COMMITTEE OF PUBLIC ACCOUNTS debate -
Wednesday, 7 Oct 2020

Business of Committee

Chairman

We are joined this morning by the Comptroller and Auditor General, Mr. Seamus McCarthy, as a permanent witness to the committee. No apologies have been received, except from Deputy Verona Murphy who may be late due to a bereavement.

The minutes of the meetings of 30 September and 1 October have been circulated. Are the minutes agreed? Agreed. As previously agreed, those minutes will be published.

I propose that we go into private session to deal with some housekeeping matters before resuming in public session to deal with correspondence and to address our work programme. Is that agreed? Agreed.

The committee went into private session at 4.32 p.m. and resumed in public session at 4.56 p.m.

Chairman

The first category of correspondence is A, briefing documents and opening statements. There are a number of briefing documents that were submitted in relation to our meeting with the HSE and the Department of Health last week. We will note and publish all of those. Opening statements for tomorrow’s meeting have been added to the meetings folder, as well as briefing material from the National Asset Management Agency, NAMA. These will be published following tomorrow’s meeting. Is that agreed? Agreed.

The next category of correspondence is B, correspondence from Accounting Officers and Ministers and follow-up from Committee of Public Accounts meetings. We will note and publish these items. Is that agreed? Agreed.

The last category of correspondence is C, correspondence from and related to private individuals and any other correspondence. Members have flagged a number of items for further consideration and we will focus on those. The first three items were held over from our meeting on 30 of September to give Deputy Carthy the opportunity to address them. The first item of correspondence is No. 2676C from Deputy Catherine Connolly, dated 18 December 2019, regarding a report by the Charities Regulator in relation to the Galway University Foundation. Is it agreed that we note this item? Deputy Carthy has indicated that he wishes to speak on this item.

Deputy Matt Carthy

This related to the previous Committee of Public Accounts, of which I understand Deputy Connolly was a member. There was a particular issue that had arisen with the Charities Regulator's report into the Galway University Foundation and a number of breaches were outlined. It might be prudent if we were to write to the foundation to ask for a detailed response to the report and to ask it to describe what, if any, actions have been taken with regard to the issues that had been raised.

Chairman

Is that agreed? Agreed. I will ask the clerk to the committee to do that. The next item of correspondence is No. 2678C from Deputy Catherine Murphy, dated 20 December 2019. It is a request for the committee to include the Office of Government Procurement in the committee's 2020 work programme. We will note this and I propose that Deputies Catherine Murphy and Carthy address this when we move to the discussion in public session of our work programme. Is that agreed? Agreed.

The next item of correspondence is No. 061C, from an individual dated 2 April 2020, making an allegation about information provided to the deposit interest retention tax, DIRT, inquiry. It is important to note that the allegation has not been substantiated. It had been proposed to note this correspondence. Deputy Carthy indicated that he might wish to speak on this issue.

Deputy Matt Carthy

There is not a huge amount of detail within this correspondence.

The name is very similar to one that is high profile and it would indicate a knowledge of these areas. I wonder if it is worthwhile for the committee to respond, asking for elaboration in regard to the points made.

Chairman

Does any other Deputy wish to come in on that issue? Are we agreed that we take that course of action and that we seek expansion of the points raised in the letter or further information? Agreed.

Correspondence item No. 117, dated 17 September 2020, from Deputy Marc MacSharry, is a request for the committee to include the following bodies in its work programme: the board of the National Children's Hospital; the Prison Service; An Garda Síochána; and the University of Limerick. Is Deputy MacSharry happy to address this when we come to the work programme?

Deputy Marc MacSharry

Yes.

Chairman

Correspondence No. 131, dated 22 September 2020, is from an individual requesting that the committee examine Caranua’s financial statements report before the fund closes. Caranua was formally known as the Residential Institutions Statutory Fund. It is proposed to request the Department of Education and Skills and Caranua to provide an information note regarding the arrangements and timeframe for winding up Caranua, and dealing with any outstanding liabilities and cases that have not been finalised.

I will open this to the floor as a number of members have indicated they wish to address this. It is certainly an issue that I would flag as one that needs to be addressed. Caranua did not file a financial report for 2019 and it is still outstanding, although it should have been filed before 20 March. Significantly, Caranua has announced that it will close shortly. My understanding is there is some €1.3 million left in the fund. We have a letter from a solicitor who acts for the applicants. The Department of Education and Skills confirmed to the Committee of Public Accounts that transitional arrangements would be put in place to deal with outstanding liabilities. On 6 August 2020, the Department confirmed to that solicitor that it will not have any transitional arrangements in place to deal with the outstanding liabilities. There are also questions in regard to Caranua’s use of preferred suppliers. Overall, there are matters to be examined. I call Deputy Carthy.

Deputy Matt Carthy

Will the Comptroller and Auditor General indicate whether he has carried out any examination of Caranua in the recent past and whether he feels it would be appropriate for this committee to delve further into the issues that are raised? They appear to be quite significant on the basis of the correspondence we have received.

Mr. Seamus McCarthy

For the information of the committee and contrary to what is in the correspondence, the financial statements for 2019 have been signed off on by me and I have certified them. Caranua would be due to come to the Oireachtas before 8 or 9 November. We have always looked at the control system within Caranua and it has itself disclosed that there are weaknesses in its control systems. It may not address specifically the things that are raised in regard to the two cases that are mentioned here. These would be expected to be the last financial statements of Caranua because it is winding down and any residual assets or liabilities would be transferred to the Department of Education and Skills. There is still an opportunity for the committee to call Caranua once the financial statements are submitted.

Deputy Matt Carthy

On that basis, I think we should do that because, clearly, if the liabilities are also going to transfer over to the Department, we could have a situation where there are liabilities that were accrued in error, or for other reasons that do not fully fit into prudent public expenditure. If so, perhaps this committee would be in a position to examine some of that before it becomes a burden on a Department that is already overstretched, as we know.

Deputy Marc MacSharry

Was it presented, as suggested here, as just one set of accounts for the two years?

Mr. Seamus McCarthy

No, it is just for 2019.

Deputy Marc MacSharry

It states they were before the Cabinet for some time. Is that the case?

Mr. Seamus McCarthy

I do not believe that is either necessary or usual practice. I would think they are just making their way through. They have to go from Caranua to the Department and then from the Department to the Oireachtas Library.

Deputy Marc MacSharry

In the last Committee of Public Accounts, this was a recurring theme. I think Caranua should be invited in to explore these issues. I would fear for individual applicants who are awaiting a process if it goes into a large Department with competing priorities. The solicitor's clients, and presumably people who are perhaps represented by others, are entitled to some level of peace of mind as to when they are going to be dealt with, if they are going to be dealt with and who is going to deal with them. There is also the fact there are no transitional arrangements in place. If that is the case, which it is according to this correspondence, then that is a problem. I support Deputy Carthy and think we should bring them in.

Deputy Imelda Munster

We had Caranua in last year and there were serious issues of concern. If memory serves me right, there were 22 applicants who apparently had missed the deadline. Nevertheless, they were deemed eligible at the time and there was still substantial money left in the pot. When Caranua representatives were asked about this, they did not really have answers and said it was under review. All of that is still up in the air. I would support Deputy Carthy's request for Caranua to come in.

Deputy Catherine Murphy

I looked for this to be discussed. I doubt there will be any surplus and we are more likely to be looking at liabilities. Part of the reason this was a recurring issue was because there was concern it was going to be a limited fund and we wanted to ensure that limited fund was wholly spent in the way it was intended to be spent, which was to spend it on very vulnerable people. We had valid concerns in regard to the setting up of the organisation and the money that was expended at that point.

This has to be dealt with as a matter of urgency and it is not something we can push off into the future. It has to be dealt with before it ends up in the Department of Education and Skills. One issue we had with the Department of Education and Skills, which is associated but is not the Caranua fund, is that of the disposal of assets from religious institutions. The Department of Education and Skills was still dealing with some of those disposals some 15 or 20 years after there was an agreement that they would be part of a settlement. Therefore, I would not be encouraged as to how the Department of Education and Skills will deal with this and I have serious concerns about that.

Deputy Cormac Devlin

I have had dealings with this group. A considerable amount of money would possibly be left over, according to this correspondence, whether that proves to be the case or not. I support the call to bring them in. I believe it is important for the committee and particularly for those who are potentially eligible for this fund that we ensure people who apply are in receipt of what they are entitled to. As I said, I have already come across problems myself, and I think it is appropriate to bring them in.

Deputy Neasa Hourigan

It seems there is a real time-sensitive issue here. The fund is closing towards the end of this year, which means those funds will be moving almost immediately. Whatever we decide to do, it needs to happen right at the beginning of our work.

Chairman

My concern is that there are still some survivors without outstanding calls for the money. They have made applications. Two of them are listed in the correspondence but there are probably several more. I have come across some of the survivors, as, I imagine, have other Deputies. I have a question for the Comptroller and Auditor General. It is important that, insofar as we can manage it, their needs are met because of their experiences. Is there any notion of how much may be in it?

Mr. Seamus McCarthy

I cannot recall what was on the balance sheet at the end of 2019. Obviously, there have been further transactions of the board since then. A wind-down process is planned. I do not have the detail at the moment. The Department or Caranua should be able to provide a fairly-----

Chairman

The correspondence mentions a figure of €1.3 million. We do not know whether that is accurate.

Deputy Colm Burke

I wish to ask about all the issues about liabilities. Rather than the Department taking over - it will only prolong the process if the Department takes over without getting it resolved beforehand - why can some of these issues not be resolved at this stage?

Mr. Seamus McCarthy

The point is that there is a structure in place - a whole organisation - that would effectively exist and continue to pay salaries and so on for a small number of transactions if Caranua remains in place. The idea is that now that the substance of the business has been completed, with a few transactions yet to be processed, it could be done. The idea is that the board would wind down and the final transactions would be effected by the Department. They will not be continuing the business because all of that will have been completed. I have said that assets and liabilities are transferring. If cash is transferring, the expectation is that there would be matching liabilities not additional liabilities. Once the body closes its business, there will be no more applications and no further claims will be admitted for payment.

Deputy Colm Burke

Could the liabilities not be discharged before the handover to the Department?

Mr. Seamus McCarthy

In some cases, the applications are estimates of works to be completed. The applicant may not be in a position to complete these in advance. The payment will not be made until such time as there is a contract in place to deliver goods or, for example, to complete works on someone's house.

Chairman

The issue is what we do from here. We can look for information from Caranua regarding how many outstanding valid applications have not yet been provided for and how much remains in the funds. Would that be helpful at this point? We could discuss further our next move. We can ask the clerk to seek that information from Caranua.

Deputy Marc MacSharry

I do not want to be in conflict with the Chairman. I want to be supportive of anything he wants to do, but I think we should press ahead and bring in the Caranua representatives. We can ask them those questions when they are here.

Chairman

We can discuss that in the context of the work programme, if people want to do that. There is no question that this matter needs to be resolved. It is simply a question of how to resolve it. This is only from the point of view of efficiency. It would be useful if we actually knew what we were dealing with, how much money there is and how many outstanding applicants there are. At this point it would be useful to get that information while we are waiting to get them in. We should seek that in any case.

Deputy Catherine Murphy

Can we find out what the wind-down costs are and the categories where they anticipate there will be costs?

Deputy Matt Carthy

I do not believe that there needs to be conflict between what the Chairman is proposing and what Deputy MacSharry is proposing. We should write to the Caranua representatives immediately, informing them that we intend to invite them to a hearing of the committee, but we should give them the opportunity to correspond with us in the short term. Perhaps they can address our concerns through correspondence. Then we may decide that we do not need to invite them to a meeting. The premise will be that is our intention at the moment.

Chairman

Is it agreed that we will look for answers to those three questions and discuss them under the work plan? We want to know how much money is in it, the number of outstanding applicants and the projected wind-down costs.

Deputy Marc MacSharry

I apologise for being difficult. Would it be okay if, on reflection, we had questions and then, by a given time tomorrow, we could send them to the clerk and he could include them, if appropriate? I imagine that if there is a problem with any of them legally, he will tell us.

Chairman

If members want to do that and they can be facilitated by the clerk, I have no difficulty with it. We will hold for 24 hours and if members submit questions that, legally and in every other way, are sound, then I do not see any reason it should not happen. Do members want that facility? That is agreed.

No. 113 is correspondence received from Deputy Hourigan, dated 24 September 2020, with suggestions for a work programme. We will consider that when we come to the work programme. Is the Deputy happy enough with that?

Deputy Neasa Hourigan

Yes.

Chairman

No. 135 is correspondence from Deputy Munster, dated 1 October, requesting that we include additional witnesses at our meeting next week with the National Treatment Purchase Fund. We had a discussion about it. I propose to discuss the matter as part of the work programme. Is the Deputy happy enough with that?

Deputy Imelda Munster

That is okay.

Chairman

No. 136 is correspondence from Deputy Catherine Murphy, dated 1 October. She has suggested priorities for examination in respect of the Comptroller and Auditor General Report on the Accounts of Public Services 2019. I suggest the best way of dealing with it is when we are dealing with the work programme.

No. 137 is correspondence from Deputy MacSharry, dated 1 October, asking the committee to consider requesting the Secretary General of the Department of Education and Skills to appear before the Committee of Public Accounts. We can discuss it with the work programme. Deputy Carthy has also highlighted his concerns regarding the system of calculated grades for the leaving certificate. Are members happy enough that we will deal with that under the work programme when we come to it presently?

Deputy Matt Carthy

Yes.

Chairman

No. 140 is correspondence from Deputy Catherine Murphy, dated 29 September, containing proposed actions relating to Periodic Report No. 6. I propose that we request the Department of Public Expenditure and Reform to provide further updates relating to the matters raised by the Deputy. Is that agreed?

Deputy Catherine Murphy

Yes. I outlined a number of items on the list rather than the whole report, for what it is worth.