We are joined by the Comptroller and Auditor General, Mr. Seamus McCarthy, as the permanent witness to the committee. He is joined by Ms Josephine Mooney, deputy director of audit. Apologies have been received from Deputy Kate O'Connell. The minutes of previous meetings are being held over and will be cleared next week.
There are three categories of correspondence, the first of which is category A with briefing documents and opening statements. No. 1745 A from the Department of Employment Affairs and Social Protection is dated 23 November. It provides briefing notes for today’s meeting on the various chapters, the outturn figures and various summary documents. These are noted and will be published.
Category B is correspondence from Accounting Officers and-or Ministers and follow-up to meetings of the committee, as well as other documents for publishing. At last week’s meeting, we dealt with a number of matters held over from previous meetings and left a few to be deal with. No. 1560 B dated 7 September 2018 is from the president of Cork Institute of Technology. It provides a detailed note requested by the committee on the preparation of the terms of reference for the KPMG review of anonymous allegations against Cork Institute of Technology in 2014. We have discussed that. It will be noted and published. We will deal with it as part of the committee's upcoming periodic report.
No. 1637 B from the Office of Public Works provides the managing valuer's report on five historical cases on foot of a preceding submission to the Department of Public Expenditure and Reform. We have advised the correspondent that we may request a meeting with the individual in due course. This matter has been discussed previously. I propose to note and publish it.
No.1684 B from Mr. Robert Watt, Secretary General the Department of Public Expenditure and Reform, is dated 24 October 2018 and encloses a minute from the Minister for Finance and Public Expenditure and Reform on the third periodic report of our meetings from January to May 2018. This will take a few minutes as it is the biggest item of correspondence. I ask members to bear with me as we go through that. We will first agree to note and publish the document. It relates to the report the committee published on 11 July 2018 that covered a range of Departments. The document contained 39 recommendations for the various Departments, 30 of which have been accepted and nine of which have not been accepted. I do not intend reading out the document because it is 27 pages long. We will briefly run through each recommendation.
Recommendation A1 was that a business case be made for all proposed major capital expenditure projects above a certain threshold. The Department accepts that and is now updating its guidance as part of the public spending code, which is to be published. We will write to the Department to ask when we can expect to see a copy of that. It is very easy for a Department to accept a recommendation, but we are interested in how it follows through. We want to know when the change to the guidelines will happen.
Recommendation A2 concerns public bodies that do not adhere to procurement policy. It has not been accepted by the Department. The committee had recommended that the Department of Public Expenditure and Reform examine "the imposition of appropriate sanctions for public bodies that do not adhere to public procurement policy." The official reply indicates the recommendation has been noted and that the matter raised is for each contracting body, with the Department acting in a supervisory capacity. It is interesting that the Department does not accept the principle involved. It states this is a matter of good governance for each individual Department. We stand by our recommendation and it is disappointing that it has not been accepted.
Recommendations B1 and B2 related to the Valuation Office's national property revaluation programme. The office accepts all of the recommendations. We were not satisfied with the timescales and the delays in revaluations, which was the basis for one recommendation. The Valuation Office accepts that and has a new plan whereby they will do a revaluation every five years.
Recommendation B3 covers the variety of payment methods that should be allowed for ratepayers who, until now, must pay their rates bill in one or two annual instalments. That has been accepted and agreed. The change will be made in the Local Government (Rates) Bill 2018.
Recommendation B4 addressed the sequence of the revaluation and how the Valuation Office chooses the counties to be included in the programme. We asked it to present the logic for tis decisions. The office stated the first revaluation is almost complete and that future revaluations will be conducted on a rolling basis of five to ten years. There were some owner-assisted revaluations and some external contractors also did some revaluations. We suggested the Valuation Office carry out a review to determine which is the most efficient and effective approach. It has accepted that recommendation but states that it "will have to be considered in the context of the overall funding allocation for the Housing, Planning and Local Government Vote Group." The Minister indicated that the Department will make funding available to facilitate this. We will write to the Department to find out how much money has been included in the 2019 Estimates to implement recommendation B5. Recommendation B6, which recommends an independent external review, has been accepted. The Valuation Office has accepted, in so far as possible, all of our recommendations.
Recommendation B7 concerns the National Shared Services Office and the management of salary overpayments. The office accepts the recommendation and has established a new committee to liaise with clients to ensure there is proper agreement and understanding. It wants to root out overpayments at source, which arise mainly from people being absent and notification not being given quickly enough. We note, however, that the office seems to be improving in that area.
We asked what savings will be achieved as a result of the establishment of the National Shared Services Office. The correspondence states: "The Minister is further informed by that Office that the process for planning the evaluation of savings from the implementation of the Shared Services model has commenced." The committee will write to the Minister to ask when this evaluation will be completed and seek a copy of the report.
The next recommendation from our periodic report related to the Dormant Accounts Fund, which was a disaster in terms of how it was managed. The key issue was that responsibility for the fund transferred to various Departments over the years. The Minister for Rural and Community Development currently has statutory responsibility for the dormant accounts disbursement scheme. Some good recommendations made by the committee have been accepted. We suggested that a substantial amount of money that had been locked in to older projects that were not going to proceed be decommitted. The Department has confirmed that an action plan has resulted in decommittals totalling just over €16.5 million and these moneys are now available to fund new measures in future action plans. This is very welcome, and it is good that the Department has accepted our recommendation on the Dormant Accounts Fund because it was one of our more important recommendations. The committee also recommended that the fund be maintained by one body to provide a stable platform for its effective administration. As I stated, responsibility for the fund has been moved from Department to Department. The Department notes our response and states that the allocation of responsibility for the fund is a matter for the Government and, ultimately, the Taoiseach. We accept that response and that it is a matter for the Taoiseach to outline ministerial responsibilities.
The final recommendation, B14, concerns reviewing the scheme. This is very important. The committee recommended that the Department review the dormant accounts application process. We felt it was overly complicated. Our recommendation has been accepted and that is good. The Department acknowledged that the assessment and selection procedures, in particular, would appear to be superfluous. It also stated that some of the rules and recommendations go far beyond the normal accountability for Exchequer funds. The Department has, therefore, accepted that some of the procedures were unnecessary and superfluous. It is now dealing with that.
The next item was the decommittal of funds and that recommendation has also been accepted. We will watch this space for future improvement. It has been accepted, however, that some of the application procedures were overly and unnecessarily complicated, and the recommendation has been agreed to that some funds should be decommitted and available for new applications. Those are two good achievements.
Our next recommendations were to a Department that, by and large, accepted very few of our recommendations. I refer to the Department of Housing, Planning and Local Government. It noted everything we said but does not seem to have accepted any of it. The committee recommended that the flow of funds from central government to local government be reviewed to simplify the process. That was noted by the Department and it stated that the Comptroller and Auditor General has a chart which explains it all. I think that chart highlighted how complex the whole issue was rather than simplifying it. We will be coming back to that Department because, in its answers, it has not taken on board the spirit of what we were saying. It might be understood by the Office of the Comptroller and Auditor General and the Accounting Officer, but the public also needs to be able to understand these things. The Department has not simplified the issue.
We also spoke of the fragmented nature of funding for local authorities from the different Departments. That has also been noted. The Department also stated that a review group has been established by the Minister to bring greater balance and equity for local authorities. That is the funding model and that is being examined. It was recommendation B18 and we are writing to the Minister to see when we might see that implemented.
The next item is about roads. The Department has stated that it is providing additional funding for serious road accident blackspots. The next recommendation, B20, was noted. That was where the committee recommended that there should be a €5 charge for online transactions for taxing cars and that the excessive charge for the quarterly issue of tax discs should be reduced. The response from the Department states that this would be a charge on the Exchequer. It is being stated by the Department that the cost of €5 for each online transaction is actually closer to €10. That does not tally fully with what we understood from the evidence here during the course of our meeting. In any event, the Department has stated that any such change would require an amendment to section 152 of the relevant legislation. We will note and publish this and if any Member or party feels that it is worth amending the legislation, a Private Members' Bill can be brought forward. We have highlighted the issue now.
The next item is in respect of the housing assistance payment, HAP. This concerns inspections. The Department has accepted recommendation B22 and states that there has been some duplication where local authorities were inspecting private rental accommodation which might also be covered by a HAP inspection. The Department makes a disappointing remark, but I admire the honesty. It stated that while the inspections are being undertaken widely by local authorities, not every local authority is recording data for every HAP tenancy on the dedicated HAP system. Inspectors are walking in and out, saying accommodation is grand and keeping no record. That is a recommendation we need to follow up. The Department admitted that inspectors are not recording their inspections. That is extraordinary.
