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COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 4 Oct 2012

Higher Education Authority - Annual Financial Statements 2011: Discussion

Mr. Seán Ó Foghlú (Secretary General, Department of Education and Skills) and Mr. Tom Boland (Chief Executive Officer, Higher Education Authority) called and examined.

Item number 8 is the Special Report No. 78 on matters arising out of the education audits. Before we begin, I remind members, witnesses and those in the Gallery to turn off their mobile telephones as interference from the telephones affects the sound quality and transmission of the discussion.

I wish to advise witnesses that they are protected by absolute privilege in respect of the evidence they are to give 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 policies.

I welcome Mr. Seán Ó Foghlú, Secretary General of the Department of Education and Skills. This is his first appearance at the committee and I wish him well in his work. I invite him now to introduce his officials.

Seán Ó Foghlú

I am joined by Ms Mary Doyle, deputy secretary in the area of higher education, Mr. Philip Crosby, principal officer in the area of industrial relations, and Ms Laura Casey, assistant principal officer in the higher education area.

I welcome Mr. Tom Boland, chief executive of the Higher Education Authority, and invite him to introduce his officials.

Mr. Tom Boland

Ms Mary Kerr is deputy chief executive of the HEA, Mr. Fergal Costello has responsibility, among other things, for the area of funding for our institutes of technology and Mr. Stewart Roche is the management accountant in the HEA.

Who have we got from the Department of Public Expenditure and Reform?

Mr. Dermot Nolan

I am Mr. Dermot Nolan from the Department of Public Expenditure and Reform and I have responsibility in the area of the education Vote.

I now invite the Comptroller and Auditor General to introduce the special report.

Mr. Seamus McCarthy

I propose to recap briefly on the sector-wide issues I outlined at last week's meeting, but I will refer first to the Higher Education Authority's financial statements for 2011, which are also included in the agenda for today.

The HEA is the statutory planning policy development and advisory body for higher education and research in Ireland. It is also the primary State funding authority for the universities, institutes of technology and certain other designated higher education institutions. The authority's expenditure and disbursements to higher education institutions in 2011 amounted to a total of €1.37 billion. Recurrent grants to institutions accounted for €1.2 billion, or approximately 88% of the total expenditure. Other significant distributions related to capital grants of some €48 million and research grants amounting to €95 million. It should be noted that the Department of Education and Skills also disburses capital grants to the institutes of technology.

The HEA received a clear audit opinion in respect of the 2011 financial statements. However, the certificate draws attention to the existence of balances held in the pension control accounts in five of the universities, which they treat as liabilities due to the authority. The background to the accounts is dealt with in the special report.

The pension control balances contribute to the large cash balances of over €700 million held by the institutions, at the end of the academic year 2011, in commercial bank accounts, which are dealt with in the special report. It concludes that it may be worthwhile reviewing the State's wider treasury management policy and considering the merits of providing for a sweeping-up of surplus funding in third level institutions and other State bodies. The HEA informed us that it was taking steps to slow the flow of funding to the institutions around the year end. Last week, Deputy Fleming asked if we could get an update to 2012. The end of year for the universities was 30 September, so it was not feasible to have something ready for the Deputy. However, I will provide an update as soon as possible.

Control over remuneration levels and employee numbers are matters shared between the authority and the Department. Both were involved in oversight of the employment control framework for the higher education sector introduced in July 2009 and updated on a number of occasions thereafter. Overall, the restrictions resulted in a reduction in staff numbers within the third level education sector by an estimated 7.3% between the end of 2008 and the end of 2010. Over the same period, full-time student numbers increased by an estimated 10.5%. Only one of the institutions concerned, Trinity College Dublin, was identified as not having kept within the terms of the framework.

Rates of remuneration of staff of universities are subject to the approval of the Minister under the terms of the Universities Act 1997. The fact that there were payments in excess of the approved levels for many senior staff was reported upon in an earlier special report. I outlined last week the exercise undertaken by the Department and the HEA to identify the amounts involved over the period June 2005 to February 2011, to provide them with the basis for deciding what action to take on recoupment.

A validation procedure undertaken by staff in my office found that the excess payments amounted to a total of the order of €8 million but there were some cases where there was uncertainty or dispute about the approved level of remuneration. I understand the chief executive of the authority has provided the committee with an update on the final amounts in respect of which recoupment action is proposed.

Another issue raised in the report related to the non-consolidation in the annual financial statements of the results of subsidiary companies of some institutes of technology. This reduces the comparability of accounts across the sector. The HEA has indicated that all institutes that have subsidiaries will be required to prepare consolidated financial statements for financial years from 2012-13 on. The report also drew attention to a number of situations where subsidiaries were in receipt of significant funding from their parent institutions to meet accumulated deficits and where there were transfers from institutions to fundraising foundations, which are accounted for as stand-alone entities whose results are not consolidated. The report noted that the HEA has been engaged in updating the codes of governance for higher education bodies. We understand that the codes will include revised provisions in respect of the governance of subsidiaries. Changes in the code may also be relevant in respect of other matters reported on in the special report, such as remuneration of presidents of institutions and expenses payments.

I invite Mr. Boland to make his opening statement.

Mr. Tom Boland

The special report of the Comptroller and Auditor General on matters arising out of education audits is a valuable review of some important elements of expenditure and control in higher education. In considering the report and in preparing for our meeting today with the committee, two principal considerations were uppermost in our minds. First, the collective responsibility of higher education institutions and relevant Government departments and agencies to secure maximum return for State investment in higher education and, second, the importance of positioning the sector to make the maximum contribution possible to economic recovery and future growth.

We have provided a detailed brief to the committee. It may be somewhat long but we felt that the issues required the fullest background and explanation and I hope the brief has achieved that. I do not intend to deal with the issues in any great detail in this opening statement but in the interests of ensuring the best use of time, I will focus on three areas in particular. Obviously, I and my colleagues are available to answer any questions members of the committee may have.

The Comptroller and Auditor General has raised issues relating to the treatment of cash balances and to treasury management in the institutions. Specifically, the report asks whether there is a case for reviewing the State's wider treasury management policy. The report also noted that any such review would need to take account of the return to the institutions, the impact on the banking system, as well as the level of Government borrowing. The HEA is entirely open to such a review. It is relevant to note that the Department of Public Expenditure and Reform is considering the issue of treasury management generally. In addition, it is also relevant for the committee to note that in respect of the higher education sector, the HEA met the National Treasury Management Agency in February of this year to discuss whether there are immediate opportunities for NTMA to manage cash balances for the institutions. Arising from that meeting it was clear that the existing arrangements of higher education institutions are significantly better than those which the NTMA would be able to offer. However, it is important to note that we will keep the situation under review as will the institutions themselves, in order to ensure that if opportunities arise or circumstances change, then these are exploited.

More generally, I would like to comment on the issue of the level of cash balances in the sector. I wish to emphasise that cash balances are not equivalent to surpluses and do not in any sense imply an over-funded system. The balances represent cash holdings of the institutions at a point in time, arising from a variety of sources. We have set that out in more detail in our background briefing. As it happens, the date on which the Comptroller and Auditor General's report is based is the time when cash balances are particularly high, that is, September. Our own analysis shows that much of the cash in place is committed against current and future liabilities. Examples would include moneys that are ring-fenced for requirements such as pension liabilities, as mentioned by the Comptroller and Auditor General. Another example is funds put aside to meet future liabilities from section 843 developments, where capital projects were undertaken in partnership with private developers, on the basis that the institutions would purchase assets at a specified future time. In addition, I would ask the committee to have regard for the fact that higher education institutions, as complex organisations, need to hold certain levels of cash to ensure that salaries and other liabilities are met in a timely way and that opportunities that arise can be exploited. The provision of upfront funding for research activity is also essential.

As a general rule, the advice to the HEA from an expert group on the issue was to the effect that up to 60 days worth of cash is necessary to enable higher education institutions to operate effectively and prudently. The committee should also note that we are not just discussing cash balances that arise from public funds. Some 40% or thereabouts of the income of higher education institutions comes from non-Exchequer sources, a very positive situation which is very much to be encouraged. The HEA has been alert to excessive cash balances. To address the situation in so far as funds allocated by the HEA are concerned, we have slowed down funding transfers to higher education institutions to take account of cash flows by rescheduling core grant and fee payments and having much stricter payment arrangements for PRTLI projects. Arrangements have also been put in place to facilitate the payment of the student contribution in two instalments. These have all reduced the amount of cash in the system at any one time and will have an ongoing impact in that regard. We will continue to monitor the situation and in addition, it is worth noting that the Department of Education and Skills and the HEA are considering the issue of the payment of research funding in advance and how that can be dealt with in the context of cash balances. This will require consultation with a range of government agencies and Departments.

I will now move on to the findings of the Comptroller and Auditor General in relation to Waterford Institute of Technology. The report notes that there were failures of control in certain aspects of the operation of the institute, specifically in the office of president. The report also notes that the institute has recognised these failures and put in place new control mechanisms to address this. The HEA agrees fully with the conclusions of the Comptroller and Auditor General. It is very disappointing when failures of this kind are identified, to say the least. On the other hand, the fact that they are identified demonstrates that, taken together, the full suite of control and accountability measures do work to identify and remedy failures. Failures of this kind also prompt the accountable bodies - the governing bodies and the HEA for instance - to look again at how systems can be revised and reformed. Apart from the cost of the failures themselves, a greater cost would be that we fail to learn the lessons when these situations arise.

In response to the situation in Waterford Institute of Technology, the HEA contacted all the other institutes to ensure that the appropriate controls, so deficient - and identified as being deficient - in Waterford, were in place and fully operational. We understand that the detailed arrangements vary across the institutes, but I can assure the committee that we are satisfied that appropriate controls are now in place. We are considering whether there would be value in requiring a consistent approach across the entire system and whether that would be practical. The committee should also note that such measures are in place within an accountability and control environment that includes legislative responsibilities, accountability to this committee, internal audit arrangements, audit by the Comptroller and Auditor General, as well as an agreed code of governance which sets out a comprehensive approach to the treatment of issues such as financial controls, risk management, accountability and transparency. Robust processes and systems combined with constant vigilance, regular reviews of processes and procedures and prompt reaction to any failures are key components of an effective accountability and control system.

The committee has, at a previous meeting, dealt in detail with the issue of unauthorised allowances. I hope today that I can assure members that the matter has been dealt with in a satisfactory way. Allowances have stopped, a recurrence of such payments will not arise and the matter has been brought to a conclusion in a way that underlines the seriousness with which both the HEA and the Department and Skills view the issue, without further jeopardising a difficult funding situation in the universities or damaging the quality of the student experience.

Can we publish your statement, Mr. Boland?

Mr. Tom Boland

Yes.

Before we go to our first speaker, Deputy Donohoe, I have a few comments to make. Your opening statement almost ignores the detail of what happened in Waterford Institute of Technology and I am somewhat taken aback by that. Did you take the time to review any of the detail of our meeting of last week? Are you not absolutely shocked by the type of expenditure by the president's office, as explained to us last week and as detailed in the various reports which were presented to the committee?

In your opening statement, Mr. Boland, you said "It is very disappointing when failures of this kind are identified".

You further stated that the full suite of control and accountability measures work to identify and remedy failures. However, it took ten years for them to work. This went on for ten years. What was taking place in the Higher Education Authority such that you did not find them? What was taking place in the HEA such that it's oversight of Waterford Institute of Technology did not work? Did the HEA examine the expenditure? Did the HEA examine the infamous flight from Waterford to Dublin? Can the HEA explain what the consultant was working on with the Department of Education and Skills, why he was in WIT and why was it was necessary to fly him or to transport him in that way from Waterford to Dublin? What action has the HEA taken in respect of WIT? What meetings have taken place with WIT to investigate these figures?

In the opening statement you said that robust processes and systems combined with constant vigilance and regular reviews of processes and procedures as well as a prompt reaction to any failures were key components of an effective accountability and control system. Do you accept that the HEA had none of these over ten years? Will you explain to the committee how this happened in WIT?

Another thing that surprises me is the consistent approach of which you speak. I would have expected this to be the norm in the way the HEA examines the spend in each of the universities or institutes and that the HEA would insist on it. This is taxpayers' money. It is a scarce resource and I would expect a better response in terms of controls from now on and a better explanation of what happened in the past as well.

Mr. Tom Boland

I will try to deal with all of those points and should I omit any of them please indicate and I will take them up again. Naturally, I read the transcript of the of the proceedings last week. I cannot say I was shocked because we already knew the details. We already knew these details because upon the matter becoming public through a freedom of information request we wrote to the institute of technology and asked for details and for the institute to carry out a thorough inquiry into what the various allegations related to. The institute did so.

What year was that?

Mr. Tom Boland

That was in 2011. It was immediately after the freedom of information request, which was submitted in March. On 17 May 2011 we wrote to Waterford Institute of Technology asking for details of the situation. The institute reported to us in July and we found the report to be unsatisfactory. We had asked WIT for details relating to several questions. We asked whether any of the expenditure was used for purposes other than that of the institute; whether any of the expenditure fell outside normal processes for expenditure control, including tendering; whether, if any such expenditure did occur, the system of financial control and review in the institute allowed such expenditure to occur; about the specific controls in place in respect of expenditure incurred by the office of the president; whether any appropriate measures have been taken to improve systems of internal control; and about other actions that the governing body proposed to take in this matter.

We received a report, often referred to as the first Deloitte report, in response to these issues. We took the view that the report did not deal with a range of issues in sufficient detail. As a result of several meetings and telephone conversations with the authorities in the institute a second report was commissioned and, I understand, is more or less complete now but its publication has been delayed for legal reasons. However, we have asked the institution to press forward with the publication of the report and with making that report available to the HEA and the Department unless there are specific legal reasons why this cannot be done. We moved quickly to establish the nature and extent of the problem. In particular we were keen to ensure that the institute moved rapidly towards putting in place the type of controls, specifically in respect of the office of president, which were necessary. On that point we sought to respond reasonably quickly.

The question the chairman raised about what the HEA did and why this happened or was allowed to happen over ten years is a little more difficult to answer, but I do not mean that in an evasive way. The HEA is part of a system of accountability and control in respect of public funding and expenditure in the higher education system. The system includes the institutions and the chief officer and the governing bodies have specific functions under legislation. The system includes a code of governance and deals with issues relating to internal audit committees and the way in which these committees interact with the governing body of the institutes to ensure an accountability culture in each of the institutes. It is at this level that the detail of issues arise in respect of accountability. The Higher Education Authority has a significant role to ensure appropriate procedures and processes are in place in institutions and that they work. It keeps the situation under review and develops alternative solutions when and if difficulties are identified. The HEA has put in place a code of governance for the institutes and the universities which is altogether consistent with the code of governance for State agencies. We review the accounts of the institutions on an annual basis and there are a range of other audits and account reviews that takes place. Apart from the institutional responsibilities and those of the HEA there are responsibilities for the Comptroller and Auditor General and this committee.

Given our mandate and resources, amounting to some 58 staff, it is not practical for the HEA, to be able to interrogate the detail of the accounts of institutions. That is, properly, a function of the chief officer, who is the accountable person, and the governing body along with their combined internal control procedures. It would be wrong for the HEA to try to take to itself the capacity to do that work. The HEA would be unable to do it and we would be taking on a responsibility that ultimately we could not deliver on. Further, we would be absolving the institutions and the management of the institutions from their statutory and fiduciary responsibilities for the moneys they receive.

One objective of the HEA is to create a climate of accountability in the institutions whereby they understand that they are accountable first and foremost. It is not possible for an agency such as the HEA to surface the type of detail that arose in this case. However, it is possible and it is our responsibility when the need arises to act as quickly as possible to ensure that whatever required systems reforms are carried out.

The HEA has failed to instil that culture of audit and accountability in WIT over a ten year period. The HEA audit committee signed off on the accounts and the WIT governing body signed off on the accounts. The only person to raise it was Mr. McFeely. He was here last week. It surprises me that the HEA did not uncover some of the difficulties in WIT during the course of the past ten years. You have referred to accountability and transparency and a culture of audit and so on but that did not exist in WIT. We refer to the office of the president of WIT as part of this spend. I understand the figures used last week were between €30,000 and €165,000.

Surely, that was a line in the accounts that would have startled anyone with an eye for that kind of expenditure.

It is €635,000.

I am sorry, it was €635,000. Surely a question should been asked about it, but it was not raised. I do not expect the HEA to know every single detail and to get down to that level of management. I do, however, expect it to take its oversight role so seriously that WIT understands clearly what is expected of it. It is clear from this ten year period that management completely ignored any effort by the HEA, if an effort was made, to get it to perform properly.

Rather than refer to the single department or president, have you looked at the audit committee, the governing body, the role of Mr. McFeely and the attempt he made to advise on some of the errors that were going on or the spend that was being made, and what was the outcome of that inquiry?

I asked you about specific spend relating to that flight, for example. It is extraordinary that someone would have signed off on transport of that kind and at that level of cost. I believe the figure was €4,200. Did you investigate that? What was the consultant working on that caused him to be in Waterford and caused this transport to be provided to get him back to Dublin? I understand he did not ask for it but that it was provided.

This committee has a right to know that in order to understand what exactly was going on and where and who fell down in the process, because someone did, indeed, fall down. I remind you that a ten year period had elapsed. When you wrote on 17 May 2011, a ten year period had gone by before anything was uncovered. A substantial amount of money is involved, from €30,000 to €635,000.

Deputy Donohoe raised the matter of the aeroplane last week.

I ask you to deal with those questions and we will then go to Deputy Donohoe. I raise it at the start of the meeting simply because I was taken aback when you did not deal with it in your opening remarks.

Mr. Tom Boland

I did not mean to be economical with information in any way, other than to keep my opening remarks short. I fully anticipated the question and I hope to help the committee as best I can in all of these issues.

It is somewhat overstating the situation to say that for ten years the system of control and accountability in Waterford Institute of Technology had broken down or did not exist. The Comptroller and Auditor General's office has said WIT is, by and large, a well-run organisation. There can be no question but that there was a breakdown of accountability and control in respect of one area of expenditure. One can call that disappointing or shocking, but it certainly should not have occurred.

Without wishing to limit its importance, no system of control can guarantee against human failure, or human ingenuity to get around the controls. In the first instance, the job of an institute of technology is to ensure that the processes are as foolproof as possible and that they are regularly reviewed. It is our job to ensure that is happening. It is said we waited ten years. In fairness to the HEA, we did not know this was happening, nor could we have known, until April or May 2011. That is the reality in which we are operating.

With regard to Dr. Port, I understand that, as of yesterday, there is new information on that situation. As far as I can recall, the HEA knew nothing about the presence, or not, of Dr. Port in Waterford. We knew he had been appointed by the Department of Education and Science to do a review of issues regarding the application for university status. We knew nothing, however, of his comings and goings and had no involvement in them. That is as much as we were involved in it. Obviously, we had no knowledge at all of the chartering of private jets to bring him to meetings.

I have been given a note relating to the flights which, if I may, I will read into the record.

During the course of the institute's meeting with the Public Accounts Committee on Thursday 27 September, the institute's response relied upon the information included in the Deloitte report. This report stated, based on clarification by the former president, that this transaction related to the charter of a plane to transport a visitor from Waterford to Dublin. This view has been further reinforced by the statement of the former chairman on 28 September 2012, in which he confirmed the plane was chartered to fly Dr. Jim Port from Waterford to Dublin and stated that, "he was comfortable authorising and, indeed, organising it at the time".

Based upon your query [that is the query of this committee] we have further investigated the matter. The following has come to light. An invoice for the sum of €4,200 was approved for payment by both the former president and the former chairman. The invoice refers to a flight on 29 June 2007, which is at odds with the timing of the trip made by Dr. Port in March 2007. The narrative on the invoice states that it related to the hire of aircraft and pilot for a return flight from Filton, England, to Dublin, including all landing and handling charges at Filton airport and Dublin Airport. When the invoice was presented for payment the institute's finance office queried this transaction in relation to origin, cost and detail. The president's office confirmed that it was in order to pay.

Based on the information to hand, it would appear that the invoice did not relate to a trip from Waterford to Dublin, but a different trip. The institute is currently investigating this matter further and has been in contact with representatives of the airline involved and is awaiting their response. The invoice for the Waterford to Dublin flight in March 2007 amounted to €769.56. Until further information can be obtained in relation to both invoices, only the former president and the former chair can fully clarify the matter.

There were two flights.

Mr. Tom Boland

Yes, a return flight and a one-way flight.

Mr. Ó Foghlú, do you wish to add to that?

Mr. Seán Ó Foghlú

There were three flights. One from Waterford to Dublin, one from England to Dublin and one from Dublin to England.

All paid by the institute?

Mr. Seán Ó Foghlú

From their statement, yes.

At a total cost of?

Mr. Seán Ó Foghlú

Just shy of €5,000.

That was in what year?

Mr. Tom Boland

On a point of clarification, the note I read was prepared for us by Waterford Institute of Technology.

The three flights were in what year?

Mr. Seán Ó Foghlú

They were in 2007.

We are still awaiting clarification from the institute on the reason for these flights.

Mr. Tom Boland

It would appear that, following the committee's discussion last week and request for the invoice, the institute had reason to check the situation and discovered the set of events it has now outlined in the note.

Mr. Seán Ó Foghlú

Given the involvement of Dr. Port and the fact that he was engaged by the Department of Education and Science, it would, perhaps, be appropriate to set out the background to Dr. Port's appointment.

Please do.

Can Mr. Ó Foghlú just recap on the flights?

Mr. Seán Ó Foghlú

First, I would like to clarify his role.

In February 2006, Waterford Institute of Technology submitted an application to the Minister for designation as a university under section 9 of the Universities Act. In February 2007, the Minister appointed Dr. Jim Port, of JM Consulting, to conduct a preliminary examination of the application, having regard, first, to the national strategy for the development of Irish higher education, second, to implications for regional development in the south east in the context of the national strategy and, third, to any likely implications for the overall structure of higher education in Ireland. Dr. Port submitted his report to the Department on 31 July 2007, we published it in February 2008 and it is available on the Department's website.

That was his particular role. Part of his undertaking of that role was a visit to WIT to meet various stakeholders. We understand he was given the agenda for whom he was to meet during that visit by the officers of WIT. We have tried to contact Dr. Port since the last meeting of the PAC and we have not been able to do so. We are working, therefore, on the basis of understandings, what we have on the files and whatever information our own officers have.

However, we will be seeking to speak further to Dr. Port. I understand that Waterford Institute of Technology has also been seeking to speak to him. The Department of Education and Skills - at the time known as the Department of Education and Science - paid the invoices provided by Dr. Port for all his travel to and from Bristol of which the Department was aware. This included his travel to Waterford for the visit which was organised by WIT. The Department was not aware that there was any private transport involved. As a result of examining the agenda for the visit, there was more than just Dr. Port in Waterford at one time of the day and in Dublin at a later time in the day. Unless different transport was involved, the president and the chair of WIT could well have been transported as well. Because we have not spoken to Dr. Port, we do not know who may or may not have been on the flight. We were not aware of the privately organised flight. From what we understand, Filton in England is close to where Dr. Port lives. He would have had a series of meetings during the preparation and finalisation of his report.

We were aware that a meeting was being arranged with the then Taoiseach, Bertie Ahern. Our files indicate that the Department did not know. We understand that Waterford was seeking to arrange this meeting and we are not sure whether this was at president level or at governing body level. We know from our files that on 26 June, Dr. Port told us the meeting was still arranged. We learned either the day before or the morning of the meeting - we are not quite sure because we have been unable to contact Dr. Port - that the meeting was going ahead. We sent some briefing material to the Taoiseach for the meeting. I spoke to the assistant secretary general involved. She does not recall whether it was just prior to the meeting or subsequently that she would have learned there had been a privately acquired aircraft involved in transporting Dr. Port. It would not have occurred to us that it had been organised or paid for by WIT. We were working on the understanding that it was privately provided. We did not pay any travel and subsistence for Dr. Port for the meeting on 29 June.

The statement which Mr. Boland read to the committee a few minutes ago is a briefing note which, we understand, WIT provided to the Comptroller and Auditor General late yesterday. The Department was informed by WIT two days ago about the various invoices. We asked for details which were provided. Because we have been unable to contact Dr. Port, we have been unable to verify the details from his point of view. However, he would not have been involved in requesting flights as these would have been organised on his behalf.

The report by Deloitte & Touche did not uncover any of this information. You mentioned a report.

Mr. Tom Boland

Yes.

How much did that report cost?

Mr. Tom Boland

The report did not uncover the second flight. It identified one flight.

One flight at a cost of €4,200.

Mr. Tom Boland

The more expensive one, as it happens.

The report gave no other details about other flights.

Mr. Tom Boland

No.

How much was Deloitte & Touche paid for that report?

Mr. Seán Ó Foghlú

I have that figure. Their first report cost €25,630. They are still undertaking a second report and the current costing is €64,608, a total of just over €90,000.

Even given the cost of the reports, they never uncovered the other two flights.

Mr. Seán Ó Foghlú

They uncovered a single invoice which was incorrectly attributed to one flight when the invoice was for the return flight.

One would imagine that having spent so much money on a report, it would have uncovered and provided all of those details, but this was not the case. As I see it, that is a failure on the part of Deloitte & Touche with regard to the presentation of the facts compared with what the committee is hearing thus far.

Mr. Tom Boland

If I may make one point. I have not spoken to Deloitte & Touche but one of the points that was made in their report, as I recall, is the speed at which they carried out the particular piece of work. They regarded it as a preliminary - I will not say, quick and dirty - but rather a preliminary review of the expenditure and done under pressure of time and that this may or may not explain this issue.

Mr. Boland, you spent €25,000 on a report. I do not care what time pressure they were under. They had a job to do. They should have forensically examined the matter and this expenditure should have come to light. That is my view.

Mr. Tom Boland

That is fair enough, Chairman.

To begin to sign things away like this and under time pressure is the type of attitude that keeps this committee going. If the attitude was one of zero tolerance for this kind of expenditure, then we might not be here today. However, we are here. It is surprising that as we ask simple questions, we are discovering the existence of further flights and further costs. That is the difficulty for this committee in this hearing. We are not getting the full facts upfront, either from WIT or by way of Deloitte & Touche which was paid €25,600 and which it seems will run up a tab of €64,000. Who was the chairman of the governing body of WIT in 2007?

Mr. Tom Boland

I assure the committee the HEA has a policy of absolute zero tolerance of this kind of behaviour. Redmond O'Donoghue was the chair of the governing body.

The Chairman has asked nearly every question I was planning to ask. When this meeting is concluded I will request that we go into private session to discuss how this meeting is being conducted. I was in attendance for the entire meeting last week and I want to have a discussion about how the Chairman has conducted this meeting because he has been speaking for half an hour.

I am just dealing with the opening statement. We can deal with that. I invite Deputy Donohoe to continue with his questions.

We will deal with it. The opening statement was provided to all members of the committee. I invested a lot of time in preparing for this meeting. I want to have a discussion on how this meeting is being conducted and how information has been given to us.

I return to the matter of the flights. In our meeting last week we were given the information about one flight but we are now informed there were three flights. What was the purpose of each of these flights?

Mr. Seán Ó Foghlú

These are questions for Waterford Institute of Technology. The Department has been informed by WIT of these flights. We obtained the details in a follow-up request as a result of the transcript of proceedings of the previous meeting of the Committee of Public Accounts. The only detail we have is what Mr. Boland read into the record of the proceedings of this committee.

Will the Secretary General provide the dates, please?

Mr. Seán Ó Foghlú

The flight from Waterford to Dublin was on 20 March and the return flight from Filton in England to Dublin was on 29 June.

Is it known who was on each of these flights?

Mr. Seán Ó Foghlú

We have no information. I indicated that from looking at details of the agenda, we can surmise that there were three people in both locations. We were working on the possibility that three people travelled on that flight. WIT has indicated that the flight was for Dr. Port. We have not spoken to Dr. Port and we are unable to confirm who was on the return flights in June but given that the flight was from Filton in England to Dublin, we are working on the assumption that Dr. Port was the only passenger.

Has it been possible to confirm that he was one of the party of three?

Mr. Seán Ó Foghlú

Yes, Waterford Institute of Technology has indicated this is so.

It is extraordinary that last week's committee meeting had a long discussion about one flight and on foot of that discussion, we now find out there were three flights.

Mr. Seán Ó Foghlú

We were very surprised by this additional information.

Deputies McDonald and Deasy spent a sizeable part of last week's meeting quizzing the representatives from WIT about the flight in question. It has emerged during this meeting that there were two other flights. When those at WIT communicated to Mr. Ó Foghlú the existence of those two other flights, did they provide any further information in respect of them?

Mr. Seán Ó Foghlú

All they have given us are copies of the invoices relating to the flights. They went back to check after the hearing in order to try to get as much information for the committee as possible. They gave us copies of the invoices and they indicated on Tuesday that, like us, they are trying to check with Dr. Port.

When was the information given to this committee?

Mr. Seamus McCarthy

At the meeting last week, my recollection is that the representatives from Waterford Institute of Technology did not make a statement about a flight from Waterford to Dublin. I think it was one of the Deputies who raised the question. It was by reference to the Deloitte report, which states that Bell Airways "charter of a plane to transport a visitor from Waterford to Dublin in 2007" cost €4,200. After the meeting I asked to see the invoice in respect of that expenditure. The invoice that was produced relates to a flight in June of that year. We drew that fact to the attention of WIT. I do not believe that the president understood last week that there were a number of flights. It was in the context of responding to us, when we queried the invoice for the June flight - which involves an amount of €4,200 - that the institute discovered that there was an earlier flight as well. That is what kicked matters off. At the meeting, the president did not know there was a second flight.

How was that information communicated to the committee?

Mr. Seamus McCarthy

To this committee?

Yes, the information relating to the existence of two other flights.

Mr. Seamus McCarthy

I think-----

Did Mr. Ó Foghlú not indicate that it was communicated to the Office of the Comptroller and Auditor General during the week?

Mr. Seamus McCarthy

We received the text of the statement, as read out by the chief executive, yesterday.

Did the committee have prior knowledge with regard to the two other flights?

Mr. Seamus McCarthy

No.

No, we did not. For clarification, I wish to state that when the statement was read out it was the first I had heard of it. As Chairman, I am annoyed that we are being obliged to extract information in this way. Prior to this meeting, I did not know anything about the other two flights or the invoice.

Okay. So what happened is that the representatives from WIT informed the committee about one flight and they then presented an invoice to the Comptroller and Auditor General's office. Subsequently, the Comptroller and Auditor General noticed that there was a three-month gap between the flight to which the invoice related and the flight about which the representatives informed the committee. Finally, when those at WIT checked the position they discovered that there had been two further flights.

Mr. Seamus McCarthy

This relates to a return journey. When they carried out further investigations they established that there was a flight in March which cost €759.

This was for the hiring of a second private jet.

Mr. Seamus McCarthy

It seems to have been. I am not sure. We do not actually have an invoice for that as of yet.

Does Mr. Ó Foghlú wish to comment on this matter?

Mr. Seán Ó Foghlú

Just one further comment in respect of the Deloitte report which showed this up. The former president told Deloitte that the invoice which turned out to be for the return flight was for the single flight from Waterford to Dublin. The former chairman confirmed that was the flight in the public statement he made late last week.

Could Mr. Ó Foghlú repeat that explanation?

Mr. Seán Ó Foghlú

Okay. We understand from WIT that it was the former president who confirmed that the invoice which turned out to be for the June flights was for a March flight. We understand that this is why the initial mix-up happened. In addition, the former chairman, in a statement which was issued publicly on Thursday of last week, confirmed it was that flight. I think there was a misunderstanding around that issue. WIT only found the invoice for the March flight yesterday afternoon.

Has anyone seen the statement from the previous chairman?

None of us has seen it.

When was it issued?

Mr. Seán Ó Foghlú

It was issued as a press statement last Friday.

From the previous-----

That was after last week's meeting of this committee.

Mr. Seán Ó Foghlú

Yes.

To whom was it issued?

Mr. Seán Ó Foghlú

We received a copy of it from WIT.

For clarification, that statement was not issued to either the clerk or the committee. We have not seen it.

Mr. Tom Boland

If it is helpful, I can read the statement.

All of the relevant information relating to this matter, including the invoices, should be circulated to the members of this committee. Deputy Donohoe is trying to ask a series of questions and it is unsatisfactory that he does not possess all the information he requires. The clerk should photocopy the invoices in our guests' possession in respect of the flights and circulate them to members in order that we might go about our work in the normal way.

And the press statement.

Yes. The committee has a body of work with which it must deal. The members of the committee are not fools. With respect, Mr. Boland's opening statement bears no relation to what is emerging now.

Mr. Tom Boland

I was not aware of this when I was making my opening statement.

Mr. Boland subsequently read another statement which he had received from WIT. If we had not asked the question, we would not have received the answer.

Mr. Tom Boland

Not true, Deputy, not true.

The information is not in Mr. Boland's opening statement. However, we will not go there. Will the Chairman see to it that we are provided with the information necessary to allow us to do our work?

What happened in this instance beggars belief. I refer to the fact that the invoices relating to the president of an institute of technology hiring a private jet were mixed up. I reiterate that this beggars belief. At our previous meeting, those present stated that they had got to the bottom of what was going on and that everything had been flushed out. However, we have now discovered that there was a second flight - which gave rise to an additional cost - and that this was organised and paid for by the same person. Information relating to this flight did not arise on foot of last week's testimony but - I do not doubt the bona fides of anyone across the table from me in this regard - it has emerged at this meeting as a result of questions asked by members. In addition, information relating to this matter was not presented to the committee.

Mr. Seán Ó Foghlú

We understood from our dialogue yesterday with Waterford Institute of Technology that it would be informing both the Comptroller and Auditor General and the committee in advance of this hearing.

That makes matters even worse. Deputies O'Donnell and Donohoe have requested copies of the various statements and invoices, is that correct?

It would take five minutes for the clerk to photocopy the documents in order that the committee might then go about its business.

We should get that information. However, before we deal with that matter-----

I would like to arrange to have it done now in order that we might proceed with our business.

Okay. Reference was made to the fact that the purpose of the second flight - about which we are discovering information for the first time - may have been to get the passenger to a meeting with the then Taoiseach. Could Mr. Ó Foghlú elaborate further on that matter?

Mr. Seán Ó Foghlú

Certainly. As part of the work Dr. Port was undertaking coming to a conclusion, the Taoiseach, we understand, wished to be briefed about the outcome and about where the report was going. The status of Waterford Institute of Technology was a major political issue, particularly in the context of what this report would say. We understand that the meeting was being arranged by Waterford Institute of Technology at a senior level or at governing body level. We do not know the precise date. We know when the meeting took place but from our records we cannot state when it was confirmed. We know that on 26 June it had not been arranged because we have an e-mail on our records from Dr. Port saying that he understood it was to take place soon but that no arrangement had been made. We know that the meeting took place on 29 June and we know that-----

Does Mr. Ó Foghlú know where the meeting took place?

Mr. Seán Ó Foghlú

It took place in the then Taoiseach's constituency office.

So it took place in St. Luke's. What was discussed at the meeting?

Mr. Seán Ó Foghlú

He was being briefed on the work under way. The report was not completed but he was being informed about the work that had been undertaken by Dr. Port.

What was the focus of that work?

Mr. Seán Ó Foghlú

I have already read out the terms of reference of the work of Dr. Port and I can do so again if the Deputy wishes.

No. It is fine. WIT considered the most appropriate way to get Dr. Port from Waterford to St. Luke's for a meeting, organised with two or three days' notice given of it, was to put him on a private jet.

Mr. Seán Ó Foghlú

That appears to be the case.

Mr. Seamus McCarthy

For that meeting on the 29th, the flight was from Filton in England to Dublin and back again.

Mr. Seamus McCarthy

There was a flight from Waterford to Dublin in March.

On 20 March.

Mr. Seamus McCarthy

Yes, on 20 March.

That was a flight from the UK to Dublin to attend that meeting.

Mr. Seán Ó Foghlú

It was from the UK to Ireland return on the same day.

At a cost of?

Mr. Seán Ó Foghlú

At a cost of €4,200.

Paid for by-----

Mr. Seán Ó Foghlú

WIT.

And arranged by it.

Mr. Seamus McCarthy

Yes.

Where is Filton?

Mr. Seán Ó Foghlú

It is close to Bristol.

Mr. Seamus McCarthy

Near Bristol.

Near Bristol airport.

Mr. Seamus McCarthy

Yes.

Do the witnesses know how near it is to Bristol airport?

Mr. Seamus McCarthy

We did not get out the measuring tape.

It is near a major airport which at the time, I am sure, had direct flights to Dublin Airport. That is a fair assumption to make.

Mr. Seán Ó Foghlú

There were certainly flights from Bristol to Dublin - we do not know the frequency of them.

I would request Chairman that we consider inviting back in WIT to give an account of this issue and how an invoice for a second flight could have been overlooked in its presentation to the committee last week.

Mr. Boland made a point in his opening statement, on which the Chairman picked up, that the HEA should not have known and could not have known the detail of what was going on. How can he reconcile that with the detail we are hearing today regarding the use of jets and the other expenditure that was described last week? Does he really believe that the HEA should not have known about it?

Mr. Tom Boland

There is no system or process in place that would have informed us and therefore we could not have known. The "should not have known" phrase relates to what would be the role of an agency like the HEA and, from a purely practical point of view, it cannot dig down into that level of detail of all the accounts of 30 institutions spending somewhere in the order €2.5 billion. There has to be an appropriate division of labour and responsibility in this space and the first line of responsibility has to be, and is as a matter of law, with the institution, its chief officer and its governing body. Of course when the HEA becomes aware of something like this, we have an obligation to act and interrogate to establish what happened and to look at systems and how they failed but we do not have that role in terms of interrogating the detailed accounts of an institution. We could not have it. We would require a great deal of resources to do it. There would be an excessive duplication of effort there.

I understand that and I am moving on to what can be done to prevent this happening again. Mr. Boland made reference to the fact that he was examining whether a consistent approach is necessary across all the ITs - I think that was the exact phrase he used.

Mr. Tom Boland

Yes.

Will he explain what he means by that?

Mr. Tom Boland

As I understand it, there are different approaches to the signing off of expenditure in the institutes of technology. All of them are good processes. I do not have the entire detail in front of me but we can provide it for the committee. The only issue is whether there would be value in having a single process that involves a signature or review by various officials. That is what I mean. It is more a question of whether this can be done efficiently and effectively or the extent to which it can be improved. I have the list of processes here; my colleague, Feargal Costello, has just provided it and we can provide it to the committee rather than going through it but there are different arrangements.

I have just got a copy of a statement by Redmond O'Donoghue, the former chairman of WIT - which is worth reading into the record given the discussion we are having - in which he says: "Never once in that period was concern about expenditure brought to my attention or that of the governing body by as much as a raised eyebrow - not by the finance function, by internal audit, by the audit committee or by the external auditor who is the Comptroller & Auditor-General". As this is the first time I have seen his statement, I do not think I can comment on it. I will conclude my questioning for the time being. Do we have the invoice?

The invoice is there. The Deputy suggested that we should bring back Waterford Institute of Technology for a further meeting. I suggest the HEA and the Department should be present at that meeting also.

Who is Fewer Harrington Lawlor & Partners?

Mr. Tom Boland

It may be a press agency.

It states here they are architects, planners and project managers.

Mr. Tom Boland

That is right.

Mr. Seamus McCarthy

We do not know.

You do not know. We have before us a few different invoices. We have one from Bell Airways for €4,200, which is the infamous invoice we have been discussing, and another one for €769.56, which is on the notepaper of a company called Fewer Harrington Lawlor & Partners.

Mr. Seamus McCarthy

There is also a Bell Airways invoice just behind that one which is for the same amount and it is addressed to Fewer Harrington. I have just seen this invoice; we did not have this particular invoice but it looks like Fewer Harrington was invoiced by Bell Airways and it in turn recouped the same amount from the institute of technology.

It is for one and the same flight.

Mr. Seamus McCarthy

It is the same flight. That would be my interpretation.

That is for 20 March.

Mr. Seamus McCarthy

For 20 March - Waterford to Dublin return.

The other one is for €4,200 - that is for two flights.

Mr. Seamus McCarthy

It states for a return flight from Filton, England to Dublin - €4,200 on 29 June.

Do we know what role this company had in regard to the report?

Mr. Seamus McCarthy

I have never heard the name before this.

Does the HEA or the Department know?

This was for the second flight.

Mr. Seán Ó Foghlú

The invoice for €4,200?

The first flight.

Mr. Seamus McCarthy

The Fewer Harrington one-----?

The Fewer Harrington one is for the first flight and the invoice for €4,200 is for the second flight.

Mr. Seán Ó Foghlú

For the second return flight.

Do we know what its role was in regard to the preparation of the report?

Mr. Seán Ó Foghlú

We received this at 4.26 p.m. yesterday so we have no-----

The Department does not know.

Mr. Seán Ó Foghlú

Yes.

That is understandable. When WIT are brought back in we should request that it explains for what this invoice is and how it relates to the work that was under way.

Mr. Seamus McCarthy

One point to note is that the Fewer Harrington Lawlor & Partners one is signed off by the former president. The committee may wish to note that.

They are all signed off.

Mr. Seamus McCarthy

Yes. I presume that is his signature; his name is referenced.

Whose signature is on it?

It is the same signature on each one.

It is the same signature on both but there is a second signature on the first invoice.

Whose is the second signature?

Mr. Seamus McCarthy

My understanding is that would have been the-----

On the Bell Airways flight, there is just a reference and on the other there seem to be signatures.

The Bell Airways invoice has two signatures.

Mr. Seamus McCarthy

The June Bell Airways invoice has two signatures and my understanding is that the second is that of the chairman of the board at the time.

Who was to give us the information? We were told yesterday someone was to contact the committee to give us all the information before this meeting.

Mr. Seán Ó Foghlú

From the senior officers in WIT.

Could that be confirmed?

Mr. Tom Boland

By not making any reference to the opening statement this morning, I assumed the committee would know about these flights and that we would be discussing them in detail.

We did not know about that.

Mr. Seamus McCarthy

When we discovered there was an issue with the invoice on Monday, we contacted the institute to tell it there is a requirement to bring a clarification and correction to the committee. We worked on the basis that the information would have been provided to the committee. If I knew they were not doing it, I would have done so. We understood the institute was going to do so.

The committee did not receive it.

Furthermore, I was not informed of any of this. That is why the witnesses' opening statement took me by surprise. I am sure this can be said for the rest of the committee members.

I will let Deputy Fleming contribute and might contribute later on other matters.

We have spent an hour or more talking about the Waterford-Dublin return flight on 31 March 2007, and also the UK-Dublin return flight. We need further details.

Mr. Seán Ó Foghlú

It was one-way to Dublin, and there was a Dublin-Bristol return flight. Our understanding is that there were three flights in total.

The Bell Airways invoice refers to a Waterford-Dublin return flight on 20 March 2007.

Mr. Seán Ó Foghlú

Okay.

It is written on the invoice. That is what I am going by. It says "return". The invoice for the UK flight refers to the hiring of the pilot and to a return flight. Therefore, there were two return flights.

Mr. Seán Ó Foghlú

With regard to staying over in Dublin on the evening of the flight-----

I have no idea. Perhaps we should move on to something else.

My first question is for Mr. Ó Foghlú and Mr. Boland. In February of this year, there was a new memorandum of understanding between the Department of Education and Skills and the Higher Education Authority. Why was there a new one? Was there one previously? If so, what is the difference between the two? Is this matter in any way influenced by issues that arose in the report of the Comptroller and Auditor General?

Mr. Tom Boland

It is a new memorandum of understanding and there was none between the Department and the Higher Education Authority before it was produced. It is now considered good practice – I can see why – for Departments to have clear arrangements with their agencies with regard to their respective roles and responsibilities, and the way in which an agency is to work with the Department.

It is a new agreement.

Mr. Tom Boland

It is a new agreement.

I find it extraordinary that, while almost €1.2 billion in taxpayers' money goes straight from the Department to the Higher Education Authority, there was no formal written memorandum of understanding between the two organisations. Some of the issues pertaining to the third level colleges arose in the 2010 audit.

Consider the position in which we found ourselves early this year. Obviously, the Department was fully aware of what was coming through the system prior to the special report of the Comptroller and Auditor General being produced by way of the annual audit and concerns being expressed. The officials will understand why people would be concerned. Did the Department just wash its hands of the money the minute it wrote the cheque for €1.2 billion if it had no memorandum of understanding? I am not suggesting there was anything untoward but I find it unacceptable that a Department, including its Accounting Officer, would hand over €1.2 billion of taxpayers' money to any organisation, be it another State body or otherwise, without a formal written memorandum of understanding outlining who is responsible and the roles and obligations of each party. Is this normal? Perhaps the Comptroller and Auditor General might advise us whether there would be a memorandum of understanding between the Department of Transport, Tourism and Sport and the NRA, for example? I refer to bodies that receive massive sums of taxpayers' money without even a formal agreement in place. I ask the delegates to comment on that.

Mr. Seán Ó Foghlú

We are working through a process whereby, to strengthen the legislative and formal links we have by means of formal letters and regular meetings, and having regard to best governance, we felt it would be a useful mechanism to develop memoranda of understanding with agencies generally. We are going through a process of developing various memoranda of understanding of agencies in line with good practice. It is not that we are questioning the practice of the past and that we did not have very regular and detailed meetings with the HEA and a regular exchange of information. We felt it would be very helpful to capture the various roles and responsibilities clearly. For example, the HSE would be operating in the context of the code of governance for State agencies and making regular statements to both the Comptroller and Auditor General and ourselves. We felt it would be helpful, however, to capture generally an overall picture in the memorandum of understanding. It would have had regard to all our interaction with the HEA and, in particular, to the system of governance and accountability and the sorts of issues that would regularly arise in audits of the Comptroller and Auditor General or in considerations of the Committee of Public Accounts. It was not specially aimed at addressing those concerns; it was a general working relationship. It also arose in part out of the developing situation pertaining to the changing role of the HEA in the national strategy for higher education and its implementation. We are developing that further and are in discussions with the HEA on its changing role and how it can be best placed to develop that role further in the context of the role the Government envisages for it.

I have no problem with any of that. Mr. Ó Foghlú has highlighted to me what I regard to be across-the-board issues, not specific ones.

The audited accounts refer to a figure of €1.2 billion in Government funding for 2011. The figure was the same the year before. A formal memorandum of understanding was not in place between the Department and the HSE. Can Mr. Ó Foghlú list the other agencies in respect of which a memorandum of understanding has been completed or is in the process of completion? I ask that the committee write formally to every Accounting Officer asking for details of those organisations that have a written memorandum of understanding with the Department in circumstances where those organisations are receiving large amounts of funds.

I am shocked to hear that, up to some days ago, there was no memorandum of understanding in place governing the €1.2 billion in taxpayers' money. I am concerned that this is being repeated across other Departments and that they are only now beginning to address the matter. I would like to know what other gaps were or are in the system and the dates of the agreements. We need to know the agreements are in place. While the Department feels a memorandum of understanding is a good idea, it was not acted upon before 28 April this year. I am not suggesting for a minute there was anything wrong in how the Department did its business but it should understand how we, as members of a public accounts committee, would be unhappy that large amounts of money are going from Accounting Officers without written memoranda of understanding. Do the delegates understand my point? They concur with it because-----

Mr. Seán Ó Foghlú

We agree with the need. The Deputy should not criticise us for improving our relationships and accountability relationships. These things are developing over time. To be fair to the Department of Public Expenditure and Reform, it is considering trying to develop a standard template for these sorts of relationships. We are slightly ahead of the curve on this matter with the HEA. As the various accountability mechanisms evolve - the work of this committee and the Comptroller and Auditor General is very helpful in that regard - and as we consider addendums to existing codes of practice and articulating relationships more formally, we will always be adding on the accountability mechanisms.

We would not say that we did not have an understood relationship prior to when the MOU was signed, but that this copperfastens it formally.

Mr. Tom Boland

In case the committee has any impression that the €1.2 billion is handed over in a vacuum, there was the whole Dáil process. In addition, the Department would send us a detailed letter each year on the allocation and we would account for that. The memorandum is more to do with our relationship in terms of governance than it is necessarily about accountability for the €1.2 billion.

There was never a suggestion from this side that there was anything untoward. The HEA has annual accounts and there are internal financial controls on page one. I would have expected the Department to have internal financial control mechanisms in place. I am pleased the system is in place now but I am surprised to hear it has not always been in place.

I had a quick glance at the memorandum. The Department's function, among others, is to hold the HEA to account in the performance of its functions. Will Mr. Ó Foghlú tell me how it does that?

My second question relates to the liaison agreement on page 7. It states that the Secretary General will meet the CEO and the chairman of the HEA on at least two occasions each year. I accept there will be other communications as well. Does that formal process happen and where and when did it happen?

We have received the annual financial statement from the HEA, which we are examining today. We are looking at more than one particular flight, in case someone thought that was the sole concern of the Committee of Public Accounts. The sum of €1.2 billion is at issue. I would hate to lose sight of the larger amount while we were talking about other important items. Is the annual report of the HEA scheduled for publication tomorrow or in the coming days? I do not refer to the financial statement but to the annual report.

Mr. Tom Boland

The annual report also contains the accounts.

It is unfortunate that we are meeting the HEA today for its yearly visit and the annual report is due out tomorrow. It would have been useful if we could have been given a draft of the report a day or two ago even though it will not be published until tomorrow. The same issue arose with the National Asset Management Agency earlier in the summer. It attended a meeting and its annual financial statement was being published a few days after its annual visit. It would have been helpful to the committee to have read about the HEA’s activities for 2011.

We must ensure that in future when bodies appear before the committee that we have copies of the most recently published annual report. If the report dates to some time ago, then we should be furnished with a draft of more up-to-date information. There might be details in the report tomorrow that we might like to discuss if we were aware of them but we do not have the opportunity. My point is a general one.

Mr. Tom Boland

I apologise but that is not the case. It is not an attempt to excuse ourselves. The Deputy is correct. Perversely, one of the things that delays the publication of an annual report is that it needs to be translated into Irish. However, Deputy Fleming is correct.

It is better than translating it into German.

Mr. Tom Boland

It is a matter of time. One could just as easily have-----

Deputy Seán Fleming

It is okay once it is not being translated from German into Irish. Anyway, we will move on.

The HEA is well placed. Will Mr. Boland send the committee a spreadsheet of this type of information? We had four third level institutions, universities and institutes of technology, at the previous meeting. I would like to get a pen picture, which I am sure Mr. Boland has, of the budget for each of the third level colleges, the number of students - specifying whether undergraduate or postgraduate - the number of staff - specifying whether teaching, research and other staff - and the student-teacher ratio and employment outcomes. The HEA should be able to provide such information. If it is available I would like to hear about the outcome from the €1.2 billion investment and whether it results in good employment and career prospects. I suspect that is what the HEA should do. Will Mr. Boland send something-----

Mr. Tom Boland

I certainly-----

Deputy Seán Fleming

It would give us a good understanding. We get caught in the details relating to Trinity College or pensions and we are not looking at the broader picture.

Mr. Tom Boland

The Secretary General mentioned the extent to which the mandate of the HEA is changing in one key area. We have perhaps been overly focused on matters to do with inputs and regulation and we are moving to a situation where we want to be much more focused on outcomes. We have all the information, except possibly for employment rates.

Deputy Seán Fleming

That may be outside the HEA's remit. Mr. Boland should give us the information available to him.

Mr. Tom Boland

We would not have it by institution anyway. We have the First Destinations report which looks at graduates four months after graduation.

I wish to raise one issue on the cash flow situation from the HEA to the various third level institutes. I accept it is only a small part of it, but up to now the local authorities have paid student support grants to third level institutes. Now, we have this new organisation that we all know as SUSI – Student Universal Support Ireland. I have been dealing with it on behalf of constituents. I understand it will make its payment to the third level colleges in ten monthly instalments, as opposed to the big lump sums local authorities made. The new approach is a far better way. Local authorities will be making cash payments to the third level colleges. Student Universal Support Ireland will be making payments to them also, and the HEA will be making payments. This is probably why large sums of cash are received. It would be better if the Department of Education and Skills were responsible. Most of the money comes from the delegates' budget. Payments to local authorities, through the Department of the Environment, Community and Local Government, are spread out over the year. Bearing in mind the Department's cash flow management and the cost to the Exchequer - I am not suggesting that having cash means having a surplus - I believe it would be better, in terms of the overall management of the State's cash position, if the money were allocated in a more even way. Other arms of the State are paying overdraft interest. I am sure the HSE and local authorities are doing so, while, on the other hand, the delegates' organisation is earning interest. The cash flow requirement needs to be managed a little better.

With regard to bank concessions to the third level colleges, the figure for 2008-09 was €9.4 million, that for 2009-10 was €11 million and that for 2010-11 was €9.9 million. What are the figures for the last academic year, 2011-12, and the current year? The delegation should know given that they provide funding. They should try to find the figure and send it on to us. They should know it in order to manage cash flow and ensure unnecessary sums of money are not being allocated that could be used somewhere else by another Department.

Mr. Tom Boland

I agree totally with the Deputy in principle. It can be done and there should be more management of moneys from all sources. It is a matter of allowing organisations to have cash to assist them in their operations and not creating circumstances in which there might be excessive cash, whatever the quantum might be.

The issue of subsidiaries is in the report. Many of them are audited. Through the delegates or the Office of the Comptroller and Auditor General, can a full list of subsidiaries, a list of every one of the third level institutions, be sent to us along with the last dates of audit? I do not know whether subsidiaries are audited by the Office of the Comptroller and Auditor General or whether some are audited externally. What was the name of the public auditor if it was not the Comptroller and Auditor General? I am always concerned that some subsidiary has run amok and that we will hear about it in two years. I would like to know that. We are hearing today about occurrences a few years ago. There is obviously something occurring this year that we will not hear about for two more years. I would like to know about such issues at this stage.

Mr. Tom Boland

We will do that. The institutions have consolidated accounts in any case, and that includes the subsidiaries. We will get the Deputy all the information.

Are they all included?

Mr. Tom Boland

The universities.

With regard to foreign travel by staff, Mr. Boland said he has approximately 58 staff. I do not necessarily expect him to have all the detail to hand. On note 5 on page 12 of the annual accounts, a figure for foreign travel of €59,185 is listed. On page 13, a sum of €5,645 is mentioned regarding foreign travel in respect of the IRCHSS. Mr. Boland might tell the public what that means. I suspect everybody on the other side of the table knows what it means but that nobody else does.

On the next page, there is a reference to another group, called IRCSET, in respect of which the figure for foreign travel is €11,905. This results in a total figure of €76,735.

Mr. Boland might send a breakdown to the committee.

Mr. Tom Boland

While Mr. Stewart Roche might have the details, I sympathise with the Deputy as the higher education system is bedevilled with acronyms and too often, we assume people know what they are. The IRCHSS is the Irish Research Council for Humanities and Social Sciences and the other one is the Irish Research Council for Science, Engineering and Technology. They had been-----

Are they under Mr. Boland's remit?

Mr. Tom Boland

They are. I am the accountable person for them. They are non-statutory research councils which initially, as a matter of administrative convenience, were put under the Higher Education Authority, HEA. However, that convenience has grown into a full practice. Members should also be aware that from the beginning of this year, both councils have been subsumed into a single entity called the Irish Research Council.

Under whose remit?

Mr. Tom Boland

Under my remit, that is, under the remit of the HEA and I am the accountable person.

Is it a subsidiary body?

Mr. Tom Boland

No. In organisational terms, it is no more than a section of the HEA although it operates with a degree of autonomy in terms of its academic programmes.

Very well. Can Mr. Boland give me an assurance that all the foreign travel to which I have referred is proper and correct?

Mr. Tom Boland

Yes.

Mr. Boland might send members a breakdown of how many staff were involved or whatever. I refer to what members have encountered in other organisations. While I do not suggest there is a problem and take absolutely Mr. Boland's assurance that it is fully accountable, valid and properly authorised at face value, he might forward a note to the committee.

I have a minor question in respect of board members. I note a figure of €129,000 for board members' expenses, which is fine. Each member appears to be getting approximately €6,900. On average, how many meetings do they attend per year for that?

Mr. Tom Boland

There are normally six formal board meetings but almost all board members also are in sub-committees or on task forces. Moreover, there may well be a special meeting on occasion. To revert to the Deputy's earlier point, it is in the annual report.

Yes, I have been looking at it. It appears on page 23.

Mr. Tom Boland

The Deputy does not have to hand the latest annual report.

Mr. Boland is referring to tomorrow's report.

Mr. Tom Boland

Yes, tomorrow's report.

Mr. Tom Boland

All the details are included therein as to who sits on what committees, the meetings they attend, the numbers of meetings they attend and so on.

I am pleased to note there is someone on the board - I will not attempt to pronounce the name - from the United Kingdom, someone from Queen's University Belfast and someone else from Amsterdam. I can understand that Professor Marijk van der Wende would incur higher travel expenses to get here. It does not seem excessive in the context of people travelling from the United Kingdom and Belfast to come to meetings. I note a number of HEA board members come from Donegal and Sligo, as well as from Amsterdam. I give the HEA credit that from what I can see, it appears modest enough in view of the distance people are obliged to travel.

Mr. Tom Boland

I am quite certain there is no extravagance in respect of travel.

Yes, it seems quite modest.

Mr. Tom Boland

Certainly, my experience in respect of the board members is they give a lot and of their time.

It would be easy to make a song and dance today out of the €160,000 paid out between expenses and fees. However, when one considers the distances from which some of those concerned are coming, it is quite understandable. I acknowledge some people would suggest they should do it for nothing but people must be paid if they take days to come to meetings. Consequently, the sum of €6,000 is modest and I look forward to receiving the HEA's report tomorrow.

Seán Ó Foghlú

A couple of the Deputy's questions were addressed to me. On the issue of accountability, the formal accountability is a request for an annual letter where we seek assurance of compliance with the code of practice in respect of a range of matters. In addition, it is seen through the irregular interactions and meeting with the chair at least twice a year as part of that. I was trying to think it through and I definitely have met the chief executive and the chair at least three times since I have been in the job. I believe we will meet again next week. Moreover, I have been at other meetings with the chair and the chief executive when the Minister has been present. I am just talking about those meetings at which I have been. We have regular meetings and that is an important part of our interaction. To be fair to the chair of the HEA, he puts a lot of effort into the engagement. We are at a key time of change in the higher education sector and he is a lead figure in terms of putting in the work and the engagement and in leading the HEA in the important work regarding the landscape document and so on.

I wish to touch briefly on Waterford Institute of Technology and have a few other questions. I thank the witnesses for the documentation they have just circulated to members. A couple of points came to mind and in the interim, I have had a chance to look at the Deloitte & Touche report. It makes specific reference to travel in respect of the Bell Airways charter of a plane to transport a visitor from Waterford to Dublin in 2007 for €4,200. That payment was entered in the accounts under the miscellaneous heading. That was not the appropriate place for such an expense. I suggest to Mr. Boland that in future, the HEA should seek an analysis of miscellaneous expenditure in any account it receives. It is the first heading one should look at because if one examines the trend in the relevant years, the actual miscellaneous figure was €58,000 in 2008 and €27,000 in 2007. The question is whether that payment was tucked in there.

Second, I refer to the invoices with which members have been provided and I have read Mr. Redmond O'Donoghue's statement. Basically, this makes reference to how it pertained to Dr. Port's stay in terms of WIT seeking university status. First, it appears to me as though there were two and not three flights. The invoice to Bell Airways is in respect of a flight taken on 31 March. That was the invoice date and the invoice is No. 198. It was invoiced to Fewer Harrington Lawlor & Partners, which is a firm of architects and planners. It was referenced to Kieran Byrne, the former president of WIT. That invoice was then sent by Fewer Harrington Lawlor & Partners as a single payment advice to WIT for the attention of Kieran Byrne. As far as I can ascertain, this is the same payment and the same flight and it was a trip to Dublin with reference to Nicholas Fewer. Did that flight involve Dr. Jim Port at all? I seek clarification in this regard. That Bel Airways invoice of 31 March was not to WIT but to Fewer Harrington Lawlor & Partners, which obviously was doing work for WIT. The Fewer Harrington Lawlor & Partners invoice that went to WIT was for the attention of Kieran Byrne and was signed off by Kieran Byrne only and was dated 11 May. Then there was a cheque requisition on 15 May for that particular payment.

As for the infamous €4,200 flight, there is an invoice from Bell Airways with no date on it. It is addressed to no one as there is no addressee on the invoice. It simply refers to flight on 29 June 2007, hire of aircraft and pilot for return flight from Filton, England to Dublin, including all handling and landing charges at Filton and Dublin Airport, €4,200. It does not give a date, as one normally would expect with an invoice, does not give an addressee as to whom the invoice was sent and does not state when the invoice was paid. It is signed off by Kieran Byrne and what looks to me like P. O'Donoghue. While I am open to correction, it looks like it was signed off by the former chairman.

I seek clarification on this issue. While people might say it is not huge in the context of the overall budget, in the context of controls and generally, when one looks at the other aspects regarding the use of moneys within the former president's office, it must be open to question. The Secretary General of the Department of Education and Skills should provide members with an overview with regard to the period in question. He should indicate who was paying Dr. Port's consultancy fee and to whom was he reporting? Was he reporting to the Secretary General of the then Department of Education and Science or to the Minister for Education and Science? Who was Minister for Education and Science at the time? Alternatively, was Dr. Port reporting to the President of WIT? Was the Secretary General aware of this flight? Does he have concerns about it? It appears as though there was a flight on 20 March and then a second flight on 29 June. The Secretary General should outline who he understands to have been on the flight and for how long Dr. Port was here.

To whom did Dr. Jim Port report? Was it in the gift of the former president of Waterford Institute of Technology, WIT, to provide this flight? There is significant confusion around this and it does a disservice to WIT and to the Department of Education and Skills. Will Mr. Ó Foghlú give me a flavour on this? Will Mr. Boland give his views on this too?

Mr. Seán Ó Foghlú

Dr. Port was appointed by the Minister at the time, Mary Hanafin, and he reported back to her.

So, he was not reporting to the president of WIT.

Mr. Seán Ó Foghlú

No, but the review was a review of an application by WIT. He visited WIT in March and there was an arrangement made by WIT to transport him on 20 March.

Why was the invoice from Bell Airways sent to Fewer, Harrington, Lawlor and Partners?

Mr. Seán Ó Foghlú

That is an invoice for a different flight. As we have indicated to the committee, we had no idea about it. We received that invoice yesterday at 4.26 p.m.

Mr. Seán Ó Foghlú

We received all invoices.

The committee has not been provided with a copy of these.

Mr. Seán Ó Foghlú

All the invoices the committee has, we received yesterday afternoon.

For clarification, we have an invoice to Fewer, Harrington, Lawlor and Partners, dated 31 March, for a flight on 20 March 2007. Fewer, Harrington, Lawlor and Partners are architects, planners and project managers based in Canada Street, Waterford. The company was obviously doing work for WIT. It was invoiced, not WIT.

Mr. Seán Ó Foghlú

We received that invoice at 4.26 p.m. yesterday. We have no further knowledge of that invoice.

The other invoice is dated 20 March. Does Mr. Ó Foghlú have it?

Mr. Seán Ó Foghlú

I apologise, but I am confused over which invoices the Deputy is referring to.

I have an invoice here stamped 17 April 2007. Its number is 198, and it is to Fewer, Harrington, Lawlor and Partners, suite 13, dated 31 March 2007, flight Waterford-Dublin, booking reference 218, Kieran Byrne, 20 March 2007. That was not invoiced to WIT. What is that flight in respect of?

Mr. Seán Ó Foghlú

Again, we received a statement of staged payment advice covering with that for the same amount of money with Fewer, Harrington, Lawlor and Partners. Our understanding is, from piecing the events together, that it was for a flight on the evening of 20 March.

That is the invoice from Bell Airways. That is the same invoice. The Bell Airways invoice to Fewer, Harrington, Lawlor and Partners relates to the same trip.

Mr. Seán Ó Foghlú

Yes

That trip to Dublin is referenced Nicholas Fewer. We need clarity on this. Is there another flight?

Mr. Seán Ó Foghlú

We are not aware of anything. All the information is provided.

Who provided the Department with the information that this flight was commissioned for Dr. Port?

Mr. Seán Ó Foghlú

We were working on the assumption given from what the former president of WIT said in the context of the Deloitte & Touche report that there was a flight from Waterford to Dublin on 20 March. As I said earlier on-----

The Deloitte & Touche report does not specify it. The report is a one-line job: chartered a Bell Airways plane to transport a visitor from Waterford to Dublin for €4,200.

This is a calamity of errors. First, we have an invoice sent to a firm of architects and planners which does not specify who was on the flight. Then we have an invoice from Bell Airways which does not state to whom the invoice is charged and no date.

Mr. Seán Ó Foghlú

As I said already, the Deputy is asking me questions about a series of invoices which were paid by WIT. The Department has no involvement in the payment of these invoices. We received them by fax yesterday at 4.26 p.m.

What is Mr. Ó Foghlú’s understanding about the time Dr. Port spent in Ireland?

Mr. Seán Ó Foghlú

Dr. Port was in Ireland on a number of occasions. There are two particular occasions associated with flights. One is associated with his visit to Waterford as part of the review process. The second is his visit to meet the then Taoiseach in June.

Was the June 2007 flight to meet the then Taoiseach?

Mr. Seán Ó Foghlú

It appears to be the case.

Does Mr. Ó Foghlú know how many people were on the flight?

Mr. Seán Ó Foghlú

There is no logical reason to think that anyone other than Dr. Port would be on the flight. However, we have no information about that.

Did Dr. Port stay overnight on 29 June?

Mr. Seán Ó Foghlú

Our understanding is that it was a return flight.

On the day? I thought Mr. Ó Foghlú said earlier he stayed overnight.

Mr. Seán Ó Foghlú

No, when he came up from Waterford to Dublin, he stayed overnight in Dublin. We understand from looking at who was attending the meetings, although we have no idea about whether they were on the flight, that the former chair and former president were at many of them.

Ultimately, does the funding for these payments come from the Department or the Higher Education Authority, HEA?

Mr. Tom Boland

I expect it is from the grant paid by the HEA to WIT.

Does Mr. Boland not find it alarming that he has an invoice from Bell Airways which could be to anyone? It was not signed off by the financial controller in WIT but by the chair and the president of the institute at the time.

Mr. Tom Boland

The situation is completely unsatisfactory on several fronts. There is a sense of shock and anger in the committee about the inadequacy of the information provided to it. It is also unsatisfactory that there is, on the face of it, clear absence of controls in the institute over this and some other issues. In the first instance, what we need to do collectively is to establish the facts. That is primarily the responsibility of WIT.

With due respect to Mr. Boland, the facts of the case are that €4,200 of taxpayers’ money was spent on a flight when there were daily flights from Bristol to Dublin.

Mr. Tom Boland

The Deputy is absolutely right. However, he has raised several questions with the Secretary General which we are not in a position to answer at the moment. Those questions should be answered in the first instance by WIT.

How much has been spent on consultants’ reports to date to look into this matter?

Mr. Tom Boland

The figure given earlier was something in the order of €90,000.

I thought Deloitte & Touche did the first report and then Grant Thornton was brought in to do a second report.

Mr. Tom Boland

Deloitte & Touche’s first report stated, there was something in the order of 4,000 items of expenditure that needed to be examined, but it focused its attention on particular issues.

How many reports did Deloitte & Touche do?

Mr. Tom Boland

Two.

Is Grant Thornton doing a further report?

Mr. Tom Boland

No, Grant Thornton is acting as advisers.

Mr. Fergal Costello

Deloitte & Touche did the first report. It did a second report which has not been published yet. Grant Thornton was retained by WIT for advice on corporate governance and how to regularise the relationship with its subsidiaries and associated companies.

Up to €90,000 has been spent on the two Deloitte & Touche reports. How much has been spent on the Grant Thornton service? How much will the total be?

Mr. Fergal Costello

Our advice from WIT is that in total it will be around €136,000 and that Grant Thornton will cost €45,000.

Just short of €140,000 has been spent on consultants' reports.

Mr. Fergal Costello

Covering all the issues.

With due respect, we are asking Mr. Costello questions here where there was information coming to the Secretary General of the Department of Education and Skills as staff were leaving for home yesterday evening. There was a general press release issued not going to the Comptroller and Auditor General and there were people under the impression that the Committee of Public Accounts would be provided with a document, which was read out here today and of which Mr. Boland and the Secretary General had no prior knowledge. Does the HEA have concerns that it is being bypassed in the process and that, in terms of governance issues here, it is being made a fool of?

Mr. Tom Boland

I have no concern in that regard. I have concerns, I grant you, at the length of time that is being taken to clarify all of these issues.

It is five years after the flight.

Mr. Tom Boland

I understand the committee has the first Deloitte report, which was a fairly top-level review. The current Deloitte report addresses a two-year period with a forensic attention to detail. That would not have surfaced these flights because I understand they took place before that two-year period-----

Let me put it another way.

Mr. Tom Boland

Let me finish.

I do not need it. What I want-----

Mr. Tom Boland

If we need more information then we should get it.

This is very simple. The HEA is meeting Dr. Port. Has the HEA sought meetings with Professor Byrne and with the former chair of WIT? This is straightforward, it is about a couple of invoices. The issue can probably be dealt with in quick fashion. Can we get an assurance here today that the Department and the HEA will pursue this and get clarity on it rather than it running into a continuous series of reports?

Mr. Tom Boland

The Committee can get assurance on the latter. However, I do not know whether Profess Kieran Byrne and-or the chair would agree to meet the HEA. I do know that Professor Byrne has not co-operated with the inquiries being conducted on behalf of WIT.

Seán Ó Foghlú

I would draw a distinction with the total reporting. We are very disappointed that the Deloitte report has not been completed. To be fair to WIT, those concerned have been endeavouring to go back through the relevant records and have tried to get as much to us and to the Comptroller and Auditor General as possible in advance of the meeting. To be fair to them, I do not think they had any intention to mislead the Committee of Public Accounts. They probably just forgot to send it on to the committee. I do not think there was a deliberate intention. They were trying to get as much information to us as possible in advance.

With due respect, the General Secretary had the documentation. The Comptroller and Auditor General was under the impression that we would have the report prior to the meeting. Effectively, it is a matter of pressing a button on a screen and sending an e-mail with a couple of attachments. The problem is that we get bogged down in process here. As a member of the Committee of Public Accounts, all I want is that we get an assurance that both the HEA and the Department will look with vigour to seek meetings with Dr. Port, who can bring clarity. They will be meeting WIT, which I accept is under a different management structure. I want assurances that they would have meetings and get to the bottom of this on behalf of the taxpayer.

Seán Ó Foghlú

To be fair to us,-----

Could I intervene here because I want to inform the meeting of something, which I will do in a moment?

In the course of our questions here, I challenged Mr. Boland about his opening statement. Unfortunately, I did not call first on Deputy Donohue because I was shocked by it not addressing the issues. I based the questions in my contribution on the information that we had at that time. We were not aware of the statement that Mr. Boland then read out; nobody was. The other matter of which we were not aware - we must be balanced here in regard to Professor Byrne - was the invoices and the press statement from a press release of last week, which were presented to the committee following a request from Deputies Donohue and O'Donnell. It would have helped us in how we framed our questions, and might have taken some of the frustration and anger out of the exchanges and the debate, had we been told, as the press release indicates, that the then chairman, Mr. Redmond O'Donoghue, had authorised and, indeed, organised the trips at the time. That, to me, is significant information because up to now we were talking about the spend from the president's office and how he conducted the business at WIT. It needs to be put on record that in this particular statement there is significant information which shows that the expenditure on this item was not only at the whim of the president and was not only something that was being done, but was authorised and organised by the chairman. That is what the statement says. I have just had time to look at it and read it.

The second matter I want to clarify is that during the course of the exchange I asked the clerk to the committee to double-check on the e-mails that would have come in to the committee. Earlier, we stated that we received no indication from the president, Dr. Ruaidhrí Neavyn as to what was going on or what we were to be informed of.

Can I make a quick point on that? The agreement on that was purely in relation to the flight from Waterford to Dublin.

I understand that.

It did not relate to the flight from England to Dublin.

It needs to be put on the record that this is contained in it.

To give full clarity,-----

I understand fully.

-----the former chairman basically gave an agreement to the flight from Waterford to Dublin. He makes no reference to the flight from Filton in England to Dublin, and the big cost item was the €4,200.

I understand that. However, the point has to be made, in regard to the statement, that we did not know at the beginning of the meeting.

The second point I want to make is that the clerk to the committee checked the e-mails in the course of our exchange and the following e-mail came in at 5.21 p.m. yesterday to the general e-mail box of the Committee of Public Accounts.

Was this the press statement?

No. This has come into the general e-mail box of the Committee of Public Accounts. It is not addressed to anyone. It states:

I wish to make a correction to a mis-statement in a report referred to at the PAC hearing on 27/9/12. The report in question, produced by Deloitte, indicates that WIT paid an invoice to Bell Airways in respect of the charter of a plane to transport a visitor from Waterford to Dublin in June, 2007, at a cost of €4,200. Upon further investigation it appears that the invoice relates to a return flight from Filton, England, to Dublin.

The invoice for the Waterford to Dublin flight in March, 2007, amounted to €769.56.

This has only come to my attention since the 1st of October.

Yours sincerely

Dr. Ruaidhri Neavyn

President, WIT.

That is the only communication that we received and it was not obvious to the clerk to the committee because it came to a general e-mail box. That is all we received.

I accept that. It does not alter the key point. The key cost here is a flight from Filton, England to Dublin. The former chair, Dr. O'Donoghue, speaks only specifically about the flight from Waterford to Dublin. In summary, will both the HEA and the Department speak to the personnel to get clarity on this and advise the committee accordingly?

Seán Ó Foghlú

Yes.

The presidents of various universities were before the committee last week. I want to check the HEA's view on their point that they are losing out to universities across the world in terms of being able retain and hire staff based on the pay structures, not necessarily the cap of €200,000 but the limits of pay within certain levels of academics, for example, a level below professor, dean and senior lecturers, and they sought flexibility in this area. It is obviously a topic that has come up for discussion.

Is there validity to the claim? Dr. Brady and the provost of Trinity College Dublin, Dr. Prendergast, certainly had strong opinions on it.

Mr. Tom Boland

There is some merit in the point they make. By and large our academic staff are quite well paid by reference to other systems, with the probable exceptions of our nearest neighbour, Australia and the United States. As matters stand, pay in universities is governed by the same procedures as pay in the broader public sector. The HEA is in the process of investigating the sustainability of funding in higher education. Sustainability is not just a question of how to get more money and where to put it. It is also a question of how it is used. In that context, one of the areas we want to explore is industrial relations matters and human resource management to find out how we might quantify the kind of flexibility universities and institutes could be given and how this might impact on their capacity to manage their resources. As matters stand, they have the same flexibility in the overall structure of public sector pay as the Secretary General of a Department or the chief executive of the HEA, that is, none.

We discussed some of these issues last week. The issue arising for the two university heads is not as much the total amount of money available to them to allocate to wages as the lack of flexibility in that parcel for retaining staff. That appears to chime with what Mr. Boland has said in regard to the lack of flexibility in the various wage gradients for university heads to reward and recognise individuals. Is that issue being examined in context of the study to which he referred?

Mr. Tom Boland

I want to correct myself in that there is a small degree of flexibility. Universities can, through what is known as a departures framework, appoint individuals at higher levels if they are what we might call high flyers. However, its use is very limited - we are speaking about a handful of people across the sector - and it is monitored closely by the HEA. The issue of flexibility has to be considered in the overall scheme of the public service but Government policy for the public service is not a subject I am qualified to discuss. However desirable it may be, I imagine it would be difficult to create this type of flexibility in one part of the public service without impacting on other parts. On a purely personal basis, I have no doubt that value could be found through this kind of flexibility but it might be difficult to achieve because of the environment in which it arises.

Seán Ó Foghlú

I understand I will be invited back to speak about public sector allowances in the near future and I look forward to that engagement. We are clearly operating in a challenging environment in terms of public sector expenditure on staffing. In that context, universities have been raising certain issues with us in recent years but, equally, concerns have been expressed about universities making payments they were not entitled to make. These matters were examined in reports by the Comptroller and Auditor General and have been considered in this committee. We have addressed the issues arising and earlier this week the Minister for Education and Skills published a draft Bill to ensure that where a university is making a payment beyond the amount authorised the Minister may order an investigation and make directions.

Is there a substantive issue of university staff not staying in Ireland because of the total compensation packages available in comparison to neighbouring countries?

Mr. Tom Boland

I am a believer in evidence-based policy making. I do not think the evidence to that effect is overwhelming but certainly that is happening in some cases. To use the phrase again, high flyers are more likely to be attracted away from Ireland. However, people also go to other jurisdictions for other reasons. An individual may leave Ireland because the laboratory facilities or the team members potentially available somewhere else are much better. It is not simply a question of vast numbers of academics travelling around the world in pursuit of higher salaries. By and large there is a reasonable level of stability. At the top notch level to which the presidents were referring, the capacity of Ireland to attract individuals is limited but we have nonetheless attracted and retained a number of high quality people. It is not a black and white story but I still see value in granting flexibility to universities and institutes in the area of pay given that it accounts for three quarters of their resources. I am, however, aware of the complex environment in which that would arise.

In regard to WIT, the invoice for €4,200 is very skimpy on details but the previous invoice dated 31 March sets out the number of hours for the flight, the landing, the aircraft and the VAT charged. Further clarity is needed on the invoice for €4,200 in terms of the date it was issued, to whom it was issued, details of the flight, when it was paid, how it was approved and the passengers on the flight. WIT has a good academic name but this issue needs to be concluded for the sake of its students and academic staff. The second report by Deloitte & Touche needs to be published and I expect the same in respect of the Grant Thornton report so that the institute can get on with its work. I would like the matter to be concluded speedily and I note the undertaking to keep the committee updated over a short period of time.

In respect of the details of the invoice for the Bell Airways flight from Waterford to Dublin, I assume the return flight was empty. I suspect the flight from Filton involved an aircraft that was sourced in England. I do not imagine Bell sent an aircraft to Filton to fly to Dublin. As Bell Airways is part of a much larger group, it may not have operated the aircraft itself. The company which supplied the aircraft may have invoiced Bell, which simply passed on a summary invoice. I ask the witnesses to investigate whether Bell received a background invoice from the company which operated the flight from Filton to Dublin and back.

Some people may question why we spend so much time discussing amounts in the order of hundreds or thousands of euro.

There is a bigger issue of process that has aggrieved all of us. We had a meeting last week during which we were assured we had got to the bottom of everything in terms of understanding what happens. Not only did we find out that we are not, but it is then communicated in such a way that it comes to the committee at the last minute and, in effect, a third party - the witnesses present today - had to communicate it to us. When dealing with an issue such as this, the process of how we see it being resolved is very important. I have a strong sense that this has not been managed in a way that gives respect to the committee and the work we are trying to do particularly in light of assurances we received last week that this was drawing to a close. I regret that today's witnesses had to give the information to us given that they received it at the same time the committee did. In effect they are in the firing line for questions from us when that should have happened last week. The real source of disappointment for me is the breakdown in how it has been handled rather than just the money itself. That is why it is very important for us to find an answer to these questions here. The way this has come to light is very unsatisfactory for us and also for the witnesses.

Mr. Tom Boland

I am reminded by Deputy O'Donnell's reference to Waterford's good name. I wish to say this for the record. There has been quite a lot of discussion about Dr. Jim Port. Dr. Port is a consummate professional of international standing and there is obviously no imputation at all by anybody of anything improper.

Mr. Tom Boland

He has done very excellent work for various aspects of the Irish higher education system and is altogether an entirely excellent person.

We have a job of work to do and I am not casting aspersions on anyone.

Mr. Tom Boland

I accept that.

However, there is an issue of how public funding was authorised and if we did not do this, we would not be doing our job.

Mr. Tom Boland

No criticism is implied of the committee.

We accept what Mr. Boland has said - it will show on the record. I believe it was also stated last week that while Dr. Port's name was mentioned no impropriety of any kind was attached to him. I believe Deputy Donohoe may have said so last week.

Seán Ó Foghlú

I wish to respond to Deputies Fleming and O'Donnell. Yes, we will look at all the different issues they suggested as part of our dialogue and we are anxious to get to the bottom of this.

I have a question for Seán Ó Foghlú and Mr. Boland. When we return and have a representative from Waterford Institute of Technology, Mr. Boland representing the HEA and Seán Ó Foghlú representing the Department, perhaps one single person might be prepared to present the detail and provide the complete answers to the questions that have been raised and remain unanswered. In order to avoid moving from one official to another, one person should be responsible for gathering that information in respect of the questions that have been raised. That would help the hearing in terms of time and clarity.

Seán Ó Foghlú

We will endeavour to do that as well.

I call the Comptroller and Auditor General.

Mr. Seamus McCarthy

I might come in on a few points. There was an exchange about the attractiveness of Irish third level institutions and so on. I do not think mention was made of the framework provisions that exist for exceptional payments to be made in exceptional cases. In terms of the work we have done here in presenting payments in excess of ministerially approved levels, framework agreement cases are excluded because they are actually approved within the framework context. I think in the discussion last week, the provost was making the point about trying to attract people into administration and management posts rather than into academic posts. There is a danger that the discussion might get-----

I apologise for interrupting the Comptroller and Auditor General. I believe it had issues with staff at the level below professor, including dean and senior lecturer.

Mr. Seamus McCarthy

On a general point it struck me that on the issues on remuneration in excess of ministerially approved levels and to a certain extent the employment control framework issue in Trinity College, there may be a difference of experience of third level institutions in issues of sanction. Universities have come under a much stricter control system since the introduction of the Universities Act 1997. It takes time for an institution that is used to doing a thing in a particular way to understand and knuckle down to controls that may be alien to it. To a certain extent that may be part of the background to the confusion about the Waterford Institute of Technology case and dealing with the committee.

Deputy Fleming's point about getting a sectoral view and having an overview of what we are doing with the money is a very important point and we will keep pushing that idea of focusing on what bodies are achieving with the money. That is why we have tried on a number of occasions to produce reports that try to give a sectoral view and identify sectoral issues. I suppose the individual difficulties in individual institutions will be the test of where those systems need to be further enhanced. Hopefully they will contribute to feedback to the HEA and the Department on areas in which controls need to be strengthened.

Given that we will conduct a further hearing, we will leave special report No. 78 open. Is that agreed? Agreed.

I thank the witnesses for attending.

The witnesses withdrew.
The committee went into private session 1 p.m. and adjourned at 1.20 p.m. until 5.30 p.m. on Tuesday, 9 October 2012.
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