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COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 9 Dec 2021

Business of Committee

The business of this afternoon's meeting includes minutes, accounts and financial statements, correspondence, work programme and any other business. We will then go into private session before adjourning.

The minutes of our meeting on 2 December have been circulated to members. Do they wish to raise any issues relating to them? Okay. Are the minutes agreed? Agreed. As usual, the minutes will be published on the committee's web page.

The next matter is accounts and financial statements, 11 of which were laid before the Dáil between 26 November and 3 December. I will ask the Comptroller and Auditor General to address these before opening the floor to any members who wish to comment.

Mr. Seamus McCarthy

As the Chair said, there are 11 sets of financial statements, all of which relate to the accounting period 2020. The first concerns the regulator of the national lottery. That gets a clear audit opinion but I draw attention to note 9, which discloses the reasons accumulated pension liabilities totalling €3 million have not been recognised in the financial statements. The note also discloses that the regulator is awaiting a decision of the Department of Public Expenditure and Reform about pension proposals that were submitted in 2015. The second set of financial statements relates to the national lottery fund for 2020. There is a clear audit opinion on that. Cavan and Monaghan Education and Training Board and Waterford and Wexford Education and Training Board received clear audit opinions. The Charities Regulatory Authority received a clear audit opinion. Associated with that, a charities fund account for 2020 received a clear audit opinion. The State property miscellaneous deposits account received a clear audit opinion. The Travellers Protection Fund Investment Account received a clear audit opinion. The Ireland-United States Educational Fund received a clear audit opinion. The Commission for Aviation Regulation received a clear audit opinion. The National Disability Authority received a clear audit opinion.

What sum of money are we talking about in respect of the Waterford and Wexford Education and Training Board, ETB?

Mr. Seamus McCarthy

It is a figure of €2.6 million in total.

I will ask about the Waterford and Wexford Education and Training Board in respect of non-compliance in procurement. Do we know what the value of that non-compliance was? Is there any detail on it?

Mr. Seamus McCarthy

Yes. If the Deputy has the document, she can click on the link and it will bring her to the statement in the accounts. It is actually €2.7 million, excluding VAT. The note in the financial statements gives a fairly comprehensive breakdown of the types of procurement that were involved and the reasons the procurement was non-compliant.

Can we agree to note the accounts and statements? Agreed. I suggest that the secretariat follows up with the ETB regarding its plan to rectify the procurement issues relating to the €2.7 million figure to ensure that, in future, measures are taken to try to counteract non-compliance.

As usual, the listing of accounts and financial statements will be published as part of our minutes.

The next item is correspondence. As previously agreed, items that have not been flagged for discussion for this meeting will continue to be dealt with in accordance with the proposed actions that have been circulated and decisions taken by the committee in relation to correspondence will be recorded in the minutes of the committee meetings and published on the committee's web page. Eight items of correspondence have been flagged under category B, which is correspondence from Accounting Officers or Ministers or both, relating to follow-up to meetings of the Committee of Public Accounts.

No. 910B is correspondence from Mr. Bernard Gloster, chief executive of Tusla, dated 22 November, which provides further information requested at our committee meeting with Tusla on 21 October. We held this item over from last week's meeting because it was flagged by Deputy Catherine Murphy, who was not in attendance due to commitments in the Dáil. This is a comprehensive response to 22 requests for information arising from that meeting, including a number of supporting documents. Is it agreed that we note and publish the item? Agreed.

No. 922B is correspondence from Mr. John McKeon, Secretary General of the Department of Social Protection, with whom we engaged this morning. It is dated 25 November this year and provides information requested by the committee regarding the Department's investigations into contractors engaged by RTÉ. The Secretary General states that due to the scale of the investigation, it is not possible to provide a specific timeline for its completion but it could continue into 2023. While the Department is receiving good co-operation from RTÉ, this investigation is being conducted alongside all other employment status investigations in other sectors. The Secretary General goes on to detail the appeals process for such investigations. Is it agreed that we note and publish this item of correspondence? Agreed.

This has been flagged by me and Deputy Catherine Murphy. I do not want to retrace this morning's steps but we followed up on the issue with Mr. McKeon and there are a number of questions there. I suggest that we write to the Secretary General and ask to be kept informed of developments with that investigation. It is a serious matter. It seems to be of significant scale. He refers in the letter to the scale of the investigation, so it is presumably very widespread or large. We will ask to be kept apprised of the different developments and any significant findings on an ongoing basis. Is that agreed? Agreed.

No. 927B is also from Mr. John McKeon, Secretary General of the Department of Social Protection. It is dated 26 November 2021 and provides information requested by the committee regarding non-compliant procurement. This and the next five items of correspondence are examples of responses to the requests we issue to bodies where the Comptroller and Auditor General has drawn attention to material instances of non-compliant procurement. In 2020, the Department of Social Protection did not comply with procurement guidelines in relation to 92 contracts. The Secretary General has asked that due to the commercial sensitivity of the contract value information it be treated in confidence so I ask members to bear that in mind. We will note and publish this item, which was flagged for discussion by Deputy Catherine Murphy.

No. 932B is correspondence from Ms Oonagh McPhillips, Secretary General of the Department of Justice, dated 29 November 2021, also providing information requested by the committee regarding non-compliant procurement. The explanations provided in relation to the Prison Service’s non-compliant procurement are less informative. While I welcome the fact that contracts are now in place in 11 of the 16 cases referred to, it is proposed to request further details on the reasons for each instance of non-compliance with procurement guidelines in the Prison Service. This item was also flagged by Deputy Catherine Murphy but I do not think she is present.

No. 937B is from Ms Jacqui McCrum, Secretary General of the Department of Defence, dated 29 November 2021. It is a detailed response to the committee’s request for information on non-compliant procurement. It is proposed to note and publish this item. Is that agreed? Agreed. This item was flagged for discussion by Deputy Catherine Murphy. There is a short letter and a table giving more details.

No. 939B is from Mr. Fergal Lynch, Secretary General of the Department of Children, Equality, Disability, Integration and Youth, dated 29 November 2021. The non-compliant procurement for the Department in 2020 totalled over €91 million. With the exception of two, this concerned contracts that moved to the Department as part of the transfer of functions from the Department of Justice that occurred in 2020. All 151 of these contracts related to the provision of accommodation services for international protection applicants. Is it agreed that we note and publish this item? It was flagged for discussion by Deputy Matt Carthy.

This is a point of particular interest as it relates to contracts pertaining to direct provision that were transferred from the Department of Justice to the Department of Children, Equality, Disability, Integration and Youth. According to the Secretary General, Mr. Fergal Lynch, the previous Department, namely, the Department of Justice, had a view that the contracts were competitive and not applicable for inclusion in the return under circular 40/2002, but this Accounting Officer took a different view. This indicates a difference in interpretation across the board, given that one Department can take a diametrically different view from another about the same contract, and it therefore raises broader questions about different contracts. Could Mr. McCarthy comment on whether there are varying levels of compliance issues across Departments? This correspondence affirms that there is a subjective view to all of this.

The committee should accept the offer of a more detailed breakdown being provided on a confidential basis. That would be useful to our deliberations. We are going to be discussing the report on direct provision, following on from our consideration of the Department of Justice's report. Before we finally sign off on that, it would be good if we could get a briefing from the Department of Children, Equality, Disability, Integration and Youth in respect of the progress to date on its commitment to dismantle the direct provision system.

I ask Mr. McCarthy to come in on that question.

Mr. Seamus McCarthy

These contracts are a bit unusual. They are not the standard thing. If they related to a more direct procurement of goods and services, it would be clearer as to whether the procurement was compliant or non-compliant. The previous Department, which was the Department of Justice, considered that the procurement was compliant on the basis that the requirement for the accommodation for asylum seekers had been publicly advertised in national and local newspapers but the new Accounting Officer re-examined the matter. I do not know whether he took legal advice on it but he certainly formed the view that it was not compliant. When I reported previously on this, I drew attention to the fact that it was not competitively procured. That was about four or five years ago. There was some advertising after that and we had a discussion with the Department of Justice at the time on whether it was a compliant procurement. There is certainly an arguable case, although this is probably a more difficult one to call than many others. There would not be the same level of ambiguity with most of what is pointed out.

That was helpful. It is something we need to keep an eye on into the future.

I thank the Deputy. Before we move on, I wish to note an oversight on my part. No. 927B from the Department of Social Protection was provided in confidence. I stated incorrectly that we would note and publish it. I should have said that we would note it but not publish it because of the nature of its contents.

I ask members to respect that.

That is agreed.

No. 941B, from Mr. Ray Mitchell, assistant national director of the HSE, is dated 30 November 2021. It provides information requested by the committee regarding non-compliant procurement. The scale of the expenditure here is significant. In its 2020 accounts, the HSE declared 91% of expenditure that was subject to procurement rules to be compliant, representing a value of over €1.7 billion, with 9% declared to be non-compliant, representing a value of over €184 million. Is it agreed that we note and publish this correspondence? Agreed. It was flagged by Deputy Catherine Murphy.

Is Deputy Carthy indicating he wants to contribute again?

This might be described as taking liberties but I have to go to the Dáil Chamber for a debate and might not get back here before we finish dealing with the work programme. We had a hearing with representatives of the Department of the Environment, Climate and Communications at which we discussed the national broadband plan, among other issues. With respect to the national broadband plan, there has been an extensive series of articles in The Currency that have a number of very worrying aspects in terms of the beneficial ownership of the consortium and, critically, in terms of investors having been paid substantial sums of taxpayers’ money in 2020 before a single home was even connected under the plan. I believe we proposed that representatives of the Department appear before the committee alongside representatives associated with the national broadband plan so as to expedite this matter as quickly as possible in the new year. If that could be accommodated by the members, I would appreciate it.

We have them in the work programme. That issue, which has arisen this week, can be flagged as a matter for the representatives to address when they are in.

My request is that we try to have the meeting as quickly as possible if earlier time slots become available.

We will do that. It is an important issue.

No. 943B is related to what Deputy Carthy has just mentioned. It is from Mr. Mark Griffin, Secretary General of the Department of Environment, Climate and Communications, and dated 1 December 2021. It provides information requested by the committee regarding non-compliant procurement. It concerns two contracts, totalling under €1 million and excluding VAT. Is it agreed that we note and publish this correspondence? Agreed? It was also flagged by Deputy Catherine Murphy.

The next category of correspondence is category C, which contains correspondence from and related to private individuals and any other correspondence. No. 947C is from a PhD candidate with the Royal College of Surgeons and dated 1 December 2021. It is a submission to the committee raising concerns about governance arrangements for payments from pharmaceutical companies to healthcare organisations and healthcare professionals. The correspondence states the evidence is that the receipt of pharmaceutical company payments is associated with higher prescribing rates, higher prescribing costs and lower prescribing quality.

Given that public funds are expended on prescription medication, it is important that robust and effective governance arrangements be in place. While a wider examination of this issue might be more appropriate to the health committee, I propose in the first instance to request the correspondent's consent to forward the correspondence to the Department of Health to request a response to the matters raised.

This correspondence has been flagged for discussion by me and Deputy Catherine Murphy who is not present. The issue is the negative influence in respect of the prescribing of medication. Undue influence could be exerted by big pharmaceutical companies, which have a lot of clout, to promote a particular brand or quantity of a drug. That is of concern. As the student pointed out, the State alone spent €2.3 billion on pharmaceuticals in 2020. It rose from €1.3 billion in 2012, so it is a substantial amount of money.

Apart from being very concerned about the public expenditure element, I am concerned from a legal perspective. I know this is the Committee of Public Accounts but I believe this matter is one of undue influence, particularly interference with what might be prescribed. How do we verify what is the case in this regard? The letter states there is evidence, but how do we know?

This is-----

I am sorry; it states there is anecdotal evidence.

The correspondent makes a number of assertions in the document and provides many links. I have read a few times the summary of what he sent us. I propose that, in the first instance, we seek the correspondent’s permission to forward the correspondence to the Department of Health. It is open to us to request, following that Department’s response, further information or evidence from the correspondent.

On the evidence for the view that the pharmaceutical industry is paying individuals, anyone with a HSE contract will note that it clearly sets out that he or she is not entitled to receive any funding from a third party. Therefore, it is serious if there is an allegation that someone is in breach of contract, which he or she technically would be in the circumstances described. On what evidence is the allegation based? The evidence is very much anecdotal rather than factual. I agree with the Chairman that we should send the correspondence to the Department of Health and that it should come back to us with a detailed response, but I would like to ascertain where we should go to try to establish evidence for what is alleged to be occurring.

On the second part, I mentioned the links that the correspondent provided. The links contain information to back up his case. We are not in a position to adjudicate on the strength of the information. The Deputy is correct that it is a very serious matter. That is the reason I flagged it for discussion. On the point raised by Deputy Verona Murphy on the well-being of patients if overprescribing were happening, it would not be a healthy situation — pardon the pun. If certain drug companies have undue influence on medical practitioners or services generally in this country, it is very worrying. Deputy Colm Burke is correct about contracts. The best thing to do is to request the correspondent’s permission to send the correspondence to the Department for its response in the first instance.

We could also ask that if the correspondent has any further evidence, he would forward that to the committee or the Department of Health, if that is acceptable.

Mr. Seamus McCarthy

The key issue for the committee is perhaps around the accounting for moneys received from pharmaceutical and medical supply companies to individual hospitals in the HSE or the voluntary hospitals. The Department of Health determines the format and disclosures that are required in the financial statements so the Department is in the best position to give a view on those governance matters. It is a bigger thing to make an allegation of bias as a result of that because there are identifiable doctors on a website mentioned in the article who receive funding. It could be in the form of sponsorship for events, research funding and so on. It would be impossible to conclude that every doctor who receives such funding would be compromised or that it would have negatively affected their prescribing. There are professional standards regulators who would be better equipped to address that aspect. The issue from the committee's point of view is around how this funding is accounted for and how transparent it is in the financial statements.

We will forward it to the Department once we get the permission of the correspondent. We can ask in that letter that if the correspondent has further evidence of this happening, it be forwarded to the committee or the Department of Health.

The last correspondence in this group is No. R0929. It is from the clerk to the Joint Committee on Petitions requesting observations on proposals to amend the committee's order of reference. If members want to make a submission on this, they should contact the clerk to the committee. Members have the item in front of them.

Next is No. 4, work programme. Next Thursday, 16 December we will engage with the Department of Health on the 2020 appropriation accounts and Vote 38 - Health. As discussed last week, the Department has been made aware that the committee wishes to discuss two outstanding reports. The first concerns a detailed review of the progress on the national children's hospital. That was submitted to the Department earlier this year. The second concerns the value for money review of the nursing homes support scheme. Both are long overdue. Last week, we agreed to write to the Department to request further information on these reports and that information was requested by tomorrow, 10 December.

On 25 November, we agreed our work programme for early in the new year and will continue to revisit that programme each week. RTÉ is the first sitting in January. That concludes our consideration of that programme for today.

The committee went into private session at 2.04 p.m. and adjourned at 2.53 p.m. until 9.30 a.m. on Thursday, 16 December 2021.
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