Business of Committee

We are joined by the Comptroller and Auditor General, Mr. Seamus McCarthy, who is a permanent witness to the committee. He is joined by Mr. Brian Hill, senior auditor. Apologies have been received from Deputies Deering, Farrell and Cassells.

We will hold the minutes of the previous meeting over until next week. Therefore, we will deal next week with anything in the minutes and matters arising.

There are three categories of correspondence. The first category is A, briefing documents and opening statements for today's meeting. Nos. 2293A and 2297A are from Mr. Conor O'Kelly, CEO, National Treasury Management Agency, NTMA. These are his opening statement and briefing documents. We will note and publish these. That is agreed.

No. 2296 A from the HSE, dated 3 July, is a briefing statement for today's meeting on the State Claims Agency. We will note and publish this.

The second category is B, correspondence from Accounting Officers and-or Ministers and follow-up to meetings of the committee and other items for publishing. We have held over a couple of items from the previous meeting. The first is No. 2161B from Mr. Paul O'Toole, chief executive of the Higher Education Authority, dated 10 May, enclosing a report on the review of the relationship between Cork Institute of Technology and certain named companies and entities which was undertaken by Mazars. We published this a couple of weeks ago and there was an indication that some people would like to make some observations. If anyone wants to make an observation on that, that is fine, and if not, we will circulate it. If somebody wants to bring it back up the next time under minutes or matters arising, we will do so. I would like to deal with it formally today. Is that agreed? Agreed. People can raise the matter again the next day, if they want, before the break.

No. 2277B is from Ms Mary Lawlor, communications and public affairs manager, National Asset Management Agency, NAMA, dated 26 June, responding to further information requested by the committee on the payment of €1.9 million to the Revenue Commissioners in 2018. At our meeting of 13 June we reviewed the 2018 accounts for NAMA and highlighted this payment to the Revenue Commissioners in November 2018 in respect of an underpayment of VAT on certain services received from abroad. The payment included €600,000 in respect of interests and penalties. NAMA advised that the liability arose primarily in respect of a NAMA secured asset located abroad where invoices were settled directly with debtors, by debtors or their lawyers. These invoices were processed externally and were not subject to the normal internal processes for assessing whether a reverse charge VAT obligation arises. NAMA advised that it has amended its procedures to capture in real time any reverse charge VAT liability due. We will note and publish this. NAMA has clarified the matter in full. I stress that it was a voluntary disclosure by NAMA in the first instance.

No. 2284B is from Mr. Maurice Buckley, Chairman, Office of Public Works, dated 27 June, providing an update requested by the committee on the basis of the measurement to determine the rent on Miesian Plaza in Baggot Street, which is the head office for the Department of Health. A meeting is expected in the coming weeks with the landlord. We will note and publish this. We will get an update on that in due course as well.

No. 2291B is from Dr. Fergal Lynch, Secretary General, Department of Children and Youth Affairs, dated 1 July. Dr. Lynch is working on providing follow-up information requested at our recent meeting with the Department and has suggested a format for providing information on Pobal. The letter contains a template for how the Department proposes to provide the information. Unless any member can suggest an alternative layout in terms of the presentation of the information, I propose that we advise Dr. Lynch to proceed as suggested. The reason we have done this is because an enormous volume of information was requested at the meeting and we want to make the flow of information in some way manageable, and they want to agree a format with us. I am happy to proceed with this. When we get the information, if we want further information again thereafter, we can revisit the matter. For now we will ask them to provide the information based on the template that they have provided here today. That is agreed.

No. 2292B is from Ms Marie Mulvihill, Department of Public Expenditure and Reform, dated 28 June, providing information requested at our meeting last week on the health budget oversight group. We will note and publish this. The matter arose as a result of recent correspondence that a health budget oversight group had been established, which people might not have been aware of and we might have seen reference to it. We think it is a good thing and follows on from a previous recommendation of the Committee of Public Accounts in our last periodic report where we stated that the Department of Public Expenditure and Reform should engage directly with those Departments that have a history of a substantial requirement for Supplementary Estimates. The Department is acting on that but perhaps it was going to do so in any event. It has set up the membership of the health budget oversight committee. Officials confirmed here at the previous meeting that the group is only dealing with current expenditure and does not include capital expenditure. We would suggest that the group would also cover that. In the meantime, it is good that there is an oversight group to work on this issue. I will list the membership of the committee so that people will know its make-up: Mr. Ronnie Downes is the chairperson, and he is an assistant secretary in the Department of Public Expenditure and Reform; Mr. Colin Menton is an assistant secretary in the Department of Public Expenditure and Reform; Mr. Colm O'Riordan is a deputy secretary in the Department of Health; Mr. Colm Desmond is an assistant secretary in the Department of Health; Mr. Stephen Mulvany is the chief financial officer of the HSE; Mr. Liam Woods is the national director and chief operations officer in the HSE; and Ms Rosarii Mannion is the national director of human resources in the HSE. The secretariat is provided by the Department of Public Expenditure and Reform. I am delighted to see that there is such a group in place.

Except for gender, the list is perfectly right.

I noticed the gender balance as well.

The committee is 100% male.

Nearly, except for Ms Rosarii Mannion.

Yes. There you go.

It is a committee for health budget oversight.

The majority of the people employed in the HSE are probably female.

We will pass on that observation. Sometimes females can be better at minding money.

We are here to discuss value for money.

Repeated research has shown that if there is female representation on an equal basis, it produces better value for money. Mr. Kieran Lenihan, the clerk to the committee, is looking at me but I have shown this research. We will come back to the matter on another day in terms of value for money. Certainly a female look at a budget oversight is essential in terms of health.

Yes. We will pass on that observation directly to Mr. Downes or whoever. No, it is not for the committee as they are only members. We will pass our observation on to the Minister for Public Expenditure and Reform, Deputy Donohoe, as he is the man in charge. I thank the Deputies for the observation.

The next item of correspondence is No. 2294B from the Department of Justice and Equality, dated 2 July, providing a notice on the sentence calculation review carried out on behalf of the Irish Prison Service. We will note and publish this item. It will be included in our periodic report that we will publish next week.

A detailed review of that particular issue has been conducted, and we were satisfied to receive that.

No. 2295B is from William Beausang, Department of Education and Skills. He has provided an update on responses received by the Department from Waterford IT arising from matters related to the spin-out company FeedHenry. We will note and publish this item and it will feed into our periodic report. Is that agreed? Agreed.

Category C relates to private individuals and other correspondence. One item has been held over from previous meetings and I want to do a detailed note on that because we have a number of letters on this issue from this particular correspondent. It is their right to correspond with this committee. No. 2260C, dated 18 June, is further correspondence from an individual about the Social Welfare Appeals Office. We considered correspondence from this individual at our meeting on 13 June 2019. The matters raised appeared to involve a breach of legislation and it was agreed to advise the individual that the matters raised were not within the remit of the committee, but were a policy or legislation issue. In this item, the correspondent states that he intends to make a further submission to the committee. We have previously written to both the Department of Employment Affairs and Social Protection and the Revenue Commissioners on matters raised by the correspondent regarding bogus self-employment. We sent responses to the correspondent, which were received, in June 2018. The Department advised in 2018 that it had published a review of trends in, and issues arising from, the use of intermediary structures and self-employment arrangements, together with the Department of Finance and the Revenue Commissioners. The report considered the available data on employment trends, including data used in the correspondent's submission, and concluded that there was little, if any, evidence that there has been an increase in the level of what is termed "disguised or false self-employment". The report made a number of recommendations. One recommendation was to increase public awareness of the services provided by the Department of Employment Affairs and Social Protection's scope section, and a public awareness campaign about false self-employment was launched in May of last year.

I propose we inform the correspondent that our consideration of the matter is closed, in light of the fact that various State organisations have dealt with the information. Is that agreed? Agreed.

No. 2279C is from Mr. John Conway, assistant secretary of Louth Environmental Group. It is dated 27 June 2019, and is a response to correspondence we sent to the group which was received from the Office of Public Works, OPW, following inquiries made by the committee regarding a flood risk project at Bellurgan, Dundalk, County Louth. I propose to advise the group to make contact with the Local Government Audit Service as the work was carried by Louth County Council, but members may also wish to take this matter up with the OPW when it is next before the committee giving its financial statements. We will note this item. Is that agreed? Agreed.

No. 2280C is a response from an individual to our recent correspondence to him regarding salaries and allowances for Oireachtas Members. We will note this correspondence. Is that agreed? Agreed.

No. 2281C, dated 24 June 2019, is from an individual responding to our recent correspondence to him and to our discussion of his correspondence in respect of Kerry County Council. The correspondent says we misunderstood the point he was making, which was about the value for money of discretionary funds that are made available to councillors. Nonetheless, our position remains that the matters raised are not within the remit of the committee and I propose to reiterate that he should make his inquiry to the Minister for Housing, Planning and Local Government. Is that agreed? Agreed.

No. 2283C, dated 27 June 2019, is from Mr. Allen Morgan, enclosing further correspondence following our private meeting on 20 June 2019. Mr. Morgan is a retired senior official from the OPW with extensive experience, having worked in the organisation for years. We met him in private session to discuss a number of projects he wanted to highlight. In response to queries from members, Mr. Morgan has provided further documentation and, in summary, he recommends that the lessons learned from the Miesian Plaza case should be embedded in all OPW projects. On the transfer of the property remit from the OPW to a dedicated agency-type organisation, he cites the example of Coillte and other European comparator countries where there is a more commercially focused agency approach. He also recommends greater and more clearly independent oversight or scrutiny of property cases, especially while these remain within OPW’s remit. Members will agree that there is merit in exploring these recommendations further. However, it is not within the remit of the committee to do so, because almost everything Mr. Morgan refers to is a policy matter for the relevant Minister. I propose that we forward this correspondence, with his permission, to the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, as it deals with the OPW, and it is under that committee's remit to consider policy matters. We will ask for its consideration and any action it deems appropriate. Members may also wish to raise the matter in other fora. Is that agreed?

What committee are we sending it to?

The Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, as that committee deals with the OPW. The OPW reports to that committee and its Estimates go through it.

What would we ask the committee?

We would ask it to take on board everything Mr. Morgan has said about a new agency, transfer of property, and so on. They are all policy issues for the committee.

I understand. We will send that to Deputy McGuinness.

Yes, as he is the chairman of that committee. The Committee of Public Accounts cannot take on what Mr. Morgan is suggesting. We accept his points about learning lessons, especially from the Miesian Plaza, and ensuring those lessons are embedded in all OPW projects in the future, but many of the points he made are major Government policy issues.

It is good stuff.

It is good stuff.

For what it is worth, the MacGill Summer School has taken the lead from the Committee of Public Accounts and now has a section on the topic of the Miesian Plaza disaster.

Very good.

We should thank Mr. Morgan for coming in and for providing this additional material that we can all use individually as well. It is important to say that it is not falling on deaf ears. He has gone to considerable effort, and some of the principles he discussed on to how projects are approached were very useful. It re-frames one's perspective when looking at overspends on large projects, and the kinds of institutional arrangements that could be put in place to avoid them in the future.

We will certainly thank him for the earlier correspondence, for the information and the report he provided, for attending the meeting in private session, and for the follow-up documentation we have now received. While we will send his correspondence on to the other committee, we have all learned from this process and we can all use this information in our roles in the Oireachtas, so we will thank him for that. That is agreed.

No. 2285C is from a company, dated 27 June 2019. At our meeting on 13 June, we decided to forward a number of items of correspondence in respect of this company to the OPW for a response. The secretariat routinely requests the correspondent's permission and, in this instance, the company has declined to provide consent for this purpose. The matter relates to specifications for cell windows in Garda stations and courthouses. The correspondent believes the winning tenders are not meeting the health and safety specifications set out in the tender documents. I propose to write to both the OPW and An Garda Síochána to ask if they are completely satisfied that the health and safety standards and specifications for the supply and fitting of cell windows are being met. I propose that we also ask the OPW to describe the controls in place to ensure the winning tenders deliver the specification set out in tender documents. In conversation with one of the correspondents, the clerk to the committee was given to understand that the matter has also been referred to the Health and Safety Authority, HSA. I propose we write to the HSA for an update on the matter. The company does not want us to send its correspondence on directly, but to raise the general issue of tendering so that what is in the tender document is subsequently delivered, and that the mechanisms to do that are in place.

We should also draw the State Claims Agency's attention to it, because there is a risk assessment aspect to its work.

Representatives from the agency will be before the committee later, so we might raise it with them then. We note that item. Is that agreed? Agreed.

No. 2289C from Deputy Catherine Murphy, dated 27 June 2019, endorsing our decision at last week’s meeting to include the Irish Greyhound Board and the Department of Agriculture, Food and the Marine on our work programme, and requesting that it be scheduled for the autumn. Bord na gCon's financial statements are on the work programme for the autumn.

Representatives of Bord na gCon will be before the agriculture committee next week to discuss matters to which attention was drawn in a recent RTÉ programme.

Approximately 50% of its turnover is public money and we need to look at it. We had representatives before the committee in early 2017 and the process was quite chaotic. The Harold's Cross property has been sold in the meantime. We should have the representatives before us to look at the next set of accounts, which I presume are available.

Mr. Seamus McCarthy

Not yet. The audit has not yet been completed but it is fairly close to completion.

We will have it for the autumn schedule.

Mr. Seamus McCarthy


Okay. We can include them on the work programme for the autumn schedule. The matters arising from the "RTÉ Investigates" programme will be discussed at next week's agriculture committee meeting. In any event, we will discuss all relevant issues.

We are concerned with the finance and value-for-money aspects.

Yes, and we deal with the funding.

We can discuss the scale of funding relative to the amount provided to other sports, for example.

It is agreed and it is in our work programme for the autumn. Correspondence No. 2290 is from an individual, dated 27 June, which makes some observations relating to housing subsidies. We note that item. The next item is statements of accounts received since the last meeting, of which there are four. One relates to University College Cork, UCC. There is a qualified audit opinion and the university recognises a deferred funding asset in respect of future pension liabilities. However, it has recognised €3.75 million more than is warranted for a funding agreement it entered with the Higher Education Authority. Otherwise, the financial statements give a true and fair view. On a separate point, it is noted that the university had non-compliant procurement to the value of €2.9 million in 2016 and 2017. It is unusual for the Comptroller and Auditor General to qualify an audit.

Mr. Seamus McCarthy

It is and we do not do it lightly. This is an ongoing issue between UCC and the Department. For a number of years I was drawing attention to and qualifying its recognition of approximately €14.5 million or €15 million in respect of this specific item. An agreement was hammered out that it would do a 50/50 share of the cost associated with this specific aspect.

With whom would it be shared?

Mr. Seamus McCarthy

It would be shared with the Department, which is the funder, effectively. In implementing it, UCC has gone for recognition of a 76/24 split. It is just not correct for it to do that.

Is it being overly prudent?

Mr. Seamus McCarthy

It is not so much that it is being overly prudent. It is assuming it will receive more funding than the agreement indicates.

Does the 76% refer to the Department's share?

Mr. Seamus McCarthy

Yes, rather than 50/50.

Is the Department not talking to UCC on the matter?

Mr. Seamus McCarthy

The parties are talking about it. It is the position as it stood in the financial statements. These are the financial statements for 2016 and 2017. Trying to get a resolution to this has delayed the completion of the audit.

The accounts for 2017 and 2018, running up to the end of September 2018, will be with the committee next spring.

Mr. Seamus McCarthy

No. The audit is due to commence in July so it will be the back end of the year before the audit is completed.

The matter may or may not be resolved. Please keep us informed.

Mr. Seamus McCarthy

We will do so.

In some areas we have focused on bogus self-employment. I am not saying it happens in universities but there can be fairly unorthodox employment practices with respect to the employment of tutors. I became aware of somebody recently who had spent three or four years tutoring but was finding it difficult to get contracts. That practice is kind of repeated in various universities. There was an offer to be paid in book tokens. It is quite shocking stuff. Is the type of employment practices in universities something that can be dealt with in accounts? Would tutors without a contract be identified in any way?

Mr. Seamus McCarthy

No. To an extent there is employment numbers control in universities and third level institutions general. It is really a policy matter. Salary payments should be put through as such. I cannot say I have heard of any cases where somebody is being paid in kind or in the form of book tokens. That is not something of which I am aware. If the Deputy has details of something like that, we can certainly have a look at it in the course of the process.

Those employees may have very few rights. During last week's meeting we asked representatives of the Health Service Executive, HSE, for a breakdown of staff numbers, including those in section 38 and section 39 organisations and contract staff. In our letter seeking clarification, we asked the number of whole-time equivalents in agency staff to the HSE. I have never seen that figure and I look forward to getting it. These people could be doing full-time work on behalf of the State all the time, especially in the home help area, but they have zero rights in the HSE. The agency involved could pull them at a moment's notice. It is a broader matter that might not be relevant to this committee. It is an employment rights matter.

Did the point come up when we asked representatives of the universities questions on the matter? Did they give a breakdown of employee numbers and the type of contracts?

Many of them do not have contracts.

That was the issue. We were left asking questions about it.

The perception is that if somebody is employed in a university, it is a good job, but some tutors find themselves drawing the dole during the summer.

School secretaries and bus drivers may also have to do that. They now have to sign on to get the dole if they do not have permanent contracts.

The question is how the information comes out. It is not coming out in the accounts. If the delegations from universities are before us and we ask questions, a certain amount of information could come out that can be followed up. The question is how to get openness and accountability, other than relying on people coming forward or us having to ask questions when a delegation is before us. That would be separate from the accounts process.

We would probably be coming at it through the back door. The sectoral committee should primarily deal with such matters to an extent. If the Deputy has an issue-----

I can write to the education committee.

We can write to the Higher Education Authority, HEA, on foot of the Deputy's comments if she so wishes.

Yes. I will send a note.

The Deputy can liaise with the secretariat. We will agree in principle to write to the HEA raising these matters and rely on the Deputy to have an input in drafting the letter.

The next set of accounts relates to the Commission for Communications Regulation. It is a clear audit opinion. The utilities regulator is a different outfit.

Mr. Seamus McCarthy


There is a clear audit opinion for IDA Ireland. The Digital Hub Development Agency provides operating space for start-up businesses in digital media, technology and the Internet. Is it located in Dublin 8?

Mr. Seamus McCarthy

Yes. It is on Thomas Street.

It also has a clear audit opinion. The next item is the work programme. Representatives of the Houses of the Oireachtas Service will be in next week to discuss its appropriation accounts. Is there an annual report that is separate from those accounts? We can see what we have.

Mr. Seamus McCarthy

They may be published together.

We will have a copy of that. In the afternoon there is an informal meeting on matters relating to the Irish Banking Resolution Corporation liquidation. The witnesses are Mr. David Hall, who is attending in person, and Professor Constantin Gurdgiev, who will attend via conference call from the United States. The outstanding matters are the appropriation accounts for the Courts Service, which we postponed a couple of weeks ago, and matters relating to the Department of Agriculture, Food and the Marine and Bord na gCon. We had two other items, including public private partnerships and something else. We will have a quick chat next week about the work programme for the commencement of the new session and its first few meetings. The Comptroller and Auditor General's report will be at the end of September.

We will be able to work from that report but it will be a couple of weeks before that if we are all here. I use the word "If." Next week, we will try to line up a meeting for September or the first week of October.

I had the Courts Service in my diary and then it was changed. What happened?

We changed it. We brought forward the meeting with the HSE on its financial statements to last week, when the Courts Service was due to come in, with a view to swapping them but the alternative date did not suit the Courts Service so we said we would just defer it. We brought the HSE meeting forward last week-----

Is the Courts Service on our list for autumn?

It is on our list. We will probably-----

Is it high up on the list?

It is the only one left standing. We will meet Courts Service officials very soon after the recess but we will wait for the Comptroller and Auditor General's report.

Mr. Seamus McCarthy

The 2018 appropriation account for the Courts Service should be available at the end of September so it probably makes sense to bring them in in early October if they are a high priority-----

We can have the postponed meeting and discuss the 2018 appropriation accounts together.

Mr. Seamus McCarthy

----whereas the accounts of some of the State bodies, with which the clerk to the committee intends to schedule meetings, will be available in September for September meetings.

We will provisionally discuss that next week before we leave.

I am a member of the Houses of the Oireachtas Commission so I presume there is a conflict of interest for me. How was that handled previously?

Once the Deputy declares it, it should not be an issue. It is a fact of life that conflicts of interest arise and the issue is how to deal with them. The first way for the Deputy to deal with it is to put it on the public record at the start of the meeting.

I am a former member of the Houses of the Oireachtas Commission so I would not panic.

The most straightforward way to handle that is to put it on the public record.

Mr. Seamus McCarthy

The Accounting Officer is the one who is responsible and accountable for the spending.

Who is the Accounting Officer?

Mr. Seamus McCarthy

The Clerk of Dáil Éireann.

There will be no other meetings. We will suspend for a few minutes to allow our witnesses to take their seats.

Sitting suspended at 9.42 a.m. and resumed at 9.50 a.m.