations Central Emergency Response Fund, UNCERF — was established. We put €20 million into that fund in order to enable United Nations humanitarian agencies to respond within one hour of an emergency.

Some of that money is already on its way to Haiti. The UNCERF has provided $26 million, which includes part of the €20 million we donated. The additional €3 million about which the Deputy inquired is bilateral funding from our aid programme.

Deputy Jim O’Keeffe

Is the €20 million money that is provided on a general basis in order to facilitate a rapid response to any emergency anywhere in the world?

Mr. Brendan Rogers

Yes. It is provided so that there will be no delay in response time following, for example, a tsunami or an earthquake.

Deputy Jim O’Keeffe

That makes a great deal of sense. So it is a general sum we make available annually.

Mr. Brendan Rogers

Yes.

Deputy Jim O’Keeffe

Is it topped up every year?

Mr. Brendan Rogers

We have delivered over €70 million to the UNCERF since it was established in 2006.

Deputy Jim O’Keeffe

So the €20 million is a general amount provided to the UN in order to enable it to respond to emergencies anywhere in the world.

Mr. Brendan Rogers

Yes, it goes to the World Food Programme, UNICEF — the key humanitarian agencies.

Deputy Jim O’Keeffe

Some of that will obviously have been immediately sent to Haiti.

Mr. Brendan Rogers

Some $26 million has been sent to date.

Deputy Jim O’Keeffe

Did that money come from the global fund?

Mr. Brendan Rogers

Yes. The global fund is over €450 million.

Deputy Jim O’Keeffe

So a small part of the €20 million we provided will have been used.

Mr. Brendan Rogers

Yes.

Deputy Jim O’Keeffe

Is it correct that additional €3 million has been given to Concern and GOAL in order to assist them in their efforts?

Mr. Brendan Rogers

Yes. We have also funded the actual organisation of the response. One of the major problems in Haiti at present relates to the bottlenecks on communications networks, not the lack of money or materials. We have funded the UN in respect of getting the response under way.

Deputy Jim O’Keeffe

How much did that cost?

Mr. Brendan Rogers

Of the €3 million, approximately €300,000 was spent on this endeavour.

Deputy Jim O’Keeffe

So it was part of the €3 million.

Mr. Brendan Rogers

Yes.

Deputy Jim O’Keeffe

Public sentiment would seem to indicate that if further moneys are available they should be diverted towards the aid effort in respect of the appalling tragedy in Haiti. The €3 million in question might be considered a somewhat modest response, particularly as it seems to be the only additional funding that is being made available in respect of this matter.

Mr. Brendan Rogers

The €3 million represents a first response and it was provided within a week of the earthquake. I understand that additional moneys will be forthcoming. The difficulty that occurred at the time of the Asian tsunami was that there was too much money in the system. During that period, money that had been earmarked for aid efforts in Africa was diverted to help the survivors of the tsunami. I am sure additional funding will be forthcoming in respect of Haiti. I do not believe there will be any shortage of money. However, the needs in the coming two weeks will tend more towards logistics, personnel and equipment. We stand ready to provide further assistance.

Deputy Jim O’Keeffe

The rescue phase of the operation is probably nearing its end. There appear to be hundreds of thousands of people who have been injured and who are in need of urgent medical treatment. In that context, there is a continuing need for support to be provided and additional funding will be required.

Mr. Brendan Rogers

Yes, and medical personnel will also be required. I understand there is a——

Deputy Jim O’Keeffe

What kind of resources would be available at official level which could be added to the €3 million that has already been provided?

Mr. Brendan Rogers

Our team arrived in Haiti yesterday.

Deputy Jim O’Keeffe

I was referring to financial resources.

Mr. Brendan Rogers

There is €50 million in our emergency fund.

Deputy Jim O’Keeffe

So it will come out of the emergency fund.

Mr. Brendan Rogers

Yes. We have the money and it can be made available.

Deputy Jim O’Keeffe

Given that we have only entered the new year, I presume all that money will be available.

Mr. Brendan Rogers

Absolutely.

Deputy Jim O’Keeffe

I endorse the comments about the former Secretary General, Mr. Dermot Gallagher, who had a fine record in office. I welcome Mr. David Cooney, who has a fine record to date in other parts of the Department. I wish him well in his new role.

I come to the question of trying to achieve efficiencies, etc., in our foreign service. We have 75 missions, including a mission in every EU state. Is that a standard requirement? Considering efficiencies, does it need to be at ambassador level? For example for the three Baltic states, would it be possible to have an ambassador in one and the other two manned by first secretaries? Could we have a more cost-effective approach to do what is necessary without offending the countries concerned?

Mr. David Cooney

I fully agree with the Deputy and so does the Minister. That is what we will be implementing over the course of the next year in a number of EU countries. I do not want to speak publicly about what countries because that would be lack of courtesy.

Deputy Jim O’Keeffe

Fair enough.

Mr. David Cooney

However, we are looking at and are in the process of implementing what I described earlier as a lighter model. These will be missions that will not be, unfortunately, as well resourced as heretofore. In some cases they will be one-person missions. It will be one person from headquarters there, probably assisted by a locally recruited member of staff. We will be cutting back on the various accessories that one normally associates with an ambassador such as a State-owned vehicle and cutting back on the size of the residence. They will be focused on EU business.

Those heads of mission will be in some cases at more junior grades than we have been appointing heretofore. Basically we are doing exactly what the Deputy said. The only point that we will not be doing is, frankly if one puts the money and the resources into having somebody on the ground if at all possible they should carry the title ambassador because as soon as they are given the title of anything less —chargé d’affairs for example — they do not have the same credibility or entrée into the local host country circles. We will be doing, if one likes, a lighter form of ambassador. In our judgment it is important that such a person retains the title of ambassador so that they have the full rights and are able to do their job.

Deputy Jim O’Keeffe

I understand that. The sensitivities of the host country and the services that are made available to our people may depend to some degree on that. While it may not have been music to the ears of senior officials in the Department of Foreign Affairs, is Mr. Cooney therefore following the suggestion in the McCarthy report or one of the other reports that there was no need to have ambassadors at assistant secretary level and that perhaps a more junior level might be more appropriate in many of our missions?

Mr. David Cooney

That is already happening. In fact, I think over the next couple of years due to the embargo we are going to be down about 15 assistant secretaries. We are already this year, in terms of the next posting round, going to see more heads of mission at counsellor level. Very soon we are going to have ambassadorial positions filled across a number of grades and they will be looked at in terms of the demands of the particular post and the mandate of that particular post. We would not, I think, concur with the McCarthy formula in terms of reducing the number of assistant secretaries. If one were to do what McCarthy wanted, effectively one would end up with a situation that once a person became an assistant secretary they would be thereafter confined to working at headquarters; they would not be able to work abroad. However, we are, in any case, going to end up with a much smaller cadre of assistant secretaries and one on which we can operate a system where people can rotate between home and abroad. We do not think it is healthy to have people abroad full time or at home full time. We think that the Department benefits from people rotating between home and abroad. The bottom line is that much of what the Deputy has suggested is actually being implemented.

Deputy Jim O’Keeffe

I want to touch on another area that might be regarded as diplomacy on the cheap, our network of honorary consuls. Do we have many of those and what kind of money do we spend on them? With cheaper travel and more Irish people travelling to distant parts of the world, is there scope to extend that network which might provide us with some representation on the ground at quite a low cost?

Mr. David Cooney

While I am speaking one of my colleagues will fish out the figures for me. Yes, we are extending the honorary consul network. While I have the opportunity, let me pay tribute to our honorary consuls who provide us with great service at no real return. They get a very small honorarium which is simply to cover their office expenses. We are broadening out the——

Deputy Jim O’Keeffe

Do they not get paid?

Mr. David Cooney

They do not get paid. They certainly do not make anything out of it. Basically their office expenses are covered. They get €1,125 per year to help cover office expenses. They are also allowed to retain 50% of consular fees. However, when one considers that many of these provide office space and actually employ people full time to service their work as honorary consul, this is not much of a return for them.

Deputy Jim O’Keeffe

That is why I referred to them as diplomacy on the cheap. Should we have more of it?

Mr. David Cooney

We are having more. We are expanding our network quite considerably. One of the phenomena of the last few years and borne out of our economic prosperity has been, of course, that Irish people have been travelling more and more. We have now the particular phenomenon of younger people going to places and engaging in activities that often puts them in harm's way. We have had a dramatic increase in the amount of consular work that the Department is doing. Consular work is the growth area of the Department of Foreign Affairs. We are having to deal with a rapidly increasing number of often very sad and traumatic situations. Particularly young people are going abroad and getting into difficulties. Let me again here pay tribute to the staff of our consular division who do a fantastic job and who deal with some very difficult personal situations.

Deputy Jim O’Keeffe

They are exceptionally helpful when contacted.

Mr. David Cooney

I am glad to hear that because we think very highly of them. We now have an increasing number of honorary consuls in what I might call remote places and we are trying to expand that.

Deputy Jim O’Keeffe

Approximately how many do we have?

Mr. David Cooney

We have 67 honorary consuls and 20 honorary consuls general. Effectively an honorary consul general is a consul who has been in the job for a certain number of years and gets a consul general tag as a result.

Deputy Jim O’Keeffe

Do they get any increase on the €1,125?

Mr. David Cooney

No, but they get an increase in prestige. A lot of them do it because it gives them prestige locally. Where we can, we try to appoint an Irish citizen as our honorary consul, but in some of the more remote areas it is not always possible to find an Irish citizen who is in a position to do this job so we appoint local nationals who do the job for us. They are——

Deputy Jim O’Keeffe

How does the Department find them? Do they apply?

Mr. David Cooney

No, it would be done by the ambassador who would be accredited to that country, usually on a non-resident basis, although we do have honorary consuls and honorary consuls general in countries like Germany where we have an embassy. For example we have somebody in Munich and Stuttgart and are looking to get someone in Saxony.

Normally it is the non-resident ambassador who when he or she visits a country is on the lookout for someone who would cover us in that country. They would start off with the Irish community and see if there is somebody there and if not they would have to look further afield. We are looking for somebody whom we judge to be reliable and to have the resources to carry out the work. The honorary consul does a wonderful job especially in the initial stages of any situation given that he or she is there on the ground and can help us out with the local authorities. The Deputy is right; it is diplomacy on the cheap, but that is the market we are in, I am afraid.

Deputy Jim O’Keeffe

Regarding costs and effectiveness, an old bugbear of mine has been the rental cost of properties. I have always had the view that where we would have a long-term presence it would be a saving to own properties. Has that process of acquiring properties and avoiding the high rents that we have had to pay continued?

Mr. David Cooney

Yes, it has. We have a view in the Department that in the long term it is far preferable to own the premises that we occupy rather than rent. If we are to invest in refurbishing a building, if we own it, it is a long term investment, but if we rent it — especially of we could be asked to leave at relatively short notice, which is the case in some situations — it is money down the drain.

Deputy Jim O’Keeffe

Have we acquired a few more in recent years?

Mr. David Cooney

We have acquired a couple of premises in the past year. In 2006 we purchased the ambassadors' residences in Ljubljana and Ankara, and new chanceries — that is the office buildings — in The Hague and Strasbourg. We were involved in construction of a new residence for the joint secretary and staff of the British-Irish Council secretariat in Belfast. That was completed in 2007. In 2007 we purchased the residences of the ambassadors in Brazil and Mexico, and in 2008 we purchased the ambassador's residence in Pretoria. We did not purchase anything in 2009 and I cannot imagine that we will purchase anything in 2010.

Deputy Jim O’Keeffe

It is not the best of times to purchase at the moment — although I suppose prices might be more competitive in these times.

Mr. David Cooney

Prices are competitive but it is the same story as here. People do not have the money to buy.

Deputy Jim O’Keeffe

What are the figures for development aid in absolute terms and as a percentage of GDP for 2008 and 2009, and the proposed figure for 2010?

Mr. David Cooney

Obviously in absolute terms we have gone down quite noticeably from a high point for Vote 29 of €768 million in 2008. We are looking at €536 million on the Vote 29 side in 2010. That is a significant drop in real terms — it is getting on for 30%. In terms of the percentage of GNP it is not that big. We were at 0.59% in 2008 and we forecast that we will be at 0.52% in 2010, obviously because GNP has shrunk in the meantime. It still leaves us in a pretty competitive place. We have not, to my knowledge, been overtaken by any other country as a result of the fall in our aid. We are still competing for sixth place internationally, which is——

Deputy Jim O’Keeffe

Is that because other countries have also cut back?

Mr. David Cooney

It is because we were ahead of them to start with and many of them are not increasing in the current circumstances. We still have a pretty extraordinary story to tell for a country that has been through what Ireland has been through over the past century. Today is the 91st anniversary of the First Dáil which reminds us that less than 100 years ago we were a colony. In the meantime we were bled dry by immigration. We experienced approximately 15 years of prosperity and yet in that time we managed to haul ourselves ahead of many countries that overall are far more prosperous than us. Despite the considerable regret that the Government and everyone in the Department of Foreign Affairs has that we have had to cut back, the story taken in its overall context is one that we should be proud of.

Deputy Jim O’Keeffe

Is it a 30% cutback?

Mr. David Cooney

Overall for the past two years, yes.

Deputy Jim O’Keeffe

What is the amount in monetary terms?

Mr. David Cooney

For Vote 29, the outturn for 2008 was €768 million and the allocation for this year is €536 million. The reduction is €232 million.

Deputy Jim O’Keeffe

Where have the cutbacks had the greatest impact?

Mr. David Cooney

The big cutback was of 24% last year. The brunt of the cutbacks was borne on the multilateral aid side. We reduced our contribution to the UN and other multilateral organisations on the Vote 29 side by 50% last year. We did our very best to maintain the programmes in the priority countries where we had to make some cutbacks. Those programmes will still be rolled out, but probably over a longer period. We sought to protect the priority bilateral aid countries and our NGO partners, although there were cutbacks. So it was the multilateral programme that took the biggest hit.

Deputy Jim O’Keeffe

Particularly in the aftermath of what has happened in Haiti, concern about our aid programme increases and people try to compensate to some degree with voluntary contributions. People have considerable concern over the possibility of fraud and they want to be happy that money goes to needy recipients rather than being stuffed into the pockets of the likes of President Mugabe. I have experience of the audits, checks and so forth. Fortified by the audits that take place, can Mr. Cooney give strong assurances that there is no or virtually no siphoning off of any of these funds for fraudulent purposes?

Mr. David Cooney

We are very confident that we have in place the controls and arrangements that minimise the possibility of fraud. We are not aware of any fraud and we have audits and evaluations at several levels. We have our own direct audits and have auditors in every one of our priority countries. So we carry out our own audits. We hire in reputable international companies to carry out audits. We do audits with other donors. The host governments do their own audits. We are working very hard to improve the auditing capacity of the host governments. Where we give direct budget support in Mozambique and Tanzania we are very much on to that. We have no evidence of fraud in these circumstances.

There are a couple of small issues of concern to us, not regarding the direct programme support, but where we are funding through organisations. When we identify anything like that it is brought to my attention immediately. We introduce the most rigorous investigation. The aid is suspended. Any further aid is suspended until these are cleared up. We are trying to help these countries to be able to run themselves to the same level. I know there are people who claim there are risks in giving money directly to governments. However, there are also benefits because by doing that we are getting involved in the way the government spends that money. There is no doubt that more money is spent on health and education in programme countries because Irish Aid is giving that money to the governments, insisting that it be spent in those areas and monitoring that it is spent in that way. We see definite outcomes there that indicate a return on that. It is the old story; charity has its uses in terms of dealing with the most immediate situation, but if one wants to put countries in a position to develop on a long-term basis, one has to help them to govern themselves properly.

We also contribute in many countries to the development of the infrastructures that police and oversee expenditure of money such as the auditing functions and parliamentary committees. I am confident — I take a close interest in it — that if something can be done to ensure this money is being spent properly, we are doing it. If we had the slightest indication that the money was being misspent we would act immediately on it.

Deputy Jim O’Keeffe

That is fair enough. One would not deal with an outrageously corrupt place such as Zimbabwe.

Mr. David Cooney

We do not give budget support to Zimbabwe.

Deputy Jim O’Keeffe

Would the Department operate with an NGO there?

Mr. David Cooney

Yes, we do in terms of aid. We have a small programme there and we give money, but we are very strict in ensuring that money is correctly spent and it does not go anywhere near the government.

Mr. Brendan Rogers

Audit and evaluation is something to which I devote a considerable amount of time. I have read most of the literature that emanates from Africa on corruption. It seems to me that the vast majority of real corruption in Africa emanates from public procurement contracts such as railroads and transportation links. That is where it is happening. We are not involved in any of that as we do not get involved in that type of large infrastructural project. We are involved in the social sectors.

The change I have observed in the past six or seven years is the emergence of national audit offices — the Comptroller and Auditor General's of the programme countries in which we operate. When I was first head of mission in Zambia we never dealt with the comptroller and auditor general there. We did not hear about the office at all. Now such offices are strong and robust. They are shining a light all over the system and they are finding little things. Most of the information is coming from the systems. Slowly and surely there is a sea change coming, especially in southern Africa. The institutions of parliamentary democracy and accountability are becoming stronger. They are finding that there are weaknesses in the system. That is the sea change I see happening in the past six or seven years and we have played a role in bringing it about.

Deputy Jim O’Keeffe

That is a good change. Our own Comptroller and Auditor General shines a light here too and finds a few questionable things on occasion.

Chairman

I wish to tell a story about our visit to Zambia last year. We met the Comptroller and Auditor General's equivalent out there. We were told by some of our parliamentary colleagues that the kiss of death for political ambition was to be appointed a member of the public accounts committee because one became highly unpopular and as a result people shied away from it. I can vouch for what Mr. Rogers has said about accountability being strong. That is reflected in the increase in consultancy services by 35% under subhead A7 for the year under examination.

Mr. Brendan Rogers

Yes.

Chairman

That shows that monitoring has been beefed up.

Mr. Brendan Rogers

That is what it is for. The word "consultancy" always has a certain resonance. Our consultancy service consists of experts whom we bring in to look at the programmes and projects to ensure they are being implemented in the best possible way.

Chairman

I will not detain the witnesses for too long. We have heard many comments in the past year especially about travelling abroad. The embassies of the visiting countries seem to have been the fall guy in explanations given, especially by Ministers. It was revealed that travel and accommodation arrangements were made by the embassies of the countries being visited. This is a matter for the finance unit also. Have new guidelines been sent to embassies abroad to tone down on the quality of accommodation and entertainment given to visiting "dignitaries" from this country? Has the finance unit tackled that issue and has the Department worked with the embassies abroad to reduce the quality of the accommodation offered to visiting Ministers and senior officials?

Mr. David Cooney

Yes. When an embassy is approached by a Minister's office either directly or through the Department about a trip, because our people are there on the ground and they have the expertise, they are responsible for recommending travel arrangements. In other words, they recommend a particular hotel or range of hotels and they advise the Minister on whether transport is required. They act on that. They send back the information and it goes to the Minister's private office.

It is probably reasonable to assume that Ministers were not always aware of the costs involved. The breakdown was often in the Minister's office. The private secretary might have taken the decision and said such and such an arrangement was fine. The Minister might not have known. That has changed and Ministers now take a careful interest in how much trips costs. I do not say that happened in every case because I am not in the blame game. I am more concerned that we put the situation right.

Since I came last year the Department has sent out seven communications to our missions precisely on that issue. It started on 17 February 2009. The Government took a decision when considering the programme of visits for St. Patrick's Day, that Ministers were not to be accommodated in suites henceforth, unless there was a particularly compelling reason. They were to be accommodated in a good room in a good hotel. They were not be driven in specifically hired limousines. Where the embassy car could do the job, it would do it. If a car had to be hired, people carriers were to be hired to try to be as economical as possible. It may be that in the odd instance for reasons of prestige or security a limousine was needed.

That was the first initiative on 17 February and subsequently a number of messages to missions were sent throughout the year. We issued our own revised travel and subsistence circular. We have strict travel and subsistence regulations in the Department of Foreign Affairs, more strict in many cases than the Department of Finance regulations. We have to keep a tight hold on it because our people travel so much. The Department of Finance issued its own revised travel regulations in the year. In October 2009 I issued an instruction to all heads of mission that henceforth when a mission was contacted about a ministerial visit it was to give recommendations and advice to the Minister's office setting out fully the costs of each element of the trip, namely, car hire, hotel and use of VIP lounge and that no commitments were to be incurred without the express approval of the Minister's office.

I am now fully satisfied that if those regulations are being implemented – I have no reason to believe they are not – travel by Ministers is being done in the most economical way possible and that Ministers are now fully aware of the costs of that travel in advance. All the feedback I am getting is that Ministers are taking these matters seriously. In fact, as the Secretary General of the Department of Foreign Affairs I am slightly worried that people are afraid to travel at the moment because of the publicity that attaches. As a country that lives by exports, we have to travel. The Department of Foreign Affairs and the Government are committed to travelling as economically as possible. However, it is important that we travel because if we do not we will not be doing the kind of promotion we need to do. The public should, at this stage, be reassured.

Chairman

The Secretary General is saying there is a balance to be struck between extravagance and arrangements that are sufficient to do the job in a professional way.

Mr. David Cooney

Absolutely. We have to promote ourselves abroad. If we do not, we will not prosper as a country. We have got to sell ourselves. The days when everybody wanted to come to Ireland to take a look at the Celtic tiger and find out how we created it are long since gone. People are not knocking on the door these days. We have got to go out and market ourselves.

Chairman

It is significant that the Department's circular was issued in February last year and that it was produced shortly after the committee's interim report on FÁS and its travel expenses. I am glad there has been a follow-up in regard to finance.

Mr. David Cooney

It was very rigorous.

Chairman

My two remaining questions relate to decentralisation. Has decentralisation to Limerick been finalised? How has Irish Aid dealt with the issues of intellectual memory and skills? Has it lost many skills as a result of decentralisation?

Mr. David Cooney

The decentralisation process has now been completed. The offices in Limerick are up and running and the operation is very successful. It brings with it all the small inconveniences that any decentralisation process brings with it. Obviously, in terms of losing experience, our development experts pretty much went down to Limerick. By and large, we kept the expertise of the development experts. We do have an issue with trying to work out the tripartite rotation of diplomatic staff who are rotating between overseas and home. Sometimes home might be Dublin or Limerick. The process adds a further complication in this regard and we must deal with that issue. In terms of giving an honest assessment of how the process works, I will defer to the head of the development co-operation division.

Mr. Brendan Rogers

As the Secretary General said, we have completed decentralisation. In a sense, we have been examined by the OECD. The OECD, in its report issued just a few months ago, said that, to date, decentralisation is working. It said there are certain challenges to be met, including those associated with communications. We have put in place excellent, state-of-the-art video conferencing facilities. There is a certain amount of travel between Dublin and Limerick, obviously. We will meet the challenges over the next couple of years. We got an excellent report. Part of the time covered by the report was the period during which we were decentralised.

The OECD says we are one of the best aid departments in the world. Our challenge is to make sure we keep the institutional memory and that we are linked fully to the Department of Foreign Affairs and maintain policy coherence. One hundred and twenty miles is not that far given that Africa, where staff live and work, is 8,000 or 9,000 miles away. We have overcome the challenges to date and we are working well. We will continue to do so.

Chairman

What was the total cost of decentralisation?

Mr. Brendan Rogers

The cost of the building is not met from our Vote but from that of the OPW. The cost to ourselves is the running cost of travel, which amounts to approximately €250,000 per year.

Chairman

I thank the witnesses.

Deputy Róisín Shortall

I welcome Mr. Cooney and his staff and thank him for his presentation. I will start by asking some questions on the diplomatic service. Will Mr. Cooney give us an update on the US missions? There were plans to open new missions? What is the position on these?

Mr. David Cooney

The US strategy paper that the Taoiseach launched on 16 March last year in New York mentioned that the Government was looking at the proposal to open two new full-time consulates, to be staffed by diplomats in Atlanta and Houston. He said we would open in Atlanta. Houston exists as a possibility but the opening of a consulate there would certainly be further down the road.

We are obviously in a difficult financial situation but we are, nevertheless, considering going ahead with the opening in Atlanta this year. We are working on this. It will be a small mission. I suspect it will be a one-person mission but it will be focused very much on trade and building up our connections in that area. There are, for instance, considerable untapped connections in the area. There are people with Irish connections and so-called Scotch Irish, who are very prominent in the United States and with whom we have not developed the kinds of connections we have developed with others.

We have an embassy in Washington and consulates general in New York, Chicago, Boston and San Francisco. They are working, they are untouched. These are our priority areas and I do not believe we will be cutting back our staff in those missions. The United States is of huge potential for us in terms of inward investment, on which we continue to work. There is obviously a considerable Irish community in these regions.

We are rolling out the US strategy and it will involve a number of initiatives. We have the economic advisory committee. The Farmleigh initiative has given us a huge boost. We will be following up with all the people in the global Irish network developed through the initiative. The United States will continue to be a priority for us and I expect to see an expansion of our network there over the next 12 months.

Deputy Róisín Shortall

What was the thinking behind Houston? Why was it selected?

Mr. David Cooney

These are the growth areas in the US in economic terms. We want to be present on the ground looking for investment and trying to open up export markets. The Irish connection is a very tangible thing but it works very much on person-to-person contact. One needs to have someone on the ground who can nurture it. We envisage potentially very big returns for relatively small investments.

Deputy Róisín Shortall

As a public representative, it is important to pay tribute to the diplomatic service. There have been many occasions over the years on which public representatives have had to make contact with the service, such as when constituents have accidents or if a family member dies abroad. Passports get lost, children get lost and other such events occur. My experience of the diplomatic service is that it has always been very positive. It is important to commend the staff on the work they are doing abroad. When we go abroad, we always return feeling very proud of the Irish diplomatic service.

Chairman

I recall a very tragic incident in Italy during the summer. There was a response in Dublin immediately and the embassy in Rome was top-class.

Mr. David Cooney

I thank the Chairman and the Deputy for their remarks. We do adopt a very professional approach to such matters. It is very rewarding, particularly when we are able to assist public representatives to help their own constituents. It is good to get feedback.

Deputy Róisín Shortall

The Irish diplomatic service, unlike many public services, is such that it is generally possible to contact an Irish person within an hour or so, even if there is an emergency at 11 p.m. on a Saturday night. An excellent service is provided and I commend everybody concerned.

With regard to the European Union, Mr. Cooney referred to the importance of maintaining missions in each of the EU capitals. I fully support this. What is the rationale for maintaining an embassy in the Vatican when issues that arise there could be dealt with perfectly well by the embassy in Rome?

Mr. David Cooney

The Holy See will not allow a diplomatic representative to be accredited who is also the ambassador to Italy. It will not allow a mission to operate from the same address as the embassy to Italy. To be crude about it, if it did there would be very few stand-alone embassies in the Holy See. It is a similar situation to Switzerland and the UN embassies in Geneva. If we want to be represented at the Holy See on a residential basis, we must have a stand-alone embassy.

We have reviewed our mission network and obviously the embassy to the Holy See does not have a trade or consular function. Its function is the maintenance of relations with the Catholic Church. Over the decades the view at Government level has been that this should be maintained.

Deputy Róisín Shortall

What staff are located there?

Mr. David Cooney

We have an ambassador, a third secretary and a locally recruited person.

Deputy Róisín Shortall

What is the cost of its operation?

Mr. David Cooney

The cost of the Holy See embassy in 2008 was €763,000. The Department owns the premises so there are no rental costs.

Deputy Róisín Shortall

Can the Secretary General give us a flavour of the activities in which the staff would be involved?

Mr. David Cooney

I can as it was my first posting abroad.

The role of the Holy See embassy goes beyond just maintaining relations with the Catholic Church. For example, it can be active in areas of the world in which we do not have representation, such as in Latin America. It used to be a great listening post for what was happening in eastern Europe before the fall of the Iron Curtain.

The current ambassador is working closely on the developments in the Vatican and the Murphy report. As the Deputy will be aware, the Irish bishops have been summoned to the Vatican and the Pope will issue a pastoral letter.

It would not be one of our busier missions. However, it is a matter for political judgment and it is not for me to decide whether we should maintain the embassy to the Holy See. It has an historical and ongoing resonance regarding the Catholic Church's situation in Ireland. It has a practical resonance in the feedback we are able to get from the Holy See on developments in Latin and Central American countries where we do not have representation.

Deputy Róisín Shortall

I accept that it is a policy matter to maintain the embassy. However, it would not be a major difficulty for the Department if a policy decision was taken by the Minister to close it.

Mr. David Cooney

I will let the Deputy say that.

Deputy Róisín Shortall

Earlier the question was raised on the decision taken by the Department as to whether it rents or purchases properties for embassies and ambassadors' residences. What is the position on residential accommodation for staff? Has the Department considered buying apartments in locations where it has permanent representations?

Mr. David Cooney

By and large, no. The reason is we have an extremely small diplomatic service. Most of our missions are two-person ones with an ambassador and one other staff member. Soon, we will have just one-person missions.

The family and domestic situation of officers varies considerably. There could be a single person joining a mission or a person with four children. If a property was purchased to accommodate a family of four, it might be rather excessive for a single person in a diplomatic representation. If a residence is purchased, it must be maintained. While there is a value in doing that where there is a large representation area, there is probably less return for that. We have not prioritised the purchase of premises for heads of mission because the demands vary from year to year.

Deputy Róisín Shortall

Are there staff vacancies in the diplomatic service? Does Mr. Cooney expect many to arise this year?

Mr. David Cooney

We are down over 50 posts over the past few months and there are more retirements coming this year. There is no doubt we are being squeezed. I fully accept the reasons the Government has to cut back on staff but there is no doubt that we are spread more thinly. We are having to double-up in covering particular responsibilities at home. We will have to examine possibilities in reducing the number of staff in missions abroad. There will be some reductions as a result of going down from two-person missions to one-person missions in several countries.

With the ban on recruitment and the voluntary retirement scheme – the Department had a larger number than normal of people retiring – we have suffered a reduction in staff numbers. That will continue and put pressure on us. We will have to look to prioritise. I am sure there will be areas where we will struggle to maintain the level of service.

The staff in the Department of Foreign Affairs have their own integrity as public servants. They take it seriously and conscientiously that they are serving the Irish people. They will do whatever they can to maintain the current level of service.

Deputy Róisín Shortall

I am interested in the distinction between general service and diplomatic staff in the Department. The McCarthy report urged greater integration of staff. Is there the potential for general service staff to move into the diplomatic area? Of the senior staff present at the committee today, how many would have come from the general service staff and from the diplomatic staff?

Mr. David Cooney

One can move between the two areas. Mr. Rogers and I started off as executive officers in the Department of Agriculture. There is mobility within the Civil Service.

Increasingly, general service staff are serving in missions. We have several ambassadors from non-diplomatic grades in African countries. The deputy head of mission in London is a general service officer. The barriers are breaking down which we welcome as it is good for people to get experience. I would not hesitate in posting a general service officer abroad if it enabled me to fill the post and the person was of sufficient calibre to carry out the duties.

Deputy Róisín Shortall

Is that happening?

Mr. David Cooney

Yes, we have two heads of missions in Africa who are from general service grades.

Deputy Róisín Shortall

Is that just at a senior level?

Mr. Brendan Rogers

No, it is at relatively junior levels too.

Deputy Róisín Shortall

Is that an option for the Department, if it has 50 vacancies?

Mr. David Cooney

The problem is the vacancies that arise are in our total complement. Many of the vacancies I refer to are in the general service grades. I make no distinction between vacancies in overall numbers, so we are being hit as hard. I should guess that in terms of voluntary retirements more people retired from the general service than the diplomatic grades. We are probably down more, therefore, on the general service than the diplomatic side. Increasingly, however, we use people interchangeably and I favour this because it gives those on general service grades better career prospects than would otherwise be the case. It is a barrier that is far less evident now within the Department than it used to be. I believe it will continue to be less evident.

Deputy Róisín Shortall

How is that managed, given the type of open competition that exists for third secretaries? How would a general service officer become a third secretary?

Mr. David Cooney

If a general service officer has worked in the Department and proved his or her value, then we should be ready to see him or her appointed to posts in missions abroad. We have a serious problem in terms of getting people to serve abroad. Despite what one might read in the media about our allegedly pampered lifestyle, we cannot get people to serve abroad. Young couples, in particular, these days do not want to go abroad, for example, because it could mean the loss of a second income. The spouse of an officer going abroad gets absolutely no compensation from the Department, despite the fact that he or she is often extremely active in the service of the State abroad. Even more significantly, for many people, going abroad for a few years means the loss of careers. My wife, for example, has given up two careers to go abroad. The public service is the best place in which to work as a travelling spouse because one can often get one's job back. However, if one works in the private sector, it is often very difficult to pick up when one comes back. Therefore, we cannot get sufficient people to go abroad, so come postings time, we are often very grateful if we find there are general service people who might be interested in going abroad to serve.

I believe the perception is often greater than the actual barriers that exist in that sense.

Deputy Róisín Shortall

Would such people serve as third secretaries?

Mr. David Cooney

Yes, they serve in all grades. They can serve as third secretaries, first secretaries, counsellors or whatever. They serve as ambassadors and they do a very good job. They just have been recruited through a different stream.

Of course these days there is much more movement in and out of the Department. Although we recruit at third secretary level in a dedicated competition, once one gets up the line, one in three promotions is opened up to general service people. The mobility to and from the Department is now much greater than it was in the past. The great advantage of general service people working in the Department is that they have often been able to build up their experience during their time there.

Deputy Róisín Shortall

I shall move on to the ODA area, which accounts for 75% of the Department's budget. Will the Secretary General outline the decision making process within the Department for making funding allocations to the various NGOs? Presumably, this is a very high-risk area, so how is that risk managed?

Mr. David Cooney

Is that in terms of the actual decision as regards which NGO will get the most?

Deputy Róisín Shortall

Yes, and also the oversight of that NGO's spending.

Mr. David Cooney

In the first case the allocation of the budget within the various subheads is done at a meeting involving the senior management of the development co-operation division and I, with the Minister, Deputy Micheál Martin and the Minister of State, Deputy Peter Power, to thrash out where the funding should be allocated. The subsequent decisions on the allocation of the funding to individual NGOs are taken after a consultation by a committee within the development co-operation division. Then the recommendations are put up through the head of the development co-operation division, through me to the Ministers for sign off. In terms of the exact processes these applications go through, I shall refer the Deputy to my colleagues.

Mr. Brendan Rogers

Before I hand over to my colleague, Mr. Michael Gaffey, who has responsibility for that area, there are a number of different schemes, depending on the amounts of money available. We spoke earlier about the multi-annual programme scheme with the five NGOs. It is like a budget support system. Before any money is given to an NGO we carry out a systematic analysis of the particular organisation, looking at its capacity to spend, audit and monitor as well as its capacity to plan. There are also a number of smaller schemes, such as the block grant and civil society schemes. We have in place a special audit policy for NGOs. The Department has a technical capacity to look at what they are doing and then we carry out a number of monitoring and evaluation visits. This is an ongoing symbiotic relationship we have with the NGO sector. As regards the specifics, I shall hand over to Mr. Gaffey.

Mr. Michael Gaffey

That is more or less it. We have a few funding schemes, for example, in terms of long-term development with the big NGOs. There is a whole set of arrangements in place in terms of monitoring and evaluation, working together with them and helping them build their capacity. Some of these are major organisations. If Concern, for instance, is receiving €20 million or more in funding from the taxpayer for development activities and more for emergencies, we must have these processes in place and we work very closely with such NGOs. I mentioned earlier we have a relationship with some 160 NGOs.

Some of those are very small organisations, not like Concern or Trócaire, for example. They are very small and may be working in specific areas. Some could be working on a particular project rather than a programme of assistance. We have strengthened that area and have been working very hard over the last year or so to consolidate a results-based methodology with them. It is not a question of just giving some money and coming up with more when that is spent. Even today there is a major meeting taking place with the NGOs on the results-based approach. When an NGO applies for money it is a question of deciding with it what outcomes we want to be achieved and finding ways to measure and manage these for results. All NGOs are required to present a formal financial report and narrative for all the funding they received. Not only do we look into the accounts with the NGOs, but we work to measure the outcomes of spending against the objectives that were set. Before we can look at an application for any further funding, that process will have had to be gone through. We have strengthened that approach in the last few years and will continue to do so.

Deputy Róisín Shortall

What is the cost of that oversight and audit function?

Mr. Michael Gaffey

Part of it is built into the multi-annual funding. Within that funding we allow up to 10%, for instance, for administration funding and that type of audit and management expense. For the much smaller NGOs that is a normal part of the work of our civil society section, and we bring in our evaluation and audit section as well as involving external audit. That is built into the costs. Every year, for instance, we have major audits of the major NGOs, but also we continually audit the smaller NGOs and their schemes. That is an integral part of our overall administrative expenses.

Deputy Róisín Shortall

Like the Chairman I was a member of the delegation that had the pleasure of going to Zambia and meeting many Irish missionaries there. It is fair to say there is a good deal of frustration on their part about the length time it takes money to trickle down through central government in Zambia, and to some extent in South Africa, through local government. It was very late in the year when the money got to the local school or health project. From speaking to some of the people working there, they found it much more effective to do some fundraising at home or get somebody to do fundraising because they would get, say, €10,000, and could spend it there and then. It is hard not to have sympathy with that kind of thinking. I know there are difficulties in regard to accountability and so on. Equally, however, there are difficulties with the slow speed of the money actually getting to local projects, and perhaps a certain amount of that being used up or diverted for one reason or another.

Mr. Michael Gaffey

There are a number of aspects. The first point to make is that missionaries and Irish NGOs still benefit hugely from the generosity of the Irish people in terms of private fundraising. In addition, there are two aspects to the issue raised by the Deputy. One is the delays there may be within local systems in Africa, with money trickling down. This is an area where our work with Government systems to help make them more efficient and effective is very important.

More directly, perhaps the Deputy came across some dissatisfaction or worry about the funding that is received directly from Government here — from Irish Aid. We have worked very closely with the missionaries in recent years to rationalise and make that much more effective. The missionaries now organise themselves under a group called Misean Cara in order to disperse funding to the different missionary projects. In many cases, one is talking about a mission which might be one or two people working in a school or clinic in the Philippines or Zambia. There would be a real bottleneck and a real problem if civil servants sitting in Limerick or Dublin were administering every payment to those missions.

Working directly with the missionaries and the missionary organisation, Misean Cara, we now provide very significant funding for missionary work. In 2008 the amount was approximately €20 million, it was €16 million last year and will probably be about the same this year. This has helped speed up and rationalise the funding streams precisely because we are working at all times with Misean Cara to ensure it is much more closely involved and is distributing the funds through working with us.

Deputy Róisín Shortall

I accept fully the difficulty of keeping track of that money and ensuring accountability. However, it is probably much more cost effective to give it to an Irish missionary working in a school. In terms of value for money, a spend of €10,000 there would probably yield far greater returns if it could be accounted for adequately.

Mr. Michael Gaffey

In terms of accountability, we are working constantly with Misean Cara on that issue and on how we move ahead in the future in working together with missionaries, because the age profile of missionaries is changing. The development work they are undertaking is vital and will continue but, in 20 years' time perhaps, it will not be undertaken as much by Irish people and will be passed on to local people, who will do it themselves. We want to maintain the structures that ensure we are not wholly dependent on individuals.

Deputy Róisín Shortall

Thank you.

Mr. Brendan Rogers

I spent nine years of my life in Zambia in various guises so I know the frustrations experienced by the missionaries. When I used to travel the length and breadth of Zambia, particularly in the early 1990s, I asked the missionaries what I and the embassy could do for them, and what the aid programme could do for them in terms of funding. They explained they did not have teachers or books. They said they could get the money from Ireland to fix the roof and get some second-hand books but they wanted a decent ministry of education, a decent curriculum and to ensure the teachers were paid. If we could do anything, it was a question of what the Irish Government could do in Lusaka with the ministry of education to make the system worked well. One could fix the roof but in two years' time there would be a hole in it again.

As a result, we have changed the way we work. We have now moved away from projects to the sectoral approach and we now work with the ministry of education. There is a sea change, although it is still frustrating. There is a now a system in Zambia that is working for the first time. Millions of children who were not at school are now at school and the missionaries are still playing a role. The missionaries are actually getting salaries from the Government of Zambia. They are not big salaries but they are now employees of the ministry of education. There is a curriculum and a huge school building programme.

All of this has taken ten to 12 years to get into place. It still has a lot of bottlenecks and is still much slower than we would like. However, it is a sea change from what was there in the early 1990s, and is due to the information that was emanating from the missionaries in all of those locations all over Zambia. That is the change. As Mr. Gaffey said, money is also going directly to the missionaries from ourselves to get the quick response work done as well. It is a type of dual approach.

Chairman

I welcome Mr. Rogers's remarks. I also welcome the paragraph in the Secretary General's opening statement that the core mission is poverty reduction. Like some of my colleagues, I was quite taken aback and upset by some of the comments made by the European Union representative in Lusaka at a function when he said some of the aid programme funding going into education and disease eradication was money down the drain and that we should be concentrating more on infrastructural works. That is a lazy way of doing it and is a recipe for corruption. The message we are getting here is, therefore, a welcome one.

I commend what was said earlier about handing over to local people to carry on the work. An example of that is the bishop of N'Dola, Bishop Noel O'Regan, who we met there. He retired just last week and his replacement is a Zambian bishop. There is a handing over of control or administration to, and the empowerment of, the local people. I support what Deputy Shortall has said.

I welcome the witnesses' comments and thank them for their contribution. As I said when Mr. Dermot Gallagher was present, the responsiveness of the Department to crisis situations, be they on a personal level or a macro scale such as in the last week, is of a nature that we totally support. I hope the Secretary General will pass on to his staff that there is a quality of service there that is second to none.

Mr. David Cooney

Thank you very much. I will pass on those remarks.

Chairman

I thank the Comptroller and Auditor General for attending. Is it agreed that we note Vote 28 — Foreign Affairs, Vote 29 — International Co-operation and dispose of chapter 22 — International Co-operation, Official Development Assistance? Agreed.

Next week's agenda is a consideration of Vote 39 — Health and Children, Vote 41 — Office of the Minister for Children, chapter 36 — the National Treatment Purchase Fund and their accounts for 2007. I thank everybody who participated today.

The witnesses withdrew.

The committee adjourned at 1 p.m. until 10 a.m. on Thursday, 28 January 2010.