Vote 26 - Department of Education and Skills

Mr. Seán Ó Foghlú (Secretary General, Department of Education and Skills) called and examined.

Today, we are engaging with officials from the Department of Education and Skills. I welcome our witnesses and thank them for the briefings with which they have provided us. We will be examining the appropriation accounts of the Department for 2018 and 2019. With regard to public health guidelines, we are joined in person by Mr. Seán Ó Foghlú, Secretary General of the Department of Education and Skills; Mr. Hubert Loftus, assistant secretary; and Mr. Tom Whelan, finance officer. We are also joined remotely by Mr. Gavan O'Leary, assistant secretary of the Department of Education and Skills; Ms Gráinne Swan, professional accountant; and Mr. John Howlin, principal officer in the education section of the Department of Public Expenditure and Reform. They are all very welcome.

I ask all those in attendance to ensure their mobile phones are on silent mode or switched off. I also ask members and witnesses to remove their masks when speaking to ensure they can be heard. When members are leaving and taking their seats, they should sanitise the area they are using.

I advise witnesses that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a 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 they 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 within Standing Order 218, which states that the committee shall refrain from "enquiring into the merits of a policy or policies of the Government or a member of the Government or the merits of the objectives of such policies."

Members are also reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.

While we expect witnesses to answer questions asked by the committee clearly and frankly, witnesses can and should expect to be treated fairly and with respect and consideration at all times, in accordance with witness protocol.

I now call on the Comptroller and Auditor General, Mr. Seamus McCarthy, to make his opening statement.

Mr. Seamus McCarthy

Annual appropriation accounts record the cash transactions related to the various services provided directly, or funded, by central government Departments and offices. The primary focus is on a comparison between the funding voted by Dáil Éireann and the out-turn recorded. Spending in excess of the amount voted is not permitted, and any amounts unspent in the year of account are liable for surrender back to the Exchequer.

The appropriation account for Vote 26, Department of Education and Skills, records gross expenditure of €10.37 billion in 2019. This represented an increase of 5.7% on the €9.81 billion spent in 2018. Expenditure under the Vote in 2019 was divided between three expenditure programmes, as indicated in the diagram which can be put up on the screen for members. For the record, programmes B and C will in the future be part of a separate Vote administered by the new Department of Further and Higher Education, Research, Innovation and Science, under a different Accounting Officer. I understand Mr. Ó Foghlú will provide further information in that regard.

Given the nature of the education system, the largest element of spending was the pay and pensions of teachers and other education staff. For example, in 2019, pay and pensions expenditure under programme A amounted to €6.55 billion, or 79% of gross programme expenditure. There was also a significant level of expenditure under the programme on capital assets. This includes funding provided for the construction, extension and refurbishment of schools and ongoing maintenance works. In that regard, I have presented reports on the Department’s site acquisition for schools and on schools estate management. I understand that the committee will deal with these matters in a separate meeting. I issued a clear audit opinion in relation to the appropriation accounts for both 2019 and 2018.

The Accounting Officer makes disclosures in the statements on internal financial control for both years in relation to contracts for goods and services where non-competitive or non-compliant procurement processes were employed. In both years, the level of non-compliant procurement disclosed was low. Non-competitive processes were used for some contracts but this is allowed under procurement rules in certain circumstances, for example, where there is a genuinely urgent requirement for services that could not have been anticipated, or where there is only one supplier of required goods, such as proprietary computer software or licences.

Mr. Seán Ó Foghlú

I thank the Chairman and members of the committee for the opportunity to discuss the 2018 and 2019 appropriation accounts of the Department of Education and Skills. We have provided the committee with briefing material on both accounts so I propose to keep my opening statement short.

As the committee will be aware, a new Department of Further and Higher Education, Research, Innovation and Science was established on 10 July 2020 and since that time we have been working to finalise the transfer of certain functions previously performed by the Department of Education and Skills to the new Department. A transfer of functions order has been made today, formally assigning most of the further and higher education functions to the new Department. As the Comptroller and Auditor General noted, most of the B and C programmes will transfer to the new Department, along with the National Training Fund. In addition, the Government has announced that certain functions relating to education welfare and the education welfare service will be transferring from the Minister for Children and Youth Affairs to the Minister for Education and Skills. Work is ongoing in that regard.

The establishment of the new Department and the transfer of the various functions will impact on the 2020 appropriation accounts but has no impact on those for 2018 and 2019, which are under examination today. The Secretary General of the new Department will be the Accounting Officer for the new Vote once it is established in the coming weeks and will submit an appropriation account for 2020 in respect of the functions transferred to the new Department. However, for 2018 and 2019, my comments and the sums referenced will relate to the whole of Vote 26.

The Department’s net voted expenditure in 2018 was some €9.34 billion. Of this, some €742 million was capital expenditure. In addition, the Department’s 2018 expenditure allocations included the non-voted National Training Fund of €415 million, providing for upskilling and reskilling, for both those seeking employment and those in employment.

In 2019, net voted expenditure amounted to some €9.87 billion, of which €940 million was capital expenditure. The expenditure allocation for the National Training Fund in 2019 was €509 million. Net pay and superannuation account for around 73% of the Department’s overall budget. In 2019, this provided for over 110,000 public service employees and some 49,000 public service pensioners.

The Department’s expenditure was divided into four programmes in 2018 and three in 2019. This means the expenditure relating to capital services, which was previously in a separate programme, is now included within the remaining three programme figures for 2019 and allocated accordingly. I will not go through the details of the programmes as time is tight.

The Department was voted Supplementary Estimates of almost €182 million towards the end of 2018 and €68 million in 2019. These made provision for increased allocation across a range of areas.

The statement of internal control that forms part of both accounts provides details regarding the control systems in place for procurement. It also notes details of instances of non-compliance with public procurement rules. Such instances have arisen for reasons such as urgency, a need for business continuity and sole suppliers. I assure the committee that action is taken where feasible to address such instances. The Department is proactively engaged with the procurement reform programme and is taking the opportunity to use centralised contracts and frameworks where appropriate.

The statement on internal financial control also notes the Department's activity in the area of shared services. Under the shared services plan for 2017-20, we have been investigating the opportunities for shared service initiatives across the education and training sector and actively participating in the roll-out of shared services.

The Covid-19 pandemic is a significant event and it has severely impacted the economy and the education sector. This event had no impact on the 2019 accounts but will of course impact on those for 2020 and later years.

The Department is participating in the central co-ordination structures to ensure a joined-up approach to Covid-19 across Government. The response of the education and training system is aligned to our core national priority of saving lives while focusing on ensuring continuity of education for learners, with a particular focus on more vulnerable students.

I thank the committee for the opportunity to speak. I am happy to take any questions.

I thank the witnesses for coming in this afternoon. I will try to make my questions as succinct as possible in order to get through as much as we can.

I will begin with the numbers in the accounts that relate to the rental of temporary school accommodation. I am sure everyone in the room could name a long list of schools in his or her area that have some sort of long-term temporary school accommodation. The list includes St. Patrick's Senior National School in Skerries, Rosmini Community School in Drumcondra and Gaelscoil Chnoc Liamhna in Knocklyon. My first question is relatively simple. Does the Department feel the taxpayer is getting good value for money from the increasing spend on temporary school accommodation?

Mr. Seán Ó Foghlú

I thank the Deputy. We are ensuring value for money where rented accommodation is concerned. This is part of a larger trend of increasing expenditure on capital as we try to put long-term capital solutions in place throughout the school sector at a time of huge growth. In the last eight or nine years the number of teachers has increased by 11,500. The amount of rented accommodation is about the same as it was ten or 12 years ago.

The spend is increasing. Has the Department undertaken a comparative analysis between that use of funds and reducing the time it takes to build capital projects?

Mr. Seán Ó Foghlú

The spend has increased and has just returned to the level it was at ten years ago. There has been a very large increase in the numbers at primary and secondary level. The number of students in primary education has now peaked, but there are still increases in particular areas. When we are providing for additional accommodation for schools, if rental accommodation is likely to be needed for more than three years we give the school a devolved grant. We see rental accommodation as an interim solution while we are moving towards long-term solutions. Perhaps Mr. Loftus would like to add a little bit more.

Mr. Hubert Loftus

I am the head of the Department's planning and building unit. There will be a large roll-out of capital development projects under the national development plan. A lot of permanent projects will be delivered. Separately to that, there are temporary needs. Some needs may be temporary because a building project is working its way through design stages and the planning process. Delays can arise in securing planning permission or as part of the An Bord Pleanála appeals process. That can impact on things.

I am aware of those issues.

Mr. Hubert Loftus

If I may make a general point, modular space - modular prefab - is accounting for an increasing portion of accommodation. The quality of accommodation has improved significantly from previous eras.

I have a question that relates specifically to the provision of those kinds of services. The accounts refer to expenditure of €29.5 million. How is that figure distributed between suppliers of units such as prefabs? What percentage of that spend goes to the top three suppliers? I assume there is a competitive process. I do not think I need to ask about that. Who are the top three suppliers and what percentage of that expenditure are they getting?

Mr. Hubert Loftus

The €29.5 million figure refers to expenditure on prefab rentals as well as property and buildings that are rented.

We will come back to the properties and buildings. I have a separate question about them. How many suppliers does the Department use for prefab units? Is there a competitive process?

Mr. Hubert Loftus

It is all done through a competitive process. We have provided detailed technical guidance on what is required of schools when they seek temporary accommodation. This outlines how they should proceed and the procurement process. We can arrange for information on the top three suppliers to be forwarded to the Deputy.

I thank Mr. Loftus. Returning to rental accommodation, we are all aware of the prefabs issue. Children throughout the country are sitting in prefabs that are older and not fit for purpose. There are also schools like Gaelscoil Choláiste Mhuire across the river from us in Parnell Square that have been in rental buildings for years. I considered this school for my own child. It is sited in a rental building that by all accounts falls well short of the quality that most of us would accept. This presents serious questions about the accessibility of school for students of different abilities. I asked earlier about comparative analysis and value for money. Does the Department consider any factors other than the financial cost, such as the quality of temporary accommodation?

Mr. Hubert Loftus

The challenges for the planning and building unit in the last decade have been a very significant increase in enrolments and the need to cater for additional capacity requirements. Those factors have been the main drivers of our expenditure requirements where both large-scale permanent capital projects and rental accommodation are concerned. The growth in numbers at primary level has now flattened out. The next decade will see a significant decrease in enrolments at primary level. We are still in the phase of increasing enrolments at post-primary level and we will be for several years.

That is not really relevant to a discussion of buildings that have been rented for a very long time. Gaelscoil Choláiste Mhuire has been in that accommodation for decades.

Mr. Hubert Loftus

The point I was going to make is that the ten-year capital envelope provided in the national development plan, which amounts to €8.4 billion, enables us to plan strategically for the longer term to address the needs of existing schools that are already in accommodation which needs to be improved. As part of that, we will be rolling out a deep energy refit programme from 2023 onwards.

What is the longest-standing rental agreement for temporary accommodation that is currently in place?

Mr. Hubert Loftus

My job as head of the planning and building unit involves managing the planning and building needs of 4,000 schools. I do not necessarily know the detail of every individual one, but we can arrange for that detail to be provided to the Deputy.

A note on subhead A15 states "A supplementary of €8 million current expenditure was approved for this subhead to provide for additional temporary school accommodation costs". If the figure for spending on rented accommodation was €26.2 million in 2018 and €29.5 million in 2019, can the officials clarify where the €8 million supplement fits?

Mr. Seán Ó Foghlú

The spend in 2018 was €26.2 million, but that does not mean that the allocation for 2019 was as high as €26.2 million. In fact, it was lower. The spend was only known at the end of the year. The allocations were worked out slightly earlier than that. We have been indicating that we expected the expenditure to be higher, but it was not possible to cater for all of that in the Estimates discussions.

I thank Mr. Ó Foghlú. I will move on to the schools remediation programme. We are mostly talking about Western Building Systems here. What have the remediation costs been so far, and how much higher does the Department expect them to run?

Mr. Seán Ó Foghlú

When answering questions on the schools remediation process we need to be conscious of the fact that we are at quite an advanced stage in the legal process, with two cases before the Commercial Court and proceedings served in relation to another 38 schools. A procurement process relating to some of the remaining work is under way. I will answer the question precisely. The latest figures available, which refer to overall costs to the end of the second quarter of 2020, are €89.9 million excluding VAT and €104.1 million including VAT.

I have been involved in construction projects with the Department before.

Has the Department looked back on that process to ensure that it does not happen again?

Mr. Hubert Loftus

Yes, absolutely. There are two parts to that. The structural issues that arose in that case happened exactly two years ago. We put precautionary measures in place across 22 schools. Today, the structural issues in those 22 schools have been addressed, the precautionary measures have been removed, and permanent solutions have been put in place. We then had to do more detailed investigations across all schools and work out a strategy for dealing with them. There are two elements to the review. Within the work-based learning space and the schools, there is a strategic review what we are doing on the overall programme and the remaining works. Second, given that the issues arose across our fire safety assessment programme, there was a question of robustness of issues in respect of schools outside of that programme, and we did sample checking on that. We did not come across any of the types of issues that we had covered in those schools. Separately, we also undertook a new design and build framework procurement process, and lessons will have been learned as part of that, and we will have strengthened the arrangements there in terms of clarity and roles and responsibilities, and crucially, putting an onus on the contractor in respect of the quality regime in place and having dedicated on-site quality staff to manage that.

I am going to move on to overpayments and paper payslips.

In 2018 and 2019, approximately 45,000 people were in receipt of approximately €5 million in overpayments. What is the value of overpayments that has been written off by the Department? Why do these overpayments persist? Are controls in place to prevent such issues happening? What has the Department done to prevent a recurrence of this in 2020?

I am mindful that out of almost 4,500 cases, there is a recovery plan in place for only 742 of them. What does a typical recovery plan look like? What is the Department's estimate in percentage terms on how much it will be able to claw back?

The Department spent €13.8 million over a six-year period on postal and telecommunications services. This is quite a large sum. How much of this is postage for payslips? I have not received a payslip in the post for ten years because nobody does that anymore. Is the Department moving towards the use of electronic payslips? If so, when? I am not going to get into calculated grades, but in terms of engagement with IT systems, is that an issue for the Department?

Mr. Seán Ó Foghlú

I will start with the second question and come back to the first. We have a significant shared services programme, upgrading and development of shared services, which I mentioned in my opening statement. That includes shared payroll services for the education and training board, ETB, sector, which would cut across two Departments and the higher education sector. It also includes the upgrading of the shared service that we operate for the schools. Until the single shared service was put in place for the Civil Service, the school sector had the largest payroll in the State. We are on the way to implementing the shared payroll for the ETBs. I will come back to the Deputy with an exact figure if necessary, but I believe we have seven ETBs over the line with the shared service payroll and we are working through to completing this for the full 16. I think we have two pilot higher education institutions - one just over the line and one coming over the line, and we have a third pilot. We also have a major upgrade programme for the payroll for schools. The plan is to move to a modern payroll service for schools.

So right now, does everybody get a payslip?

Mr. Seán Ó Foghlú

At the moment everybody gets a payslip.

Is that every two weeks?

Mr. Seán Ó Foghlú

Every two weeks.

So, is it fair to say that the majority of that €13.8 million is spent on payslips going out to people every two weeks?

Mr. Seán Ó Foghlú

I do not know the answer to that, but I can check.

Does anyone know the answer to that?

Mr. Seán Ó Foghlú

We can check and we can get back to the Deputy.

The nature of overpayments arises for a number of reasons. There can be a number of external factors and other factors involved. We are a paymaster on behalf of managerial authorities for more than 3,700 schools, which have voluntary boards of management, and we are dependent on them submitting the data required for the appointment of staff. The closing date for entry to the payroll is ten days in advance of payment. This is to allow time for checking and so on. Issues can occur that give rise to errors in payment, which then can give rise to changes being needed. Overpayments occur due to the insufficient time being allocated for the implementation of new budget decisions and issues such as that. There can also be internal factors such as the payment of salary at the incorrect point on the salary scale, human error or incorrect allowance.

We recoup overpayments in a number of ways. There is repayment by deduction from salary or pension, repayment by arranging a transfer directly, repayment in part by lump sum and balanced by deduction instalments and a range of other ways. Following the recovery, the overpayment of funds are then lodged with the Department. We have sanction to write off a number of overpayments for different reasons as well. Given the scale of our operation, we have a large-scale number of overpayments, and that is what arises but it is very small in the context of the overall budgetary expenditure. As of 31 December 2019, the outstanding overpayments as a percentage of overall 2019 expenditure was 0.11%.

Grants to education bodies working in the primary and post-primary sectors increased by €10 million in the 2019 accounts. Additional costs arose specifically in respect of the State Exams Commission, SEC, with regard to reforms to the leaving certificate appeals system and the accelerated implementation of the online marking system. Was the procurement of services from external companies involved in that €10 million increase in spending?

Mr. Seán Ó Foghlú

Obviously the SEC is an agency of the Department and it has its own accountable person. I am the Accounting Officer overall for the Vote and there is an accountable person and they submit their own accounts. I am trying to get details on the areas mentioned.

The expenditure of the reform of the leaving certificate appeals system was €3 million. Was it just the SEC expenditure that the Deputy was asking for?

Yes, and the online marking system.

Mr. Seán Ó Foghlú

I will see if I can find it in the note.

Perhaps I could be more direct in my questioning. The question related to whether the procurement of services from external companies was involved in that increase in spending. To be more direct, there has been much discussion about a company called Polymetrika. In 2019, and in the accounts that are before the committee today, were services procured from Polymetrika?

Mr. Seán Ó Foghlú

No.

So, there were no services in the 2019 period relating to that company?

Mr. Seán Ó Foghlú

There were no services from the SEC relating to Polymetrika.

In the accounts before the committee, Mr. Ó Foghlú has a broader responsibility. Was there a relationship with Polymetrika in 2019?

Mr. Seán Ó Foghlú

No, there was no expenditure from the Department of Education and Skills directly on Polymetrika. There was, as far as I am aware, expenditure from the Education Research Centre, which is another State agency, with Polymetrika.

Can Mr. Ó Foghlú outline the nature of the services that were provided in 2019?

Mr. Seán Ó Foghlú

This is not within the remit of the Department of Education and Skills but within that of the Educational Research Centre.

I am a little surprised that that information is not available to the Secretary General, given that this might have been an expected question.

Mr. Seán Ó Foghlú

I apologise to the Deputy. We had four working days' notice for this hearing.

Mr. Seán Ó Foghlú

I have seven files of information.

My question is this: did the Department procure services from Polymetrika in the 2019 period?

Mr. Seán Ó Foghlú

No. I have answered that. An agency of the Department, the Educational Research Centre, did. I am trying to find the bit of information I have on this. I apologise-----

Will Mr. Ó Foghlú tell us the basis on which those services were procured and the skills Polymetrika brought which clearly were not within the Department's current resources?

Mr. Seán Ó Foghlú

Again, the Department did not engage Polymetrika; the Educational Research Centre, ERC, engaged it. I have information on the nature of the work that Polymetrika has undertaken for agencies under the aegis of the Department. I can outline that. Either Polymetrika or the person who is the owner of Polymetrika, Fernando Cartwright, was involved with the Irish education system in 2010. At that time we received information from the PISA 2009 survey on the achievement of 15-year-old students and there was an unexpected decline in that regard. The ERC, at our request, commissioned Statistics Canada, where that person was working, to examine all the Irish PISA data to establish why the unexpected declines had occurred. Two experts from Statistics Canada, including the named person, worked with the ERC to provide a full technical review of PISA at the request of the Department. Further work and research articles were written in that regard. In addition, the research that was undertaken established that a bias in the way the trend data were constructed had occurred.

It was related to the international PISA rankings rather than the accelerated implementation of any new online marking system.

Mr. Seán Ó Foghlú

Absolutely, and that is going back since-----

Will Mr. Ó Foghlú talk to us about the work carried out in 2019 on the accelerated marking system and whether it laid the foundation to use a very select number of areas? Did it lay the foundation for online marking in subsequent years, this year and so on?

Mr. Seán Ó Foghlú

The nature of the online marking work undertaken by the State Examinations Commission was to ensure that the documentation and the examinations coming in in various subjects, as many as possible, and the number was expanded, could be scanned in and then made available for the examiners online to remove the need to send out the examination papers. That was the major project that the State Examinations Commission carried out to try to get the results out as speedily as possible and to get the appeals process implemented as speedily as possible. In 2019, the State Examinations Commission had to undertake a speedy appeals process following a major court case the year before. It brought back the appeals process dates so it was able to do as much as possible of that online.

I imagine that when Mr. Ó Foghlú uses the word "speedy", it was probably nothing compared with what he would have envisaged speedy being in 2020.

Mr. Seán Ó Foghlú

That is correct.

Was any of the work that was comparable in that period applicable in subsequent years? Mr. Ó Foghlú is saying they did not relate-----

Mr. Seán Ó Foghlú

No. The work of the State Examinations Commission on those two projects helped it move to operate more in an online way. Other than that, it was not of immediate assistance to the work that needed to be undertaken on the calculated grades. The technical understanding of Mr. Fernando Cartwright and Polymetrika of the way the Irish system works would have meant that he was well positioned to come in and assist. I referred to PISA, but he also did some other work for the Educational Research Centre on PIAAC. In 2019 it consulted him on the procurement of an integrated online assessment platform to supply the Educational Research Centre tests to schools. For that work that was undertaken in 2019 and-----

Standardisation occurs in every year. Were any other companies contracted to provide advice or assistance on the standardisation of examinations as it related to 2019?

Mr. Seán Ó Foghlú

No. The standardisation of exam results was undertaken completely by the State Examinations Commission. It has its own systems for that, following the written exams and so on.

As Mr. Ó Foghlú has referred to those systems, was the coding of those systems or the IT systems which assisted in the standardisation process carried out within the existing IT systems within the Department or did it procure additional services for that?

Mr. Seán Ó Foghlú

Again, this is done not by the Department but by the State Examinations Commission, which is an agency of the Department. It has some IT support itself and, for example, it had to outsource some of the online work.

Do we know the companies that are involved in that?

Mr. Seán Ó Foghlú

I do not have the names of them to hand, but we can certainly get details from the State Examinations Commission for the Deputy.

Yes. I appreciate Mr. Ó Foghlú's assistance on that. I think it will prove beneficial as we move on with the issue.

I wish to return, in the very brief time I have available, to the issue of the posting of payslips, which the previous speaker raised. I think many people will be shaking their heads at the thought of thousands and thousands of payslips each fortnight going out by post when it is a service that could easily be provided online. As a new Deputy to the Committee of Public Accounts, I just cannot believe we have not revisited this issue, not just in recent years but in recent decades.

Mr. Seán Ó Foghlú

A huge system upgrade needs to be planned because, let us be honest, we cannot drop the payroll. It has to work every week. It is so important for the wide range of payees. We have a major IT project under way planned to do that and we have done it in our shared services, which we are beginning to implement for the education and training boards.

Does Mr. Ó Foghlú have an expectation or a timeline on that?

Mr. Seán Ó Foghlú

I do not have the project plan here but it is a major project over a number of years. An interim payroll upgrade will happen next year, and we are investigating the extent to whether as part of the payroll upgrade and the software upgrade it might be possible to do that. I would very much like to be able to do what Deputy McAuliffe has said, and I agree with his assertion that we need to do better. I cannot guarantee that that will be part of it but we are pushing to try to make it part of it.

The Secretary General might come back to the committee with a timeline on that if possible.

I welcome our guests. I wish to put on the record our thanks to the Department of Education and Skills. It has had an incredibly difficult year, and everybody recognises that. Nobody could have imagined the challenges it would face. Everything needs to be accepted in that context, and I wish to clarify that that is accepted by the committee.

To call a spade a spade, the witnesses know the reason the committee decided to invite the Department here. It was as a result of the debacle surrounding the calculated grades. We are told we have to be careful in what we put to the witnesses and how we put it, but we have an opportunity to get a sense of the procedures that have been in place traditionally in the Department and to come to an understanding of how different things were managed. We understand that non-competitive procedures are sometimes used. I think the Comptroller and Auditor General uses the term "in matters of urgency". I think we probably understand what urgency means now better than ever. In those instances what safeguards are in place? For example, has it ever happened in 2019, 2018 or any other previous year that a company or a representative of a company would be employed in an advisory capacity and end up subsequently securing a lucrative contract, from either the Department or an agency of it?

Mr. Seán Ó Foghlú

First, I very much appreciate the Deputy's opening remarks. What he has described is not what happened here. Therefore, we are immediately getting into discussing what happened here. I just want to ask the Chairman for advice here. I want to go with his guidance.

The subject before us is the 2018 and 2019 accounts. If the Secretary General wishes to comment on the procurement issue in those accounts, he can do so. He can also address that issue in relation to 2020 if he is happy to do so. The Deputy's main line of questioning should be on the 2018 and 2019 accounts.

Mr. Seán Ó Foghlú

If the Chair wishes me to go there, I will do so but I need to do it on the direction of the Chair.

The Deputy is asking about procurement procedures in 2018 and 2019. Is that correct, Deputy Carthy?

I am asking in particular about the safeguards.

Mr. Seán Ó Foghlú

No. The Deputy had an assumption, which does not apply in this case. I cannot enter into a supposition that does not apply in this case.

Mr. Ó Foghlú should it explain the issue to me in that case. That would be the easiest approach.

Mr. Seán Ó Foghlú

I would then be talking about this case. Am I allowed to talk about this case?

Mr. Ó Foghlú should continue on the 2018 and 2019 accounts.

Mr. Seán Ó Foghlú

I am caught here because the supposition the Deputy has is that somebody was employed to advise and then asked to do something. That is not what happened here.

In that case, Mr. Ó Foghlú will not only have to correct the record of this committee but that of every publication and media outlet in the country.

Mr. Seán Ó Foghlú

I do not agree with that. To get into this issue I would have to start describing the relationship that Polymetrika had-----

On that matter and to give a bit of context-----

The Deputy is entitled to question Mr. Ó Foghlú about procurement procedures in 2018 and 2019 and I would expect those questions to be answered.

I am also allowed to act as if I have not been living on another planet for the past six months. According to an article on the journal.ie, "As part of contingency planning for the Leaving Certificate 2020, the State Examinations Commission hired Polymetrika to develop the code used to calculate the grades." Previous to that, Polymetrika "had been engaged in an advisory capacity" to a technical board within the Department. Is either of those two statements incorrect?

Mr. Seán Ó Foghlú

Again-----

The Deputy is asking about the current year.

I was basing my assumption on the supposition that what was reported and had not been challenged by the Department, to my knowledge, was true, and I asked if this practice had taken place in previous years. The broader question was on what safeguards are in place with respect to urgent procurement processes when they are required. Nobody is doubting that there are times when urgent processes are required. The issue is what safeguards are in place to ensure we do not end up in a situation where the State could be hit to the tune of millions of euro as a result of a debacle.

Mr. Seán Ó Foghlú

Again, there is an assumption in what the Deputy is saying that the procurement has led to the difficulties and challenges. For me to get into talking about the calculated grades, on which, by the way, we have a session with the Joint Committee on Education in three weeks' time, it is necessary to set the context at the time. The Deputy set the context well in terms of the difficulties and challenges. Contingency work was under way and the State Examinations Commission engaged Polymetrika. The nature of the contract allowed for both advice on the development to feed into it as well as the potential for use in the implementation. Those things were linked.

I will ask a short question in a historical context. On contracts which are awarded under urgent and non-competitive procedures, is there a standard mechanism in place within the Department that ensures that if that contract ends up being a cost to either the Department or the wider State, not only is there a clawback of the funding but there is also a mechanism for potential compensation to the taxpayer for money that may have been charged to the citizens and the Government as a result of a mess being made of that?

Mr. Seán Ó Foghlú

When the Department has to operate an accelerated procurement process for emergency reasons, there are procedures in place where sign-off is required within the Department. The nature of those contracts will typically have a range of such matters addressed in them.

Can we get a note on that perhaps?

Mr. Seán Ó Foghlú

OK.

I welcome our guests from the Department of Education and Skills. I am moving on to the topic of school transportation services in subhead A9. In the financial accounts, the Estimate provisions were €198 million, with an outturn of €220 million. There was approval of a supplementary fund of €20 million. Does the Secretary General believe we have a cost-effective and efficient school transport programme in place that is fit for purpose and ensures value for money? It is an essential service that provides transport to more than 130,000 students.

Mr. Seán Ó Foghlú

Yes, I do. It is a complex system where we have a transport organiser in Bus Éireann, which has some limited transport provision itself, extensive route planning, engagement and subcontracting to a range of private contractors. I believe there is value for money. However, it has been difficult to cost that in recent years. Not unlike some of the other areas we referred to earlier on, such as rented accommodation, we are involved in detailed discussions with our colleagues in the Department of Public Expenditure and Reform every year on the costings. There is a particular increase in costings when it comes to additional routes but the biggest driver in costs is special education needs expenditure and the need for special education needs transport. We had a value for money review a number of years ago and we have another review under way. That review is also taking place in the context of the programme for Government, sustainable travel and so on. That is an important aspect. There is value for money but we always need to look at ways of doing things differently. School transport is a demand-led scheme and there are elements of choice in it.

On Mr. Ó Foghlú's statement on value for money, without proper costing methodology for the direct and indirect costs, members of this committee need an explanation on the financial transparency. We are well aware that over 89% of services under the school transport system are contracted out by Bus Éireann. It receives in excess of €220 million and administers the programme, despite only providing approximately 12% or 13% of the service. We have seen the behaviour of Bus Éireann this year, especially on the back of Covid-19, where it shut down the portal for a period of time. As public representatives, we had an outcry from parents and guardians who were left without any information or access to tickets. Mr. Ó Foghlú might think it is a good system that is fit for purpose but there are a lot of challenges around it. The costing methodology is hugely important to providing transparency, especially in this committee.

Mr. Seán Ó Foghlú

I actually said there is value for money. We need to work more on the nature of the scheme. As Deputy Carthy said, this has been a challenging year. We learned of a change of medical advice around post-primary school transport the week before children returned to school. Bus Éireann has jumped in to try to sort that out and has been working with us to try to sort that out. We have secured Government approval to move towards 50% transport. We are on a journey towards ensuring that 50% transport is put in place on second level school transport. We have it for nearly all of the special education children on second level school transport and we are working our way through it. There has been a real challenge for everybody in doing that. I would not use this year's challenge to fault Bus Éireann.

We are also working on improving our accountability relationship with Bus Éireann. The Comptroller and Auditor General had a report on this in 2018 and I was before this committee at that time working through those issues in detail. Since then, there have been a number of areas of detailed correspondence in that regard between me and this committee, particularly towards the end of 2019, around areas relating to value for money.

There is great demand on the school transport system at high peak times, and we see that every year when September arrives. We still have the same issues. We need to reflect on the customer service of Bus Éireann and its planning and resourcing for these peak periods. There is also a need to look at how the company delivers its services to the public.

Mr. Seán Ó Foghlú

I agree and the company has sought to enhance its customer services. Equally, however, we have cut-off dates for people applying and paying for transport. Even in a good year, and this was not one, people have not met those cut-off dates. The Department, Bus Éireann, and the Minister responsible have always sought to provide as much school transport as possible. Each time we set a deadline, it passes and we allow for that.

If we adhered to the deadline, we would be able to provide transport more easily for everybody who had applied and paid by that time. We do not want to do that, however. There was one period, in particular, when the health advice changed as we were trying to put the new arrangements in place, and that meant it was not possible for Bus Éireann to respond. The company has now put those arrangements in place to try to work further on its customer service. I accept fully the points made by Deputy Dillon.

I have one final question.

I will let the Deputy in for a second round of questions. I call Deputy MacSharry.

I ask the Chair to let me know when three minutes remain, if he could.

I welcome the witnesses, and like Deputy Carthy, I thank them for their heroics for getting children back to school. I particularly thank all the teachers. I cannot imagine all the stress and anxiety they are all feeling now. They all deserve our gratitude, as do Mr. Ó Foghlú and his team.

I want to talk briefly about Caranua. I see it had 26 employees at year's end. We understand Caranua is in wind-down, so how is it envisaged that will be done?

Mr. Seán Ó Foghlú

I appreciate Deputy MacSharry's opening comments. It has been a combined effort, in particular regarding the school system and the responsibilities on leadership and staff within schools. It has been a real challenge and it remains a challenge, as our Minister has said.

Mr. Seán Ó Foghlú

Caranua is in wind-down mode. The information the Deputy has is from the end of 2019, I think. Caranua is working its way through that process and the numbers of staff are reducing. All staff are on fixed-term or specific contracts, and numbers have fallen in recent months as the number of open applications has reduced. With the operational wind-down under way, 11 staff remain and the organisation expects to lower that number as it works its way through this process. We are also planning to publish legislation for the dissolution of Caranua, and that will need to be discussed in pre-legislative scrutiny, etc.

I note that Caranua had a financial update in September, where it was stated that total spending was €109.5 million. By my calculations, that means about €500,000 is left. What assurances can Mr. Ó Foghlú give us that there will be enough money for survivors with claims outstanding, as well as operational costs? Are there plans for a supplementary budget provision from the Department?

Mr. Seán Ó Foghlú

I do not think we are legally allowed to give Caranua a budget, and we do not do so.

That is fine. Will the organisation need more money?

Mr. Seán Ó Foghlú

The budget is provided on the basis of the redress payments. Caranua is working down its operations, and has announced that applications have ceased. It is working through the range of issues remaining, such as appeals and cases. It is unlikely that the organisation will have used every aspect of its available funding at the time of dissolution and it is unlikely that any significant cash assets will remain.

We must work that through that situation, but the issue for us concerns working with the groups of survivors regarding the services that might be in place following the dissolution of Caranua, and we have been engaging with survivors on that issue. I refer to whether it is possible to put services or some other arrangements in place that will continue to support them to a certain extent. Funding, however, for the sorts of activities requiring direct expenditure in respect of survivors is unlikely to continue after the dissolution of Caranua.

The situation is that €500,000 remains, and when that runs out the money is gone.

Mr. Seán Ó Foghlú

It will be run out in a planned way, and Caranua will not be continuing after that. It would need a provision of the Oireachtas to allow funding to go to it, because the only funding allowed to go to it is under the redress scheme. Under the law, however, any additional redress money goes to the national children's hospital.

Mr. Seamus McCarthy

If I could add a point of information, there is accrued interest on the €110 million. The total overall budget, then, is slightly over €111 million.

That is fine. I have another question, and then I can come in for a second round. When the Department contracts people, whether under procurement legislation or otherwise, is it normal practice to indemnify them against any claims?

Mr. Seán Ó Foghlú

It can depend.

It is case by case.

Mr. Seán Ó Foghlú

It would not be the case in respect of building, for example, where there would be much procurement.

No, I understand that.

Mr. Seán Ó Foghlú

Where someone is doing a task for us, however, such as an investigation, or something like that, like an advisory job, an indemnification can be sought. To give an example, we had to put indemnifications in place for teachers this year in respect of the calculated grades process.

Understood. I ask the final portion of my question in the context of section 19 of the Comptroller and Auditor General (Amendment) Act 1993. Did we indemnify Polymetrika?

Mr. Seán Ó Foghlú

No.

That was not done.

Mr. Seán Ó Foghlú

No.

Mr. Seán Ó Foghlú

There are detailed provisions in the contract, but we did not indemnify the company.

I call Deputy Munster who has five minutes.

Regarding those responses, I would just like to get some clarity. I do not know if I heard Mr. Ó Foghlú correctly regarding his answer to a question from one of my colleagues. Did he say that the Department had never previously engaged Polymetrika in any contract in any year?

Mr. Seán Ó Foghlú

The Department directly, no.

Was the Education Research Centre the only organisation to engage Polymetrika?

Mr. Seán Ó Foghlú

Yes, as far as I am aware.

Mr. Seán Ó Foghlú

That is the only instance that I have in front of me now.

That is fine. Just out of curiosity, if the Department did not have any previous contracts with Polymetrika, why was it then the preferred supplier of services?

I am sorry-----

I am asking the question regarding non-compliant procurement, in particular.

Mr. Seán Ó Foghlú

This is a 2020 question. I am quite prepared to answer it-----

If I could finish, I was saying that I was asking the question regarding non-compliant procurement. I am curious to know on how many occasions, in total, in 2018, 2019 and 2020 the Department used the non-compliant procurement process rather than the full procurement process.

Mr. Seán Ó Foghlú

In our accounts, we set out the details regarding procurement-----

That is fine. Does Mr. Ó Foghlú have the total number?

Mr. Seán Ó Foghlú

I just need to find my note on procurement.

We will move on to the next question, and return to this topic later.

Regarding any other adverse outcomes from those non-compliant procurements, but also more generally, what would the practice be concerning-----

Mr. Seán Ó Foghlú

I have the information now. There were 36 cases recorded in 2018, totalling €2.88 million. There was a range of reasons for those procurements. Regarding 12 of those cases, for procurement of more than €25,000 without a competitive tender, the total was €2.7 million.

Was that in 2018?

Mr. Seán Ó Foghlú

Yes, that was 2018.

Does that give a total of 48 cases in 2018?

Mr. Seán Ó Foghlú

There were 36 cases, amounting to €2.8 million. Of those, 12 were costed at more than €25,000 and 24 were under €25,000. In 2019, our statement of internal control shows there were two contracts in the value range €25,000 to €100,000, totalling €109,000, and two contracts came in at €338,000.

There were two contracts in that particular range in 2019.

Mr. Seán Ó Foghlú

Yes, as set out in the statement of internal control. However, the Deputy is assuming the nature of the engagement by the State Examinations Commission, first with Polymetrika and then with the Department, and that there was not any sort of process in place. The Deputy is positing a supposition about 2020 into a previous year's question, which I cannot fully answer without describing the situation in 2020.

To be clear, the Deputy may ask about procurement in 2018 and 2019, including practices and procedures, and we expect those questions to be answered.

That is exactly what I am asking in respect of non-compliant procurement. This committee is about examining systems, practices and procedures. For my own interest, giving Polymetrika as an example of a contract in respect of which there was a non-compliant procurement, what would the practice be in regard to the Department-----

Mr. Seán Ó Foghlú

Again, the Deputy is making an assumption.

In general, what would the practice be in terms of the Department giving further contracts to a contractor it had previously engaged and which made a shambles of that previous contract? Would the Department ever have a practice of giving a second contract to a company that had not fulfilled a prior contract or had made a complete bags of it? Has the Department ever given a second contract in those circumstances? It is a straightforward question.

Mr. Seán Ó Foghlú

It is not actually a straightforward question because procurement-----

I assume the Department keeps a record of such things.

Mr. Seán Ó Foghlú

Clearly, if we were very unhappy with a contractor, we would not wish to engage it again. However, where we follow procurement rules on buildings, for example, it is very complicated to rule anybody out from a procurement process.

In the case of what we have seen this year, would that type of contractor be awarded a contract again? We are talking about the use of public moneys.

Mr. Seán Ó Foghlú

The Deputy is assuming that the contractor made a bags of it.

I am asking whether any such contractor would be likely ever to be issued another contract by the Department or would the latter, from a value for money position, say that it would not qualify this time?

Mr. Seán Ó Foghlú

We are not allowed to exclude on that basis. There are complex rules about the grounds on which we can exclude contractors from tendering.

A doubling of price is surely a grounds for exclusion.

Deputy Munster's time is up.

If I may, Chairman, I want to quickly raise another issue. The media has reported this week all about the complete hames that was made of the Covid-19 contact tracing system. I have heard reports in the past week or so of schools that were asked to conduct tracing themselves, with staff and principals having to spend hours and days tracking down close contacts. What is the Department's position on this?

Mr. Seán Ó Foghlú

I am happy to answer the Deputy's question but it is one that is relevant to 2020 and the reopening of schools. If the Chairman wishes me to answer, I will do so.

Mr. Ó Foghlú may answer as briefly as he can.

Mr. Seán Ó Foghlú

This is an area in which public health staff are leading and we are working closely with them. There is a procedure in place and the public health people are really trying to work speedily with schools. They will contact a school as soon as they understand there has been a case involving a student or staff member. They have been doing that but, as the numbers have gone up in recent weeks, it has become a greater challenge. It is a very challenging time for us all and we are hearing today about what happened over the weekend and the particular challenges that have arisen. In response to those particular challenges, the public health personnel are working to ensure the children in question are self-isolating and that there is follow-up. If any school staff member is part of the group who were, over the weekend, asked to do their own contact tracing, then the school is asked to inform the Department. We will make sure the public health people work with those staff and process them in an urgent way. We have had a lot of dialogue and briefings with stakeholders and the public health people in the past couple of days, as the Minister has outlined. We recognise the challenges in this regard. The public health authorities, supported by us, are seeking to put in place enhanced schools public health teams for when schools return after the half-term break.

I have one final question.

I already let Deputy Munster in for a second round of questions. We are way over time and I must be fair to the other speakers.

I thank the witnesses for the work that they and all the people employed by the Department are doing in schools and colleges throughout the country. My questions relate to public private partnerships, PPPs, in respect of which I want to raise, first, a comparison of costs issue. Page 21 of the appropriation account includes a reference to two projects. In the case of the first, the National Maritime College of Ireland, the account details expenditure of €126 million and a total cumulative cost of €187 million. In regard to the second, the CIT Cork School of Music, expenditure of €101 million is indicated and a total cost of €220 million. Why is there such a big variation in cost between the two projects? The additional cost for the National Maritime College of Ireland is some €50 million, whereas the additional cost for the CIT Cork School of Music over the cumulative period is more than €119 million.

Second, I understand there is a provision under the PPP contracts process whereby projects can be refinanced, to the benefit of both the Department and the contractor. Some of these projects would have been agreed at a time when interest rates were extremely high. Given that interest rates are currently very low, I am wondering what level of engagement there has been between the Department and the companies with which it has contracts on the possibility of refinancing, which could be to the benefit of both parties.

Mr. Seán Ó Foghlú

The projects to which the Deputy referred are a matter for the new Department with responsibility for further and higher education, research, innovation and science. The accounts are still with us and I am still the Accounting Officer but all the relevant staff and functions are now with the new Department. Mr. Loftus and I have both been working on this matter. We in the Department of Education and Skills have the pilot schools PPP bundle and the five other schools bundles and they will be staying with us. The new Department has responsibility for the contracts to which the Deputy referred, as well as the Grangegorman campus project and the planned PPP bundles for the institutes of technology sector. The responsibilities in this regard are being split between the two Departments.

In terms of the schools PPPs-----

In fairness, these particular projects were undertaken by Mr. Ó Foghlú's Department. We are talking about the 2018 and 2019 accounts. The two contracts in question were agreed under the remit of the Department of Education and Skills and there is a huge variation in the costs involved. I am asking what engagement there has been with the contractors in that regard.

Mr. Seán Ó Foghlú

They are under the Department as was but they are not under the Department as is.

Mr. Ó Foghlú is still the Accounting Officer.

Mr. Seán Ó Foghlú

Yes, but I am making the point that they now come under the remit of the new Department.

I accept that but I am looking for an explanation as to why there is such a variation in cost, with one project having an expenditure that went from €101 million to €220 million while the other went from €128 million to €187 million. Can I get an explanation of that huge variation? My second question was about engagement with contractors in regard to the refinancing of PPP projects. I know the Government has engaged on the restructuring of contracts worth some €70 billion in the past 24 months. Has that type of engagement occurred within the Department of Education and Skills?

Mr. Hubert Loftus

The easiest thing might be to write to the committee providing the detail the Deputy has requested and an update on the projects. These are projects that are being delivered and in respect of which there are contractual commitments and liabilities, bearing in mind the 25-year period.

We can reflect this in the answer. I will give the Deputy a full picture.

And perhaps an explanation as to why there is such a big variation.

Mr. Hubert Loftus

We can do that.

I want to move on to another issue with regard to the 40 schools requiring remediation. What is the checking system for the Department when a contract is completed? Who signs off that it is fully compliant with building regulations? This involves 40 different projects. I presume we had different people engaged in supervising these projects. How come so many went through the system without problems having been identified?

Mr. Hubert Loftus

The primary responsibility in terms of certifying compliance with building regulations rests with the contractor. In a design and build scenario, which was these scenarios, it rests with the design and build contractor, which is the company in the first instance. Based on these certifications the Department makes payments and we have a project management company that makes these payments based on the certification and the underlying certification by the contractor.

When a certification comes in, is there not a checking system to make sure that what the company contracted to provide is actually delivered?

Mr. Hubert Loftus

Yes, and there are various elements to the certification process. Within a design and build scenario there is the contractor and that contractor's design team. The design team members do the certification with regard to that contractor and we have a project management team with technical support that is involved, based on receipt of the evidence provided by the design and build contractor. Many of these projects predated the building control (amendment) regulations, BCAR, introduced in 2014. There is an assigned certifier involved in more recent projects. The bigger issues we have on these schools predate the BCAR.

The job of the assigned certifiers is to sign off that everything has been provided.

Mr. Hubert Loftus

They have a statutory function under the BCAR and they are independent of the contractor and independent of the Department.

I welcome the witnesses, whom I have met on numerous occasions in this forum. I want to ask about the claims. In 2019 there were 83 claims but I want to ask about the 2018 claims. The average claim was €5,300 but the average legal costs were approximately €12,900, which is almost €13,000. Why is there such a big difference? What is the Department doing to learn from the claims and reduce the legal fees with regard to this ratio?

Mr. Seán Ó Foghlú

Is the Deputy referring to claims on the building side or claims more generally?

Claims against the Department by members of the public.

Mr. Seán Ó Foghlú

Is the Deputy referring to Table 6.2?

I do not have the document with me.

Mr. Seamus McCarthy

I think it is Table 6.2.

Mr. Seán Ó Foghlú

These are the cumulative claims, which include claims relating to planning and building in the main. The cumulative expenditure on all these excludes the legal fees relating to planning and building as they do not relate to litigation.

The average claim paid out in 2018 was €5,300.

Mr. Seán Ó Foghlú

These include a range of issues, including those dealt with by the State Claims Agency for the education sector as a whole and legal claims under redress. It is work throughout the education sector and not necessarily just in terms of the Department. It is where there is a compensation arrangement in place throughout the whole of the education sector. It is quite a wide-ranging set of responsibilities across a wide range of schools and other activities.

This jumped out at me because I asked a parliamentary question in July and I received a table with regard to all the Departments. Up to June 2020, the Department of Education and Skills had a grand total of 71 claims, which was the highest of any Department. Why would this be?

Mr. Seán Ó Foghlú

In simple terms it is because of the sector. It is the biggest sector in terms of activity. The State Claims Agency does not operate in the entire sector but it does in a range of provision and there are historical cases. It is quite broad.

It would be quite useful if the Department could give us a note on this.

Mr. Seán Ó Foghlú

We will be happy to do so.

If it could be sent to us in writing it would be appreciated. We can come back on it.

I apologise because I had to leave that meeting earlier and I do not know whether Western Building Systems was dealt with. It was working under a public private partnership arrangement as far as I can recall. Did the Department do other surveys in schools that did not involve Western Building Systems? Was the survey confined to Western Building Systems?

Mr. Hubert Loftus

It was part of our design and build programme rather than public private partnership. It represents approximately one quarter of the programme. Other operators provided many other projects also under the programme, and very successfully. With regard to the structural issues that arose approximately two years ago, they have since been addressed. We broadened out the sample to other schools to see whether the type of issues that arose were applicable in other schools and to provide reassurance to ourselves and the sector generally. From the sample undertaken, no similar issues arose in other schools that gave us such concern.

It is unique to these particular schools.

Mr. Hubert Loftus

Those structural issues were unique.

Where are the legal proceedings in relation to that?

Mr. Hubert Loftus

The legal process is very advanced. I must be conscious when I am answering questions here about the legal process. It is at quite an advanced stage. There are two cases in the commercial court and proceedings have been issued in 38 others. They have been issued and served. I am also conscious that we have a procurement process under way with regard to the remaining works to be done on these schools.

With regard to learning from this, Mr. Loftus said it was unique to a particular entity. Are there measures such as changing tender processes or design that will happen as a consequence of this incident?

Mr. Hubert Loftus

As a Department and as a planning and building unit we are always in learning mode and looking to see what works well and where improvements can be made. In the schools remediation programme the issues have been addressed in the initial 22 schools and we are doing a procurement process for remaining issues. We are doing a strategic review in light of the experience, and in light of the fact we are in a Covid environment and the extent we can work in a live school environment and how it gets managed is also an issue.

More generally, the work in the schools mediation programme, which involves a fair bit of retrofitting type work, will be particularly relevant to the deep energy retrofit programme that we will do in all schools generally. Separately, with regard to the issues that arose here, as part of the next iteration of our design and build programme strengthening procedures have been put in place.

I thank all the witnesses for coming in. I appreciate the Secretary General had four days to prepare and by all accounts he did not do a bad job.

On page 18, paragraph A.9, it states "€2 million of which relates to the provision of transport services to mainstream students". Could the Secretary General explain that to me?

Mr. Seán Ó Foghlú

In the context of school transport-----

Mr. Seán Ó Foghlú

-----that means primary or second level students and not putting that in the special education scheme. They are primary or second level students.

That have their-----

Mr. Seán Ó Foghlú

Is that provisionally?

It states €2 million of which relates to the provision-----

Mr. Seán Ó Foghlú

From what is the Deputy quoting?

I am quoting from the school transport services paragraph A.9 on page 18. It seems an odd figure given that I would have thought everyone was a mainstream student other than those in the disability services.

Mr. Seán Ó Foghlú

No. It is because the special education needs is the bulk of the increased costs and, therefore, there were some increased costs associated with students who do not have special education needs. It is €10 million for special education needs direct transport, €4 million for bus escort and then €2 million of the extra costs was within the general scheme.

Is it in the general scheme as in they travel on the bus as normal?

Mr. Seán Ó Foghlú

It is.

It is just an increase in costs.

Mr. Seán Ó Foghlú

It just means we have to run more buses.

Thank you.

To come back to the bus transport, as the Secretary General can imagine there are major difficulties with school transport every year with under-capacity, routes and all of that. I understand a review of the school bus scheme is being carried out. Am I right on that?

Mr. Seán Ó Foghlú

Yes, Deputy.

Can the Secretary General advise why that review was undertaken? I heard him say earlier that he thought it was value for money.

Mr. Seán Ó Foghlú

It started off with a very dominant value for money focus. Let us be honest, the expenditure on the scheme has been increasing at a rate much above the rate of inflation in recent years. I do not believe anybody is happy with that but at the same time the costs are mostly associated with special education needs. Obviously, we have to do that but we always have to look at ways to do things better. Also, elements of choice have come in. We have choice, for example, at primary school level between different types of primary schools and to a certain extent the post-primary school level. At primary school level we have the Catholic religion, Protestant religions, Irish medium and multidenominationals. All that means we are providing a range of transport opportunities and eligibilities.

Not divided based on religion, I hope.

Mr. Seán Ó Foghlú

Anybody of whatever religion can get school transport provided that they are eligible for school transport to their nearest Catholic or Protestant school if it is more than two miles or 2 km away from their home. It is not their religion rather it is the patronage of the school to allow for choice. That, for example, at post-primary level means a very important school transport service running to our Protestant post-primary schools, which are very dispersed, especially outside Dublin.

Okay, so that is part-basis. When does the Secretary General expect that review to be ready?

Mr. Seán Ó Foghlú

We hope to complete it for the next Estimates process. However, a particular element that has come in more strongly in the programme for Government, which we have built in, is the importance of transport generally, public transport, and climate action. There is another aspect to that review, which has been added to the nature of the terms of reference.

The Secretary General expects that will extend the review. Has he an idea of the timeline involved?

Mr. Seán Ó Foghlú

We hope to complete it within the next year for the next Estimates process.

We look forward to that.

If I may have one further minute, Chairman, regarding the statement of internal financial control and fire safety, there has been a spend of €1.5 million over 55 schools identified as fire safety compliance work. Could the Secretary General explain that to me?

Mr. Seán Ó Foghlú

That was in the initial stages of the remediation programme. It is what gave rise to the remediation.

Okay, that is perfect. They identified 40 that needed-----

Mr. Seán Ó Foghlú

Not quite. We had to engage project consultants in a very short timeframe to engage in urgent work because it was associated with fire safety. They were already on a procurement framework with us doing work for us but we had to expand their work to do this piece of work that came up urgently and arising from that work there was the remediation aspect.

I appreciate that. Will that money be recouped through the remediation cases?

Mr. Hubert Loftus

That fire safety assessment programme related to the schools constructed by the contractor where the legal process is under way and that would be part of the issue.

We can expect to see that money coming back effectively

Mr. Hubert Loftus

It is part of the case but there are the proceedings. Ultimately it will be for the courts to decide.

But it is part of the case.

Mr. Hubert Loftus

That would be just one part. The major part would relate to the works and the remediation works.

Briefly, on the €6.67 million that came back from Bus Éireann, was that over year or an accumulation of excesses that it had stored up?

Mr. Seán Ó Foghlú

Under the arrangements we have with Bus Éireann, there is a management charge which was capped. As part of that there was an aspect which could give rise to a surplus, of which we would agree any expenditure, but after a review of that by the Department of Public Expenditure and Reform we instigated a new arrangement that it would not hold on to any money.

Was it accumulated over one year?

Mr. Seán Ó Foghlú

It was less than the total that there would have been in a year as far as I am aware. There was a remaining surplus which increased to that level. We can provide the details to the Deputy if she wishes.

I will allow a second round of questions and I will start with a few brief questions. On the public private partnerships, approximately 40 buildings have been completed under them. Has the Department carried out post-project reviews of those public private partnerships? A simple Yes or No answer will suffice.

Mr. Seán Ó Foghlú

We have a major review under way of the pilot schools.

Is there a review carried out of each project?

Mr. Seán Ó Foghlú

We have a major review of the first batch of them and that will give rise to a much more speedy review of the other bundles. It is a very interesting review because what it is showing----

Will it be published? Just a brief answer, please.

Mr. Seán Ó Foghlú

It will.

Will it be sent to the Comptroller and Auditor General for a value for money assessment?

Mr. Seán Ó Foghlú

It will. Yes, absolutely.

Thank you.

Regarding the defective buildings, of which there are a few in that batch in Portlaoise in my constituency, the Secretary General said the assigned certifier signs off on these. My understanding when the legislation went through was that the assigned certifier comes in at the end and signs off on them. Who is the Department’s man or woman on the job every day making sure that things are being done properly? It is widely reported that there were no wall ties put into the walls in many of those buildings in those batches of public private partnerships. Wall ties cost 14 or 15 cent each. There was nobody on the ground to see that the wall ties were put in between the double cavity wall when the schools were built and that was the main structural problem in some of them. Who is the Department’s person? Does the Department have a clerk of works on site?

Mr. Hubert Loftus

At the outset in responding to the Chairman’s questions, I need to remind him there is a legal process under way-----

I understand that.

Mr. Hubert Loftus

-----and I have to be careful in terms of what I indicate.

We saw television coverage of walls being opened and wall ties being retrospectively fitted.

Mr. Hubert Loftus

Regarding the responsibility for constructing buildings, certifying compliance with the building regulations rests with the contractor. These projects were part of the design and build programme.

I understand that. Major taxpayers' money is going into this and we all support that. We have great new school building programmes and they have been very successful. However, there have been many defective buildings and much of it from what we can garner from what has happened is that it was due to bad practices on a day to day basis. Who is in the eyes and ears on the ground of the Department of Education and of the taxpayer on those sites, making sure that elements such as wall ties are fitted and that proper standards in safety and construction requirements are being met? Who is that person on a day to day basis?

Mr. Hubert Loftus

The oversight requirements rest, in the first instance, with the contractor and the contractor’s design team. Second, the Department would employ project managers with technical support, be they architects or engineers. They have an oversight role.

The question is-----

Mr. Hubert Loftus

In addition, in more recent years the Department has a had a full-time clerk of works on projects.

Does the clerk of works visit daily?

Mr. Hubert Loftus

Since 2016-----

We are talking about multimillion euro projects.

Mr. Hubert Loftus

The clerks of works are employed full-time. They would be there-----

Is there a clerk of works on each site?

Mr. Hubert Loftus

In more recent years, yes, although not in the earlier years.

Was there a clerk of works on site for these projects?

Mr. Hubert Loftus

They were on site for those projects delivered in more recent years, irrespective of whether they were carried out under the design and build programme or as traditional projects outside the programme.

Will Mr. Loftus tell me whether there was a clerk of works on site for these projects, yes or no?

Mr. Hubert Loftus

It depends on the year they were built. More recent projects will have had a full-time clerk of works.

Can we have a clerk of works on site from here on out?

Mr. Hubert Loftus

It is Department policy to have a full-time clerk of works on large projects.

These will make sure that wall ties are fitted and so on. I thank Mr. Loftus. I have a very brief question on the design of school buildings. As public representatives, we all make the case for new schools in our areas. The design seems to take an awful lot of time. There are many new schools in the constituency I represent. I very much welcome these, although a few buildings are still needed, including buildings for the Kolbe Special School and a school in Abbeyleix. They all look very much the same, however, so why do we start with a blank canvas? This puzzles me. They look like a generic building. They are a very similar. There seems to be one type of building for a single-storey school and another generic type for a two-storey building. Why do we start with a blank canvas? Why do we not use the same modular design from one site to next? This would speed up the process and reduce costs and architect fees.

Mr. Hubert Loftus

Many things are standardised, including classroom sizes and layouts. We also had a generic repeat design process that delivered projects for us, but such designs have to fit the configuration of the particular site and any associated planning permission requirements. A great deal is standardised.

With regard to the process and the length of time it takes, we have a very structured design process based on stages.

I know that. I ask Mr. Loftus not to go into it.

Mr. Hubert Loftus

It is an important point for the Committee of Public Accounts to hear. That structured process, which involves walking through preliminary design, developed design, detailed design and the detailed tender package, ultimately delivers projects for which the final account typically comes within 5% of the contract sum, which is important for the management of taxpayers' money. That must be borne in mind. It should also be borne in mind that it takes time to work through the procurement process. We are always looking to do things better and to innovate. I note the point the Chairman has made. We are looking at increased use of modular building solutions, particularly in light of the Covid situation.

Mr. Seán Ó Foghlú

I would like to make one further point on that issue. It is very brief. It is on energy efficiency. The nature of school buildings, their aspect to the sun and so on are very important. This means there has to be different innovations and approaches when designing schools for different sites. We put a lot of effort into that.

We have just under 15 minutes left. I will allow each speaker three minutes. Is that okay?

That is perfect. How much of the budget has been put aside for next year with regard to leaving certificate contingency?

Mr. Seán Ó Foghlú

That is a 2021 question.

I believe we are taking things too far with this literal interpretation.

Mr. Seán Ó Foghlú

I am quite happy to talk about 2021 if the Chairman permits.

If Mr. Ó Foghlú is unhappy to talk about it, he may say so to the Chairman, who will stop me.

Mr. Seán Ó Foghlú

The State Examinations Commissions has extensive funding. The issue is not really the availability of contingency funding for State examinations but whether they can be held. We really want to hold them. It is really important. What has been the most challenging issue this year? One might think it was getting the teachers to do the job. It was, but not really. The biggest challenges were ensuring the well-being of the students and the uncertainty this horrific pandemic has meant for the decision-making process. The first decision we made was to pull the oral and aural examinations. The second was to move the written examinations back, which turned out not to be possible. We were then faced with a call. We could delay the whole year and the students' transition or we could do something different. Nobody wanted to do this, but it is what we had to do. People want even less to do it again.

We are holding written examinations in the middle of November because the leaving certificate was not cancelled, just postponed. Estimated grades were just an option to which people could opt in. We are running the written examinations in partnership with the schools in three weeks' time and will learn a lot from doing so. We really want to be able to do this properly. We have already announced that there will be more choice in the examinations and we have set this out for students. That is very clear and is included in the guidance on the curriculum. We really have to try to avoid continuously speculating on alternatives and indicate to everyone that we will have to manage this virus while keeping schooling, the examinations system and the transitions going. If we do not, we will cause great stress.

The advice of the National Educational Psychological Service, NEPS, played a big role in the decision to postpone the examinations. NEPS has also played a big role in advising the system when the schools reopened. Well-being is really important.

I have a yes-no question. Is it safe to say that, at this stage, the Department is preparing to hold written examinations irrespective of whether there is a vaccine?

Mr. Seán Ó Foghlú

The Department is preparing to hold written examinations and is assuming they will be held in the context of Covid.

Good. Finally, I want to pass on two very quick comments.

The Deputy must be very brief because there are three more speakers.

I know this does not fall under our remit but, because it will be three weeks before the Department's representatives meet the Joint Committee on Education, Further and Higher Education, Research, Innovation and Science, teachers have asked me to raise the cross-departmental issue of contact tracing. The delays in this area are causing them an awful lot of anxiety. Will the Department consider issuing protocols with regard to things emerging out of hours, after school or over the weekend? That suggestion comes from schools. I know it is not our business but I said I would mention it.

Mr. Seán Ó Foghlú

I have addressed these issues before. On health, we are working with public health officials to enhance the availability of teams to work with schools. We share schools' concerns. They are making a great effort to sustain schooling through this horrific time resulting from the virus.

I will go back to the old chestnut of the religious congregations' contributions towards the cost of redress for victims of child abuse in residential institutions. These date from 2002 and 2009. It is hard to believe but at this time last year, almost to the day, we received a report that a number of buildings had still not been transferred. Where are we at this stage? Is that all complete now?

Mr. Seán Ó Foghlú

I am very happy to answer this question because it is something we have discussed in detail. All the work has been done. We are just awaiting formal sign-off with the Property Registration Authority or permission from Ministers in respect of any remaining buildings. We have got through all legal and technical issues regarding the transfer of all buildings from both the 2002 and 2009 agreements. The only group in which no transfer is happening is that of the Edmund Rice Schools Trust playing fields. We are working out the detail of the sharing agreement to which the trust has agreed in principle. All of the detailed contract work for all properties is complete. As I have briefed this committee, I met some of the groups approximately a year ago to ensure this was moved on. All that work has been done.

There were six instances of fraud or irregularities up to March of this year. Five have a combined value of approximately €111,000. The sixth was only recently uncovered. Does the Department have a ballpark figure for sum involved in that irregularity or fraud? Has An Garda Síochána been notified of these matters? How are they being handled?

Mr. Seán Ó Foghlú

These are issues that arise across the schooling system and, in this case, in one of our agencies. Depending on its nature, each issue could be referred to the Garda. In some instances, an amount can be recouped and it is not necessary to refer it to the Garda, but a number of more high-profile cases have been referred. In some cases, the amounts involved are relatively small. We can provide the committee with more detail if it wishes.

If Mr. Ó Foghlú would not mind.

I will touch on something again where people might have been overly defensive. I am trying to get a sense of the protections in place when non-competitive procurement needs to take place. No one knows better than the Department of Education and Skills how to have a stringent procurement process. I was a member of ETB boards of management for several years and the procurement rules that the Department had in place were the bane of our lives. We all accept that, because of an urgent requirement, situations will arise where a non-competitive process needs to be employed. What protections are in place to protect not only the Department, but also the taxpayer and the education system?

Mr. Seán Ó Foghlú

It would obviously depend on the nature of the procurement. We do not want to enter into any non-competitive procurement process. Where we engage an individual to assist in an advisory or investigative task, he or she could ask for an indemnity and we would have to seek the agreement of the Department of Public Expenditure and Reform. To get it, we would often use clauses about reclaiming elements of the fees paid.

I was asked whether there was an indemnity in the Polymetrika contract and I indicated that there was no absolute indemnity. Issues relating to our expectations of Polymetrika and Polymetrika's expectations of the SEC initially and then the Department were set out. There is a limited potential penalty clause in the contract.

Let us dance around the eggshells that have been put in front of us. If a company is being employed under a non-competitive process to carry out work that involves software development, what mechanism is put in place to assess effectively the capacity of that company to deliver what is being asked of it?

Mr. Seán Ó Foghlú

It would depend on the nature of the work. In this instance, it was not software. Rather, it was a combination of coding and psychometrics, which was a unique skill set that was in considerable demand, given that everyone in the western world was trying to do the same thing. The companies that one might have turned to sooner, for example, those in our neighbouring jurisdiction, were all occupied doing the exact same work and there was no capacity. It was not just a coding piece of work. It was also psychometric-----

What mechanism was in place to ensure that the person who stated he or she had that unique set of skills actually had them? How does the Department determine whether someone is up to the job?

Just a brief answer, please.

Mr. Seán Ó Foghlú

In this instance, it was clear from working with the person, the person's company and the person in a previous company that he had an extensive range of skills.

The Department had never worked with him.

I call Deputy Verona Murphy.

Mr. Seán Ó Foghlú

Our partner agency, the Educational Research Centre, had worked with him. We had worked with the individual. He had been working on behalf of the Educational Research Centre at the time. In 2009, he did stunning working in respect of PISA, the OECD's assessment of teenagers' numeracy and literacy in science. His work changed how PISA assessed those. This person had a particular expertise-----

His work has changed how the next leaving certificate be done as well.

Mr. Ó Foghlú spoke about value for money in terms of bus transport. In Bus Éireann, there is a policy that over-70s cannot drive a bus. Under employment law, that would not be tolerated in the private sector. It inhibits the process from achieving value for money. Many over-70s hold a licence and are suitable to work school hours, namely, mornings and evenings and nothing in between. The policy should be reviewed or at least form part of the review. We received from the Department of Education and Skills an estimate of €87 million for the cost of Covid bus transport.

Mr. Seán Ó Foghlú

That is the lower end.

I can see that. There are requirements for Garda vetting and so on, but many of these people are retired bus drivers who could take up this work.

I appreciate that where the leaving certificate is required, one of the foremost matters on the Department's mind is the well-being of students. Has it any engagement with the UK in that regard? The UK is already considering not holding next year's A-levels and O-levels on the basis of Covid continuing. A great deal of money may be spent by the time our Department reaches a decision. Mr. Ó Foghlú stated that it would use the written exams as a template. While I appreciate that, I ask that the Department not go beyond that. We will face the same conundrum as we did this year. We already have a template, namely, not doing the leaving certificate.

Mr. Seán Ó Foghlú

The over-70s issue is a Bus Éireann policy and is not necessarily part of the review, but I can ask for its rationale again.

We work closely with our partners in the various jurisdictions in Ireland and Great Britain. The UK formally announced in the past week or so that it would proceed with written exams. We work closely with it and we have networks of engagement with it on, for example, qualifications, quality assurance and inspectorates. There are two aspects to that. Within Ireland as a whole, it is important to have North-South relationships. We had input from the Northern exams body into our work. It is also important in the context of Brexit that we have relationships with our colleagues in England, Wales and Scotland. We are working towards that.

I thank Mr. Ó Foghlú.

I will ask a final question in the two minutes remaining. Have the units of the National Educational Psychological Service, NEPS, throughout the State been open and providing services during levels 2 and 3?

Mr. Seán Ó Foghlú

NEPS is a service within the Department. It is providing services and liaising with and supporting schools.

Is it open for business?

Mr. Seán Ó Foghlú

Yes. The staff are working away.

Are its buildings open?

Mr. Seán Ó Foghlú

In terms of how the staff operate and engage, we are trying to minimise physical visits to schools and so on.

Of course.

Mr. Seán Ó Foghlú

However, the staff are working away. In fact, we have expanded the numbers in NEPS for this year for the very reasons the Chairman cited.

I thank the witnesses for joining us and providing information. We are trying to work under the guidelines. It can be difficult at times for members as well as witnesses, but we must try to manage the situation carefully. I thank the Comptroller and Auditor General for attending and assisting the committee. Is it agreed to request of the clerk to seek follow-up information and carry out any agreed action arising from today's meeting? Agreed. Tomorrow, we will engage with the Department of Public Expenditure and Reform.

The witnesses withdrew.
The committee adjourned at 6.30 p.m. until 11.30 a.m. on Thursday, 22 October 2020.