COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 7 Nov 2013

Business of Committee

Chairman

Are the minutes of the meeting of 24 October 2013 agreed to? Agreed.

We have received correspondence since our meeting on Thursday, 24 October. No. 3A.1 is correspondence, dated 24 October 2013, from Mr. Colin Bray, chief executive officer, Ordnance Survey Ireland, providing additional information requested by the committee at its meeting on 17 October. This correspondence is to be noted and published, with the exception of the details of the lease for Tuam and Sligo. One issue that needs to be followed up on is the payment of board director fees, irrespective of whether board members attend meetings. We will include this matter in an upcoming report.

No. 3B.1 is correspondence, dated 6 September 2013, from Mr. John Moriarty on the National Aquatic Centre. The correspondence is to be noted. The evidence given to the committee on the contracts entered into by Campus and Stadium Ireland was subsequently corrected and, therefore, no further issues arise.

No. 3B.2 is correspondence, dated 10 October 2013, from an anonymous source regarding St. Catherine’s special needs school, County Wicklow. The correspondence is to be noted and a copy forwarded to the Health Service Executive for a note on the issues raised.

Deputy Simon Harris

This is a school in my constituency. I have raised this matter before and stated the HSE will have to comment on it when it attends the committee on 14 November, in particular the audit undertaken which has not been published but which has been widely leaked to the media.

Chairman

That was noted.

No. 3B.3 is correspondence, dated 18 October 2013, from Ms Geraldine Tallon, Secretary General, Department of the Environment, Community and Local Government, providing a note previously requested on issues raised by Mr. Michael Barrett, Lakeside Marina, Athlone. The correspondence is to be noted and a copy forwarded to Mr Barrett.

No. 3B.4 is correspondence, dated 18 October 2013, from Mr. William Treacy, Portlaoise, County Laois on Horse Racing Ireland and the Turf Club. The correspondence is to be noted.

No. 3B.5 is correspondence, dated 24 October 2013, from Mr. Tom Moran, Secretary General, Department of Agriculture, Food and the Marine, providing a note previously requested on issues raised by Mr. William Treacy. The correspondence is to be noted and a copy forwarded to Mr Treacy.

Deputy Sean Fleming

When will representatives of Horse Racing Ireland or the Turf Club attend the committee? With other issues, we could raise this matter concerning Mr. Treacy.

Chairman

We will arrange it in the work programme.

No. 3B.6 is correspondence, dated 22 October 2013, from Mr. Brendan Ryan, chief executive officer, Courts Service, providing a note previously requested on issues raised by Mr. Kevin Fitzgerald regarding Digital Audio Recordings-Courts Service. The correspondence is to be noted and a copy forwarded to Mr. Fitzgerald

No. 3B.7 is correspondence, dated 22 October 2013, from Mr. Seán Ó Foghlú, Secretary General, Department of Education and Skills, regarding a note previously requested on issues raised by Mr. Owen Mullins regarding education grants. The correspondence is to be noted and a copy forwarded to Mr. Mullins.

No. 3C.1 is correspondence received on 31 October 2013 from Mr. Adrian Neilan, chief executive officer, Bord na gCon, enclosing briefing material on matters to be considered at the meeting on Thursday, 7 November 2013. The correspondence is to be noted and published.

No. 3C.2 is correspondence received on 5 November 2013 from Mr. Adrian Neilan, chief executive officer, Bord na gCon, enclosing the opening statement from Mr. Phil Meaney. The correspondence is to be noted and published.

No. 3C.3 is correspondence received on 5 November 2013 from Mr. Adrian Neilan, chief executive officer, Bord na gCon, enclosing his opening statement. The correspondence is to be noted and published.

Deputy Sean Fleming

Before we move on from correspondence, I am most concerned about correspondence we have not received. At least five weeks ago we had the Accounting Officer for the Department of Public Expenditure and Reform before the committee. He was asked to provide answers to simple questions that he did not have on the day. Most of these answers could have been provided in 24 hours. There is no reason all the information requested could not be supplied within seven days. Five weeks have now passed and there have been several further requests. I am proposing that if we have not received the information requested by next week, we ask the Accounting Officer to present himself for ten minutes at the beginning of the following week’s meeting to explain why he has not supplied the information. It is not about him giving the answers but to explain why an Accounting Officer for a Department with which this committee liaises has not responded to requests for information. While people may think this is extreme, often committee members ask questions, are told they will receive a reply but do not obtain one. As a matter of form, from now on if an Accounting Officer does not supply information requested after four weeks, he or she should be automatically brought back for ten minutes to explain why he or she has done so. It would probably be the best way of ensuring we receive the answers and information requested. Perhaps the secretariat will go through all of the meetings held since the summer and find out what information we have not received from Departments. Secretaries General should be put on notice that if we do not receive it within the next week, they are to come before the committee to explain why they have not responded.

Chairman

Is any other member offering?

Deputy Sean Fleming

Can we agree to write to the Secretary General of the Department of Public Expenditure and Reform to explain that we need the information requested? It is six weeks since our meeting with him. It is not good enough.

Chairman

The Deputy’s suggestion that the Secretary General or Accounting Officer automatically appear before the committee if information requested is not received by the committee within four weeks is reasonable and should be standard practice. On the specific question of the information sought from the Department of Public Expenditure and Reform, it is setting a bad example for other Departments when this committee is trying to set a good example to ensure there is a good response publicly to queries raised by it. I suggest we send a copy of the Official Report of the meeting to the Secretary General. It is reasonable to suggest that if we do not receive a reply by next Thursday, he be asked to come before the committee next Thursday. I do not believe he can let it go another week, as it will just continue on until Christmas.

Deputy Eoghan Murphy

Effectively, Deputy Sean Fleming’s proposal is that if information requested from a Secretary General is not presented within ten days, he or she will be back before the committee in three weeks.

Chairman

Yes, they will have ten days in which to reply.

Deputy Eoghan Murphy

That is fair.

Chairman

That would help us in our work. We will send a transcript and if there is no response, we will set aside some time next Thursday.

I think it will take more than ten minutes but we will get the explanation then. Does any other member wish to raise matters?

At the meeting with the Department of Public Expenditure and Reform, I asked that we would get some assurance that people involved in whistleblowing in the Department would be given appropriate protection in their employment in the spirit of the legislation that is coming forward. I cited a number of cases where employees of the State are being sidelined and are not being given work to do. They are victims simply because they are whistleblowers. I relate this in particular to FÁS. I was assured at that meeting that this would happen and that they would be given the appropriate protection in the spirit of the legislation but I am aware that this is not happening. I am asking the clerk to write to the Secretary General reminding him of the commitment he gave and asking him to ensure that this commitment is extended to FÁS given recent developments there.

In respect of correspondence that came before us under the Department of Education and Science where the community-based Tipperary Hostel project was provided with funding amounting to €4.2 million, I reported to the meeting that I went down to see that project. The old church that is there has been properly and appropriately restored. The floorboards in it are now lifting and there is much maintenance to be done on what I imagine was a very good job undertaken by those involved. The main project of the building adjoining the church is half-finished. The €4.2 million that was invested in that project by the Government and taxpayer is now lying idle. It is unfinished and losing money in the process. The reply we received from the Secretary General was that it was his view that any matters relating to the continued development of the Tipperary Hostel project rest primarily with Tipperary Town Council and Tipperary Hostel Limited. That overlooks the point I made on the day, which was that we need to protect the investment of €4.2 million already made by the Government. It is simply not right that it would be left to fall asunder for the want of completing the job. Perhaps more money should be spent on it but it should be completed and the €4.2 million protected. I asked the Secretary General that day to provide a full report on the matter and now it has been pushed to Tipperary Town Council, Tipperary Hostel Limited, Pobal and others. We need to go back to the Department of Public Expenditure and Reform on this and ask what is going to be done. We have more correspondence relating to this before us and it is a scandal that this matter would be let go without intervention from some Department or without bringing the various players in this together to find a solution. I ask the committee to agree that we write to the Secretary General to ask for a more comprehensive report on this matter with a view to bringing forward some sort of resolution to the problem that exists and to inform us as to how they intend to protect the investment of €4.2 million made by the taxpayer in that project.

The other matter we would like to get up to date on is the letter to the Committee on Procedure and Privileges regarding the investigation into the SIPTU fund.

Clerk to the Committee

The delay here relates to the fact that the Houses of the Oireachtas (Inquiries Privileges and Procedures) Act was introduced in September. Under that legislation, the Houses of the Oireachtas are required to draw up new Standing Orders mainly relating to the protection of witnesses who come before or are compelled to come before inquiries. That has not been done yet so once that is finished, we will be able to proceed. We have an application in but we want to be able to see what the guidelines are.

Chairman

Can we write to them to remind them that this is a dated matter, we are anxious to draw a conclusion to it and we would like to see a bit more efficiency on their side in providing us with the appropriate framework to bring in the witnesses under compellability and to conclude our report?

Clerk to the Committee

Yes.

Chairman

It is not good enough that it would drag on from year to year. The last item that is outstanding is the Dublin Docklands Development Authority, DDDA.

Clerk to the Committee

The next stage is that the former CEO of the DDDA, Mr. Paul Maloney, is due to appear before us on 28 November 2013. After that, it had been agreed that we would call in the former chairman, Professor Niamh Brennan, who took over the DDDA after the purchase of the Irish Glass Bottle site. We can review it after that to see if there is anything more for us to do or whether we can conclude our report at that stage.

Chairman

Will we be able to conclude with the list of witnesses before the end of November so that, again, we can move to close off something that has been hanging around for years?

Clerk to the Committee

We may be able to do it in December. I must talk to Professor Brennan. Mr. Maloney is coming in on 28 November. At that stage, we will be able to review matters and possibly have a follow up with Professor Brennan. We may be able to do it.

Chairman

If it facilitates witnesses, perhaps another day other than a Thursday can be set.

Clerk to the Committee

Yes.

Chairman

I am sure members are quite agreeable to that in order to get through the workload but to have that amount of work dragging behind either because of CPP or dates is not satisfactory. Will we be launching the bank stabilisation report next week?

Clerk to the Committee

At our last meeting, we agreed that we would first of all send it to the Department of Finance just to check our figures. The Department is working on that and will get back to me tomorrow. The other issue that came up at that meeting was that the committee agreed that we would give a copy of the report and invite in a number of retired former officials. I am awaiting the updated draft of the report which will go to them tomorrow. I suppose we should give them an opportunity to have a say on that report if nothing else.

Chairman

We invited Mr. Doyle, Mr. Neary and Mr. Cardiff to appear before us.

Clerk to the Committee

Mr. Cardiff gave evidence to the committee but Mr. Doyle, Mr. Neary and Mr. Hurley were the three people in question.

Chairman

We should inform all of them, and possibly Mr. Cardiff because he gave evidence, that this is our report, give them copies and see if they will come forward as witnesses at some future meeting.

Clerk to the Committee

Yes.

Deputy Simon Harris

Since the Chairman is bringing so many issues to finality, it reminded me of another issue we have discussed many times, namely, the lack of accountability once money leaves central government and goes to local government. It is timely to look at this again considering the publication of the Local Government Bill. I would take the Chairman's advice and guidance on this but we raised the following issue with the Minister for Public Expenditure and Reform by way of a letter and with the Secretary General of the Department when he was here on a number of occasions and the Secretary General of the Department of the Environment, Community and Local Government. The issue was the fact that members collectively are not satisfied that there is adequate scrutiny when money goes to local authorities. The Minister for Public Expenditure and Reform gave us an answer from memory that he was open to looking at this committee having a greater role in tracking that money. I think that is desirable but if it is not going to happen that way, we need to know what is going to happen instead. In my county alone, I could list a litany of complete and utter waste. We do not have the same level of opportunity to scrutinise that. There are vast sums of money on deposit and on loan and development levies not paid. Again, I am open to suggestions from the Chairman and the committee but I think we should pursue it with the Departments of the Environment, Community and Local Government and Public Expenditure and Reform at this stage in the context of the Local Government Bill by reiterating our desire for some greater level of transparency in terms of local government funding.

Chairman

Would it be possible to facilitate that and bring in the Secretary General of the Department of Public Expenditure and Reform and possibly the Secretary General of the Department of the Environment, Community and Local Government and have a discussion with them?

Deputy Simon Harris

I know they were both in but the Bill has been published since they appeared before us and I have yet to see in the Bill what greater scrutiny there will be from when money leaves central government to go to local government so I would very much welcome that.

Deputy Eoghan Murphy

Deputy Simon Harris is correct in regard to the need to follow local government expenditure, but I thought we had already addressed this issue. We met in private session at one stage because we attempted to see a change in the legislation, but that change was not forthcoming. The idea was that we would either do our work as a sub-committee investigating local spending or that there would be another arrangement. We discussed the issue and a decision was made on the role we would play. I cannot remember the decision made off the top of my head, but some new practice was meant to be developed.

Chairman

We spoke about the engagement between the local government auditor and the Comptroller and Auditor General in improving the oversight of local expenditure, but nothing has changed since.

Deputy Eoghan Murphy

Was a new practice not meant to be implemented on foot of the dialogue between the Comptroller and Auditor General and the local government auditor?

Chairman

I ask the Comptroller and Auditor General to comment on the matter.

Mr. Seamus McCarthy

Two things are relevant. There is an agreement between us and the Local Government Audit Service that we will look for areas in which we can co-operate in order that we can bridge any accountability hiatus. Obviously, however, we have to work within our existing legislative remit. It could be a situation where we run a joint audit process whereby the service does the work on the ground in the local authorities and we examine the national issues. It is envisaged in the proposals on the reform of local government that a national oversight committee will be established to examine the more systemic issues relating to the business of local government. That is not something in which I will have a role. I am not up to date on how the proposal is being developed and whether it is provided for in the Bill. To a certain extent, we need to sit back and wait to see what is put in place and how it will be operationalised.

Deputy John Deasy

Does that mean if the Comptroller and Auditor General does not have a role in the new arrangement, we will not have a role as a committee?

Mr. Seamus McCarthy

That is right.

Deputy John Deasy

Does the committee have scope to suggest amendments to a Bill?

Clerk to the Committee

We are precluded from dealing with policy issues. It is for the Oireachtas to consider that matter. I do not think we should be taking on an advocacy role, but we can deal with the matter. There is a chapter in the annual report of the Comptroller and Auditor General on the funding to local authorities. It is an avenue, but it is not adequate in the context of following the money.

Chairman

Can we write to the two Ministers to suggest there is a gap in the arrangement, whether on the local government audit side or in our role as the Comptroller and Auditor General and the Committee of Public Accounts, and that we would like to see a structure in place in which we would be involved in auditing the local government expenditure where it came directly from central funds?

Clerk to the Committee

Yes.

Chairman

We are pointing to a gap or failure in the system and asking them to address it. When Mr. Watt was here previously, he indicated clearly that he was favourable towards changes in how our work was done.

Deputy John Deasy

While we are speaking about the Minister for Public Expenditure and Reform and Mr. Watt, I remind the committee that Deputy Robert Dowds and I have been working on the issue of commercial rates. We have raised the issue at this committee on three or four occasions in the past year. It is another important element when it comes to local government. Taking up what Deputy Simon Harris said about what the Minister, Deputy Brendan Howlin, had offered with regard to the committee investigating this area, there is an acceptance of the arguments we have been making on commercial rates. The Ministers and Secretaries General to whom I spoke in the past couple of days appeared to accept the amendments we would be tabling to the Local Government Bill 2013. We need to take an holistic view of commercial rates when it comes to the two Departments mentioned. The Departments of Finance and Jobs, Enterprise and Innovation could also play a role. There has been a lack of joined-up thinking between Departments on commercial rates and their potential effect on businesses in putting them to the wall. Based on what we have done at this committee, the Departments have reached the point where they recognise that these sentiments deserve attention. If one is going to organise something with the Departments of the Environment, Community and Local Government and Public Expenditure and Reform, Mr. Watt has been very helpful. Deputy Robert Dowds and I have met him on a couple of occasions and he has been very constructive on the commercial rates issue. When it comes to any kind of initiative regarding the funding of local government and where the funding goes, the issue of rates will be part and parcel of it.

Chairman

We will write to them first, following which we will see if we need to ask the two Secretaries General to come before us for a discussion. We will include it all in the same correspondence.

Deputy John Deasy

To give members an idea of the difficulties that arise, the Department of Finance used to be the umbrella Department for the Valuation Office, but now it is the Department of Public Expenditure and Reform. However, as the latter views - correctly I think - the office as an independent agency, it has a difficulty getting involved with it. The Department of the Environment, Community and Local Government is the only Department with a vehicle going through the Oireachtas dealing with commercial rates. For that reason, everything is in segments and there is no overlap or connection between the Departments. The jurisdictions are separate, but the issue deserves an initiative between the Departments, perhaps led by this committee, to deal with it holistically.

Chairman

We will copy the Departments of Finance and Jobs, Enterprise and Innovation in our correspondence because they also have a role to play in the issue. We will receive the correspondence first and, if necessary, then speak to the Secretaries General.

Deputy Sean Fleming

I understand there is a valuation Bill on the Dáil Order Paper.

Deputy John Deasy

A Valuation (Amendment) Bill was introduced in the Seanad several months ago to provide for self-assessment. This would be an entirely different system from that which obtains. New valuations are being prepared, but when that Bill is enacted, there will be an entirely different assessment regime for businesses. Nobody has thought about how we deal with one set of people whose businesses were being valued using a new method being brought in. We were told that the people whose businesses were valued using the old method would not be allowed to self-assess under the new method. These are the issues that need to be addressed.

Chairman

No. 4 is reports, statements and accounts received since our meeting on 24 October. They include No. 4.1 - Royal Irish Academy; No. 4.2 - Dundalk Institute of Technology; No. 4.3 - financial statements from Oifig an Comisinéara Teanga; and No. 4.4 - Dublin City University. Are the accounts okay?

Deputy Sean Fleming

Two of them refer to the deferred pension funding asset. Is there a shortfall in funding? Is it an asset or a liability? That issue arises regularly. Is it possible for the Comptroller and Auditor General to give us a schedule of all the areas within his remit, separate from Departments, in which pension funding issues arise? We get a piece every week, but I would like to see them added up.

Mr. Seamus McCarthy

On the finance account, we have been drawing attention to the fact that an overall assessment of liabilities has not been prepared. The last time the liabilities were assessed was in 2009 when we carried out a special exercise. The figure that emerged at that stage was approximately €116 billion in aggregate.

That is doing it from a central perspective. If everybody was calculating his or her pension liability, we could add it up across all entities, but some accounts, for example in the health sector, do not calculate pension liabilities at all. There is that variability. Central Government Departments do not calculate them either because they are not in accrual accounts. There is a further complication which has been raised at previous meetings in that there is considerable variability in the assumptions we have used between entities from year to year. I have some people examining the spread of assumptions used and who is and is not calculating liabilities. I envisage coming back with a report on that area.

Separately, the Department of Public Expenditure and Reform has agreed that it will carry out an updating of pension liabilities. The aim is that it will be in respect of the position at the end of 2013. That should be represented in the 2013 finance accounts when we will have an update on the aggregate figure.

Deputy Sean Fleming

Therefore, Mr. McCarthy is working on a report which we might see next year.

Mr. Seamus McCarthy

Yes.

Chairman

We note the reports, statements and accounts received.

The work programme is on the screen. A meeting has been scheduled for 6 p.m. on Tuesday, 17 December 2013 for the sub-committee to discuss NAMA. All committee members will be notified about that meeting.

We have scheduled a second meeting with the HSE and the Department of Health on 27 February 2014 to examine chapter 21, budget management in the HSE; Vote 38 - health and Vote 39 - Health Service Executive. At that meeting we can also examine pay levels in the voluntary health sector. When the HSE representatives come before us next week, we should remind them that members may want to address budgetary issues.

Can we agree our agenda for the meeting at 10 a.m. on 14 November when we will meet representatives of the HSE and the Department of Health to discuss the 2012 annual report of the Comptroller and Auditor General - chapter 22, eligibility for medical cards?

Deputy Sean Fleming

In the Comptroller and Auditor General's annual report on the HSE there is a specific note on medical cards which indicates an assessment was made of dormant medical cards, but there is no figure given. It was also referred to in the previous year. This feeds into the probity issue of medical cards. Am I right in saying that is a significant element of what we could be talking about the next day? Mr. McCarthy has highlighted this issue. Probity is central to the report we are examining.

Mr. Seamus McCarthy

Yes.

Deputy Sean Fleming

I thank Mr. McCarthy.