Pobal: Financial Statements 2018

Ms Anna Shakespeare (Chief Executive Officer, Pobal) called and examined.

This morning we are dealing with Pobal and its financial statements for 2018. We are joined this morning by Ms Anna Shakespeare, chief executive officer. She is new to the position having joined in August. You are very welcome to your first meeting of the Committee of Public Accounts. Ms Shakespeare is joined by Mr. Jerry Murphy, deputy chief executive, and Mr. Brian Lehane, chief financial officer. They are also joined by Richard Deane and Gerard Sellars. We are also joined by Mr. Paul Geraghty, principal officer, Department of Rural and Community Development, and Mr. Gordon Gaffney, principal officer, Department of Children and Youth Affairs.

I wish to advise members, witnesses and everyone in the Public Gallery that all mobile telephones must be switched off in their entirety or put in airplane mode, as merely setting them to silent mode can still cause interference with the recording system. I advise witnesses that by virtue of section 17(2)(l) of the Defamation Act 2009, they are protected by absolute privilege in respect of their evidence to the committee.

If they are directed by the committee to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the provisions of Standing Order 186 to the effect that they shall refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits of the objectives of such policies. While we expect witnesses to answer questions asked by the committee clearly and with candour, they can and should expect to be treated fairly and with respect and consideration at all times in accordance with the witness protocol. We will begin by inviting Mr. McCarthy to make his opening statement.

Mr. Seamus McCarthy

Thank you Chairman. Pobal is a State-owned not-for-profit company limited by guarantee. The company was originally established in 1992 by agreement with the European Commission to manage an EU grant scheme to support local development. Over time, the functions of Pobal have expanded significantly. It now functions as an agent for a number of Government Departments and EU bodies providing administration, management and support services for around 25 programmes in the areas of social inclusion and equality, inclusive employment and enterprise and early years education and childcare. In 2018, Pobal issued grants totalling around €695 million. As indicated in the figures now on screen, almost 70% of the payments were in relation to childcare programmes funded by the Vote for the Department of Children and Youth Affairs. Other significant areas of grant payment related to community employment schemes funded by the Department of Employment Affairs and Social Protection and community services grants funded by the Department of Rural and Community Development. Pobal recoups its administration costs under the terms of service agreements with the funding Departments. In 2018, Pobal spent a total of €35.1 million in administration costs and other programme supports. This comprised €21.7 million in respect of payroll and €13.4 million in non-pay costs.

My audit report on the financial statements drew attention to the statement on internal control which disclosed that in 2018 Pobal incurred expenditure to the value of €1.15 million on goods and services, the procurement of which was not compliant with the relevant procedures. This mainly related to ICT and project management services required to deliver the national childcare scheme. I also drew attention in the audit report to Chapter 16 of the Report on the Accounts of the Public Services 2018, which examines the delivery of early learning and childcare funding programmes. This deals with Pobal’s role in administering the schemes and in ensuring compliance with scheme conditions. The statement on internal control summarises Pobal’s compliance activity in that regard.

Thank you. I now invite Ms Shakespeare to make her opening statement.

Ms Anna Shakespeare

I thank the Chairman and committee members for their invitation to attend this meeting. I am accompanied by Mr. Jerry Murphy, our deputy chief executive who has been with the organisation since 2005, and Mr. Brian Lehane, our chief financial officer who joined Pobal in July 2018. I was appointed as chief executive of Pobal in August this year. I joined Pobal from St.Michael’s House where I was chief executive since 2015.

Pobal values the role of this committee and we are here to account for and apply the lessons of this process. Pobal is a not-for-profit, registered charity and a company limited by guarantee without share capital. Pobal’s board is appointed by the Government under the aegis of the Department of Rural and Community Development. Established in 1992, Pobal has developed in response to Government priorities over 27 years. On behalf of Government, our work supports valuable services in marginalised communities. Our core role is to deliver an effective programme and grant management service in order to create an inclusive society where Government and communities work together.

In 2018, Pobal managed 25 programmes, primarily for four Government Departments. The areas, groups and communities we support are outlined in the briefing document we submitted to the committee. In managing these programmes in 2018 Pobal disbursed €694.7 million, an increase in expenditure of €79.7 million over 2017. We supported 2,500 community groups and almost 32,000 individuals through the Social Inclusion and Community Activation Programme, SICAP. We channelled funding to 4,832 early learning and care services, supporting approximately 81,899 families with reduced fees through the community subvention programme. We also approved 19,000 participants for the seniors alert scheme.

In 2018 Pobal employed 442 staff in 2018, with 46% based outside Dublin. We operate our programmes efficiently. Our administration spend for 2018 was €29.94 million or 4.10% of budget. Pobal’s budget has evolved to deliver programmes of work in line with Government policy and requirements which make a difference to people’s lives. Funds disbursed moved from €257 million in 2011 to €695 million in 2018. This reflects changes in Irish society and the Government’s commitment to supporting civil society with these changes.

As CEO, my vision for Pobal is to deliver a value for money service for Government and to make a difference for people and communities. The landscape of Irish society has altered significantly, redefining who we are and how we live. Working with community and voluntary organisations, Pobal aims to build capacity locally and to support sustainable, resilient communities. In a world increasingly fraught with social challenges, the importance of a strong network of natural community supports is a critical component of individual and collective well-being. It enables us to meet the challenges of the future.

Pobal is committed to ensuring our processes deliver verifiable management of taxpayer’s money, while offering user friendly and effective support to all stakeholders. Our supports assist community organisations to meet their legislative, governance and financial management requirements. We also provide practical help such as helping hands workshops and managing better guides. Where possible we utilise information technology to reduce the administrative burden on community organisations. We have seen remarkable changes across the early learning and care and the school age childcare sector in Ireland in recent years, including the development of the First 5 strategy and the national childcare scheme, of which Pobal is scheme administrator.

We are proud of our work but we know we do not always get things right. We welcome the oversight of the Comptroller and Auditor General and this committee. This process is important in reminding us of our purpose and in identifying areas for improvement and learning. The committee is aware the Comptroller and Auditor General highlighted two issues in our 2018 annual financial statements. I accept that there is a need for improvement in our procurement processes, with non-compliance on a proportion of expenditure on goods and services in 2018. I take this matter extremely seriously, as does the organisation. A corrective action plan is in place with targets and timelines for completion.

The second note to the accounts relates to Chapter 16 of the 2018 Annual Report of the Comptroller and Auditor General, which examined the administration by Pobal of early learning and childcare funding programmes. Two of the recommendations in the chapter were directed to Pobal. However, we understand this chapter will be considered in greater detail at a future meeting of this committee.

Looking ahead, in 2020 the Department of Rural and Community Development will undertake a periodic critical review of Pobal under the code of practice for the governance of State bodies. This is the first such review under the 2016 code. The Department of Children and Youth Affairs has also indicated it will undertake a major operational review of all its early years programmes and the operating model in the early learning and care sector. We look forward to both reviews and implementing any recommendations for change and improvement. The entire team at Pobal works hard to deliver for the communities from which we come and where we live. It is an important part of our organisational culture that we exist for families and communities who not only need the services and programmes we administer but who also, in real terms, pay for these services. I thank the committee for the opportunity to appear today and my colleagues and I are happy to take any questions members may have.

Thank you Ms Shakespeare. The first speaker today is Deputy Shane Cassells who has 20 minutes. All other speakers will have ten minutes. I remind everyone that the weekly voting slot in the Dáil is scheduled for 1.45 p.m. This meeting will finish at 1.45 p.m. at the latest, if not before then. We will be dealing with other business in the afternoon so we must finish by 1.45 p.m. at the very latest.

I welcome Ms Shakespeare and her team to this meeting. I wish her well in her new role and thank her for the comprehensive briefing documents that were provided to the committee prior to this meeting. The total amount of money going through Pobal is substantial, amounting to €695 million in 2018. The largest element comprises grants from the Department of Children and Youth Affairs, totalling €506 million.

Are all of those moneys distributed to programme supports or do some administration and salary costs come out of them? Ms Shakespeare mentioned the administration cost of €29.4 million.

Ms Anna Shakespeare

We extract some of our costs from that €506 million.

Is that done on a proportional basis in terms of the staff assigned to the early years sector within Pobal or across the board?

Ms Anna Shakespeare

We agree a programme of work in the context of our performance delivery agreement and the number of full-time equivalents associated with that programme under the governance of the service level agreement between ourselves and the Department. Indeed our other programmes are delivered in that way. I refer the Deputy to my colleague, Brian Lehane, who might be in a position to provide further detail.

I want to get an understanding of Pobal's work because many people may not be aware of it, despite its significant budget. Until 2006 the funding for childcare infrastructure came from the EU under the equal opportunities childcare programme, EOCP. Is that correct?

Ms Anna Shakespeare

Yes.

That would have been focussed on training, education, employment and assisting people in coming back into the workforce. That changed to the national childcare investment programme around 2006. Is that right?

Ms Anna Shakespeare

That is my understanding, yes.

Then it moved to Exchequer-based funding. Is that correct?

Ms Anna Shakespeare

That is my understanding.

At the time there was a rationale for Pobal when it was run under the previous model. Can Ms Shakespeare explain to me the need for Pobal now as the middleman, considering that change in 2006? Could the Department not do this work? We needed the middleman to draw down the EU funding but then we moved to Exchequer-based funding.

Ms Anna Shakespeare

I will refer the Deputy to my colleague, Jerry Murphy, who worked in the organisation at that time.

Mr. Jerry Murphy

The Deputy is absolutely right to refer back to the long history of our involvement in early years care. Pobal was party to the original investigations around the needs for childcare and much of that started with particular needs in disadvantaged communities but as we moved through that cycle there was a tendency to divide responsibilities so that the more administrative elements of the role came to Pobal. These include significant elements of policy making, design, standard setting and oversight that traditionally lie with the Department but because of the intricacies of managing these flows of moneys to so many individual groups the decision was made that there were advantages in having a specialist organisation with the knowledge and infrastructure to do that. Over many years we have developed staff teams with the experience of the local bodies and how things work, with experience in financial management, compliance and people who are available to interact directly with groups whether in a support role or dealing with issues such as financial compliance. We also developed a series of expertise around matters such as monitoring and reporting to the Department. We feel we have developed a set of skills distinct from what would normally be within a Department.

There is a representative from the Department of Children and Youth Affairs but there is also one from the Department of Rural and Community Development. Am I correct in saying it was the original parent body in 1992? I am trying to understand why Pobal, which was established to manage EU grants, is administering childcare grants now. It had a different sphere. Is that why the Department of Rural and Community Development is here today too?

Ms Anna Shakespeare

The Department of Rural and Community Development is our lead Department.

That Department is the lead, not the Department of Children and Youth Affairs.

Ms Anna Shakespeare

That is correct. In any programme activity with another Department we write to our lead Department for the authority to proceed.

On that point, what is the Department of Children and Youth Affairs' interpretation of its relationship with Pobal and the fact that this middleman is implementing the grants for the Department?

Mr. Gordon Gaffney

The Department's relationship is on a customer-type basis. There is a strong governance methodology with a service level agreement and an annual programme of works. Pobal is better suited to undertake the type of work because it has an in-depth knowledge of the early years sector. It has strong relationships. We believe there is strong governance in place between us and Pobal. It is fair to say, however, that it has grown out of EU schemes into Exchequer schemes and over the past five years there has been a 141% increase in funding in the scale of the schemes under administration by Pobal. Our Minister is about to undertake a review of systems and structures to consider Pobal and the city and county childcare committees to see if there are improvements that can be made to the system.

Is there a review under way?

Mr. Gordon Gaffney

A review is about to commence on this very matter.

In her briefing document Ms Shakespeare noted that Pobal received over 36,000 queries in 2018, 78% of those are related to the early years and childcare, so that accounts for most of its work. She cites the early childhood care and education, ECCE, scheme, the higher capitation applications.

I note the high profile launch of the new national childcare scheme this week but a woman contacted my office who, during the soft launch, was twice provided with an invalid Chick code. She eventually got the correct code yesterday but here's the rub: she was a mum returning to the workforce, she had applied on 7 November and was commencing work shortly after that but due to the glitch in the system her application was processed only yesterday, 10 December. She now owes her childcare provider a substantial sum for that period but she has been told the payments cannot be backdated. They are in place only from yesterday and she is out of pocket. Can Ms Shakespeare enlighten me please on that?

Ms Anna Shakespeare

First, it is unfortunate that an incorrect childcare identifier number was allocated. We express our gratitude to that individual for joining us at the soft launch because that was part of individuals like her assisting us in ironing the glitches out of the system.

I know that but unfortunately she is out of pocket for a substantial amount of money through being part of that guinea pig programme. She had a very bad experience as part of it. She is now collateral damage.

Ms Anna Shakespeare

As I said, I thank the Deputy's constituent and I understand the very difficult situation she now finds herself in. The income assessment is the foundation of the national childcare scheme.

She was told that it would be turned around in ten days. That was on 7 November; 10 December was yesterday.

Ms Anna Shakespeare

That is correct. As part of our verification process to ensure proper oversight of the financial controls and that the system was working correctly we have had to do some manual exercises around identifying individuals going through the income assessment. That means we need to connect with the data from the Department of Employment Affairs and Social Protection and from the Revenue Commissioners to calculate the income assessed value of the subsidy that will be awarded to an individual such as the Deputy's constituent. It is regrettable that it has taken a little time to get through that.

However, we needed to balance the piece of making sure that, on the one hand, when an individual gets his or her income assessed value, the payment he or she is going to get is absolutely correct because an individual might make, as the Deputy's constituent obviously did, life-changing decisions to go back into the workforce or into education and, on the other hand, it is about balancing the approach to ensure probity in Exchequer spend of money.

On the higher capitation whereby the payment per child varies depending of the qualification of the room leader, am I correct that a room leader with a level 5 or 6 qualification would result in a payment of €69 per child?

Ms Anna Shakespeare

I will have to confirm that.

Where it is a room leader with a degree qualification it would be €80.25 per child. It should be noted, and the Comptroller and Auditor General noted it in his report, that in 2010 just 11% of ECCE room leaders had a degree qualification and the figures available for 2018 show that this has risen to over 50%. That is very positive. Will Ms Shakespeare explain the problems with the payment of higher capitation since September? My office has been contacted by providers since then and the verification process by Pobal in many cases is still ongoing, meaning that the higher capitation is not paid and the providers are out of pocket. They have higher qualified room leaders who must be paid and who command a higher wage. The verification process is still ongoing for many of the people who contacted me. Can Ms Shakespeare explain why the delays are occurring? If there is a change in the opposite direction and the provider goes down from a room leader who has a degree qualification, I presume the provider will owe a refund of moneys. Will she discuss that?

Ms Anna Shakespeare

It was agreed between Pobal and the Department of Children and Youth Affairs that an appraisal of the higher capitation applications would commence in early October. The application process opened in August to allow service providers ample time to submit applications. It involves the Pobal employees verifying the qualifications and verification of the qualifications of all those individuals. What happened is that when we went to seek the verification of the qualifications of some of the individuals and when the qualification confirmation and verification came back, they went back to the end of the queue so we had to revise our process. I again acknowledge that was a learning point for us. Those individuals subsequently have been moved further up the queue. In some respects that has contributed to the delay in that regard.

I appreciate that Ms Shakespeare is new to the post. She referred to that as a learning point but this organisation has been on the go since 1992. We are dealing with a very fragile industry. I attended a briefing with providers last month and many of them have become exasperated as to whether they would even continue in the profession. There are major pressures in counties such as Meath, Kildare and Dublin with even attaining places for children, such is the dearth of places in urban areas, yet providers are at the end of their tether. Despite people's perception of this being an industry flush with cash because of the high fees that are charged, many providers are on the breadline and the delay in the processing of payments, where Ms Shakespeare said people go to the end of the queue, is causing many of them to be on that line. It is coming up to Christmas and it is still not resolved. Will the situation be remedied or will we see it continue in 2020?

Ms Anna Shakespeare

Absolutely. I should add that by agreement with the Department of Children and Youth Affairs, an initial preliminary payment was made and a second preliminary payment has been made while we work our way through the higher capitation application verification exercises. My colleague, Mr. Murphy, might wish to add to that.

Mr. Jerry Murphy

We are conscious of the fact that, particularly in this instance with early years, we are working with a sector that is always close to the limit. What that means for us is that often we intentionally manage our processes in a way that gives us very little time for things like turnarounds, to ensure that payments are done as quickly as possible. It puts a significant amount of pressure on our side but it is in recognition of the fact that moneys need to flow. While we have been involved in this for a long time, it is reasonably recently that the higher capitation grants were transferred to us. We opened the process early to allow people to make submissions early, but it was always flagged by us that the assessment process would not start until significantly later than that. We are conscious that this was translated by the sector as an expectation that the assessments would begin shortly after the applications were sent in. I know learning points are not as important as delivery, but that was equally a lesson for us.

I appreciate that. I have cited two examples - a parent who is out of pocket because of the glitches in the system and, second, the industry providers who are facing financial hardships as well. Both the administration of the scheme by Pobal and the glitches in the system are causing these pressures on a very fragile industry.

Childcare in the early years has been hitting the headlines for all the wrong reasons this year, unfortunately. The Department has to develop a quality service. As part of that, in the annual report the Department outlines its better start programme, which is a national early years quality development service for the early learning and care providers working with children from birth to six years of age. When the controversy with the Hyde & Seek crèches in Dublin was uncovered by RTÉ, I tabled a parliamentary question to the Minister to ask if the early year specialists under the better start programme had visited this crèche. I was told in the reply that the better start programme visited the crèche and that the quality development service assigned an early years specialist to work with this service from November 2015 to September 2016. The early years specialist visited the Hyde & Seek crèche on 13 occasions during this time and made recommendations to the service on ways to improve quality. There were 13 visits to this service, which was exposed on RTÉ, on ways to improve quality. Was none of the shortcomings that were subsequently exposed by RTÉ highlighted by the early years specialist, who visited it on 13 occasions, to Pobal and what actions were taken?

Mr. Jerry Murphy

Our staff were not aware of the issues that were highlighted in the "RTÉ Investigates" programme and did not see any evidence of the child protection issues. Any time our staff are in a situation where they are aware of any such issue, there is an immediate process for passing on that information to Tusla, which is the regulatory agency there. Our supports through the better start programme are related to the learning environment, the mechanisms that are used by individual staff members to ensure they are carrying out their roles properly and the standard of their care service. It is an unfortunate reality that one can work successfully with a series of individuals but there is still the wider context of the management system of a crèche, which was uncovered there.

Mr. Murphy's comment goes to the nub of the issue. Pobal had people going in but they were dealing with the learning environment. There is a plethora of people involved in early years childcare. As Mr. Murphy mentioned, there is Tusla, which has its sphere of work to do. There is Pobal, which has its sphere of work and then there is the Department of Children and Youth Affairs as the overarching body. The Department of Rural and Community Development is involved. The Comptroller and Auditor General when doing reports on local government will say it is complex, but the area of childcare is even more complex in terms of the plethora of people involved, including the Health Service Executive, the Department of Children and Youth Affairs and the Department of Rural and Community Development. There are so many that things fall between the cracks. There were 13 visits to this crèche, but Mr. Murphy said Pobal's sphere was to deal with the learning environment. A significant amount of money is being spent on the better start early years specialist programme. It is €7.9 million this year.

Next year that will rise to €9.7 million, an increase of nearly €2 million. Did no one look at the broader picture rather than looking at the learning environment only and leaving everything else to Tusla? Tusla also looks at certain aspects only. It defies belief. Things get missed when everyone works in silos.

Ms Anna Shakespeare

To answer the Deputy's question, he is right in that the focus of the Better Start programme is supporting the implementation of the national curriculum and Aistear and Síolta in early learning and childcare environments. Better Start staff are clearly instructed to report any child protection or welfare issues they notice. No child welfare or protection issues were identified in their visits to those crèches and locations.

Has Pobal re-examined these published reports in respect of anything that could have been looked at during that period?

Ms Anna Shakespeare

I am satisfied that no child protection or welfare concerns existed at that time. We will take the point on the organisation retrospectively going over the reports with a fine-tooth comb.

On the matter of different stands of funding coming from different agencies, if Pobal is auditing a community childcare centre and looking at money coming from the Department of Children and Youth Affairs, how does it deal with money coming from, for example, the Department of Rural and Community Development for a transport programme? Is everything looked at in silos or in its entirety?

Mr. Jerry Murphy

First of all, I will distinguish between the issue of audit versus the issue of verification and compliance visits.

Pobal carried out 3,500 such visits last year, as opposed to 17 audits. Am I correct in that? Is that considered a low number of audits? What sparks an actual audit?

Mr. Jerry Murphy

The majority of these audits were sparked, to use the Deputy's term, by a contractual commitment of ours under the community services programme. We contract with the Department of Rural and Community Development to conduct audit visits on a set percentage of programmes.

In that case, they are not sparked by anything. They are carried out on percentage basis.

Mr. Jerry Murphy

Absolutely. The small number which remain - I believe it is seven but I may call on my colleagues in that regard - were conducted because of information given to us which suggested the need for an audit.

I will refer to those inspections because there was a significant issue in respect of non-compliance. Am I correct in saying that there was non-compliance in 50% of cases?

Mr. Jerry Murphy

To start with, I would clearly distinguish between compliance visits and audits. The compliance visits which happen under the early years programmes consist of Pobal staff looking at record-keeping within each childcare centre to see whether it complies with the rules that are in place for early years education. The main issue found with regard to what the Deputy raised was around attendance records. Under the subsidised schemes, the Department of Children and Youth Affairs pays money based on the attendance of a child at a service. The services charge Pobal for those schemes. Our compliance team checks records to ensure the child's attendance matches what we are being charged for.

To return to my original question, if Pobal is looking at a service which receives funding from a number of different strands or Departments, how is that examined?

Mr. Jerry Murphy

With regard to that massive work, we look at that small element of records. We do not look at a service's broad financial books.

Ms Anna Shakespeare

To go back to the Deputy's earlier question, he has correctly identified the number of interactions between Tusla, Pobal and others. At the heart of this is the major operational review being completed by the Department of Children and Youth Affairs. I understand that part of the drive behind that review is to bring some rationalisation to these interactions.

I will ask the witness from the Department of Children and Youth Affairs about the term "rationalisation". Does that mean the Department is moving towards a more streamlined provision? What does that mean?

Mr. Gordon Gaffney

We are not going to pre-empt the findings of that review but certainly-----

Is the review being carried out internally by staff or is a consultancy involved?

Mr. Gordon Gaffney

We are proposing to set up an interdepartmental group with the involvement of staff and a consultant. It has not been formally published yet. We are still working through the planning phase. We hope to see that completed over the coming year.

The report will be finished by the end of next year.

Mr. Gordon Gaffney

I am sorry. We hope to see it commenced and the bulk of the work completed next year. I cannot say that the report will be finalised by the end of next year.

Will the report then go to the Minister, whoever that might be, for a review of the findings?

Mr. Gordon Gaffney

We expect it to go to the Minister for review and decision.

I also want to raise the issue of delays in the higher capitation payments. I am aware that an apology was issued but no reason or rationale was provided for the delays. I am glad that has been somewhat clarified today. Ms Shakespeare said an appraisal was carried out in October. Did that relate to the delays? How soon can we expect to see an improvement given the problems this issue causes for people?

Ms Anna Shakespeare

If I can be of assistance, there may be two issues at play here. The first is that we did, unfortunately, have a financial failure. Some €11.5 million of payments did not issue as a result of an ICT failure. That is one part. The second part relates to the higher capitation payments. I can absolutely confirm that much has been learned from this in respect of timing and the amount of work entailed in verifying the qualifications of providers seeking that additional funding. We have put in place two interim payment plans to ensure the sustainability of those organisations in the interim.

How soon can we expect to see improvement in the overall system? It is fair enough that interim payment systems are in place, but when will the overall system be improved so that we can rest assured that this will not happen again?

Ms Anna Shakespeare

I expect that there will be further improvements with effect from this month. The implementation platform or payment platform is to be replaced with the national childcare scheme in 2020. We expect to see improvements as that early years platform is implemented further.

There is no question of administration resources being insufficient. That does not come into play at all, does it?

Ms Anna Shakespeare

Is the Deputy referring to Pobal's resources?

Ms Anna Shakespeare

I am not aware of that issue being brought to our attention.

With regard to compliance visits, I was going to ask what exactly is checked but Mr. Murphy said that it is record-keeping and so on. Some figures were given to us in the briefing note. It states that "19 % were deemed major

non-compliant". That is a significant and worrying figure. Will Ms Shakespeare provide some detail in that regard?

Ms Anna Shakespeare

As Mr. Murphy has identified, that 19% figure relates to child attendance. The child's registration is linked to his or her attendance at the early learning and care centre.

It is strictly down to child attendance, there is nothing else.

Ms Anna Shakespeare

Yes. It is in accordance with the registration.

Was that introduced on foot of the issue in Galway in 2014 when children were registered as attending a crèche which they did not attend? To the best of my recollection, I believe an overpayment to the tune of €100,000 was made but I stand to be corrected. Were these compliance visits put in place since that case arose or were they carried out prior to that?

Ms Anna Shakespeare

These compliance visits relate directly to the programme rules and guidelines published by the Department. These have been refined over time to provide further clarity. Our most recent compliance visits have related to the refined programme rules and guidance

Those came in after the issue arose in Galway.

Ms Anna Shakespeare

Yes.

How are the services to undergo audit chosen? What is the rationale?

Ms Anna Shakespeare

It is agreed as part of the programme of work with the Department of Children and Youth Affairs. It is also based on a review of the monetary value and risk profile associated with that spend.

There are a number of drivers behind it, if that makes sense.

How many on average are carried out each year?

Ms Anna Shakespeare

There were 3,400 compliance visits completed in 2018.

Okay. Seventeen audits were carried out in 2018. Were there any instances of misuse of public funding that came up in any of those audits?

Ms Anna Shakespeare

There were 17 audits. Seven of them were childcare related and were related to non-capital spend, and ten were related to the community services programme, with one of those also relating to dormant accounts funding. I am not aware of any actual or suspected misappropriation. We work alongside providers in improving their governance and their systems. As Deputy Cassells has referenced, it is a developing sector and we would see a part of our role in supporting agencies, improving their governance and improving their compliance over time.

Will Ms Shakespeare explain the increase in consultancy costs between 2017 and 2018?

Ms Anna Shakespeare

There was an increase of €226,000 in consultancy between 2017 and 2018 and we have done a detailed review of that internally. I will pass that question over to Mr. Lehane, our chief financial officer.

Mr. Brian Lehane

There was a big increase, which was related to various projects. A strategic review was undertaken, there was a review in regard to ISO 27001, and a review of the early years procedures. An employee survey is also part of that figure, and the HP deprivation index was also undertaken in 2018, as well as the charity review. There are various elements making up that figure of €226,000.

What were the specific requirements for all of those reviews?

Mr. Brian Lehane

One was in regard to the leadership review of Pobal overall, given the growth of the organisation. There was a review of the contracts we have regarding procedures for the early years policies, particularly around compliance. With regard to ISO 27001, we have started a process around getting alignment with ISO 27001 and what we need to do around that aspect. The charity review was around the charity standing of Pobal. As for the employee survey, given the fact that Pobal has grown, we took a review of employees and their views of Pobal.

Will Mr. Lehane expand on that last point?

Mr. Brian Lehane

What we are trying to do is get the employee excellence through people award, so our first step was to survey the employees of Pobal to get their views on Pobal and how they feel about working with Pobal. We will then move it on to get the excellence through people award.

Cuirim fáilte roimh na finnéithe.

Ms Anna Shakespeare

Go raibh maith ag an Teachta.

Is dea-scéal é go bhfuil an méid seo airgid ag Pobal le leithdháileadh ar thograí suntasacha agus tábhachtacha.

I welcome the witnesses. It is a positive story to have this money, so there is a particularly high onus on Pobal to be accountable for itself as an organisation and then to ensure accountability on the ground. My questions come within that. With regard to the bike to work scheme, how many people availed of that?

Ms Anna Shakespeare

Within Pobal?

Yes. It is in the accounts and it jumped out at me.

Ms Anna Shakespeare

We will have to come back to the Deputy on that as I do not know the number.

It is just out of interest. A bugbear of mine is property being leased continuously. Page 116 of the Pobal accounts gives a list of its offices. Pobal owns no land or buildings and, therefore, it provides the services through a number of rented premises. Is that right?

Ms Anna Shakespeare

That is correct.

The accounts deal with total leasing commitments. I will first take the list of properties, which are located throughout the country. Are there two in Galway - one in Clifden and one in Galway city?

Ms Anna Shakespeare

That is correct.

They are all rented.

Ms Anna Shakespeare

Yes.

Some leases have expired.

Mr. Brian Lehane

They have been renewed. That information is out of date. The date for Adelaide Road, which had expired, has gone to 2024, the one for Monaghan has gone to 2028, and Limerick has gone to 2020.

Limerick has gone to 2020 and Adelaide Road has gone to 2024. What are the details? Has the rent increased or decreased?

Mr. Brian Lehane

Overall, rent has increased. From 2017 to 2018, there was an increase in rent because, in 2017, we moved into Ormond Quay, so there is a full year's rent in 2018, and 2018 was the first year we moved into Adelaide Road, so our rent overall has increased.

What is the total amount going out on rent every year?

Mr. Brian Lehane

The total amount in rent for 2018 was approximately €1.7 million and the balance is made up of service charges of €300,000.

What does that mean?

Mr. Brian Lehane

It is basically the service charge we pay to the landlord for the upkeep and maintenance.

Would that be €2 million per year?

Mr. Brian Lehane

It was €2 million for 2018.

What was it for 2019?

Mr. Brian Lehane

It should be a similar figure for 2019.

Under the heading "Break Clause", it states "None", and there were no break clauses in any of Pobal's leases.

Mr. Brian Lehane

No.

Mr. Brian Lehane

At the time, they were not included. When they were negotiated, maybe it was felt we did not need a break clause. I do not know the answer as they were negotiated before I joined.

Mr. Jerry Murphy

I was there at the time. At the time some of them were negotiated, it was simply not possible to get a break clause, particularly from a Dublin landlord. They had queues of customers and they were not willing to offer that kind of arrangement.

Really? They had queues of customers. In regard to Galway, Letterkenny, Limerick and all of those, had they queues of customers?

Mr. Jerry Murphy

The Deputy is right. It is a very different situation there.

It is not, because there is no break clause in any of them.

Mr. Jerry Murphy

No.

Maybe it is better or cheaper when there is no break clause. I do not know and I am no expert.

Mr. Seamus McCarthy

It usually does have a cost effect. It may be cheaper. That is obviously something one would want to look at in regard to a lease. It strikes me that the note that is presented here would be improved if the duration of the lease was given as well because, obviously, if it is a short-term lease, such as a five-year lease, one would not be looking at a break clause. The extension on Adelaide Road is to 2024, so that is five years, and one would not expect a break clause on such a short lease.

Perhaps the witnesses could come back, through the Chair, to clarify when the leases started. I think of Galway, where we became very aware of the number of rented buildings. I think of one HSE building which was almost €1 million per year. I do not need to exaggerate because it was so high - more than €800,000 or almost €1 million per year for 25 or 30 years, and when they broke it, there was a penalty of €1 million. I am very conscious of rented buildings. Has there ever been a discussion at board level in regard to a permanent building or the purchase or construction of a building?

Ms Anna Shakespeare

I am not aware there has been. The nature of Pobal is that we are dependent on programmes of work that are finite of duration and nature and related to a performance delivery agreement and a service arrangement. Therefore, the continuance of Pobal into the future is something the board would definitely be mindful of when investing heavily in assets. It is certainly something we can take back to the board from this committee.

In relation to debts outstanding, I forget which page it was on. I was running in and out. Usually, I have it marked.

Mr. Seamus McCarthy

Is it the grants repayable?

Mr. Seamus McCarthy

It is on page 115. It is at the top of that page.

Pobal estimates that €1.7 million of this closing balance is irrecoverable and the remaining balance then is set out. Is the €1.7 million written off? Are these grants given out that were not used?

Mr. Brian Lehane

That is correct. The majority of those grants of €1.7 million go back quite a period of time to the early opportunities childcare programme and the national childcare investment programme. They have not been written off yet but we are liaising with the Department of Children and Youth Affairs regarding those debts.

It looks like they will be written off.

Mr. Brian Lehane

Potentially.

Up to one year, there is a debt of €1.3 million that is outstanding for one year. Is that right?

Mr. Brian Lehane

That is correct.

More than one year and up to five years, there is €1 million and more than five years, €2.1 million.

Mr. Brian Lehane

Correct.

Is that irrecoverable?

Mr. Brian Lehane

In our view, it has gone through our recovery process. A lot of those amounts relate to companies that either have been dissolved or are in liquidation, and I would suspect that the majority, if not all, of that could potentially be deemed irrecoverable.

Where does the fault or the gap lie that such an amount of debt is irrecoverable?

Mr. Brian Lehane

I suppose it needs to be looked at in the context of the total funding over the period since 2000 of approximately €2.4 billion. There are various reasons that would happen. Given funding commitments, organisations, as I said, have gone into liquidation. They have been dissolved. We go through a process in Pobal to seek recovery of those funds and at times we are successful in getting them, and at other times we are not.

Are there repayment plans in place for some of those?

Mr. Brian Lehane

For some of those, there would be repayment plans in place.

Mr. Brian Lehane

I do not have the full figures in front of me but I can certainly get that. However, there would be repayment plans in place.

Maybe Mr. Lehane could come back with that.

Mr. Brian Lehane

Yes.

In relation to chapter 16 of the Comptroller and Auditor General's report, there were a number of recommendations. I refer to delivery of the early learning and childcare programmes. I am focusing on the two recommendations that are directed to Pobal. Has Ms Shakespeare looked at those? Will she tell me where Pobal is with them? I refer to recommendation 16.2, that, in conjunction with the Department, "Pobal should implement a formal risk rating model ...". Recommendation 16.4 is also directly related to Pobal.

Recommendation 16.2 is serious enough, is it not? It refers to a formal risk-rating model, which was not in operation. It states that "Pobal should implement a formal risk rating model and use it to calculate the required level of compliance activity...".

Ms Anna Shakespeare

Apologies, I am trying to find it in my folder.

Ms Anna Shakespeare

There were two recommendations that specifically related to Pobal.

Recommendations 16.2 and 16.4. One is the risk and the other is in relation to a "reliable methodology".

Ms Anna Shakespeare

We have commenced that work with the Department. There is a compliance working group in place.

Since when has it been in place?

Ms Anna Shakespeare

That is in place since September.

The second question related to the further works that we have agreed as part of our programme of work. We have commenced a pilot of governance audits relating to an agreed programme of work with the Department of Children and Youth Affairs.

Let me go through those a little. In relation to a risk-rating model, Pobal carries out compliance visits. Is it based on risk assessment? It is good that the compliance is happening but it is not done in a methodical manner. The recommendation is that "Pobal should implement a formal risk rating model and use it to calculate the...compliance activity...". In regard to that relatively recent chapter, is Ms Shakespeare saying one step has been taken and a compliance working group has been set up?

Ms Anna Shakespeare

Absolutely.

Was it in September?

Ms Anna Shakespeare

In September.

Mr. Gordon Gaffney

If I could intervene on that, the Department in conjunction with Pobal takes cognisance of risk. Non-compliance is a big problem in the sector. In 2018-2019, we concentrated on those schemes with the highest risk of over-claims and focused their attention on those in order to minimise the level of over-claims that would be occurring had we not undertaken compliance activities in those areas.

I suppose at this point I am only focusing in on the two recommendations, specifically to see where we are with them. Returning to the committee that was set up in September, it is now December. What would have happened in the meantime?

Mr. Gordon Gaffney

The base of the national childcare scheme, NCS, has far stronger governance built in from the word go. The scheme has been designed to address weaknesses in previous schemes. Looking at working towards a formal risk-rating methodology is a difficult task and it will take time. With the introduction of NCS, it affords us the opportunity to do that on a proper basis.

In the meantime, compliance visits and compliance activities are targeted towards the areas of the highest risk. Under our formal risk-rated model, it has recognised that those schemes where we are targeting or focusing attention are the ones with the highest level of over claims.

I understand and welcome that. However, it is a specific recommendation. Pobal has accepted the recommendation. What has happened as a result? A committee has been set up with a view to setting up a formal risk-rating model. That will take time.

Ms Anna Shakespeare

It is a joint working group with the Department.

How many times have they met?

Ms Anna Shakespeare

My understanding is the group has met on two occasions, if not three.

I take it there are minutes of those meetings. At what stage does Ms Shakespeare envisage that the risk-rating model will be set up?

Ms Anna Shakespeare

I will have to confirm that to the committee, but at the earliest possible time.

Mr. Gordon Gaffney

I presume it would be for the next programme year. That is the most likely time at this stage, but as soon as possible.

What of recommendation 16.4, on the methodology?

Will Pobal send the committee a note on a possible timescale for that?

Ms Anna Shakespeare

I will, indeed.

Under recommendation 16.4, in practical terms, the report states that it was expected to result in audit checks that focus on verifying and improving governance standards. In November this year, the Department of Children and Youth Affairs agreed with Pobal that we would engage with governance reviews or governance audits of some early learning and care providers. It is a pilot programme of governance checks to a sample of a number of community-based services. That has commenced.

That is a good start and there is a pilot project. However, Pobal accepted the recommendation that "Pobal should develop a reliable methodology to enable it to estimate and monitor the underlying level of over-claims...". When will that methodology be in place?

Ms Anna Shakespeare

What we have done in response to the early years chapter from the Comptroller and Auditor General's report is we have completed an entire assessment of the potential over-claims and reached a figure where the over-payments number has been clarified. We are in the process of recouping a total value of €1.1 million on behalf of the Exchequer that resulted from those over-payments. We have €690,000 still outstanding as part of an agreed repayment process with providers and €400,000 has been received back on behalf of the Exchequer.

That is all very positive but there is an absence of methodology. There is a recommendation that Pobal has it. When will it be in place?

Ms Anna Shakespeare

My understanding is that we have a methodology and an approach in integrating and working with providers in an integrated case management system to ensure the sustainability of a provider while understanding that there will be a repayment piece.

Can I cut through this for a moment?

Ms Anna Shakespeare

Sorry, Deputy.

Maybe I am being unfair and maybe Mr. Gaffney or Mr. Geraghty will help me. I am looking at the chapter and at two specific recommendations, the first of which is that "Pobal should develop a reliable methodology ...". Is it perfectly reasonable to ask when that reliable methodology will be in place in relation to the over-payments?

Mr. Gordon Gaffney

We are working towards that.

Mr. Gordon Gaffney

I will have to get back to the Deputy on that. We take this report very seriously. We are working through since we received this report.

As pointed out, the initial pilot phase has happened and we will work through.

When will the pilot phase be completed?

Mr. Gordon Gaffney

I understand that it should be completed by the end of the year-----

The end of this year.

Mr. Gordon Gaffney

-----but I would need to check and see exactly where we are on that.

We cannot examine the minutiae but only governance and accountability. If recommendations were made and the Department accepts them, that is great and the job is done, but they have not yet been done and there is a little vagueness. I understand that it takes time and that the recommendations were made only recently but there is a certain vagueness in the response on when the items will be dealt with.

The Department might get the detail of the Vote for us or of where the Vote stands and send it to the committee. It might help us determine the timescale.

Mr. Gordon Gaffney

Certainly.

Pobal maps are a wonderful resource, but something has come to my attention and perhaps our guests can clarify it for me. I have asked the school whether I can use its name, and while I am not especially interested in doing so, it does not mind. A school in Galway cannot secure DEIS status, even though on every level it should have it. That is a matter for the Department of Education and Skills, but the decision is made based on Pobal maps, and the level of deprivation in the area and various other criteria. As a result, the school cannot secure DEIS status. Does Pobal just take raw data from the CSO or does it conduct its own analysis on the ground?

Ms Anna Shakespeare

I ask Mr. Murphy to answer this question.

Mr. Jerry Murphy

Pobal maps and the underlying deprivation index are based on CSO data but there is significant work in identifying the key criteria within those data, which need to be amalgamated into the deprivation index. That identifies a series of the key components that, as a total, point to the reality of the life of an individual community. The schools issue is separate and distinct from us.

I understand that. I have that much information and have not much time but have raised the matter to make a point. The school has written to Pobal on the matter and I can give our guests the details later if they wish.

Mr. Jerry Murphy

Yes, please.

The school highlighted, according to its analysis, the level of deprivation, the substantial number of non-national pupils and the language barriers, as well as other barriers. The great weakness for the school is that the Pobal map has put it in a place where it should not be.

Mr. Jerry Murphy

What we would always point out, which is central to this, is that Pobal maps define the community who live in an area. A service such as a school can be located outside a disadvantaged area but still serve the community. There are instances where advantaged schools are stuck in the middle of disadvantaged communities. There is a distinction between the kids in a school and the community we map. We would like to talk to the school the Deputy mentioned.

Is there a forum whereby the school can engage with Pobal to outline what is happening on the ground as a result of the categorisation? I have met representatives of the school and visited it, as have other Deputies. The categorisation does not reflect what the school experiences or the area. Is there a way that it can engage with Pobal with a view to having the agency take its concerns on board?

Mr. Jerry Murphy

If it is about funding that we administer, all our schemes always try to ensure we are available to talk-----

It is not about funding.

Mr. Jerry Murphy

Exactly. We will need to talk to the school and maybe communicate with the Department of Education and Skills because-----

It is about the Pobal map, and the indices or criteria used.

Mr. Jerry Murphy

In that instance, we need to talk to the Department of Education and Skills about the way it interprets the data there.

I thank our guests. We will revert to them on the matter.

The Department of Education and Skills will be contacted. To clarify, where are we leaving that topic?

Ms Anna Shakespeare

We will undertake to talk to the Department of Education and Skills on the specifics the Deputy raised.

It is a general issue. The point the Deputy made applies to other locations. A school might have students who are not from deprived areas but it might be located in a deprived area, and vice versa.

Ms Anna Shakespeare

Yes.

Mr. Seamus McCarthy

It may be that the index does not suit the purpose the Department of Education and Skills is trying to serve with its designation of schools. It is a question for the Department to be aware of that and what it means for what it is trying to achieve.

We will ask Pobal to talk to the Department of Education and Skills and to revert to us then.

Pobal might also engage with the school that wrote to it. It was quite recently.

The Deputy will provide the details.

Absolutely, although it has written directly to Pobal.

The Deputy's point could be used as an example, given that many of us will be aware of similar cases where the geographical area is too large, and where there are pockets therein that should conform to the categorisation but do not.

We might separate the services Pobal provides. Having talked to people on the other side who engage with it, although not from the childcare perspective, I note that its services are targeted and focused on outcomes, and that it certainly puts organisations through their paces to ensure there will be good outcomes. That is definitely a positive in Pobal's work on, for example, community employment schemes and community services. Nevertheless, in other countries, the delivery arm of such work is local government, whereas we have a centralised, fragmented system.

As has been noted, a plethora of organisations deal with childcare. There are not only the individual childcare providers but also the State providers. Local authorities provide planning permission and ensure that the ratio of childcare provision in buildings is as is set out in high-level policies. There are also county childcare committees, Tusla and so on. It is fragmented. It is interesting when one hears from somebody on a reception desk at a local authority that if non-Irish nationals ask for services, they expect the services to be delivered at the local authority level but they are not. We should accept that the service is fragmented to begin with. We are not especially good at organisation building.

How are Pobal's staff levels determined? There were 442 members of staff in 2018. In its briefing document, Pobal stated its current challenges have resulted from rapid growth over a short period. What certainty has Pobal about staff? What has been the profile of the staff growth over a couple of years?

Ms Anna Shakespeare

Does the Deputy refer to grade?

Ms Anna Shakespeare

For the period 2014 to 2018, inclusive, our staff numbers doubled, which was reflective of the programmes of work we have taken on on behalf of the Department of Children and Youth Affairs primarily. Much of that relates to Better Start, the access and inclusion staffing model, which is about mentoring and quality-supporting community childcare providers around improving and implementing the Síolta and Aistear curricula. Approximately 140 of the staff are related to that during that period.

While the figure will include administrative staff, what are the other disciplines?

Ms Anna Shakespeare

Does the Deputy refer to disciplines right across our staff profile?

I refer in particular to those that have resulted from the growth.

Ms Anna Shakespeare

It is mostly early years specialists because that is the nature of their work. They need to be able to speak with authority in respect of those childcare, early learning and care services. Some 140 of those staff would come with early childhood education qualifications.

Does Pobal have vacancies?

Ms Anna Shakespeare

We have a number of vacancies but we stay on top of matters through our resource allocation or requisition process.

So there is not a big shortage of staff at the moment?

Ms Anna Shakespeare

No. One of the bigger challenges we have is that the workforce is primarily female. We build additional staff into the workforce plan to allow for the normal leave requirements that arise in that gender profile.

One of the other challenges Ms Shakespeare describes is the perception of Pobal being overly bureaucratic. Does that come from both the childcare side and the community employment side or is there a difference in that perception or that reality?

Ms Anna Shakespeare

Pobal administers the programmes and the grant management in accordance with the programme rules that are defined, as a matter of policy, by the funding Department. While there will be different programme rules and guidance, the principle remains the same in the context of our role in verification, checking compliance, following through with audits or requiring agencies to submit documentation to Pobal to demonstrate the outcomes focus, on the one hand, and probity in respect of Exchequer funding, on the other.

On the compliance checks and reviews and the 3,747 contracts reviewed in 2018, Pobal found that 50% of the contracts that were reviewed were found to be the subject of either moderate or major non-compliance. Almost one in five, or 19%, were non-compliant in a major way. Can Ms Shakespeare describe what major non-compliance looks like?

Ms Anna Shakespeare

As we might have referenced in our earlier exchange with Deputy Munster, major non-compliance is the concept of a child being registered with a facility and the consequent non-attendance of that child in that early learning and care facility. Compliance visits are only conducted on funded programmes from the Department of Children and Youth Affairs. The early learning and care sectors are subject to compliance visits.

Are there repeat offenders? Is it a question, for example, that children are enrolled and then do not turn up? Is it up to the provider to then notify Pobal? What happens in such cases?

Ms Anna Shakespeare

It is exactly as the Deputy described it. Children are enrolled or registered with the programme and they may not attend. While the compliance visit officers look at a snapshot in time, they are proportionate in their review of that attendance. For example, it is only when it relates to a pattern of non-attendance that it becomes a non-compliance issue. We recognise the fact that family circumstances need to be flexible and that a mother or father might need to take a day off, for example. It is only when that is a sustained pattern in that snapshot period that it then becomes an issue of non-compliance. The registration is amended as a result of the compliance visit and non-compliance is addressed in that context going forward.

In some parts of the country, it will be difficult to find places in childcare facilities and then, for example, somebody signs up to a certain facility and does not send the child to it. The provider can then end up being non-compliant and, at the same time, somebody else requires the place. An element of fair play has to involved in this. Is there a financial penalty, for example, for people who are non-compliant having signed a child up or is it all on the provider?

Ms Anna Shakespeare

It is all on the provider. The money follows the child and the service is funded on the basis of the registration and the subsequent attendance of the child. If the child is not attending, the money does not flow. Before we reach that scenario, we work with the provider involved to support it to ensure and maximise attendance.

Does anything stand out in the context of certain locations? Is there any profile of deprivation involved? Does anything stand out which suggests other actions need to be taken?

Ms Anna Shakespeare

I will pass that question to my colleague, Mr. Jerry Murphy.

Mr. Jerry Murphy

Larger providers and the community providers were targeted last year. It is often the community providers, especially those in disadvantaged areas, that have particular difficulty with issue. This is often because they are working in difficult circumstances. It is not that there is a casualness on the provider's side. If, however, a provider is working in an area with a lot of families that fact particular challenges etc., as opposed to working in an area where family circumstances are generally more advantaged, it can be difficult. There are patterns and there are real challenges for particular sets of providers, which is why there is flexibility, the importance of which Ms Shakespeare mentioned.

Would Pobal give feedback to the Department on initiatives that might be taken or additional supports that might be required in order that providers do not find themselves in a position of non-compliance?

Mr. Jerry Murphy

Yes. Pobal and the Department have worked together, including being co-located in a single office in respect of the development of the national childcare scheme over the past two and a half years. A significant amount of the attention in the development of that scheme has been directed at learning from the existing schemes and amending the rules, the way matters work and the processes to try to bring more business reality to the scheme, including with this issue.

We all accept that margins are tight for providers. I echo some of the points that were made earlier in the context of not having delays and simplifying the process because the overheads of administration can be reduced. It is important to do that in respect of such an important programme. On that programme, primary school teachers will say that the differentiator that used to be noticeable, whereby people could afford to send their children to preschool, is not that noticeable now and they will say there is a strong educational advantage to the programme that is being run.

On the recovery process to which our guests referred, where a grant is repayable, what is involved? The longer a debt stands, the more likely it is that payment will not be made. Some of these debts have stood for up to one year, some for more than one year, some for up to five years and some for more than five years. I suspect that when it goes beyond five years, the chances of getting a repayment are almost nil. What is Pobal's recovery process and what effort does it put into getting early resolutions?

Ms Anna Shakespeare

I will talk about the early years sector where early learning, childhood and care providers may have over-claimed on the basis of attendance. We are mindful of the fragile environment in which early learning and care providers are working. We have an integrated case management team that works on an individual basis with each early learning and care provider to agree the repayment. In the current community childcare subvention programme, prior to NCS, and many individuals are choosing to remain on some of those legacy schemes. We have an opportunity, because there is a prepayment in advance, to work with that provider to agree a repayment plan that is proportionate and reasonable in circumstances where they may have over-claimed. In addition-----

Pobal deducts it.

Ms Anna Shakespeare

Yes, we do so in an agreed way with that provider to ensure that at all times the sustainability of learning and care for that community is the priority and that it is not harmed in any way. In addition, where providers find themselves in difficulty with that funding from a sustainability perspective, there is also a sustainability fund to which applications can be made. That goes through an approval process with the Department of Children and Youth Affairs and we go back and work with the provider involved in order to achieve full repayment in respect of the over-claim that may have occurred.

Do the other sectors feature at all in the overpayments?

Ms Anna Shakespeare

The funding model is somewhat different in early learning and care. The money follows the child and the registration, whereas it is done a little differently for programmes. I may hand over to Mr. Lehane to address the debt recovery process from a finance perspective.

Mr. Brian Lehane

For non-early years, we typically seek to get all the financial statements from these organisations to make sure that they are compliant with the payment of the grants each year. There is also a procedure when grants are not being paid. Three follow-up letters are issued to each of the grantees seeking recovery. Sometimes grantees will respond and we enter into a repayment plan with them. If others do not respond to us, they are put on a debtor management scheme and we feed that back to the Department for further action, whether it is a write-off or legal action.

Does anything in particular stand out? Is there anything substantial or are we talking about relatively small amounts?

Mr. Brian Lehane

It varies. There is a substantial amount outstanding for one but the rest are relatively small.

What is the substantial one?

Mr. Brian Lehane

I understand it is approximately €400,000. I understand that company is going into liquidation.

Is that a scheme or what is it?

Mr. Brian Lehane

I will have to come back to give the Deputy the full details of that, if I could.

Is it a specific provider?

Mr. Brian Lehane

It is a non-early years provider. It is a social inclusion protector.

Mr. Lehane might send us a note with as much as he can without disclosing the identity.

Surely if one provider owes €400,000, the witnesses can tell the committee who that is in more detail?

Mr. Brian Lehane

I do not want to provide wrong information. I want to double-check it.

We want the right information. It seems that there is only one. I could understand if there were 40. One group somewhere has overclaimed by €400,000. I will have my own questions in a minute but it seems that it would be very obvious to the witnesses who that was.

Can Mr. Lehane give us the name of the scheme or project that it relates to?

Mr. Brian Lehane

I cannot recall it straight away but I can come back to the committee on it.

Could one of Mr. Lehane's colleagues make a phone call? The letter that goes out says to have a facility to make contact to get further details. Can somebody make a call and come back to us?

Ms Anna Shakespeare

We will arrange that immediately.

That is under way.

Those are the questions that I wanted to ask.

We will try to get an answer shortly. I thank Deputy Murphy and call Deputy O'Connell.

I thank the witnesses for coming in. My first question relates to the charitable status of community crèches. The witnesses are probably aware that I was going to bring this up because Revenue was in here. I understand that the status is granted because it is an education provider, so it falls under that category. Why do community crèches have charitable status while non-community crèches that engage with, and are compliant with, the early childhood care scheme cannot avail of that? Is there a reason? I understand the not-for-profit element. It seems an unfair advantage. If there was a community crèche down the road and a private operator, it would be unfair for competition. Do the witnesses think that all crèches should be granted charitable status if they want it or that the way that we are going, with community crèches having charitable status, is okay? If there is a profit, do community crèches use surplus money to employ additional staff? Are they eating into their profits and, therefore, having better ratios and better services? Do they provide a better service than the person up the road who is trying to operate a business? It is about fairness in the system. In parts of Dublin, there can be a community crèche that appears to have an advantage over nearby private providers.

Ms Anna Shakespeare

I understand the Deputy's question as being whether Pobal has a view about all crèches being offered the opportunity to have charitable status.

If they provide education-----

Ms Anna Shakespeare

With respect, that is a matter for the Charities Regulator.

We had the regulator and Revenue in and they said it was basically Pobal's responsibility.

Ms Anna Shakespeare

When we engage with early year learning and care facilities, we ask them whether they feel they satisfy the criteria to register as a charity, which is primarily driven by their charitable objects as a company, and whether they engage in fundraising activities. That is my understanding of it.

Does Ms Shakespeare see crèches as education providers?

Ms Anna Shakespeare

Absolutely. Early learning and early years.

I know that many other people have spoken about these overclaims. It appears to me that children were registered in a particular crèche. They may only have required three days, from Tuesday to Thursday, but the crèche was claiming for five days or a version of that. I have been through the scheme. I have three children and happened to have them when this all came in. Private crèches are very specific about signing forms and when the child will be in. It is very easy to monitor who is in a crèche each week. I do not understand how this situation could emerge. There is €400,000 from this particular group. What is the total outstanding amount owed for overclaims?

Ms Anna Shakespeare

The overclaim for the 2018-19 period is €1.1 million.

What was the previous one?

Ms Anna Shakespeare

It was €313,000 in 2017-18.

What was it the year before?

Ms Anna Shakespeare

I do not have the figure.

What is the outstanding amount on Pobal's books?

Ms Anna Shakespeare

The outstanding amount is €690,000 with repayment in process for those providers that overclaimed.

Some €690,000 is left. There is some €1.1 million plus €313,000. Surely Ms Shakespeare knows how much money was overclaimed or fraudulently claimed?

Ms Anna Shakespeare

Yes. It is €1.1 million for 2018 and 2019, and €300,000-----

Ms Shakespeare must have the figure, a bit like the guy who owes €400,000. Surely there is a figure for the total overclaimed over the lifetime of the scheme?

Ms Anna Shakespeare

The actual overclaim was-----

With some €1.1 million plus €313,000 for the year before, what is the total?

Mr. Jerry Murphy

The Department of Children and Youth Affairs may want to speak on this. The Department received advice that the rules that were in place for the year prior to that were not ones which allowed clearly defined levels of overclaims, so we-----

Pobal let them off.

Mr. Jerry Murphy

The only overclaims that can be defined are for those two years.

The system allowed it before that.

Mr. Jerry Murphy

There was a lack of clarity which would have allowed-----

With respect, if one is claiming for a child for five days and the child is only in for three, there is not much ambiguity about that.

Mr. Jerry Murphy

The ambiguity was about the terms used within the rules. It was about attendance in some places but in other places, it was about registration. If a child was registered for five days, some providers would understand that to be acceptable.

Why does Mr. Murphy think there was such a jump in overclaims between 2018 and 2019? How did it treble in a year? Did somebody say that this is a great gig to be involved in, since crèches can be paid for the children without even having to have them in the place? Why did it jump so much?

Ms Anna Shakespeare

It related to the type of compliance review and the type of programme that was reviewed for the 2017-18 period. The lesson we learned was that with the agreement of the Department, the community childcare subvention programmes would be targeted in the 2018-19 period with a particular focus on the larger contract holders. The intention was to maximise that review to identify what the overclaims that have been mentioned might amount to.

We do not know the identity of the entity that owes €400,000. Do we have any idea what its turnover might be? What proportion-----

Mr. Jerry Murphy

We have information on that. I apologise for the confusion. It was an early years grouping, rather than a non-early years grouping. The total amount was €483,000.

That is basically €500,000.

Mr. Jerry Murphy

The name of the grouping was West Clare Early Years. It was a consortium grouping that managed early years provision across west Clare. It had facilities in Kilrush, Kilkee, Kilmihil and elsewhere.

The total for the whole group came to €500,000.

Mr. Jerry Murphy

The whole group went at the same time. This followed an audit by-----

Where did the whole group go?

Mr. Jerry Murphy

It was dissolved, basically.

Mr. Jerry Murphy

In the end, it went into liquidation. By the way, there were issues involved here that were referred to the Garda. When Pobal audited the group, it realised that there were significant problems with record-keeping. I need to be careful in this regard because the case was referred to the Garda. There were significant issues with record-keeping. When the board of the group considered these issues, it decided to cease activity and subsequently went into liquidation. This meant that any of the approaches to recovery that we would normally take was simply impossible.

Pobal is not going to get anything back.

Mr. Jerry Murphy

No, we will not get anything back.

It should just give it up.

Mr. Jerry Murphy

Yes.

There is no point wasting any more money. We handed over €500,000 to a consortium in County Clare to run crèches.

Mr. Jerry Murphy

To run a whole series of crèches.

It overclaimed and the system allowed it. We are able to go back on a couple of years only.

Mr. Jerry Murphy

No. We cannot go back further than those years. I cannot give the Deputy a guarantee that the problems in these areas did not begin before the years in question. This was a classic case. Obviously, such amounts of money are very significant. I remind the Deputy that the major capital investment that was made by the State in some cases resulted in a significant set of crèches in west Clare that was not previously available. Our role was to engage with local communities and groups to ensure these facilities were brought back into use as quickly as possible. That has resulted in a series of contracts being put in place. New providers in each location are using these facilities and making these services available to the people of west Clare.

Do we know what the turnover of the group in west Clare was in this two-year period? I am trying to find out how significant a proportion of its total turnover the €483,000 accounts for.

Mr. Jerry Murphy

In the interests of accuracy, it would probably be better for us to go away, put those figures together and come back to the committee with them rather than attempting to provide them now.

Could we get a ballpark figure?

Yes. If its turnover was €1 million, half of it was fraudulently obtained.

Mr. Jerry Murphy

I expect that between the five centres, the turnover was significantly more than that. We would not look at the records because it is a series of centres. I think it would be much safer to come back to the committee with an accurate figure.

I think we could do with a very detailed note on how something like this happened. Almost €500,000 that should have been used to help children to be educated has gone missing, essentially. It was overclaimed and was not used for the purpose it was supposed to be used for because the children were not even there. I would like to ask about the other entities that are going to pay back money. How can they pay back money if they are non-profit entities? How are they going to manage the reality of this? My understanding is that there is not much margin in this business for childcare providers that are legitimately claiming for children who actually exist in the crèche. If this money is going to be paid back, how will that be managed by non-profit entities? Is the reality that none of this money will come back?

Ms Anna Shakespeare

Some €400,000 has been received back, and a further €690,000 is expected back, from agencies that are in a repayment plan managed through Pobal and its integrated case management function. As I have said, we are very mindful of the need to work with the provider to repay, while balancing that with our duty to ensure the early learning and care facility is sustainable into the future. We work with providers across a number of strands to improve governance and the service. There is a general stream of seven different types of support that we provide to providers when they are in repayment mode. We are very mindful that we have agreed a sustainability fund with the Department in circumstances in which there are going concerns, or might be going concerns.

I can understand the conundrum here. Pobal really needs the childcare providers. If it had another option, it would not generally deal with the provider that took it for a ride for two years. We need the places because there is a shortage of places. It seems to me that because these operators have the places, they have been let away with it to some extent. The repayment process seems to be quite passive. If this was in the private sector, they would not get away with this sort of carry-on. This is fraudulent, as far as I am concerned. If someone is overclaiming in respect of children who are supposed to be getting a service, that is clearly and obviously fraudulent. I have had to sign forms for children as they have gone in in the morning and as they have come out. When crèches are inspected at any point, the headcount needs to be right. That brings me on to my next question about the 13 inspections that took place before the "Prime Time"-----

I would like to ask a question about this matter before the Deputy moves on from it. Where in Pobal's accounts is the amount that is due shown?

Ms Anna Shakespeare

This relates to the 2018-19 period.

The accounts in question cover the period up to the end of December 2018.

Ms Anna Shakespeare

Yes.

Where in the 2018 accounts are the amounts that are due to be paid in respect of these overpayments identified?

Ms Anna Shakespeare

The identification of those amounts did not occur until 2019. They should feature in our 2019 accounts.

I have been trying to find this big figure, but I have not found it. Ms Shakespeare is telling me that it is not in the accounts that were laid before the Oireachtas the other day.

Ms Anna Shakespeare

I apologise.

Okay. Let us clarify this point.

Mr. Brian Lehane

As the contract is with the DCYA, these refunds would not be-----

To whom is the money due to be repaid?

Mr. Brian Lehane

It is due to be repaid to the DCYA.

I ask Mr. Lehane to spell that out for the public.

Mr. Brian Lehane

Sorry. It is the Department of Children and Youth Affairs.

The Department of Children and Youth Affairs is owed this money back.

Mr. Brian Lehane

Yes.

Does it come through Pobal at all? Does it come in to Pobal and go on to the Department of Children and Youth Affairs? When the money is being repaid, where does the cheque go? Who gets the cheque?

What bank account are the repayments going into?

We have been told that there is a repayments system. Is that system with Pobal or with the Department of Children and Youth Affairs?

Ms Anna Shakespeare

Perhaps if I can clarify this matter. As I said to another Deputy, the manner in which the payments are recouped involves a reduction in payments going forward.

The money is taken out of the subvention.

Ms Anna Shakespeare

Yes.

It is taken out of the following year's payment.

Ms Shakespeare has said that €400,000 has been recovered and €690,000 has been promised. The total is €1.4 million. All we are missing is €310,000.

Ms Anna Shakespeare

Okay. The total for the 2018-19 period is €1.1 million, of which €400,000 has been recouped. My understanding is that the majority of the total of €313,000 for the 2016-17 period has been recouped.

Okay. Given that Pobal is not in command of the repayments and recoupments, can we get the Department to send us a detailed note about the debt we are talking about?

I would like to add that deductions are being made in cases in which providers are continuing to operate.

What about the providers that are not continuing?

The Deputy is referring to providers that have been liquidated.

They might have been liquidated or they might simply not be continuing in business. What happens in such cases? I understand the process that applies in the cases of providers that are continuing. Surely there are others that fall into another category.

They may have wound down or whatever.

Ms Anna Shakespeare

Are the Deputies asking about recouping money from companies that have closed down?

They are asking about money that is due to be repaid, for example as a consequence of overpayments having been made. It could be due back for a variety of reasons.

Ms Anna Shakespeare

The only overpayment arises in relation to early childhood programmes. There is no overpayment which arises in the context of-----

We are talking about overclaims, rather than overpayments.

Ms Anna Shakespeare

Apologies. Overclaims do not arise under the other programmes that we manage.

Could it arise in the Tús or rural employment schemes?

Mr. Brian Lehane

If there was a change of circumstances, there might be a little bit to be paid back, but that would be a matter for the Department of Employment Affairs and Social Protection.

What was the total spend on the early childhood scheme in 2018-2019? How much was paid to crèches?

Mr. Brian Lehane

It was approximately €500 million.

I refer Deputy O'Connell to page 103 of the accounts, which sets out a figure of €506 million in that regard. The spend on the early years programme was €484 million. I ask the witnesses to forward a note on the matter to the committee.

Mr. Gordon Gaffney

Yes, for the purposes of clarity, because we are getting a bit confused in this sphere. The Department did focus in on the CCS programme. That is where the jump between the two years in overclaims has occurred.

Will Mr. Gaffney repeat that point, please?

Mr. Gordon Gaffney

That is where the jump and identification of overclaims occurred.

The overclaims were identified because there was a focus on the scheme for 2018-2019. It is not necessarily the case that in the previous year there was not as much overclaiming, rather it is that the Department did not look into that year as forensically as it did in respect of 2018-2019.

Mr. Gordon Gaffney

There was more of a focus on it in 2018-2019, having evidence of which schemes were the risker schemes. We have already-----

Based on what Mr. Gaffney said, there is a risk, potentially, that the same amount of money was overclaimed in 2017-2018-----

Mr. Gordon Gaffney

It is possible.

-----but the Department did not focus on it. The Department decided instead to focus on 2018-2019. Previous to that, the system allowed such practices. What advice was given to suggest that the Department had no recourse pre-2017? From where did that advice come?

Mr. Gordon Gaffney

The Chief State Solicitor's office has reviewed the cases in that instance and the advice is that the scheme rules were not sufficiently robust to proceed.

What happened since 2017 to make the rules more robust?

Mr. Gordon Gaffney

The schemes were improved and clarity was brought to bear.

What does Mr. Gaffney mean when he says "clarity was brought to bear"? I presume there was an amendment of the schemes in order that clarity was brought to bear.

I would imagine the child care services were told they could not claim for children that are not on their books.

Ms Anna Shakespeare

The programme rules and guidance under which Pobal operates were improved and clarified by the Department.

Did that require a statutory instrument?

Ms Anna Shakespeare

No.

It was done at administrative level rather than statutory level.

Ms Anna Shakespeare

Yes. It is the clarification to which Mr. Jerry Murphy spoke earlier.

To be clear, the flaw was in the administration, not in the statutory framework.

Ms Anna Shakespeare

Yes.

Mr. Seamus McCarthy

It was a design flaw in the scheme.

It was possible, so it happened.

Mr. Seamus McCarthy

In regard to the amounts of money, I would characterise the overclaims that are identified as detected overclaims. The point I was making in the recommendation was around the need for a methodology that would allow for the identification of the underlying level of overclaims. In other words, how much should one go after and design one's compliance work specifically to try to identify where the greatest risks are and what is the best way of trying to identify those. The figure that is known may not be the full total.

That is my point. We are only being made aware of the ones that were chosen for examination. This is a very expensive but brilliant scheme that helps children. However, it is sad that like previous schemes, it is flawed. Given current technology, PPS numbers and so on, it is hard to understand that this could happen and so much money could be taken out of the system. Do we have any information with regard to how the money was being spent or is that a matter for the Garda? Why did the services need the extra money? Is it that these were private companies, as in the case in Clare? Where was the money spent? If it was spent on children, that would be grand. Do we have any information with regard to how it was spent?

Mr. Jerry Murphy

Is the Deputy asking about the west Clare incidence?

All of the services involved, but particularly the one in west Clare.

Mr. Jerry Murphy

That significant incidence is very different, in our point of view, from the vast majority of other cases. It was passed to the Garda because of concerns we had about where the money went.

Ms Anna Shakespeare

To allay some of the concerns the committee might have, the programme of work from a compliance perspective was agreed with the Department at the front end of the academic years going forward such that we could be more preventative in our work around identifying registrations and non-attendance in that context.

Can we expect that in the next set of accounts there will be no overclaims, or relatively none? Has Pobal sufficiently informed the providers that this cannot happen again such that another chunk of money will not be overclaimed?

Ms Anna Shakespeare

There is much greater awareness in the sector and a level of unrest as well associated with that.

In what context is there unrest?

Ms Anna Shakespeare

In the context of the repayments and, as mentioned by the Deputy, the regulatory activity in the sector. It is a sector that is under development. We want to make sure that we support it sufficiently because, as rightly mentioned by the Deputy, the children are citizens of Ireland and our future. At the same time, we want to ensure probity for public money and recoupment where there has been an attendance and registration differential. One of the flexibilities that will be built into the national childcare scheme makes this much clearer. As we go forward in fully implementing the national childcare scheme across all the early learning and care providers, it builds in a degree of flexibility where mam and dad are not available to drop the child to the crèche or whatever for family reasons and so on. It will also allow for greater oversight and greater compliance as we move forward with that programme.

On the Tús scheme, am I correct that a person can only participate in it for 12 months?

Ms Anna Shakespeare

Yes.

I have received a number of representations regarding the scheme. I recently attended an event which was a celebration of the work of Tús. It has been brought to my attention that for many people who engage in this scheme it takes three or four months to familiarise themselves with the work and that on completion of their time on the scheme they tend to end up in jobs in the retail sector, including charitable shops and so on. Many of the participants are people who come from complex situations and have not managed to get employment and are given this pathway to work. However, the scheme expires in 12 months, which is relatively short given it takes participants three or four months to become familiar with the work. I have raised with the Minister for Employment Affairs and Social Protection, Deputy Regina Doherty, a request for the scheme to be extended to 18 months or two years such that participants can remain in it and be more useful or move to another job. The view of Tús and those who take on participants under the scheme is that the period of transition is too short. In many cases they are just settling in when they are moved somewhere else. Is there scope to extend this scheme?

Mr. Jerry Murphy

It is a policy issue for the Department-----

Mr. Jerry Murphy

-----even though we administer it. It is a pattern we are seeing as well, particularly now as the economy has improved. The people who avail of many of these schemes have greater depths of need than would have been the case three or four years ago. From our point of view, there is very good reason to review the design of a number of schemes to try to reflect the greater intensity of need among individual participants.

Many of these people just need somebody to hold their hand as they get back into the system. It is regrettable for the person who was long-term unemployed and got this opportunity that there is no scope to extend it.

On mandatory vaccinations, I understand there are constitutional issues around making vaccination mandatory. There does not appear to be a constitutional issue with child care providers insisting that children registered in a scheme must be vaccinated. Have the witnesses had any discussion with the Department of Health on this issue?

Ms Anna Shakespeare

No.

It is an issue that needs to be addressed into the future in light of the recent outbreak of mumps and the measles epidemic. The UK has lost its measles-free status. In the context of the administration of the child care schemes, can we insist that all children registering with a child care provider that is in receipt of State funding must be vaccinated? I do not believe there is a constitutional arising in that regard.

In regard to the 13 inspections that were carried out prior to the "Prime Time Investigates" programme, it is a matter of concern that premises would be inspected and obvious welfare issues would not be identified.

Inspectors can sometimes look in the wrong place. Has Pobal updated or changed its inspection regimes to look in the right places? If a certain amount goes into a State scheme, there is an expectation, especially with our history in Ireland, that we would have the most robust child protection and we would not return to anything like the past. It is very disheartening to see many parents so distressed. It is a major decision to go back to work and put one's child into a crèche. Has Pobal made its inspections more robust and fit for purpose so that it can weed out problems and we do not have another "Prime Time Investigates" incident?

Ms Anna Shakespeare

I could answer that in a couple of ways. The Better Start access and inclusion model, AIM, service, which we host on behalf of the Children and Youth Affairs, does not have a statutory basis. It does not run an inspection regime. The inspection regime for early learning and care services is managed and run by Tusla and the Department of Education and Skills. This goes back to the point made by Deputy Cassells about fragmentation and providers' experience in that context. However, the primary role of the Better Start AIM staff is to support an active implementation of service improvement in the context of early education and care around the Síolta and Aistear curricula. In addition to that, their job is to carry out a classroom-based assessment to identify services that might benefit from additional funding associated with AIM, that is, cases where children with additional support needs might benefit from additional supports. The work of the Better Start AIM staff employed by Pobal is very different from the statutory function undertaken by Tusla and Department of Education and Skills staff. Does that answer the Deputy's question?

It does. Ms Shakespeare is saying it is their problem, not Pobal's.

Page 88 of Pobal's accounts refers to financial irregularities. Does that include the €400,000 referred to by Deputy O'Connell?

Ms Anna Shakespeare

It does.

How many cases does that paragraph refer to?

Ms Anna Shakespeare

Is Deputy Connolly asking for the number of cases that have been referred to An Garda Síochána in 2018?

Ms Anna Shakespeare

I will have to come back to the committee to clarify that.

There is a paragraph on financial irregularities. I am asking for the number of cases. What is the total amount? What is the age profile of these cases? I want the details. There are financial irregularities. Pobal has been in communication with An Garda Síochána. How many cases have there been? What is the value of what is outstanding? This is basic stuff. It is included in the accounts. I am asking Ms Shakespeare to clarify that paragraph from her knowledge.

Ms Anna Shakespeare

I cannot answer that question at this point in time.

Can anybody present do so? Can the Department or anyone else answer?

Ms Anna Shakespeare

I am afraid we are not in a position to assist the Deputy at this point in time. We will have to come back to the committee. My apologies. Alternatively I can make a call.

This goes back to my initial point. Clearly the systems were not in place. How were these financial irregularities detected, in whatever number of cases there were?

Ms Anna Shakespeare

They were detected during audits or verification visits conducted by the compliance, audit and risk staff of Pobal.

Ms Shakespeare can tell me that but she cannot tell me the number of cases.

Ms Anna Shakespeare

I cannot say how many cases.

Ms Anna Shakespeare

Due to a lack of knowledge on my behalf.

That is all right. However, if Ms Shakespeare can tell me the result of audits, she must have some information.

Ms Anna Shakespeare

Some 17 audits were completed in 2017. Some of the debtors we are talking about recouping go back further than that.

This is essential information.

Ms Anna Shakespeare

I do not disagree.

Does Ms Shakespeare have any idea of the total value? How many cases have been referred to An Garda Síochána?

Mr. Jerry Murphy

The one piece of information we can give the Deputy now is that fewer than five cases have been referred to An Garda in the past three years. We will find further details.

What does "fewer than five" mean? Does that mean four and a half?

Mr. Jerry Murphy

I apologise. Of course we would much prefer to give details. We are making contact now, and we hope to be able to answer before we break. We will certainly come back immediately after. The Deputy is absolutely right. It is a critical detail that we should be able to supply.

It is critical that Pobal is learning. Mistakes can be made. Things happen; people do things wrong. However, the question is how often that happened and what has been learned from it. One specific case has been highlighted, with €400,000 at issue. Could the overall figure be €1 million? I am just picking an arbitrary figure.

Mr. Jerry Murphy

It may be important to point out that the management carries out financial controls in every case. If we refer an individual case to An Garda, it is because there is something completely outside of our control that we-----

I understand all that but the details are important at this point, if only by way of reassurance. The witnesses cannot enlighten us any further at this point.

Mr. Jerry Murphy

We cannot say more about the number of cases that were reported to An Garda Síochána. However it was certainly fewer than five. We can clarify that before we finish today. Financial verification visits were completed. In 2018, some 157 visits were completed in respect of 211 grants, in addition to the 17 audits.

I read all that. We have only a few minutes, so committee members have to read the material and ask our few questions. I am unhappy that the witnesses are not able to elaborate on that paragraph at this point. I ask them to come back and elaborate on the financial irregularities, with a full profile of the amount outstanding, the ages of those involved and what Pobal has learned. Are there other similar cases? These questions should be answered today.

I have a question regarding agency staff. This has come to my attention, not with regard to Pobal but with lots of organisations. Does Pobal employ staff through agencies?

Ms Anna Shakespeare

Does the Deputy mean recruitment agencies?

Ms Anna Shakespeare

We employ a very small number of staff - fewer than three - in this way.

Is the agency paid a fee for placing those employees with Pobal?

Ms Anna Shakespeare

Yes. We have also outsourced part of the national childcare scheme, namely the parent call centre, to an agency called Abtran as part of a contract.

Can the witnesses give us details of that?

Ms Anna Shakespeare

We can.

Just three staff members are employed through agencies.

Ms Anna Shakespeare

Yes.

Is that all? Why did Pobal have to go through an agency for those staff members but not for the rest?

Ms Anna Shakespeare

They are typically IT staff. We use a recruitment agency to assist us in recruiting particular grades of staff that are very hard to recruit in the normal workforce.

Did Pobal go through a procurement process before contracting the recruitment agency?

Ms Anna Shakespeare

Absolutely.

I have two final points. I have tabled several parliamentary questions about a report on Pobal's charitable status. The Department may be able to enlighten me. A report was carried out and never published.

Mr. Gordon Gaffney

I am terribly sorry but I am unaware of that. I will certainly come back to the Deputy on that.

I am being vague about it because I did not bring the details with me. However, I have tabled several parliamentary questions.

Ms Anna Shakespeare

The report is available on Pobal's website.

That is great. My final point concerns the bike to work scheme. How many people avail of that? I refer to page 113, which addresses payroll deductions, the Revenue Commissioners and the bike to work scheme. I am interested to know how many people are using it.

I would like the note we receive after the recess outlining the total value of the irregularities to include the total number of organisations involved. Could we have their geographical locations? Are they predominantly located in a particular part of the country? I would also like to know how many of the 157 visits Ms Shakespeare mentioned found non-compliance. Is it always community crèches that have overclaimed or was there an equal number of cases in the private sector? It would be interesting if these cases were predominantly community crèches. The rules seem to be clear for one group and not for another. That is what I am getting at.

I wish to ask about the call centre. I am aware of that call centre because there are several entities whose calls go through it.

What work is done by the call centres?

Ms Anna Shakespeare

They handle queries and calls relating to the implementation of the national childcare scheme to assist parents in making an application online for their subsidy for their child or children, as the case might be.

Is it the financial side?

Ms Anna Shakespeare

It is a helpline. So it holds the hands, in some circumstances, of parents who wish to make an application and need some of that support.

Does Pobal have them on contract?

Ms Anna Shakespeare

Yes.

What is the duration of the contract?

Ms Anna Shakespeare

Three plus two in the context of procurement, having procured for it.

Is there a particular element of training?

Ms Anna Shakespeare

Yes. There is training to handle the calls, handle complaints and there is also a complaints and appeals process that will be managed as part of that.

Do they manage the appeals process or does Pobal do that?

Ms Anna Shakespeare

We manage the appeals process but the appeals will be heard by external independent individuals and we have gone through a recruitment process for that.

Are they part of Pobal's staff?

Ms Anna Shakespeare

The appeals officers, as I understand it, will be on a fee-for-service basis so as and when required.

The second preschool year was quickly announced and there was a scaling up issue. Does that kind of a decision present Pobal with extra difficulties in terms of Pobal scaling up along with an announcement being made?

Ms Anna Shakespeare

Pobal makes every effort to be the servant of Government in that regard. When a policy decision is made we do our utmost to deliver on it within the shortest timeline possible. I am not going to say that there are not challenges with that but we certainly work with the funding Department to make sure that we are in a position to deliver, as and when required.

Is Pobal likely to be asked in advance? Recently we had this with an organisation that delivers a service or oversight. Essentially, there were teething problems because inadequate consideration was given to what would be required to deliver a service within a defined period. Does engagement take place with Pobal?

Ms Anna Shakespeare

There absolutely is engagement, Deputy. As part of the performance delivery agreement and the agreement of the programme of work, for example, with the Department of Children and Youth Affairs, they are very clear with us what their expectation of us will be in 2020. Equally, with our lead Department, the Department of Rural and Community Development, we have an agreed signed programme of work for 2020 relating to the deliverables and what they expect us to deliver for it. That is how we manage our work as best we can. We absolutely aim to be as responsive and agile to Government demand as required.

Pobal has 442 employees. What is the gender breakdown approximately?

I am asking the Deputy's questions now.

Ms Anna Shakespeare

I have the information to hand in my pack. The gender split is 357 women and 129 men as of 30 September.

We are finally getting it right.

But we have too few captains.

I ask the same question in respect of senior management posts. Pobal has salary scales of over €80,000, €90,000 or €100,000. What is the gender balance of the top eight or ten senior management posts for whichever figure?

Ms Anna Shakespeare

There are 11 members of the senior management team, the executive management team, of whom four are women.

So the majority are in the direct opposite direction when it comes to senior management.

Ms Anna Shakespeare

But the chief executive is a woman, Chairman.

Good. We know that is worth three men on any day. Of the 11 members, are they employees and not board members or anything else?

Ms Anna Shakespeare

No, they are employees.

I heard the ad that started on the radio today. It affects Pobal as a witness has said that Pobal processes the payrolls for Tús, the rural social schemes, etc. We all know that there will be no P60s at the end of year. People on Tús or community employment schemes would not have access to computers on the job. How will they get their details? How does Pobal plan to help them get their payroll year-end information?

Ms Anna Shakespeare

I have to ask the chief financial officer about that question. He is in a position to answer that.

Mr. Brian Lehane

I am not. Actually, it is a good question and I do not have an answer but I would agree to check for the Chairman.

I worry about this. We had Revenue here last week.

Mr. Brian Lehane

Yes.

We all know that the crunch is going to come when people will look for P60s come January or February.

Mr. Brian Lehane

Yes.

We know the P60s will no longer be available and 1 million letters will be issued to every employee and pensioner.

Mr. Brian Lehane

Yes.

I have heard the first ads. The Revenue ad advises people to look up myAccount and they will get their details.

Mr. Brian Lehane

Yes.

On the group that Pobal employs - the Tús workers and rural employment scheme employees - the one thing I am sure about is that they do not have access to computers on the job. What arrangements will Pobal put in place to ensure that the employees it pays can access their year-end summary payroll information?

Ms Anna Shakespeare

We have been implementing e-slips with the implementing bodies for the period 2018. My understanding is that 86% of them have been using e-slips so the digital slips.

Is that option available on people's phones or laptops?

Ms Anna Shakespeare

Absolutely. The digital age, as the Chairman has said.

So 14% of the employees have not bothered logging on yet. Is that right?

Ms Anna Shakespeare

That is as of 2018. What the picture is absolutely for 2019, I am not 100% clear. Sorry, it is 68% and not 86%. I gave the wrong figure.

Are one third of the employees freewheeling?

Ms Anna Shakespeare

In 2018, there were two thirds that were accessing e-slips.

I ask the CEO to send us an up-to-date note.

Ms Anna Shakespeare

Absolutely.

I mean in due course when the CEO replies to the other requests.

Ms Anna Shakespeare

Yes. Thank you, Chairman.

I know there will be problems in the new year for so many people. Many of the people in that category of employees are not office based. The Tús and rural employment scheme employees are probably the least able to access a computer facility in the course of their work so I ask employers to help.

Ms Anna Shakespeare

Sure, yes.

The CEO understands my request.

I wish to refer to the legacy capital programmes that are mentioned on page 20 of the briefing note that Pobal sent to us. It states:

Pobal continues to manage contractual commitments under the following programmes:

Early Years Capital from 2012;

National Childcare Investment Programme 2006 to 2011; and

Equality Opportunities Childcare Programme 2000 to 2006.

Some of those schemes have been completely dormant for over a decade. Please send us a note on what Pobal must do with them. Please outline what contractual commitments are still in place in respect of these schemes that have finished 13 years ago.

Ms Anna Shakespeare

Around the legacy capital?

Yes. Does anyone know? Pobal must know approximately. The CEO is only a few weeks in the job and I do not expect her to know all of the answers. Does some of the CEO's colleagues know?

Mr. Jerry Murphy

Is that the type of work, Deputy, that we are still involved in?

I have read Pobal's note on page 20. What does it mean?

Mr. Jerry Murphy

If I might give an example, we talked about west Clare earlier and the fact that we had to keep those centres open. One of the tools that we had there was the continued management of the leans that would have been place around some of the early years capital, grants that had been made to fund some of those centres. There is that. There are elements of ongoing work of that nature. We will come back with a note.

Send us back a note on each one of the three that have been mentioned. When I see contractual commitments being referred to in respect of schemes that closed over a decade ago I just want to know what it is about-----

Ms Anna Shakespeare

Yes.

-----and the financial commitment. If there is a contractual commitment I need to know what that is about but I need a price tag at the end of each of them. I would expect that it is small but I do not know and that is why I am asking.

Do county childcare committees still exist? Does Pobal deal with them?

Ms Anna Shakespeare

They do and there are 30 of them.

I did not have time to read everything. Reference to the committees did not jump out at me in some of the documents but I am sure they are mentioned somewhere in the 150 pages. What is the role of the childcare committees vis-à-vis Pobal? Please tell me what they do that Pobal cannot or vice versa. What is their role?

Ms Anna Shakespeare

We fund the community childcare committees on behalf of the Department of Children and Youth Affairs. There are 30 county childcare committees nationally. They will form part of the major operational review referenced by the Department of Children and Youth Affairs.

Pobal deals directly with the providers so please explain their role.

Mr. Jerry Murphy

While we deal directly with the providers, there is a series of supports that are much better dealt with locally. We contract with the county childcare committees and agree a work plan with them. The idea is that they are locally-based groups that are immediately available to childcare centres. In terms of the roll-out of the national childcare scheme, for example, we trained all of the county childcare committees who in turn train all of the local providers. The idea is that if a local provider needs to pick up the phone about an issue, the county childcare committee should be the first point of contact. Issues get escalated to us if they are of a more difficult nature.

Pobal funds them but it sounds as if they are part of the organisation.

Ms Anna Shakespeare

They are agents of the Department of Children and Youth Affairs on the ground, in reality.

Pobal funds them completely. Is that correct?

Mr. Jerry Murphy

We contract them.

Do they have any other sources of funding?

Mr. Gordon Gaffney

As far as I know, all of their funding comes from the Department of Children and Youth Affairs.

I ask the witnesses to send us a detailed note and breakdown on these committees. I am sure some of them are quite big while others are quite small. People talk about all of the direct engagement they have with Pobal and I was just wondering where the county childcare committees fit into the picture. I ask for a detailed note on that.

In the context of the ECCE scheme, does Pobal have a role to play with regard to homeless children? How do they get their entitlements under the scheme? Homelessness must pose a particular difficulty.

Ms Anna Shakespeare

The role that we play in supporting homeless children is in the context of their registration in an early childhood learning and care facility.

Obviously registration must be a difficulty if children are moving from hotel to hotel and from one area to another. That must be an issue on somebody's desk.

Ms Anna Shakespeare

Yes.

Mr. Jerry Murphy

It is an issue and there was a particular sub-programme of the main programme-----

I do not see it referred to anywhere which is why I am asking.

Mr. Jerry Murphy

It is not identified as a programme for us but there is a sub-programme specifically aimed at funding for that group of children.

I ask that Pobal sends us a note on that.

Ms Anna Shakespeare

It is the community childcare programme for refugees and children who are in transitional arrangements.

What does transitional mean? Does transitional refer to their accommodation?

Ms Anna Shakespeare

It means they are homeless or living in temporary accommodation. There is a particular fund there.

To clarify, Pobal is going to send us a note on both groups.

Ms Anna Shakespeare

Yes, absolutely.

We want a note on people seeking international protection and people who are homeless at the moment. We want to know how they access services. People who are moving from one hotel to another must be very vulnerable.

Ms Anna Shakespeare

If I recollect correctly, there were 750 children who received funded services under those two programmes.

That is good to hear. Ms Shakespeare should say that out loud. It is good to hear that they are accessing services because people would be worried that they are not. That really is good to hear.

I will turn now to page 90 of the accounts. We are dealing here with non-compliance with procurement rules, an issue with which this committee deals all of the time. Reference is made to a sum of €693,000 for software development, €350,000 for ICT business analysis and €105,000 for project management. We want a detailed note on all of those. The headings are included in the accounts but we want detailed information on each of these items. We want to know how the expenditure arose, why it arose, whether the contracts have ceased and where we are in 2019 in relation to same. The Committee of Public Accounts has been addressing similar issues with every organisation that has come before it in the last six months. We want a detailed note.

Ms Anna Shakespeare

Yes and as I said in my briefing note, we have a full corrective action plan in place as well as a compliance improvement plan and revision to documents.

Yes, Ms Shakespeare said that earlier but we want to get a more detailed note. I am sure she can understand why.

Ms Anna Shakespeare

Absolutely, yes.

Does Pobal have a suggestion box for employees or anything like that?

Ms Anna Shakespeare

Yes, we do.

Can employees get a financial reward if they make suggestions? I am thinking, for example, of people recommending family or friends for employment. Is there any incentive scheme in place that rewards employees?

Ms Anna Shakespeare

We have a suggestion box for all employees so that we can hear about how to improve our services and about their experience of working with us. We recently brought to our partnership committee, which is our employee engagement committee, a proposal to incentivise employees below a particular grade to come forward with candidate suggestions. This would be a cost-reduction measure in the context of recruitment agency fees. Obviously the normal rules would apply and the individuals in question would have to go through a thorough and robust recruitment process. The candidates would not have an edge as such and that is made extremely clear to everyone. A small token is given to the individual in the context of incentivising-----

A small token is given to the person who nominates the candidate. How does that work? If someone nominates a friend for a job, how does it work? To whom does the person make the suggestion?

Ms Anna Shakespeare

The suggestion is made to the human resources department.

Would the human resources department then send out an application to the person nominated?

Ms Anna Shakespeare

The person would be invited to submit a curriculum vitae. He or she may or may not make the shortlist.

What does the small token amount to?

Ms Anna Shakespeare

I reviewed the policy a few months ago and-----

Is it €10, €100 or €1,000?

Ms Anna Shakespeare

It is €1,000.

Wow. That is not too small.

Ms Anna Shakespeare

That is only in proposal at this point in time.

What is that subject to?

Ms Anna Shakespeare

It is subject to tax-----

Mr. Jerry Murphy

It is subject to tax and to performance. It is paid in two tranches. A sum of €500 is paid on recruitment and after the probation period, the other €500 is paid.

Is that paid by way of a voucher or is it paid in cash?

Mr. Jerry Murphy

It is paid in cash, with the tax deducted.

With the tax deducted-----

Mr. Jerry Murphy

Yes, it is paid in cash, after tax. The sum of €1,000 is the gross amount.

Has the Comptroller and Auditor General come across similar schemes elsewhere? Would this be normal?

Mr. Seamus McCarthy

It is unusual.

Right. I ask Pobal to send us a note on this policy.

Ms Anna Shakespeare

At this stage, it is still a proposal that we have brought to our partnership committee-----

It probably exists at the moment in some form and Pobal is now formalising it. My interpretation of what I am hearing is I suspect there is a scheme in place that is now being formalised.

Ms Anna Shakespeare

It is not in existence at this point in time. It has not been acted upon. It is a proposal that we have reviewed with our partnership committee.

Who came up with the proposal? I have not heard much about this kind of scheme in the public service. I ask the witnesses to send us a note on same and we will chew on it.

Ms Anna Shakespeare

It is with a view to offsetting recruitment costs.

When there are vacancies at Pobal, are the recruitment advertisements done through an agency? How does Pobal conduct its normal recruitment process? Is it done internally?

Ms Anna Shakespeare

We use Irishjobs.ie, publicjobs.ie and sometimes we use a recruitment agency if there is a particular focus on the type of individual that we are trying to attract.

I ask for a note on how many positions were filled using an agency and the costs involved in comparison with posts filled through the PAS. I ask for a breakdown for staff hired in the last year. I would like to know the mechanism through which they came into Pobal.

Ms Anna Shakespeare

Okay.

That can be sent on to the committee because I would not expect the witnesses to have that information to hand now. Obviously we are also interested in the rates paid to recruitment agencies. I understand that the aforementioned scheme could be a lot cheaper than paying an agency a percentage of an annual salary. I understand that but we need to know what is going on.

Ms Anna Shakespeare

May I correct a figure that I gave to Deputy Connolly earlier?

Of course.

Ms Anna Shakespeare

We have seven agency staff, a reduction of three from last year. I am sorry but I had the wrong figure in my head. Seven agency staff are in use at the moment.

That is not a lot out of 400.

Ms Anna Shakespeare

No, it is not.

I have a question on the seniors alert scheme, about which I am constantly being asked in my own constituency. Pobal refers to the scheme in page 10 of its briefing note. It says that the growth of the seniors alert scheme was very positive, with over 19,000 applications approved in 2018, representing an increase of 163% on 2016 levels and 52% on 2017 levels. It is mentioned again on page 18. Pobal points out that funding is available towards the purchase of equipment including personal alarms and pendants. Is that a wrist alarm and a pendant that hangs from the neck? In the first year the cost of monitoring by a registered monitoring provider is also provided free of charge under the scheme from 1 November, when a range of changes were made to the scheme. I read somewhere else in the briefing note that 10,000 people joined the scheme last year. Who does Pobal deal with in the provision of this service? What companies are involved in the scheme?

Ms Anna Shakespeare

We procure services from external assistive technology agencies. We have recently reviewed the scheme with the Department of Rural and Community Development. It is a very important scheme for the Government of Ireland. It ensures that elderly people, particularly in rural communities, can stay at home safely with some assurance that if something happens they can press the button on their alarm or pendant and summon help. Somebody will contact them and will know that there is an issue.

Is that done by mobile phone or landline? How does it work?

Ms Anna Shakespeare

It is done by both.

How many companies provide it? Is it done on a regional basis?

Ms Anna Shakespeare

There are four suppliers at this point. We are re-procuring for that in 2020 by agreement with the Department until 2022, with an option of extending it by a further two years.

I ask Pobal to send us a note on the current arrangements. Next year is next year. I will not ask our guests to disclose the names.

We will have a library of notes.

Yes, but it is good information to have. It will add to the public knowledge. We will put it all in the public domain. As we all know, it is amazing how many people watch our meetings. Before the day is out, I will receive emails and phone calls saying we should have asked about something else. Many people, especially senior and retired people, watch our meetings.

Ms Anna Shakespeare

Absolutely.

Pobal might send us a note on the companies. It does not need to breach confidentiality but it might give an indication of how much the scheme costs for each company, who the suppliers are and whether there are guarantees.

Ms Shakespeare spoke about the gender breakdown and the fact that there are additional staff to cover maternity leave. What is the incidence of maternity leave? I am pleased to hear it has been provided for, given that it is a fact of life. If women are to be in the workforce, they have to be provided for. I have no difficulty with maternity leave being provided for. I recently met a group from the HSE and was told that maternity leave staff accounted for approximately one third of its workforce. Is the breakdown for Pobal similar? It might relate to the age profile of the HSE's staff.

Ms Anna Shakespeare

Does the Deputy refer to the average number of women on maternity leave?

What proportion of staff are for cover?

Ms Anna Shakespeare

I have given the committee the numbers of women versus men. I will need to confirm the figure for how many women go on maternity leave.

If Ms Shakespeare could outline how Pobal plans for that cover, it would be useful. It would be useful to see how one organisation compares with another.

Ms Anna Shakespeare

For example, we referenced our access and inclusion model, Better Start, which is primarily female in its gender base. A male member of that team is unusual. We build in a percentage of the staff turnover to support and ensure that the service continues. The maternity leave staff might change location based on the particular profile of individuals on maternity leave at any one time.

As for other employees, with respect, it becomes obvious when an individual has impending maternity leave. We work to ensure there is a service continuity plan with a replacement. As of September 2019, we had 39 staff on maternity leave. I would expect that a high number of those individuals were part of our access and inclusion model, Better Start, based on the profile of the employees, their gender and their relative age profile.

We will ask Pobal to send a note. When Ms Shakespeare made the point earlier, I was struck by the beautiful way she put it as taking account of employees' gender. I thought that if only the HSE had a similar policy, life would be wonderful. The HSE comes immediately to mind for many reasons, but other organisations, too, could benefit from the template that Pobal has drawn up. I acknowledge that it had to build it into its planning, but it could be useful for other organisations to learn from.

Finally, how many protected disclosures has Pobal received and what is their status? Have they been resolved or are they under external review?

Ms Anna Shakespeare

We had no protected disclosures in 2018?

Is any ongoing?

Ms Anna Shakespeare

No.

Perhaps that is because of the gender balance.

Ms Anna Shakespeare

Pobal is a very happy place at which to work.

It sounds like it. I thank our guests from Pobal and wish them every success in the important role they have. I also thank our guests from the Departments of Rural and Community Development and Children and Youth Affairs and the Comptroller and Auditor General for attending, and for the information they provided and will provide to the committee. The committee will sit again in mid-January and we would like to have all the answers on our desk when we return. It is a reasonable period to allow for all the answers to be provided.

The committee will now suspend until 3 o'clock, when we will meet Mr. Finnegan and representatives of the Office of Public Works regarding the new print facility in Kildare House.

Ms Anna Shakespeare

I thank the Chairman and, on behalf of everybody at Pobal, wish all the committee members a merry Christmas.

I thank Ms Shakespeare.

The witnesses withdrew.
Sitting suspended at 1.45 p.m. and resumed at 3 p.m.