COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 10 Nov 2016

Business of Committee

Chairman

We have a quorum and the committee is now in public session. We are joined by the Comptroller and Auditor General, Mr. Seamus McCarthy, a permanent witness to the committee, who is accompanied today by Mr. John Riordan, deputy director of audit. Apologies have been received from Deputy Alan Farrell.

The first item on the agenda today is the minutes of the meeting of 25 October. Are they agreed? Agreed.

The next item is matters arising from the minutes. I do not think there is anything specific there. Is it agreed to move on? Agreed.

The third item is correspondence received since the last meeting. There is some correspondence to be dealt with and we will move through some of it as quickly as possible. I will say at this stage that before we go into public session with the Comptroller and Auditor General followed by the Department of Finance officials, I wish to go into private session for a couple of minutes for one or two items of the correspondence that I do not wish to put on the public record at this stage. There will be a few minutes in private session at that point.

Under the third item, correspondence received, there are three categories of correspondence. Category A deals with today's meeting. The first item is 170A. It is the opening statement of the Department of Finance officials. Is it agreed to note that? Agreed.

The next item of correspondence is under category B, correspondence from Accounting Officers or Ministers following up on previous meetings. The first item under category B is 162B, a letter from Mr. Oliver Ellingham, NAMA board director, providing clarification on the board minute of the 13 March 2014. Members may recall a reference to a typo. It is good to note that this has been corrected. Can we agree to note and publish that? Agreed. We will also add it to our Project Eagle folder.

The next item of correspondence is 130B(i) to (iv), correspondence received from the HSE following up on an outstanding matter from their appearance before the committee in July of this year. As well as four attachments, there was a large number of documents provided on a USB relating to Console. The secretariat is in touch with the ICT department here in the Houses of the Oireachtas about the best way of making these available to members over the next week. Can we note the correspondence for now? We will have engagements with the HSE in the new year and members can review all of the documents in preparation for the meeting at that stage. Is that agreed? Agreed.

Deputy Catherine Connolly

A Christmas present, is it?

Chairman

Yes.

Deputy Marc MacSharry

Or we could bring them in now.

Chairman

The next item is 140B. It is correspondence received from Ms Eilis Finan, former member of the NAMA board. The correspondence outlines that while Ms Finan is happy to appear before the committee, she left the board on 21 December 2013 and, as such, feels that her input may be very limited. If the committee agrees, we can inform Ms Finan that her presence is not required. There are other directors who were there during 2014. She had left the board before any decisions came to be made. We will have seen practically every relevant board member at the time. We will agree to that and let her know accordingly.

The next item is item 148B. It is correspondence received from NAMA-----

Deputy Catherine Connolly

Can we just reserve our position on that and let me think about it?

Chairman

We will hold it over. Essentially, we previously decided that we would invite all of the board members who were on the board during the period of 2013 to 2014. Ms Finan is confirming that she resigned or left the board in December 2013 and was not there when any decisions were made. She has no papers, no immediate recollection and very limited possible input to our committee. The other directors who were there at the time are coming next week. We can hold over that decision for the moment.

Deputy Catherine Connolly

They are coming in on 13 December?

Chairman

Yes. We will have to make a decision on Ms Finan this morning because they are due in next week. We will deal with it in private session shortly.

The next item is item 148B. It is correspondence received from NAMA as a follow up to information requested. We will note this correspondence and put it into the Project Eagle folder. Is that agreed? Agreed.

The next item is item 150B(i) to (v). It is correspondence received from the Minister of Finance, Deputy Michael Noonan. A number of documents have been provided as a follow up to our engagement with the Minister on 6 October. Additionally, a CD was provided with a number of other documents. Can we note this correspondence and put it into the Project Eagle file? Agreed. We will publish that as well.

The next item is item 151B(i) to (xvii). It is an e-mail from the Department of Health attaching a number of documents sent to the previous committee in relation to the Grace case. It is being brought to our attention again as it was referred to in a recent newspaper article. Can we note and publish this? I understand that the HSE or Tusla are dealing with that directly and I do not want to duplicate any work of any other committee. Shall we note it and publish it? Agreed.

The next item is item 166B. It is a letter from Mr. Tom Rice, chief legal officer to PIMCO, informing the committee that PIMCO is declining the invitation to appear before it because of ongoing investigations, among other reasons. However, Mr. Rice does provide a considered response to the committee’s stated areas of interest. We have invited PIMCO and it has said, for various legal reasons and inquiries that are ongoing, that it is not in a position to attend. It has answered the specific questions we put to it in our letter of invitation. We have heard from the Comptroller and Auditor about the famous PIMCO withdrawal of phone calls, etc. We have had extensive evidence presented in public by NAMA officials and board members. In the interest of balance of the evidence being put out in public session, we have to read this letter into the public record rather than just having it buried in correspondence and appearing somewhere down the road.

At the end of the correspondence or at the start of the next session, I will read it into the public record. It will take five minutes. The public are entitled to see PIMCO's response in view of the fact that its representatives will not be here. We cannot really address any further questions that occur. It will be PIMCO's position and we can put it to NAMA when its representatives are before the committee subsequently.

Deputy David Cullinane

That is a good idea. I know we have the NAMA CEO and chairperson coming before us again. However, the response that we have received back from PIMCO contradicts some of what the NAMA board members said when they were here, most specifically, the NAMA legal team and the people who were involved on NAMA's side in those conference calls. There is currently no plan to have them before the committee again, but they have to come before the committee again given that letter, because it is a very strong contradiction of the evidence that was given to us by them.

Chairman

I agree with the Deputy because the PIMCO letter is an important letter from our public hearing's point of view. Immediately after this, we will forward it to NAMA for a detailed response because it will not have received this, as it is a letter to the Committee of Public Accounts. We will address those issues when representatives of NAMA come before us again.

Deputy Mary Lou McDonald

I agree with all of that. The letter does a number of things. It resolves the April 2013 issue, to which it refers. It changes the entire narrative of exactly what went on. It is probably the most illuminating piece of correspondence and evidence that has come before us. That is why I believe the Chairman does need to read it into the record.

I have a question for the Chairman as regards Brown Rudnick. Have we approached Brown Rudnick to appear?

Chairman

No. We will discuss that issue later on and maybe-----

Deputy Mary Lou McDonald

We can, but in my view, and it will become clear when the letter is read, we need to do that. We need to specifically ask that Mr. Tuvi Keinan appears before this committee.

Chairman

I think we are agreed that it is a significant letter. I will read it into the public record shortly. It will take a few minutes. People will understand the queries better when the letter has been read into the record. We will come back to this.

Deputy David Cullinane

Once the Cathaoirleach reads it into the record, if there are further questions for PIMCO-----

Chairman

I would be happy to write again.

Deputy David Cullinane

We might want PIMCO to clarify some matters and we should be in a position to ask those questions.

Chairman

Absolutely. We will deal with that when it is read into the record. That is important.

Deputy David Cullinane

Perfect.

Chairman

We now come to items 167B(i) and (ii), correspondence from NAMA attaching a document on impairment figures and Project Eagle. We have noted and published that and will put it in our Project Eagle folder.

Category C is correspondence from private individuals. Items 120C(i) to (iii) deal with a letter from an individual on alleged illegal state aid to the construction sector. The issues in the correspondence are detailed and complex. I propose we refer it the Departments of Finance and Jobs, Enterprise and Innovation for a response. It is a very technical letter and I would like to get a response before we consider it. Is that agreed? Agreed.

Item 121C is a confirmation letter from Mr. Robert Farrer-Brown, general counsel and managing director to Lazard, stating that Mr. Patrick Long will attend the Committee of Public Accounts meeting on Tuesday, 22 November 2016. We will note and publish that. Is that agreed? Agreed.

Item 124C is a letter from an individual regarding Caranua alleging an issue regarding extensive use of travel. While we agreed to put Caranua on our work programme at our previous meeting, I propose we forward a copy of the letter with information attached and seek a response in the interim. Is that agreed? Agreed

Items 125C is a letter from an individual entitled "Will PAC cover this up?" We have had a number of items of correspondence from this individual. Given the allegations within, I propose we refer it to the Office of the Parliamentary Legal Adviser. I have also stated in an earlier meeting that issues raised by the individual have been raised in other fora also. I cannot see how, given our work programme at the moment, we can give the matter further consideration. I propose that once we complete our hearings on NAMA, we review all the correspondence received from this individual since the start of this Dáil and we make a decision on how and if we can proceed any further at that stage. I propose that we commit to doing this by the end of January. These are the long handwritten - not typed - letters, so people will know the ones I am talking about. Can we agree also that any further correspondence will be held until then? We are asking the parliamentary legal adviser for advice on these letters.

Deputy Catherine Connolly

It is difficult for us because this keeps coming up. We made a decision that we would look at it and that is what the Chairman is confirming.

Chairman

Yes. I am giving a timetable now and saying that we are sending it to the parliamentary legal adviser. Essentially, we will be busy until December with our current programme. I am saying that we will have dealt with this by the end of January. I am putting a specific timetable on it.

Deputy Catherine Connolly

That is a timetable to make a decision on how we will progress it.

Chairman

Exactly. I am saying it will be by the end of January and I hope we can meet that. That is what we want to do.

Item 127C is an e-mail from the Charity Regulator, Ms Melissa Moloney, responding to a letter from the committee about a charity in Bantry. A more substantive response is to follow. We note that. Is that agreed? Agreed.

Items 128C(i) and (ii) comprise a letter from Deputy Bobby Aylward attaching a letter from the Carolan's Court Residents' Association raising questions over NAMA's sale of Kilronan Castle Hotel and a holiday village of 60 houses. I propose we write to NAMA on the key issues and seek a response and we will take it from there. Is that agreed? Agreed.

Item 129C is a letter from the assistant clerk to the Committee for Finance in Northern Ireland agreeing in principle to a meeting with the Committee of Public Accounts on NAMA and the sale of Project Eagle. Can we just note this for the public record? This is one of the letters I want to discuss in private session in a few moments.

Item 131C is a letter from an individual regarding a Higher Education Authority investigation into alleged irregular payments at the University of Limerick. I understand the HEA has produced a report on the matter. I suggest we write to the HEA seeking an update on actions taken following the report and to the University of Limerick for a response. When we receive that, we will deal with it further. It is noted.

Item 132C is an e-mail from Deputy Bobby Aylward asking when the 2015 financial statements for the Irish Greyhound Board will be available. Perhaps the Comptroller and Auditor General could tell us the status of the Irish Greyhound Board audit for 2015.

Mr. Seamus McCarthy

I cleared the accounts for signing on 23 September. Bord na gCon had to attend to a number of matters and we are waiting for it to complete that. I expect to have the accounts shortly and to sign them by the end of the month.

Chairman

How long will it take to publish them after that?

Mr. Seamus McCarthy

That is in the hands of Bord na gCon. I am sure it will not delay too long with them.

Chairman

Once the Comptroller and Auditor General signs off, it will be back to the board to publish.

Mr. Seamus McCarthy

Normally it would submit them to the Department of Agriculture, Food and the Marine. The practice has been that the Minister for Agriculture, Food and the Marine brings them to Cabinet for noting. There may be a slight delay there, but it is in the hands of Bord na gCon and the Department.

Deputy Bobby Aylward

Is it normal that it takes 11 months, until November of the following year, for the accounts to be signed off or would they normally be done in the first six months?

Mr. Seamus McCarthy

The aim would be that they would be done in the first six months. Last year, the 2014 accounts were finished in September and signed off then. There is a capacity issue on our side. We cannot process everything in the first six months anyway. Typically, Bord na gCon has had them in September or October, so there is a bit of a delay this year.

Chairman

Item 133C is a letter from the HSE regarding Meath disability service and an individual who wrote to us regarding housing arrangements. The response is comprehensive. We will forward this to the individual concerned. I propose we also inform him that as his complaints have been considered through the proper fora, including the Office of the Ombudsman, the committee considers the matter closed. Is that agreed? Agreed.

Item 134C is an e-mail from a professor of finance offering assistance to the committee in its examination of the Comptroller and Auditor General's Special Report 94. Can we note that for the moment and return to it in private session? Agreed.

Item 135C is correspondence received from the Deputy Chair of the Committee of Finance of the Northern Ireland Assembly, Claire Hanna, MLA, acknowledging the proposal of the two committees working together on examining the sale of Project Eagle by NAMA. We note this and publish it, but we will discuss it in private session shortly. It relates to the arrangements for our meetings.

Items 136C(i) and (ii) deal with correspondence received from an individual regarding alleged financial abuse in the Brothers of Charity in Cork. The individual was sent a response we received from the HSE on this matter and has decided not to pursue it further. Can we note the correspondence? Is that agreed? Agreed.

Item 137C is an email from an individual who is raising concerns about wages and management in Caranua. I propose that we write to Caranua forwarding a redacted version and requesting a response. Is that agreed? Agreed. As mentioned earlier, Caranua will be on our work programme for the new year.

Item 138C is correspondence received from an individual keeping the committee up to date with an ongoing case with the Residential Tenancies Board. The board will be furnishing the committee with a report in the new year so I suggest we note this correspondence while we wait for that report. Is that agreed? Agreed.

Item 139C is an e-mail received from an individual alleging non-compliance with company law and the Chartered Accountants Regulatory Board by financial institutions and the sale of assets to NAMA which were not in the ownership of the institution but rather the Central Bank of Ireland. This matter is quite complex and I propose we refer it to the Central Bank for a detailed explanatory note. We will come back and consider the matter then. It is a highly technical matter and we want a report on it.

Item 140C is correspondence received from Eilish Finan. We have dealt with this and will come back to it in private session. She is a NAMA director.

Item 141C is a letter received from Mr. Paul Quinn, chief procurement officer in the Office of Government Procurement. This is a reply to correspondence we received regarding issues relating to the evaluation process in respect of the mini-tenders for the Office of Government Procurement framework. Mr Quinn outlines that there is ongoing litigation on this case and as such does not want to discuss this specific case but has offered to send the committee an overall description of the tender process framework. I suggest we write to him to accept that offer. Is that agreed? Agreed.

Item 142C is an e-mail also from Mr. Paul Quinn regarding the tendering process for residential disability services. Mr. Quinn states the Office of Government Procurement would not be involved in such a process and it is a matter for the HSE. We are awaiting a response from the HSE on this matter. We will note the correspondence in the meantime. Is that agreed? Agreed.

Items 143C(i) to (iv) refer to correspondence received from an individual regarding the misappropriation of moneys at Mayo, Sligo and Leitrim education and training boards, ETBs. We have already received other correspondence from this individual on this matter.

We have written to the Department for a response. I suggest we forward the latest correspondence to the Department. We will consider the response when we receive it from the Department.

Items 145 to 147C relate to correspondence received from an individual that includes copies of correspondence relating to alleged loss of money to the taxpayer. The matters mentioned are unsubstantiated. The individual has telephoned the secretariat several times to discuss similar matters. While we have no wish to be unhelpful to a member of the public, I propose that we can only note the correspondence. I further propose that we direct the clerk to write to the individual informing him of same, stating that the Committee of Public Accounts does not believe it can meaningfully address the concerns and will return any future correspondence and asking him not to contact the office again. We have had extensive engagement from this particular individual. People maintain that what he is saying is unsubstantiated. We cannot follow up on issues that are unsubstantiated.

Deputy Bobby Aylward

Who is this?

Chairman

I will not give the name. It is in the correspondence. The relevant items are 145 to 147C in today's correspondence. The name of the gentleman is on the screen but I do not want to publish his name at this stage. You can check your file afterwards if you want to follow it up further.

Items 149C(i) and (ii) are correspondence received from the executive directors of Trócaire and Friends of the Earth with regard to the Committee of Public Accounts meeting on 21 July 2016. Discussions took place with the National Treasury Management Agency in respect of the investment of Ireland Strategic Investment Fund, ISIF, in the fossil fuel industry. The letter calls on the Committee of Public Accounts to review the ISIF investment strategy and for the committee to establish climate risk as a standing item in its programme of work. We received a response to the issue raised on 16 September from the National Treasury Management Agency. I propose that we forward the response to Trócaire. Since climate risk policy is more appropriate to the Joint Committee on Communications, Climate Action and Environment, I propose that we forward the correspondence to that committee as well. To refresh people's memory, when the NTMA was before the committee on 21 July, we raised the issue of climate change and fossil fuels publicly. NTMA sent back a letter dealing with the issue. The agency said it was reviewing its policies. We received the letter on 16 September. It is in our committee documentation. I propose we send the letter to Trócaire and Friends of the Earth. We should also send a copy to the Joint Committee on Communications, Climate Action and Environment. Is that agreed? Agreed.

Deputy Catherine Connolly

I agree with that. Where will this come back before us? This is a question of value for money in the investments. We have other issues to discuss today and I have no wish to delay, but this came up under the Comptroller and Auditor General's report. He did not raise it, but that was the way it came before us. I raised it. I remember that, on the day, Mr. Kelly was perfectly honest and straight and said the agency had not considered it. That is my recollection. Where will it come back before us? We need to examine the matter in terms of money and investing. I understand the agency is losing money in some investments in fossil fuels.

Chairman

I will make a suggestion to the Deputy. Perhaps we should take the opportunity to review the reply from NTMA dated 16 September. If you wish, we will hold the correspondence over until the next meeting. Have a look at it. The NTMA representatives maintain they are drawing up a policy to deal with the matter.

Deputy Catherine Connolly

It would be great to get the view of the Comptroller and Auditor General in respect of where it will come up in future.

Chairman

It will come in. We will get the NTMA 2016 annual report next year. We brought it up in the context of the NTMA annual report and we will do that again.

Deputy Catherine Connolly

NTMA is actively reviewing its policy as we speak. Is that correct?

Chairman

That is what the agency representatives have said. When they are before the committee next year we will check it out. We will send it back to the two organisations and to the other committee, because it is under the policy area of that committee.

Item 152C is a letter from an individual referring to a freedom of information request that was sent to the Committee of Public Accounts. However, neither the clerk nor the Oireachtas freedom of information officer has any record of having received same. The clerk has informed the individual. The person restates and expands on some issues relating to the awarding of Aosdána grants. I propose that we write to the Arts Council seeking a response and enclose a copy of the correspondence received. Is that agreed? Agreed. This topic was mentioned at a previous meeting in July. We will follow it up.

Item 153C is an e-mail from Mr. John Mulcahy, a former NAMA board member, clarifying the extent of his knowledge of Project Eagle. Mr. Mulcahy will be at our meeting next week. We have agreed to note and publish that.

Let us move on to reports, statements and accounts received. The list is coming up on the screen. Item 4(1) relates to the Beaumont Hospital board. It has a clear audit report. As for Aontacht Pobal Teoranta, a HSE subsidiary to promote integration of persons with disability, the Comptroller and Auditor General states that the director's report is closed and that the company is to be wound up. The assets and liabilities will be transferred to the HSE. The organisation only had an annual turnover of €1,200 in 2015. Effectively, it has been closed at this stage.

The next item relates to the Rent Tribunal for the period from 1 January 2015 to 7 January 2016. The Rent Tribunal was dissolved on 7 January 2016. The functions were transferred to the Residential Tenancies Board. Next, the Institute of Public Administration has a clear report. The Law Reform Commission has a clear report as well.

Next is the Financial Services Ombudsman Bureau. The bureau handles complaints from consumers relating to financial services providers. A note in the accounts discloses that legislation enacted in 2013 provides for changes in the pension funding arrangements of the bureau. Pending the resolution of discussions with the Department of Finance in respect of implementation of legislation, the financial statements disclose that accrued pension liability only by way of a note. We have come across the issue of pensions in numerous public bodies.

The Cork Education and Training Board has a clear audit report. The last item relates to the Food Safety Promotion Board. This is a North-South body. Note 16 of the financial statements disclosed that non-effective expenditure totalling €152,000 had been incurred by the board. This relates to rent associated with space at its headquarters in Cork that has been unoccupied since December 2013 while a subletting agreement for the space expired. A total of €76,000 of this expenditure relates to 2015. The Comptroller and Auditor General might wish to make a quick comment.

Mr. Seamus McCarthy

I wish to draw the attention of the committee to the fact that there is non-effective expenditure here. In 2015, it went over a threshold of €100,000. That is the figure I use as the cutting point for making a reference. It is simply a question of noting it. The board is obviously looking to sublet the space.

Chairman

The organisation is stuck with an empty building and it is paying the lease. Is that correct?

Mr. Seamus McCarthy

There is empty space.

Chairman

We will note that and note the comments of the Comptroller and Auditor General.

Next is the work programme. I gather everyone has the work programme for the coming weeks. We will start with the Comptroller and Auditor General shortly. After that we will hear from officials from the Department of Finance. Next Wednesday, the Northern Ireland Deputy First Minister, Mr. Martin McGuinness, will appear. On Thursday, 17 November, we will hear from former members of the NAMA board in the morning. At 2.30 p.m. we will hear from representatives of Cerberus Capital Management. On Tuesday, 22 November, representatives of Lazard will be appearing. On Thursday, 24 November Frank Daly and Brendan McDonagh will be back.

I propose we go into private session to discuss some items of correspondence that we have received that we cannot put in the public arena.

Deputy David Cullinane

Will we be discussing the legal opinion we received on whether the sales process could have been suspended?

Chairman

Yes, we can discuss that.

Sitting suspended at 9.40 a.m. and resumed at 10 a.m.