COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 15 Dec 2011

Chapter 41 - Partnership Arrangements in the Health Service

Ms Geraldine Tallon (Secretary General, Department of the Environment, Community and Local Government), Mr. Michael Scanlan (Secretary General, Department of Health) and Mr. Cathal Magee (Chief Executive Officer, Health Service Executive)called and examined.

Chairman

I remind members and those in attendance to switch off mobile telephones as they interfere with the transmission of the meeting. I advise witnesses that they are protected by absolute privilege in respect of the evidence they give to the committee. If they are directed by the committee to cease giving evidence on a particular matter and continue to do so, 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 asked to respect the parliamentary practice to the effect that, where possible, they do not criticise or make charges against a Member of either House, a person outside the Houses, or an official by name or in such a way as to make him or her identifiable.

Members are reminded of the provision within Standing Order 158 that the committee shall refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government, or the merits of the objectives of such policy or policies.

I welcome Mr. Cathal Magee, chief executive officer, Health Service Executive, and ask him to introduce his officials.

Mr. Cathal Magee

I am accompanied by Dr. Geraldine Smith, assistant national director, internal audit, and Mr. Sean McGrath, national director, human resources.

Chairman

I welcome Mr. Michael Scanlan, Secretary General, Department of Health, and ask him to introduce his official.

Mr. Michael Scanlan

I am accompanied by Mr. Chris Fitzgerald, principal officer, Department of Health.

Chairman

I welcome Ms Geraldine Tallon, Secretary General, Department of the Environment, Community and Local Government, and ask her to introduce her official.

Ms Geraldine Tallon

I am accompanied by Mr. Barry Quinlan, principal officer, local government division.

Chairman

I welcome Ms Oonagh Buckley, principal officer, Department of Public Expenditure and Reform.

Ms Oonagh Buckley

I am accompanied by Mr. Tom Heffernan who is also a principal officer in the Department.

Chairman

Before asking the Comptroller and Auditor General, Mr. Buckley, to introduce the 2009 and 2010 annual reports, while I am aware that SIPTU representatives have not been invited as witnesses, I wonder if the organisation is represented in the Visitors Gallery or otherwise. I would have expected SIPTU to be represented at today's meeting in light of the reports into this matter and its interest in the matter under discussion. I ask Mr. Buckley to introduce the 2009 and 2010 Annual Reports of the Comptroller and Auditor General and Appropriation Accounts. The full text of Chapters 37 and 41 can be found in the annual report of the Comptroller and Auditor General or on the website of the Comptroller and Auditor General at (www.audgen.gov.ie.)

Mr. John Buckley

Chapter 41 of my report updates previous reporting. In the 2009 report the operation of the SKILL programme was outlined and I understand a considerable amount of follow-up material sought by the previous committee has been tabled today.

Chapter 41 in the 2010 report gives some detail on the cost of partnership activity in the health service between 1999 and 2010, the general arrangements for administering the partnership funding and the results of evaluations. Over the 11 year period, just over €41 million was paid out through the health services national partnership forum, of which €16 million was spent on grants to partnership committees and projects. The balance comprised payments of €1.7 million to trade unions under an action plan for people management and the rest was the cost of administration of the forum.

Figure 165 in chapter 41 sets out a synthesis of the findings of evaluation of the partnership projects. The overall message appears to be that partnership impacted favourably on local industrial relations and change processes but that there was limited contribution in the areas of harnessing knowledge and experience of front line staff to improve service quality and innovation; ensuring that participative practices that worked well were disseminated; ensuring that formal compliance with performance management structures was accompanied by actual service improvements; and achieving integrated governance as opposed to the discrete silos that existed throughout most of the service.

The central accountability issue dealt with in both reports concerns the payment of certain funds into a SIPTU national health and local authority levy fund. Overall, approximately €2.8 million in unvouched or round sum payments were made to the levy fund. This sum is comprised of €955,000 paid by an office of health management which was abolished in 2005; €1,050,000 paid by the HSE through what was an internal executive agency, the health services executive employers agency; and €70,000 which was paid from the health services national partnership forum. The payments from the office of health management and latterly the HSE were mainly a continuation to a front line supervisors programme that goes back to 2002. On their allocation, the funds for this programme were directed to be paid to SIPTU. The purpose of the payments from the national partnership forum was to support training and development within unions under the action plan for people management.

The HSE sourced payments were intermixed with some payments from funds under the control of the Department of the Environment, Heritage and Local Government and Beaumont Hospital. Ultimately, €275,000 relating to the action plan moneys has been refunded by individual trade unions and €698,000 - the balance in the levy fund - was refunded to the Department of Finance.

The results of the various investigations and internal audits conducted to date suggest that detailed substantiation of the expenditure from the levy fund may not be possible. A feature of both situations is that the payments were ancillary to the main activity being carried out through the Health Service Executive agencies involved. While recommendations have been set out in my two reports in order to achieve full and transparent accounting for the use of public resources the following appear to be some general lessons. First, funds earmarked at central government level for specific purposes should be transparently designated in Estimates, that is, it should be clear whether they are to take the form of grants which are to be fully accounted for or grants-in-aid which are not subject to the same detailed accounting. Second, in general an agency should only be used as a vehicle for the administration of specific funds when those funds will be subjected to the same controls and checks that apply to the agency's mainstream programmes. Third, while collaborative steering and implementation monitoring committees provide valuable inputs into successful programme management, the financial administration of the associated public funding should not be controlled or influenced by the persons who represent recipients of that financial assistance. I thank the Chairman.

Chairman

I ask Mr. Magee for his opening statement

Mr. Cathal Magee

I thank the Chairman for the invitation to attend this meeting to discuss the matters arising from two chapters of the Comptroller and Auditor General's reports, chapter 37 of the 2009 report and chapter 41 of the 2010 report. Both reports have been the subject of discussion at meetings of the Committee of Public Accounts on 7 October and 16 December 2010. My statement lists the five reports which have been submitted to the committee by the Health Service Executive. As requested by the committee, we have submitted three further reports and these new reports are set out at the bottom of page 2.

Since the previous committee meetings SIPTU published in March 2011 its trustees' investigation into the SIPTU national health and local authority levy fund. Following on from the various internal audit reports, a total of €973,177 has been refunded to the Exchequer. This comprised the balance of moneys in the SIPTU national health and local authority levy fund bank account in March 2011 of €697,894 and amounts totalling €275,283 refunded to HSE by four other unions, in respect of APPM (partnership) funding.

As requested by the committee a joint analysis has been prepared on the totality of the funding for the SKILL and partnership programmes. This analysis is based on all information available to us from a number of different sources. It sets out, as far as it is possible for us to ascertain, the transactions relating to these funds. The analysis also highlights where we have been unable to validate fully items which were routed through the SIPTU national health and local authority levy fund.

The HSE requested further information from SIPTU on the SIPTU national health and local authority levy fund. However, it was not in a position to provide the HSE with the information requested. The information required by the HSE is detailed in the appendices accompanying our joint analysis report.

The HSE internal audit report dated 9 December 2011 identified a clear breakdown in HSNPF's financial controls arising from undocumented changes in its APPM funding procedures from late 2005 to 2008, which resulted in HSNPF paying APPM moneys in lump sums to SIPTU without adequate vouching.

The HSE internal audit reports into this matter identified that unvouched amounts totalling €750,000 were paid in four lump sums to the SIPTU national health and local authority levy fund, some of which were then subsequently paid by the SIPTU national health and local authority levy fund to other trades unions. SIPTU has stated that the bank account into which this funding was paid was not an authorised account of the union.

The internal audit concluded that the change in HSNPF's financial procedures resulted in a situation whereby the HSNPF was unable to account for its disbursement of lump sums totalling €750,000 in Exchequer funds to the SIPTU national health and local authority levy fund. This is completely unacceptable in terms of control and governance.

Many of the governance issues and control weaknesses that emerged in the audit reports arise from the nature of this partnership operating model – existing as it did as a satellite entity and a non-statutory body acting outside the mainstream management and organisational control system. Breaches of governance included: the executive role played by the joint chairs, payments authorisation processes, and a lack of adequate vouching for transactions. The HSE has now subsumed both the SKILL and HSNPF programmes within the HR directorate of the HSE, ensuring that appropriate governance and accountability oversight is now in place.

The HSE has also taken appropriate steps required to ensure comprehensive compliance with its regulations in regard to payment, travel and procurement and to address in full the recommendations of internal audit and the Comptroller and Auditor General to ensure these failures do not recur.

I commend the detailed investigative work conducted by the HSE's internal audit, at the request of the HSE National HR director, which uncovered these control breaches in both the SKILL programme and the HSNPF.

This concludes my statement and together with my colleagues we will take any questions you might have.

Chairman

May we publish the statement?

Mr. Cathal Magee

Yes.

Chairman

I invite Mr. Michael Scanlan to make his opening statement.

Mr. Michael Scanlan

Chapter 37 of the Comptroller and Auditor General's 2009 Annual Report dealt with the SKILL programme.

At meetings of the committee of the Thirtieth Dáil on 7 October and 16 December 2010, Mr. Magee and I briefed the committee, based on the information available to us at that time, on various aspects of this programme. In February 2011, a value for money review of the SKILL programme, which was undertaken for the HSE by Ernst & Young, was finalised.

In March, SIPTU published a report of its inquiry into the establishment and operation of the SIPTU national health and local authority levy fund bank account.

The final report of the committee of the Thirtieth Dáil, published in July, dealt with the SKILL programme and the Health Service National Partnership Forum. I understand that, in accordance with normal practice, the Minister for Public Expenditure and Reform will issue a response to the recommendations in that report.

As requested, the Department and the HSE have recently furnished the committee with a joint analysis of the various issues involved. This joint report covers the background to, and our involvement in, the funding of the SKILL and partnership programmes, the question of foreign travel by our respective officials, the Ernst & Young value for money report and the SIPTU report.

Drawing on information from various sources including the HSE internal audits on SKILL and partnership, data available in the Department of Health, records available from the Office for Health Management and the SIPTU report, we have tried to determine, as conclusively as possible, what public moneys were paid into the SIPTU national health and local authority levy fund bank account.

Chapter 41 of the Comptroller and Auditor General's 2010 Annual Report deals with partnership arrangements in the health service. Partnership was Government policy and the national agreements on social partnership referred to in the chapter applied across the public service, with appropriate partnership structures and funding being put in place in the different parts of the public service. As the Comptroller and Auditor General's report indicates, partnership was seen as an enabler of change and modernisation through the development of a shared vision for the service by management and staff.

The Health Services National Partnership Forum, HSNPF, was established as a joint management-trade union consultative group for workplace partnership in the health service. It was established in 1999 on foot of the provisions of Partnership 2000, the national agreement on social partnership in place at the time. I note from the Comptroller and Auditor General's report that the forum typically supported 500-600 local partnership projects a year, which involved management and unions, staff and service users across the health services.

The forum and its facilitators were instrumental in developing the health sector's action plan for people management, APPM. The 2001 Health Strategy had contained an explicit commitment to produce this plan, which when completed identified key areas to be addressed, including effective people management, improving the qualify of working life, developing and implementing best practice employment policies, investing in training and education, and further developing the partnership approach. I note the Comptroller and Auditor General's conclusions and recommendations about the manner in which certain APPM funding was paid by the forum into the SIPTU national health and local authority levy fund bank account.

The Department was represented on the APPM national implementation monitoring committee when the first application for funding was approved in 2004. It ceased to be represented on the committee when the HSE was established in 2005. The Department continued to be represented on the National Partnership Forum after the establishment of the HSE but its representatives were not aware of the change in procedures referred to by the Comptroller and Auditor General in his report.

I thank the Chairman and members of the committee for their attention. I will do my best to answer questions the committee may have.

Chairman

May we publish that report?

Mr. Michael Scanlan

Yes.

Chairman

I invite Ms Geraldine Tallon, Secretary General at the Department of the Environment, Community and Local Government, to make her opening statement.

Ms Geraldine Tallon

I thank the Chairman and members of the committee for the opportunity to make a brief opening statement on the matters being considered by the committee.

In the course of the committee's consideration of the SKILL programme, and partnership arrangements in the health service, there has been reference to the local government sector national partnership advisory group – LANPAG. The SKILL programme did not run in, or receive funds from, local government.

I briefed the committee of the Thirtieth Dáil on 28 October 2010 in regard to the partnership arrangements in the local government sector. As requested, I have recently provided an updated briefing paper outlining the background to the establishment of LANPAG, its funding, the funding provided to SIPTU for training of trade union representatives in areas related to the partnership process, and the current position in regard to the funds in question. LANPAG is based in, and supported by, the Local Government Management Services Agency. It has been funded annually through an allocation from the Local Government Fund and its accounts are audited by the Local Government Audit Service.

The SIPTU National Trustees sub-committee report of March 2011 acknowledged that supporting documentation had not been provided for €200,000 of the €789,000 provided by LANPAG to the SIPTU national health and local authority levy fund account.

The Department, last year, requested LANPAG to obtain reimbursement of the €200,000 from SIPTU, in the absence of documentation to show that the funding was utilised for training, and in the meantime to take steps to return the €200,000 to the Local Government Fund. LANPAG returned this sum to the Local Government Fund in March 2011. It was subsequently agreed that the remaining balance, of some €697,000 in the SIPTU Levy Fund, should be refunded to the Exchequer.

Over half the overall funding of €37.7 million allocated to LANPAG over the period 1999-2009 was paid in subvention to local authorities in respect of the salaries of partnership facilitators and the operation of partnership committees. Almost a quarter, €9 million, was utilised in annual funding to support local authority partnership projects, and some 10%, €4 million, supported the return to learning initiative, which focused primarily on education for outdoor workers and general operatives. The costs of three foreign study trips were also met by LANPAG directly over the period. LANPAG has not received any additional funding in 2010 or 2011 and its partnership, educational and training activities have been supported from existing unspent allocations. The agreed funding for such purposes in 2011 is some €388,000.

Chairman

May we publish Ms Tallon's statement?

Ms Geraldine Tallon

Yes.

Chairman

Before I call on Deputy Nolan to put his questions, I am surprised the witnesses have not mentioned the SIPTU inquiry report in their statements. I am sure they are aware it has been published. The report's conclusions on 21.7 and 21.8 must have made uncomfortable reading for the Accounting Officers, because it described the actions of the State authorities as incomprehensible and said there was a "failure to adhere to the most basic standards of governance, transparency and accountability in relation to the disbursement of public moneys". That is part of the conclusion of the report, yet nobody has made any comment on it in his or her statement. Would any of the witnesses like to make a comment now? SIPTU is not present now and has not been asked to come as witness, but I would have expected that due to its central role in this, a representative would have attended in the public gallery out of public interest. However, in its absence, we have the report and the comment and I am surprised the witnesses did not take the opportunity in their opening remarks to put on record their views on conclusions 21.7 and 21.8 of that report.

Mr. Cathal Magee

If I can comment, in earlier statements to the Committee of Public Accounts in October and December, particularly in my statement to the committee in December 2010, we acknowledged that with regard to governance and accountability, there has been a systemic failure to adhere to financial travel procurement regulations of the HSE relating to the operation of the SKILL programme and the HSE national partnership programme. There is no question, based on the evidence which emerged from four or five internal audit reports and from prior discussions with the Committee of Public Accounts, but that there has been a very significant failure on the part of the public bodies with responsibility for Exchequer funding to satisfy themselves about the application of that funding and the transactions that it underpinned.

Chairman

Does the HSE accept the commentary arising from these two conclusions?

Mr. Cathal Magee

We have no argument with it Chairman.

Mr. Michael Scanlan

I would echo what Mr. Magee said at the last meeting of the Committee of Public Accounts of the previous Government. I accepted the Comptroller and Auditor General's finding that the manner in which the Department had made funding available was not sufficiently clear to allow for it to be governed properly and that the decision in December 2004 to use some of the SKILL funding to keep that annual grant going also added to the confusion. I accept the points referred to by the Chairman.

Chairman

Does Ms Tallon wish to comment?

Ms Geraldine Tallon

Comment relating to LANPAG is limited enough in part 10 of the report. I explained to the committee on the last occasion we met, and in the briefing I have given, that we have provided invoices and documentation for €589,000 of the €789,000. Money was paid on the basis of invoices and supporting documentation in every instance and that documentation is available within LANPAG. With regard to the remaining €200,000, where we were not able to provide supporting documentation, that money has been returned from LANPAG into the local government fund. I think that overall the controls have operated in quite a tight manner.

Chairman

Does Ms Tallon accept the conclusion of the SIPTU report?

Ms Geraldine Tallon

I cannot comment any further than my colleagues have already commented. It would not be fair of me to comment with regard to the health sector. Looking back with hindsight, perhaps there is more we could have done in the local government sector, but we have been able to document all of the spending, other than €200,000 and have returned that to the local government fund.

Chairman

We will come back to that again.

Deputy Derek Nolan

Was SIPTU invited to this meeting or informed it was taking place?

Chairman

No. SIPTU is not accountable to us here, but I would have thought that following the reporting of this and its own report, it might have monitored the committee and its work.

Deputy Derek Nolan

Perhaps if we return to this issue in the future, we should inform SIPTU that is happening.

Chairman

At the end of this session, we might make a recommendation to that effect.

Deputy Derek Nolan

I thank the witnesses for their opening statements. I apologise in advance that because this is a new committee since they were last here, I may repeat some questions they have been asked previously.

To sum up what has taken place in simple terms, we have an account for which neither the Health Service Executive nor SIPTU takes ownership. It seems it is a private account, with two unaccountable signatories. Some €4 million of public money was lodged to that account, but proper account was not kept of it. Receipts were not retained, payments were not recorded and money was paid out of the account without a clear understanding of what it was supposed to be used for. It was quite all over the place. There was no service level agreement between the HSE and the administrators of the unofficial account or no agreement in place dictating or governing how the account would work, be used or accounted for. In some genuine cases the money was spent properly, but in many cases it was spent in an unorthodox fashion, including on 18 trips to the USA, €100,000 on restaurants, €308,000 on credit card bills and in other ways that have created outrage among the public. I understand that €973,000 of that money has since been repaid.

There are two issues. First, is the issue of waste. I see the money as having been spent in a wasteful manner. Second, based on the report of the auditor, Dr. Geraldine Smith, some €1.15 million is unaccounted for. She has gone through the spending with the benefit of the SIPTU report and of the report of the HSE's internal investigation and analysis and has stated that there is €1.15 million that she cannot verify. How can the situation arise where the organisation which has been assigned an unofficial account, for which it bears no responsibility, is suddenly in receipt of over €4 million of Exchequer funding? Surely proper governance should not permit that to happen. In my reading of the situation, I see a catastrophic breakdown in corporate governance. I also see that we can extrapolate from that the distinct possibility of fraud and theft of hundreds of thousands of euro of unaccounted for money. How was this account sanctioned to receive payments from the Health Service Executive, bearing in mind that SIPTU had never written a letter saying it was its account?

Mr. Cathal Magee

I will ask my colleague to deal with some of the issues raised.

Dr. Geraldine Smith

As the Deputy knows, the account is an unauthorised account of SIPTU's. In carrying out the audit, I did not see anything initially relating to the SKILL programme asking that the money be made payable to the SIPTU national health and local authority levy fund. The main problem was that there were no records available in HSE SKILL. I approached SIPTU management about this, and they acknowledged they did not pay out these amounts that we had refunded to them, nor did they receive any grants. We looked at the grants and we found there was no business case made for those grants. Those grants initially began through the Department of Health, and the first piece of paper we find on that is in a communication from the SIPTU representative to the Department, asking that with the imminent establishment of the HSE, could this be put on a firmer footing. At that stage, the Department sanctioned €250,000 thereafter to be sliced from the SKILL fund.

From my investigations, nobody knew that this was an unauthorised account of SIPTU. Any reference to the SIPTU national health and local authority levy fund meant that SIPTU was in the name. All the documentation coming from the SIPTU representative was on SIPTU headed paper. He was a known SIPTU agent. Nobody had any suspicions that this was an unauthorised account by SIPTU.

Deputy Derek Nolan

Is Dr. Smith saying that the money was being paid before there was a paper trail of the funding? The first paper trail of the money being paid into the account is when renegotiation of how that money is paid in comes up.

Dr. Geraldine Smith

Initially yes, but we have to bear in mind that the audit we were conducting was on SKILL, and it went from 2005 onwards, following the establishment of the HSE. When these things were uncovered, I looked back and found that the money had also been previously paid through what was known as the office for health management, so we were able to trace it back. Ultimately, we are now at a stage where we can see payments to the SIPTU national health and local authority levy fund going back as far as 1998. We have had to follow those trails right back.

Deputy Derek Nolan

So Dr. Smith can see the money going in, but cannot see the process establishing the-----

Dr. Geraldine Smith

No. As an auditor, I would have expected to see an application or a proposal from a party to an organisation applying for funding for whatever, with a business case outlined. I would have expected to see that go before a Department or an agency to be evaluated, with a decision being made to approve or reject the application and a certain amount of money approved. We did not see that.

Deputy Derek Nolan

As somebody who used to work in the private sector and in finance, it sounds rather bizarre to me that there would be no paper trail.

Dr. Geraldine Smith

It is not good governance or accountability in any man's language.

Deputy Derek Nolan

Is there anybody who works for the HSE and who is responsible for maintaining that documentation? Is there someone responsible for it not being there now?

Dr. Geraldine Smith

The key player in this was the HSE official, Alan Smith, who was general manager of SKILL. Before that, he was also general manager for the office for health management, through which these payments were made. The Department would have approved the payments to be paid by the office for health management to the SIPTU national health and local authority levy fund. There is very little documentation. The OHM was disbanded and subsumed when the HSE came into existence. We have searched for documentation and I think we have found as much as we possibly can. The files are not complete from an audit perspective. There is very little documentation to say that this proposal was set out, evaluated and so on.

Mr. Cathal Magee

The background on the SKILL programme is set out in Chapter 37 of the report of the Comptroller and Auditor General. Paragraph 3 deals with grant payments. The grant payments under SKILL to SIPTU go back to 2001. At that time, it stated in the report of the Comptroller and Auditor General in 2001 that the then Department of Health and Children entered into an arrangement to fund the provision of training front line supervisors in the health services, and asked the office of health management to develop that. As part of this, the report stated that the Department directed the OHM to make payments to SIPTU.

Back in 2001, therefore, a formal arrangement was entered into by the Department with SIPTU through the office of health management to fund those grants. Those grants were worth about €190,000 to the period up to 2004. The Department of Health and Children increased the funding to €250,000 from 2005, and it was confirmed to SIPTU that the ongoing funding of this amount would be made available out of the SKILL programme budget. There is commentary from the Comptroller and Auditor General about whether there was enough rigour about the purpose of this funding, how it was to be governed and so on. Clearly, through SKILL, a grant was authorised to go to SIPTU as far back as 2001. The understanding at that time was that it was to the trade union SIPTU. I do not know if anybody at any point saw the concept of something separate from SIPTU. It was trade union funding, even though SIPTU management have been at pains to point out to us that they were not aware that was not authorised. It appears there was no visibility on the part of the Department, the OHM or certainly the HSE, that this was anything other than a SIPTU account.

Deputy Derek Nolan

That highlights that the systems in place at the time in the HSE were inadequate, because money could be paid into an account without confirming it was a SIPTU account.

Who sanctioned the decision to move to the block €250,000 grant?

Mr. Michael Scanlan

The sanction to move to €250,000 and to make it an annual payment was issued by the Department in late 2004, and was to apply from 2005 onwards. It happened against a background where there had been one-off payments, and although they were sanctioned each year, they were not sanctioned on an ongoing basis. A request was made by SIPTU, with the establishment of the HSE, for that money to be put on a firmer basis.

Deputy Derek Nolan

Who made the decision? Who signed off on it?

Mr. Michael Scanlan

I have given details and copies of all the sanctions. An officer of the Department sanctioned that in late 2004. I can provide the name. We tend not to do so, but I have put the name on record before.

Deputy Derek Nolan

Is that person still working with the Department?

Mr. Michael Scanlan

Yes.

Deputy Derek Nolan

I compliment Dr. Smith on her work. I have been reading many of her audit reports, and the quality of them is very high. In her report on the decision to change the block grant, she states that the partnership's management speculated that in hindsight, the reason the procedures were changed at the request of the union representative was probably because the union chair representative feared that the funding, which had been allocated late in the year, might have been clawed back. The reason he wanted that was because if he did not spend the money, it went back. If that was what management speculated or thought at the time, but the change was still sanctioned-----

Dr. Geraldine Smith

We have actually moved on in time. The Deputy is referring to the change in procedure in the health services national partnership forum in respect of the payment of funding for an Action Plan for People Management.

Deputy Derek Nolan

Is this the second funding stream?

Dr. Geraldine Smith

Yes. Action Plan for People Management funding was initially approved through the Department. It was under the health services employment authority before 2004 and under the HSE from 2005. A body was set up in the HR department of the HSE known as the "Action Plan for People Management Implementation Monitoring Committee". The trade unions submitted an application to the committee and, equally, the partnership forum submitted an application to the committee. I have a diagram here that might be useful in helping people understand the different flows. Other bodies would make applications to this committee, and the monitoring committee, which comprised trade union officials, Department of Health and Children officials up to 2004 and HSE officials from 2005, would approve the applications. Essentially, the situation was that trade unions were submitting applications to the monitoring committee, and they, with others, were sitting on the committee approving those applications. That committee approved funding to the unions of over €1.1 million over several years. It was decided that the money, rather than going to the trade unions directly, would go to the partnership forum to be disbursed to the trade unions. In fairness to the partnership forum, it did set up quite good procedures initially which required that the trade unions would apply to it, suitably vouched and documented, for the approved funding, and they would get the money.

In 2005, a situation arose in which the money was received quite late. What I have been informed is that the trade unions were afraid the money would be clawed back, and it was decided to pay them the balance of the funds in 2005 in bulk form. They were paid €50,205. The next big change we see is in 2007, when the SIPTU representative wrote to the partnership forum saying that, as agreed, he or she would validate the claims of other trade unions, so the full funding was paid over in respect of 2006, 2007 and 2008 by the partnership forum to the SIPTU representative through the SIPTU levy account. That is where the change was. There is no documentation within the partnership forum on this. As I said, with hindsight, it acknowledged that this was certainly a breach of procedure and should not have happened.

Deputy Derek Nolan

So actually, what happened was that the Department of Health and Children transfer to the HSE became a block grant in 2005 and the partnership funding changed to a block grant also?

Dr. Geraldine Smith

No. We must distinguish between the partnership funding and APPM funding. We will concentrate on the APPM funding. The partnership forum got €1.55 million over the years, of which €1.1 million was trade union funding for which trade unions had submitted applications. That funding had nothing to do with the partnership forum per se, except that it was decided that it would be routed through the forum to be dispensed to the trade unions. The problem was that the procedure was changed and it paid over the full amount. Essentially, the forum got a letter from the SIPTU representative saying, more or less, please pay the money to the trade unions, and it gave cheques for €200,000, €250,000 and €250,000 three years running.

Deputy Derek Nolan

As I said, it is complicated. The funding was used for various things. Foreign trips have been mentioned a lot. Forty trips were paid for out of the levy fund and 16 out of the partnership fund. Of these, 18 were to the USA, with officials, spouses and trade union members travelling. A retired member of the HSE travelled on one of the trips.

Dr. Geraldine Smith

That was the general manager of the SKILL programme, who had previously been in the office of health management.

Deputy Derek Nolan

The SIPTU report shows that throughout the period of the fund's existence, there were reimbursements. These averaged about €5,000 per year until, in late 2009, they suddenly increased to €20,000, and in 2010 they increased to €82,000. Reading between the lines, one can see the reason, which is that this matter had become public and people were suddenly talking about it, and money started to come in to cover the possibility of being caught out.

Dr. Geraldine Smith

That is a fair assessment.

Deputy Derek Nolan

This would have been paid by certain staff of the HSE, surely.

Dr. Geraldine Smith

Yes.

Deputy Derek Nolan

Have those people identified themselves? Does Ms Smith know who they are? Has she discussed the matter with them?

Dr. Geraldine Smith

There are two parts to the Deputy's question; I will take the first part, which was about the moneys that came in in late 2009. This matter became public knowledge at the end of September 2009 when I contacted SIPTU. It was known then that it was an unauthorised account. The Deputy is right: the SIPTU report identifies that about 72% of the refunds into that account occurred in late 2009 and 2010. One of the questions for me, on receiving the SIPTU report on 25 March this year, was whether we had a list. Obviously it is in the public interest to know how many public servants reimbursed moneys, because that would indicate to us whether we had captured the names of all those who travelled. I asked SIPTU for that information, but the financial advisers who compiled the report were not authorised to provide it to me.

Deputy Derek Nolan

Who withheld that authorisation?

Dr. Geraldine Smith

The SIPTU trustees.

Deputy Derek Nolan

The SIPTU trustees have refused to tell Dr. Smith who the people were.

Mr. Seán McGrath

With regard to the HSE, we know there were a number of staff who went on these trips. We also know that in some cases travel and subsistence allowances were claimed and paid. What we do not know, with regard to the payments back into the SIPTU account, is how best we can match them. We had our own internal investigation, which was done by Mr. Turlough O'Sullivan, and he found that in all cases the trips were worthwhile, appropriate annual leave had been taken and so on. When we questioned each of the individual staff members, we found they had either funded the trips themselves or had reimbursed the funding through the HSE internal investigation. What we cannot find out is the information on the additional payments into the SIPTU account.

Deputy Derek Nolan

There is a question of bona fides if the money only started to come in when the fund became public knowledge.

Mr. Seán McGrath

We sought the names from SIPTU and unfortunately we have not got them.

Deputy Derek Nolan

It is also an internal human resources matter if some of the staff, who were travelling as members of the HSE, took spouses with them under the assumption that they would pay the money back, but did not do so until it suddenly became likely they would be caught out.

Mr. Seán McGrath

The investigation of these individuals was quite thorough, and Mr. O'Sullivan's report has confirmed that everything was above board. Notwithstanding that, we found out as a result of the SIPTU report that additional moneys had come in towards the latter end of the year, as the Deputy has stated.

Deputy Derek Nolan

Has Mr. O'Sullivan's report closed that off, or is the case still open as a HR matter?

Dr. Geraldine Smith

With regard to the Turlough O'Sullivan report, the human resources unit circularised all staff asking them whether they had gone on the trips. We certainly have that part boxed off. However, the amounts going into the SIPTU account are quite substantial. I was actually quite surprised at the extent of it. This was one of the questions I raised with SIPTU. When we got the report, which was published on Friday, 25 March, we went through it in detail, but it did not answer all the questions I had hoped it would answer, such as the number of trips, the costs and who went on them. I wrote to SIPTU on 19 April this year - that letter has been provided to the committee - setting out the areas in which we were still seeking clarification. The expectation last year, when we attended the two sessions of the committee, was that the SIPTU report would provide us with the missing answers, but it did not. It provided some figures, which were fine. However, the inconsistency in the report, from my perspective, was that it listed categories of items and gave figures for some categories but not for others. Members will see this on the income and expenditure analysis they have before them. For example, we do not know the amount spent on bank drafts or educational support grants, and we do not know the number of trips that were taken. We have raised all these issues with SIPTU. I met the financial advisers who assisted on this, and they said they could tell me what they were authorised to tell me, and equally, if they were not authorised they would tell me so. As it turned out, they were not authorised to give answers to most of the questions we had raised.

Deputy Derek Nolan

I have read Dr. Smith's correspondence-----

Chairman

Apologies, Deputy - Mr. Scanlan wished to come in on this point.

Deputy Derek Nolan

If I may, Chairman, I would like to comment on the issues raised by Dr. Smith. I have read the correspondence in which she engaged, which amounts to an extremely professional critique of the information missing from the SIPTU report. How would Dr. Smith rate that report? From a financial point of view, does she consider it audit-worthy? In her correspondence with Mr. O'Flynn and Mr. McGrath, there is constant talk of working together to sort this matter out and a commitment to meet Dr. Smith at a minute's notice. Yet she is now saying that SIPTU did not authorise its financial advisers to engage with her.

Dr. Geraldine Smith

With regard to the first question, as an auditor, I was expecting the SIPTU report to include detailed lists and an income and expenditure account, something like the account I have compiled. We were aware that the organisation had engaged financial advisers. Such advisers can only talk to me in the capacity under which they have been given authorisation, so I have nothing to say about them. It was the trustees who compiled the report. One of the questions I asked SIPTU was whether this was the financial advisers' report or if there was a separate report compiled by them. The financial advisers told me that this report was it, that there was nothing else and would be nothing else. This was the extent of it and whatever was in there, that was it and everything had been answered. Of course, from our perspective, everything had not been answered.

Deputy Derek Nolan

Dr. Smith mentioned that one union returned more money than SIPTU said it had received. She raised a plethora of difficulties in this regard. I am quite shocked by the SIPTU reaction. I am not at all impressed that it is refusing to be open and to give Dr. Smith its full authorisation to deal with these matters. Is there constant correspondence or has Dr. Smith hit a roadblock?

Dr. Geraldine Smith

Correspondence has stopped as of now, but there is further correspondence from that engagement. In compiling the analysis, which members have seen, it was important for me to seek to identify all of the sources of income coming from public funds, as requested by the previous committee. In this regard, the Department provided me with a list of funds it said it had authorised into the account. When I compared that with what was in the SIPTU report and what I already knew, there were several transactions on the Department's list which I could not find anywhere else. When we subsequently sought clarification from the Department, it came back with a definitive list.

Again, however, there were amounts which did not tally. Specifically, there were two key sums, namely, one in July 2001 of IR £150,000, which equates to €190,000, and another of €190,000 in July 2002. There were several other amounts as well, but these were the key sums for which we could not find a match. Consequently, we wrote to SIPTU seeking clarification. That letter has been provided to the committee - if not, we will provide it. We indicated that the Department had clarified the sums in question but that we could not see them anywhere in SIPTU's accounts. We asked SIPTU, first, to check its head office accounts in case the sums were paid into those accounts in error and, second, to request its financial advisers to look in the SIPTU levy account. SIPTU came back to us to confirm that those amounts were in neither their head office account nor the levy account.

Correspondence in this regard is still ongoing as part of our efforts to get to the bottom of this issue. Essentially, we have two amounts which we cannot identify and which we are continuing to pursue.

Deputy Derek Nolan

Is SIPTU blocking the HSE's investigation?

Mr. Seán McGrath

I will take that question, Deputy. I have been in constant contact with SIPTU. As far as the union is concerned, its investigation simply has not yielded the answers to the questions we are posing in regard to corporate functions and so on. There is a lack of paperwork. Notwithstanding that, in respect of some of the questions we have already posed to SIPTU, as outlined in our letters - in regard to the reimbursements, for example, as the Deputy raised - I believe we should be getting the answers to those questions. However, we have not.

Deputy Derek Nolan

In other words, SIPTU is blocking the investigation.

Mr. Seán McGrath

In some of the areas we are examining, we are still looking for answers. SIPTU is saying, in respect of the total investigation it has undertaken, it does not have some of the answers we are seeking.

Deputy Derek Nolan

I understand that it may not have some of the information. However, it seems to be the case that some of this information is in fact available. In the case of the lodgments, for instance, it would be very easy to see who paid the money in or who wrote the cheque.

Mr. Seán McGrath

That is right.

Deputy Derek Nolan

If SIPTU is blocking that type of information from being sent to the HSE, it is scandalous.

In regard to how the money was spent, the fund seems to have been used for quite extravagant purposes over the years, including trips abroad, huge restaurant bills, accommodation costs and so on. In the case of the Beaumont Hospital scheme, the people involved said it was an absolutely scandalous use of resources. This all happened over several years - not just in 2009 when the investigation began - and involved officials of SIPTU, the Department of Health and the Department of Finance. The fund was very loosely regulated and its operation very vague, with no service level agreement in place.

Given the relationship between the fund and so many actors within the system, that is, the HSE, SIPTU and the Department of Finance, it is difficult to comprehend how there could be no knowledge of the impropriety that was going on and no corporate acknowledgment that money was being spent in a very loose way. There seems to have been a culture of almost turning a blind eye to it. As such, we must be concerned not only with putting in place a system to ensure it does not recur, but there is also a question of addressing a culture within the organisations themselves. That is probably the greatest failure in all of this. It is difficult to understand how people did not recognise that this was an unacceptable, lavish and over-the-top use of taxpayers' money. Having said that, the refunds in 2009 and 2010 suggest that people knew it was wrong and were afraid of being caught.

As I said, there is more to this than simply putting in place structures for the future. It is very important that we should write to SIPTU after this meeting explaining that we have discussed its report with the officials and that we hope for and expect greater co-operation from the organisation in seeking answers to the questions that have arisen. I thank the delegates for their assistance in this matter.

Chairman

Mr. Scanlan indicated that he wished to comment.

Mr. Michael Scanlan

On the specific point of the refunds, one can see a trend in the SIPTU report. In fairness to officials in the Department, there were two whose spouses accompanied them. To the best of my knowledge, one of those did not even have the cost paid for and refunded. The other certainly assured me, because I asked that question, that it was refunded before the trip. I take the Deputy's point about the perfect storm on governance, but in fairness to the person concerned, I wished to clarify that. I understand he wrote to the previous committee to convey that information.

Mr. Cathal Magee

The partnership forum was created as a non-statutory consultative agency. It self-configured its governing structure with a forum of 24 people, four trustees, joint chairs representing union and management and an executive. The forum was seen as independent and outside the governance of either the HSE or the union. In other words, it was separate from both. In fact, the directors' statements, which are quite extensive, indicate that they saw the forum as independent. The same type of concept, although not quite as structured, applied in the case of the SKILL programme. It was something of a satellite, outside the mainstream governance and control processes. There were people with separate offices, separate bank accounts and separate governance structures. In the case of the partnership forum, it was separately audited. Therefore, in a sense, people did not have visibility in terms of who was deciding what. For example, when one reads the audit reports, one can see that some of the people who went on the trips thought they were being funded not by SIPTU but rather by the Department or the HSE. People who were going on trips did not know who was picking up the tab. At least that is what is stated. It is clear that, within both the SKILL programme and the partnership forum, the governance structures that were in place sowed the seeds of the problems that eventually arose. There were very large amounts of money involved.

What happened was unfortunate because some very good work was done within the SKILL programme. Some of the training that has been done in respect of non-nursing people is exemplary. The partnership forum did very good work in the context of changing the industrial relations culture for many of the non-nursing and support grades. Huge progress was made in that regard. The elements of funding within the SKILL programme and the partnership forum that were directed into this unofficial SIPTU national health and local authority levy fund has created damaging repercussions in respect of what were fundamentally sound initiatives in the areas of training and partnership. That is the tragedy of what occurred.

The seeds were sown in the manner in which these constructs were put in place. That is the major lesson to be learned going forward. When this matter came to light in 2010 we closed the offices and the relevant bank accounts, disbanded the management structures, put new governance rules in place and integrated all of the functions into the mainstream organisation. The points the Deputy makes are valid.

Deputy Derek Nolan

At the request of the HSE's audit committee and the CEO, a complaint was made to the Garda Síochána. What is the status of that complaint?

Dr. Geraldine Smith

I will answer that question. We made a complaint to the Garda, with which we are fully co-operating by providing documentation and information. The investigation is ongoing and I would prefer not to go into too much-----

Deputy Derek Nolan

So the investigation is taking place.

Dr. Geraldine Smith

Yes, the matter is with the Garda.

Deputy Derek Nolan

I thank Dr. Smith.

Chairman

I will try to draw some of the information relating to this matter together. In the context of the establishment of the SKILL programme in 2004, the structure of what eventually emerged was, in general terms, developed by Mr. Alan Smith and Mr. Merrigan. What level of co-operation has been forthcoming from Mr. Merrigan?

Dr. Geraldine Smith

We have had a few telephone conversations with Mr. Merrigan. I met him on two occasions, namely, 11 November 2009 and 3 March 2010. In the period between those two meetings, Mr. Merrigan provided me with two lever arch boxes of documentation. I was able to identify some elements of expenditure from those documents. That is more or less all the communication we have had with Mr. Merrigan.

Chairman

How would Ms Smith describe his co-operation in the context of the investigation? Was he forthright?

Dr. Geraldine Smith

It is difficult to say. We sought information and he provided some documents. The documents were not as comprehensive as we would have liked and there was no sequence to them. We sought access to the bank account and he stated that he could not provide it because it contained other funds and, therefore, it would be not proper to give us access. He had engaged an accountant who had examined some of this and who gave us very high level figures. However, these were not figures over which they could stand. I was seeking a report from an accountant stating, "I have examined the figures and I certify them as correct". There was nothing like that. Essentially, I was presented with figures on a page. This was completely inappropriate from my perspective.

Chairman

In the context of Dr. Smith's answers to Deputy Nolan, she referred to the SIPTU account.

Dr. Geraldine Smith

Yes.

Chairman

She referred to it in that way. Is it fair to state, however, that SIPTU would say that it is not its account?

Dr. Geraldine Smith

Absolutely. SIPTU has stated that consistently since I met its representatives. The latter say it is an unauthorised account of the union.

Chairman

From 1998 onwards, all of the correspondence was with SIPTU.

Dr. Geraldine Smith

Is the Chairman referring to the HSE's correspondence?

Chairman

The headed paper used and the presentation used in terms of the Department seeking money, etc., all indicate that the account was SIPTU's.

Dr. Geraldine Smith

Absolutely. The HSE and the OHM-----

Chairman

They were dealing with SIPTU.

Dr. Geraldine Smith

Absolutely. There is no doubt about that.

Chairman

In the context of the earlier moneys-----

Dr. Geraldine Smith

Relating to the OHM.

Chairman

----- and regardless of the amounts involved, what is the level of transparency with regard to the purpose for what those moneys were spent? Are their receipts available? Was someone in the HSE - Mr. Alan Smith or someone else - satisfied with regard to how the money was being accounted for? Was there ever a property accountancy or other trail in respect of the moneys involved?

Dr. Geraldine Smith

The audit did not identify a trail.

Chairman

There was no trail.

Dr. Geraldine Smith

There was no trail.

Chairman

In 2004, moneys from the Vote of the then Department of Health and Children went to the Midland Health Board. They then were transferred to the Office of Health Management and on to SIPTU. There was then an involvement on the part of the former Health Service Employers Agency, HSEA, and so on. In other words, the money was delivered via a scenic route. At no stage was it ever stated that this was a separate account or that it related to some other body within SIPTU. So it is now a non-SIPTU account. As far as Dr. Smith is concerned, however, the HSE was dealing with SIPTU.

Dr. Geraldine Smith

On any documentation I have seen, the reference is always to SIPTU. Any correspondence from the SIPTU representative was always on SIPTU headed paper. Such correspondence requested that the money be paid into the SIPTU levy account. E-mails at SIPTU indicate that the person involved was a known official. As far as the management of the HSE was concerned, they were dealing with SIPTU and not with an individual. In the course of the audit and in speaking to various people about this, they stated that they did not believe they were dealing with an individual but rather that they were dealing with SIPTU.

Chairman

In the context of the SIPTU account, Mr. Merrigan was dealing with Mr. Alan Smith. The latter represented the then Department of Health and Children. What sort of co-operation has been forthcoming from Mr. Alan Smith? It was, after all, the latter who put this informal structure - which eventually got out of hand - in place. Surely Mr. Alan Smith is a key figure and he could have provided a great deal of information with regard to the transactions relating to the money involved.

Dr. Geraldine Smith

When we began the audit, Mr. Alan Smith had retired. He was not, therefore, a HSE employee when the audit was being carried out. He retired in 2008 or 2009. I contacted him and he attended an interview with me. He was able to provide some information but not a great deal. One of the questions I asked related to the bank account. He informed me that he was not aware that this was an unauthorised account of SIPTU. He said he thought it was a SIPTU head office account. We only had one opportunity to interview Mr. Alan Smith. He declined, on grounds of illness, to meet us thereafter.

Chairman

Was he due to retire at the time he did retire?

Mr. Seán McGrath

He sought to retire through a scheme that was available to-----

Chairman

So he took early retirement.

Mr. Seán McGrath

Yes. He went on early retirement in, I think, March 2009. We formally requested, both by registered letter and through other means, to meet him but he has claimed ill health. As part of Mr. O'Sullivan's investigation, a request for a meeting was sent to him. Unfortunately, he did not attend and he has not helped us since.

Chairman

The report from SIPTU indicates where the money was spent. It states that €13,530 was paid to the general manager of SKILL, Mr. Alan Smith, to cover certain costs. I understand some of that money was made available to a relation of his for an educational course.

Dr. Geraldine Smith

I think that was a different person.

Chairman

Did that happen?

Dr. Geraldine Smith

Yes.

Chairman

Were explanations provided in respect of the amounts of money involved?

Dr. Geraldine Smith

No. We have to pursue the matter of the €13,000, to which the Chairman referred, in the SIPTU report with Mr. Smith and, as I said, we have some other matters to pursue with him as well.

Chairman

What are the chances of that happening given the fact that he has not co-operated up to now?

Mr. Cathal Magee

To step back to December 2010, Mr. Smith was the one individual who declined the request to attend the interviews with Mr. O'Sullivan who was conducting the investigation into the expenses. As Mr. McGrath said, we sent two registered letters to him and made numerous telephone calls and his lack of co-operation with the investigation in our view is not acceptable for a former public servant who was centrally involved in the management of the SKILL programme. We are advised that Mr. Smith is not a compellable witness in any non-statutory HSE investigation but we continue to press him to secure his assistance with this investigation. There is the issue of the €13,000 and the issue of reconciling the sources of funds and the application of those funds around the amounts Geraldine Smith mentioned. He was the key administrator of those funds.

Chairman

Would Mr. Magee have requested any of these funds to be returned by the individuals of whom he was aware, including Mr. Smith?

Dr. Geraldine Smith

We got back the balance of the €697,000 that was in that SIPTU account, as the Chairman would have seen. On the issue of the €13,000, we will have to talk to Mr. Smith about that and we have other queries, which only recently came to light, for him as well, so we will certainly pursue this. That part of the matter is not over as far as the HSE is concerned.

Chairman

To return to the last comment made by Deputy Nolan on where we can go from here, based on the information or lack of it from SIPTU and under section 10 of the compellability Act, we can give SIPTU an opportunity to furnish us with evidence, and we will do that. We will give it the opportunity to co-operate in terms of tracing how public moneys were spent under that section of the Act. We could do that immediately after this meeting to put in train a request for that evidence.

Deputy Paul J. Connaughton

From reading all this and hearing the witnesses' answers, Father Ted would be proud of this, with money resting in his account. When application was made for the block grant, there is a lack of a paper trail, but in any paper trail the HSE has of the application, on what were they seeking to spend the money?

Dr. Geraldine Smith

The documentation is just a letter and it was a request for funding for front line supervisors' training.

Deputy Paul J. Connaughton

Were questions asked on what that would entail and what it would cost?

Dr. Geraldine Smith

From the HSE's perspective, this would have been approved in the Department going back as far as 2001 or thereabouts. When I spoke to Department officials when we were carrying out the SKILL audit, in seeking this documentation and seeing what documentation the Department had in terms of any application, assessment and all of that, it could not locate it. I might ask Mr. Scanlan to respond further on that question.

Mr. Michael Scanlan

I may or may not be able to help on this one. As Deputy Nolan said, there are two funding streams, one is what I call the annual grant and the other is the APPM funding. On the APPM funding, I am aware from Department records that there was a formal submission to the monitoring committee. It was looked at and a certain amount was sanctioned, although not the amount sought. When I checked the annual grants, it proved difficult to find a start point. The Comptroller and Auditor General's report gave us a start date and we have had to work back. While I have letters of sanction, I do not have, as Dr. Smith said, a formal proposal or submission indicating what it was for and then a decision. It tended to be letters of sanction that were usually sent out, as the Chairman said, to a health board for the money. That was the way funding was dealt with at the time and for it to go on into the office for health management. The only other point I can add is that in a previous report before the December 2010 committee I sent in a report to the committee which included statements from all the officers who had signed the sanctions. That gives their best recollection of the background to what was going on. I could go on but I do not want to take up too much of the committee's time.

Deputy Paul J. Connaughton

Even with this application, there were no specifics as to what-----

Mr. Michael Scanlan

No. As I said at the start when the Chairman asked me, and the Comptroller and Auditor General found this in last year's report, the terms of the sanction that issued from the Department were not specific enough to allow somebody to say this is what we have to do to make sure-----

Deputy Paul J. Connaughton

No one asked at the time where the money was going or how it was going to be spent. I find it difficult to believe that a letter came in seeking X amount of money and that approval for it was simply ticked off and the money sent out.

Mr. Michael Scanlan

In terms of where the money was going, there is clarity at least from the Department's point of view that it went out into the health system in the way the Chairman described it, which was the way funding was dealt with at that time. To repeat what others have said, it was always the understanding of the Department that it was going to SIPTU. I would just make that point.

In terms of the purpose of it, it was not that a letter came in because I cannot see one other than, I think, in 2003 and certainly in 2004, where there was already a history of this having been sanctioned. The letter that came in at that point was to say can we continue it. That said, and this is where I would go back to what I sent into the committee before, two things are important to note. I asked somebody in the Department, because I was not around at the time, the way health funding was managed back then. They took 2002 as an example and something of the order of €300 million went out in a series of individual sanctions throughout the course of that year. That was just the way it worked. A second point I would make is that if the Deputy looks at the report made in December, he will see there is an explanation given. To be fair, the officials I talked to co-operated, but it is not a paper trail on a file in the way the Deputy might expect.

Deputy Paul J. Connaughton

What is the level of money still outstanding?

Dr. Geraldine Smith

I will take that question. So far SIPTU has refunded to the Exchequer the balance of €697,894 that was in the unauthorised SIPTU levy account. In addition, again as a result of the audit, when I circularised the unions asking them to confirm that they had received funding which it was indicated had been paid through the SIPTU account, funds totalling €275,283 were refunded to the HSE. Altogether, €973,177 has been refunded to the HSE-Exchequer in respect of this.

Deputy Paul J. Connaughton

Is there any more due back?

Dr. Geraldine Smith

No. I do not think so. The balance on the account was handed over to us. That is it. That is what we know.

Deputy Paul J. Connaughton

How much of that is unaccounted in the sense of the HSE not knowing what it was spent on?

Dr. Geraldine Smith

The Deputy would have seen the analysis, the I&E account that we pulled together. To clarify as to what this document is, there are two parts to the front page of it, one is the receipts and payments we have compiled from all known sources and the other is the comparison as to what the SIPTU report says. It is important to remember that the SIPTU trustees' report could only access bank records from January 2001. I am not making any comment that there is money missing or anything like that. In terms of the receipts and payments I have compiled, I have been able to track them back as far as 1998. We tracked grants going from the office for health management back as far as 1998 to the tune of €1.335 million. We have also tracked grants from the SKILL programme of €1.05 million. We have tracked the cost reimbursements of €348,000 going in. We know the partnership forum, through APPM grants, paid them €920,000. We know they also paid €26,000 unrelated to the APPM into the SIPTU account. We know from evidence from the Secretary General of the Department of the Environment, Community and Local Government that LANPAG paid them €789,000. Our own audit found some elements of spouses' flights. The SIPTU report gives us more detail and so we have been able to identify that that was money that went into the account, again totalling €139,896. The SIPTU report also identified for us the €100,000 going in from Beaumont and some miscellaneous receipts and rebates. We do not know what that is. That all goes back to 1998 and it identifies €5.057 million going into the account.

What we do not know is whether there were any reimbursed costs between December 1998 and January 2001, that is, in the account before SIPTU trustees got hold of the statements. We do not know if there are any other funding sources that we have not managed to identify or that have not been identified to us, and we do not know if any other refunds went in. There could be other amounts in the account on which we would like clarity but the bottom line, and it is an important bottom line, is that the balance in the account has come back to the Exchequer.

Deputy Paul J. Connaughton

What is being done from this day on to sort out this mess because anyone watching these proceedings will probably have more questions than answers? What we do not want to happen, especially for a public accounts committee, is that we go quiet on this issue. We still do not know where a great deal of money was spent. We know it was spent inappropriately in certain cases. No one that I know of has been taken to task on that as of yet. What are the relevant Departments doing to make sure that this is sorted out as soon as possible?

Mr. Cathal Magee

First, this investigation is incomplete. Based on the correspondence we have circulated to the committee I think we need further information and insight from the SIPTU account and the SIPTU investigation because that is the trail to reconcile the data we can see on our side with the application of that funding. We need access to further information to complete the investigation, both at an individual level and also in regard to reconciliation and validation of what Dr. Smith has put together as a potential set of accounts.

Second, what has emerged based on the exhaustive work we are trying to do in terms of sources of funds is that we have identified sources of funds of the order of €5 million where we can only see the application of funds of approximately €4.5 million. There may be sensible explanations for that gap but we have yet to forensically validate how that gap is explained, and that is a critical part. As Dr. Smith said, there are two significant payments in 2001-02 that the Department of Health has confirmed that we have not yet sourced to where those funds apply.

This work is not yet complete and further access to documentation within the SIPTU unofficial account would help. We must continue to do work around reconciliation of the sources of funds and have further discussions with Mr. Smith on a number of issues, particularly regarding the application of funds, to try to get his help to secure what can be explained. This is still an open investigation.

Deputy Paul J. Connaughton

Mr. Magee knows how he will go about that in terms of the people he has to talk to-----

Mr. Cathal Magee

Yes.

Deputy Paul J. Connaughton

-----but does he believe he is being blocked by them in any way? Will this investigation come to a dead end, be brushed under the carpet and regarded as something that happened in the past because that is not acceptable?

Mr. Cathal Magee

In this sort of situation a forensic approach to the investigation must be taken until one can satisfy oneself that one can account for funds. That is the approach we are taking. We have put a great deal of time and resources into exhaustive investigations going back to 1988 to organisations that no longer exist and individuals who have left. Our view is that this is not complete. We said in previous meetings of the Committee of Public Accounts that we would not conclude a position until we had the SIPTU report. The SIPTU report has not answered all the questions we would want answered. We are not sure whether we will get answers to those questions but we have to complete that. This is not complete until we can satisfy ourselves and the committee that we have at least accounted as far as is possible for the gaps in the source and the application of funds, and the gaps regarding our perception of how these funds were used and what happened within the SIPTU unofficial account. That has to be closed to complete the investigation.

Chairman

To answer Deputy Connaughton's question further, and it is linked to Deputy Nolan's question which I referred to earlier, to assist the process we will send SIPTU a transcript of this meeting with the statements and with a statement of its rights. Under section 10 of the compellability Act we give them the opportunity to furnish the committee with evidence or to appear here. It depends on whether they want to voluntarily come forward with the information and assist. I expect that SIPTU would co-operate in that regard when given the opportunity. We can then fill in some of the blanks before us this morning.

There are indications in the SIPTU report as to how this money was spent in terms of the trips taken and who went on them, the fact that many of them coincided with St. Patrick's Day and that an official from the Departments of Finance or Health was on the trip and not in work. I presume all of those threads within the different Departments are being followed up and that not only will we have information on what is required from SIPTU but we will have clear information on the individuals involved, what the money was spent on, where they went, and if expenses were claimed from the Health Service Executive, for example, in respect of any of those trips to ensure that, as a public accounts committee, we can see clearly the activity of the officials involved. It is probably unusual that these same officials might have been sitting on the opposite side in terms of trade union negotiations or discussions yet they were being looked after by this particular fund - Mr. Magee says SIPTU - and were being brought on trips abroad. Looking at the way that money was spent we see that the officials there had two credit cards. A total of €302,000 was clocked up on those cards, of which €108,000 was spent on restaurants. There is the €13,500 I referred to earlier which I understand Mr. Magee intends to pursue with Mr. Smith. Some of the funds were given to members. There is a maximum grant of €6,000 for educational support. I mentioned wrongly Mr. Smith's name earlier. In fact, it was another person who got a grant of €6,000. That individual was a member of SIPTU and a HSE employee and was related.

It appears everyone was looked after in the context of this fund for one reason or another. A value for money audit must be conducted around the spend that we know of because Mr. Magee said the courses were of value to people but what was the value of the 18 trips to America and so on about which we have spoken? What value did people get from those trips or were they just jollies for people they were doing business with in terms of the partnership process? I would like to know the answer to those questions.

Another figure in this is €35,000 for charitable donations. Has that figure been validated in some way in terms of where the money went and to which organisations? Those are the questions that must be answered as Mr. Magee investigates further all of this sorry saga, and the information needs to come back to the committee. Would the witnesses like to comment on that?

Dr. Geraldine Smith

I will comment on one aspect of that. Much of this information is with the SIPTU representative, and the SIPTU trustees report would have collated that.

When speaking to the SIPTU representative, he provided me with two bankers' boxes full of documentation. On collating figures, I arrived at a total sum of €485,607. Within that, I can identify approximately 85 transactions. There are amounts pertaining to charitable donations etc. We have a list of those but we do not have further information on how the moneys were spent by the bodies in receipt of them. We do not have that information and SIPTU does not have it. It is with the SIPTU representative. The documentation is quite sparse.

Mr. Michael Scanlan

If I understand correctly, the Chairman is looking at the SIPTU account but saying there is an onus on us to examine our own records to be able to answer the questions.

Chairman

That is because it was officials from Mr. Scanlan's Department, the Department of Finance and others who went on the trips. We need to understand what was going on with Mr. Scanlan's officials.

Mr. Michael Scanlan

Absolutely. I was about to say that I agree.

We have done a lot of work and have provided the committee with a lot of information about that. I am more than happy to ascertain whether there are gaps remaining. Regarding the two payments to which Dr. Smith referred, for instance, I have provided the committee members with copies of the letters of sanction as examples. It has not proved possible to join that up at other end when one considers the SIPTU report. On the study visits, I have provided the committee with details based on the claims we received. After some visits, people did not submit claims. I will be happy to provide more details. We will determine again whether there are gaps that our records can help close.

Chairman

While we must acknowledge the SIPTU issue, we must recognise the fact that, officials in the Departments, presumably reasonably senior ones, went on these trips abroad. If they had been from a Department that had been familiar with good governance and the need to be accountable, and if they had been familiar with the fact that their boss or Accounting Officer would have to sit before the Committee of Public Accounts at some stage to explain trips that they enjoyed that resulted in restaurant bills of €108,000, the bell would have been ringing to suggest there was something wrong. They would have been saying there was something odd about each trip and how it was arranged. They would have said there was something odd about how flaithiúlach the trip organisers were, and about how so much seems to have been covered in the context of the trips. They would have been able to ascertain how much they learned on any trip. If the function of the expenditure had been to learn something, improve partnership or better understand the role within the new or emerging Department, those concerned, as conscientious officials, would have said there was something wrong and that they had better report it. There was no whistleblower at the earlier stage, and no official who felt odd about being glad handed as described. That is essentially what was taking place and it is odd.

Mr. Michael Scanlan

I have provided some of this information before. With regard to the purpose, I have a mixture of contemporaneous notes on the visits, some non-contemporaneous notes based on memory and itineraries. As the Chairman said, the purpose was appropriate to the issues being dealt with at the time. The joint management union composition was definitely seen as appropriate; that was the whole purpose of it. The Chairman referred to the restaurant bill. I am not sure the SIPTU report adds much clarity but my information on the trips-----

Chairman

It says they were having a good time.

Mr. Michael Scanlan

My information from my officials is that provision was made only for the air fare at economy class and boarding on a room-only basis. In the case of five trips, the delegates claimed subsistence from the Department. I am not sure whether the restaurant bills about which the Chairman speaks related to foreign trips.

The other key question the Chairman asked was a fair one. He asked whether nobody asked who was paying, how it was being paid for and whether the money was sent around in another way. I was asked this on the last occasion and believe the answer is that it was not until the internal audit started and we started to unpick the various facets that people saw the full picture. For good or ill, there just was not an official who said he knew what was going on and who had sanctioned money on the basis of being brought on a trip. Everybody was working to an agenda, which involved a combination of partnership, general up-skilling, change and determining how matters were being dealt with in other countries.

Chairman

It was certainly a change for many officials to have a well-funded trip to the United States on St. Patrick's Day.

Did Mr. Scanlan or Mr. Magee receive a single report from any of the officials who travelled indicating how important the trips were and how much was learned thereon? In any trip, did any official involved give a report on the value for money financially and educationally?

Mr. Michael Scanlan

It was the point on education that was throwing me. I have reports from officials on the purpose of the visits, the itineraries and who they met. Some are more long and detailed than others, but I do have-----

Chairman

Did any of the reports impress Mr. Scanlan by way of indicating the trip in question was worthwhile? I am just seeking an idea as to what exactly the officials were doing.

Mr. Michael Scanlan

It is a long time since I read them, to be honest. I can share some of them with the Chairman, if he wishes.

Chairman

In a general way, having read the officials' reports on the trips and educational supports received, would Mr. Scanlan have said he was happy to pay for and complete the schemes in question?

Mr. Michael Scanlan

What is throwing me is the Chairman's remarks on education and training. I have regarded the trips all along as joint management-union visits to other parts of the world, often but not exclusively to the USA, to examine how change was being dealt with. I can recall one trip in which the officials were examining how the authorities in Canada introduced change in their ambulance service. The departmental official on that trip was dealing with the issue of the ambulance service. The trip was to examine how what I believe were called "emergency medical technicians" were deployed. There was validity to the purpose of that trip and to the objective of talking to Canadian employers and unions about change and upskilling.

Chairman

There were 18 trips to the United States, one to Canada, 18 to the United Kingdom, two to Australia and one to Brussels. There is an onus on us all to determine what was occurring on these trips so we can determine whether they represented value for money. Having done so, we will be able to understand whether the officials regarded each trip as a junket, a bit of a jolly on which they were treated well, or whether they actually learned something, as was the case in Mr. Scanlan's example from Canada. The picture will not be complete until we get all the Department's information on this. We have rightly focused on SIPTU in this exchange but there is a need to examine the Department's input and who the officials were. I certainly would like to know.

Mr. Michael Scanlan

I would be happy to provide that information. I agree with the Chairman that it is a good idea.

Deputy Simon Harris

I very much welcome the suggestion that we ought to use the power of compellability in regard to SIPTU. SIPTU is not known for being quiet on matters of public interest but its silence on this issue is absolutely deafening. It is quite difficult to have a complete conversation when one is missing a crucial piece of the jigsaw. I thank Dr. Smith for her analysis, which has been very helpful, but we are obviously missing a huge part of the jigsaw. When one considers the correspondence trail members have seen, SIPTU has been made aware by the HSE of this meeting. It is aware of the outstanding questions and its failure to answer them is utterly unacceptable. Members have been given an insight today into the murkier side of partnership and regardless of whether it was intentional, a slush fund effectively was created. Having read the various items of documentation and having listening to proceedings today, there was a slush fund involving restaurant bills and foreign travel and, essentially, union officials buddying up with people with whom they were negotiating on behalf of the public interest, which has caused serious concern.

I wish to revert to a number of issues and wish to ascertain I understood Dr. Geraldine Smith correctly in respect of SIPTU. Is it the case that it has the names of its officials who travelled on the trips and simply will not give them over or does it not know who the officials in question are?

Dr. Geraldine Smith

I do not know if SIPTU has them.

Deputy Simon Harris

Okay.

Dr. Geraldine Smith

I asked it for the list of people who made the refunds, as well as any information in respect of travel it could identify. However, the financial advisers informed me they were not authorised by the SIPTU trustees to give me that information.

Deputy Simon Harris

Okay. As for this unauthorised account, which will really boggle the mind of anyone who is listening into proceedings, the HSE was receiving letters seeking public money on SIPTU letterheads, which obviously had the address of SIPTU's head office. When responding, the HSE directed its correspondence to SIPTU's head office and the postman consequently arrived at its head office with a letter from the HSE or from the then Department of Health and Children.

Dr. Geraldine Smith

Absolutely.

Deputy Simon Harris

All the correspondence was going directly to SIPTU head office.

Dr. Geraldine Smith

Absolutely.

Deputy Simon Harris

That is helpful. As for the signatures on the letters seeking public funding, how senior were they? I appreciate it is not for Dr. Smith to answer for SIPTU or its chain or command but I am trying to get an insight into the credibility of the letters being received by the HSE and the then Department of Health and Children.

Mr. Seán McGrath

The person with whom we were dealing was the most senior SIPTU official regarding health services. He was a national secretary or whatever it is called in its ranking structure. He was the front of SIPTU in the HSE since 2005 and with the Department before that.

Deputy Simon Harris

The HSE and the then Department of Health and Children were dealing with the highest-ranking health official in the SIPTU organisation.

Mr. Seán McGrath

Yes.

Deputy Simon Harris

He provided them with the details of what I will refer to as the unauthorised SIPTU account-----

Mr. Seán McGrath

Yes. Headed paper.

Deputy Simon Harris

----- and yet SIPTU was not aware of this.

Mr. Seán McGrath

That is right.

Deputy Simon Harris

That is absolutely bizarre but members obviously cannot take the matter any further in the absence of representatives from SIPTU. I thank Mr. McGrath for this.

I do not wish to focus exclusively on SIPTU but will revert to the role of the then Department of Health and Children in the context of partnership. Section 18.4 of the SIPTU report refers to civil servants from Mr. Scanlan's Department going on these foreign trips or study visits, call them what one will, and they were under the impression that such trips were being paid for by a fund controlled by union officials. From Mr. Scanlan's interaction with his civil servants, what was their understanding of the trips on which they were going?

Mr. Michael Scanlan

Does the Deputy refer to my best understanding of their understanding?

Deputy Simon Harris

Yes.

Mr. Michael Scanlan

Sorry, it is complicated. It is that these were partnership visits in that general sense. One of my concerns - at least the SIPTU account has helped in this respect - but when I appeared before the committee last October, there was understandable confusion about people going on these visits in the context of the SKILL programme, which was a specific fund for upskilling and training. My understanding is they were partnership visits in the first instance and, second, there was some level of understanding of partnership funding. That was all that people seemed to know. It was known these trips were being organised by the aforementioned official, it was known it was SIPTU in that sense - if I can use that word while allowing for SIPTU's current corporate view - which was making the arrangements, booking the flights and providing the hotel rooms. Thereafter, in the case of five visits I think, the official claimed subsistence from the Department. The civil servants applied for and got permission to go on the trips because of their purpose. However, they were seen as partnership visits more than anything else.

Deputy Simon Harris

Excuse my ignorance in this regard but the term "partnership visits" means very little to me. It probably means very little to the everyday person.

Mr. Michael Scanlan

Okay.

Deputy Simon Harris

Would it be correct to state it was an idea whereby people working on the work side, that is, union officials and people developing policy within the Department, would go abroad to consider how different aspects of the health service were run?

Mr. Michael Scanlan

It arose from a basis in which, in respect of health in particular but perhaps across the public service, there had been huge industrial relations problems. In the immediate run-up to this development, there had been a national nurses' strike and either a four-day or five-day strike by allied health professionals. There had been a series of disputes and, second, emerging from all those disputes, a key part of the settlements had related to looking at what I would term the skill mix. I refer, for instance, to the introduction of the graduate nurse programme and the introduction of additional training, upskilling and career outlets for therapists and allied health professionals. Consequently, the reason SIPTU in particular featured in this regard was there was a shared view among officials in the Department that there should be a better way to deal with matters. Why end up having an industrial action to end up in a space in which there might be a win-win outcome for both sides? Consequently, if one takes SIPTU, there was a view for a long time that there was merit in upskilling SIPTU support staff. One point to emerge from the value-for-money study of SKILL, which essentially is where matters culminated, is that very good training was provided but the real issue was with making use of those staff.

Partnership has its opponents and detractors but as someone who has worked in the system, I can remember that in 2005, we still were facing industrial action to allow people who had been trained up to take on duties we felt to be appropriate, that is, to implement it. While it was not a panacea, the idea was not simply in respect of going abroad, but specifically for these trips, there was a value in unions and management asking their counterparts in other countries how they dealt with similar issues, whether industrial action always ensued or whether there was scope for a win-win outcome in which both sides could see a value in, as in this case, in upskilling and training. Other cases pertained to broader reform and I will do what the Chairman suggested because it is a good idea. I believe another case related to a country heading into a major reform of its health system. The concept was to go together to talk to people who previously had done it differently.

Deputy Simon Harris

I take the point and no one in his or her right mind would have any difficulty with dialogue, conversation or learning. However, I have a difficulty with its cost and the €108,000 spent in restaurants suggests they were not so engaged over a sandwich and a cup of coffee.

Mr. Michael Scanlan

As we may be jumping to the wrong conclusion, I am not at all sure that the restaurant bill relates to foreign travel.

Deputy Simon Harris

With respect, I do not care where they ate or in what country the restaurant was located. I refer to the sum of €108,000.

Chairman

It cannot be justified.

Mr. Michael Scanlan

I agree and I have no idea on what it was spent, because of the point made by Dr. Smith. My point is that from what I have been able to establish on the visits from my officials, I know what they claimed and what they were paid for. I do not know the breakdown of that restaurant bill. However, I agree with the Deputy that partnership should not require lavish spending.

Deputy Simon Harris

Can Dr. Geraldine Smith cast a light on the restaurant bill or bills and on from where the cumulative figure of €108,000 comes?

Dr. Geraldine Smith

That €108,000 was on the credit cards, to which we did not have access. We simply were told there was €108,000 in restaurants and perhaps accommodation, etc. From what I have learned thus far, I do not believe it solely pertained to restaurants abroad, as restaurants in Dublin certainly also were used in this regard. However, we do not know the actual amounts relating to foreign restaurants compared with Irish restaurants.

Deputy Simon Harris

No, and from my perspective, that matters very little.

Chairman

It was not fish and chips.

Deputy Simon Harris

No, and the fact they were buying Irish will not comfort many people either. This is not to be flippant because the point made by Dr. Smith exposes a further difficulty, which is that the HSE has received the credit card totals but not any degree of breakdown from SIPTU.

Dr. Geraldine Smith

Absolutely, we have not even seen the credit cards to identify which restaurants they were.

Deputy Simon Harris

I have two final points. While the Chairman touched on this, it strikes me as odd that study visits took place around St. Patrick's Day. Does it strike Mr. Scanlan as being odd that officials from his Department and SIPTU officials were eager to go on a study visit, if I am using the correct term, to the United States or anywhere else around St. Patrick's Day? Surely we can accept that there was a degree of people here, whether they were studying or otherwise, ensuring that they were enjoying life as well. Mr. Scanlan might comment on that.

Mr. Michael Scanlan

I have three quick comments and this is looking at it through the lens of ten trips in which the Department as involved. Not all were on St. Patrick's Day. There was a pattern at the same time and I am not going to say other than that. It has been put to me that, from the viewpoint of the officials who were fairly senior, it was a good time to be out of the office because of the Dáil and everything. However, I am not going to deny what the Deputy said either.

Deputy Simon Harris

The final point I want to make concerns our responsibility as policy makers and that of the Accounting Officers, rather than SIPTU. SIPTU received the money and what it did with it afterwards is a cause of huge public concern. However, the fact is that the Department of Health and Children initially, and then the HSE, were the ones dispersing the money without a service level agreement. What have we learned from that? I suppose it is a matter for the HSE now, but can Mr. Magee give assurances to the Irish taxpayer that such funds no longer exist and that lessons have been learned in terms of service level agreements?

Mr. Cathal Magee

There is a lot of learning from the audits both into skill and partnership. As I said earlier about structure, the fact is that entities can have an almost quasi-statutory basis, operating independently outside the mainstream governance structure. How these agencies or bodies were set up and functioned is the key.

Secondly, any time that an agency has been brought into a public service, due diligence is required because there is movement between the Department of Health, the office of health management and the HSE. Since 2005, the HSE has embraced many individual independent organisations. We now have a practice whereby before that integration takes place there is full due diligence of what exactly one is taking over, as one would in a commercial environment. What happens is that the HSE becomes reputationally responsible for something of which it may not have been the originator.

The whole control process around procurement, expenses and trips has been restated and reformalised. We have set out strict directions to all our management and parts that non-adherence to these procedures and control processes will be a significant disciplinary issue. Arising from these audits, we have moved to close down these independent satellite operations completely, and all the internal bank accounts. One of the examples here is that each of these, both SKILL and partnership, had their own bank accounts so they were operating with an individual bank account within a public service system. One of the HSE's key priorities is to rationalise the number of bank accounts and close down any satellite bank accounts that are operating. That is the basis on which we can control them.

There is enormous learning on a number of levels around structure, processes and controls in order to satisfy ourselves with accounting responsibility and satisfy the public about the proper use of public funds.

Chairman

What funding was made available under the general heading of partnership in 2011?

Mr. Seán McGrath

None.

Chairman

What is your plan for 2012?

Mr. Seán McGrath

None minus.

Mr. Cathal Magee

We have ceased all grants and funding. Partnership has moved back to a traditional engagement. Over a period of time, partnership became a third force outside both unions and management. It became almost a separate dynamic, so it is now back to direct engagement.

Chairman

First, it is interesting that we have gone from an expenditure of €41.1 million over ten years to zero. Secondly, Mr. Scanlan commented about the value of the SKILL programme. He said there was some value in it. A recent review conducted on the €59 million over a six-year period by Ernst & Young said it did not provide value for money. My point is that it has been analysed and Ernst & Young made a finding that it was not value for money. At the last meeting of this committee, it was recommended that a value for money review would be undertaken by the HSE. Can Mr. McGrath tell us what stage that is at?

Mr. Seán McGrath

May I comment on both points?

Chairman

Yes.

Mr. Seán McGrath

On the bigger sums of money, a lot of that cost is obviously people cost.

Chairman

Which cost?

Mr. Seán McGrath

In relation to the €44 million you mentioned, Chairman, on partnership. So a sizeable proportion of that, about 50%, is people as in salaries. That has gone back into the line where people have been redeployed or reassigned, but there are no grants to this partnership forum which has now been disbanded.

The value for money programme from Ernst & Young effectively said that, in total, the programme was doing what it said on the tin but in certain instances we were not transferring the learning back. For example, if one trains a health care assistant to do X, Y and Z, that health care assistant - in some cases and some sites - was not transferring that learning back into the sites. Therefore, we need a more defined and filtered approach in relation to that training and the development of individuals. We have commissioned a health value for money review concerning partnership, which is currently under procurement. As regards the programmes that were there, from the €44 million spend, as the Chairman outlined, we will be examining where the value for money was, or was not, in the particular programmes of activity in the system.

Chairman

Has that recommendation from the previous Committee of Public Accounts been taken up?

Mr. Seán McGrath

Yes, it has.

Chairman

It is at procurement stage at the moment.

Mr. Seán McGrath

It is almost completed at this stage.

Chairman

Okay. I now call Deputy O'Donnell.

Deputy Kieran O’Donnell

I thank the officials for attending the committee meeting. I have had a chance to examine the figures which make for astounding reading. This point is in no way personal, but it really is an unqualified mess. According to the old adage: "He who pays the piper, calls the tune." The figures stretch from 1998 to 2009, which is an 11-year period. Interestingly, in 1998, the full amount given to the fund was €31,750. I compiled these figures from the annual report. The figure was €85,800 in 1999; €127,000 in 2000; €221,000 in 2001; €280,000 in 2002; €205,000 in 2003; €350,000 in 2004; €459,000 in 2005; and €478,000 in 2006. We then suddenly get into magic numbers. In 2007, just short of €1 million went into the fund. In 2008, the figure was €723,000, while it came back down to €247,000 in 2009. Between 2007 and 2008, €1.7 million went into the fund, which is nearly 40% of all the money that went into it. It defies logic and understanding. I would have looked at every year. Did the officials look at the amount of money that was in the fund before the disbursements went out? Let us take 2007 and 2008 which is where it spiked. Some €972,000 went in in 2007 and €723,000 in 2008. Did the officials look at the level of funding in the account before the disbursements went in?

Did they look for returned paid cheques? How did this account work? Were cheques paid out of it or was it done on the basis of a credit card? It appears to have been incredibly loose. This happened over an 11-year period. Furthermore, significant payments were going through from 2001 to 2009. How was this allowed to continue? In summary, did the officials look at the amount of money that was in the account before putting extra money into it? Have they sought the returned paid cheques in respect of the account? Did they spend €1.7 million between 2007 and 2008, which is about 40% of the fund?

It has all the appearance of being a slush fund. The partnership forum gave out €943,000, of which €818,000, 86% of the fund, cannot be accounted for. Of this €818,000, €770,000 is unvouched, while €48,000 is an aggregate vouched figure. How was the fund run? When the accounts were closed, there was a sum of nearly €700,000 which had been spent in the account in question. How did this happen? This is about a fund amounting to close to €900,000 which is unaccounted for. From 2007 cheques for €250,000 were written. Will Mr. Magee give me an idea of the corporate governance procedure for the fund? He who pays the piper calls the tune. SIPTU received the funding, but it was paid by the Health Service Executive, the Department of Health and the Department of the Environment, Community and Local Government. How was this allowed to happen? Why, over one year since this was discovered, do we not know what actually happened?

Mr. Cathal Magee

On the various reports and statements made, I have stated the governance and control terms were without precedent. It is not defendable. It has its origins in the independent structures and agencies put in place with no or little governance procedures.

Deputy Kieran O’Donnell

It is interesting to note expenditure went out of control during the so-called Celtic tiger years. In 2003 the level of expenditure was €205,000 and in the space of four years it had ballooned to just short of €1 million. It is inexplicable. I am dumbfounded.

Chairman

As I said at the start of the meeting, it is incomprehensible.

Deputy Kieran O’Donnell

We are going around in circles and need to cut to the chase. How did this happen?

Mr. Cathal Magee

In chapter 37 on the SKILL programme, a de facto grant to SIPTU dating back to 2001 was authorised and approved, to be directed to SIPTU through the office of health management, an agency within the health system at the time.

Deputy Kieran O’Donnell

The sum involved was €221,000.

Mr. Cathal Magee

Prior to the setting up of the HSE, this sum was increased to €250,000. That funding went through every year until we ceased and suspended it in 2009. It had approval and authorisation, as recognised by the Comptroller and Auditor General. However, there were several elements to it. It did not have a clear purpose. In other words, why was that money granted? For what objective had it be granted and how was it to be evaluated? This issue has been raised by the Comptroller and Auditor General.

Deputy Kieran O’Donnell

Was that the partnership fund?

Mr. Cathal Magee

No, it was the SKILL programme. Within public financial procedures there is grant aid and a grant-in-aid. A grant should be vouched with supporting documentation. A grant-in-aid does not have to be vouched, but there is a need for audited accounts. The public financial procedures define a payment as either a grant or grant-in-aid with two control processes. Neither was complied with in the case in question. The payment of €250,000 was not vouched and no accounts were provided.

It is important to remember that this fund was outside the health system. It was, in fact, understood to be SIPTU funding. SIPTU has stated it was an unofficial account outside the SIPTU governance structure. There was no visibility with the fund in terms of its balances or usage. I agree with the Deputy's proposition that accountability in respect of this public money lies with the people who discharged it.

Deputy Kieran O’Donnell

What was the partnership forum and who controlled it?

Mr. Cathal Magee

The partnership forum was set up in 1999. It had 24 members, half management and half union.

Deputy Kieran O’Donnell

What was the make-up of the members on the management side?

Mr. Cathal Magee

They would have come from the Department, health systems, voluntary hospitals and the health boards.

Deputy Kieran O’Donnell

From where did the forum's funding come?

Mr. Cathal Magee

It came from the Department and the HSE when it was established.

Deputy Kieran O’Donnell

It is interesting that the forum gave no funding between 1998 and 2003. In 2004 it gave €54,000; in 2005, €117,000, and in 2006, €48,000. Then in seven months in 2007 it gave €450,000 to the SIPTU slush fund. In any man's language, that does not add up. The devil is in the detail. In 2008 it gave €250,000. Therefore, between 2007 and 2008 it gave €700,000 when it only gave €48,000 in 2006. How did this happen?

Dr. Geraldine Smith

Regarding the payments of €200,000 in February 2007 and €250,000 in September 2007, the first was funding which actually should have been given in 2006 but which was paid in 2007. The funding to the unions was €200,000 in 2006, €200,000 in 2007 and-----

Deputy Kieran O’Donnell

I have just gone through the figures and provided a summation for each year. No such summation was provided in the executive's analysis. When the executive examined these payments, did it obtain copies of the bank statements for the SIPTU account?

Dr. Geraldine Smith

No. Again, the unauthorised SIPTU account is outside the control of the HSE and the Department. The account was set up by a SIPTU official and member. We have had no access to the documentation on it. When I went looking for the information for the audit, we were not provided with it. The person who had the documentation was the SIPTU representative.

Deputy Kieran O’Donnell

Did the executive ask for the documentation?

Dr. Geraldine Smith

Yes, we asked for it.

Deputy Kieran O’Donnell

Has the executive initiated legal proceedings to obtain the documentation?

Dr. Geraldine Smith

No, we have not.

Deputy Kieran O’Donnell

Why not?

Dr. Geraldine Smith

It is not a HSE account. It is an unauthorised SIPTU account.

Deputy Kieran O’Donnell

Yet it is HSE money.

Chairman

That is another one on which to seek the information under the compellability Act. That might assist in terms of getting it.

Deputy Kieran O’Donnell

At a minimum, would the Department and the HSE have looked at the level of funds that were in the unofficial SIPTU account - I do not like the name because it was an extremely receptive account and a sap for money - before disbursements went out?

Dr. Geraldine Smith

The funds that went into that account came from various sources. The HSE did not know that the Department of the Environment, Community and Local Government would have been providing funding into this SIPTU account, which SIPTU states is unauthorised.

Deputy Kieran O’Donnell

To whom would the Chairman or the CEO of the forum have reported? To whom were they answerable?

Dr. Geraldine Smith

As Mr. Magee stated, there were 24 members on the forum, which was essentially the board: 12 from the management side and 12 from the unions. Two of their number were joint chairs. Every year, there were joint chairs, one a union representative who was the SIPTU representative-----

Deputy Shane Ross

Who was that? Could we have his name?

Dr. Geraldine Smith

-----Mr. Matt Merrigan - and then over the years there would have been a management joint chair as well.

Deputy Kieran O’Donnell

To whom would they report?

Chairman

He signed the cheques as well.

Dr. Geraldine Smith

No. Mr. Merrigan did not sign cheques, not from the forum. He signed them on the SIPTU account.

Chairman

To clarify as we go along, he did sign.

Dr. Geraldine Smith

Yes, absolutely.

Deputy Kieran O’Donnell

What I am trying to get at here is that the partnership was extremely inventive in accessing funding. It had very willing participants to give it funding. To whom did the partnership forum report?

Mr. Cathal Magee

This is a core issue. The governing structure was quite unusual. It had 24 members in the forum, it appointed four trustees, it had joint chairs and then it had its officers. It had its own bank account, its own offices and regarded itself as a non-statutory consultative body. In our comments,-----

Deputy Kieran O’Donnell

With a great deal of taxpayers' cash.

Mr. Cathal Magee

That is the heart of the problem. If you look at the director's statements to the internal audit, its view was that, even when the HSE was set up in 2005, the agency did not come within the governance responsibility of the HSE. That is stated by the director. They saw themselves as independent of the HSE and independent of either management or unions, albeit through the HSE or through the Department prior to the setting up of the HSE. At the heart of this was a governance question.

Looking at the audit report Dr. Smith has completed, even at one point, back in 2002, their insurers raised the question: what was the status of this body and where was its duty of care? That question was not answered and the governance structure continued. It was audited separately, it had its own bank accounts, it reported its own set of accounts. It viewed itself as an entity separate from the governance and I think that was at the heart of it.

Nonetheless, it should be said about the partnership forum that in all of its businesses in relation to partnership projects and partnership people who were employed the audit has referred to the fact that it did very good work and did that work in a very proper way. The majority of its funding and the majority of its resources were directed at activities within the partnership process. However, the process of funding SIPTU is the subject of our focus here in that there was a change in procedure in 2005-2006---

Dr. Geraldine Smith

In 2005, initially.

Mr. Cathal Magee

Where, normally, any application for funding from SIPTU to the forum would have been vouched and would have come through the forum process, there was a change of procedure where this funding was directed directly to SIPTU on application from SIPTU.

Deputy Kieran O’Donnell

That was in 2005-2006.

Mr. Cathal Magee

That is the subject of a separate audit report from Dr. Smith.

Deputy Kieran O’Donnell

Who authorised that change?

Chairman

Before Dr. Smith answers that, can I add to it? At that point, who were the four trustees of the forum? Were they informed of the change? Did they approve of the change?

Dr. Geraldine Smith

There were four trustees.

Chairman

They rotated.

Dr. Geraldine Smith

They rotated. I have the details here.

Chairman

In 2005, when this change was made, who were the four trustees by name and did they approve of this change?

Dr. Geraldine Smith

I can come back to the Chairman on that shortly.

Deputy Kieran O’Donnell

Furthermore, it is interesting, if Mr. Magee states that the change came in 2005-2006, that one suddenly saw that the money went out of control into SIPTU from 2007, in particular, in 2007 and 2008. There was €1.7 million going into that fund between 2007 and 2008 - €1 million in 2007 and €723,000 in 2008. Something happened because the amounts that went into the fund in the relatively early years bear no comparison to those of the latter years. From what Mr. Magee is saying, up to 2005-2006, all of those amounts were vouched.

Mr. Cathal Magee

Within partnership.

Deputy Kieran O’Donnell

Within partnership, they all were vouched. The HSE would have come into being in 2005. Mr. Scanlan might expand on that. Prior to the HSE coming into existence, what would have been the procedure in terms of funds being paid through the OHM and the SKILL programme? There was: approximately €31,000 in 1998; nothing in 1999; €127,000 in 2000; €221,000 in 2001; €208,000 in 2003; and €235,000 in 2004. There is quite a significant amount of money. What would have been the procedures on control of moneys being paid to the - dare I call it - unofficial SIPTU account?

Mr. Michael Scanlan

In my view, and Mr. Magee has touched on it, it goes back to what public financial procedures required and a point that the Comptroller and Auditor General made at the start. As I understand it, these all are technically grants to various agencies for particular purposes and we were not clear enough about that purpose. As Mr. Magee states, under public financial procedures there are then expectations or guidelines about how one should manage those grants. I am open to correction, but my understanding is that for something to be a grant-in-aid it requires formal approval of the Department of Finance or Public Expenditure and Reform and even of the Dáil. In the absence of proof that something is a grant-in-aid, it is assumed to be a grant.

Deputy O'Donnell's colleague, Deputy Harris, spoke of lessons. Naturally, we all are focused on the lessons around matters such as SKILL and partnership. More broadly, there is an issue for us about the management of, for want of a better term, grants, which could go out to all sorts of very worthy causes, if I can put it that way, and which are nothing to do with partnership and nothing to do with trade unions. I am conscious of a point made earlier, because it has come to my attention in recent years where we fund our own agencies, that we need to be sure that we are not what I would call "over cashing" them in a particular year. I think what Deputy O'Donnell is saying is that one should look at such funding, particularly since we are effectively borrowing all that money now. There is a bigger piece of learning around how matters approved at policy, political or any other level are managed through financial control procedures.

Deputy Kieran O’Donnell

I address this to the Department of the Environment, Community and Local Government because I want to be complete and do not wish to exclude it. Once again, one notes a trend in the figures. In 1999, the figure was €858; in 2000, €259; in 2003, €15,000; in 2004, €10,000; in 2005; €91,000. Then, suddenly, one finds that for 2006, 2007 and 2008, respectively, the figures are €180,000, €271,000 and €182,000, respectively. Why did the amounts increase? Why was there a hiatus in 2007-08 in all the bodies which were dispensing funding into this unofficial SIPTU account?

Ms Geraldine Tallon

There was no particular change in governance of LANPAG at any point. It was established as a partnership body within the local government management services board and it remained in that structure throughout its existence. From 1999 onwards funding to SIPTU was provided on the basis of invoices and vouched expenditure. LANPAG possessed documentation for €589,000 of expenditure but did not have sufficient supporting documentation in respect of another €200,000.

From approximately 2006 onwards the Department and the local government system increasingly used public private partnerships to develop infrastructure in the local government sector, particularly in the area of water services. Specific guidelines and frameworks were developed through social partnership for PPPs, including guidelines from the Department of Finance in early 2005 regarding stakeholder consultation for employees and their representatives in the context of the development of PPPs. They became a sensitive issue in the context of management-union negotiations in the local government sector because they were seen as potentially displacing significant amounts of direct labour. They were specifically controversial for SIPTU members in the local government sector and there was agreement in 2006 to provide dedicated funding to upskill SIPTU membership and local representatives in bargaining, negotiation and dialogue around the PPP process. That additional expenditure between 2006 and 2008 is reflected in those figures.

Deputy Kieran O’Donnell

This came about on foot of negotiations with the unions to upskill their workers.

Ms Geraldine Tallon

It came about as part of the framework agreed under Towards 2016.

Deputy Kieran O’Donnell

Am I correct to say disbursements were made to this unofficial account in the absence of receipts being provided for them? Were they regarded as grants rather than expenditure on the part of SIPTU?

Ms Geraldine Tallon

Disbursements totalling €589,000 were made to the account on the basis of invoices from SIPTU on head office notepaper.

Deputy Kieran O’Donnell

Were they vouched?

Ms Geraldine Tallon

There was supporting documentation. In respect of the other €200,000 there was a copy of a letter from the Department of the Environment, Heritage and Local Government confirming a grant of €100,000 to strengthen trade union input to stakeholder consultation under the national framework for public private partnerships.

Deputy Kieran O’Donnell

Did the Department look for the expenditure to be vouched?

Ms Geraldine Tallon

Expenditure should have been vouched in that regard. We had set the condition that funding would be drawn down on foot of proposals approved by LANPAG. Ultimately it was not possible to get sufficient supporting evidence through LANPAG or SIPTU and, for that reason, the Department secured the return of €200,000 from LANPAG into the local government fund.

Deputy Kieran O’Donnell

Is it correct that €200,000 of the expenditure of €789,929 was reimbursed?

Ms Geraldine Tallon

Yes.

Deputy Kieran O’Donnell

What about the trustee list?

Chairman

There were four trustees in 2005.

Dr. Geraldine Smith

There were four trustees, two from management and two from the unions. The management side comprised the CEO of the Mater Hospital and a human resources official from the HSE. The union representatives were from the INMO and IMPACT, respectively.

Chairman

Did they agree to this change?

Dr. Geraldine Smith

I posed that question to the former director of the forum in light of the procedures that had been put in place.

Deputy Kieran O’Donnell

What is the name of the person to whom the question was posed?

Dr. Geraldine Smith

Larry Walsh. He was the former director of the partnership forum. I asked him the reason for the change and whether it was approved by the forum and its trustees. There is no formal documentation or evidence that it was formally approved. Mr. Walsh pointed out that some of the trustees, as union representatives, were in receipt of some of these APPM trade union grants. Ordinarily they would have to apply to the forum for the disbursement of grants but with the change in procedure whereby the SIPTU official could ask that the money be paid to him before he paid it to the unions they would de facto have known-----

Deputy Kieran O’Donnell

I ask Dr. Smith to go back over that slowly to explain the change in procedure. What was the old procedure?

Dr. Geraldine Smith

It was decided that the partnership forum would receive the approved APPM funding for trade unions. The partnership forum did not apply for these funds. The trade unions applied on their own behalf to the APPM implementation committee. It was decided - by whom I do not know because that information is not available - that rather than the APPM paying the money directly to the trade unions it would give it to the partnership forum, which would disburse it to the trade unions. The partnership forum, and its trustees, agreed to that and stated that it needed a procedure. The partnership forum then established a strong procedure which required claims made by the unions to be suitably signed and accompanied with back-up documentation. Everything worked fine until December 2005, when a balance of €50,000 was left in the moneys approved to the trade unions.

Deputy Kieran O’Donnell

Was that balance in the bank account?

Dr. Geraldine Smith

No, that was the approval. The APPM committee had approved a disbursement of €200,000 for the unions for 2005. Claims totalling €150,000 had been submitted and the partnership forum was holding a further €50,000 that had been left unclaimed. I asked the director why was it paid and he said he believed that the SIPTU official feared it would be clawed back at the end of the year if it remained unspent. This is why the balance of funds was sought and it was paid over from the partnership forum to the SIPTU official, care of the account.

Deputy Kieran O’Donnell

Was it unvouched?

Dr. Geraldine Smith

It was unvouched. That was the first time the procedure changed.

Deputy Kieran O’Donnell

It was the first time an unvouched payment was made.

Dr. Geraldine Smith

Exactly. Table 3 shows that €48,000 was disbursed in April 2006. Vouchers were submitted by the trade union official to the partnership forum but I was not happy with them. They were copies of invoices that would have been sent to SIPTU and he also sent in vouchers totalling €67,000 for a balance of €48,000. Again, it was not looking for like for like funding.

Chairman

The vouchers were for more than what was drawn down.

Dr. Geraldine Smith

Precisely. It was a sheaf of invoices

Chairman

That was good. At some stage, €200,000 came into the account.

Dr. Geraldine Smith

Into which account?

Chairman

I am sorry, I will let Dr. Smith finish first.

Deputy Kieran O’Donnell

Will Dr. Smith go through the procedures in terms of the change?

Dr. Geraldine Smith

The major change we see comes in 2006.

Deputy Kieran O’Donnell

When in 2006?

Dr. Geraldine Smith

No 2006 funding went out in 2006 because the funding was received late by the partnership forum. They received that funding towards the end of the year and then the SIPTU official requested that this be paid out to him and "that, in accordance with agreed practices, I will validate and vouch the payments to other unions". We see the 2006 money going out in 2007. It is the first time we see the full approved grant being paid en bloc to the SIPTU account.

Deputy Kieran O’Donnell

In a seven-month period in 2007, €450,000 went out.

Dr. Geraldine Smith

Absolutely. In September 2007, we see the 2007 funding being paid en bloc. Again it is requested. There is a letter coming in from the SIPTU official saying, “As agreed as per our arrangement please pay-----

Deputy Kieran O’Donnell

Was that vouched?

Dr. Geraldine Smith

No.

Chairman

Could I just take Dr. Smith back? The change was arrived at by virtue of the threat of the money being withdrawn and then Mr. Merrigan presumably saying the money would be drawn down into a separate account. That established the precedent for him saying he wanted the €200,000 paid into the account. That came into the account in spite of the fact that he offered invoices for €67,000 for the €48,000.

Dr. Geraldine Smith

That is a different figure. We are going back to 2006 now.

Chairman

In spite of that happening, those who were there at the time allowed this to happen or oversaw this happening and the money went into that SIPTU account Four other trade unions were paid out of the account and they refunded €275,000 later. The money also went from the SIPTU-Mr. Merrigan account to SIPTU.

Dr. Geraldine Smith

We do not know that.

Chairman

That is the point I am making. We presume that happened but we do not know that is what happened and, therefore, we cannot say that SIPTU refunded any money because we do not know whether it got any money. However, we have presumed it was part of the union make up.

Deputy Kieran O’Donnell

Is Dr. Smith saying that in late 2006 funding was paid from the unofficial SIPTU account with €50,000 in it for the first time and thereafter the funding was paid like a grant unvouched into the SIPTU account?

Dr. Geraldine Smith

Yes, that was the big change.

Deputy Kieran O’Donnell

Was that a change in policy or a change in practice?

Dr. Geraldine Smith

It was a change in the procedure.

Deputy Kieran O’Donnell

Would this have been discussed at board level in the partnership? Would they have said from then on the funding could be paid out without being vouched?

Dr. Geraldine Smith

No, having reviewed the minutes of the partnership forum, there is nothing to say, "We are changing this procedure this way".

Deputy Kieran O’Donnell

Who made that call?

Dr. Geraldine Smith

Some of the recipients of the money would have been on the partnership forum so for example, let us say I am a trade union official. I have agreed that we have this money so I know that there is a fund there. I apply to the partnership forum, I provide invoices and I say, "Here are the invoices. I have spent €10,000 on X". The partnership forum will say fine, it is an accordance with the procedure, I have proper vouchers and there is the money. With the change in procedure, I, as a trade union official, would now not to go to them because I know the money is going to SIPTU and I apply to SIPTU for that money. So the people who were applying for the grants were on the forum. They knew de facto about the change.

Deputy Kieran O’Donnell

Instead of a union applying directly to the forum to draw down, the money was routed through this slush account. They effectively applied to the slush account and, therefore, procedure was bypassed.

Dr. Geraldine Smith

Yes, this is according to the SIPTU representative. He says "as agreed" and I have validated the following claims. They knew about it.

Chairman

Was that Mr. Merrigan?

Dr. Geraldine Smith

Yes.

Chairman

I refer back to 2005 and the four trustees. What were the chief executive officer of the Mater Hospital and the HSE HR officials saying about this change? Was anything said? Can Dr. Smith name them?

Dr. Geraldine Smith

There was nothing in the minutes. That is the place we as auditors would look to view the discussion, dialogue and decisions. There was nothing there to say that procedure changed. There were two joint chairmen for the forum. One of the joint chairmen was the SIPTU official.

Chairman

Can Dr. Smith name them?

Dr. Geraldine Smith

Mr. Merrigan was the joint chairman from the establishment of the partnership forum.

Chairman

And the four trustees?

Dr. Geraldine Smith

In the period 2001 to 2007, the chief executive officer of the Mater Hospital, Mr. Martin Cowley; from 2005 to 2007, we had a HSE HR official, Mr. Brendan Baker; from 2007 to the dissolution of the forum, we had Ms Nora Mason, a HSE HR official; and from 2000 until the disbandment of the forum, we had Mr. David Hughes, who was the INMO representative.

Deputy Mary Lou McDonald

I apologise for arriving late. The mind boggles. I acknowledge Dr. Smith methodically retraced the steps again and again. I would like to change tack slightly. Has she established what these people were doing in the US, Canada or Australia?

Chairman

We have covered that ground.

Mr. Michael Scanlan

We had a bit of a discussion about that beforehand. It is a fair question and the Chairman's suggestion - which I am committed to doing - is to try to put together a synopsis from the Department's records of the purpose and the learning or value of those trips. I am happy to provide that.

Deputy Mary Lou McDonald

I thank Mr. Scanlan for that.

On the issue of learning, Dr. Smith referred to procedures and processes. It is clear that an absence of procedure or a rational process for whatever reason was at play here. Who was called to account for this in the Departments and the HSE? This is a scandalous turn of events and a scandalous misuse of public moneys. While this was not committed in the first instance by the Departments and the statutory agencies, they were party to it. How did that play out internally? What happened?

Mr. Seán McGrath

With regard to the HSE, we looked at the number of people who went on the trips. That was the basis for it. We knew in total there were 12 HSE officials, six of whom were managers in the system. Six of them at some point in time would have been on the partnership programme, been responsible for SKILL or involved with union engagement as part of the HR fraternity. They were the six that we looked at. Turlough O'Sullivan was brought in to look at the trips that had taken place and did an investigation for us. As we said earlier, we have not been able to validate in regard to some of the SIPTU people but in regard to the accounts they all took annual leave, they got subsistence for it and they got permission from their CEO or boss in each of the particular cases.

Unfortunately, we have been unable to discuss with one senior manager, Mr. Alan Smith, who is the general manager of the SKILL programme, any details surrounding the travel. He travelled on all the trips. He would have been a close link in regard to the operation of the SKILL programme from its inception prior to being in the HSE and the Office of Health Management, but he has not co-operated with any of our investigations or indeed our details-----

Deputy Mary Lou McDonald

Where is he now?

Mr. Seán McGrath

He retired from the health service in 2009 just as we were going through the audit process.

Deputy Mary Lou McDonald

Okay.

Mr. Michael Scanlan

From the Department's point of view, what I would say is that this predates my appearance here last December or October. My personnel officer did a review of all the foreign travel. I also certainly in December then provided the committee of the previous Dáil with full details and written statements in terms of the sanctioning of the annual grants that went out. I would say that I have not had the same experience. In other words, my officials have co-operated fully and that has been acknowledged with the HSE internal audit. I would say that - and I said at a pervious committee - in terms of, say, the foreign trips, each official applied for and was approved to go on them. They claimed conference rate of subsistence and so on. They acknowledged and recognised from the start that part of the expenses were being met elsewhere. I have checked with the Department of Finance which has confirmed that was appropriate in all the circumstances. So there was nothing inappropriate in that sense.

I have said to the Chairman that I will come back about the intrinsic value or merits of the trips. On the face of it they seem to be the sorts of trips that, if I put it the other way around, if somebody came to me and said, "We think the Department should fund a trip like this for this purpose", I could well have said "Absolutely". However, it is the nature of the way that it was funded that has caused the problems here. In the earlier debate this came up and I will not use some of the phrases that were used.

Chairman

Did Mr. Smith claim his expenses from the Department?

Mr. Seán McGrath

In regard to some of the expenses that we tracked, yes he did, but we have not got a full picture of it because we never had part of the investigation.

Chairman

Why would he need expenses if he had €13,500?

Mr. Seán McGrath

The €13,500 may refer to a different issue. We have not got to the bottom of that.

Chairman

Do you not know that?

Mr. Seán McGrath

No.

Deputy Mary Lou McDonald

If there were a number of trips to the United States, the core issue is to understand what they were doing. The Department has established that the leave was sanctioned in an appropriate way and so no rules were broken. However, that seems to be a very cosy arrangement between officials at different levels on the management and union side. I make that as an observation. Since they went courtesy of all of us, I would like to know what precisely they were doing over there.

I apologise that I have another meeting to attend. It is deeply unacceptable that SIPTU would not make available all required documentation on this matter. I am very pleased the committee is seeking it, but it adds insult to injury that we need to go to such lengths to secure that information. Until we see the traffic and the substance of that account, we are really reconstructing pieces of the puzzle and are not in a position to put it all together.

Deputy Shane Ross

I also apologise because I have been in the Dáil all morning. I would be more interested in questioning SIPTU than questioning the witnesses before us this morning.

Deputy Mary Lou McDonald

I am sure the Deputy would.

Deputy Shane Ross

I presume that is going to happen.

Deputy Mary Lou McDonald

There is a shocker.

Deputy Shane Ross

The HSE got €973,000 refunded. How much more does it expect to get back?

Dr. Geraldine Smith

I do not think that there is much more that we will get back. Essentially, the €697,000 in the SIPTU levy account was the balance in the account. The SIPTU head office has handed back to the Exchequer any moneys left in that account. The account is closed and the money has come back to the Exchequer.

Deputy Shane Ross

Is it finished?

Dr. Geraldine Smith

Yes, from that account.

Deputy Shane Ross

Does Dr. Smith expect any more money back from elsewhere?

Dr. Geraldine Smith

No. Clearly we have to pursue further matters with the former manager, but essentially that account is now closed.

Deputy Shane Ross

Is the HSE pursuing it now?

Dr. Geraldine Smith

We have a few issues to go back to the former general manager on and that is going to be one of them.

Deputy Shane Ross

Can Dr. Smith elaborate? What is the progress?

Dr. Geraldine Smith

Only recently - in the past week or so - we identified that two sums had gone into this SIPTU account from 2001 and 2002 from the Office for Health Management. One of them-----

Deputy Shane Ross

How much?

Dr. Geraldine Smith

There were two transactions of €190,000.

Deputy Shane Ross

They were identical amounts.

Dr. Geraldine Smith

Yes, identical amounts. Essentially they equated to £150,000 in 2001, which in euro equivalents is €190,000. The Department has confirmed that these payments would have been made. I have tracked down bank statements and the cheque counterfoils for the Office for Health Management. I have gone through 2,400 cheque counterfoils looking for payments through SIPTU, through which I have identified a few, but these two sums of €190,000 were not on them. We have asked SIPTU. We went to SIPTU and asked it if the levy account received this money or if SIPTU head office received it. Again we were trying to cover all angles. Again it came back and informed us that, according to its financial advisers, neither the SIPTU head office account nor the SIPTU levy account actually identified those funds.

Deputy Shane Ross

So there is €380,000 missing and unaccounted for.

Dr. Geraldine Smith

We cannot see-----

Deputy Shane Ross

Where it went.

Dr. Geraldine Smith

----- where it has gone.

In regard to the transaction of 27 July 2001, the Department was able to provide me with a letter last week that went from Mr. Alan Smith in August 2001 back to the Department saying, "I confirm I have paid the moneys to Mr. Merrigan, SIPTU national health and local authority levy fund." We have this confirmation from the official back to the Department saying he has paid it. SIPTU has said it is not in its account - it is not in the levy fund. I cannot see it in the OHM statement. We are going back to him to find out-----

Deputy Shane Ross

Has this money just disappeared into thin air? Is that what Dr. Smith is saying?

Dr. Geraldine Smith

We do not know.

Deputy Shane Ross

Has it not landed anywhere?

Dr. Geraldine Smith

We do not know. We cannot see where it is.

Deputy Kieran O’Donnell

There must be other bank accounts.

Chairman

Is this €380,000 additional money?

Dr. Geraldine Smith

No, it is in there. That is APPM funding.

Chairman

I want to know how much is missing.

Dr. Geraldine Smith

It is €380,000 that we have to go back and try and identify.

Chairman

Is it a separate amount?

Dr. Geraldine Smith

It is already included in the analysis we have given the committee in terms of the €5 million.

Chairman

All right, so it is in there.

Dr. Geraldine Smith

We have endeavoured to pull together all the figures that are in the public domain that we know about.

Deputy Shane Ross

Is Dr. Smith absolutely clear about where the HSE sent it?

Dr. Geraldine Smith

I will give the Deputy the trail.

Deputy Shane Ross

Does Dr. Smith know where the HSE sent it?

Dr. Geraldine Smith

We have correspondence from the Department to the general manager of OHM, who was Mr. Smith, stating it was approving £150,000 for training for front-line supervisors, which is what it was called in those days. That is the July 2001 letter. Then we have a letter back from Mr. Alan Smith to the Department stating, "I confirm I have paid this money to Mr. Merrigan, SIPTU national health and local authority levy fund". The question then arises as to why an official would send such correspondence if he had not issued it. We are endeavouring to get to the bottom of it. This documentation emerged only last week.

Chairman

Is that a direct question you can ask Mr. Merrigan-----

Dr. Geraldine Smith

It is.

Chairman

-----because he has given you incomplete documentation on other aspects of this? This is one particular area where we can ask where is the money.

Dr. Geraldine Smith

It is, but the key to this is that SIPTU's advisers got access to SIPTU's bank statements from January 2001. This transaction was made in July 2001 so it should be seen in the accounts. It is a large amount. It would be different if it was a small amount but it is a significant amount. I am looking through the lodgments of the account. One should be able to see £150,000.

Deputy Shane Ross

Is SIPTU being obstructive?

Dr. Geraldine Smith

The documentation is not with SIPTU. I know it is very hard to understand-----

Deputy Shane Ross

It is not with it?

Dr. Geraldine Smith

No. The account was opened by Mr. Merrigan with another SIPTU member-----

Deputy Shane Ross

I know.

Dr. Geraldine Smith

Jack Kelly. The two of them opened the account.

Chairman

The second person was a member of the union but also an employee of the HSE.

Dr. Geraldine Smith

Yes, at St. James's hospital.

Chairman

Who was paying them?

Deputy Kieran O’Donnell

Was the money paid over unvouched?

Chairman

Let us be straight about it.

Dr. Geraldine Smith

The question is-----

Deputy Kieran O’Donnell

Was the €190,000 paid by the partnership unvouched?

Dr. Geraldine Smith

There is no documentation. This money would have been paid from the OHM to the SIPTU account.

Deputy Kieran O’Donnell

Yes.

Dr. Geraldine Smith

There is no documentation. All we have is one letter from Alan Smith to the Department confirming he paid the money.

Deputy Shane Ross

Is there any documentation requesting it?

Dr. Geraldine Smith

No. I have not tracked down that documentation.

Deputy Shane Ross

So it is an invisible transaction on both sides.

Dr. Geraldine Smith

The documentation we have is from the Department to the OHM confirming the provision of £150,000 and asking for it to be paid to SIPTU-----

Chairman

What about the other amount? There were two amounts.

Dr. Geraldine Smith

The next amount was the following year in April 2002. The only piece of paper we have is a letter from the then Assistant Secretary at the Department to, I believe, Alan Smith stating the Department would provide €190,000 with regard to SIPTU frontline training.

Deputy Shane Ross

This sounds extraordinary.

Dr. Geraldine Smith

It is.

Deputy Shane Ross

Is this the way partnership money operated at the time? One did not have to state what it was for or require documentation for the Department to pay over €380,000. Is that how the system operated?

Dr. Geraldine Smith

I am not making excuses but this was pre-HSE-----

Deputy Shane Ross

I know. This is not pointing the finger. I am merely asking.

Dr. Geraldine Smith

All I can state is that there is no documentation in the former Office for Health Management. We looked for it. The OHM was subsumed into the HSE in 2005. There is no complete block of documentation that we can see. I have sought documentation and bits and pieces are coming back to us.

Deputy Shane Ross

Was this operation a characteristic of partnership money or was it common in other areas of the Department also? Was it peculiar to partnership slush funds - if one wants to call them that - or did it operate like this elsewhere?

Mr. Michael Scanlan

I may be able to help. I will answer the question, but the key issue with regard to the payments is that we have records which show we sanctioned them. As Dr. Smith stated, in one case we have a record of a certain person paying it out but we cannot find receipt of that money in the SIPTU account. It is even more serious than wondering under what conditions the money was paid, inadequate or otherwise.

Dr. Smith stated we were able to provide documentation with regard to the 2001 case but all I have found with regard to 2002 is a letter to the Office for Health Management and, which may partly answer the other question, as I stated earlier what tended to happen with regard to health funding prior to the establishment of the HSE was that most allocations went to individual health boards and agencies early in the year but held funding under a variety of headings went out during the course of the year.

I asked somebody to look at 2002 and give me a sense of it, and in that year approximately €300 million in held money was released to various agencies and health boards for various purposes throughout the year. Some of this money was for pay increases, which was absolutely legitimate because the money would not be released until the pay increase had been sanctioned. Other payments had absolutely nothing to do with partnership, and I made the point earlier about a range of worthy causes.

The other documentation I have is the revised determination for each health board at the end of the year. This collated the original payment and all additions received during the course of the year and was advised to each health board and, I think, to the Comptroller and Auditor General. The €190,000 appears in our records as having gone out, as was the practice, to the Midland Health Board. Money went out to health boards, and one of the reports on the partnership forum-----

Chairman

Money went to the Midland Health Board in one case and in another it went to the South-Eastern Health Board.

Mr. Michael Scanlan

Exactly. It depended on what organisation was being funded.

Chairman

The action plan payment was to the South-Eastern Health Board and the SKILL payment was to the Midland Health Board.

Mr. Michael Scanlan

If memory serves this was because SKILL originated in the Office for Health Management and the CEO of the Midland Health Board was the chairman of the Office for Health Management.

Chairman

This will move away from answering the question, but in terms of the audit trail and what you are finding out how did you manage to get information from the Midland Health Board or the South-Eastern Health Board? Were officials available to you who operated in these regions who were able to assist in any way? Will you give us a sense of it? We have the diagram which shows the route the money embarked upon as it left a Department, went to a health board and so on. Were you able to get officials to explain how they operated it?

Dr. Geraldine Smith

The issue with these two transactions is really with regard to the Midland Health Board-----

Chairman

Yes.

Dr. Geraldine Smith

-----because as Mr. Scanlan stated the funding would have gone from the Department to the Midland Health Board to go to the OHM to go to the SIPTU account.

Chairman

Was it as simple as it being just transferred on and that it came in and went out?

Dr. Geraldine Smith

It would have been in the letter of determination I believe. The money would have been in the Midland Health Board letter of determination. The Department would have given the money to the health board, it would have been clearly earmarked for the Office for Health Management and it would have been given to the office. These payments would have been made in the overall determination and the Midland Health Board would have had authorisation from the Department to hand over the money to the Office for Health Management. This is all appropriate.

Chairman

I must ask whether it was done like this to disguise something. Was it done like this to pass the parcel for accountability to somebody else and somebody else again down the line? There was no accountability.

Mr. Michael Scanlan

Genuinely-----

Chairman

I am just asking.

Mr. Michael Scanlan

I accept that and I understand why the Chairman is asking in this particular case, but genuinely the answer is "No", it was the system of health funding. If it helps, I examined one year and can provide the committee secretariat with the information. It shows the number of occasions that funding was released for projects, but as I understand how funding operated, it went to health boards which in turn funded particular offices and projects. Earlier, I mentioned many patient support groups and advocacy groups are funded by way of grants. At present, it is done through the HSE Vote but the best of my understanding is that previously it worked like this. However, this is how it worked in the old days to the best of my understanding.

Chairman

The accounts of the Midland Health Board must have contained a line stating that £150,000 was received and then forwarded to the office of health management. Did the office of health management have to account to the Midland Health Board or is there a similar line in its own accounts? Has the audit trail been traced?

Mr. Michael Scanlan

Dr. Smith may be able to answer the Chairman's question but I would have expected to see precisely the trail described by the Chairman. It would have been sent, accompanied by a letter, in what we describe as a revised allocation to the health board. The health board's accounts should have indicated that it had been forwarded to the office of health management, OHM, and its accounts would also have described what happened.

Chairman

At some stage, somebody was demanding accountability from the next in line.

Mr. Michael Scanlan

That is correct. The report from the Comptroller and Auditor General shows that the same applies if one reverses it. The partnership forum was doing a great deal if the APPM funding is parked. Much of its work involved funding projects, in which case the money went into the partnership forum and was then allocated to various hospitals and health agencies, each of which was accountable for its respective expenditure. In normal parlance, the OHM was accountable in that sense.

Chairman

I have nothing against charities but I will take the charity figure as an example. The SIPTU report indicates that Mr. Merrigan decided to distribute €35,000 from that money to charities, of which €25,000 went to the Special Olympics and €10,000 went everywhere. He made that decision by himself. The person immediately above him in the chain did not receive any paperwork and the midland board did not ask for paperwork. There was a scandalous lack of management, whether under the old system or the new one. People were being paid to be accountable but they did not do their job.

We can investigate Mr. Merrigan further but when we study the workings of how the money was allocated, nobody sought to account for it. Serious players were paid considerable sums of money to account for expenditure in the health service. Hospitals and other health services were under pressure. It is incredible that the system was creaking yet nobody asked questions about this money.

Mr. Smith arises regularly in this discussion in terms of partnership and his position as an employee in the health service. He was some person who engineered this under the noses of the Departments and the unions to extract that vast amount of money and to look after Mr. Merrigan and the other employee of the health service, Mr. Kelly. However, questions arise regarding how one individual working with two SIPTU officials and a health service employee could engineer this without being asked a single question at a time when organisations were expected to scrutinise expenditure. He must have had the confidence of people inside to get the money in the first place and then to account for it. He must have had an understanding with somebody that he was the type of person who could account for it.

It is astonishing that the affair continued for so many years. The SIPTU report finds it incomprehensible. That organisation does not have much ground to stand on but, in fairness, the report referred to the system. The more that witnesses speak about the same individuals when new information leaks out, the harder it becomes to believe it could happen given that so many health services and State agencies were involved. Does Mr. Magee agree? I recognise I am asking him almost the same question as the one I asked after his opening statement but it is unbelievable. The taxpayer must be shocked that, even with so many investigations about value for money being conducted, we are still not able to account for €1.1 million.

One of the most respected unions in the country failed miserably or does not want to co-operate fully in clearing up this mess. It has refused to provide Dr. Smith with the information she requires to complete the jigsaw. As an employee of the State, it is imperative that Mr. Smith accept his obligation to volunteer the necessary details. Irrespective of who is right or wrong, we need to get to the end of the matter. He needs to reconsider his position. Similarly in respect of Mr. Merrigan and SIPTU in general, it is not good enough to blandly claim it is not an official SIPTU account when the documentation is on SIPTU paper and senior officials in a number of Departments clearly understood that they were dealing with that union. I appeal to SIPTU, Mr. Smith, Mr. Kelly and Mr. Merrigan to come clean on this operation because we cannot close our book on it until we know what happened to every piece of the jigsaw. Only then can we draft our own report and recommendations on accounting for taxpayers' money in this sort of situation.

I cannot overlook the failure of the State's systems to control one individual in terms of how the money was drawn down and spent. Officials went on these foreign junkets and they must have seen what was happening. The more we discover about this saga, the angrier I become. My opinion is shared by other members. We are determined to get to the bottom of the matter and our request for information under section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act 1997 is serious. The individuals involved ought to take that into account.

Deputy Shane Ross

I agree with the Chairman. My question on whether these practices were peculiar to social partnership moneys has not been answered. We appear to be dealing with a triangle, the vehicle for which is the social partnership money. I am disturbed by what I see as a lack of vigour in pursuing this money. In regard to the assertion that SIPTU is not in a position to provide the information requested by the HSE, it is in a position to pursue the matter. It is not good enough that that explanation is accepted as adequate. I am suspicious, not of the witnesses but of the fact that for years money was flowing and disappearing into thin air and no one was doing anything about it. People must have known for five or six years that this was going on, including officials in the Department, the HSE and SIPTU. If I am correct, the finger is being pointed at SIPTU which it has been said is not providing information. As such, I presume it is being pointed to as the body from which this information must be obtained. Is it correct that it is not co-operating? Is that true?

Dr. Geraldine Smith

I will take that question which I will address in two parts. I referred to the SIPTU report issued on Friday, 25 March. When we obtained a copy and went through it, we were not satisfied with the level of detail contained therein. As I stated, the expectation of the Committee of Public Accounts and all officials on this side, as stated on two occasions last year, was that the SIPTU report would provide the remaining piece of the jigsaw. We eagerly anticipated its publication. Members will note from the correspondence we have provided that it did not provide us with the information we wanted. It detailed some categories and the relevant amounts and others with no figures. I wrote a comprehensive letter to SIPTU on 19 April asking for clarity on a point by point basis. It replied that it had authorised its financial advisers who had assisted its trustees in putting together the report to speak to me. I met the advisers who told me up front that they had been authorised to give me details in response to some questions but not in respect of others.

Deputy Shane Ross

Does Dr. Smith believe them?

Dr. Geraldine Smith

I do.

Deputy Shane Ross

Does she believe it is right SIPTU should be hiding behind financial advisers?

Dr. Geraldine Smith

I believe the information should be available, but it must be remembered that the financial advisers are being paid by SIPTU trustees and can only act in accordance with their clients wishes.

Deputy Shane Ross

Therefore, they are instructing the financial advisers to tell Dr. Smith that they are not authorised to give particular information and thus hiding behind these financial advisers. SIPTU is withholding information through its financial advisers.

Dr. Geraldine Smith

Possibly.

Deputy Shane Ross

That is correct.

Dr. Geraldine Smith

Yes.

Deputy Shane Ross

SIPTU is refusing to give the information by putting someone in the middle.

Dr. Geraldine Smith

I was expecting clear information on travel and subsistence, trips and a list of the people who had returned €182,000.

Deputy Shane Ross

Did Dr. Smith contact SIPTU directly and tell it to forget about the financial advisers and give the figures?

Dr. Geraldine Smith

The financial advisers were acting on behalf of SIPTU.

Deputy Shane Ross

I know. Why did Dr. Smith not make direct contact with SIPTU and ask for the figures?

Dr. Geraldine Smith

We have been in contact with SIPTU.

Mr. Seán McGrath

I have corresponded with SIPTU directly to obtain all of the information we sought on its report. I have discussed details face to face with it. Unfortunately, in some cases, it is not in a position to give information because it states it does not have it and, in others, as identified in the report, in which we have asked for further detail it has not been provided.

Deputy Shane Ross

Therefore, it is not giving the detail required.

Mr. Seán McGrath

Correct.

Deputy Shane Ross

What does Mr. McGrath propose to do about this?

Mr. Seán McGrath

We are still seeking information from SIPTU.

Deputy Shane Ross

For how long has Mr. McGrath been waiting for it?

Mr. Seán McGrath

The report was published in March. As can be seen from the correspondence given to the committee, we have been in contact with SIPTU during the past couple of months.

Deputy Shane Ross

On what grounds is it refusing to give information?

Mr. Seán McGrath

It is stating in many cases that it does not have the information. In others, it is stating the SIPTU account at local level is outside the scope of SIPTU corporate. It is being run by SIPTU officials, but it is not something over which it has control in terms of the provision of information.

Deputy Shane Ross

SIPTU is stating it has no access to any of the information Mr. McGrath is seeking?

Mr. Seán McGrath

We have had access to some information.

Deputy Shane Ross

On the information it is refusing to give, it is stating it has no access to it.

Mr. Seán McGrath

It is stating it has no access to some of it. As discussed, on reimbursements to the fund, in particular by end 2009-2010, which grew, we cannot close off our investigation into some of the travel undertaken because SIPTU is stating the reimbursements were of moneys back into the system for travel undertaken. We do not have the names of individuals who forwarded the money to SIPTU which has not given us a list of the names.

Deputy Shane Ross

I am trying to establish if SIPTU is withholding from Mr. McGrath information to which it has access?

Mr. Seán McGrath

I believe it is.

Deputy Shane Ross

Why would it do this?

Dr. Geraldine Smith

When I asked the financial advisers the reason we could not have the information, they explained that legal advice to SIPTU trustees determined the content of their report of 25 March and that in that respect they were hamstrung in what they could report.

Deputy Shane Ross

Does Dr. Smith believe that? Legal advice is the last refuge of the scoundrel.

Dr. Geraldine Smith

That is what I was informed.

Chairman

The committee will ask for the information.

Deputy Kieran O’Donnell

The figure for the office for health management, OHM, is €380,000. Is Dr. Smith saying SIPTU is unable to confirm receipt of this amount?

Dr. Geraldine Smith

Yes, it is stating it cannot see it in the levy account statements to which it has obtained access.

Deputy Kieran O’Donnell

They are the bank statements.

Dr. Geraldine Smith

The bank accounts, yes.

Deputy Kieran O’Donnell

Therefore, there is €380,000 unaccounted for outside unvouched items.

Dr. Geraldine Smith

Yes.

Deputy Kieran O’Donnell

This dates back to 2001-2002.

Dr. Geraldine Smith

Yes.

Deputy Kieran O’Donnell

In simple terms, the answer to this issue lies in the bank statements.

Dr. Geraldine Smith

It does.

Deputy Kieran O’Donnell

Is there a possibility that there are other bank accounts?

Dr. Geraldine Smith

I suppose that is a possibility, but it has never come to our attention that there is another account. One possible option is that the money was not paid out by the office for health management. However, the conundrum remains, why would an official of the office for health management write to the Department to confirm, "I have paid the money to SIPTU." That is where we are at right now.

Deputy Kieran O’Donnell

Confirmation has been received that both payments were made to SIPTU.

Dr. Geraldine Smith

No, only one, the July 2001 payment, has been confirmed.

Deputy Kieran O’Donnell

What is the position on the second payment?

Dr. Geraldine Smith

We only have one piece of paper and that is from the Department's assistant secretary to Mr. Smith saying, "We approve and will be giving you €190,000 for frontline supervisors training", which was the name of the-----

Chairman

Who is the assistant secretary?

Dr. Geraldine Smith

Mr. Frank Ahern.

Deputy Kieran O’Donnell

Was this money paid, unvouched, to the SIPTU unofficial account?

Dr. Geraldine Smith

That is the question. We do not know because SIPTU states it cannot see a record of it in the bank statements. As I said, one would expect a lodgement of that size to be readily identifiable.

Deputy Kieran O’Donnell

It is not unreasonable to say this is almost another GUBU. Money has been flowing hither and tither and remains unaccounted for. This is unacceptable to the general public. One would have to say, from a financial viewpoint, that this is scandalous.

Chairman

We will not close this chapter today. We have made our appeal to the various parties involved to co-operate voluntarily. We will seek the information and send the transcript of this meeting to the various parties. We will wait and see what we can achieve through that process. We will revisit this chapter again as soon as we can or when we get the information together. There are too many unanswered questions. We have taken this matter as far as we can today. We will pursue it further immediately following the meeting by way of seeking the relevant information. I will not at this stage call on Comptroller and Auditor General for a final comment.

The witnesses withdrew.

The committee adjourned at 1.40 p.m. until 10 a.m. on Thursday, 12 January 2012.