Business of Committee

We are joined by the Comptroller and Auditor General, Mr. Seamus McCarthy, who is a permanent witness at the committee. He is joined by Ms Orla Duane, deputy director of audit. Apologies have been received from Deputy Shane Cassells.

Are the minutes of 19 September agreed? Agreed. No matters arise from those minutes.

We shall now deal with correspondence. There are three categories of correspondence. Category A comprises the briefing documents and opening statements in respect of today's meeting. No. 2425A, dated 1 October 2019, and No. 2426 A from An Bord Pleanála are briefing documents and opening statements for today's meeting. We will note and publish these. Is that agreed? Agreed.

Category B comprises correspondence from Accounting Officers or Ministers or both and follow-up documents on Committee of Public Accounts meetings and other items for publication. We discussed No. 2342 on the Strategic Banking Corporation of Ireland last week. The information provided was not that requested by the committee and we circulated among committee members what we asked for precisely. We decided not to publish at the time and to hold the matter over until we received a response from the corporation. When we receive it, we can consider publishing.

No. 2354B is from Professor Phillip Nolan, President, Maynooth University, dated 29 July 2019, responding to a request from the committee for details on an investment by the university in a subsidiary which will not be recovered, as well as information regarding employment contracts for employees in the organisation. Professor Nolan confirms the loss and states the investment was appropriate based on the information and advice available at the time. He also provides an information note in regard to employment contracts and states that engagement of staff on an occasional basis is necessary, appropriate, fair and in compliance with relevant legislation. While we will note and publish this item, I want to make a few remarks on the subsidiary. Maynooth University set up a subsidiary called Innovation Value Services Limited for research and development and the organisation did not meet its expectations. The company was ultimately wound down at a loss to the university of €750,000. That is a very substantial figure and that is why we wrote to the university. In its detailed reply to us, it points out that the provision of €750,000 against the impairment of the loan to Innovation Value Services Limited represents a real and regrettable loss, and that it will not impact on education or services to students but will reduce the university's capacity for research and knowledge transfer. That is an honest answer from a third level college. Normally it is said there is no effect but at least in this case the university says there will be an impact on its capacity for research and knowledge transfer. The university had an innovation value institute in the college that had attracted over €10 million since 2010. It decided to set up a subsidiary, which it is entitled to do. Before it set up the company, based on what is projected, it commissioned PwC to produce a report, and the latter advised against the initial business plan, which projected an investment of €1.25 million. The investment plan was then scaled back on that basis. The university invested €410,000 in the subsidiary in October 2015 and, in May 2016, it advanced another €300,000. After the first year of operation, it agreed to defer the loan repayments until December 2019 because it knew the organisation was not meeting expectations. In May 2019, the decision was taken by the university executive not to invest further in the company. The board of Innovation Value Services Limited met on 18 June 2019, which is not that long ago, and decided to wind up the company and cease trading by the end of the financial year, which I presume is about now. Those are some of the salient facts. We need to ask for a copy of the final accounts for the company when it is ultimately wound up and audited.

Second, we raised the question as to whether the loan of €750,000 was included on the university's risk register. The replay given was that the risks associated with Innovation Value Services Limited were not specifically included in the register. The university said it updated the risk register in February 2017, which was two and a half years ago, and it was further updated over the summer of 2019, which has just passed. At this stage, we must write to the university and ask for the risk register. In my view, this should be produced on an annual basis, at a minimum. The HSE produces them on a quarterly basis. It does miss things but at least it has a system in place every quarter. I expect a body such as the university to produce a register regularly. A year is the most that should elapse before producing a register. Even if we get a register once per year, it will not be too bad. The one the university is operating from is two and a half years old. I propose that we write to it asking it for the risk register it was working on over the summer. Let us see where that stands.

That is all I want to say about the matter.

I mentioned the occasional lecturers. The university gives details on this on page 17 of its letter, which is a very comprehensive document. There are about 40 pages in the reply. It indicates there are 1,394 occasional staff, 668 of whom receive under €1,000 and 239 of whom receive between €1,000 and €2,000. The overwhelming majority of them receive under €4,000 and would not be considered in any way full-time. They are occasional, perhaps. Most of them are postgraduates at the college. That is what the university says here. I will come to Deputy Catherine Murphy, who will have more knowledge on this. I am just putting on the record what the university says because we will discuss the response. I want to put the response on the record because the university does not expect everyone to read the 40 pages. The university is saying the overwhelming majority of the occasional staff are postgraduates doing just a small amount of work here and there. It says it complies with legislation. That is the university's response. I have a duty to put it on the record.

Obviously, when we get more information back, we will come back to this. If we had got a copy of the university's risk register last year, it would not have shown up this. What else is the register likely not to include? Seeing it now, after this has been disclosed, yes, they are taking corrective action, but I am concerned we are not getting a full picture. That is one aspect. The business of universities is about creating knowledge. If NUI Maynooth is acknowledging the loss in respect of research and knowledge transfer, that is really at the core of what the university is supposed to be about. I am not sure we have fully fleshed out what this implies, and I would like to hear from the university what it means by "impact".

Regarding the number of staff, I completely accept that universities have people coming in and possibly doing several hours' additional work and that that is normal practice and adds to the value of the university. I think there are much greater employment protections at primary school level than at university level, not just in Maynooth but in the whole university sector. People going to college, who are very often the people paying for the staff, and their parents - and there are Government grants and so on towards tuition fees - do not appreciate that very often what is provided is perhaps one contact hour for every lecturing hour. I think great liberties are being taken in this regard. A total of 1,394 is a lot of people without contracts. We have spoken about this in the context of RTÉ and bogus self-employment, for example. Whereas this would not fall into the exact same category, it is a category of staff about whom I would have concerns as to how universities manage their accounts.

There is the other issue of how universities perform if not enough research hours are provided compared with contact hours. This shows up in our accounts, and that is the only reason it is appropriate for discussion here. However, we are hearing from the president of the college, not from the people who have a grievance about this. I think we are hearing a one-sided view on it, and I have concerns about that.

Much of what I wanted to say about the risk register has been said. I thank the Chairman for going through the correspondence in detail.

It was a summary.

It was very helpful, and I will reread it with a different eye. The risk register is what jumped out at me, again, as someone who is not experienced in this area. We rely on such registers. When I look at the accounts every single week I see the risk registers and what has turned up on them. However, the risk register is only as good as what goes on it, so perhaps somebody could help us with that. What criteria are used? Who checks those who put items on the risk register?

Mr. Seamus McCarthy

A risk register is a requirement under the code of practice for governance. It is probably fair to say the register is not a precise science. It is really about requiring an organisation to look at the specific risks that arise in its business. One check on the adequacy of the risk register is whether what happens, and the response to what happens, has been foreseen in the risk register as it goes. I think this has come up with organisations such as An Garda Síochána.

CervicalCheck was not on the risk register for the HSE until the court case.

Mr. Seamus McCarthy

Exactly, so it certainly arises that organisations will have blind spots. Nearly every organisation will have things that it assumes will always work because they always have worked. Having a good risk register is more an art than a science, and keeping it up to date is a procedural matter. However, the judgments that are made as to what goes on it and what is an appropriate response are a matter that an organisation needs to grapple with. The organisation needs to update it regularly, as the Chairman said. A review once a year would probably not be adequate for a relatively large organisation. One would want perhaps a quarterly review of the register and systems in place that ensure that it is not just something that is happening at the top of an organisation but that it percolates down through the organisation such that everybody is thinking about the areas specific to their aspect of the business and what they would do if certain of those risks materialised. It is, therefore, hard to say "this is an excellent risk register" and "that is a very poor one". It is seen in the outturn.

On that point, let us take the case of Galway. This is very much factual. It is another problem about which nothing was done, but the hospital was good in that it put the capacity of the hospital on the risk register. Then let us turn to the universities, not just NUI Maynooth. Knowledge was mentioned. I believe knowledge should be acquired through questioning. I disagree slightly with just the way Deputy Catherine Murphy put it. I believe that the universities should inculcate a questioning environment, which we seem to be losing, and that knowledge should be acquired in that manner as opposed to knowledge for knowledge's sake and for a profit. However, that is a policy matter. I was in Waterford on Monday leis an gcoiste Ghaeilge agus bhí mé in Institiúid Teicneolaíochta Phort Láirge. It brought back to me a lot of the matters and issues we looked at here. Does the risk register not assume a lot more importance now that the universities are more and more in the business of setting up companies with a view to making a profit? Is that not a whole new aspect of the risk register now, with public moneys and public buildings being used in that manner?

Mr. Seamus McCarthy

Absolutely. There may be third level institutions that do not have subsidiaries and are not involved in business structures. Once one gets into a new model of service delivery, there are different kinds of risks which one may not be fully aware of if one does not have a background in that. What one would expect to see is that the risk register is an organic instrument of the organisation that changes as the business changes and as the environment around the organisation changes or if demand is going up, funding is tightening or a commercial venture is part of what is being done.

Given the profile of what has happened here, is that a blind spot? Would Mr. McCarthy have expected to see it on a risk register way earlier?

Mr. Seamus McCarthy

I do not want to speak specifically about Maynooth because I have not looked at this precise point.

If one is using subsidiaries to deliver parts of one's business, then one needs to have a part of one’s risk register dealing with that. For example, what if there are trading aspects or control of intellectual property as we have had in other institutions? One needs to identify what are the risks and where can this potentially go wrong? What systems and controls do we need to have in place to ensure it does not go wrong, or if it does, that we can respond appropriately?

I want to raise a separate issue concerning the follow-up correspondence from Maynooth. It is to do with what it calls occasional staff and staff on contracts. The volume of people on contracts at the university is high. The university stated in its cover note that it does not engage persons on zero-hour contracts. That is true. However, there are if-and-when contracts or what it calls occasional staff contracts. The university stated it believes the engagement of staff on an occasional basis is necessary, appropriate, fair and in compliance with relevant legislation. In some cases, it may well be.

The difficulty is that we are seeing this more and more with public bodies which are employing people on if-and-when contracts. On some occasions, it is the right thing to do; other times, it is not. Watching this across all organisations, my fear is that some public bodies are hiding behind this position. If-and-when or low-hour contracts may suit some people but they do not suit everybody. If it does not suit somebody, then it is the only contract offered. There is an issue in relation to their rights and entitlements, whether it is sick pay, holiday pay and other entitlements. We have seen it with other public bodies and I believe we need to keep an eye on it.

I noted in Maynooth that 1,394 staff were on occasional staff contracts. It seems to be a bit high. I know there is a logic to it and I can see how it would suit a university. It is something that I will keep an eye on. When is the Department of Education and Skills due back before the committee?

It is not scheduled yet. There are two points we need to take up on the two different topics. One, what it calls occasional staff. The university says that most of them are postgraduates. We are going to ask about the 1,394 figure it gave and how many of those are in receipt of payment for more than one year, two years, three years and four years? If we find 95% of them were postgraduates, just passing through the college as a tutor, that is fine.

However, if we find in that bracket that there are some people on that arrangement year in, year out, that is the issue we need to examine.

That is a problem.

Finding out how long each of those have been in receipt of an occasional arrangement will give us an indication how many are permanently on it.

Following up on Deputy Catherine Murphy’s point, the university said it will affect its capacity for research and knowledge transfer. We want the university to give us an information note on the research and knowledge transfer activity for the past three years, as well as it plans and arrangements for this and next year. Based on the figures it gave us, €700,000 seems to be a large figure if it is only had €10 million external research and development over a long period. It might represent a small proportion or it could be the most of it. I have no idea. We want to know the level spent in this area in each of the past three years, this year and the plan for next year. We can then see the impact. Has it closed the whole operation? Has it had a significant impact? I have no idea based on the reply we got.

We need the details on the two points. Is that agreed? Agreed.

We want a copy of the risk register and a note. There should be an audit and risk committee as part of the board. It should have been their job. We want to know what they have been saying.

Mr. Seamus McCarthy

Part of the code of governance is a requirement for an annual review of the effectiveness of the controls in the organisation. One of the things that should be reviewed in that exercise is the risk management system. It should be annually considered outside of the risk assessment process itself. There should be an exercise. Very often this is done by internal audit. This would be looking at whether the risk register is working for the organisation. There is also a requirement on a cyclical basis for an external review of risk management at least once every three years.

Does that happen all the time?

Mr. Seamus McCarthy

It is supposed to happen. I cannot say regarding any individual or organisation.

Where we see that an evaluation of the effectiveness of the control system is not carried out, we will be drawing attention to that. If we identify that the risk register has gone three or five years without being reviewed externally, we will also draw attention to that.

Would that be highlighted in the accounts when they come before us?

Mr. Seamus McCarthy

We would certainly be drawing attention - we have done it in the past - to whether the review of the effectiveness of controls had been carried out in a timely fashion. As we are consistently referring to it, the practice is now more embedded. It does not come up as often as it would have done say four years ago.

It is something we will keep an eye on. We can ask the Department of Public Expenditure and Reform about this as I assume it sets the policy in this regard.

Mr. Seamus McCarthy

It does.

Is that not a question for Maynooth as well, namely, that it reviews the effectiveness?

We have agreed that. The first thing is the three years and what it said in its governance statement in the annual accounts. If it gets a transcript of this discussion, it will understand why we are asking these questions.

Mr. Seamus McCarthy

I would also make the point that in a situation where an organisation’s accounts fall into arrears, there is a danger that all these controls slip because it is not completing the cycle every year in a timely fashion. The whole thing works together. One looks for where there is slippage in the system to nip things in the bud.

No. 2410B is from Mr. Pat Meehan, chief executive, National Oil Reserves Agency, NORA, dated 25 September 2019, replying to our request for an information note on the agency's compliance with the EU's oil stocks directive.

We were referring to the Brexit situation. It gives an indication of how much oil is held in the State. When we wrote to the agency, two thirds was in the State and quite a bit was in the UK. Since then, based on this letter, some of it has come on shore. Most of it is stored in Ringsend and Tarbert. It hopes to bring in further facilities for storage in the coming years.

I was going to raise it anyway. It is ironic that we had written to it and this correspondence came back. I understand the 100-day storage issue that we had. Does the Comptroller and Auditor General audit this agency?

Mr. Seamus McCarthy

Yes.

The 2007 Act provides that the agency can get its money from a levy of 2 cent per litre on petrol, diesel and home heating oil. It is a bit more complicated for aviation fuel. The Act is prescriptive in that the agency should raise this levy for its running costs. Running costs of the agency are about €80 million to €90 million a year. I am told that there is somewhere in the region of €250 million in its accounts based on this levy. We levy 2 cent per litre under an Act which states that the agency must cover its running costs and not to exceed that. It now seems to have substantially exceeded this amount. We are all hard-pressed consumers paying 2 cent per litre. It has been mentioned in the media and in dispatches from Ministers and the Department that these excesses could be used for the climate action fund.

It has been mentioned in media dispatches from Ministers and their Departments that these excesses could be used for the climate action fund. Frankly, that would be in breach of the law on the basis that if we are collecting the money for A, we cannot use it for B. I am not against using money in this way, but we live in an era in which we all accept that we are heading for carbon taxes. The receipts from the latter will be invested in the climate action fund. If an excess of between €100 million and €150 million accrues because running costs are being exceeded and if, effectively, this is being collected illegally or in a manner that is contrary to legislation, something needs to be done. The Government could consider whether this levy might be reduced or stopped - I accept that this is a policy issue - as long as we can ensure that the oil companies pass it on to the consumer. I emphasise that 2 cent a litre is an awful lot. On that basis, I think this is something at which we should look. I suggest to the committee that we should invite NORA personnel and officials from the Department of Finance to come in to discuss the issue. Does the Comptroller and Auditor General have any comments to make on what I have said? Can he confirm my concerns?

Mr. Seamus McCarthy

I have not looked at the detail. I do not have the accounts for NORA with me. The committee is certainly entitled to call the organisation. There are current issues of relevance.

If there is a large cash balance sitting on the balance sheet-----

It has been hinted in dispatches that it may be possible to use this money for this, that and the other. It seems that next week's budget will hit consumers with additional carbon taxes. If that happens, so be it because it is a matter for policy or whatever. If we are hitting consumers for 2 cent a litre for the specific purposes of the oil reserve that we require and that we all support, but in real terms we should be hitting them for 0.5 cent a litre or something like that, we need to be honest with people or else we should give the money back.

Does the Comptroller and Auditor General know whether NORA has the facility to make a dividend payment to the State? He might not know. I am putting him on the spot. Some of the other semi-states are able to transfer money back to the State. If the Comptroller and Auditor General does not know the answer straight up, that is fine.

Mr. Seamus McCarthy

It would make sense that such a facility would be there. I can check and come back to the committee.

Will the Comptroller and Auditor General get it checked and come back to us?

We will ask the Comptroller and Auditor General to give us an update next week.

It is worth chasing up.

Then we can decide whether to put it on the work programme. We will not set a date. The Comptroller and Auditor General might be in a position to answer these questions next week when he has looked at the accounts. If we need to bring NORA in, we can put it on the work programme on a provisional basis.

I did not make it up.

A levy of 2 cent is being imposed on people.

The levy is supposed to cover the running costs. At the moment, approximately two and a half years' running costs are in the bank. People do not have that kind of money.

Can we find out if this is exclusively what NORA can spend this money on?

It is. If the Deputy checks the National Oil Reserves Agency Act 2007, she will see that NORA can impose a levy for its running costs. At present, it is imposing a levy for-----

I do not dispute what the Deputy is saying.

The only reason I am asking is that I have a memory of the queues during the oil crisis. I suspect that part of the reason for the levy is to make sure there is security. I think this matter was originally raised in the context of Brexit and the rest of it. Can NORA spend the money on providing for additional capacity, as opposed to covering its running costs? That is really what I want to clarify.

They have dealt with that. We asked about that in the letter. They informed us that most of the stock in Ireland is retained in Ringsend and Tarbert and that negotiations are ongoing in relation to a further facility, the refurbishment of which is subject to a commercial contract. This would enable NORA to add another 55,000 tonnes, which is not a big amount in its terms, to its stocks in Ireland by 2023, which is four years away.

The levy was set in 2007. At that time, nobody in the Department was saying that a 2 cent levy might be needed because of Brexit.

We will put it provisionally on the work programme for now. We will ask the Comptroller and Auditor General to give us an update for next week. It goes without saying that we will note and publish the correspondence.

The next item of correspondence is from Mr. William Beausang, who is an assistant secretary in the Department of Education and Skills, and is dated 18 September 2019. It provides an update on the development and disposal of intellectual property in FeedHenry at Waterford Institute of Technology. We asked the Minister to consider appointing an investigator under the relevant legislation to examine matters raised in the Comptroller and Auditor General's special report No. 104. Mr. Beausang has advised that the Department is considering documents and has set out a number of concerns relating to the management of conflicts of interest. I will summarise this long letter for Deputy Cullinane by saying they have a whole lot of things to look at, and eventually they might do something. They do not say what they are advising.

I am not going to go over the history of the matte because most people here already know it. We had lengthy discussions on this with the Department in the past. We had similar discussions with the HEA when it became obvious that it was not able to publish the report it had done because it was outside its remit. It looked like the Minister, through the appointment of a special investigator by the Department, was the only option. I would like to draw the attention of colleagues to the second last paragraph of the letter that came back, which mentions that there had been a need to follow up with everyone who had submitted correspondence to the previous review, the report of which cannot now be published. According to this letter, the correspondence and documentation subsequently received by the Department - the follow-up documentation - sets out a number of concerns relating to the management of conflicts of interest. That was essentially our point from day one. My point all along has been that the concerns which have been outlined, some of which were the subject of a report, cannot be left hanging. We know it is probable that the report would have set out some of those concerns, but the HEA was just not able to publish it. Is it going to be left hanging? The Chairman is right when he says that the Department has come back to say it is still looking at whether further action is warranted. If concerns relating to the management of potential conflicts of interest which have been documented by individuals still exist, there is a responsibility on the Department to follow them up. It may or may not transpire that these matters were managed properly, but we cannot adjudicate on that. It is not our job to adjudicate on it. That is why we have a process. Special investigators are appointed to establish the facts and report on them. That needs to be done in this case to give closure to the issue. If it is not done, all of these issues will continue to be raised by individuals within the institute, those individuals will not get any satisfaction and - more to the point - the facts will not be established. We need to go back to the Department to say that if serious concerns are still being documented and sent to it, it has an obligation and a responsibility to follow them up.

Having looked at the letter, my view is that it has parked everything to which the Deputy has been referring. The matter has just been parked.

Three years have passed.

The letter says that the Department has a central oversight role and that the HEA is monitoring governance practices. The Department has asked the HEA to arrange a study of this. The terms of reference are being finalised and the Department will be updated in due course. The Department has stated that when it gets the information from Waterford, which we have mentioned, and when it gets the aforementioned HEA study, the terms of reference of which have not yet been agreed, it will examine all of that. When it has completed its consideration of all of that, it will advise the Minister on what to do next. That sounds like it will take years. Potentially, it could be a long way away from where it started. This issue is being parked.

I ask the Chairman to bear in mind that a report from the Office of the Comptroller and Auditor General, which is confined to examining these matters from a value for money perspective, focused on the relationship between State funding and the company that was spun out. It looked at a very limited aspect of this matter. As we know, the HEA report looked in more detail at other issues relating to the spinning out of these companies, including the management of conflicts of interest. That is what they were looking at. The report we got from the Comptroller and Auditor General showed that the institute accepted that it needed to improve on some issues that had arisen. I think the board has since taken those issues on board. We want something similar here. All we want is the facts. When we have the facts, it will be up to the board to follow though on them. It is important for all the other institutes. Many companies spin out of them. Last week, I met representatives of a fantastic company that spun out of an institute. This stuff is good. Many people are doing work in this area. It is important for everyone who is involved in spinning out these companies that the facts are established. We have never said that there is wrongdoing. We are saying that people are saying that there are issues. They are writing into the Department. They are engaging. They are doing the right thing by putting their information on paper, documenting it and giving it to the Department. As the Chairman indicated, it has been parked.

Will the Deputy crystallise what he wants us to do?

We should write to the Department to thank it for its letter.

However, if they have follow-up correspondence and documentation in which concerns regarding management of conflicts of interest are raised, they have an obligation to pursue the matter further.

Notwithstanding the long-term study.

We should ask if they have examined the possibility of appointing a special investigator. When they were here, they indicated that was one of the options they were considering.

We will write back to them on that basis. The Deputy has made the point very clearly. We will note and publish that correspondence.

I want to provide one clarification in respect of the previous item that might be of use. Everything I said was correct. In the 2007 Act, section 44(3) states: "In determining the rates of levy, [that is, the 2 cent per litre that everyone is paying] the Minister shall seek to ensure that (taking one year with another) the sums realised by applying those rates to the volume assessments meet but do not exceed the estimated expenses of the Agency and of each designated subsidiary." Therefore, it has approximately 2.5 times what its running costs are. There have been dispatches, both in the UN speeches by Government this week and by the Minister, Deputy Bruton, talking about repurposing the legislation to use this money in respect of actions suggested by the Joint Committee on Climate Action. That would be a breach of the law. That is from where I am coming from in respect of this matter and I say it for the benefit of the Comptroller and Auditor General in the context of his report to us at next week's meeting. I apologise for bringing us back to this matter.

I thank the Deputy. That is appreciated.

We move to category C correspondence, which is from or relating to private individuals and any other correspondence. Some of this arrived during the summer but we had to clear the earlier categories of correspondence at our two previous meetings. No. 2349C is correspondence from an individual, dated 15 July 2019, responding to a request from the committee for his consent to forward his correspondence in regard to renewable electricity. The correspondent has requested us to forward it to the Joint Committee on Communications, Climate Action and Environment. We will forward it to that committee for any action it may deem appropriate.

No. 2350C is correspondence from an individual copying the committee in on correspondence to the Taoiseach regarding the long-term effect on careers of cannabis convictions. There is no specific request to the committee but the item may be of interest to some members. We have not been asked to do anything and we have just been given a copy of the correspondence to the Taoiseach. We will note this item.

No. 2353C is correspondence from Ms Orla Allen of the Irish Petrol Retailers Association, dated 24 July 2019, providing consent to forward its correspondence to the Valuation Office. There is additional information provided which we will send to the Valuation Office to be considered in its response. Is that agreed? Agreed.

No. 2355C is correspondence from Deputy Catherine Murphy forwarding a query from an individual requesting the committee to make inquiries with the HSE regarding difficulties with its new payroll system, the national integrated staff records and pay programme, NiSRP.

The movement to automated systems will always cause glitches to begin with, which I completely accept. We have received a response on the NiSRP. Perhaps it was just me who received that.

I do not have it.

It is stated that the system is working well. The only reason I am putting the matter on the agenda is that this was being trialled in one part of the country, which I understand would be a sensible thing to do. However, it has produced quite a significant difficulty for some staff cohorts, from what I am hearing, to the point that there appears to be an inflexibility in it. The HSE has invested in this system and if it is to be rolled out to the rest of the country, it has the potential to cause industrial conflict, for example, because people are not getting paid or are not being paid in a timely way. I would have some concerns about that, although that is not for the Committee of Public Accounts. What is of concern is that if it requires to be recalibrated, that needs to happen. However, if we have invested in a big system and the system is not fit for purpose, that is an issue. If it is just a recalibration, that is another matter. I do not know which it is but I am hearing complaints, although whether that is for this committee is another matter.

Where do we go with this?

I do not know. The HSE is a very complex organisation, as we know, and various types of people are employed, some 9 to 5, some 24-7 and so on.

We will include it as an item to be discussed with the HSE representatives. I have proposed that they will be coming in again shortly. There is a chapter in the Comptroller and Auditor General's report in connection with HSE primary care centres. Quite a lot has happened since HSE representatives where here to discuss last year's financial statements, particularly in the context of the Comptroller and Auditor General's report. We will be inviting representatives of the HSE to come before us in the fairly near future. We can address this issue that meeting.

It is probably in a wider context as well. There was a time lag for the investment in some IT systems. It would be useful to understand that because one of the constant complaints was that there were something like seven or nine different ledgers. Getting visibility on the accounts, or even segments of things that one could look at in order to compare one part of the country with another, had been deficient. There is a big investment programme and we have to make sure it is robust and fit for purpose. That is where my main concern lies.

Mr. Seamus McCarthy

In advance of a HSE meeting, it might be useful if it provided a note in regard to that system in advance, rather than just taking it up on the morning of the meeting. At least if the committee understood the scale of what the HSE is planning, what stage its plans are at and the costs it envisages, it would be a better start to the meeting, rather than just doing it on the morning.

That is agreed. We will write to them and put them on notice.

No. 2356C is correspondence from an individual, dated 8 August, who has made a detailed submission regarding the financial situation of Irish wind farms. Related to this are Nos. 2368C and 2370C, dated 8 August, correspondence from individuals also requesting the committee to review the submission. We know this matter is not within the remit of the committee as it is a policy matter and the submission refers to activities of EirGrid, which is a commercial semi-State company and is not audited by the Comptroller and Auditor General. The correspondent has specifically requested us not to forward the submission to anybody else. I propose, therefore, to advise the correspondent that the matter is not within our remit and to suggest he correspond with the Committee on Communications, Climate Action and Environment. We will thank him for the correspondence, which the members have read, but it is not something we can formally deal with because EirGrid and the wind farms are not under the remit of the committee.

Nos. 2358C, 2359C and 2360C constitute correspondence from an individual copying the committee in on correspondence to the solicitors disciplinary tribunal and related to freedom of information provision. There is no specific request to the committee. We will note these items.

No. 2366C is correspondence from an anonymous individual, dated 30 August, alleging improper and illegal conduct at Maynooth University. We have received correspondence from the university regarding the governance matter, and it deals with those types of issues. I propose to write to the university to provide an information note in regard to the specific items. No. 2385C, dated 13 September 2019, is correspondence from Deputy Louise O'Reilly, forwarding a copy of the same letter. We note this item. When we write to the university, we will give it a copy of letter and ask it to respond.

On No. 2385C and in the context of transparency and proper procedure for public contracts, we should ask the university to clarify the issues raised in the correspondence.

Is Deputy Munster referring to the correspondence from Deputy O'Reilly?

We will forward both No. 2366C, the letter from the individual, and No. 2385C from Deputy O'Reilly, and ask for a comment on both.

No. 2369C, dated 3 September, is from an individual concerning the national broadband plan. The correspondent has copied the committee on a submission to several Ministers and to the Committee on Communications, Climate Action and Environment. We have looked at this matter as it pertains to our last periodic report but the communications committee is responsible for matters relating to the roll-out of broadband. I propose that we advise the correspondent accordingly. The issue of the cost incurred to the Exchequer to date in implementing the national broadband scheme continues to be a matter for this committee.

No. 2371C, dated 21 July, is from the secretary of the Irish Environmental Forum, referring to evidence given by representatives of the Environmental Protection Agency at a meeting of this committee on 18 April regarding the Aughinish plant in County Limerick. I propose to request the correspondent's consent to forward the documentation to the EPA for response to the matters raised. Is that agreed? Agreed.

No. 2372C, dated 6 August, is from an individual querying the frequency and necessity of road repairs and resurfacing in the Donnybrook and Ballsbridge areas of Dublin. I propose that we advise the correspondent that this matter is not within the remit of the committee and should instead be taken up with Dublin City Council or, alternatively, the Local Government Audit Service. We are being asked to take on the potholes.

It is interesting that this correspondence is from a person in Dublin 4. The perception is that everything has visibility from Donnybrook.

The person should go and see what the roads are like in rural areas.

The correspondent is concerned about the frequent nature of the repairs and whether they are necessary. His view seems to be that the road is fine but the city council has so much money that workers come around every so often to do repairs.

In fairness, that is a different point.

The correspondent is saying that the repairs are a waste of money, which is probably why he wrote to us.

He is probably right.

Mr. Seamus McCarthy

He is altruistic.

We will not get into the issue of funding of local authorities today.

Is the individual saying that roads are being resurfaced when there is no need for it to be done?

That is what he is saying. There are many counties where people are crying out for some of that extra money. We will move on.

No. 2391C, dated 20 September, is from a member of the Irish Greyhound Board. The individual is of the view that he was unfairly mentioned during our meeting with representatives of Bord na gCon on 19 September. Having reviewed the transcript of the meeting, I am satisfied that the remarks made at the committee were fair and reasonable. Deputy Kelly asked about the past and current membership of the board, which was a question I would have asked myself if the Deputy had not raised it.

This letter is highly inappropriate. I would not go so far as to say that there is an attempt to exert influence over the committee or nobble somebody, but it is not appropriate. I agree with the way in which the Chairman proposes to deal with it. If there are other instances of people trying to do this to the committee or to a member of the committee, we should deal with them in the same way.

We should be clear that it is okay for people to write to the committee, and we will deal with the matter. It is important to give that message. I am looking at this from a procedures perspective.

Yes, the person is entitled to write to us.

Absolutely. However, for something like this to be published would be a very different matter.

We are not publishing the letter.

If it were published, we could have a mistruth being putting out on the basis of somebody's opinion or interpretation. It is our job as a committee to make the decisions on what transpires here. In this scenario, reference was made to what the individual in question said when he attended a meeting of the committee. That person might have a different interpretation of what was said, but he cannot seek to change what was actually said.

I am not taking issue with the Deputy. My concern relates only to the procedure that applies when a letter of this nature is submitted. I just wanted to clarify the matter.

Deputy Connolly is right that the person is entitled to write to the committee. I am dealing with it as Chairman. As I said, I would have raised the issues that were raised had no other member done so. We do not publish correspondence from individuals because to do so would assign parliamentary privilege to that correspondence. All the category C correspondence from private individuals is dealt with in this way.

No. 2399C, dated 24 July, is from the Louth Environmental Group. It concerns a flood risk mitigation project in Dundalk, County Louth, an issue on which the correspondent contacted the committee on a previous occasion. It is a copy of correspondence sent to the Department of Housing, Planning and Local Government. Is it agreed that we note the correspondence?

Will the Chairman consider writing to the local authority or the Department for clarity on this issue?

It relates to flood relief, which I assume is a matter for the Office of Public Works, OPW.

There are questions over the level of funding and regarding substandard work.

I am happy to write to the OPW requesting that it respond to the correspondence. I thank the Deputy for her suggestion, which is a better way of dealing with it.

Thank you, Chairman.

No. 2401C, dated 22 March, is from an individual concerning a decision of Student Universal Support Ireland, SUSI, and related requirements. The individual is in a difficult situation, which we all have encountered with constituents, as a consequence of SUSI's requirement that applicants provide financial information in respect of both their parents. Even where a student's parents are separated or divorced and there may be difficulties within the household, SUSI insists on obtaining that information. In some cases, a student might be living with one parent, who has no contact with the other. It might even be the case that one parent has secured a court order against the other. SUSI will not process grant applications until information on both parents is received, even though it is sometimes not possible for the applicant to obtain it. I propose that we write to SUSI requesting it to indicate its process and procedures for dealing with such exceptional cases. I have encountered students who could not go to college because one of their parents would not facilitate any correspondence with anybody. Without that information, SUSI will not process the application. That is unfair to students and it is not being dealt with in a satisfactory way. We will not refer to the correspondent in our letter to SUSI but we will ask about the organisation's general position on dealing with these types of issues. Is that agreed? Agreed.

No. 2411C, dated 25 September, is from an individual concerned about appointments to the public service of persons with a knowledge of Irish. I propose that we ask the Department of Public Expenditure and Reform to provide an information note regarding those appointments. The correspondent refers to the proposed official languages Bill 2019 and argues that the allocation of employment to a special interest group, which he calls "our Irish speakers", is a contrived State regulation and amounts to jobbery. Can Deputy Connolly advise whether the Department of Public Expenditure and Reform is the right Department to address on this matter?

Níl aon eolas agam faoi sin.

Go raibh maith agat. We will write to that Department.

No. 2414C, dated 22 September, is from Mr. Allen Morgan, who was recently in touch regarding the administration of his correspondence to the committee. The secretariat is providing him with clarifying information in that regard. In this correspondence, he asks the committee to consider a particular matter as part of our examination of the OPW's 2018 account. I propose that we note the correspondence for now and members may refer to it as part of any upcoming engagement with the OPW. There is a chapter in the Comptroller and Auditor General's report concerning the OPW, so we will be engaging with that body concerning its overall financial statements.

No. 2415C, dated 25 September, is a response from the Irish Petrol Retailers Association to our consideration of matters raised by it in regard to the Valuation Office and the Valuation Tribunal. I propose that we note the correspondence and keep the points raised in mind.

I want to follow it up in further detail. I have looked at this correspondence. At a previous meeting we asked about the valuation of car-parking spaces in some of these out-of-town locations. To summarise this correspondence, there are two issues. It referred to a two-year backlog for the 2017 appeals. I am not sure if it is the tribunal or the Valuation Office. We want that matter clarified based on this correspondence.

We really need clarification on the second item. The correspondence from the Irish Petrol Retailers Association states: "The Valuation Office has recently made some amendments to the methodology they use for service stations ... which is positive but we have been told that these amendments will not apply to stations revalued under the 2017 revaluation even where they are appealing to the Valuation Tribunal." Essentially, the Valuation Office is stating that there will be two separate methods for valuing filling stations for rates: those valued under the 2017 regulations; and those now being valued under the recent amendments. That is not fair. Given that it could take ten years for such filling stations to be revalued again, they may be at a commercial disadvantage for up to a decade. The IPRA is also saying that when filling stations appeal valuations carried out under the 2017 rules to the valuation tribunal, it will not accept the new amendments and is sticking to the old regulations. That appeals process is unfair. We want that clarified and it does not sound fair to me.

We asked the Valuation Office for a response on the issue of car park spaces at supermarkets, etc. That was mentioned in the context of rates in towns. The Irish Petrol Retailers Association graciously sent us a copy of the Valuation Office practice note regarding supermarkets. We did not get it from the Valuation Office yet, but it is its document. The petrol retailers are utterly confused by what the Valuation Office says about car parking at supermarkets. It states:

Car parking arrangements associated with retail units will be dealt with as follows:

- Common car parking facilities serving retail units will be reflected in the rent passing. [Is that the rent from the landlord to the supermarket?] Under these circumstances these facilities will be reflected in the passing rent.

It suggests that where somebody has developed a facility with many shop units, including a big car park used by all the customers for all the shops, the cost of the car park will be reflected in the rent charged by the landlord who owns the property. However, we are asking about the rates and not the rent.

The practice note also states: "Where the building occupier occupies car spaces at a physically separate location then they will be valued as a separate relevant property with a description of ‘carpark’." It is stating where common car parking facilities are used for several shops, it is reflected in the rent. My question is then about the rates assessment for the landlord. Was the landlord assessed for the commercial value of the car park? It seems to be suggesting supermarkets are covered in the rent. I want to know where in the system the commercial value of the car park is valued for rates. The Valuation Office seems to be suggesting the supermarket does not pay it. That should mean the landlord does it. Are we then going to be told the same property cannot be valued twice? I have not worked that one out. I want clarification on it. It is a good question, and the answer muddied the water further as far as I am concerned. We want to know the commercial value of the car park at these shopping centres. Where is the rates demand notice and who pays them?

It does not cover all eventualities.

A very large car park could be owned by-----

The supermarket-----

-----the supermarket.

-----as happens.

If it is exclusive to the supermarket, is it rateable? That is competing against small shops on the main street which has paid parking. That is just one aspect of the methodology. As I said last week, there are different categories within a floorspace.

We have asked for that; we have not got that reply. We only asked the Valuation Office for that last week. The petrol retailers gave us a copy of the Valuation Office's instruction on the issue of the commercial value of a car park. One of the major supermarkets could own the facility and rent out the units. Is the car park included in its rateable valuation? Where it is owned by a property developer and rented to the supermarket and other businesses, where is the commercial value of the car park captured?

Yes. That is what we want to know. I think the Valuation Office will understand what we are asking. If the person writing the letter on behalf of the committee is not sure, I can send him or her a copy of the transcript. The committee can be blamed if the person does not understand it.

No. 2416, dated 26 September 2019, is from an individual regarding the 2017 Comptroller and Auditor General special report on the provision of school transport. We considered a related item from this correspondent last week and suggested that he write to the Joint Committee on Transport, Tourism and Sport. The individual obviously followed the debate here last week and this letter has stated that he is happy to do so.

That covers all the correspondence we have had since July. We come to financial statements and accounts that have been laid before the Oireachtas since the last meeting. The first one is the Health Insurance Authority, for which there is a clear audit opinion. As with all health organisations, there is an issue of funding for pensions. The next item is the risk equalisation fund, for which there is a clear audit opinion. What is that? Is that for the private health insurance?

Mr. Seamus McCarthy

Yes. It is actually managed by the Health Insurance Authority. The two accounts travel together.

The next one is the Health Products Regulatory Authority, for which there is a qualified audit opinion. The cost of superannuation entitlements is accounted for as they become payable rather than in the year the entitlements are earned which is standard for health. Why is that qualified and the one above it-----

Mr. Seamus McCarthy

It is because it is operating an FRS 102 accounting system that requires it to deal with pension liabilities on an accruals basis, but it has a direction from the Minister not to do that. Therefore it is not complying with the accounting framework it has adopted.

Should it not put at the beginning of its financial policies, "FRS 102, as amended by the Minister"?

Mr. Seamus McCarthy

It does that.

Is that not enough for you?

Mr. Seamus McCarthy

No, it is not because effectively it is not complying with the framework. It has disclosed why it is not doing it. I am drawing attention to it, but I am obliged to say it is not giving a true and fair view. That is the qualification.

The Health Insurance Authority has a similar issue in accounting for pensions, but it does not get a qualified report. What is the difference?

Mr. Seamus McCarthy

Effectively it is not using an FRS 102 framework.

Okay, I understand. It is using a particular accounting framework and not sticking to it whereas the others are not using it at all. I understand. I hope the viewers follow what we are saying on that.

The next item is Horse Racing Ireland, for which there is a clear audit opinion. The National Council for Special Education as been given a clear audit opinion. I think we could talk to representatives of that organisation some time. The next item is the credit institutions eligible liability guarantee scheme, for which there is a clear audit opinion. Athlone Institute of technology has received a clear audit opinion. With regard to St. Patrick's College, its final residual account is closing down-----

Mr. Seamus McCarthy

It will appear for a number of years. There are a number of legal cases that have to be discharged, but effectively it is not trading.

Can the liabilities not be transferred?

Mr. Seamus McCarthy

All the liabilities other than these court cases have been transferred to DCU.

Okay. The next item is-----

I support the Chairman in what he said about the National Council for Special Education and its processes.

We will put it on the work programme. I am not saying tomorrow. It is definitely an issue that-----

Yes. Everybody in the building would have an interest in that. Its financial statements are now available.

Next are the appropriation accounts for all the Departments' Votes which the Comptroller and Auditor General published on 30 September. His report is with it. He highlighted various matters in his report. We will go through it forensically if we are all here.

Mr. Seamus McCarthy

I look forward to it.

It depends on how long we are here. Someone will do it somewhere along the line. I thank the Comptroller and Auditor General for all that. That is the end of the financial statements.

On the work programme, we have already arranged a meeting with An Bord Pleanála for today. Next week, we will have the National Transport Authority. The following week we have Caranua. The week after that we have the Department of Agriculture, Food and Marine because there is a gap between the report and that.

We have a gap for the week of 31 October, on Brexit day. People are not sure whether the Dáil is sitting that week but we will assume it is. There are a couple of items we could possibly include. These are the Charities Regulator, Pobal and Sport Ireland. We have mentioned the possibility and we can see whether we can get one of the three of them for that date.

On 7 November, we will discuss the relevant chapters of the report of the Comptroller and Auditor General on the Department of Employment Affairs and Social Protection. I am sure we will also speak about the public services card, on which I want to comment now. We will start to climb up to the HSE and the children's hospital as soon as possible after that because there is a chapter on it in the report of the Comptroller and Auditor General. Now that we have the report of the Comptroller and Auditor General we will try to flesh out our work programme until Christmas at the next meeting. There is nothing major to be said.

An item I want to raise that ties into the work programme is an issue that was raised last week in our very useful meeting with the Data Protection Commissioner on the use of the public services card and her report. We also dealt with other financial matters. Towards the end of the meeting, I raised the issue of a person who continued to use an expired free travel card. The person should not have done so because social welfare payments had ceased. However, the travel card element of the public services card had not been cancelled and the person continued to use it. After several months, the card was confiscated at Heuston Station when it did not work in the turnstile to leave the station. Afterwards, the person received a fine from Irish Rail for €1,000 for not having the correct ticket. So far so good, but this raises data protection issues. The person, whom I dealt with over the summer, told me the issue of how Irish Rail got the individual's name and address had already been raised with the Data Protection Commissioner. There is no dispute with regard to the amount but there is a data protection issue.

Arising from our meeting last week, on Friday I received a very interesting email, as did the Comptroller and Auditor General, from a person with regard to a use of the public services card I had not really thought about until now. If this is happening we really need it to be clarified. On the public services card is a photo, the person's PPS number is on the back, and there is also the person's signature. The card also shows a date until which it is valid. On the front it may have the letters FT to signify free travel, or it may have the letters FT+S to signify the person's spouse can accompany him or her for free. The individual who sent the card used it on the Luas in Dublin and on one of the major bus companies, not Dublin Bus. When the public services card goes through the ticket machine information is recorded and the individual got curious about what is recorded when the public services card is given to private transport companies. The person tracked it down and eventually received a letter back from the National Transport Authority, NTA, because the bus operator and Luas said it was nothing to do with them and that the person should contact the NTA. In recent days, we received a copy of the letter sent to the individual by the NTA. The NTA states that when a person uses the card none of the person's information on the card is recorded but every card has a number - not the PPS number - that the transport companies have. This allows the companies to claim payment. I know there are also lump sum grants but perhaps Iarnród Éireann is slightly different. This number records all of the trips and journeys made by card holder. The rail company does not have the person's name and address or other details but it sends the number to the Department of Employment Affairs and Social Protection where it can be matched to the person's PPS number.

The NTA states only the Department of Employment Affairs and Social Protection knows the PPS number and the individualised anonymous number held by the transport companies. The Department does not provide this information to anyone. As far as public transport is concerned, all the NTA knows is that the number has been used but not who used it or anything about the person using the card and it is entirely anonymous. The email also states that when the public services card is presented at the ticketing machine, it records that a journey has been taken and assigns the value of the fare forgone to the record, which is stored in the ticket machine. The information held by the transport company is the ID, which is the number on the card, the date and time of the journey, the route number and the fare forgone, which is the adult single fare. The data is then uploaded to the back office system and subsequently made available to the Department of Employment Affairs and Social Protection. The purpose of recording the information is so the transport operator can record overall passenger numbers and overall usage and also be able to make a claim for reimbursement from the Department in respect of services delivered to free travel pass holders.

It appears that when the information comes back from the travel company the Department of Employment Affair and Social Protection has details with regard to 900,000 people, including every State pensioner in the country, on every time they use public transport and every trip they take. The allegation in the email is that the person did not know the State had such mass surveillance systems in place. I do not think people knew the card and the Department could obtain details on every trip taken. I can see why from a financial position but from a data protection point of view I can see that people were not aware that this is the case. We will write to the Department of Employment Affairs and Social Protection to clarify this particular issue on whether it has a record of all of the travel taken.

The NTA will come before the committee next week.

I know it will be budget week but I assume the Department has a lot of staff and that people dealing with data protection are not those involved in who gets an increase next week or whether there will be an increase. Somebody should be able to give us an information note in advance of next week's meeting so we can raise it with the NTA. Is that agreed?

It certainly raises issues.

It is raising a big issue.

Something in the back of my head is telling me provision was made somewhere on this but I am not certain.

It states the card is for identification and use of public services, and this is a service. For how long are the details of travel and the details of every time the person stepped on a bus or train held? I do not know.

These are the golden questions that have never been put.

We are now asking the questions. The public needs this information.

Mr. Seamus McCarthy

The NTA is the controller of the system and it should be able to explain to us to whom it provides information, the nature of that information and its purpose. My interest in it primarily is with regard to control of public expenditure but obviously we want to ensure the system is operating the way it was designed to operate and within the law.

Another aspect is that Go-Ahead has some of the bus routes and that information will be transferred through it. My understanding is there is a different type of arrangement with Go-Ahead, in that the fares go directly to the NTA rather than to Go-Ahead, and that its contract is just to drive the buses. The NTA has a direct aspect on this. It is a tripartite arrangement instead of the direct relationship between Irish Rail and the Department of Employment Affairs and Social Protection. It is going three ways.

The Deputy is quite right. I did not read all the correspondence on this. The person made very clear that the company was contacted directly, and it stated it operates under licence from the NTA and that as it is the NTA's equipment it will have to deal with the issue.

It is totally an NTA issue. I was there. The licences are centralised through the NTA and it does all-----

The processing. It will come before us next week and we will make sure we write to it regarding seeking clarification on this matter next week. We will also write to the Department of Employment Affairs and Social Protection so we have a reply in advance of next week's meeting on this issue so we can close or open the circle as the case may be. We need the information from both organisations prior to next week.

Prior to the summer recess, the issue of Cork Institute of Technology, CIT was being addressed. I will speak to the clerk of the committee as a number of questions were asked and I would like to know whether they have been sent to CIT. I will speak to the clerk and find out.

We need to remind the people in CIT that there are questions outstanding. I might provide correspondence to enable that, which might make it easier.

That would be good. On housekeeping matters, there is a check under way in regard to the organisations who were in prior to the summer recess and were asked to respond in writing to questions. Any organisation that has not replied fully will be contacted again before next week, following which I will update the committee. I suspect we have received most of them. To my knowledge, there is not much outstanding. Deputy Kelly is correct that we need to follow up on that correspondence specifically.

As there is no other business, I suggest we suspend for approximately 20 minutes. I remind members that voting in the Dáil has been postponed owing to the special debate taking place in the House today, such that once we get started we will not be interrupted.

I thought it was postponed to allow us to get home early in light of Storm Lorenzo.

We will get to go home early. I only have to travel as far as Portlaoise.

Sitting suspended at 10.30 a.m. and resumed at 10.50 a.m.