COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 25 May 2017

Business of Committee

Chairman

We are joined by the Comptroller and Auditor General, Mr. Seamus McCarthy, who is a permanent witness at the committee. No apologies have been received.

The first item on the agenda is the minutes of the meetings of 11 and 18 May 2017. Are they agreed to? Agreed. As there is nothing specific arising from them that will not come up in our discussion of items further down the agenda, we will move on straightaway to correspondence.

Category A is correspondence related to today's meeting. As we have no witnesses this morning, there is nothing to be noted formally or published.

Category B is correspondence from Accounting Officers and-or Ministers as a follow-up to previous meetings. The first item is No. 516B, dated 22 May, from Dr. Graham Love, CEO of the Higher Education Authority, HEA. The correspondence includes the terms of reference for the HEA's analysis of intellectual property policy implementation across higher education institutions. Dr. Love mentions that the HEA is putting together terms of reference for a review of the spin-out company FeedHenry in Waterford Institute of Technology and that they will be completed shortly. This is a very welcome development. Do members wish to make specific comments or will we simply note the correspondence?

Deputy David Cullinane

I sent on the HEA's proposed terms of reference for the Waterford Institute of Technology examination. I do not think they should be confined solely to FeedHenry because there are multiple companies that need to be examined. There is also the wider policy on multiple conflicts of interest. What I can do is communicate directly with it, but if we have a very limited, narrow focus, we will be missing the bigger issue.

Chairman

Does the Deputy propose to send on directly-----

Deputy David Cullinane

I can, but I note that what it is looking at seems to be quite limited. That is my concern.

Deputy Catherine Murphy

Might the intellectual property include things like, for example, the material produced within universities that is then provided for the various journals where people are not paid for their work, or is it exclusive to the spin-out companies?

Chairman

I do not know the answer to that question, but we will have the matter clarified.

Deputy Catherine Murphy

There is a real issue in that regard.

Chairman

We have not concentrated on it until now. We will inquire whether it is included in the terms of reference and formally write to it again on the issue.

The next items are Nos. 520B.1 and 2 from the Secretary General of the Department of Education and Skills, Seán Ó Foghlú, regarding Caranua's accommodation. There was a debate in the Dáil yesterday on this issue.

Deputy Catherine Connolly

I thank the Department for getting back to us. It gave us three letters. The web of intricacy is becoming more apparent and I would like the help of the Comptroller and Auditor General in this instance. I ask that we deal with Caranua, with other correspondence. It has come back to us to clarify that it is paying rent.

Deputy David Cullinane

Caranua corrected the record of the Committee of Public Accounts.

Chairman

It did, regarding the date. In correspondence, item No. 517C, Ms Mary Higgins, CEO of Caranua, corrected a statement made at the meeting of the Committee of Public Accounts on 13 April 2017. For the record, Caranua had rent-free accommodation from 2013 to May 2016, not 2017, as had been indicated.

Deputy Catherine Connolly

Most other Deputies and I raised this matter. I asked whether Caranua was paying rent. I checked the accounts with the Office of the Comptroller and Auditor General to determine whether I had missed something and was told that no rent was being paid. I asked on the day whether rent was being paid and the CEO said no but that it would be paying rent as it was about to move into the private market or words to that effect. It subsequently transpired that rent had been paid and that there had been an extension of the lease from 2016 to 2017, involving a sum of over €100,000, of which €50,000 had been paid. I find it difficult to believe it was an oversight, but I accept the correction.

The bigger issue is that neither the Department of Education and Skills, the Office of Public Works nor Caranua has explained why Caranua needed to move into expensive premises. There was an extension of the lease and it is now moving. The cost will be €272,000 per year. I will be guided by the Chairman on this, but we expressed an opinion that this was a very serious matter. I have a point on which I want guidance. The Office of Public Works appeared to lease the premises on Frederick Street. I do not know from whom it leased it or the cost involved. The Department of Education and Skills and Caranua were based there, among other organisations, and no rent was paid from 2013 to 2016. If no rent was paid for that period of time, why, when the amount in the fund is decreasing and serious concerns have been expressed about it being reduced, would it enter into an expensive rent agreement? We have asked it not to do so. For four years no rent was paid, although it now appears that it was for three years because the figures were retrospective. Why is the Office of Public Works or the Department of Education and Skills insisting on the payment of rent? I do not know why that is happening. Furthermore, the Minister has to give permission. He has a clear legal responsibility to say "Yes" or "No" to a contract. From all of the convoluted replies we have received, I understand no consent has been given. Has Caranua entered into a contract? It is an abdication of responsibility. I would like to be guided by the Chairman. It is an obscenity that Caranua will have to pay rent of €272,000, including €8,000 or €9,000 for three car parking spaces. These are not things about which it should be concerned. There are many other issues to which I would like to come back in the context of outstanding reports, but for the moment I am limiting myself to this issue. The Comptroller and Auditor General might help me to clarify it.

The Office of Public Works has a serious question to answer. What policy was changed? I understand it is leasing the premises to which Caranua will move and charging rent. I do not know all of the facts, but I am trying to obtain the information.

Deputy David Cullinane

I do not want to be unfair to any witness who came before the Committee of Public Accounts. At this stage, I do not want to say we were misled because we have to analyse the questions, the responses and the correction that has now been made fairly. The questions asked by Deputy Catherine Connolly, other members and me were specific. They concerned the rent being paid in the year to which we had referred. It now seems that rent was being paid. Very direct questions were asked and for the life of me, I cannot see how the responses given could have been given because the witnesses would have known that rent was being paid. It was not a slip of the tongue. If it was a question in passing, I could have understood the response. However, the questions were continuous and we probed the responses we received. The discussion did not involve just one question. I am a little concerned about this. At a time when the fund is being reduced, my understanding is any rent payment will have to come from the fund which inclues money that should be going to the survivors. That is our real concern. There are questions for the OPW, from which we need to hear. We also seek clarification from the Comptroller and Auditor General, which would be helpful.

Deputy Catherine Murphy

Almost all or most of what we will examine are historical circumstances about which we can do very little, except try to create consequences to change future behaviour. This is a case in which we can avoid such future consequences. The Department of Education and Skills and the Office of Public Works have a role to play in that regard, but it feels as if they are trying to bide their time to have it over and done with by the time the question is properly answered. We, therefore, have to put our foot down.

Chairman

The Comptroller and Auditor General might give us his observations.

Mr. Seamus McCarthy

When representatives of Caranua came before the Committee of Public Accounts, before the committee were the financial statements for 2014 and 2015. From the correspondence received from Caranua and the Department, it is my understanding the situation changed in 2016. The OPW was the leaseholder of the premises in which Caranua was accommodated. Under the lease it paid rent to the landlord. It obviously has a large portfolio management operation, but when the time comes, there is a review and break option. It examines the accommodation and decides it is no longer suitable and that there is a need to move to a new premises. It might have subletting agreements with public bodies. As I understand it, Caranua's landlord is the OPW, but the OPW is passing on the cost it is incurring. Caranua has not paid rent on its current premises. There was a note in the financial statements pointing to the fact that the OPW was carrying the cost of its rent for the first number of years.

Deputy David Cullinane

The figures for 2016-----

Chairman

Let the Comptroller-----

Mr. Seamus McCarthy

The figures were for 2014 and 2015. There was a note in the financial statements outlining the expenses charged to the fund. There was also a note stating Caranua was occupying premises given to it by the OPW. It did not pay rent in 2014 and 2015. In 2016 the OPW decided that it would surrender the lease on the building, a much bigger building than the one occupied by Caranua. As it did not have alternative accommodation, it negotiated with the landlord an extension of the lease for a further year. At that point, it decided to ask Caranua to pay rent. That is where the confusion arose. The figures seem to refer to the second half of 2016 and the first half of 2017. There is a possibility that it will extend the lease further because it appears, from what has been written, the alternative accommodation and the new lease have not yet been put in place. The agreement has not been finalised.

When it is finalised, the occupiers will pay the OPW the rental amount. That will be the figure of €270,000 or whatever it is for Caranua.

Chairman

We need to write to the OPW to ask what brought about the change in approach from earlier years to 2016. It was not charging rent in the earlier period and the OPW seemed to change its approach.

Deputy David Cullinane

I also have a follow-up question after Deputy Connolly asks her question.

Deputy Catherine Connolly

Why did the OPW not charge rent for three years? Why was there a policy change?

Mr. Seamus McCarthy

I do not have information about it. It seems to be the question that has not been answered. At one time it was okay for the OPW to provide the accommodation without charging but now it has changed the policy.

Deputy Catherine Connolly

That is the crucial question. I do not know if the Comptroller and Auditor General is right, in the sense that he is 99% of the time, but it has been confirmed to us in correspondence that rent totalling €50,000 was paid over as part of the extension. When the chief executive officer was in, we clearly asked if it was paying rent and she said it was not but it was going to. She did not say it had been paying rent for a portion of 2016 and 2017 when it had done so. Did the Minister for Education and Skills give his consent under the Acts to pay that money for rent?

Mr. Seamus McCarthy

As I stated, the extension of one year went from approximately the middle of 2016 to May 2017. As I understand it, it paid €53,000 in 2016. We have not done the audit of 2016 yet. It paid €53,000, which is half the rent, and it had a commitment to pay the other €53,0000. The whole €106,000 should be recognised in 2016. It is a 2016 audit issue.

Deputy David Cullinane

That is my question. So from the middle of 2016 until 2017, Caranua must pay the rent for that period. It has paid some but not all of it. In other words, it owes money.

Mr. Seamus McCarthy

Yes.

Deputy David Cullinane

It owes it to the OPW. It has paid half of it.

Chairman

We will conclude this. We will write to the OPW to ask it to explain its change in policy. That is for the OPW to answer directly to this committee. The second letter will be directed to Caranua to clarify the evidence. We will check the transcript. If its representative indicated it had not paid up until 2016-----

Deputy Catherine Connolly

She has corrected that.

Chairman

There is a revised letter today.

Deputy Catherine Connolly

She said she was wrong.

Chairman

Yes, she had the wrong date. Okay, that is clarified. Given that there must have been some contract resulting in them taking on that payment in 2016, did they get the Minister's consent for the contract? We will ask the Department the same question. Caranua is not in the new premises and the documentation has not gone in. We will ask the OPW to clarify the change of attitude and Caranua to clarify the contract and whether it got ministerial consent. We will double-check it directly with the Department. When we get that information we will come back to the matter.

Deputy Catherine Connolly

I think we are all of the mind that rent should not be paid.

Chairman

The legislation may not agree with the Deputy's sentiment.

Deputy Catherine Connolly

The precedent has been there for three years.

Chairman

That is what we want to know.

Deputy Catherine Connolly

I asked for reports and I got some. The fault may be mine as I probably limited them to the word "audit". I would like a copy of all external reports of any nature, although nothing to do with clients or suppliers, that Caranua got and paid for. I would like a list with names and cost. For example, we know about Mazars and Capita but there were many more. There is a list that includes Treacy Consulting and what was referred to as "a team of consultants" making a presentation. I would like a list of private companies or external agencies, separate from suppliers.

Chairman

And costs.

Deputy Catherine Connolly

Yes.

Chairman

That is agreed. The next item of correspondence is No. 521B, correspondence date 23 May from Mr. Ray Mitchell from the Health Service Executive, HSE, regarding questions put to the HSE relating to the Grace case and evidence given by the director general. May we note this for the moment as we will be coming back to it? People have it and we will be talking to Mr. O'Brien about that separately.

The next item is No. 534B, a considerable amount of documentation provided by An Garda that was requested following our meeting on 4 May. May we note this as we will return to it in private session? This is the Templemore documentation. We will not have a discussion-----

Deputy David Cullinane

I will make a point in public session, if I may. It seems all this correspondence has again been leaked to the media. We have raised this several times. As politicians, we all speak to the media, and it is part of our work. We are carrying out an examination and a national media outlet should not be doing it. We cannot have them setting the agenda for us and selectively deciding what are the key issues. They examined this before we have had the opportunity to do so. It is the reality. The national broadcaster and media are examining this material before we have even had the chance to examine it. That potentially undermines our work. We can continue with it but it is not good practice for this committee. We cannot do our job fairly if the substance of what is in the documents is already in the public domain, being examined or scrutinised by the media before the Committee of Public Accounts even gets a chance to read the stuff. The stuff was sent on as soon as it came in. My phone was hopping yesterday with journalists asking for the information. When one person has it, they all want it, which is fair enough.

Given that we have agreed to do a focused examination and we will discuss in private session how we will proceed, how can we continue if there is a parallel process where the media is also doing an examination, even before we do? I will put it to members and leave it at that.

Chairman

It is a fair comment.

Deputy Josepha Madigan

The difficulty is an opinion is usually written with a slant on whatever way the information is disseminated to the media. I do not know how we will control that. If we get the documentation while we are here in session, there would be no time to read it.

Deputy Alan Kelly

Within a half hour of it being sent out, the phones were hopping with people asking for this, that and the other. We cannot work this way. I do not know what the Chairman can do about it. There are many people who are not yet here but I ask the Chairman to speak with everybody on the committee individually. We will get more documentation that will be highly sensitive. We are talking about very serious issues relating to the security of our State. This constant stream of documentation will end up in the media and be analysed. Deputy Madigan is right in that a spin or opinion will be put on it. I do not know how journalists could have examined the documentation sent to us and joined it with others since we got it yesterday; we could not do it in that time. There is a theme emerging that these are the real issues but there is much deeper stuff coming from this documentation. We can join it with other matters. This is like a big jigsaw and we will continue to work at it.

While in public session I should also say that the volume of documentation we have not yet received is, frankly incredible. All the documentation I requested has not arrived. It is very specific documentation, so that is deeply worrying. Perhaps the Chairman could speak with members of the committee individually and ask them to ensure that all documentation is kept in-house.

Deputy Josepha Madigan

That is a good idea. Was there mention before of practices within the banking inquiry? I was not here then.

Chairman

That was a formal investigation, with documentation in the room. There was no leak from that committee.

Deputy Josepha Madigan

How was it managed?

Deputy Alan Kelly

Effectively, it had a documentation room.

Chairman

Yes. Should we write to the Committee on Procedure and Privileges to outline our concerns? A member of the Committee of Public Accounts is responsible for this leak. Should we ask that committee to write to each individual member?

I can ask people, but if the CPP would point out the responsibility of members separately it might help. There are two concerns. The first is that the slant of what is published and recorded by national media will be thought by the public to constitute our agenda for the day when there could be much broader issues. The second worry I have is that someday a witness will say "I am not coming in because I have already been adjudicated on in the minds of the committee on radio, television and the newspapers". That will potentially damage our ability to get full co-operation from witnesses when we see this. We have had the opening statement from our private session in the newspapers already today. I do not know what the source of that was but I worry some witnesses may take a jaundiced view of appearing here if they are not getting fair play as they see it. We will write to the CPP and express our concern, asking it to consider the matter. It is probably not the first time it has come across this issue and it may have some other view as to how this matter could be dealt with.

Deputy Catherine Murphy

Did we not raise with the CPP before the exact same thing in relation to Project Eagle?

Chairman

We did.

Deputy Catherine Murphy

What happened?

Chairman

We will get out the correspondence. We eventually took the matter into our own hands and did not circulate any further electronic copies. We only handed them out. We had to do that ourselves. That is not possible with weekly correspondence, however.

Deputy Josepha Madigan

What do we do if the leaks continue? That is why I was asking about the banking inquiry. Should we not take an example from that and go down that course?

Chairman

That was a formal investigation into a matter approved by the Dáil. We are not in compellability mode. We are like any other committee seeking goodwill from people to co-operate. To go down the compellability road, the committee would have to get the approval of the House and the CPP and specify the reasons it was necessary. That is a mammoth task and not feasible for a weekly agenda.

Deputy Mary Lou McDonald

Irrespective of what we say, who writes to who in whatever tones and what appeal is made to people's better nature and judgment, there are those among us who will leak anyhow. Most of the material that arrives to us, we publish in any event. Is that so?

Chairman

No. Quite a lot of the correspondence is not published from all the State bodies.

Deputy Mary Lou McDonald

Let me put my idea in a different way, then. There is that correspondence which will be published and self-evidently is cleared for publication. There is other material we will decide not to publish for whatever reason. I am not even convinced it will work but I think the following is our best shot. Can we decide that the clerk and our officials will circulate electronically all of those things which, in any event, will be published but that we take a different tack with other documents? As we saw, that is a slightly different matter in terms of evidence, material or information. At minimum, we could deliver it, which would at least give members pause to think "Actually, this documentation is different in its nature". That may not be workable. However, writing to the CPP to write to all of us is not going to make any difference. If people were amenable to that logic, the leaking would not have happened. It is very frustrating and annoying. While we could get over that, the real danger is that somebody we want to appear and to assist us with our investigation might take the view, legitimately, that he or she is not going to get a fair crack at things and refuse to show up. We need to be conscious of all of that. Once we have the witnesses in the room, it is absolutely fair that we question and examine matters rigorously and fully. That is how the committee operates. However, no one should be doing anything that causes anyone to feel that not only will the questioning be rigorous and tough, but that it will not be fair. That is a real problem for us. That is the only suggestion I can come up with but I do not know if it is workable.

Chairman

The secretariat is taking it on board and seeing if it can come up with some formula or other. It is asking for time to be allowed to come back on that.

Deputy Catherine Connolly

Deputy McDonald made a very practical suggestion, but I despair of this. We are being treated like children in a school. Our role is to do a job as best we can in the fairest way we can. The challenge is to continue to do that regardless of what somebody puts into a newspaper. It places a higher onus on us to question rigorously but fairly. If I go back to the Commissioner, there were difficulties in the way the document we now have was produced on the day. We did not have copies of that. It was introduced on the day.

Chairman

Which document?

Deputy Catherine Connolly

Mr. Barrett's.

Chairman

We got that subsequently.

Deputy Catherine Connolly

Yes, but he referred to it at the time and continued to speak from it at the time. That in itself needs to be reflected on because it was produced on the day. In fairness to the Commissioner and the rest of us, we did not have a copy of it and it was not in context. That is just by way of example. We could go on forever talking about leaks to the papers. We should have as few private meetings as possible. That was my practical suggestion for NAMA. That way, everything would be discussed openly with no need for leaks. On the more delicate correspondence, Deputy McDonald is right.

Chairman

We will ask the secretariat to see if a formula can be developed to improve the situation. The next tranche of correspondence is category C. Items C1 to C4, inclusive, are from an individual and relate to new evidence in an ongoing dispute between North Meath Communities Development Association and the HSE. We wrote in March to this body to convey the decision of the committee that it is ultimately a contractual matter and that the committee can provide no further assistance on it. Do we agree that remains our position?

Deputy Shane Cassells

There was also correspondence that went to the Minister for Health, Deputy Harris. It was referred by the committee to the Minister seeking a response. Indeed, the Government Chief Whip was also in correspondence with us. Was there any response in relation to that? It is a legitimate concern of this organisation. The Chairman has met with its representatives and understands the issues involved. We are talking about public money. The former PAC wrote to the Department of the Taoiseach to ask for its analysis of this situation and I do not think it replied.

Chairman

We received a response from the Minister for Health which has been sent on to the people who wrote to us directly on the matter. Did we write to the Taoiseach's office?

Deputy Shane Cassells

It was referred to that office by the previous PAC.

Chairman

We will follow up that item of correspondence, repeat it or send a copy. We will get a response and send that out. However, the new evidence referred to relates to 2001 and is not new evidence at all. It is not even the last decade. We will follow up the matter with the Taoiseach's office.

Deputy Shane Cassells

I would appreciate it if that could be done. There is a letter on screen from the Government Chief Whip. The Chief Whip thinks the matter is serious enough to be dealt with and has corresponded with the Minister for Health.

Chairman

Perhaps that is the route. It may be the Minister they should be talking to and not the PAC. We will conclude. We will send out the reply from the Minister and get the reply from the Taoiseach's office. We will communicate it to them when we have done that. It will arise in correspondence.

Deputy Catherine Murphy

Going through the mountains of correspondence we see, a great deal of it is not appropriate to the committee. I do not necessarily mean this matter. Some thought should be given to being quite public about what is and is not appropriate. People are always looking for an outlet to get a remedy and, as such, understanding the remit of the committee is a public information issue. That might be considered to alert people to the fact that the committee is not the location for remedies which are within the remit of Departments or other jurisdictions.

Chairman

That is a good suggestion. We will ask the secretariat to work on having a standard document in place so that when we get documentation that we are all satisfied is not within our remit, we can say that, according to that document, this is the procedure. We spend a lot of time on business that is not within our remit on some occasions. People can have genuine grievances regarding how they were dealt with but it is not always our job to solve that. We will work on that document.

Deputy Shane Cassells

That issue was discussed extensively by the previous Committee of Public Accounts.

Chairman

Yes, it was. Prior to the last election, letters were issued by the then Committee of Public Accounts-----

Deputy Shane Cassells

-----with recommendations as well.

Chairman

Yes, the last committee got into it in more detail than we feel we should. There have been arbitrators' reports all over the place on this. We are not here to re-arbitrate on arbitrators' reports. That is not our function. As the Deputy has said, lots of correspondents have given us copies of arbitrators' reports over the years but that is not our function. We will get the correspondence from the Taoiseach's office and make sure that the item is dealt with.

The next item of correspondence is No. 501C, a document I received in connection with HSE spending in University Hospital Galway. I do not know the executive's views on what is involved so I propose that we write to the HSE requesting a response to that item of correspondence.

Item No. 502C (i) and (ii) is a copy of correspondence sent to the Secretary General of the Department of Public Expenditure and Reform by an individual regarding a waste of taxpayers' money. This is a copy of correspondence and is not direct correspondence to this committee. We will note this item.

The next item is No. 503C (i) to (vi) dated 17 May from an individual referred to as Person A in hearings in the University of Limerick. The correspondence states that the evidence that was presented by the university to this committee was misleading and includes a report to that effect. The details contained are quite personal. I propose that we write to the individual and suggest that she may wish to bring this to the attention of the review board being led by Dr. Richard Thorn. Confidential, personal medical information has been sent to this committee. Dr. Thorn is examining this area and I believe we should ask the correspondent to send the information directly to him. Is that agreed? Agreed.

Deputy Mary Lou McDonald

We are not publishing that-----

Chairman

No, we are noting it and we are certainly not publishing it. It is confidential medical information on the individual.

Deputy Catherine Connolly

It was submitted to make an important point about something that was said at a meeting of this committee, which she says was incorrect.

Chairman

Yes. I think at this stage-----

Deputy Catherine Connolly

I agree with the Chairman but it is important that-----

Deputy Mary Lou McDonald

-----we capture that point.

Chairman

We got the information for a good reason. She sent it to us, at considerable difficulty to herself. We must respect, appreciate and empathise-----

Deputy Catherine Connolly

The issue is that she had at all times planned to go back to work, which was not said. That is what is important.

Chairman

Correct, and we will make sure that she sends it on to Dr. Richard Thorn. Is that agreed? We are not publishing that particular item of correspondence.

Items Nos. 504C (i) and (ii) and No. 513 (i) to (iii) are duplicate items of correspondence from an individual attaching correspondence and communications with different members of An Garda Síochána on bonus provision. We will note these items. It is not clear that this issue is within our remit. We have been included on a circulation list so this is not a matter specifically for this committee. It has not been directed to us so we will just note the correspondence that we received.

Item No. 505C (i) and (ii) is correspondence received from an individual relating to alleged illegal dumping of unauthorised material in County Meath. The committee is being kept in the loop on this matter and it has been raised with An Garda Síochána. We will note the item. The issue is ongoing and we are just being kept up to date on it.

Item No. 506C (i) and (ii) is correspondence dated 18 May from the Department of Justice and Equality. This is a follow-up to the criminal justice (fixed charge processing system) working group. This is a matter that was brought to our attention by the PARC Road Safety Group, via Deputy Tommy Broughan. I propose that we forward copies of this correspondence to the aforementioned group and to Deputy Broughan. Is that agreed? Agreed.

Item No. 507C is correspondence from an individual alleging treason and betrayal by public servants. We will note that item, but will take no further action.

Item No. 508C (i) and (ii) is correspondence dated 15 May from an accountancy firm attaching a report carried out on pension related deductions in respect of retained fire fighters with a dual mandate with a local authority. This is a policy matter which is outside the terms of reference of this committee. We will refer it to the relevant sectoral committee. Some members may have encountered this issue at a local level. This is definitely a matter for the Committee on Housing, Planning, Community and Local Government. I propose that we write to the correspondent to advise that we are forwarding the correspondence to that committee.

Item No. 509C is correspondence from an individual containing allegations in respect of Naas General Hospital. The secretariat has received a large amount of information as outlined in the email. The clerk will examine this and revert to the committee in the coming weeks. We may need to receive legal advice on whether this is a protected disclosure under the terms of the Act and I will ask the clerk to the liaise with the parliamentary legal adviser on that point. When we get a clearer view on the documentation, we will come back to it at that stage. Is that agreed? Agreed.

The next item of correspondence, No. 510C, is from an individual regarding teachers' pay and accountability. This was sent to a number of committees and the clerk has been informed that the Joint Committee on Education and Skills will be examining the matter further so we will just note it.

The next item of correspondence, No. 511C, dated 19 May 2017, is from Deputy David Cullinane and includes an email from the chairman of Irish Greyhound Owners and Breeders Federation regarding comments made by the Chairman of Bord na gCon, Mr. Meaney, at the Committee of Public Accounts meeting last week. As Mr. Meaney fully withdrew the comments he made later in the meeting, we will just note that matter. The remark was fully withdrawn on the day.

The next item, No. 512C (i) to (ii) is correspondence dated 19 May 2017 from Mr. Tony O’Brien, Director General, HSE, in reply to the issue of Console staff. The letter reiterates the stance of the HSE, as previously advised to this committee. I suggest that we publish this correspondence. While we are not happy with the way the staff of Console were treated, we must be pragmatic about this. A liquidator is involved and nobody can prejudge the outcome of the liquidation process. The HSE has said that the staff are not its legal responsibility while the Department of Health is saying the same. There is a view among members of this committee that we should propose that the Government, through the Minister, would make an ex gratia payment but that probably cannot be done during the course of the liquidation process and we do not know when that will end. The view of the committee is that if the former staff of Console are left as unpaid, unsecured creditors at the end of the day then the Government should consider making an ex gratia payment in respect of their work but that cannot be done just yet.

Deputy Mary Lou McDonald

I agree with that absolutely. On one level it is the case that the HSE and the Department do not have direct responsibility for these former employees. Nonetheless, it was the failure of governance, for which they had a responsibility, which led to the whole debacle. It is unthinkable that the workers would be left out of pocket and stranded. I accept the Chairman's point about the duration of the liquidation process and the fact that there is a timing issue involved. However, I believe we should set out very clearly our expectation regarding an ex gratia payment to the Minister and to the HSE, as the Chairman has described. We should be saying that now.

Chairman

I will ask the secretariat-----

Deputy Mary Lou McDonald

We can couch it in terms such as "in the event of this particular outcome"-----

Chairman

If they remain unpaid-----

Deputy Mary Lou McDonald

Yes, exactly.

Chairman

I will ask the secretariat to draft that letter, which is not as straightforward as it might seem. We will get that point communicated to the Minister so that he will know our position in advance of the conclusion of the liquidation process.

Deputy Mary Lou McDonald

We need to ensure that there are no surprises-----

Chairman

Yes, but the response will not be immediate.

Deputy Catherine Murphy

Sometimes liquidation processes take years to complete. Indeed, it is not unusual for them to take years. We are now trying to fast forward to a point in time when there will be a different Committee of Public Accounts and the letter must be written in that context. The letter must contain clear instructions as to what is meant by this committee at this stage-----

Chairman

In case anybody misinterprets and thinks we are indicating that there might be an early payment, we cannot put a date on that.

We do not want to build up unfair expectations about what people will receive. The Government may choose not to accept our-----

Deputy Mary Lou McDonald

We can recommend it.

Chairman

It will be a matter for the Minister to bring a proposal to the Government about in due course. We will put that to him. That is why he said the letter needs to be carefully crafted.

Deputy Catherine Connolly

Is there a general issue there? I do not know who wrote that letter, I cannot see the bottom of it.

Chairman

Mr. Tony O'Brien.

Deputy Catherine Connolly

It refers to Console as a private organisation on one hand. On the other hand, it gets public funds. He says the public funds are limited to certain services. Then it is a charity. We have a charity regulator and a charity authority that is not fully resourced. Perhaps we could get an update on that. We have been here for a year and three months - I know Deputy McDonald has been here for longer - and this comes before us all the time about governance, lack of resources for the authority that should be looking at it, over and over, and we are then left with this. More important, people are left with no jobs.

Chairman

We are back on to section 38 and 39 agreements. The State has outsourced €4 billion worth of delivery of health services under section 38 and 39 agreements, to hospitals that were formerly owned by religious institutions and different bodies. Under section 39 agreements, there is Saint John of God Hospital and the Central Remedial Clinic, and it means that if something goes wrong, the State can say it is one step removed from the process. It is a big policy issue that €4 billion of the HSE budget is contracted out for work to be delivered by private companies. The Committee on the Future of Healthcare should be looking at that.

Deputy David Cullinane

Remember in the audit-----

Chairman

We will bring the charity regulator in when its accounts come up for audit.

Deputy David Cullinane

In the HSE internal audit into Console, it made it very clear that because of all its findings or conclusions were of a high risk rating, they collectively proposed a systemic problem for the HSE, not for Console. That was from the HSE's internal audit. That was not fully accepted by the director general, but it was what the internal audit said. We still have not come back to it, because since we dealt with Console, we have had a number of other charities that have found themselves in similar situations. We are really busy and it goes back to the resource issue, including the amount of time we have to spend on issues, the resources of the staff here and even the Comptroller and Auditor General. There are big issues in that area that we have not dealt with.

Chairman

We will move on but will refer to that shortly.

The next piece of correspondence is No. 514c, dated 26 May, from an individual about the review being conducted in the University of Limerick. The individual raised matters with the committee in earlier correspondence, but has notified that he will now be engaging with the independent investigator, under Dr. Richard Thorn, mentioned earlier. We note that.

Deputy Mary Lou McDonald

On the back of this piece of correspondence, and in anticipation of our discussion on our programme of work, I would like to make the following point. The terms of reference for this new investigation into the University of Limerick, UL, have been set out. I think that we, as a committee, should have the Department come before us to put it through its paces with regard to the investigation's terms of reference. We should also ask Dr. Thorn to come in to speak to us about this process. The reason I say that is that we have had a pattern not just with third level institutions, but other organisations, where we deal with things after the fact.

We have established that the information given to the committee from UL sources was incomplete and problematic. I would not be happy for us to proceed with our work in this sector and for there to be a parallel process under way under Dr. Thorn that we have had no interaction with, no sense of it and no testing of it. We would perhaps store up trouble for when we discover afterwards that there was an omission, flaw or something that might have been of concern. I suggest that we ask the Department and that we invite Dr. Thorn to come in to speak to us and to explain the process that he is undertaking, the kind of timelines that are envisaged - because that is not clear - and how all of it will work out.

Deputy David Cullinane

In the course of our work, issues arise where organisations will then embark on their own course of action. In the case of UL, there is now going to be a review and examination - set up by the Higher Education Authority, HEA - and the terms of reference are set out. It is not precluded from giving us the information that we need. What sometimes tends to happen is that these examinations are presented as almost legal and sub judice, but they are not. We do our work, and whatever others do, they do. Others should not try to hide behind the fact that they are doing their own examination when we seek information. It is irrelevant. Whatever they do is a matter for them. We have our work to do. This has happened a number of times. We should be very clear that, whatever correspondence we need, whatever incomplete information we get which needs to be complete, we can seek and should get that, irrespective of what these terms of reference say and what this process in Limerick is about. It is entirely a matter for those conducting that examination.

Chairman

We will come back to that, because we will be talking about the third level colleges in a few minutes.

The next item is No. 523c from Deputy Alan Kelly on the committee's examination of finance of the Garda. We note that and will discuss it in private session in a few minutes.

The next item is statements and accounts received since the last meeting. On the screen are three accounts and statements received. One is the Language Body, which received a clear audit opinion. The second item is the National Sports Campus Development Authority, which received a clear audit opinion. The next is the University College Cork, UCC, and its accounts up to 30 September 2015. Does the Comptroller and Auditor General have any idea when we will see the accounts to September 2016? We are eight or nine months after the year end at this stage.

Mr. Seamus McCarthy

Offhand, I cannot say. We are working on that.

Chairman

There is a qualified audit opinion on UCC's 2015 account. There is recognition by the university of expected future Exchequer funding of €15.9 million in respect of pension added year commitments, which the Department of Education and Skills has refused to fund. The next item on the audit opinion refers to the non-consolidation of the UCC trust fund, worth €12 million at the reporting date. That matter will be dealt with as part of the work programme. In addition, attention is drawn to the non-consolidation of Cork University Foundation, which has accumulated reserves of €6 million.

Will the Comptroller and Auditor General tell me, while there are foundations that we all know about, if there are separate trust funds?

Mr. Seamus McCarthy

Yes.

Chairman

This is getting better. Tell us, please.

Mr. Seamus McCarthy

In most cases, if there are trust funds, they are consolidated. The difference in Cork is that this trust fund is not consolidated. In my opinion, it should have been consolidated.

Chairman

Who controls the trust? The college?

Mr. Seamus McCarthy

The college. That is the point. Since the college controls the trust, it should consolidate the moneys. It is slightly different with the foundations in that there is a distance between them. They do not directly control them.

Chairman

Are there trust funds in the other colleges?

Mr. Seamus McCarthy

There are in a number of other colleges.

Chairman

That did not come out in our conversation before. We just spoke about the foundations.

Mr. Seamus McCarthy

It did not come out, because if they are consolidating them in their financial statements, then the full financial position can be seen. It is perfectly legitimate and reasonable to have trusts for specific purposes. The point is that somebody looking at the financial statement should be able to see what its financial position is. What I am trying to draw attention to here is that, in Cork, it should have included that in its balance sheet, which it did not.

Chairman

I ask Mr. McCarthy to assist the committee because we will be doing a report on third level institutes shortly. I ask him to compile the information on trust funds that exist in third level institutions, and the amounts that each college has. Mr. McCarthy seems to be saying that they are generally consolidated.

Mr. Seamus McCarthy

Yes, in general.

Chairman

We did not pick up on that particular point in our discussion. Mr. McCarthy might be able to separate it out.

Mr. Seamus McCarthy

There may be a bit of work involved in that, but we will do our best.

Chairman

We do not need it today. Our work on third level institutions will not be complete without knowing that.

Mr. Seamus McCarthy

On the previous point, about the recognition of expected future Exchequer funding for pension added years, that was something I drew attention to with regard to the 2014 financial statements as well.

The figure was lower at that point. I think, in evidence here, by the Department and by UCC, there was an indication that they are moving to a resolution on that. It is just to remind the committee of that.

Chairman

Is the takeover or amalgamation with Irish Management Institution, IMI, in this year's accounts or the 2016 accounts?

Mr. Seamus McCarthy

I cannot remember, offhand.

Chairman

Please come back to us about the 2016 accounts audit and the timescale.

Mr. Seamus McCarthy

Yes.

Chairman

Deputy Cullinane is next. We will probably discuss this matter further in private session as well because it is part of our work programme.

Deputy David Cullinane

I will not go into that.

Chairman

Just briefly.

Deputy David Cullinane

I have a question on the IMI and the more than €20 million transfer. I would like clarity on whether the matter has been covered.

I have technical questions on non-consolidated trust funds. Is it the case that non-consolidated trust funds fall outside the purview of the financial controls of the institute? Do consolidated trust funds fall within the purview of the financial controls of the institute like the board of governors, etc?

Mr. Seamus McCarthy

I would say that in this situation the controls are operating. They are controlling the trust.

Deputy David Cullinane

Right.

Mr. Seamus McCarthy

It is their money. Obviously there are limitations on how it can be applied. It is restricted.

Deputy David Cullinane

What does the Comptroller and Auditor General mean by non-consolidated?

Mr. Seamus McCarthy: The financial statements do not show the €12 million.

Chairman

They are excluded.

Deputy David Cullinane

Excluded.

Mr. Seamus McCarthy

They are not included in it.

Deputy David Cullinane

They are subject to financial controls.

Mr. Seamus McCarthy

They are in control of it and that is my point. If one is in control of it then it should be reported in the financial statement.

Deputy David Cullinane

Good. I thank the Comptroller and Auditor General.

Chairman

Deputies Connolly and Madigan have indicated a wish to speak. I urge them to move on quickly.

Deputy Catherine Connolly

Why are they not consolidated?

Chairman

They should be.

Deputy Catherine Connolly

I understand. The foundation in Galway has clearly said that it was none of our business and it did not control the matter. However, institutions do have a control of trusts. What reply did the Comptroller and Auditor General receive when he raised the issue?

Mr. Seamus McCarthy

I think they have accepted the principle that it should be consolidated. My recollection is that they are proposing to consolidate it for 2016-----

Deputy Catherine Connolly

Yes.

Mr. Seamus McCarthy

-----but they had settled their financial statements and were not disposed to changing to consolidation for 2015.

Deputy Josepha Madigan

Why was it left out? Was it deliberate or was it just oversight?

Mr. Seamus McCarthy

It was just the view they took.

Chairman

We will write straightaway to UCC seeking a formal explanation as to why it did not consolidate the trust fund. It was in control and I can see no good reason for it to leave things that way. The Comptroller and Auditor General is black and white on the issue.

Deputy Josepha Madigan

Yes.

Chairman

We have a qualified audit report from a third level institution that is unacceptable. A foundation is slightly different. A trust fund is black and white and we want a detailed explanation.

Deputy Catherine Connolly

Coca Cola is involved.

Chairman

Pardon.

Deputy Catherine Connolly

Coca Cola.

Chairman

I know that Coca Cola is one of the backers.

Deputy Catherine Connolly

I am joking. There is a list of people.

Chairman

There is a list of people involved. We will write straightaway as a result of this qualification.

Can we move on because we have a few things to do? We have completed our discussion on statements. We will discuss our work programme in private session. In private session we will call in the whistleblower in respect of the Grace case but we will discuss our own items beforehand. As there is no other business I propose that we go into private session.

The committee went into private session at 10.05 a.m. and adjourned at 1 p.m. until 9 a.m. on Wednesday, 31 May 2017.