Business of Committee

We are joined by the Comptroller and Auditor General, Mr. Seamus McCarthy, who is a permanent witness at the committee, and Ms Olivia Somers, senior auditor. No apologies have been received in respect of today's meeting. The minutes of 17 October have been circulated. Are they agreed? Agreed. If any matters arise, they can come up under correspondence.

The next item on the agenda is correspondence. There are three categories of correspondence. Category A relates to briefing documents and opening statements for today's meeting. The first are Nos. 2493 and 2499 from the Department of Agriculture, Food and the Marine. These are briefing documents for today's meeting. We will note and publish them.

Category B relates to Accounting Officers and their Ministers in follow-up to meetings of the committee and other items for publication. At our previous meeting, we agreed to hold over two items for consideration. Nos. 2432 and 2465 from Ms Katherine Licken, Secretary General, Department of Culture, Heritage and the Gaeltacht, provide an update relating to the post-project review requested by the committee of the Pálás cinema project in Galway. Do members wish to discuss that today or hold it over?

I do not mind. If the committee is under time pressure, it can be held over, although I certainly want to discuss it. It will take some time, and I would prefer to take some time rather than rush.

Okay. We will hold it over until the next meeting. I have no problem if the Deputy wants-----

Will there be a next meeting?

It will be in two weeks, on 7 November 2019. The House is not sitting-----

The Chairman is certain there will be a meeting on that date.

We are certain. We have been told it will be on that date.

That is great. There will be no election in that case.

We will come to the document in question in our work programme. We will not meet next week.

The document is important.

I agree and have read it. It is worth 20 minutes of discussion.

We will hold it over. The document will hold and does not have to be dealt with today. We will deal with it at the next opportunity.

No. 2456 is correspondence from Professor Willie Donnelly, president of Waterford Institute of Technology, WIT, dated 11 October, providing details requested by the committee in respect of an accumulated revenue deficit of €6.3 million in August 2017. We requested details of the historical breakdown of the deficit for each financial year since the revenue deficit commenced, and how much it has increased year by year to the current position. We will note and publish the correspondence. Deputy Cullinane would like to comment on the matter.

The way we were presented with the figures is very unsatisfactory. I had to contact the secretariat to figure out what exactly the figures meant. It is not the way to present figures to the Committee of Public Accounts. We sought the deficit year on year but what we received was a copy and paste of a chart from what I imagine is a set of accounts. It is not clear what exactly the figures mean. There is no breakdown of what they mean, even in respect of the institute cumulative position. Is the year-on-year deficit €2.4 million or €3.8 million? It is unclear.

We need to reply to the Accounting Officer to say it is unsatisfactory, and that we want a better breakdown of the figures and an explanation of why the deficit has increased year on year. In 2011, it was €2.4 million, if I am correct, although the Comptroller and Auditor General might extrapolate those figures. In his view, is it an acceptable way to present figures to the Committee of Public Accounts, given that we sought a breakdown of the deficit year on year but received only a chart with figures whose meaning is not obvious.

Mr. Seamus McCarthy

I would agree it is difficult to interpret them. It is really a matter for the committee itself to decide if the explanation provided is adequate. Certainly, there are a number of difficulties with it. Even some of the figures presented are minus figures but are presented without a minus sign, which is somewhat confusing. More explanation would certainly be helpful to the committee.

Our reply needs to be clear. It should state it is unsatisfactory for WIT to give such a response, and that we want a detailed explanation of the deficit year on year and the reason for the deficit, because it seems to have increased. There are also consolidated accounts, given that a consolidation exercise was carried out in 2014.

Mr. Seamus McCarthy

That is correct.

There has been some positive movement in the past year and the institute seemed to address the deficit. A cost containment plan was put in place, for example. Nevertheless, there has been an increase from €2.4 million to €9.5 million. It is my understanding that institutes of technology are not allowed to be in deficit.

Mr. Seamus McCarthy

They are not supposed to be in a deficit position. The better columns to look at are the consolidated cumulative figures and the movement year on year. The figures in the fifth column should all be minus figures, or at least the figures €1.748 million, €1.897 million and €0.509 million. Just looking at those figures, without reference to the 2018 figures, for which the audit has not been completed, it seems to indicate a reduction in the deficit being achieved in the 2017-18 period of accounts. The figure is subject to adjustment if anything is discovered as a result of audit.

We will reply to the correspondence and, as Chairman of the Committee of Public Accounts, I will state I have viewed the chart and am bewildered by it. The institute does not explain the difference between the institute cumulative position figures and the consolidated cumulative figures, and it did not indicate whether the figures relate to thousands or millions of euro. The schedule is wholly unsatisfactory. As the Deputy noted, we want a breakdown of each year explaining the movements and where there was a deficit, the principal elements that led to it. We want an appropriate-----

I will leave the specifics to the Deputy from County Waterford but the chart contains figures without any context. We do not know whether they relate to millions of euro. I heard the word "millions" mentioned but-----

We are only guessing.

We are guessing. It is wholly unsatisfactory.

It is contemptuous to present figures such as that.

It is utterly unsatisfactory and we will state as much in our reply. I have never seen such an unsatisfactory set of figures produced at a meeting of the Committee of Public Accounts on such an important matter. If this is how WIT conducts its business at this level, it raises serious questions about its overall management and governance.

In our reply, we should ask whether the financial controller signed off on the correspondence.

Yes, absolutely. I am happy to do that.

If the financial controller allowed the schedule to be sent to the Committee of Public Accounts as formal correspondence, it is shocking and raises concern. I echo the Chairman's views on the matter. There is an issue at the highest level.

We are quite clear about our reaction. I will indicate we do not seek a response but instead reject the letter as utterly unsatisfactory, and that we want a proper response with proper explanations. We formally reject the letter. Does that satisfy the Deputy?

I propose we publish the correspondence to allow people to see what we mean. Is that agreed? Agreed.

No. 2457 is correspondence from Mr. Bernard Gloster, chief executive of Tusla, providing an information note requested by the committee in respect of contracts that were non-compliant with procurement guidelines. People will have observed the committee in recent months being strong in respect of such cases. Where there have been annual reports or financial statements suggesting non-compliance with procurement guidelines, we seek detailed explanations of why that happens. While the Comptroller and Auditor General deals with such matters as part of his audit whenever he conducts one, the Committee of Public Accounts henceforth intends to bring such matters very much into the public forum. Any time anything relating to non-compliance with Government procurement guidelines comes across our desk, we will write to the organisation seeking a detailed explanation and the measures in place to remedy the issue. Otherwise, it may continue. We highlighted some extraordinary issues in Tusla's 2018 accounts. The agency stated it would review the matter in 2019, but it is near the end of 2019 and still it states the accounts will be reviewed. Almost a year, therefore, after the end of 2018, it has not dealt with the issue. We might highlight some of the main issues.

Nevertheless, Tusla's response is good, comprehensive and gives great detail on everything over the relevant figure where there was non-compliance with Government procurement guidelines. It has given a breakdown by contractor under each heading. It is a proper response. We hope that by highlighting it, the list next year, and in subsequent years, will be greatly reduced, which is what the committee wishes to achieve.

In the correspondence about the contracts awarded without a competitive procurement process, Tusla stated it had consistently focused its efforts on addressing non-compliance issues and contracts utilising a risk-based approach in allocating its available procurement resources. I wonder where it did so, however, because all the evidence suggests it did not. In section 4, it explicitly states the procurement system relies heavily on self-reporting. Is Tusla suggesting, therefore, that it learns of non-compliance only after the fact?

Tusla seems to indicate that because a large number of locations were involved, when it accumulated-----

Is it stating it has no way of monitoring non-compliance?

It appears it has no real-time method of monitoring it.

Mr. Seamus McCarthy

Tusla emerged from the HSE, where there was a systemic problem with procurement. I referred to that in the HSE financial statements. It is an indication Tusla is beginning to address the problem but in the case of some of the expenditures and contracts it has in place, it refers to them as legacy.

They are six years on from establishment. It is about time that these legacy contracts were dealt with.

It is not acceptable even at this stage if they have no way of monitoring it until it comes to the fore.

Mr. Seamus McCarthy

It is a difficulty for a very decentralised organisation and structure.

I note too that non-compliant contracts of €5.4 million were identified in the agency in 2018. They also said these contracts represented just over 3.5% of the total expenditure which falls under the scope of procurement. I am not aware of any rule whereby 3.5% non-compliance is acceptable.

Mr. Seamus McCarthy

There is no such rule. I draw attention to any situation where we identify more than €500,000 in the value of procurement that is non-compliant.

It is a ridiculous excuse really, is it not?

Mr. Seamus McCarthy

That is for the committee to determine.

That is why we are dealing with it. The Deputy is right to highlight it. This is an issue we are going to have a look at.

We should welcome the fact that we got a comprehensive report from them. I echo the points that have been made. There does seem to be benefit coming from the fact that we are shining a spotlight on the issue, which is good. I understand some of the reasons that have come back and it gives us a greater understanding as to why there is non-compliance. However, the overall figure of €5.4 million is very high. As the previous Deputy said, the procurement system remains heavily dependent on self-reporting which is a red flag, from my perspective. The document goes on to state that there is no facility to implement real-time controls and that the agency will continue to rely heavily on a manual review process to ensure compliance with procurement guidelines. It is not acceptable that there are no real-time controls. They need to outline to the committee how they are going to put those controls in place and when. It is one of the agencies with which we can work because it has given us a comprehensive report. We should acknowledge that when responding but maybe we should seek further information as to how they are going to go from a self-reporting system to one that has much better controls.

The issue of legacy jumped out for me as well. That is the whole point. It should not be a legacy. There are one or two references to local arrangements. That does not mean there should not be a competitive process. We are seeing a wider trend which came up last week with Caranua. When an organisation is set up, there is inadequate consideration of the arrangements that will develop a compliant and inquiring culture. A five year old organisation that is talking about legacy is really a carryover from a previous organisation and a previous culture. We have to do something. We also saw it with the Tax Appeals Commission.

And the education and training boards, ETBs.

It was chaotic and in most cases under-considered. At this point there must be some degree of pulling those organisations together and having some discussion with them about how it could have been done differently. We are an evolving country and we are going to have new organisations. We are rubbish at institution building. Part of the reason is that we do not get the foundations done right. We do not identify the right resources or put the correct systems in place that will develop a culture. We have to do a piece of work on that. It is really the process part of the Committee of Public Accounts.

The Deputy is correct and we have highlighted this. For the Tax Appeals Commission, the Department of Finance did not get the planning right for its establishment and underestimated the work. We have seen the same thing with Tusla; when it came out of the HSE, the relevant Department did not get a proper understanding of what was going to happen. We saw it with the ETBs. We have seen that Government Departments are systematically unable to plan for the establishment of a new organisation, to get it up and running in an efficient manner within a reasonable period. They wholly underestimate the task at hand. Five years on, it should not be the job of this committee at all to pick up this stuff. There is something the Committee of Public Accounts can say on that issue, I think, in due course.

It has all been said in that regard. There is another aspect to this and, as a committee member, I certainly need more information on procurement. I agree we have highlighted that non-compliance is unacceptable. However, on the ground, the ETBs talk about the difficulties the current system is creating for a sustainable supply of services that helps the local communities, which is the other part of it. I would love some discussion around that. Our role is to highlight and stop this but it is also to ask other questions. With procurement done at national level, is there a built-in review of whether this is the best way and whether it is providing value for money and helping local communities? Particularly in respect of the ETBs and the hospitals, I see a whole load of major cleaning companies and translation services for which the contracts are just rolled over repeatedly. What about local businesses? Is it geared to help them? That is where I am at really. I have mixed feelings.

Mr. Seamus McCarthy

That very concern has been raised in the past and there are policies on how best to design a procurement process so that small and medium and local enterprises are not forgotten. It probably does not make sense to have a national contract for something like contract cleaning, which has to be delivered at a local level. Regional or county bundles would be perfectly sensible or, at least, there is a need for a strategy around designing what is optimal and what will deliver best value, particularly at local level.

That does not exist, does it? That is the difficulty. There is a vacuum in respect of this.

We will come to that. We have opened up the door on the non-procurement. The question is about the adequacy in the round of the guidelines they operate. We have all seen the national stationery list that is provided to every school in the country. If they want to buy a ruler or a pencil parer they have to operate from the list, although exceptions can be made. It might be over-prescriptive and they might have taken a lazier approach of one size fits all for the whole country. As the Comptroller and Auditor General said, some of this might be far more effective if it was under each region.

Where do we go to progress this?

We are going to invite the Office of Government Procurement in for a special meeting on procurement and to address two issues. I am jumping on to the work programme. Week in and week out we are seeing reports audited by the Comptroller and Auditor General of non-compliance with Government procurement. In recent months - I want to check if it is since the start of this Dáil term and will ask that to be verified - in respect of every financial statement that comes in with a reference to that in it, the committee is formally requesting an official response, compiling a response, and asking the Office of Government Procurement for its response on those matters because it is over Government procurement. We will include in the invitation that we want them to go through the 42 Government Department Votes that are put through the Oireachtas. The Comptroller and Auditor General glanced through them this morning. Some Departments and Votes of the Oireachtas have non-compliance with Government procurement. I want to know what the Office of Government Procurement is doing in respect of Government Departments. I want it to summarise the most recent report of the Comptroller and Auditor General in respect of every incident. I could ask the Comptroller and Auditor General to do it but I think it is time the Office of Government Procurement stepped up to the mark. If it is only here in the business of sending out circulars with no follow-up it is no good to anybody. As part of that meeting, exactly as Deputy Connolly said, we will ask if they are designing their strategies in an appropriate manner to give the best value in an overall context.

I wonder if they are the best people.

We have to start with them.

Have we access to any other research that would look at this or is it the Comptroller and Auditor General's role? I want to capture the feedback that we are getting on the ground so that we can put it-----

My apologies for cutting across the Deputy, but we might consider speaking to the small and medium-sized business organisations.

Or the education and training boards.

We can put it on the work programme as to who we need to bring in and we can invite in that organisation, and probably some others, to give us a rounded view.

We can tease out the theme as to what we want out of it.

We will not sign off on the specifics today but we can see the gist of where we are going.

Would it be possible to get some information from the Comptroller and Auditor General, the Department of Public Expenditure and Reform, or the Office of Government Procurement, OGP, in advance of them coming in? First, any time there is an audit opinion given, we go through them here and there is the amount for each organisation. Of the 40 plus organisations that are audited, is there an overall figure that the Comptroller and Auditor General would have, year on year, as to the total amount for non-procurement?

Mr. Seamus McCarthy

The liaison officer has previously prepared a note for the committee harvesting the values-----

If we could get an up-to-date figure on that, it would be helpful. Second, could we get some flavour of what areas the problems are in? Information technology, IT, would appear to be one area. Could we see in what area is the most consistent failure to see where the patterns are? What organisations or Departments are the worst offenders? Can we have a breakdown of the value of the contracts? Is it contracts of up to €500,000, €1 million, €5 million, or €10 million? It would be helpful if that type of breakdown could be given to us. Otherwise, we will be here trying to tease out that type of information when really we should have it at our fingertips when the groups are here. If we could get that type of report, it would be a much more useful meeting.

For the next meeting, I will ask the secretariat to draw up a programme to deal with all of this. We want that information here to analyse it at the public meeting, and not to have to ask the organisations to go away and bring back the information a month later.

To add to what we might request from them, this information should be framed in the context of the European legislation, which is routinely discussed, where public organisations are spending money. We might remember the library service example. We actually lose more than our European counterparts-----

That is correct.

-----because of our size. We should also ask what strategies they have, in the context of what we are asking for, that will deal with, for example, bundling matters. We might also ask them for an overview of procurement challenges in the context of Brexit. It is very obvious that is going to have a bearing on some aspects of this, for example, if something is in the English language. The library example would be a case in point. There is also the question where people come in low, as that particular one did but it ended up costing as much and we lost jobs as a result.

We will note and publish that documentation. We will devise a specific programme of work on this issue, to include the broader context, not just compliance.

Is there a role for the Comptroller and Auditor General's office here on the suggestions that have been made? If there is not, that is okay.

Mr. Seamus McCarthy

My role is to examine and to report. What I do not want to be doing-----

Is to be prescriptive.

Mr. Seamus McCarthy

-----is giving information off the top of my head or not having prepared something by at least following up with an engagement with, let us say, the OGP or the Department of Public Expenditure and Reform or some of the client bodies.

More particularly on the suggestions about regional and making it more appropriate or suitable, where do we go with that? I do not want to lose that in the overall approach. That is where I am coming from, as well as the monitoring of the non-compliance.

Okay, we will-----

Mr. Seamus McCarthy

In terms of setting up a framework for how the committee might proceed, I can certainly talk to the clerk about that.

That would be helpful.

Mr. Seamus McCarthy

To put a framework on it of the key issues and challenges that arise, one of the points around scaling the procurement competition properly is that, on the other side of it, if there is not a competition, how do we tackle the issue of somebody being locked out of the market because of favouritism? We have to have competitive procurement, and we have to scale it and have a competition that is sensible for nature of the product. That kind of analysis is exactly what the OGP was designed-----

Mr. Seamus McCarthy

Yes. Deputy Cullinane mentioned ICT as being one of the areas where there is a lot of non-competitive procurement. Very often that is because a purchaser is locked into a particular supplier. There are kinds of proprietary goods or services being supplied. In a way, that is not really where the non-competitive, non-compliant issue arises. We have to look at it, though, over a ten-year period, if we are locking into a technology. That arises certainly with HSE and in the medical sphere, where a technology is bought and they are then locked into a maintenance contract for parts and replacement and so on.

What is interesting as well is the Cathaoirleach's point, which is that the guidelines themselves may need to be looked at, because if that is the case with ICT, we could be unfair in some respects in pointing non-compliance when in fact it is just not practical for them. It is a case of separating out where the problems are and where they are not. If it is a matter that the guidelines need to be reviewed, perhaps that is something that we could have in a periodic report.

Some contracts might roll on for a ten-year period, but maybe the original contract should have specified a ten-year period.

Mr. Seamus McCarthy

Exactly.

Then it would not be required because it would be obvious. We have had a good discussion. We know there are significant and broad issues, and we will come back to them. We will note and publish that and will come back to that specifically in our work programme.

No. 2458 is from John McKeon, Secretary General of the Department of Employment Affairs and Social Protection, providing up-to-date information requested on the costs of the public services card and including current figures. He states in this letter that the costs are €67.8 million, €36 million of which is in respect of staff costs related to the administration of the SAFE process, and €31.8 million of which has been paid, broken down as follows: €29.2 million to the card production company, with set-up costs, which appear to be €2.6 million, and the help desk and card activation costing €2.64 million. The Department is coming before us in a couple of weeks, and we will wait and see if all of our questions on the public services card are answered then.

Can we also ask the Department to provide information on the lifespan of the card and the projected cost? Are there any storage costs involved in the vast amount of information that is provided and that the Department retains? That was one of the subject matters that the Data Protection Commissioner referred to in her report. I note that, according to the Department, it does not have biometrics but that it has facial matching software and maintenance. It is not a gigantic amount of money but that suggests biometrics to me.

We will put the request of the Deputy in a note to the Department, which is to be supplied with the briefing material in advance of the meeting.

That is similar to the question I was asking. I have a card and it runs out. What is the cost of its renewal? Is that is the question Deputy Murphy was asking?

Maybe it would be better on an ongoing basis. These are the questions we will ask on the day.

We might get that in advance.

We want this in the briefing note in advance of the meeting so that we can have a productive meeting when the Department appears before us. That is noted and published.

No. 2461 is from Julie Sinnamon of Enterprise Ireland, responding to our request for an information note regarding the loan write-off to the value of €7.7 million. It is a very detailed and comprehensive letter. To summarise it, Enterprise Ireland gave a loan to an organisation, Nadcorp, in 1986. The arrangement was that for several years simple interest would be charged. It was agreed with the other investors that the loans to the organisation would, after a number of years, then commence to attract a 10% compound interest rate, which would continue to accrue. Enterprise Ireland says that as the financial position of the company never facilitated it being in a position to pay this, the repayments continued to mount up.

It states that this was a technical inclusion in the loan agreement and that is why it was recorded in the financial accounts of the company each year. A proposal was made to sell the company and Enterprise Ireland and the other shareholder sold their share in it. The other investor and Enterprise Ireland wrote off the accumulated interest. They were paid simple interest for the earlier years of the loan but the interest accumulated when the interest rate was more severe in the latter years was never collected. The company was not in a financial position to pay the money. When the shares were sold Enterprise Ireland had to write off €7.7 million of what it describes as technically accrued interest that may have been payable at a future date, even though this was in the contract. I also note that Enterprise Ireland states that the other investor wrote off a figure of €10.3 million in compound interest as part of the same transaction. Enterprise Ireland has explained the matter fully so we will note and publish the correspondence.

No. 2462 is correspondence from Mr. Gerard Dollard, CEO, Bord na gCon, providing information on the number of employees who leased cars as part of their terms and conditions of employment. The number was six. I asked questions about travel expenses and somebody asked about the number of leased cars. The information is a small follow-up reply. A considerable amount of travel is done by staff in Bord na gCon. Senior staff must physically attend all of the race meetings for a variety of governance reasons. I suggest members read the previous correspondence we discussed last week which provides a complete breakdown of a range of travel expenses, the vast majority of which was for under €5,000 per individual. The breakdown seemed fairly comprehensive. We did not raise the issue of leased cars at an earlier meeting but it was raised at our last meeting. Today's correspondence clarifies that six cars were leased. We can note the correspondence and if members want to follow up the matter, they can do so. The correspondence clarifies a minor point. We note and publish that.

No. 2463 is correspondence from Mr. Pádraig Dalton, director general, Central Statistics Office, requesting the committee's observations regarding the CSO's Statement of Strategy 2020-2030. The secretariat of the committee will collate all responses if members wish to make an input into that. I spoke to the secretariat yesterday and we are not obliged to make observations. I am pleased that the CSO has sought our views. As to what should be included, I have made a few suggestions. If other members want to contact the secretariat, we can include their observations which the CSO might take into consideration when drawing up its strategic plan. I noted a couple of issues. The risk register for the national census will come up next year. There may be categories of people, or areas, where compliance with the requirement to complete the form is not 100%. That is a risk the CSO needs to assess and build into its national census. Oversight is required for data collection by public bodies, for example, An Garda Síochána. The CSO has been strong on this but maybe it needs to go further. I also referred to the inclusion of approved housing bodies in relation to numbers on the State's balance sheet. EUROSTAT has said the large ones should be included. A broader issue for all of them now is the recording of bodies substantially funded from the public purse. In other words, there are many organisations that work almost full-time for the HSE. Should these be included in the figures the CSO collects? I am only raising the issue.

Another issue is the recording of contingent assets, which is not really done. There are certain moneys that are due to the State. For example, some employers owe money in respect of the redundancy scheme and this is only noted if it is received. People in payment arrangements with the Department of Employment Affairs and Social Protection arising from overpayments made in the past owe a large debt. This is recorded when the payments are collected. The CSO should have a system for recording the total debts or the total amount collectable in assets, rather than just recording those payments that it receives.

Those are my personal observations. If anyone wants to include anything in the letter, he or she should contact the secretariat. I thank the CSO for asking us for our views. We note and publish that. I ask any members of the public who read this letter to make observations to the CSO if they are so inclined.

No. 2467 is correspondence from Mr. Derek Moran, Secretary General, Department of Finance, responding to our request for information on the fees paid to barristers. I want to hold this matter over because Deputy Alan Kelly who specifically asked about this issue will be late. I suggest we hold it over in fairness to the Deputy. There is awful stuff in this. The Department is not going to tell the committee which barristers it paid millions of euro. In deference to the Deputy who raised the issue, we will hold it over. We will note and publish it. Deputy Kelly asked that we hold it over to the next meeting for discussion.

I will make one point.

I urge Deputies to keep their comments brief in deference to the Deputy.

What is extraordinary is the response to whether the accountants or barristers are working for the public. These are public contracts on public works but they are not working for the public.

Correct.

That is a bit strange.

When we note and publish that today people will see that.

That will take some time. We also have to deal with the Pálás Cinema.

The statement is extraordinary.

I will call Deputy MacSharry and then conclude discussion of the matter because it merits a detailed discussion.

We will need time to discuss that. We proposed discussing the Pálás Cinema.

Yes. I ask Deputy MacSharry to be brief. I do not want to open up the debate because Deputy Kelly, who raised the issue in parliamentary questions, is not here yet.

The implications of this is that privilege under the general data protection regulation, GDPR, can be claimed in any case of non-compliance. As such, the public will not be entitled to know.

I am not a barrister. Perhaps Deputy Connolly could advise.

I was a barrister in the past.

The implication is that any contractor, whether a contract cleaner for an office who was or was not properly procured, is not entitled to know. As normal, the house always wins. The last to know anything is the public. The attitude of the Department is that it cannot, and does not want to, tell the public anything and that it has now received legal opinion from the Office of the Attorney General that it does not have to do so. In that case, we are all wasting our time.

This arises from a series of parliamentary questions tabled by Deputy Kelly in the past couple of months and advice from the Office of the Ceann Comhairle and the Office of the Attorney General. Out of deference to the Deputy, we will hold discussion of this matter for another day. The content is shocking.

We will note and publish it and discuss it at our next meeting.

Mr. Seamus McCarthy

I have the answer that was given to the parliamentary question. There is disclosure in relation to companies or partnerships.

Yes, but it is individuals.

Mr. Seamus McCarthy

With regard to the solicitor's practice, the information is given.

That is a sole trader.

Mr. Seamus McCarthy

The external council is aggregated. It does not distinguish individuals. It may be that the GDPR concern is solely in relation to payments to individuals and not in relation to companies.

In that a case, if one is a sole trading billionaire, one is in business. That makes a mockery of things.

If it is a payment made to a person, it is personal information, whereas a company or partnership is not covered.

That is bananas.

It is a joke. It is a disgrace if GDPR prevents taxpayers from knowing how their money is spent. We will come back to this matter.

It is not contract cleaning rates.

Exactly. The matter merits a serious discussion and we will hold it over until the next day. We will note and publish the document in the meantime.

No. 2468 is correspondence from Mr. Denis Leamy, chief executive, Cork Education and Training Board, providing information requested by the committee on the number of contracts that were non-compliant with procurement guidelines in 2018.

That is relevant to the previous discussion.

Yes. We will do work on non-procurement and the design of contracts. I acknowledge that the board has given a detailed breakdown of how the figure of €2 million was arrived at. That is a substantial amount and the biggest item is bus hire. A comprehensive breakdown has been provided. As with Tusla, I thank CETB for that. Having the information is the first step in correcting the problem. We will note and publish the correspondence and come back to this issue. We will include all of the correspondence on non-procurement as part of our dossier when we have the meeting.

No. 2469 is correspondence from Dr. Orlaigh Quinn, Secretary General, Department of Business, Enterprise and Innovation, dated 16 October, providing information on the delay in the laying of the accounts of Science Foundation Ireland. The issue was an administrative oversight. The accounts were audited and approved by the Cabinet and we picked up that there was an oversight. We will note and publish that.

No. 2472 is correspondence from Ms Leonora Harty, system governance, Higher Education Authority, providing information on the employee assistance helplines in higher education institutes. We will note and publish that. The note states that the helplines deal primarily with queries regarding individual and workplace well-being services they provide and not so much with broader governance issues. If members wish to discuss this in greater detail, we can do so.

We will note and publish that in the meantime.

No. 2471 is from the Strategic Banking Corporation of Ireland, SBCI. We have a similar letter, No. 2498, which is almost a similar document. There is a different date on it. It is not on the schedule. We wrote to the SBCI concerning the statement in its accounts of the number of employees assisted by the loans it has extended. We said that was not a real figure. The SBCI actually gave us a figure of total employment in organisations to which it advanced some portion of a loan. This letter states that the average loan is approximately €49,000, which is quite small. It has already extended €1.24 billion in loans. It includes great information, including a county-by-county breakdown of the number of loans and their value for each year from 2015 to 2019. It is very good information in which members might be interested.

The SBCI accepts that all it knows is the number of employees in organisations that have been assisted: "As this is the only data we collect pertaining to employment, we are unable to fulfil directly the committee's request for a breakdown of the number of jobs supported by the SBCI, as distinct from the number of jobs in companies which receive funding or support from SBCI." The correspondence goes on to state: "We will keep our data-gathering under review to ensure that we can continue to provide the Committee with high-quality information that can assist in its review of the SBCl."

The correspondence answers our questions. The SBCI now acknowledges that the figures submitted were overall totals. It does not have a mechanism to produce more granular data. It would be better not to put these inflated public relations-friendly figures in the accounts to give the impression that the SBCI is helping thousands of people when it has no information at all on the actual number of people assisted by the loans it has granted.

No. 2498 is a slight correction of No. 2471. They are essentially the same. I have outlined the essence of the letter. We have made our point. We will take the same query up with Enterprise Ireland and IDA Ireland. If one added up all the jobs these bodies claim to assist, triple-counting would imply there were about 3 million people in the workforce.

I appreciate that the SBCI gave us a very detailed response but it did not answer all the questions we asked. We asked for a county-by-county breakdown of jobs that have been created. What we got was a breakdown of loans by county. When the SBCI wrote to us several months ago, it stated that it supported 148,000 jobs. This letter states: "it is difficult to make a direct link between an individual SME taking out an SBCI loan or leasing product and that same SME creating a specific new job or maintaining a specific job that would otherwise have been lost."

The Chairman spoke about a glossy figure. The SBCI put out an earlier statement in a letter to us claiming to support 148,000 jobs, but under a bit of scrutiny that does not seem to be the case. The SBCI cannot tell us how many jobs it has actually supported. This raises a question about value for money. Is the SBCI just supporting loans that would have been offered anyway? Its remit is to support job creation. Can we reply to this correspondence? The SBCI refers to jobs supported. What does it mean by that? We could also ask for a breakdown of the numbers by region or county.

In fairness, I will answer that. I have studied the various correspondence. All the SBCI has stated in the past is the total number of employees in organisations that have benefited from SBCI loans. That is not an appropriate figure from our point of view.

This was sold as the number of people whose jobs are supported by the SBCI. However, I will read out this sentence again; "we are unable to fulfil directly the committee's request for a breakdown of the number of jobs supported by the SBCI". The SBCI acknowledges that it cannot do it. If it cannot provide that information on a national basis, it is because it does not have it. We will not ask the SBCI for something it has told us in writing that it cannot provide. The SBCI has answered the question. It does not collect the data and cannot provide it. We might point out that it produces figures that are not relevant to its lending. We have made that point. The SBCI does not have the information we seek. I will ask its officials to improve data collection. Perhaps the application forms submitted by companies receiving loans funded by the SBCI should include a question on the number of new jobs the loan is expected to support or the number of jobs that will be specifically retained as a result. We will make that suggestion. We will not tell the SBCI how to do its job. Perhaps the officials feel they cannot do this. As things stand, they have said they cannot answer the question. There is no point in asking them for further details.

In a week when we have been hearing about sizeable job losses, one relevant issue is how much it costs to create a job. We have heard different figures from IDA Ireland and Enterprise Ireland and now we are seeing this. The information we have been given is very welcome, and I agree with the Chairman that this is what we sought. That much is clear. However, I note that an external review of the SBCI was carried out by Ernst and Young in 2019. It cost €120,000. It would be useful if we could get a copy of that.

We will ask the secretariat to provide that. We have noted and discussed the correspondence at length. We are vigilant in reviewing the information presented in annual reports and distinguishing the impression it gives from the reality.

No. 2473 is correspondence from Ms Leonora Harty, assistant governor of the Higher Education Authority, HEA, providing information on international student recruitment in the higher education institutions. We discussed this after Dundalk Institute of Technology or a similar institution had been involved. This detailed note states that the HEA does not have staff in the Far East to recruit students. It is done through agents. Sometimes agents approach the college and sometimes the colleges source well-known and well-respected agencies. The universities have signed up to an international agreement to assure the quality of the agents. They regularly consult the Irish embassies in the relevant country to make sure they are dealing a bona fide agent.

This has arisen again due to non-compliance. We highlighted that procurement requirements had not been complied with when hiring an agency to recruit students in another country. That is what this correspondence concerns. It is nice to get that reply. We will note and publish that.

No. 2474 is from Mr. Brendan Gleeson at the Department of Agriculture, Food and the Marine. It provides information requested by the committee on the Irish Harness Racing Association. We will note and publish that. If anybody wants to ask a question on that at our imminent meeting with the Secretary General, please do so.

No. 2475 is also from Mr. Brendan Gleeson and provides information requested after our meeting with Bord na gCon on the Irish Coursing Club's tracing systems for greyhounds and Bord na gCon's role in ensuring traceability. We will note and publish this. I have a lot of questions about this. I was concerned when this issue arose at the meeting with Bord na gCon and I am far more concerned about the matter now. We will raise this at our meeting with the Secretary General.

No. 2480 is from Mr. Cillian Byrnes at the Valuation Office. It provides further details, which we requested, on the system for determining local authority ratings. The Valuation Office states that copyright for part of the attached document lies with the Society of Chartered Surveyors Ireland and the Royal Institution of Chartered Surveyors and therefore should not be published without their permission. Can we agree to note the item and respect the publishing restriction on the relevant parts?

We also mentioned the issue of car parks and how they are valued as a part of various supermarkets. The reply states that retail parking is "a relevant factor in arriving at the rateable valuation of the property" where car parking facilities are connected with the property. The letter then states: "Where a property does not have its own exclusive car parking spaces, the availability or otherwise of free or paid parking spaces nearby is one of the factors that may influence its valuation." Essentially, the Valuation Office is saying that if a property is in a town and there is paid parking somewhere nearby, the valuation will be higher.

That is ironic. People have to put money into parking meters for the local authority and businesses pay higher rates as a result of their doing so. It is a great system altogether.

It is an extremely interesting note from the Valuation Office in the context of commercial ratepayers. It is hugely insightful in the context of our understanding of the system, particularly at a time when revaluations are happening across the country, including in my constituency. It helps us to understand the zoning method and how it is based on the principle that the most valuable part of the shop is that closest to the street or mall. Zoning occurs from the shop front backwards and there are reductions to it as one goes along. It is interesting that it states that zoning is a tool, an aid to valuation, which must at all times be overruled by common sense. I hope that is adhered to.

The revenue derived from rates accounts for €1.5 billion, or 33% of current local government income. In some cases, it provides as much as 53% of total funding for individual local authorities. The Comptroller and Auditor General tries to have a yearly analysis of the flow of income into local government. Last year, the Minister for Finance, touching on Exchequer contributions to the Local Government Fund, said:

Turning to Local Government, 2019 will see a contribution from the Department’s Vote to the Local Government Fund of €185 million – an increase of €60 million on 2018. This will provide significant additional support to the local government sector in providing a range of essential services at local level ... and resources for certain local government initiatives across the country.

Four weeks ago, suddenly the Local Government Fund was cut by nearly €30 million without a dickie bird of a mention. I tabled a parliamentary question to ascertain how something could be cut by €30 million in one year. The answer pertained, supposedly, to the fact that support for local government in 2020 had be realigned, largely as a result of the valuation of Irish Water as a global utility for commercial rates. From 2014 to 2019, compensation was paid to local authorities in lieu of commercial rates from Irish Water and Irish Water is liable for commercial rates from 2020. In the Department's reckoning, compensation in lieu of commercial rates ceases and the apportionment of the valuation of Irish Water among local authorities from 2020 will be based on population. This is similar to other global utility companies with national networks. It highlights the difficulty in analysing the flow of income into local government. In the reply to the parliamentary question, the Department went on to say that it expected the local authority sector to collect a broadly similar amount, and maybe even a greater amount in some cases, through commercial rates as was received in previous years through Exchequer funding for water rates compensation. It said it would monitor the financial impact of the transition for local authorities. Can the Comptroller and Auditor General highlight or analyse the real impact of this major realignment? Some €30 million has gone out with the stroke of a pen but the Department states that it will come back in another way, but it goes to the heart of the issues with the funding of the local government sector, which particularly worries me.

Mr. Seamus McCarthy

I would consider that any allocation of funding is in the policy domain so I cannot really comment on it.

I am not asking for the Comptroller and Auditor General's assessment of the rights and wrongs of the apportionment but on the financial impact on the sector, which he analyses. The Department has made an assessment that it will be largely in line but it does not know. The impact is always felt by the private sector in that the €1.5 billion to fund local government has to be taken from private business. A total of €30 million is going from Irish Water. There are so many strands of funding but the Department does not know what the real impact will be in 2020. They cannot know as the budgets are only going to be compiled this month for the 40-odd local authorities around the country. I am asking the Comptroller and Auditor General if he actively monitors the impact of something like that.

Mr. Seamus McCarthy

Each year for this chapter, we have tried to document and compile a report on the flows of funds from central Government to local authorities. We do not question what the amount would be but try to just track the figure. It is very complex as funds flow into and through many accounts. I do not envisage that we will go beyond that but it may be one of the things that is visible when we look at the 2019 or 2020 report. I would comment on a significant change but I would not go beyond that or question why it is or how it might be replaced in the case of a reduction.

I wish to highlight again the complexity of funding. Last year, an increase of €60 million was heralded in a speech but there is a cut of €30 million this year and there is no reference to it. The Department said we may or may not get an equitable amount in 2020 but nobody knows. It is a significant amount of money.

We are moving from direct subvention from a Department which will no longer be there, to be replaced by the payment of rates on a national valuation basis by a commercial State organisation, namely, Irish Water. In the figures the Comptroller and Auditor General provided, has he included the funding figure from commercial State organisations such as, for example, the ESB and Irish Water though the global valuation system? Have these bodies been in the Comptroller and Auditor General's charts up to now?

Mr. Seamus McCarthy

I was not anticipating this so I have not checked. I will come back to it.

We will come back to it. In the meantime, global valuations for gas companies, EirGrid, the ESB and various telecommunications companies are done and divided proportionally among each local authority based on population. It depends on the services, of course and, for example, Bord Gáis Energy rates cannot be distributed to every local authority because not every local authority has natural gas. We will write to the Valuation Office straight away and ask for a complete report and breakdown of the global valuations of all the groups I have indicated, and for an indication of the total global valuation and the breakdown among the relevant local authorities, as well as how it is going to deal with the Irish Water situation. There is a mechanism for us to get the information. Maybe we should place on the public record those areas of activity which are exempt from rates, namely, most public offices, government buildings, hospitals, public schools, etc.

Deputies do not pay rates on constituency offices because there are Deputies who have their offices in this building. There is equal treatment for all Deputies in respect of where their staff operate. I will put that on the record just in case people think there is something going on. I can clarify all of those matters.

It is an interesting-----

Any information we can get on this matter would be useful. We will ask the Valuation Office to provide that information. We might then have to take the matter up with the Department.

That was the issue I was pursuing in terms of zones and proximity to streets. The information would be useful. Could we write to the relevant organisations and ask them whether we can publish this material?

Putting it into the public domain would be useful. Could we do that in the first instance?

I will ask the secretariat to determine whether we should ask the Valuation Office to get permission or we should write directly. It has been suggested that we do it, but it was produced for the Valuation Office. I will let the secretariat work out who to contact in order to get permission to publish.

We probably need to raise the issue I mentioned about car parking and out-of-town venues separately. It could be at odds with and could undermine other policies on the viability of town centres, which are the heart of any location.

There was a transfer of assets worth in excess of €11 billion from local authorities to Irish Water. A large water treatment plant like the one in Leixlip, which is in the news at the moment, was owned by Fingal County Council before being transferred. It will now be subject to rates. We are still questioning whether Irish Water will come under the remit of the Comptroller and Auditor General. It is difficult to figure out whether it is a public, private or semi-State entity, which is causing confusion about how what are publicly built treatment plants are now being subject to commercial rates.

Commercial semi-State organisations like the ESB and EirGrid pay rates. There is no loss of revenue-----

The word is "commercial".

Yes. Irish Water is a commercial State-owned company that is on the State's balance sheet. It is a matter of transferring the payment. The block grant from the Department will not continue. Instead, Irish Water will pay the equivalent in respect of it. It is a little bit-----

Is it a block grant that goes to Irish Water and then Irish Water pays commercial rates?

From what element is it paying the commercial rates?

This is an issue that we will have to get clarified. We might decide to write to Irish Water directly. It is not subject to the committee, but I would expect it to respond to an Oireachtas committee.

It is not subject.

First, we would ask about Irish Water's dealings with the Valuation Office, how much the company is proposing to pay and how that figure is distributed. The figure will be the Valuation Office's global valuation of the organisation. Second, many of the major water treatment plants are being operated under long-term public-private partnerships. Where do they come into the mix in terms of rates? Does the private company in the partnership pay the rates to Irish Water, which then pays them on, or is the private company, which is making profits from the water treatment plants, exempt from rates? Is that another cost to Irish Water that might have to be passed on to the consumer?

I will ask the secretariat to send the transcript of the questions we have just laid out to Irish Water to see whether it can help us on this matter, with due respect to the fact that it cannot be compelled to appear before the committee. We hope that, as a commercial State body wholly owned by the Minister, it will respond and provide that information. We will try to move on now, as we have covered this matter.

We will hold over category C correspondence, which is from private individuals, for the next meeting because I want to move on to conclude our business and to get to our discussion with the Department of Agriculture, Food and the Marine. There is just one little issue to wrap up. We will hold over the noting of accounts. The only comment I wish to make about the work programme is that, if the Dáil had been sitting next week, we would have had a scheduled meeting with the Courts Service. I will ask the secretariat to move that to as early a date as possible. The HSE is scheduled to appear before us on one day and the National Paediatric Hospital Development Board will appear on another day. Since the dates between now and Christmas are tight, I suggest that we combine those meetings into a morning and afternoon session. I will ask the secretariat to work on that and to include in the programme - we have no date yet - a meeting with the Office of Government Procurement regarding all the issues. At our next meeting, we will finalise the details. We have a few meetings scheduled. The next meeting, which will be on 7 November, will be with the Department of Employment Affairs and Social Protection. The OPW is possibly scheduled for 14 November. A little bit of moving around has to happen because the Dáil is not sitting next week. I expect that the Courts Service will be before us on 14 November.

We have said enough about the work programme now, and I would like to move on to the Department of Agriculture, Food and the Marine. Actually, Deputy MacSharry mentioned an issue. Since he is a member of the committee and is present, does he wish to raise it briefly now?

Did everyone get the letter? I would like the committee to invite the State's chief procurement officer because he can add all sorts of value in respect of process and procedures to our consideration of how money is spent on infrastructure projects.

Could we ask-----

He is the person who retired from the-----

That was in his personal capacity-----

He was in there in a personal-----

-----but he still works for the State. It is important that we have a chat with him.

Coincidentally, we were dealing with the issue of procurement earlier in the meeting. We have already indicated that he is going to be invited depending on the work schedule. He is not the Accounting Officer, but the head of the office. In some Departments, the Secretary General is the Accounting Officer for a couple of bodies under the Department. We need both. We will check to see whether we can get both the Accounting Officer and the head of the Office of Government Procurement to appear to discuss capital projects procurement and the current circumstances.

It would add value to how we approach a great many things. The clerk might correct me if I am wrong, but is the committee entitled to invite people who are officers of the State to assist us with our work?

I will answer. The Accounting Officers can be compelled, but we do not ever want to go that route. He is the head of a Government office, that being, the Office of Government Procurement, and the head of the office should be here, full stop. It is proper practice. If the head of a Government office that gets voted expenditure from the Dáil feels he or she should not attend the Committee of Public Accounts, we will have a big issue about whether the Dáil should give that organisation money. The Accounting Officer should also attend, but we need the head of the organisation because the Accounting Officer does not run it on a day-to-day basis. We will need both here. We will put the matter on our work programme and ask the secretariat to work in a date as soon as practicable.

We will now suspend before meeting the officials from the Department and we will finish our deliberations by lunchtime.

Sitting suspended at 10.18 a.m. and resumed at 10.27 a.m.