COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 4 Nov 2010

Pobal Annual Report and Accounts 2009

Mr. Seosamh Ó hÁghmaill (Secretary General, Department of Community, Equality and Gaeltacht Affairs) and Mr. Denis Leamy (Chief Executive Officer, Pobal) called and examined.

Chairman

Before commencing, I advise witnesses that they are protected by absolute privilege in respect of the evidence they are to give this committee. If they are directed by the committee to cease giving evidence regarding a particular matter and they continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against a Member of either House, a person outside the Houses, nor an official by name or in such a way as to make him or her identifiable. Members are reminded of the provisions within Standing Order 158 that the committee shall also refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits of the objectives of such policies.

I welcome Mr. Seosamh Ó hÁghmaill, Secretary General of the Department of Community, Equality and Gaeltacht Affairs, and ask him to introduce his officials.

Mr. Seosamh Ó hÁghmaill

I am accompanied by Ms Kathleen Stack, assistant secretary general, who among other things has responsibility for finance and local and community development, Mr. Colm Treanor, principal officer, who is head of finance, and Ms Mary Hurley, principal officer, who is head of corporate governance and human resources.

Chairman

I thank Mr. Ó hÁghmaill. Will Mr. Leamy, the chief executive of Pobal, introduce his colleagues?

Mr. Denis Leamy

I am accompanied by Mr. Jerry Murphy, programme manager, Ms Bernie Lynch, director of audit, and Mr. Gerard Sellars, financial accountant.

Chairman

Will the officials from the Department of Finance identify themselves?

Ms Áine Stapleton

My name is Áine Stapleton and I am accompanied by Mr. John Conlon.

Chairman

Our guests are all very welcome. This is the first occasion on which Mr. Ó hÁghmaill has appeared before the committee as Secretary General. I congratulate him on his appointment and wish him the best in these difficult times. I wish the former Secretary General, Mr. Gerry Kearney, well in his retirement.

Mr. Seosamh Ó hÁghmaill

I will pass the Chairman's sentiments on to Mr. Kearney.

Chairman

I ask Mr. Buckley to introduce the proceedings.

Mr. John Buckley

Some €459 million was spent by the Department of Community, Equality and Gaeltacht Affairs in 2009. In that year, its principal programmes were designed to address community initiatives, on which it spent over one third, or €166 million, of its resources; combatting drugs, on which it spent €41 million; supporting rural communities, on which it spent €96 million; the Gaeltacht and the islands, on which it spent €91 million; the Irish language, on which it spent €10 million; and North-South initiatives, on which €54 million was spent. In the current year the Department has taken on functions related to equality and disability.

Pobal administered €316.5 million in programme expenditure in 2009. Of this, €147 million was spent on behalf of the Department. The balance was paid out under schemes that fall within the remit of the Department of Justice and Law Reform, the Office of the Minister for Children and Youth Affairs, the Department of Transport, the Department of Social Protection and the Higher Education Authority. Some €25 million of the overall funding was sourced from the dormant accounts fund.

Chapter 24 of the annual report deals with the rationalisation of funding and administration of local development initiatives. The rationalisation of local development agencies in terms of funding and organisation is proceeding in two stages. First, Leader and partnership groups have been reduced by almost half and there are now 52 of these local development companies. A second phase of the rationalisation involves the integration of the bulk of the existing 164 community development projects into these 52 local development companies. The national programme which will support the work of the new companies is the local and community development programme, which is listed as a subhead in the Department's Vote. This new programme is broadly designed to encourage uptake of services and access to educational, recreational and cultural development activities and resources, develop the capacity of people to participate in the workforce and promote engagement with local delivery and governance.

The rationalisation is part of a wider set of adjustments. This matter is dealt with in a number of chapters in the annual report. In Chapter 9, for example, I comment on progress in the areas of State body amalgamation and abolition. A forthcoming report will refer to the integration of educational welfare services. The overall focus of this line of reporting is - taking account of the fact that rationalisation is likely to be a key feature of economic adjustment in the coming years - to review the extent to which process efficiency is being pursued through re-engineering the services and seeking the maximum synergy between the amalgamating entities.

The review identified three main areas which need to be managed. First, newly established or reconfigured entities will only achieve the maximum focus, clarity and coherence if they have strategies with goals and objectives for their areas of delivery. This was not pushed while the reorganisation was pending but it will be important in the context of the new arrangements. Second, it would be expected that there would be some scope for asset consolidation arising from the cohesion and integration processes. It is important to ensure State-funded assets continue to be used to good effect and are not lost in the process of rationalisation. Third, attention must be given to capturing the outputs and outcomes of the reconfigured companies which should, in turn, allow a judgment to be made on effectiveness when periodic evaluations are carried out in the future.

The second phase, which involves the integration of the community development projects into the local development companies from 2011 onwards, will bring its own challenges. The work of most companies will then include performing a wide range of additional functions. As this phase beds in, it will be important that overall work plans are drawn up within a strategy supervised by city and county development boards and that the companies' governance and internal control systems will address all functions and that their performance reporting will capture all output.

The report notes that, to date, rationalisation has focused largely on the realignment of the multiple structures and schemes. While recognising that this may be an appropriate focus initially, it would be desirable, if maximum value is to be gained from the process, that opportunities for increased synergies and greater efficiencies be thoroughly examined at an early stage. As community development projects are integrated, local development companies will become more complex and variable in function and attention to process rationalisation will, in such circumstances, become more pressing. The overall challenge is to evolve models which will be flexible enough to meet local needs but which will be structured in a way that will facilitate the joined-up thinking and delivery that will allow for both innovation and efficiency.

Mr. Seosamh Ó hÁghmaill

A Chathaoirligh agus a chomhaltaí den choiste, ba mhaith liom buíochas a ghabháil libh as an deis a thabhairt dom ráiteas gairid a dhéanamh anseo inniu, nuair atá Cuntas Leithghabhála na bliana 2009 do Vóta Uimhir 27 - An Roinn Gnóthaí Pobail, Comhionnanais agus Gaeltachta á scrudú ag an gcoiste. Gabhaim buíochas freisin le hOifig an Ard Reachtaire Cúntas agus Ciste as an mbealach proifisiúnta a rinne a gcuid oifigeach an obair a bhí riachtanach i ndáil leis an gcuntas sin.

Members will be aware that in March 2010, as part of the restructuring of Departments and agencies announced by the Taoiseach, the Department of Community, Rural and Gaeltacht Affairs became the Department of Community, Equality and Gaeltacht Affairs. In the context of this restructuring, responsibility for social inclusion policy and family policy was transferred to the Department from the Department of Social Protection and equality, disability, integration and human rights were transferred to it from the Department of Justice and Law Reform. Responsibility for the rural social scheme and the community services programme was transferred from the Department to the Department of Social Protection.

On foot of these changes, the Department has grown significantly and now has 387 staff located in offices in Dublin, Tubbercurry, Na Forbacha in Galway, Portlaoise and Roscrea, and at a number of smaller regional offices. A key priority for the Department over the coming period will be to create synergies across the range of functions it now holds and to build a coherent and strong new Department, acting in support of the most vulnerable members of society and of those working to make a difference right across our communities.

It may be helpful if I were to briefly update the committee on the six core areas of the Department as reviewed by the C&AG in the context of the 2009 audit. These are as follows: developing communities; tackling drug misuse; rural development; Gaeltacht and islands development; promotion and maintenance of the Irish language; and North-South co-operation.

On the local and community development front, work concluded on the redesign of the Department's programmes to support communities to ensure optimal benefit is realised from this expenditure. From 1 January 2010, the community development and the local development social inclusion programmes were replaced by the new local and community development programme, LCDP. The new programme is underpinned by four high level goals, which seek to improve outcomes and overall performance in promoting local and community development. In 2009, €71 million was provided under the predecessor programmes to the LCDP to deliver supports to counter disadvantage and to improve access to employment, training and education. In addition, support was provided under RAPID and to promote volunteerism and active citizenship.

A total of €50.4 million, an increase of almost 7% on the 2008 position, was expended on the community services programme, which assists in providing employment opportunities, while delivering valued services to communities. Some 2,700 persons were employed under the programme in 2009. Under the scheme of community support for older people, a total of €2.13 million was provided to 432 community and voluntary groups to assist 6,523 older people. The scheme was reviewed in 2009 and a revised seniors' alert scheme was introduced earlier this year.

With regard to drug misuse, the National Drugs Strategy 2009-2016 was approved by the Government in September 2009. The Government also approved the establishment of an Office of the Minister for Drugs, OMD, to subsume the functions previously undertaken by the national drugs strategy team and the Department's drugs strategy unit and the development of a national substance misuse strategy to incorporate drugs and alcohol. Work continues in this regard. In 2009, almost €22 million was expended to support 340 projects under two rounds of the 14 local drugs task forces plans. The projects, which focus on the areas of treatment, rehabilitation, education, prevention, awareness and curbing local supply, and employ in the region of 300 people.

With regard to the regional drugs task forces, almost €10 million was expended to support 146 projects, including targeted funding for Limerick city. These projects have a similar focus to those supported in LDTF areas.

Finally under this heading, I might mention head shops, and the work carried out in 2009 and 2010 by this Department, along with colleagues in the Departments of Health and Children and Justice and Law Reform, including the bringing forward of legislative proposals. There was widespread acceptance that the substances sold in head shops posed serious health risks and could lead to the use of illicit drugs. Following the enactment of the legislation, I understand that the number of head shops has dropped from 102 earlier in the year to 11 in mid-October.

The Rural Development Programme 2007-2013 commenced in February 2009, with funding of €425 million available over the lifetime of the programme - almost treble that of the previous programme. The main aim of the programme is to improve the quality of life in rural areas and facilitate the diversification of the rural economy. A total of 36 local action groups, formerly known as Leader companies, have been contracted to deliver the programme throughout Ireland. In 2009, the CLÁR programme invested almost €13.60 million to support physical, economic and social infrastructure across a variety of measures. The measures covered a wide variety of developments, including water and sewerage infrastructure, bilingual signage, sports capital grants, minor health projects, school play facilities and coastal projects. Total expenditure under the rural social scheme in 2009 amounted to just under €48.4 million. During the year, there were 2,600 participant places available on the scheme and 130 supervisor positions. Through the scheme, almost 2,700 community based projects were supported, which contributed to a wide range of community activities and facilities being made available throughout the country.

I refer to the Irish language, the Gaeltacht and islands. The draft 20-year strategy for Irish was published in November 2009. It is based on the objectives set out in the Government's policy statement on Irish published in December 2006. The key objective of the proposed strategy is to increase significantly the number of people who are functionally bilingual in Irish and English and to support the position of Irish as the principal community language in the Gaeltacht. The Department operates a number of schemes to improve the infrastructure in the Gaeltacht to enhance its economic fabric and attract investment to the region. A total of €4.2 million was spent in this area in 2009.

Some €19.7 million was spent on capital works on the islands during 2009. Key projects included the Inishbofin and Clifden airstrips, and the Cill Rónáin pier and harbour development. More than €5.6 million was expended in 2009 in providing passenger and cargo ferry, air and road transport services for offshore islands under 22 contracts administered by the Department. These ensure the provision of regular access for island communities to the mainland at an affordable cost to island residents. A central translations unit was established in the Department in October 2009, following a Government decision to address systematically the issue of translating statutory instruments and to take forward a review of the official standard for Irish.

Under North-South co-operation, I might mention that the Department co-funds two North-South Implementation Bodies - Waterways Ireland and An Foras Teanga, comprising Foras na Gaeilge and the Ulster-Scots Agency. In 2009 we continued to work with colleagues in Northern Ireland through the North-South Ministerial Council in support of both bodies. Co-operation also continued across a number of other areas of the Department's work.

With regard to legislation, the key development in 2009 was the passing into law of the Charities Bill. When fully commenced, this legislation is intended to provide a robust, statutory, regulatory framework for charities and enhance the accountability and transparency of charities operating in Ireland. In mid-2009, the Government noted a proposed timeframe to end-2011 for the roll-out of the key actions necessary to enable the full commencement of the legislation and work in this regard is continuing.

I refer briefly to chapter 24 of the annual report of the Comptroller and Auditor General, entitled Managing Cohesion and Integration, in which issues relating to the cohesion and integration processes, systems of evaluation, governance, performance measurement and the treatment of local development company assets are raised. Following previous discussions with this committee, as I have outlined, the Department has since brought forward a new integrated LCDP, drawing on evidence-based international practice. This addresses key concerns raised in the Comptroller and Auditor General's report and previously considered by the committee regarding programme design and performance. The new programme, which is being implemented since January 2010, features enhanced impact and outcome indicators; strengthened internal financial control and corporate governance; and targets for improved service delivery on the ground. Steps are in hand to commission a national evaluation of the programme, which will assess both its impact and effectiveness, commencing in 2011.

With regard to the assets of local development companies and other wind-up issues, a review of the treatment of assets under the cohesion process commenced on 1 September 2010, with the aim of ensuring that assets purchased by Leader and partnership companies, with the assistance of public funds, transferred appropriately to the new integrated local development companies. This review will be completed early in 2011.

I will be happy to expand on any of these areas, if the committee wishes. Is mian liom mo bhuíochas a chur in iúl arís as an deis a fháil chun an ráiteas tosaigh seo a chur in bhur láthair. Ta mé ag tnúth le pé eolais atá a lorg ag an gcoiste maidir le hobair na Roinne a chur ar fáil feadh mo chumais. Go raibh maith agat.

Chairman

Go raibh maith agat. May I publish the statement?

Mr. Seosamh Ó hÁghmaill

Yes.

Mr. Denis Leamy

I thank the Chairman and members of the committee for the opportunity to present and discuss the work of Pobal. I have detailed the origins and background of Pobal in the fact sheet accompanying this statement and members should also have our strategic plan and annual report. I wish to concentrate on the steps we have taken to maintain service provision to all our beneficiaries while operating on a significantly reduced administration budget, and to touch on new work and future developments.

Pobal is an independent company and registered charity. In 2009, we managed 17 programmes on behalf of seven Departments and boards. We administered more than €317 million in government funding allocations to more than 4,500 groups and agencies and conducted over 600 verification/audit visits. Our work, framed by a three year strategic plan, which is overseen by the board of Pobal whose members give their time on a voluntary basis. Pobal is accountable to Departments through service level agreements and agreed reporting systems. All programmes managed by Pobal on behalf of Departments tackle issues of social inclusion. By this we mean local and community development, local provision of child care, rural transport and other community services, support for labour market activation, and work towards equality, peace and reconciliation. These programmes are at the heart of local responses to the economic crisis. Pobal staff are working intensively to support this work, including making significant efforts to assist local groups to implement projects with reduced resources. It is our priority to continue to deliver a quality of service to communities and to assure public accountability.

With regard to changed management in the company, in autumn 2008 and in light of the serious economic difficulties faced by the State, Pobal began an ambitious programme of change in response to a reduced administration budget. We did this through a strategy of reducing staff numbers and cutting costs while at the same time improving structures and stepping up our business improvement programme. Following consultation with staff representatives, we reduced our staff head count from 280 to 180 through a voluntary and compulsory redundancy programme; a recruitment freeze and non-renewal of fixed term contracts. We achieved a reduction in salary costs ranging from 3.5% to 10.5% as well as significant reductions in overheads, including a reduction of 49% in travel and subsistence costs. Our overall administration costs to Departments have reduced from 6.4% of funds managed in 2005 to 4.8% in 2010, a reduction of 25%. Members will understand that making these reductions has been exacting for staff, management and the Pobal board. While Pobal can confidently recount achievements and high standards of service delivery in the past two years, these have often been gained under very challenging circumstances.

The reduced staff numbers made it necessary to make changes to Pobal's structure. The local and community development programme, RAPID, and the community services programme are now co-managed by regional teams. The rural social scheme and peace programmes are each assigned to an individual regional office. This structure enables a multi-functional team to work with beneficiaries in one region, thereby providing a single point of contact with Pobal and the possibility of economies of scale in providing services.

I would like now to speak about current and future developments. Pobal's business improvement programme was originally set up to reduce our administration, improve reporting for beneficiaries and to counter perceptions of bureaucracy. In the past two years this has also contributed to reducing our costs. Through investment in ICT, we continue to streamline our processes and systems, including payments to beneficiaries, contract compliance and on-line reporting.

Despite the demands of delivering our work within the restricted resources available, Pobal has sought to improve programme delivery, drawing on experience and lessons learned. For example, in the local and community development programme, a redesigned strategic planning process, monitoring system and provision of detailed guidelines have been informed by issues raised in the report by the Comptroller and Auditor General being examined today and by the need to ensure that the programme delivers clear value to communities. This will be reinforced by using the Pobal Haase Index to inform the Department's funding decisions for the programme.

On the question of new programme development, the new "free preschool year" in early childhood care and education, ECCE, has a projected value of €170 million with around 4,300 providers participating and currently 64,000 children benefitting annually. Pobal is responsible for checking and reporting compliance by all services to the terms of the scheme. The national early years access initiative is a new collaboration between philanthropic organisations and Departments, which has been initiated, managed and co-ordinated by Pobal. The primary target population is children up to six years of age and families residing in socio-economically disadvantaged areas. Work on this initiative started earlier this year.

Pobal has come through significant change since 2008. It is essential that the organisation continues to build on opportunities while ensuring that it operates cost-effectively and efficiently, keeping beneficiaries to the forefront of our thinking. We are proceeding to the next phase of our organisational review in the context of a new four year strategic plan. Our aim is to consolidate our structures further to enable Pobal to deliver this plan. This will enable us to maintain and enhance our support to Departments, agencies and beneficiaries; extend and deepen our work with those experiencing social and economic exclusion; and to meet community needs while providing a robust framework for accountability.

I thank the Chairman and members of the committee for this opportunity and I am happy to provide answers to any questions they may have.

Chairman

May we publish Mr. Leamy's statement?

Mr. Denis Leamy

Yes.

Chairman

Before inviting Deputy D'Arcy to open the questioning, I would like to refer to the session held here on 21 October with the Department of Finance. During that hearing the committee requested that the Secretary General of the Department of Finance forward to us information on the impact on debt servicing and debt repayment of the bank bailout over the next 15 years. On that occasion, Mr. Cardiff promised that information would be with us on the following Monday. We reminded him that Monday was a public holiday and agreed that the information would be made available on the Tuesday of the following week. To date, we have not received that information. We have been told that the information will be made available today to the Opposition spokespersons.

I would like to put down a marker on behalf of the committee that to our job effectively on behalf of the taxpayer, it is important, when we seek information and get commitments from senior officials of Departments in regard to the supply of that information within a specific time and date, that we receive that information as promised. The committee will not in the future tolerate this type of attitude to its work. I understand the Department of Finance has a difficult job in these times but a commitment was clearly given, without any ambiguity on the day, by the Secretary General, Mr. Cardiff and his has failed to deliver on his commitments to this committee.

Deputy Michael D’Arcy

My initial questions are directed to Pobal. Like many other agencies, Pobal has experienced a reduction in funding. Has an analysis been undertaken by Pobal or the Department of Finance or other Department in regard to the impact of a potential reduction in number of its programmes? There has been much talk in regard to the cut, be it 5% or 10%, in certain programmes. The free preschool year programme costs €170 million, which is a lot of money, although in my view money well spent. Have any of the Departments or Pobal analysed how a reduction in that programme would impact further down the line? An easy book exercise would be a percentage reduction in that €170 million of, say, 10% which would result in a cut of €17 million.

I would like to know how if any analysis has been undertaken of how such cut would impact on those now three year old students when they reach 18 years old and their communities in terms of whether it would be more beneficial if this money had remained in that programme versus our having, in 15 years time, to spend a multiple of that €17 million on other programmes run by the Department of Justice and Law Reform or others? Is the expertise to undertake such analysis available in any of the Departments or Pobal? I accept expertise in academia is available. Irish based academics are undertaking this type of analysis in other jurisdictions. Have any of the Departments or Pobal requested academics within this State to undertake this type of analysis? Is that a fair comment?

Mr. Denis Leamy

On the analysis, no particular analysis has been undertaken of the future affects of particular cuts in expenditure. We work with the Department in reducing some of the expenditure on programmes. In doing so, we are conscious of ensuring front-line services are not affected. The cuts applied in terms of administration relate to administrative elements and do not affect front line services. The Deputy's point is well made, namely, that early intervention in regard to all community activity prevents the need for further expenditure in the future. That is accepted by Pobal, which would always aim to protect to the greatest extent possible whatever interventions exist in the communities and for young people.

On the Deputy's question in regard to analysis, we have not been involved in particular analysis in relation to that matter.

Deputy Michael D’Arcy

I pose the same question to the secretary general of the Department.

Mr. Seosamh Ó hÁghmaill

The programme mentioned by the Deputy does not come within our particular area.

Deputy Michael D’Arcy

I use that programme as an example.

Mr. Seosamh Ó hÁghmaill

The Deputy has raised a serious point. Much of the decision making in these areas nowadays is being driven by economic circumstances.

Deputy Michael D’Arcy

I appreciate that.

Mr. Seosamh Ó hÁghmaill

When budgets are being set out for different programmes there are calls to be made by Ministers as to what and how much they can protect in particular areas. Mr. Leamy's point is a valid one. Our Minister has taken a very strong policy line that he wishes to protect the service delivery end. When making cuts in programmes we try to focus on the administrative area, such as salaries, inasmuch as we can. The Deputy is speaking about the longitudinal view and I could not claim we are doing anything like that. In the case of our new local community development programme, which will have that longer view, we will be in a better position over time to do it for that programme.

Deputy Michael D’Arcy

I refer to the programmes administered by Pobal and those administered by the Department. This is not meant to be a criticism of individual officials but I do not think a long-term view is being taken. It seems to be a very immediate view with regard to funding for programmes. We do not know whether we may be storing up big problems further down the line. I find it remarkable that some academics in Ireland are being employed by the IMF to analyse what cuts are being made by all Departments and yet the Departments and companies such as Pobal have not done any analysis. This means the people who could be coming in here are analysing our programmes and the Departments are not doing so. This is a real concern and it is a bigger concern for more than the Department of Community, Equality and Gaeltacht Affairs. I think it applies to all Departments.

Pobal has reduced its staff from 280 to 180. I do not seem to be able to put my finger on any figures for redundancies. One hundred people have left the organisation. Has a redundancy package been offered and agreed and what are the terms?

Mr. Denis Leamy

This redundancy process was commenced in late 2008 because the administration budget was being reduced. There was a call for voluntary redundancies in the first instance and 73 people volunteered. The terms of the package were two weeks' statutory redundancy plus three weeks per year of service. The average redundancy payment was €25,000 per person. To reduce staff numbers by a total of 100, vacancies were not filled and fixed-term contracts were not renewed.

Deputy Michael D’Arcy

The redundancy package was five weeks per year served.

Mr. Denis Leamy

It was two weeks plus three weeks.

Deputy Michael D’Arcy

We are dealing with the cohesion integration programme, from more than 90 companies to a little more than 50 companies. I was involved with a Leader company when I was a local authority member. The belief was there would not be redundancies but we know this was incorrect. As regards companies which have been downsized, was it agreed that people choosing to exit an organisation were given the same terms of redundancy of five weeks - three weeks plus two weeks?

Mr. Denis Leamy

To put this in context, we drew on our contingency fund to pay for the redundancy package in Pobal, in agreement with the Department. Pobal allowed other companies in the local community development programme and integrated companies to spend on the two weeks' statutory redundancy but they could draw on their reserves for the remaining amount if they wished.

Deputy Michael D’Arcy

Pobal has offered five weeks per year of service by drawing on its reserves but this is still State funding. There seems to be an inconsistency between what is available for Pobal and what is available for the companies which Pobal oversees. Is this the case?

Mr. Denis Leamy

The concern about companies going through a similar process has been discussed by the board of Pobal. The board wrote to the Department outlining its concerns in this regard. We are constrained by what we can allow companies to do. It is a case of a policy decision to extend the terms beyond two weeks' statutory redundancy. We have outlined our concerns to the Department.

Deputy Michael D’Arcy

Pobal has told the companies it oversees that the five weeks' payment agreed for Pobal staff may not be consistently applied in those companies.

Mr. Denis Leamy

They are independent companies so they manage their own affairs. All Pobal can accede to is the two weeks' statutory redundancy payment because it is confined by-----

Deputy Michael D’Arcy

Pobal is effectively the parent company of those companies and it oversees how they spend their funding.

Mr. Denis Leamy

That is correct.

Deputy Michael D’Arcy

Mr. Leamy has stated Pobal has agreed five weeks with the Department but the companies under Pobal's remit have not been given any direction about the redundancy terms for their staff. I see a lack of consistency and I think it could be a source of annoyance and anger when people look up the line and see terms of five weeks being available to one company and Pobal recommending only the statutory redundancy for others. I do not wish to labour the point. I ask for the Department's opinion.

Mr. Seosamh Ó hÁghmaill

I acknowledge it is clearly an issue which is causing unhappiness. In the case of Pobal we were considering a proposal which would result in a streamlined and more coherent organisation delivering programmes for many Departments. It was paid for within Pobal's contingency resources.

With regard to the other companies, the Department has taken legal advice on this matter. It has been made clear to me that there is a basis for me to allow money to be used to meet legitimate wind-up or redundancy costs at a statutory level. This is my current position. In most cases these are private independent companies. We provide the funding but the Department is not the employer. The strong advice I received was that there was only a basis for the Department to provide public funding to meet statutory costs.

Deputy Michael D’Arcy

Yet the Department agreed to Pobal staff having five weeks per year of service.

Mr. Seosamh Ó hÁghmaill

It may sound unjust but this was in a very different context.

Deputy Michael D’Arcy

It is not a case of sounding unjust; it is unjust. I know from speaking to people in other companies that it is a source of anger. They are the people at the coalface who have to abide by all the rules and regulations placed upon them but yet when it comes to consistency with regard to jobs being shed, the people up the line are well catered for while the people down the line are given the statutory amount.

Mr. Seosamh Ó hÁghmaill

My advice was that I could only provide funding to the level of statutory redundancy.

Deputy Michael D’Arcy

Why then did the Department agree to five weeks in the case of Pobal redundancies?

Mr. Seosamh Ó hÁghmaill

It was in a different context and in a different time. This was a large company delivering a range of services for the State and the outcome would be a more coherent and streamlined organisation. The funding was available from within the company's own resources-----

Deputy Michael D’Arcy

Those are still State resources and funding. I know there is an arm's length distance between the Department and Pobal but this does not matter a whit to people who feel aggrieved.

Mr. Seosamh Ó hÁghmaill

I acknowledge that people feel aggrieved but, ultimately, the question was what was the appropriate role of the State in relation to these companies that were all private independent companies. The appropriate role, I was strongly advised, was that we could only make funding available for statutory levels of redundancy.

Deputy Michael D’Arcy

I do not want to labour the point but Mr. Ó hÁghmaill will understand how people would be concerned about the people overseeing them getting an extra three weeks. It is easy for Mr. Ó hÁghmaill to say his advice from someone else was that they are independent companies.

On the top of page 339 in chapter 24, it states: "It was also noted that several local development companies had significant cash reserves relating to unspent grant funding." I presume because of the recession people are not advancing projects because funding is not being made available from their own resources or from financial institutions. While €425 million is available between Pobal and the Department, from what I am being told I get the impression that nationally there are some accounts in which very little of the funding is spent. There are other accounts where funding is exhausted. I do not want to see any money spent unless it will help and benefit the economy as a whole. If there are companies with unspent funds in certain accounts, however, will it be possible for the money to be spent in the time schedule outlined, between 2007 and 2013, or is it likely that this programme, as with the two previous programmes, will be extended into 2014, 2015 or even 2016? What are Mr. Ó hÁghmaill's views on permission being given for funding to be transferred from one account to another one where there may be greater demand?

Mr. Seosamh Ó hÁghmaill

Can I clarify that the Deputy is talking about the Leader programme?

Deputy Michael D’Arcy

Yes.

Mr. Seosamh Ó hÁghmaill

I must acknowledge that the start-up to Leader was quite slow. The Deputy is probably aware of the background to that. There were certain issues and challenges at the beginning. It has picked up quite a bit in the last while. We started off the year expecting to spend, I think, in the area of €40 million. It was quite slow earlier in the year. Quite a number of reasons have been put forward for that. One was the issue of credit as people were finding it difficult.

Deputy Michael D’Arcy

That has not improved.

Mr. Seosamh Ó hÁghmaill

Some promoters are having problems raising matching funding, which the Deputy understands. The other was that there were issues with some of the groups around the rules and I suppose I could say there has been a fair bit of complaining about some of the level of the rules and the detail of the rules. What we have tried to do to counteract some of that is that we have had a number of meetings. There was one quite recently where the Minister met all the chairs and chief executives of the Leader companies. There has certainly been a pick-up in the spend. We recently agreed, with the agreement of the Department of Finance, to make additional funding available this year if the companies are able to come forward with valid projects. That part of it is starting to work better. When the contracts were signed originally with the groups, there were indicative figures agreed for each group. I think we have had to take a more pragmatic line with some of the groups that are not spending - to say to them that we will make money available to the better spenders if they are not able to step up to the plate, as it were. In some of the areas the spend is still quite low. Whether that is a function of the groups - I do not want to be critical of the people involved - the local circumstances of one kind or another or the particular challenges in an area, it is clear that looking at the spend across the groups, some have performed much better than others.

Mr. Denis Leamy

In relation to the local development companies, where there would be some surplus or unspent funds, there is now a reserves policy in place in relation to all the companies. All the companies must have this reserve policy in place in terms of how that funding is spent. As well as this, all annual funds for the local community development programme must now be spent within the year in order that there is no allowance for transfers across different accounts.

Deputy Michael D’Arcy

I get the impression there is a set of rules that is a hindrance to allocating funding to groups. Some superb groups are seeking funding but cannot get it from certain accounts because the account is effectively exhausted, yet there are other accounts within the same company with large sums of money no one is seeking because they do not have either the line of credit or their own matching funding. I am not talking about white elephants. I am talking about community groups that are organised, capable, bright and motivated. The rule that prevents them from sourcing funding needs to be tackled quickly.

Mr. Seosamh Ó hÁghmaill

There was a meeting with all the chief executives last Friday or the previous Friday in Tullamore to talk to them about where they see the blockages, to tell them we have more money available in the current year if they have projects in line - where perhaps they thought money would not be available to them in terms of the annual allocation they had been given - and that we are open to taking things forward over the next period. I have just been looking at the figure. There is about €54 million in the system at the moment.

Deputy Michael D’Arcy

That is €54 million out of what amount?

Mr. Seosamh Ó hÁghmaill

There was €40 million allocated this year. Admittedly, last year we spent a little more than €20 million. If we say another €40 million or €50 million this year, there is still a long way to go.

Deputy Michael D’Arcy

A long way to go.

Mr. Seosamh Ó hÁghmaill

The allocations run, as the Deputy knows, to 2013 and then we have two further years to make the spend up to 2015, but it is challenging.

Deputy Michael D’Arcy

I attended the launch of the RDP in Molesworth Street by the then Minister at which significant emphasis was placed on flagship projects. I refer to page 357 of chapter 27. There was effectively a €4 million saving in the flagship projects.

Mr. Seosamh Ó hÁghmaill

Is this the dormant accounts funding?

Deputy Michael D’Arcy

Yes. Were there any flagship projects?

Mr. Seosamh Ó hÁghmaill

There is a flagship project, the Mitchell's integrated services centre in Tralee, which was quite delayed. There was funding of €2.5 million for that. There were problems about matching funding and so on. At around mid-year, the blockage on that particular one seems to have cleared and the contractual arrangements for a grant of €1.5 million was cleared which is to be matched by the local Tralee credit union. I think the matching funding issue has been a problem. In very broad terms, if money from the dormant accounts is not spent, it can be reallocated. It is not lost in that sense but this matching funding issue has been impacting in many places.

Deputy Michael D’Arcy

Hugely.

Mr. Seosamh Ó hÁghmaill

It is a difficult one to deal with.

Deputy Michael D’Arcy

Can I ask about the thinking behind the flagship project?

Chairman

We are on Vote 27, which is on page 357.

Deputy Michael D’Arcy

Yes. It refers back to page 349. It is B7.

Chairman

Okay.

Deputy Michael D’Arcy

Do I understand correctly that just one project has been pursued since 2009 and that the blockage was removed halfway through 2010?

Mr. Seosamh Ó hÁghmaill

That is my understanding.

Deputy Michael D’Arcy

Can I make a suggestion with regard to groups that do not meet all the criteria for the dormant funds scheme, such as the criterion that they be involved in tackling economic and social disadvantage? I appreciate that in this economic climate, we want to ensure money is spent properly. I suggest that other groups which are available, up and running and capable should be considered in that context. I am making that suggestion with the best of intentions. Rather than letting the money sit there and doing nothing with it - Mr. Ó hÁghmaill has said that is what happened with a project that may now be moving again - we should get it out to other groups that are active, capable and willing to move forward. There is a mistaken belief that the rural matters for which the Department is responsible take place 150 miles from here. If one travels just 20 miles from here, one can be in a very rural area. There is a mistaken belief that the entire east coast is urbanised or semi-urbanised. The funding in question could be used in some of the very rural areas within a short distance of Dublin. I am sure it could be given to many groups if the criteria were not as strictly applied. The potential exists to provide some form of stimulus for advancement. Could I have Mr. Ó hÁghmaill's view on that?

Mr. Seosamh Ó hÁghmaill

The Deputy may be aware that a dormant accounts (amendment) Bill is being prepared at the moment. It will take account of various proposals on how this funding should be-----

Deputy Michael D’Arcy

Divvied up.

Mr. Seosamh Ó hÁghmaill

Yes. I refer to the actual process of making decisions on where the funding should go and how the application process should be set out. The Government has made a commitment to close the Dormant Accounts Fund Disbursements Board as it exists at the moment. It has been suggested that a more direct system of providing this funding should be introduced.

Deputy Michael D’Arcy

Yes.

Mr. Seosamh Ó hÁghmaill

There is an expectation that the Bill will be produced in this session. A new disbursement plan will have to be decided on if that is the way the legislation pans out.

Deputy Michael D’Arcy

That is fine. That will happen down the line. This programme will probably have come to an end by the time the Bill is fully enacted. Similarly, the Charities Act 2009 will not be enacted in full until the end of next year, even though we debated most of it last year. It is likely that the legislation mentioned by Mr. Ó hÁghmaill will not be of much benefit in the short term.

Mr. Seosamh Ó hÁghmaill

I would like to mention some figures. Approximately €40 million has been approved by the Dormant Accounts Fund Disbursements Board. It is waiting to be allocated to those who meet the conditions. Some of the projects have been very slow. That is just a fact. Many of the projects are community-based. They sometimes find it difficult to meet the various criteria. It is always a question of trying to get a balance between-----

Deputy Michael D’Arcy

There is a lot of shoulder-shrugging going on. I would like to ask about Pobal.

Chairman

The Deputy has exceeded the amount of time available to him. I will allow him to ask a final question.

Deputy Michael D’Arcy

I will be brief. My question about Pobal relates to its transparency. We are here to ensure public money is spent correctly. It seems to be getting more onerous to draw down funding. I have been told by representatives of voluntary community groups that they almost have to hire someone to do it for them or they have to take time off work to do it, which can necessitate hiring people to fill in at work. Many people have less time for voluntary work due to the economic difficulties we face. They are trying to look after their own jobs and businesses. The goalposts are being moved all the time. I wish to hear the officials' views on the extent to which it is becoming too onerous for volunteers to draw down funding. I know there is a balance to be struck. I am shrugging my shoulders now. That is why we are on this side of the room and the officials are on the other side.

Mr. Denis Leamy

We constantly examine the requirements we impose on groups. We are conscious they can be onerous on beneficiaries. I would like to outline some of the processes. We need the groups to establish certain legal requirements, which we try to keep to a minimum. There are also some financial requirements, as well as requirements that relate to the specific guidelines of individual programmes we manage on behalf of Departments. The board of Pobal initiated a review of these requirements in 2007. A number of changes were implemented as a result. We reduced many of the requirements that applied to the smaller grants of less than €10,000 in particular. Many of these groups receive an average of €100,000 per annum. It is incumbent on us to impose certain strictures on the accountability of that funding. I accept the Deputy's point about the capacity issues that are encountered by groups as they attempt to meet the various requirements. This matter has been the subject of a great deal of discussion at meetings of the board of Pobal. We are developing a toolkit for these groups. We intend to work closely with many of them in the new year in order that we can support them in this regard. We have been doing that constantly. We need to provide more on-line and telephone support within the existing resources. It can be onerous at times, especially for directors of companies. Onerous responsibilities are associated with being a director of any company.

Deputy Michael McGrath

I welcome Mr. Leamy, Mr. Ó hÁghmaill, their colleagues and the officials from the Department of Finance. It seems to me from reading the material and from my own experience that the structure which has evolved over the years to administer many of these schemes at community level is quite cumbersome. Many of us have encountered political minefields when we have sought to unravel the schemes as part of the cohesion and integration processes. Under the cohesion process, the number of Leader and partnership companies has been reduced from 94 to 52. Is that the final figure? That is where it will finish. What happened to the 42 companies that were made defunct? Have they been legally wound up? What has happened to their assets?

Mr. Seosamh Ó hÁghmaill

I should make it clear that when we talk about cohesion, we are essentially talking about the bringing together of Leader and partnership companies to create a new cohesive company.

Deputy Michael McGrath

Yes.

Mr. Seosamh Ó hÁghmaill

The Deputy is obviously familiar with that. I will set out where we stand at the moment. The figure as of now is 52. I mentioned in my opening statement that we have initiated a review to examine the issue of assets in the context of the winding up of these companies. Essentially, 59 Leader-partnership companies have been subject to cohesion. Some of the other companies were Leader companies only and were not subject to cohesion, if I can use that term. I refer to partnership-Leader companies that were subject to cohesion. The assets of the 59 Leader-partnership companies are to be transferred to 25 new integrated companies. That is the focus of the review we are doing at the moment. We have gone to the various companies to ask for various types of information. I refer to information on due diligence, asset registers, transfer agreements, bank balances, bank statements, etc. We are in a fairly early stage of the process. It seems that within the area we are looking at, the property and land involved is worth approximately €5.6 million. That is the kind of figure which is coming up at the moment. It appears the other fixed or tangible assets are worth approximately €6.6 million. They were the figures that were there at the time of the cohesion. Some of them are changing. There is one case where one piece of property valued at €4.5 million was revalued recently at €2.6 million. It is clear, therefore, that the figures will change.

Essentially, what we are trying to confirm is that the assets have transferred, including where there was cash. That process is ongoing. We have done a couple of pilot reviews. We went to Laois and Carlow to run a pilot on how this might look and looked at their documentation, asset registers and so on. This has informed what we are doing more widely. As with everything else, some are responding better than others. We have had a pretty good response to our request for the initial documentation, which we are examining at the moment. So far, only two or three have not responded to us.

Deputy Michael McGrath

To clarify the position regarding the €5.5 million in property and land and the €6.6 million in other assets, are these assets held in the companies that have been or are to be wound up? Given that the number of companies is being reduced from 94 to 52, 42 companies will no longer exist eventually. Are the assets of €12.2 million in the companies that are being subject to cohesed?

Mr. Seosamh Ó hÁghmaill

They are in the 25 integrated companies where the Leader and partnership entities came together to form a cohesed company. In our analysis of the financial statements and so on of these companies, we found there is a potential set of assets that should have transferred. It should be noted that this a preliminary analysis which, as I stated, was only started on 1 September. However, we now have reasonable documentation from 23 of the 25 companies we are dealing with. That is the cost and there will be book values and so on. Many of the assets, when we analyse the information, may well be close to obsolete, depending on what they are.

Deputy Michael McGrath

Does Mr. Ó hÁghmaill know what is the total book value of the assets across all of the cohesed companies?

Mr. Seosamh Ó hÁghmaill

The information I have simply looks at the transfer from 59 Leader and partnership companies. This is the figure across the 59 Leader and partnership companies which later became 25 companies.

Deputy Michael McGrath

The 59 companies became 25 companies.

Mr. Seosamh Ó hÁghmaill

Some were Leader companies and some were companies that already operated on an integrated basis prior to-----

Deputy Michael McGrath

They will remain in their current structure.

Mr. Seosamh Ó hÁghmaill

Yes, if a company was already integrated, it remained as it was. Similarly, the urban partnerships remained as they were.

Deputy Michael McGrath

Does the Department have a legal right to the assets being held by the companies that will no long exist? These are companies in their own right, with their own shareholders and so on.

Mr. Seosamh Ó hÁghmaill

Yes.

Deputy Michael McGrath

Given that the assets would have been acquired by way of public funds, do we have a legal right to take them?

Mr. Seosamh Ó hÁghmaill

Our view throughout has been that if the asset was acquired in the first case with State funding, it should transfer. In most of the cases we have dealt with so far, that is working through.

Deputy Michael McGrath

In the event of the Department encountering a difficult company, where does the State stand legally if the company holds assets?

Mr. Seosamh Ó hÁghmaill

Without trying to avoid the question, I would probably have to take further legal advice at that point.

Deputy Michael McGrath

Is there a significant risk of the loss of assets to the State through the cohesion process? The Comptroller and Auditor General raised the issue of surplus assets on page 331 of his report. The Department has begun to address this matter in the review Mr. Ó hÁghmaill spoke about in his opening remarks.

Mr. Seosamh Ó hÁghmaill

The indications so far in our work are that there is not a significant risk. The asset that was mentioned by the Comptroller and Auditor General in his report was in County Louth. It had been valued, as I mentioned, at €4.5 million and revalued recently at €2.6 million. We just got word in recent days that it has been transferred to the new cohesed company. Even on its own, that takes a very large piece out of the amount we had estimated to be potentially there.

Deputy Michael McGrath

If I may move on to the integration process, how are the efforts to bring 164 of the community development programmes, CDPs, within the remit of the 52 new cohesed companies progressing? Where do we stand in this regard? How many CDPs are under the remit of the cohesed companies?

Mr. Seosamh Ó hÁghmaill

As the Deputy is possibly aware, this has been a fairly difficult process. Some of the CDPs have been operating for a long time - two decades - and the process has not been without its issues. It is moving along quite well at the moment. About 160 of the CDPs have formally signed up to come into the programme. I am not saying this means they no longer have issues. Lots of them have issues.

Deputy Michael McGrath

Only four CDPs have not signed up.

Mr. Seosamh Ó hÁghmaill

Some will opt out - we have had a small number of such cases - and there will be some which, for other reasons, the Department would view as not being part of the integrated programme. Their focus is rather different. Although they have been treated as part of the CDP family, as it were, some of them have particular focuses which do not lend themselves to the normal CDP processes. While Pobal is probably closer to the action than I am on this matter, in broad terms we have the 160 CDPs that are there and we have agreed a number of mechanisms where there will be exceptions to full integration. The Deputy may be aware of some of these cases, for example, HSE south in Limerick and the Northside Partnership. They will be cases where there may be a clustering of CDPs and so on rather than a full integration model.

We are also looking at a small number of CDPs where the level of funding we are providing into the activities of the CDP only represents about 15% of the overall turnover of the body. There are some very large CDPs that draw on funding from other programmes.

Deputy Michael McGrath

Based on current information - 160 CDPs have signed up - and his knowledge of the 164 CDPs, how many CDPs does Mr. Ó hÁghmaill expect to be fully integrated under the cohesed companies? An estimate will suffice.

Mr. Seosamh Ó hÁghmaill

The CDPs are currently being funded under the LCDP, which came in from the beginning of this year, and because of that they have signed up to the programme and to working with us to get to a stage whereby they will move into an integrated model by the end of the year. Many challenges remain and Pobal is putting in place many supports. It is doing due diligence and a great deal of legal advice is being made available and so on. If one takes out the CDPs that will go in under different models, I estimate the figure will be roughly 95.

Deputy Michael McGrath

Ninety-five companies will be integrated.

Mr. Seosamh Ó hÁghmaill

Yes, that would be my target, although I acknowledge that there are still a number of difficulties.

Mr. Denis Leamy

I will add a little to what has been said. If one stands back, we have had to put in place a number of processes in terms of support around the legal processes. We have also support around HR in terms of the transfer. It has been fairly challenging to carry out this work, as members will imagine. We are also putting supports in place so that all the organisations can go through a due diligence process. That is being undertaken at the moment. We are engaged with legal firms to support the CDPs and integrated companies to proceed with the process. This is progressing and we are starting to receive the information necessary to make this progress and reach the deadline of the end of the year. As the Secretary General stated, we are well on course to meet this target but that is not to underestimate the challenges in carrying out the process, which are significant. We intend to reach the number cited by the end of the year.

Deputy Michael McGrath

The estimate of the number of companies that will be fully integrated is 95 leaving 69 under a different structure.

Mr. Seosamh Ó hÁghmaill

There are complications. Some companies are moving in with Údarás na Gaeltachta. Agencies such as Pavee Point will not become part of the integrated model.

Deputy Michael McGrath

Of the 95 companies that will be integrated, how will that look from the point of view of communities? Will the CDPs move their offices? They have now legally come under the cohesed company. Will the CDP continue to exist as a separate legal entity? Will it remain incorporated?

Mr. Seosamh Ó hÁghmaill

No, it will become integrated into the local community development company.

Deputy Michael McGrath

Will it maintain its own base and separate operation or will it vary on a case-by-case basis?

Mr. Seosamh Ó hÁghmaill

It will probably be worked out on a case-by-case basis. The main thing for us that the work has to integrate and become part of the new programme. It must fit in with the objectives of the new programme. How it works in particular places will depend from place to place. We would envisage the staff transferring over in a full integration model. The funding will go through the local development companies directly.

Deputy Michael McGrath

What is the budget allocation in 2010 for the LCDP programme?

Mr. Seosamh Ó hÁghmaill

It is €71 million between the two.

Deputy Michael McGrath

Is that €71 million between the LCDP and-----

Mr. Seosamh Ó hÁghmaill

I am sorry, it is €67.5 million for the two programmes.

Deputy Michael McGrath

Until now that would have been administered by the 164 CDPs.

Mr. Seosamh Ó hÁghmaill

I am sorry, I am confusing the Deputy. That is the full amount for the two programmes. I am told the funding for the CDP is €19 million. The balance I mentioned is for the local development programme which was the former LDSIP programme.

Deputy Michael McGrath

Who administers that?

Mr. Seosamh Ó hÁghmaill

It goes through the partnership companies.

Deputy Michael McGrath

Has that been the case all along?

Mr. Seosamh Ó hÁghmaill

Yes.

Deputy Michael McGrath

Did Mr. Ó hÁghmaill say the total funding for the CDPs under the old structure was €16 million?

Mr. Seosamh Ó hÁghmaill

It was €19 million.

Deputy Michael McGrath

On the level of accountability and the reporting arrangements that have existed up to now, that is a lot of money to allocate to up to 164 CDPs. One company has up to 45 members of staff. Were there concerns about governance issues across the CDP sector? Were we getting value for money? How much of that money was going on administrative salaries? Was it an efficient way to disburse that amount of money to services?

Mr. Seosamh Ó hÁghmaill

By way of background, our concerns about some aspects of the CDP programme reflect the fact that we tried to bring it into a more integrated structured programme. The local community development division in the Department monitored and oversaw the CDP programme. It was not monitored through Pobal. The Department took a hands-on approach involving site visits, performance reviews, work plans and audited accounts as per a standard type of operation.

We had formal contracts in place with each CDP setting out its responsibilities. We did some work with the Office of the Director of Corporate Enforcement to get advice on the best corporate governance and company law requirements. We carried out two audits of the CDP, one in 2004 and one in 2006. A number of issues emerged from that process which we are bringing forward through our own audit committee. We also made an arrangement following that with our inspection services unit which operates across the Department. It was initially set up to deal with the Leader programme but it now has a role in inspecting projects across the Department. It began to carry out inspections on the CDP.

Before we moved into the area of integration, we carried out a review of the CDP programme in 2009 in which we looked at the impact of all of the various CDPs. Arising out of that, decisions were taken to close down funding for a number of them. An appeal system was in place. Some schemes were closed and some remained in operation. There was a monitoring system.

Deputy Michael McGrath

On the issue of fraud which was raised in the last paragraph of page 335, chapter 24, in the Comptroller and Auditor General's report, he refers to three cases involving the misappropriation or misapplication of funds by staff in three CDPs which had been reported to the Department's audit committee in 2009. In one case there was not enough evidence for a prosecution but the project could pursue a civil action. The project did not have the funds to pursue a civil action and has been declared insolvent. In the second case a fund of €24,000 was returned by a former employee. Did a prosecution materialise in that case? In the third case a file was sent to the Director of Public Prosecutions. Does Mr. Ó hÁghmaill have an update on those cases? Were further cases of misappropriation of CDP funds identified through the Department's work?

Mr. Seosamh Ó hÁghmaill

No. The three cases relating to the CDP that we reported last year are pretty much as they were. One case is still with the DPP. I am not sure whether I should mention an individual case. I do not wish to mention names.

Deputy Michael McGrath

That is fair enough.

Mr. Seosamh Ó hÁghmaill

In one case we went back to the Attorney General's office. The Garda suggested the company itself could take a civil action but it did not do that. Nothing happened. We went to the Attorney General's office through our internal audit committee to see whether the Department has an option to take. The third case is still with the Garda.

Deputy Michael McGrath

Were there no other cases?

Mr. Seosamh Ó hÁghmaill

We had no other cases in terms of CDPs. A number of potential cases came forward this year but not under the CDP programme.

Deputy Michael McGrath

Under what programme?

Mr. Seosamh Ó hÁghmaill

One of them is a drugs task force where there seems to be some evidence that there may be misappropriation of funds. The case is in the hands of the Garda at the moment. The Comptroller and Auditor General has been informed.

Deputy Michael McGrath

How much money is involved?

Mr. Seosamh Ó hÁghmaill

The amount of money potentially involved is of the order of €137,000. A second case has come to our notice under the PEACE programme. It is located in County Armagh. It is being followed at the moment through SEUPB which is the paying authority for it. In one case it has been referred to the PSNI. In the other case we are looking at getting the money back. The only other case to mention is the Tipperary case that has been in the newspapers. Again, that case has been reported to the Garda by Pobal and a process is being followed.

Deputy Michael McGrath

How are these cases being picked up? is it through the audit channels?

Mr. Seosamh Ó hÁghmaill

Yes, audit in some cases but in one case in Armagh it was because of a whistleblower's letter. Another case came to light following a letter from a concerned employee to the auditors of the company.

Deputy Michael McGrath

Is the case regarding the drugs task force involving €137,000 with the Garda for investigation or has a file been sent to the DPP?

Mr. Seosamh Ó hÁghmaill

It is at the investigation stage at the moment.

Deputy Michael McGrath

Okay.

Mr. Seosamh Ó hÁghmaill

We have a fraud policy in place. In all of these cases we try to follow the policy we have laid down in terms of reporting to the Comptroller and Auditor General and bringing in the Garda at the appropriate time.

Deputy Michael McGrath

It raises questions about the internal control policies and governance issues. The drugs task force is not affected by integration or cohesion. I accept it is only an investigation at this stage. We will see where that leads. In many cases the budgets for individual drugs task forces would not be enormous so the suggestion that such an amount of money could be misappropriated is worrying. The sum of €137,000 is a lot of money.

Mr. Seosamh Ó hÁghmaill

Much of the work we do is from the bottom up and with volunteers, which creates its own issues. Obviously, we must try to ensure we do the right thing.

Deputy Michael McGrath

I have two final questions. On the rural development programme for the period 2007 to 2013, funding of €425 million is being delivered by 36 local action groups, formerly known as Leader companies. Are they among the 52 Cohesion companies?

Mr. Seosamh Ó hÁghmaill

Yes, they are.

Deputy Michael McGrath

Are all administration costs, including the salaries of the chief executives and secretaries, associated with each of these groups met from the figure of €425 million?

Mr. Seosamh Ó hÁghmaill

Yes. The European Union has laid down an upper limit for both administration and animation costs in getting the programme up and running.

Deputy Michael McGrath

How much of the €425 million will be spent in meeting such costs?

Mr. Seosamh Ó hÁghmaill

The most recent administrative cost figures for this year were running at around 3% to 4% of activity. However, in overall terms, the European Union has introduced a 20% cap.

Deputy Michael McGrath

In Ireland the expected percentage is between 3% and 4%.

Mr. Seosamh Ó hÁghmaill

If one considers expenditure versus the administration costs of individual companies in the current year, one will note the figure is running at approximately 3% to 4%. Obviously, in adding it all up, one approaches the cap.

Deputy Michael McGrath

Could it cost between €12 million and €16 million at local level to administer the sum of €425 million?

Mr. Seosamh Ó hÁghmaill

Yes.

Deputy Michael McGrath

My final question to Mr. Leamy is on the excellent free preschool year scheme. Is there a trend being reported of service providers trying to charge top-ups through the back door? What issues are being encountered and are they being pursued?

Mr. Denis Leamy

Our role in relation to the free preschool year scheme relates to compliance. To date, we have carried out 2,130 compliance visits. We check the very issues the Deputy raised in terms of fees and policies.

Deputy Michael McGrath

There were 2,130 visits.

Mr. Denis Leamy

That number of visits have been carried out so far.

Deputy Michael McGrath

Did they involve checking the paperwork?

Mr. Denis Leamy

We check the paperwork to ensure the providers are operating according to the rules of scheme. There would be an odd occasion on which we would spot confusion on the part of child care providers regarding the scheme. In such instances, we inform the Office of the Minister for Children and Youth Affairs which contacts the child care provider to ensure the scheme is being operated properly and effectively. We will have a more complete picture by the end of the year when all the compliance visits have been completed.

Deputy Michael McGrath

Is there evidence that service providers are seeking to charge top-up fees for services that would be regarded as central to the overall service, as opposed to taking children outside the school environment? That is the anecdotal evidence I am picking up.

Mr. Denis Leamy

Yes. We have encountered it in a number of instances. When we do so, we communicate directly and state the practice is not permissible.

Deputy Michael McGrath

Is the communication with the provider or the local child care committee?

Mr. Denis Leamy

The provider.

Deputy Michael McGrath

There is direct communication with the provider.

Chairman

I have a number of questions, my first of which is to Mr. Ó hÁghmaill. Paragraph 24.25 of the report of the Comptroller and Auditor General refers to the SCOPE system and the capture of baseline data. The SCOPE system used was abandoned and the Department had no system for capturing baseline data. It later reintroduced the system. What is the background to this issue?

Mr. Seosamh Ó hÁghmaill

The Chairman will be aware that the SCOPE system was used in Pobal and involved taking data under the former local development social inclusion programme, LDSIP. I am not familiar with the details. Essentially, it involved capturing-----

Chairman

Mr. Leamy may have it.

Mr. Seosamh Ó hÁghmaill

Yes.

Mr. Denis Leamy

It is not true to say the SCOPE system was abandoned. It was in place under the LDSIP.

Chairman

The Comptroller and Auditor General states at paragraph 24.25 that there is currently no system capturing baseline data. The SCOPE system used to capture output data under the old programme was suspended in 2010 pending the introduction of a new system. However, we then discovered the SCOPE system was being reintroduced as an interim measure.

Mr. Denis Leamy

Yes.

Chairman

Therefore, it was abandoned.

Mr. Denis Leamy

We asked groups to use the spreadsheets that related to data collected in the absence of the monitoring system. We are developing a new monitoring system which will be in place by the end of the year. It will capture all the data necessary for the new programme. In the interim, we had to have some way of capturing outputs. That is why we continued to use the Excel sheets for output capture.

Chairman

My other question is on decentralisation. What is the current state of play on decentralisation to Charlestown, County Mayo?

Mr. Seosamh Ó hÁghmaill

As the Chairman will know, the original plan under the decentralisation programme was to move the Department to Knock Airport, but that was subsequently overruled by An Bord Pleanála. The Government made a decision for the Department to move to Charlestown. In the meantime, a decision was made to move to an interim location at Tubbercurry, County Sligo, just across the border from County Mayo. We had approximately 100 staff there at one point, but that number decreased to approximately 85, partly because of vacancies arising and because we lost a number of staff to the Department of Social Protection recently on foot of the transfer of schemes.

The long-term issue is to be reviewed by the Government next year. The site in mind in Charlestown has not been purchased. A decision will have to be made by the Government on whether it wishes to proceed with it at this stage. The balance in the Department has changed with the influx of new staff in the Department of Justice and Law Reform and the Department of Social Protection, but the numbers in Dublin have increased quite a bit. We also have about 60 staff in Na Forbacha on foot of a decentralisation move around 1980. That is a long-established unit which deals mainly with the Irish language and the islands.

As I mentioned, we have a small number of staff who are part of the Department but who are seconded to the Equality Authority and the Equality Tribunal in Roscrea and Portlaoise.

Chairman

Is it all a bit of a mess.

Mr. Seosamh Ó hÁghmaill

It is fair to say that it is challenging at times. It means quite a bit of movement for people, depending on when meetings have to take place. We use video conferencing facilities a lot.

Chairman

Where was the headquarters located prior to the move to Tubbercurry via Knock?

Mr. Seosamh Ó hÁghmaill

Our headquarters is still located in Dublin. We have not actually moved it yet. It was due to be moved-----

Chairman

How many staff are in Dublin?

Mr. Seosamh Ó hÁghmaill

The number has now increased and is certainly over 100. I will check the figure.

Chairman

Is it decentralisation in reverse?

Mr. Seosamh Ó hÁghmaill

There has been an element of that because we received approximately 20 staff from the Department of Social Protection. The number from the Department of Justice and Law Reform was nearly 100. I am informed there are 160 staff in Dublin.

Chairman

How did the Department decide to move to Tubbercurry when the site at Knock was unavailable because of planning permission issues? It was supposed to move to Charlestown.

Mr. Seosamh Ó hÁghmaill

Perhaps I was not clear enough. The original plan was to locate at Knock Airport. A site was actually purchased by the OPW for the Department near to the airport.

Chairman

What was the cost of the site?

Mr. Seosamh Ó hÁghmaill

Around €300,000.

Chairman

What is happening to it now?

Mr. Seosamh Ó hÁghmaill

It certainly has not been developed.

Chairman

When was the sum of €300,000 paid for it?

Mr. Seosamh Ó hÁghmaill

The OPW paid for it. The cost was actually €390,000 and the purchase was made in 2007. An Bord Pleanála decided to refuse planning permission for the headquarters because it was not happy the development involved was suitable beside an airport.

Chairman

If I were buying land, I would add the clause "subject to planning" to my bid. Was this done in this case?

Mr. Seosamh Ó hÁghmaill

I do not think so.

Chairman

So we have a bit of useless land now worth a third of what was paid for it. What will happen to the site?

Mr. Seosamh Ó hÁghmaill

I am genuinely not sure what the Office of Public Works has in mind for the site. It is on the road to the airport. In due course, it may become useful to some other development around the airport.

Chairman

Is the Department renting properties in Tubbercurry?

Mr. Seosamh Ó hÁghmaill

The Department, through the Office of Public Works, is renting two offices in Tubbercurry both of which were refurbished. The contract is until the end of 2012.

Chairman

What does the rent cost?

Mr. Seosamh Ó hÁghmaill

It comes to €175,000 per annum.

Chairman

Does that include the renovation costs?

Mr. Seosamh Ó hÁghmaill

No, that is just the rent. The non-property costs which included expenditure on information technology, computers, telephone services, staff training, various support, travel and subsistence came to €260,000 in 2009.

Chairman

In effect, €112,000 per year until 2012 but the Department does not where it is going after that.

Mr. Seosamh Ó hÁghmaill

Four major sites under the decentralisation programme have been put on hold by the Government, one of which was the Department's. There was a site in Charlestown but it was not purchased in the end. It is still available but a decision would have to be made to purchase it and develop a new building on it.

Chairman

Are officials relocated to the west now back in Dublin?

Mr. Seosamh Ó hÁghmaill

No, the staff in Dublin were relocated to us from other Departments because of our new functions. The staff in the west were either from Dublin or already in existing centres in the west who wanted to get closer to home, such as officials based in Galway who transferred to our Department.

Chairman

Were compensation or relocation costs paid to those people?

Mr. Seosamh Ó hÁghmaill

No. There were small amounts available for training but nothing for relocation costs.

Chairman

The Comptroller and Auditor General's report raises questions about organisations claiming funding from various agencies, including the Department. Were the Department's training courses in-house or were external trainers involved?

Mr. Seosamh Ó hÁghmaill

In the past year we have moved much more to in-house training for our staff.

Chairman

What was done before this?

Mr. Seosamh Ó hÁghmaill

It depended on the training. We have used the Institute of Public Administration to conduct financial management training for our staff. We have used some Irish language training companies to do certain modules. We have also had to do some performance management development scheme training.

Chairman

What are the amounts spent on training?

Mr. Seosamh Ó hÁghmaill

I will get a note on that for the committee.

Chairman

The Department has a relationship with Atlantic Philanthropies and the Centre for Effective Services which redesigns social inclusion programmes. One problem identified by the Comptroller and Auditor General is that it is not known how much goes on administration in many of these programmes. How did Atlantic Philanthropies and the Centre for Effective Services come into this?

Mr. Seosamh Ó hÁghmaill

Atlantic Philanthropies agreed to put up funding for the development of more evidence-based approaches to designing programmes and so on.

Chairman

For the record, who is behind this organisation?

Mr. Seosamh Ó hÁghmaill

Atlantic Philanthropies is an international philanthropic association, founded by Chuck Feeney. It is involved in putting money into many activities in this country and others.

In this particular case, it agreed to put up €5 million to help develop an evidence-based approach to policy and programme design. The Department of Health and Children agreed to become involved in it to advance its work on children, particularly in examining how projects have value and impact. Our Department became involved as a joint funder with this. Both Departments are matching the funding from Atlantic Philanthropies at €500,000 per annum each over five years, €2.5 million in total.

Chairman

That means €10 million will go into analysing policy outputs.

Mr. Seosamh Ó hÁghmaill

The key work done for us by the CES has been around the new local and community development programme. It analysed the two existing programmes for best practice and what works and compared them to similar programmes in Australia, New Zealand and Canada. It then offered us advice on how the new programme could be structured to allow us to show it delivering.

Chairman

When was this study carried out?

Mr. Seosamh Ó hÁghmaill

This work was done in 2009.

Chairman

An bord snip nua claimed the impact of these programmes was doubtful, however, and questioned the State's investment in them.

Mr. Seosamh Ó hÁghmaill

That was part of the argument on the day. It is a theme the committee has touched on in the past too. It is about not just showing how many people use such and such a service but what difference it makes. From talking to those who run similar programmes in nearby jurisdictions, I know they find it difficult to get real evidence that they are making a difference on the ground. That is why we are working with the CES. Next year, we are hoping to start an independent evaluation of the programme. It is a question of trying to analyse whether we are getting a fair bang for our buck, as it were.

Chairman

One of the problems we have is that we get persistent correspondence from individuals regarding some of these programmes. We are told that if they no longer existed, they would hardly be missed. That may be very unfair, but it is a point the committee must address.

Mr. Seosamh Ó hÁghmaill

I acknowledge that, Chairman. Certainly, this was a serious issue for the McCarthy group, as regards much of what we do. It is a feature of the type of work this Department does. It is soft, not equivalent to laying 100 km of road. It is quite difficult, and is an aspect of our approach to the language as well as to the drugs question. We have to acknowledge this.

We are trying to find a methodology through this work with the CES on the local and community development programme. We are talking with them at the moment about using that to move into other programmes we do. We are also working closely with the Department of Health and Children, which is finding much of the work with children it is doing, as regards early intervention and so on, very valuable. It is a question of trying to build on that.

Chairman

I agree, and Deputy D'Arcy referred earlier to the great work being done locally by so many of these programmes, and I have that evidence, first-hand, in my areas, also. We are not questioning the activity and effectiveness of the work at local level, but there seems to be a whole fuzzy area involving enormous amounts of funding.

Getting back to the €10 million as regards the co-funding between the Department and Atlantic Philanthropies, for example, have reports resulted from these studies, and in the event, who did them?

Mr. Seosamh Ó hÁghmaill

One report was published quite recently that essentially was based on the review they did across these types of local and community development programmes. They tried to draw from it a number of key messages that work in other jurisdictions. There is evidence that if programmes are designed with these key issues included, they are more likely to work. We used the type of work they have done to help us to design the programme. Until such time as it is up and running and we have a system in place to evaluate it, it will be hard to know whether it will work and if it will deliver as it is supposed to. The reference is Effective Community Development Programmes: a Review of the International Evidence Base, and it was published in September.

Chairman

I am not being smart, but is that all we got for our €10 million?

Mr. Seosamh Ó hÁghmaill

I was about to say that the big deliverable for us so far has been the design of the new programme. The work with the CES enabled us to get to a point where we could bring forward a newly designed programme focusing on just four goals, with sets of objectives, indicators and so on. These are now being developed with Pobal, and the €60 million or €70 million that is being spent on these programmes will be the issue for us as to whether we can show they are actually delivering.

Chairman

In 2007, also, a value for money report was done by Fitzpatrick Associates. Was that a report on the same theme?

Mr. Seosamh Ó hÁghmaill

Yes, there are two programmes that are now coming together to form this new programme. The Local Development Social Inclusion Programme was the main one. We have been trying to feed the value for money study that was done on that into the work with the CES, the redesign of the programme and the work with Pobal.

Chairman

Some 26 recommendations were made, but only five have been implemented, so what is happening?

Mr. Seosamh Ó hÁghmaill

Perhaps things have moved on, in a sense, since that. It was written at a time that possibly foresaw the programme that was in place then, continuing, whereas we have changed course in many ways by bringing the two programmes that existed into one, and trying to integrate them.

Chairman

Could Mr. Ó hÁghmaill give us a breakdown of the €10 million in terms of how the co-funding between his Department, the Department of Health and Children and Atlantic Philanthropies was spent? Aside from the report that has been published, what else has been done for the €10 million?

Mr. Seosamh Ó hÁghmaill

Essentially, they have set up an office in Dublin and recruited staff into that. They are working with ourselves and the Office of the Minister for Children and Youth Affairs. There is a work programme each year, which outlines what the targets are, and what is to be done for each funder. Essentially, we work together with them on bringing those forward. The big issue for us this year, for example, is to try to get arrangements in place to start the evaluation work for next year, in a way that stands up, is independent and delivers the type of results we are looking for.

Chairman

Just to be clear, I am not criticising Atlantic Philanthropies or anybody, indeed, on this. I am just trying to get a grip on precisely what is happening, on behalf of the committee as regards the €10 million. When we have two Departments and so many people in them, why do we have a different agency, with a building in Dublin carrying out the same work?

Mr. Seosamh Ó hÁghmaill

I suppose they are offering us something that we do not have in-house, namely, expertise on evaluating child care, community interventions and so on. They are giving us an academic viewpoint, which is one part of it, but also an international perspective as well. We have a nominated member of staff who works with them, so in that sense it is a collaborative initiative.

Chairman

Has the Department of Finance an input into all of this?

Mr. John Conlon

Not directly, Chairman.

Chairman

Why not?

Mr. John Conlon

We do not get involved in the programmes that are being run by the Department or its agencies.

Chairman

What about a value for money analysis?

Mr. John Conlon

In terms of what Mr. Ó hÁghmaill has been talking about, the development of some empirical data to support public policy making in this area where there has been a lack of expertise, this is to be welcomed particularly as regards developing policies within a fiscal framework for the future, which will be more challenging.

Chairman

In the Comptroller and Auditor General's report, reference 24.56, addressing financial management and control, there are nine important recommendations. Will Mr. Leamy say what Pobal has done to address the issues of financial management and control, and the recommendations of the Comptroller and Auditor General?

Mr. Denis Leamy

In terms of financial management and control we make a set of requirements in relation to each company, which it has to return to us on a regular basis. We have developed further finance guidelines that each of the companies now has in terms of those requirements. The information is supplied to us on a regular basis and we assess that against the companies' accounts. In addition, we have regular audits and verification visits to those companies, ensuring the money is spent in accordance with programme guidelines.

Deputy D'Arcy mentioned earlier the question of trying to have a balance between what might be seen as bureaucratic control and accountability, and we are striving to achieve that, in terms of the new financial guidelines each of the companies has. That is in response to what was highlighted in the Comptroller and Auditor General's report. There are best practice guidelines, which the companies have. Financial guidelines were issued in January 2010 and we also had information sessions with all the companies last March as regards auditing, financial management and human resource issues. Each local development company has a case officer within Pobal to deal with its financial weaknesses on an ongoing basis.

We look at areas such as corporate governance, finance management, financial policies in terms of a company's public procurement, travel subscriptions and human resource policies as well as policies in relation to ICT. All that is happening on an ongoing basis.

Chairman

I thank Mr. Leamy.

For what it is worth, I should just like to say to Mr. Conlon and Ms Stapleton that in my opinion, the Department of Finance should be involved in the analysis being carried out by Atlantic Philanthropies. This is very important work in evaluating the effectiveness of programmes and much of the expertise or knowledge could be used in analysis of other programmes.

Mr. John Conlon

While I know what the Chairman is saying, he must consider the resources available to us in the Vote sections to provide input into such analysis. We definitely would support the development of empirical data to support policy.

Chairman

Okay. I thank Mr. Conlon.

Mr. Seosamh Ó hÁghmaill

We have set up a high level group between ourselves, Pobal and the Centre for Effective Services that includes input from the sector, to try to marry together some of this. One point raised by the Comptroller and Auditor General was getting more buy-in from this sector and getting greater understanding on what different people were trying to bring to this issue. With this expertise from the CES, Pobal's expertise on the ground and the sector's knowledge of how to run the programmes, I am hopeful this initiative will bring some dividends.

Chairman

I agree with Mr. Ó hÁghmaill. This is very important because there is much uninformed comment to the effect that much of this activity is a waste of time and money or is money down the drain. The best way to defend the effectiveness of these important programmes is by carrying out this work, which is happening.

I will turn to subheads E7, E8 and E9 of the appropriation accounts for 2009 of Vote 27, Department of Community, Rural and Gaeltacht Affairs. I note the Údarás na Gaeltachta administration expenditure has fallen from €13.8 million to €11.8 million between 2008 and 2009. A total of €42 million approximately was allocated to Údarás na Gaeltachta under subheads E7, E8 and E9 in respect of current programme expenditure, grants for projects and expenditure on premises. I note that an bord snip nua recommended that the job of attracting investment should be done by the Department of Enterprise, Trade and Innovation and I refer to the recent expenditure of Údarás na Gaeltachta between 2007 and 2008. The committee is asking questions regarding travel expenses and expenses for conferences abroad of most of the Departments appearing before it and of the agencies that work under their remit. I have seen reports that visits have been made to places such as Las Vegas, Shanghai, Los Angeles, Chicago and New York by senior officials of Údarás na Gaeltachta. The stated reason given by Údarás na Gaeltachta for many of them was to make contact with IDA Ireland and other agencies. What would be the purpose of a meeting between Údarás na Gaeltachta and IDA Ireland in Las Vegas? Did alarm bells ring in the Department of Community, Equality and Gaeltacht Affairs when these issues were raised elsewhere? For example, between 2007 and 2008, €30,000 was spent on travel to Halifax, Canada, to look at seaweed projects and seven different trips were made by senior executives of Údarás. Has the Department carried out an internal audit in respect of such activities? I could carry on for ten minutes providing the details of some of the stuff that has emerged, which on first reading is like a mini-FÁS. Has the Department carried out an internal audit into activities within Údarás na Gaeltachta in respect of these goings-on?

Mr. Seosamh Ó hÁghmaill

Not into that particular issue. To clarify, the particular issue to which the Chairman refers and which appeared in the media at a particular time was raised with the chief executive officer of Údarás na Gaeltachta, who obviously is the person who is accountable for that expenditure. To provide the context to members, we have a fairly high -level monitoring group that meets Údarás at least once per quarter and part of what it does is to consider accountability issues, audit issues and other similar issues which obviously include expenditure issues and so on. Within that forum, we raised these issues with the chief executive officer. I do not wish to speak for him and I do not believe he would have agreed with the presentation of some of those issues but he gave an assurance that everything that was spent was within the rules.

Chairman

Did the Department ask one simple question? Did it ask for a list of venues, the purpose of each trip-----

Mr. Seosamh Ó hÁghmaill

I do not think-----

Chairman

-----or whether Department of Finance guidelines were followed?

Mr. Seosamh Ó hÁghmaill

Yes, we did ask that.

Chairman

Did the Department get lists?

Mr. Seosamh Ó hÁghmaill

While I could be wrong, I do not think we sought lists. It is possible that the local office in Na Forbacha did so but I am not aware of that. I certainly sought assurances that it was in line with Department of Finance rules.

Chairman

In the Secretary General's role as Accounting Officer for the Department, why did he not seek a full detailed written report on all the issues that were raised publicly?

Mr. Seosamh Ó hÁghmaill

To be honest, my concern at the time was to be sure that what they were doing was in line with procedures and was meeting the requirements of the Department of Finance.

Chairman

What, for example, was the purpose of a trip to Las Vegas to meet IDA Ireland contacts there?

Mr. Seosamh Ó hÁghmaill

I do not know the individual case. Údarás has an enterprise role and has had a role in attracting direct foreign investment for a number of years. As part of its exercise of that role, it is obliged to deal with Enterprise Ireland or IDA Ireland, whichever is the appropriate body, as it goes about its business to ensure-----

Chairman

When a report appeared in the public arena to the effect that visits were made to the United States, that business class flights were booked at a cost of €8,200 and that receipts for the claims made on the trip have gone missing, did this not raise questions?

Mr. Seosamh Ó hÁghmaill

We raised these issues with the chief executive officer. I cannot state we carried out a review of the particular case because we certainly did not. We sought assurances and the Department also receives annual assurances from the chair of Údarás na Gaeltachta that the body is operating in line with the code of practice for State bodies. We have carried out a number of reviews with Údarás in recent years of which the committee will be aware. The most recent work we did with it related to expenditure in the regional offices but we did not carry out a review of the specific issue in question.

Chairman

Did the Department not ask any questions about another trip to Shanghai in 2008?

Mr. Seosamh Ó hÁghmaill

I am aware that Údarás na Gaeltachta has companies operating in Gaeltacht areas that originate in some of these places. For example-----

Chairman

Again, the reason given was to hold meetings with IDA Ireland.

Mr. Seosamh Ó hÁghmaill

I can only assume these were meetings with IDA Ireland in the context of trying to get investment into a Gaeltacht area. For instance, the aforementioned seaweed example would, I presume, pertain to the company Arramara Teoranta. It used to be a State body but has been taken over by Údarás which is trying to develop the commercial potential of seaweed on the west coast. Part of this goes back to the initial point made by the Chair concerning the enterprise role of Údarás and its future direction. At present, the Chairman probably is aware that the future of Údarás is bound up with the draft Government strategy on the Irish language which proposes that Údarás would continue with an enterprise role.

Chairman

Having failed to get a report on all these matters, will the Secretary General now ask for a full report on all the issues-----

Mr. Seosamh Ó hÁghmaill

I would be happy to do that.

Chairman

-----including whether there was compliance with the Department of Finance guidelines in respect of the travel of spouses and partners and the type of air travel that was used?

Mr. Seosamh Ó hÁghmaill

I would be happy to do that and will revert to the committee.

Chairman

We should also be provided with a list of all the visits between 2005 and the present. The Department of Finance will also provide the committee with a report on whether it is satisfied that all its guidelines have been followed. New guidelines were published as a result of this committee issuing a report in February 2009 arising from the FÁS investigation. The Department stated it had issued new guidelines to all Departments and State agencies and advised them of the need to comply with those guidelines. Will Mr. Ó hÁghmaill provide the committee with a report on whether there was any follow-up by his Department to the reports that were in the public arena 12 months ago concerning goings on in Údarás na Gaeltachta in 2006, 2007 and 2008?

Mr. Seosamh Ó hÁghmaill

Yes.

Deputy Michael D’Arcy

I have a question for Mr. Leamy on the cost of the extra three weeks statutory redundancy to Pobal.

Mr. Denis Leamy

While awaiting the specific figures, the average cost of a redundancy, including the two weeks' statutory redundancy, was €25,000.

Deputy Michael D’Arcy

By 100.

Mr. Denis Leamy

No, by 77. The remainder went through other means.

Deputy Michael D’Arcy

Is it possible for the committee to receive the correspondence between Pobal and the Departments concerning the sanctioning of the three extra weeks per year's service? I would also like the correspondence regarding the lack of sanction for additional weeks for people working at the coalface. The HSE has a scheme wherein more than the statutory amount is being made available, yet it is in a similar position to those companies in that its employees are not employed directly by the lead Department. What number of staff exited the companies under Pobal from the start of this programme in 2007 to date?

Mr. Denis Leamy

We will provide the Deputy with the details on that. As to his original question, the total cost of redundancies was €1.9 million. We have figures on the number of staff made redundant in the companies in 2009. The total number was 42. In 2010 to date, that number is 32.

Deputy Michael D’Arcy

Almost identical to Pobal's figures.

Mr. Denis Leamy

Pretty similar, but spread out across the country.

Deputy Michael D’Arcy

Were there different levels of redundancy packages?

Mr. Denis Leamy

Yes.

Deputy Michael D’Arcy

Were they sanctioned by both Departments?

Mr. Denis Leamy

Yes.

Chairman

I have a final question, after which I will invite Mr. Buckley to contribute. The Department needed to invest an extra €2 million to cover Údarás na Gaeltachta's shortfall in capital requirements. What were the circumstances?

Mr. Seosamh Ó hÁghmaill

My recollection is that it was fairly late in the year when Údarás na Gaeltachta approached the Department with a number of commitments to invest in job creation that the former would have been able to fulfil if additional money could have been found. I understand that the request was agreed. I am unsure, but my colleagues might know whether it was agreed as part of a Supplementary Estimate. It was certainly agreed by way of viring from savings on the Vote.

Chairman

Mr. Ó hÁghmaill might provide the committee with a more detailed response.

Mr. Seosamh Ó hÁghmaill

I will give the committee the details. We got details from Údarás na Gaeltachta as to what the projects were. I will pass those on.

Chairman

I call on Mr. Buckley.

Mr. John Buckley

Obviously, the report we have examined today considered the reconfiguration of a particular area, broadly speaking, the agencies that promote social and economic inclusion. We will keep the change management process described in the report under review.

Future sessions will examine the initial round of rationalisation in the State agencies and of some functions related to educational welfare. Having considered all three reports, it may then be possible for the committee to examine how the process of rationalisation can be most effective, taking account of the fact that a wide range of delivery mechanisms are either funded by the State or supported by it. Only when we consider all three reports together will we see the full complexity of what is involved. It may then be possible to learn lessons and make recommendations on the process of rationalisation that will inevitably come from any scaling back of budgets.

Chairman

Does the committee agree to note Vote 27 and the Pobal annual report and accounts and to dispose of chapter 24?

Deputy Michael D’Arcy

It looks like I am the committee.

Chairman

Agreed. I apologise to the delegations for members' absences, but votes and suspensions are ongoing. I thank witnesses for their attendance and testimonies.

The witnesses withdrew.

Chairman

Next week's agenda is Vote 34 - Department of Enterprise, Trade and Employment, chapter 29, National Training Fund - Skillnets, and chapter 30, Redundancy and Insolvency Payments. I thank everyone for their attendance.

The committee adjourned at 12.25 p.m until 10 a.m. on Thursday, 11 November 2010.