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Thursday, 18 Apr 2013

Business of Committee

The first item on our agenda is the minutes of our meeting on 27 March 2013. Are these minutes agreed to? Agreed.

Item No. 2 is matters arising. Our last meeting was with the director of the Local Government Audit Service who gave an outline of the work of his office. A common thread appeared in our examination of bodies that receive Exchequer funding which is not subsequently audited by the Comptroller and Auditor General. That common threat relates to the need for greater accountability for this funding, whether it is given to the CIE for school transport, a voluntary hospital or to local authorities for the provision of specific services. It may be appropriate that we draw up a short report on these issues and report to the Dáil with recommendations. I ask the clerk to examine the issue with a view to drawing up an outline of a report that the committee can work on. Is that agreed? Agreed.

No. 3 is correspondence from Accounting Officers received since our meeting on 21 March 2013. Correspondence dated 22 March 2013 from Mr. Robert Watt, Secretary General of the Department of Public Expenditure and Reform, providing information requested at the meeting of 7 March 2013. This is to be noted and published.

No. 3A.2 is correspondence dated 28 March 2013 from Ms Niamh O'Donoghue, Secretary General, Department of Social Protection, providing information requested at the meeting of 14 March 2013. This is to be noted and published. There is one issue where data have not been supplied that relates to the number of people in receipt of a welfare payment who do not attend for interview as part of the work activation process. The committee will examine the issue of labour market activation measures when it examines Chapter 17 of the Comptroller and Auditor General's report with the Department of Education and Skills. We will also bring in FÁS to discuss the issue and it may be appropriate if the Department of Social Protection was already represented at the meeting.

No. 3A.3 is correspondence dated 8 April 2013 from Mr. John Moran, Secretary General, Department of Finance, regarding the provision of information requested at the meeting of 21 February 2013. This is to be noted and published. The correspondence relates to the level of cash retained in bank accounts by public bodies. We will follow up on the issue with the Accounting Office at the Department of Public Expenditure and Reform. The matter was specifically raised by Deputy Harris.

No. 3A.4 is correspondence dated 12 April 2013 from Mr. Brian Purcell, Secretary General, Department of Justice and Equality, regarding the provision of information requested at the meeting of 21 March 2013. This is to be noted and published.

It was after we had that meeting, or that information was requested, that we received a chunk of very detailed information and I wish to acknowledge that his reply was gold standard. When we talk about receiving correspondence from people who appear in front of the committee it is that standard that we seek.

No. 3A.5 is correspondence dated 15 April 2013 from Mr. John Moran, Secretary General, Department of Finance regarding the provision of information requested at the meeting of 21 February 2013. This is to be noted and published.

No. 3A.6 is correspondence dated 12 April 2013 from Mr. John Moran, Secretary General, Department of Finance regarding the provision of information requested at the meeting of 7 March 2013. This is to be noted and published. As we are drafting a report on the work of the Committee of Public Accounts on bank stabilisation that we hope to publish in May, the information contained in the correspondence will feed into the report. I ask the clerk to go back to the Department in respect of the redacted information that was supplied to the previous Committee of Public Accounts on the guarantee as this is directly relevant to bank stabilisation. It is important that we return to Mr. Moran on the basis that we have requested that the documents provided to the last committee meeting that was heavily redacted and request same to be provided to us with perhaps less redaction because we want the information which may not be as commercially, or otherwise sensitive, now as it was then. The information would be relevant for the report that we are concluding and it is important that it is provided to us.

We also asked Mr. Moran on the day if there was a note taken of those who attended meetings over the period in the Department. He was asked to check that out. I ask again that we remind Mr. Moran of the need to provide the information because it is helpful to the report that we are currently undertaking and will provide to the Dáil in May or June.

I ask the Chairman to clarify to which report he is referring.

We agreed to carry out a report to complete the circle, as it were, on bank stabilisation. It is part of the Comptroller and Auditor General's report to us. We are simply finalising all of the details on that matter and concluding the report that I think was started by the previous Committee of Public Accounts. The report will bring all of that information full circle and to a conclusion.

No. 3B refers to individual correspondence. No. 3B.1 is correspondence dated 19 March 2013 from Mr. Pat Brady, Dunboyne, County Meath regarding the apprentice programme allocation and is to be noted. Mr. Brady raised an issue about the further use of equipment installed in Institute of Technology Blanchardstown at a high cost and we should ask the Department of Education and Skills for a note on the matter.

No. 3B.2 is correspondence dated 20 March 2013 from Mr. William Treacy, Ballybrophy, County Laois regarding previous correspondence with the committee regarding welfare of horses and is to noted. Mr. Treacy has engaged in considerable correspondence. He has supplied documentation that he received under FOI that shows how the Department handled the issue. The issues he raises, including the welfare of his horses who were with a trainer, are issues over which the Department of Agriculture, Food and the Marine states it does not have a remit. As the issues have not formed part of a Comptroller and Auditor General report to the committee so the matters raised are outside its remit.

I think that we referred the correspondence to the Garda for investigation because there was an allegation of fraud in previous correspondence.

Did we do that?

Can the committee do anything further, given that the matter is with the Garda?

It was referred to the Garda but they have not responded to the information or the request that we made.

Would they normally come back to us about it?

They may not want to. It is a matter for the Garda.

It is a matter for the Garda now that we have passed on the file. Did the committee receive correspondence from the Garda on the matter?

No. It is matter for the Garda. We just passed on further information.

I thank the Chairman.

No. 3B.3 is correspondence dated 9 April 2013 from Mr. Edward Stevenson, Lusk, County Dublin regarding accounting for the cost and effectiveness of the Hepatitis C Compensation Tribunal. This is to be noted and a more detailed breakdown on legal costs to be sought from the Department of Health in respect of each of the years from 2010 to 2012.

No. 3B.4 is correspondence dated 9 April 2013 from Mr. Sean ÓFoghlú, Secretary General, Department of Education and Skills regarding the provision of a note on issues previously raised by Mr. Bev Cotton regarding Macroom Youthreach Centre. This is to be noted and a copy forwarded to Mr. Cotton.

No. 3C refers to documents relating to the committee meeting 21 March 2013. No. 3C.1 is correspondence dated 11 April 2013 from Mr. Michael O’Keeffe, chief executive, Broadcasting Authority of Ireland re briefing paper on matters to be considered at the meeting of 18 April 2013. This is to be noted and published. No. 3C.2 is correspondence received 16 April 2013 from the Department of Communications, Energy and Natural Resources regarding a briefing paper on matters to be considered at the meeting of 18 April 2013. This is to be noted and published. No. 3C.3 is correspondence received 16 April 2013 from the Department of Communications, Energy and Natural Resources regarding a opening statement, to be noted and published. No. 3C.4 is correspondence received 16 April 2013 from the Broadcasting Authority of Ireland re an opening statement and is to be noted and published.

No. 4 refers to reports, statements and accounts received since the meeting of 21 March 2013. No. 4.1 is the Institutions Redress Board, 4.2 is the Children Acts Advisory Board, and 4.3 is the Broadcasting Authority of Ireland. Do members wish to raise any issues?

Once again we have received accounts nearly 14 months after the end of the year. In terms of the Children Acts Advisory Board it was almost 18 months afterwards. Can the Comptroller and Auditor General indicate why these reports take so long to reach us?

Mr. Seamus McCarthy

All of these were certified in 2012 at various dates. When we complete the audit the certificate goes back to the body concerned, they submit it to their parent Department and then the Minister has responsibility for presenting it.

In general, there is no strict statutory limit and sometimes the requirement to submit it may be overlooked. That is probably what happened with the Broadcasting Authority of Ireland.

This is the fourth time it has happened in the past few months. The week before the Broadcasting Authority of Ireland comes in to meet us, at the end of April 2013, we receive the 2011 accounts. The 2012 financial year has long since passed and the accounts have been prepared. The accounts may not have been signed off by the auditor and the audit may not have been commenced or completed. I find this most unhelpful to the committee. It has happened previously that one hour after visitors left the meeting, they published their accounts for the 12 months prior to the year we were discussing. I refer to the idea of an organisation lodging accounts with the Oireachtas immediately before appearing before the committee, when the accounts are 16 months old. We need to see the accounts for 2012, even if they are not audited. They should have been presented to us in draft form so we can have a meaningful discussion. We are continually given the runaround by State agencies and this is the fourth time I have raised this exact point. It is clear that the financial year has come and gone since the accounts were lodged in the Oireachtas but we do not have the accounts. What is the point in discussing something such as this? The accounts cover a period between 28 and 16 months ago. We are discussing information that is 28 months old, from January 2011.

We should deal with it as part of the work programme. Organisations have a vested interest in not providing us with up-to-date information. Perhaps it is carelessness or the way the public service works to give people information that is 28 months old. As part of our work programme, when inviting any State agency to appear before the committee, we should know the last accounts available to us, whether the subsequent year-end has been completed and where the accounts are for that year, even in draft format. Normally, accounts produced by large reputable organisations produced or prepared for audit should be very close to the final figures at the end of the audit. We should log this in our programme from now on. We are chasing history at this stage.

The Broadcasting Authority of Ireland accounts of 2011 had a clean audit opinion. When were the accounts signed off?

Mr. Seamus McCarthy

On 29 June 2012.

Does the Broadcasting Authority of Ireland then go to the Department of Communications, Energy and Natural Resources.?

Mr. Seamus McCarthy

We give the certificate to the Broadcasting Authority of Ireland. I do not know offhand when the Broadcasting Authority of Ireland gave it to the Minister and when the Minister sent it on. There are two parties to it.

Are the accounts received from the Department or from the Broadcasting Authority of Ireland?

Mr. Seamus McCarthy

The Minister, or the Department, lodges the accounts in the Oireachtas Library.

The route involves the Comptroller and Auditor General conducting an audit, signing off and sending a certificate to the body itself and the body sends the accounts to the Department, before the Department, or the Minister, lays the accounts before the Oireachtas.

Mr. Seamus McCarthy

Yes, but sometimes there is a bit of a gap. We generally sign off on a Word document version of the financial statement, which is then typeset with the annual report.

When does the Comptroller and Auditor General receive the draft accounts for audit?

Mr. Seamus McCarthy

The end of March and earlier for some entities.

Is the Comptroller and Auditor General conducting the audit of the Broadcasting Authority of Ireland accounts for 2012 as we speak?

Mr. Seamus McCarthy


Bearing in mind the question raised by Deputy Sean Fleming at this meeting and at previous meetings, we should write to the Department of Public Expenditure and Reform to ensure the type of information we seek can be provided in a timely fashion prior to meetings. As we schedule meetings with various Accounting Officers, the clerk should take note of what we say so that the information sought is available to us at an earlier date.

Mr. Seamus McCarthy

There was correspondence a couple of weeks ago where a journalist suggested financial statements be published by the Oireachtas. They are in the Library but no one has access to them unless they are put on the Oireachtas website. The Clerk of the Dáil was to talk to the Oireachtas Library about doing so. The point made by the journalist was that the accounts are there but they cannot be accessed. Perhaps it is possible to build a listing of who has submitted and who has not.

That is a matter that came up in correspondence with the Irish Examiner. We agreed it is a good idea and that it should be undertaken.

Clerk to the Committee

They are going to do it.

There is nothing preventing the Broadcasting Authority of Ireland putting its annual report on its website and creating a link to its accounts. I have been at meetings where annual reports have been completed but the organisation in question has not placed the reports on the website for journalists and the public to see. They have been hidden.

Mr. Seamus McCarthy

All of the larger bodies we audit publish their financial statements.

Mr. Seamus McCarthy

Yes, eventually. Where they are published with an annual report, the financial statements tend to be promoted and made available on the website. Certainly, there are gaps as not everyone is doing it.

What are the penalties for companies so consistently late?

Mr. Seamus McCarthy

There are no penalties.

Are there no penalties?

Mr. Seamus McCarthy

No. Generally, we are not talking about companies.

Semi-State bodies are sometimes the worst offenders.

Mr. Seamus McCarthy

I cannot comment on the commercial semi-State bodies but for statutory bodies there are no penalties for late presentation or publication of reports.

Is there no incentive for them to deliver on time?

Mr. Seamus McCarthy

No, other than an expectation or perhaps if the body is appearing before the Committee of Public Accounts. It may then check all the detail and ensure the accounts are presented.

In terms of carrying out an audit, is the timeframe under which audits are to be conducted set down in law? The Broadcasting Authority of Ireland generally has its audit signed off by the end of June. Is that set down in legislation? Statutory accounts must be audited and filed with the companies office within a certain period of time? Is there anything similar in law in this case? The Broadcasting Authority of Ireland accounts could be left run until the year. Is there a requirement that they must be audited by a certain time?

Mr. Seamus McCarthy

There is an expectation under the code of practice for the governance of State bodies that they be done within six months. Generally, we have a peak of certification at that stage. In legislation, there may be a date specified by which the body should provide us with a set of financial statements but there is no date by which we must complete the statements. We cannot complete everything at the same time. We certainly prioritise the bigger State bodies.

Is it a code of conduct as distinct from a legislative basis?

Mr. Seamus McCarthy

Yes, exactly.

I refer to a related point on correspondence. The Chairman touched on this earlier but I missed the opportunity to comment on it. I refer to correspondence item No. 3A.2 from the Department of Social Protection. Question No. 4 follows from an issue I raised about providing more up-to-date information regarding the number of people in receipt of social welfare payments who turned up when they were asked to turn up. At the meeting, we discussed this and the Department suggested between 70% and 80% of those who had been asked to turn up to an interview did so. This was a gigantic improvement on previous figures. The change that happened is that there was more sanction introduced because people would lose a portion of payments if they did not turn up.

I asked for more up-to-date information on that because my recollection is that the figures it gave us were for last summer when the scheme was introduced and it has not supplied that information to us yet and it is after Easter. I would appreciate if we could contact it to reiterate the need for that to be supplied to us because it is now April and we should have more up-to-date information on how that is working.

We will return to that issue anyway but we will write to it.

No. 5 is the work programme. Our meeting next week will be with the HSE to deal with the 2011 accounts. We raised a number of issues in our recent report and we will seek updates on these as well as on the broad range of expenditure by the HSE.

The following week we will examine departmental oversight of the Dublin Docklands Development Authority DDDA. The new chairman of that authority, Mr. John Tierney, has been in contact with the clerk and he will attend the meeting. Mr. Tierney has only recently taken over the chair of this body and his input into the central issue of the acquisition of the Irish Glass Bottle site will be very limited, but we may use the meeting so that he may bring the committee up to date on the current financial position of the DDDA and the plans in place to wind up this body.

The DDDA has supplied the committee with some papers arising from its limited examination of the executive of the DDDA and I have asked the clerk to circulate a note with these so that members are familiar with the agreed approach being taken to the examination of the Comptroller and Auditor General's report on the DDDA. The DDDA correspondence will be circulated to committee members tomorrow and it might be helpful if we met in private session at the start of our meeting next week to discuss the resumed examination of the report of the Comptroller and Auditor General on the DDDA.

Is there anything impeding a proper discussion of the matter when the DDDA appears before us?

The reason I asked the clerk to prepare a note on this and to deal with it in the context of the work programme is that on the last day Ms Lambkin of the DDDA was with us, she gave certain information and she was a key figure during the period of time all of this operated. She is no longer available and has taken up employment elsewhere. We are now resuming that inquiry with the new chairman of the DDDA, Mr. John Tierney. It depends on what members want to do in regard to this but I can see that Mr. Tierney will have no information on the past, bar maybe minutes if he has read them. It is really up to members to decide who should appear before us and how we should proceed with this.

I thought we were not allowed to proceed with this because of ongoing legal matters.

They are over.

Does that mean the Minister has lifted his-----

All of that was dealt with.

Has the Minister lifted his order that we cannot discuss this or how does it work?

Once the court dealt with it, the committee could resume its work. We are not waiting on anyone to lift an order to deal with it. What we will be short of is information because the witness who will appear before us, Mr. Tierney, is a new chairman. The question is how members want to proceed and what other witnesses they might want to invite.

Will representatives from the Department of the Environment, Community and Local Government be at the meeting? My recollection is that the main area on which we wanted to move forward was to understand the governance relationships between the Department and the DDDA at the time. We could not do that because of what subsequently happened. Even if Mr. Tierney is not in a position to comment, will representatives of the Department, who were involved in the oversight of the DDDA at the time all of this happened, attend?

I asked the clerk the same question yesterday. We should emphasise this by asking the clerk to go back to the Department and to say we require those witnesses to attend in order to continue our investigation into the oversight by the Department of the DDDA.

That is the crucial area for me because my understanding is that Mr. Tierney is leaving Dublin City Council quite soon. I do not know if he will play a further role in regard to chairing the DDDA.

Clerk to the Committee

I think he will.

In the same week he is to appear before us, he is taking up his position as CEO of Irish Water.

Will he play a future role in the DDDA?

Clerk to the Committee

As far as I am aware, he will.

The most important thing for me at that meeting will be that people from the Department, who can answer questions on the oversight mechanisms in place at that time, appear. I recollect that at the last meeting we put questions on the operation of the board at that time. Representatives of the Department were involved in those meetings, or were involved in what happened after the meetings in order for action to be taken and money to be spent. We must be able to question them directly on what happened.

Taking that as a position, the witnesses who will be required to attend will be asked to do so.

I agree with Deputy Donohoe but we must bear in mind that the last time the DDDA appeared before the committee, it was somewhat farcical because it felt constrained in regard to the questions it could answer because of ongoing legal action. Now the DDDA will be back in but some of the key people who we want to answer questions have left it. We will have new people in who will answer every question beginning with: "I was not there at time, I have been told this or I have read these notes". This is yet another example of people being involved in major economic and financial decisions which blew up in the taxpayer's face walking off to other employment and never having to face public scrutiny. Can we seek some people who were involved to appear before us, even if they are no longer in the employment of the DDDA? I am sure Mr. Tierney will co-operate but having somebody appear before us who will tell us he was not around at the time will not get to the bottom of the issues to which we want answers.

Mr. Tierney will come in but I take it members are insisting a Department representative comes in and that the person who served on the board comes in, that is, to deal with the oversight of the DDDA. Arising from that meeting next week, it may be decided by members that others who are not now involved in the DDDA should come before us. If that is the case, members can name them and invite them to a further meeting. I presume our meeting next week will not deal with all of the issues and that we will have a further meeting on the matter.

Is there an obligation on those who are no longer directly involved to come before the committee if requested or does it depend entirely on their goodwill?

I think it would be hard for them to ignore an initial request from the Committee of Public Accounts. It would depend then on what role we see them having played or how significant their contribution to the hearing might be as to what we might do to get them to attend.

It is not an absolute that they must attend.

Not the first time, or not when one initially requests them to attend. One can decide thereafter what one needs to do in terms of compellability.

Is there compellability if we require it?

Clerk to the Committee

Let us not go to there until one absolutely has to. The first thing one does is-----

I appreciate people may willingly come in.

Clerk to the Committee

We may be in that territory.

It could arise if people want to avoid answering questions.

Clerk to the Committee


If it does arise, there is that way to deal with it.

Clerk to the Committee

The other issue in terms of what we had agreed last year is that we would invite Professor Brennan, who took over as chairman of the DDDA after the acquisition of the Irish Glass Bottle site had been completed. She took over as chairman and gave some evidence to the committee of the changes she had made. We are in correspondence with Professor Brennan in that regard.

Has she agreed to come in?

Clerk to the Committee

She has discussed it with me. I think she wants to be sure about what she is coming in to discuss. I am working on a note which I will give to members so that they can agree next week on what areas she should be required to come in to discuss.

On receipt of the information that the Chairman will be supplying to us tomorrow, will we have a further meeting on this issue next week, prior to the public session, to agree how we move it forward?

Clerk to the Committee


We are all agreed that the meeting on 2 May will not be the end of the matter. We will be getting the Department of Environment, Community and Local Government's insight into what happened in that period and we will do our best to progress it with the new management that is now in place. After that, we will determine what the next steps should be.

Clerk to the Committee


Have the legal proceedings relating to this particular case concluded?

What would be the normal procedure in terms of how far in advance the committee would send a request to witnesses to appear before it? For instance, for the meeting on 2 May, have the requests been issued already?

Clerk to the Committee

Yes; the request went out to the Accounting Officer of the Department and to the Department of Public Expenditure and Reform. They were put on notice after-----

Has the current chairman of the Dublin Docklands Development Authority been invited?

Clerk to the Committee

Yes; Mr. John Tierney has been in touch with us and confirmed that he will attend the meeting.

There is acceptance of the need to appear before this committee. Is that right?

Clerk to the Committee

Yes. There are no issues in that regard.

I am only posing the question in order to ascertain what witnesses that will be there, as currently confirmed. The Clerk is awaiting a response from Professor Brennan; is that correct?

Clerk to the Committee

Yes, but the parameters and so forth should be discussed by the committee at next week's private meeting.

That is fine. Thank you.

Is that agreed? Agreed.

On the work programme, the HSE is listed to appear before the committee next week and the exact same issue arises that was discussed some minutes ago, namely, the fact that we will be discussing the 2011 financial statements. Has the Comptroller and Auditor General commenced the audit of the 2012 financial statements?

Mr. Seamus McCarthy

Yes; that is well under way.

Here we go again. I have just raised this issue as it pertains to today's meeting and it also pertains to next week's meeting, where the HSE will be discussing its accounts for a period that is between 16 and 28 months ago.

We do not generally confine ourselves to the-----

I know that, but lots of organisations have come before this committee voluntarily, including NAMA and the NTMA, and given us an opening statement on the current, up-do-date position on their accounts. As a result, discussions about those accounts tend to be a bit more current and relevant. Some organisations choose to be helpful while others just stick to the accounts that are listed, which are between 16 and 28 months old. From the perspective of our work programme, we will have to do something about changing the protocols or procedures of this committee so that when an organisation is coming in to discuss its 2011 accounts in 2013, it is put on notice that it will be required to discuss account information that is more current.

I agree, Deputy Fleming, and we have put the accounting officers on notice that we will not confine ourselves to the accounts listed - in this case, those of 2011. We have informed them that we will also be dealing with accounts for 2012 and into 2013.

The other issue concerning the HSE is that it was reported that there was an issue concerning its internal accounts, about which a report was prepared. As I understand it, we have asked for copies of that internal report to assist us with our work and hopefully it will also be available to us at the meeting next week.

Can we ask the HSE to have responses ready to the findings of our own report, rather than telling us that it will come back with further information at a later date? I ask that the executive be ready to respond to questions arising from our public report.

I will put it on notice, in writing, after today's meeting. I will also forward a transcript of today's meeting to the HSE so that it clearly understands the feelings of the members of the committee. Is that agreed? Agreed.

We will now move on to item No. 6 on our agenda, which is any other business. While I do not want to delay these proceedings any further, I wish to respond to articles published recently in one of the daily newspapers and, in the interests of protecting the independence of the Committee of Public Accounts and of transparency and accountability, to deal with the issues raised therein in a non-political way. There is a political content to the reports, which I will deal with outside of this forum. I wish to deal now with the facts relating to the freedom of information request referred to in the articles. I am sure members have all seen the six articles in question.

I wish to say that I was a Minister of State in the Department in question at the time. When the first report was released to the newspapers, it concerned me greatly and was news to me in terms of the figures. My only comment at the time and up to now was that it was, at that time, not a matter for me and that I was not aware of the figures. The construction of the office went on and the office was provided.

I wrote on 4 April to the Comptroller and Auditor General asking him to investigate the matter. He duly responded and I will ask Mr. McCarthy to deal with that response later. In order to deal with the other aspects of the issue which were reported, I wrote to the Standards in Public Office Commission on 4 April and asked that it investigate the matter to determine whether any regulation was breached. I have received a reply from the commission to the effect that it does not have a role in this matter. I received a reply from the Comptroller and Auditor General and he can explain that reply himself. I wrote to him as a Member of the House rather than as Chairman of this committee. The general content of the reply was that the accounts, dating back to 2007, were signed off and he did not see how he could investigate this matter fully.

If any other body or agency had spent that kind of money on an office for a Minister - a Department or the Comptroller and Auditor General - I am sure I would be the first one to say we need to inquire into that. Notwithstanding the fact that the Standards in Public Office Commission and the Comptroller and Auditor General do not see a role for themselves in investigating the matter, I believe this committee must request all the details and paperwork relating to the decisions, costs and any other relevant information concerning that undertaking from the two Departments. The Department of Enterprise, Trade and Employment, as it was then, does not own the building in question. It is owned, on behalf of the State, by the Office of Public Works, which at that time was under the aegis of the Department of Finance. It was the Department of Finance, through the OPW, that actually agreed the costings and spent the money. It is only right that we ask both Departments for all and every single piece of information they have on this matter. When that information is properly compiled, it should be made available to the members of this committee, along with the response given to the newspaper on foot of the freedom of information request. I have a copy of that response and can make it available to the committee if it is not readily available elsewhere. Then the members of this committee can decide what they wish to do. They can ask both Secretaries General to appear before the committee to discuss the details of that project. I believe members would want to be armed with all information relevant to this matter, including the information on the decision makers from each Department.

That is what I would ask for if it was any other matter I read about or that came before us.

Could we ask the Comptroller and Auditor General to comment on the matter? A figure of €250,000 is of concern to the PAC; this is our work. Could the Comptroller and Auditor General comment on the 2007 accounts and the procedures he would go through in looking at this matter? The Chairman has spoken about the available information so perhaps we could hear about the approach the Comptroller and Auditor General would take.

Mr. Seamus McCarthy

As the Chairman said, he wrote to me on 4 April and requested that I consider investigating the expenditure to determine if all guidelines relative to procurement and value for money were observed on that specific expenditure. My understanding is that the expenditure in question was charged mainly to the 2007 appropriation accounts for the Office of Public Works and some for the Vote for the Department of Enterprise, Trade and Employment. Those audits were completed in 2008 and subsequently disposed of by the committee. The option of reopening and audit that has already been closed is not available to me.

Compliance with procurement guidelines and good procurement practice, including if there was competitive tendering and the achievement of good value, are matters that are routinely tested on a sample basis in the course of audit. The sort of risks suggested by the expenditure in 2007, in terms of whether there was extravagance or perhaps non-compliance with procurement, would be routinely tested by us but on a sample basis. I cannot therefore give assurances now about every procurement event in 2007; that is not possible for specific procurement. Generally, however, in the findings for 2007 there were no particular concerns.

One option available to me is to carry out a value for money examination but given the materiality of the expenditure in this case and the lapse of time since then, I do not think it would be the best use of resources available to me. All I can really say is that I do not see anything here that would warrant me carrying out a value for money examination. That was how I responded to the Chairman.

The Chairman wrote to me not as Chairman of the Public Accounts Committee, and I responded to him in what would otherwise have been confidential correspondence from my office. I would not discuss this with anyone else other than that the Chairman has raised it.

I want to make it clear that I do not want to politicise this, this must be kept separate from the political cut and thrust of the argument around it. It is something I would not draw the Comptroller and Auditor General into but I feel, having examined the figures for the first time under that FOI request, that the information as outlined by me should be requested from both Departments.

In terms of the work of the PAC, wearing its non-political hat, is it possible that the information that is forthcoming could be examined by the Comptroller and Auditor General in the normal way? That would allow this to be looked at outside of the political process. The normal examination would have taken place on a random basis. This is one item that has arisen and it must be addressed in the interests of the PAC. We would address any item of expenditure at that level in the normal way and this is no different. Could that be looked at in that way?

Mr. Seamus McCarthy

The difficulty is for me to approach a Department or the OPW to ask for information on a specific expenditure.

If the information was provided to the Comptroller and Auditor General, could he do it in the normal way?

Mr. Seamus McCarthy

There is a question about me doing any further investigation. I would have to do that within the powers available to me. Also, I can only report on a matter and opine on the value for money achieved or whether procurement was adhered to if I do it on the basis of having done some formal work. I have looked at the information about this in the public domain and I do not want to be drawn into giving an opinion on it. If there are risks identified related to this, or an indication of non-compliance with procurement guidelines, I would want to look at that as it currently applies in the OPW or the Department, rather than looking at what happened historically. I do not see any great value in using resources to carry out a formal examination and I do not want to stray into reporting in other guises or giving a layman's opinion. If I give an opinion on expenditure, I want to give it as Comptroller and Auditor General, based on work I would have carried out.

The process the Chairman has outlined sounds thorough and satisfactory. He is quite right to deal with this in this manner because it is an issue of public concern. The sum of money, €250,000, is the cost of a house for many people who are looking to buy one today, and the Chairman has been honest enough to admit that he would be the first to be hopping mad if people came before the committee in similar situations, be they university presidents ordering flowers or anything else we have seen here. It is essential we apply the same guidelines and level of scrutiny to this issue as we would to another issue.

There is, however, a broader issue. Is this an isolated incident? What was the cost of a ministerial office back in that period? Was it only the Chairman's office that cost €250,000? Was this an average cost? There is work that must be done on the protocols in place for ministerial offices. I will reserve my judgment until I review the correspondence, because I have only seen the media reports but those reports clearly suggest the Minister must sign off or approve the expenditure and we must establish the protocol there. Does a Minister actually sign off line by line and should he do so? What is the protocol now?

This is also relative, it must be compared to other ministerial offices at the time. This committee has scrutinised political expenses and public sector allowances and there is a body of work that should be done on ministerial offices on a broader level. When the Comptroller and Auditor General talks about things like value for money, it can only be established by making comparisons with similar situations. We should see if it is possible to establish the protocols and the process for other ministerial offices. Also, is it just that someone has submitted a freedom of information request about the Chairman of the Public Accounts Committee? If the FOI had been about a different Minister of State at that time in that Government, would there have been a similar level of expense? We do not know the answer to that question now but the process outlined sounds satisfactory and those are the two questions we should encompass in that process.

The Chairman is wise to raise this himself because it brings it out into the open. I agree with Deputy Harris.

Would this detail have come up in 2007 in the Committee of Public Accounts at the time?

Mr. Seamus McCarthy

For this specific procurement?

That level of detail of expenditure in a Department. If we were sitting as the PAC in 2007 going through the accounts, would it have been obvious to us that such an amount was being spent on that sort of work?

Mr. Seamus McCarthy

If people were looking at the OPW accounts, I do not think they would see the detail down to that level. They would probably see a line in one of the notes about the level of expenditure on works for Departments, but it would be for the whole Department rather than drilling down a level.

Would it be for the whole Department or for all Departments?

Mr. Seamus McCarthy

It would be set out on the basis of Department by Department.

Would it detail what was spent in that particular line?

Mr. Seamus McCarthy

Generally not, but I think the nature of the works would probably be an indication. For instance, on the OPW Vote there would be a line relating to expenditure for the Garda Síochána which would typically be renovation, decoration, maintenance of Garda stations and so on.

The committee would discover that through questioning the line in the accounts, a member would then be able to get the level of detail. It would be up to the members-----

Mr. Seamus McCarthy

One can pursue a line of questioning with the Accounting Officer for the Office of Public Works in relation to what was purchased or procured for that line of expenditure. Deputy Harris raised some very good points and are examples of the systemic issue that an individual procurement will point to. If I were to do a piece of work I would have to look at the issue in a broader way because things can go with an individual procurement but it may not be indicative of a systemic problem. When I see a systemic problem or if I believe there are grounds, if I see a repeated pattern, as the Deputy states, back in 2007 there was an expectation that a standard of a particular level would apply for Ministers or Minister of State. We certainly question routinely and look for evidence of extravagance. Difficulties arise in cases of decoration or style. The Deputy mentioned flowers and in those cases it is difficult to call it and say that value has been achieved. There may be subjective views as to what style is appropriate and delivers value for money.

That level of detail would only stand out if the expenditure was abnormal and then the Comptroller and Auditor General would bring it to the attention of members. Is that the case?

Mr. Seamus McCarthy

Yes. Sometimes if we find there has been extravagance or waste on a small scale, we will ask the Department to disclose it. In cases where there is a complete loss of value for money, in cases of nugatory expenditure, in cases where money was spent but no value was achieved, or expenditure on credit cards or hospitality being out of the norm, we will ask a client body to disclose it in the financial statements. If it is quite significant and a systemic problem is identified, we will draw it to their attention that they are in breach of procurement guidelines or in breach of value for money expectations. We would suggest to them that they might discuss it in their statement of internal financial control but also outlining there has been a problem and the steps they have taken to address it. If there has been a loss of money, as was the case in the building for the Probation Service in Wolfe Tone Street, we will present a report on cases from which lessons can be learned and lessons that have a wider application than the client organisation.

I wish to develop a point that Deputy Harris raised. If there was a need to do something that had wider repercussions, is Mr. McCarthy saying this can be looked at only from today's guidelines on procurement?

Mr. Seamus McCarthy

No. If there was a situation that had persisted for a particular length of time, let us say for instance that we are talking about a capital project, the initial spend was in 2010 and when we look at the case again in 2011, we have concerns, we can then look back at the history of the project. We would do that and as a matter of routine we would report on the overall evolution of a project. A comparable example might be the look back at the Dublin waste treatment facility, in which one is looking back at the full history of the project to see what actually happened, what happened at the point of specification and so on.

On that basis, one would have to look at what happened across all Departments in the years from 2005 to 2009 to get a full picture of this issue.

Mr. Seamus McCarthy

If I thought it was warranted, but I must be practical about the matter. One does not look back if there is nothing to be learned. One might look at a programme and say there has been expenditure of a similar nature on a housing programme or a grant scheme and one would look back over two or three years to see how money was spent. One might test. Normally the sample testing would be done on a current basis in a situation like that. One would not look for a sample going back to 2006-2007, unless there was a very particular reason for doing it.

I wish to acknowledge the way the Chairman raised this issue. The members of the Commmittee of Public Accounts only ever reach conclusions on matters when we have the facts in front of us and have the evidence. It behoves us not to do so until we see these things ourselves and see the documents in relation to it. With that in mind, I think it is important that the points the Chairman has identified and the action steps he has suggested happen in a timely manner. Could he indicate when he made that request and when he believed the information could be forthcoming? I want to support the point made by Deputy Harris as I think it is important to look at the issue in the context of relative spend at that time for other similar pieces of work so that we can gain an understanding of what was happening in relation to how these things were being addressed in the past and how this can be evaluated against it. The action steps that have been identified are appropriate but I want to see them done in a timely way.

It is important that when the committee writes to individual Departments it shows it has a timeframe.

Was this reported in the Comptroller and Auditor General's report in 2007? If not, why not? What was the reason that expenditure of the level of €250,000 was not picked up and reported on at that time?

Mr. Seamus McCarthy

Most of the expenditure would have been borne on the Vote of the OPW. One is looking at hundreds of millions of euro being spent at that stage. If we did not pick it up in the sampling at that stage we could give no opinion on that specific line of expenditure, but if we tested a sample and found there was no systemic problem with it, that we could see compliance with procurement guidelines and with competitive tendering expectations and so on, then we would not have necessarily reported anything.

What are the typical materiality levels set when the Office of the Comptroller and Auditor General conducts an audit in the OPW?

Mr. Seamus McCarthy

The normal materiality level would be 1% except in cases in which we see - - - - -

That is 1% of spending of a particular Department?

Mr. Seamus McCarthy

Yes, but I should say that we consider and report on a much lower threshold of materiality, a figure of €100,000 is normally taken as the point at which a reference would be made in the certificate or would trigger a report.

Will Mr. McCarthy then explain - - - - -

Mr. Seamus McCarthy

Materiality by its nature - - - - - -

The point I am trying to make refers to points made by all the other members, the procedures that are used in the audit of Departments. We had a combined item of expenditure and once again it is reported. I take Deputy Donohoe's point that it must be based on evidence but I think the Committee of Public Accounts needs to be seen to follow up on public spending. This case relates to spending in the order of €250,000 and yet from Mr. McCarthy's comments, I do not know whether he was not aware of or did not have an opportunity to look at the files to see if it came up in the deliberations of the Comptroller and Auditor General back in 2007.

Mr. Seamus McCarthy

No, we did not examine it in 2007. We did not examine this specific expenditure in 2007.

Mr. Seamus McCarthy


It did not come to be reported.

Mr. Seamus McCarthy


I have been told that items of expenditure of €100,000 or more are looked at. This one was worth €250,000.

Mr. Seamus McCarthy

No. I think the materiality threshold is what one would report upon. If we were to look at every procurement of €100,000 or more, we would never get to report anything.

Mr. Seamus McCarthy

We simply cannot look at every expenditure.

I suggest that we should set a time limit and provide that if the information has not been requested by that time, we will work with the Comptroller and Auditor General to find the best way of bringing clarity to the workings of this committee as it deals with this matter.

I would like to make a slightly more general point. I was the mayor of South Dublin County Council shortly before the Celtic tiger collapsed. When certain buildings were being constructed at that time, I was absolutely horrified with the actual expenditure involved. It would be useful if, as a result of this discussion, we could see a comparison between the amounts of money that were spent on projects such as the one under discussion and the equivalent amounts that would be spent nowadays. That would allow us to see whether we are getting better value for money now than we were then. My impression is that when public buildings were being constructed during that period, the costs went through the roof. It would be interesting to see the situation now, to learn about the extent to which have we improved the situation and to compare what the equivalent costs would be if these projects were being done by the private sector. I suspect that the charges seem to go up across the public sector. Maybe I am wrong in that regard. That is my suspicion.

Mr. Seamus McCarthy

I would like to make an observation in the context of other projects. The trend in construction costs over the span of the 2000s involved an enormous and rapid increase up to 2006 or 2007, followed by a complete collapse. I think there is a general awareness in society that this happened. One would expect every project, considering them on a like-for-like basis, to be procured now at a much better price than would have been the case in 2007. That would be one's expectation purely on the basis of the price indicators. If one were to carry out a piece of audit work based on the hypothesis that this is what one expects to find, one would seek accountability if one found a current project that is not cheaper, on a like-for-like basis, than a 2007 project. An Accounting Officer would have something to answer for, at a current date, in such circumstances.

We will learn very little if we look in isolation at the situation that was reported about the Chairman in a newspaper. People can decide whether the sum of money was large and they can arrive at their own conclusions. It would be helpful if details of the cost of refurbishing and renovating the offices of Ministers and Ministers of State around the same period of time were made available to this committee in order that we could form educated views. We should not have to rely on national newspapers making freedom of information requests to get such details. The expenditure of the Chairman has been subjected to freedom of information requests because he happens to hold a high profile position at this forum. We should know what the position is with regard to similar officeholders at that time. I am calling for that to happen. I do not think it is helpful that the freedom of information system has to be used if such information is to be obtained. That process tends to go on and on for weeks. The information in question should be made available to the Committee of Public Accounts by the Accounting Officers of the various Departments. We should be able to look at the different circumstances and situations. That is how one gets the whole picture. If we do not approach the matter in that way, it will be very difficult for us to come to any sort of judgment or conclusion on this isolated case.

Mr. Seamus McCarthy

According to the committee's schedule, representatives of the Office of Public Works are scheduled to come in to discuss the office's appropriation account on 25 May next. When one looks at the appropriation account, one can see there has been expenditure on capital projects, etc. It would be appropriate in that context to ask systemic questions about how things are done.

Is it the norm for any refurbishment to be paid for by the OPW, as distinct from the individual Department?

Mr. Seamus McCarthy

It is certainly the norm for certain buildings. In the case of a listed building, for instance, the occupant would not be allowed to make any alterations. Decoration and routine maintenance, etc. would probably fall, or can fall, to an appropriation account of a Department. I suppose many Accounting Officers would seek to have the OPW pay for significant works or alterations to take such works off their own budgets.

Was the expenditure we are talking about incurred by the OPW, by and large?

Mr. Seamus McCarthy


The OPW specified the job, tendered the job, checked the tenders, looked at value for money, oversaw the job, authorised payment and approved payment. That was all done in the OPW.

Mr. Seamus McCarthy

My understanding-----

The bill was then sent to the Department.

Mr. Seamus McCarthy

Yes, my understanding-----

Was the Department-----

Mr. Seamus McCarthy

No, actually, I think the bill was actually borne on the OPW Vote. The payment was actually made from the Vote of the OPW.

It was not recouped from the line Department at all.

Mr. Seamus McCarthy

It was not recouped.

So this is an OPW issue.

Mr. Seamus McCarthy

Yes, the making of this particular payment is generally regarded as being a circular transfer.

We have often seen the OPW not being paid by various Departments after doing work in those Departments. Is Mr. McCarthy saying that the amount would not even have been charged to the Department?

Mr. Seamus McCarthy

It would not have been. The cost of extensive works of this nature would not generally be charged to the Department. It would be more likely to be charged for minor maintenance works, such as the repair of light fittings, minor carpentry work, handyman work or some element of craft work. As I understand it, the specification would normally be done by the OPW. I would make a distinction in this regard. While the specification would normally be done by the OPW, as I understand it, there would be a listing of requirements.

Would that be done by the Department?

Mr. Seamus McCarthy

The Department would say that a certain number of people need to be accommodated.

Staff, Ministers and other people.

Mr. Seamus McCarthy

It would say that it needs certain sorts of facilities. Special wiring might be needed for ICT equipment, or storage space might be required. That would normally be specified by the Department on behalf of which the work is being done. As I understand it, the detailed specification and design work would typically be done by the OPW.

I want to be helpful and make sure we understand. By and large, all of this work was done in the OPW. I am bringing us up to date so we understand. If a project like this was being done in any Government office or building today or next year, I assume the OPW would keep a file on it from the beginning to the end. The file would record where all the procedures went up and details of any arguments about payments and quality of delivery. A file should be kept in the OPW by the project manager.

Mr. Seamus McCarthy

I would expect that to be done. If we were selecting a particular project for examination, we would expect a file to be presented to us with all the relevant papers.

When the committee is wording its letter, it should seek the full file from the OPW specifically and also from the Department itself, which may have had a role in outlining its requirements.

I want to clarify one or two things before we move on. We have witnesses to invite into the room. The building occupied by the Department of Jobs, Enterprise and Innovation is not owned by the Department. It is actually owned by the State and the OPW looks after it. My understanding is that it is a listed building. I wish to inform Deputy Harris that it was not my expenditure. The total expenditure came from the OPW. The OPW designed it, laid it out, specified it and did whatever else it did regarding this project. The OPW paid for it. The cost, with the exception of the cost of the furniture, was not recouped from the Department. There was a reimbursement from the Department to the OPW in relation to the furniture aspect of the project. At no stage - this is a political point - did I have an involvement in designing or asking for particular furniture or whatever.

I understand there is a protocol or arrangement in place whereby a particular office is designed in a particular way. For example, an office for the use of a Secretary General, assistant secretary, junior Minister or senior Minister will be designed in a certain way. In this case, the Office of Public Works assumed responsibility for the expenditure on and design of the project. The request to both Departments should take into account the view expressed by members that the investigation should cover the period from 2007 to date and examine the protocols that are in place. The other points of interest raised by members should also be included in the request.

I may have omitted to state that I submitted a freedom of information request to the Office of Public Works seeking a copy of all the material Deputies have sought. I will submit a similar request to the Department, as I have nothing to hide in this matter, which I would like investigated. If the planned meeting with representatives of the Office of Public Works on 25 April does not suit the office in terms of producing the information the committee has requested, we will arrange a separate meeting to deal with the matter.

On the timeframe, I raise this matter today because I am also concerned. I would have stopped the works if I had known they would cost so much money. There is not a political animal in this House who would not have stalled at the cost of an office of that size. I was the first occupant of the office in question, which was subsequently occupied by two other Ministers of State, including the incumbent. It may be no harm for the Deputy to visit the office and ask where the €250,000 - the final cost was €290,000 - was spent.

To respond to Deputy Harris, if we are asking about Ministers and junior Ministers, we should also seek information on Secretaries General and assistant secretaries to ascertain

how we are all treated in respect of this matter. I will supply the plans that were provided under the freedom of information request I submitted. They were certainly different from the plans I saw in today's newspaper. Members need to have the facts.

From the point of view of a timeframe, I have asked for the investigation, and members support the thrust of this investigation and have added their voice to different aspects of it. I presume the committee will write to both Departments concerned today. Given that I wrote to the Office of Public Works on 9 April, I presume it is in the process of compiling the relevant information. There should not be any delay or kicking to touch of an examination of this issue.

Are members satisfied that we have concluded with this matter? As that appears to be the case, we will proceed to the agenda proper. On any other business, is the agenda for the meeting scheduled for 10 a.m. on Thursday, 25 April agreed? Agreed. We will meet the Health Service Executive to deal with Vote 40 - HSE annual financial statements 2011.

I wish to raise one further matter under any other business. I am aware that the committee is restricted in terms of calling in representatives of the Central Bank. May we ask representatives of the Central Bank to come before us to discuss the specific issue of the value for money the bank provides to the taxpayer?

Mr. Seamus McCarthy

There would have to be a specific report on the issue.

Would it have to be a report done by the Comptroller and Auditor General?

Mr. Seamus McCarthy

That is my understanding, yes.

Mr. Seamus McCarthy

The reason is that the Central Bank is a listed entity in the second Schedule of the Comptroller and Auditor General (Amendment) Act of 1993. As a result, it is excluded generally from examination by the Committee of Public Accounts. There is, however, under the 1997 or 1998 Act, provision for me to carry out a value for money examination of the Central Bank's activities. Previously, the only time we did this was when we reported on the Financial Regulator. We have done a report on three occasions and the Financial Regulator of the day has appeared before the committee.

Could we ask the Comptroller and Auditor General to do a specific value for money report on the Central Bank?

Mr. Seamus McCarthy

It is certainly something I would consider. We have shown that where we believed there was an issue to be looked at, we have gone and done that. There is provision for the committee to correspond with me and outline in correspondence issues of concern and so on. I can certainly consider that.

What would Mr. McCarthy require for that purpose? Does he only need a direction from the committee? Could members ask the clerk to the committee to write a letter to the Comptroller and Auditor General asking for such a report to be done?

Perhaps the clerk will liaise with Deputy Ross on the issue.

I will raise the issues I believe to be important and revert to the committee next week.

What is the role of the Comptroller and Auditor General in respect of the Central Bank?

Mr. Seamus McCarthy

I am the auditor of the Central Bank.

In terms of the audit of the Central Bank, one would expect that the committee would be able to request representatives of the Central Bank to come before us on specific aspects of the audit and a special investigation would not be necessary. Is it Mr. McCarthy's view that, notwithstanding the Comptroller and Auditor General's function of auditing the Central Bank, committees of the House may not engage formally with the Central Bank?

Mr. Seamus McCarthy

I can only speak in relation to the Committee of Public Accounts. I believe there is also a reporting line from the Central Bank to the Committee on Finance, Public Expenditure and Reform. In that context, I do not know whether that committee may raise issues.

The law specifically precludes the committee from bringing representatives of the Central Bank before it-----

Mr. Seamus McCarthy

Before this committee.

-----in any form unless the Comptroller and Auditor General carries out a special investigation?

Could we not bring in representatives of the Central Bank on the basis of the Comptroller and General's audit report?

Clerk to the Committee

The Central Bank is excluded. The law specifically states-----

I ask the clerk to circulate to members a copy of the relevant Schedule. What other bodies are excluded?

Clerk to the Committee

They are mainly commercial State-sponsored bodies.

Could we have a note on which bodies are excluded? This is news to me.

Does the committee have any capacity to bring in representatives of the Central Bank other than by means of a special report? Has this been examined legally?

Clerk to the Committee

We have obtained legal advice on the matter. I can write to members setting out the legal advice on the position in respect of the Central Bank. I do not have any difficulty doing that. The issue has arisen previously.

How old is the relevant legislation?

Mr. Seamus McCarthy

It is the Comptroller and Auditor General (Amendment) Act of 1993. I should point out, however, that when the Act was originally passed the Central Bank was not included in the second Schedule. It was placed on the Schedule by a statutory order the following year. I believe it was 1994 but I can get the specific reference.

In that case, the Committee of Public Accounts was able to bring representatives of the Central Bank before it for one year.

Mr. Seamus McCarthy


Mr. Seamus McCarthy

Yes, one year on its accounts.

An exclusion was subsequently introduced.

Mr. Seamus McCarthy

The exclusion lasted for four years until subsequent legislation, either the 1997 or 1998 Act, made provision for the Comptroller and Auditor General to carry out a value for money examination. My office carried out our first piece of work in relation to the Central Bank the following year, which specifically examined banking supervision.

Were any changes made in the raft of legislation introduced in the years since 2008 in respect of the role of the Comptroller and Auditor General? The office is mentioned in many of the Finance Acts and other legislation introduced since 2008. I am trying to ascertain whether there is some provision that would allow the Committee of Public Accounts to request the Central Bank to come before it.

Mr. Seamus McCarthy

As the clerk to the committee noted, there is legal advice.

How recent is the legal advice?

Clerk to the Committee

As far as I am aware, the legal advice was given to the previous committee. The law has not changed in the meantime.

We will proceed with the request made by Deputy Ross, which I presume is supported by members. The Deputy will assist the clerk to the committee with the issues he wishes to raise. The Comptroller and Auditor General will then consider the request and if that is accepted, representatives of the Central Bank could then come before the committee.

The proposal made by Deputy Ross is supported and we will deal with that business. I ask the clerk to write the letter as soon as possible.