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Thursday, 16 Jun 2022

Business of Committee

Deputy Catherine Murphy resumed the Chair.

The public business before us this afternoon is as follows: minutes; accounts and financial statements; correspondence; work programme; and any other business. The first item of business is the minutes of the meeting of 2 June, which have been circulated to members. Do members wish to raise any matters in respect of the minutes? No. Are the minutes agreed? Agreed. As usual, the minutes will be published on the committee's web page.

Nine sets of financial statements and accounts were laid before the Houses between 30 May and 10 June. I will ask the Comptroller and Auditor General to address those before opening the floor to members.

Mr. Seamus McCarthy

The first set of financial statements relate to Trinity College Dublin for the year 2020 to 2021. It received a clear audit opinion but I am drawing attention to three matters, the first of which is the recognition of a deferred pension funding asset. That is a standard issue for universities. I also draw attention to a disclosure in the statement on internal control relating to an investigation of alleged inappropriate payments that is under way in Trinity College. I also draw attention to non-compliance with the procurement rules.

The second set of financial statements relate to the Charities Regulatory Authority for the year 2021. It received a clear audit opinion. Published with it is an account of charity funds that are managed by the Charities Regulatory Authority. It is a relatively small amount of money, approximately €1.6 million. There is a clear audit option in respect of that account.

No. 4 relates to the accounts of Home Building Finance Ireland for 2021. It received a clear audit opinion. Related to that are the accounts of a subsidiary company of Home Building Finance Ireland, named Home Building Finance Ireland Lending DAC. There is a clear audit opinion for the 2021 accounts of that organisation.

No. 6 relates to the Cork Institute of Technology which, as the committee is probably aware, is a dissolved body. These are the final accounts of the Cork Institute of Technology. They cover the period 1 September 2019 to 31 December 2020 and received a clear audit opinion. I do, however, draw attention to non-compliance with procurement rules.

No. 7 relates to the Dún Laoghaire Institute of Art, Design and Technology for the year 2020 to 2021. It received a clear audit opinion.

The National Asset Management Agency 2021 financial statements received a clear audit opinion. I do, however, draw attention to a settlement with the Revenue Commissioners in respect of underpayment of professional services withholding tax in the period 2013 to 2016. The settlement included an interest payment of €1 million and penalties of €100,000.

The accounts for the Strategic Banking Corporation of Ireland, SBCI, for 2021 received a clear audit opinion. I do, however, draw attention to a disclosure in note 7.3 to the financial statements in respect of a suspected fraud by a borrower from a participating on-lender of SBCI-backed loans. The implication for SBCI in that regard is not determined yet. There is a question of guarantees and who is carrying the risk with regard to any loss that might arise.

On the issue with Trinity College Dublin, am I right in assuming the college will come back to Mr. McCarthy? Will it come up in the next set of accounts?

Mr. Seamus McCarthy

Is the Vice Chairman asking about the investigation?

Mr. Seamus McCarthy

We will be examining the situation again when we are looking at that. I hope matters will have moved on and been resolved. Trinity will have determined more information about the issue at that stage.

The committee can take it that there will be some conclusion to that situation.

Mr. Seamus McCarthy

Indeed it can.

Mr. McCarthy mentioned an issue with a borrower in respect of SBCI.

Mr. Seamus McCarthy

It was a suspected fraud by a borrower from an on-lender. SBCI operates a model whereby it provides funding to on-lenders, which, using their own systems for assessing borrowers, will determine whether a loan will issue or not.

How would that have come to light?

Mr. Seamus McCarthy

It came to light within the on-lender. It realised there was a problem with the loan.

That is another matter to which we will come back.

Mr. Seamus McCarthy

It certainly is not yet a closed matter. SBCI must determine whether any of the liability will impact it.

May I return to consider Trinity College? I will start with the issue of non-compliant procurement in greater detail. It is a factor in approximately 1% of the college's overall expenditure.

Mr. Seamus McCarthy

It is approximately 1%.

Does the Office of the Comptroller and Auditor General have a cut-off point below which-----

Mr. Seamus McCarthy

Is the Deputy asking is there a threshold at which we draw attention to an issue?

Mr. Seamus McCarthy

We apply a flat threshold of €500,000 or more of non-compliant procurements.

This example breaches that threshold.

Mr. Seamus McCarthy

That is correct.

Is there a percentage involved?

Mr. Seamus McCarthy

We measure it by monetary value rather than by percentage. That is the threshold we use. It is arguable that we should apply a percentage but the amounts of money involved could be very substantial. Some of the organisations we audit are very large and if we used a percentage, it could mean significant sums that are not being properly procured would not have attention drawn to them.

I agree. When Mr. McCarthy looks at the accounts and audits Trinity College Dublin, does he include revenue from facilities such as gyms or accommodation?

Mr. Seamus McCarthy

All of the activities of the college are grouped. They are consolidated accounts so all the activities are included.

Does that include commercial activities such as the gym in Trinity?

Mr. Seamus McCarthy

It includes on-campus commercial activity.

What about accommodation or facilities that are not on campus?

Mr. Seamus McCarthy

I think they are still part of the group. Its accommodation in Dartry is included.

Is it the case that not all universities are like that?

Mr. Seamus McCarthy

They would consolidate those kinds of activities, where there are subsidiary companies. The results would be consolidated. There was no consolidation with regard to the foundations, which are separate, fund-raising activities that they argue are independent of the university but for the on-campus services, which are run by subsidiary companies established by the university, the results would appear and transactions would be going through.

They are showing in those numbers.

Mr. Seamus McCarthy


In relation to NAMA, was that the agency directly as opposed to something that was sold?

Mr. Seamus McCarthy

It was actually a payment for professional services-----

Mr. Seamus McCarthy

No, by agents of NAMA. That was the difficulty. It was unclear as to whether withholding tax should have been paid. In 2017, they brought it to the attention of Revenue themselves but it is only now being finalised in relation to the period 2013 to 2016. Once they had identified that there was a problem, they changed the practice and there was no difficulty after 2017 but the settlement has only been reached now.

Is it agreed that we note the accounts and statements?

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

Moving to correspondence, as previously agreed, items that were not 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 on correspondence will be recorded in the minutes of the committee’s meetings and published on the committee’s web page.

The first correspondence members have flagged for discussion is No. 1271 B from Mr. Brendan Gleeson, Secretary General, Department of Agriculture, Food and the Marine, dated 27 May 2022, providing information requested by the committee regarding the appointment of the CEO of Horse Racing Ireland, HRI. It is proposed to note and publish this correspondence. Is that agreed? Agreed. Deputy Matt Carthy flagged this item for discussion but he is not here right now. He may wish to raise it a future meeting so we will hold it over until then.

The next flagged correspondence is No. 1272 B from Ms Oonagh McPhillips, Secretary General, Department of Justice, dated 24 May 2022, providing information requested by the committee arising from our meeting with the Department of Justice on 28 April 2022. There was a back and forth discussion about where responsibility lay. Regarding question No. 3 and non-compliant contracts that have been running for longer than five years, I suggest that we request clarity as to whether the four non-compliant contracts referenced continue to be rolled over or are now in compliance. Essentially, responsibility moved from the Department of Justice to the Department of Children, Equality, Disability, Integration and Youth. Apparently responsibility transfers with the files so we cannot ask for further input from the Department of Justice but the Secretary General of the Department of Children, Equality, Disability, Integration and Youth could be asked to clarify the rationale for finding the contracts were non-compliant. It would be useful to do that. Apart from anything else, this is probably likely to happen again if there is a change in remit and it would be useful to build a bit of institutional memory in relation to how that works and how that conclusion was reached.

Question No. 7 included a request for sight of the valuations relating to the Thornton Hall site but this request is not addressed in the reply. It is proposed to reiterate the request for sight of the valuations themselves. Similarly, question No. 13 is not answered. We requested the recommended number of domestic violence refuge beds in the State, as per the Istanbul Convention, and how it compares to the current number of such beds in the State but no such information is given. It is proposed to note and publish this correspondence and to request further information as outlined. Is that agreed? Agreed.

I flagged this item along with Deputy Carthy. On question No. 5, I got a reply from the Department recently that relates to this. I received a reply on 1 June having sought the information more than a year ago. The information is quite useful. For example, the estimated outstanding liability related to the Irish Prison Service prisoner personal injury claims at 28 February 2021 was €63 million. Some of that is related to in-cell sanitation. I am happy to provide this document to the committee. There is no point in repeating all of it but we might just seek an update on it. We can hold it over to next week and seek an update on it.

On CCTV and local authorities, I think legislation is required. I am referring to item six on page six of the reply, which relates to community-based CCTV grants. The question arises as to who is the data controller: is it the local authority or An Garda Síochána? It would be worth asking the Department if that has been defined. I think legislation might be needed and if so-----

Can we ask whether legislation is needed? Related to CCTV, I am also chasing up the red light camera issue. I had been told by the Department of Transport that it can be rolled out because it is all automated and is not looking at people but at licence plates. However, just in the past week or so I have been told that legislation may be needed there. We are very far behind other countries on this. It seems to be falling between a number of Departments and nobody is moving on it. If we could at least get a straight answer about whether legislation is required, that would be of some use.

Mr. Seamus McCarthy

It is interesting to note that 35 grants have been approved to a total of €954,000, of which €613,000 has been advanced. One would imagine that if there was a legislative problem none of that money would have been advanced because it could not be drawn down.

I am sure some of that has gone to Dublin but the CCTV cameras are rarely in use because of the concern around it.

Mr. Seamus McCarthy

There is a question then about the value of paying for cameras if they cannot be used.

This is something that comes up frequently at local government level.

Mr. Seamus McCarthy

I remember it coming up here previously.

There is real confusion about whether the cameras can be used and about who is the data controller.

Mr. Seamus McCarthy

I think the previous Committee of Public Accounts had correspondence with the then Departments of Housing, Planning and Local Government, and Justice and Equality, as well as with An Garda Síochána. I do not remember it was ever resolved as to what action is needed to make it happen.

We will try to get some sort of definitive answer on what is needed.

We need someone to champion it. That is the action that is needed.

No. 1279B is from the Minister, Deputy Michael McGrath, dated 31 May 2022 enclosing the minute of the Minister for Public Expenditure and Reform in respect of our report on the examination of the 2019 and 2020 appropriation accounts, Vote 29 – Environment, Climate and Communications, and expenditure on the national broadband plan. It was welcome that all five of the committee recommendations were accepted. The recommendations relate to the failure of the State to meet the greenhouse gas emissions and renewable energy targets, sustainable energy programmes' expenditure; and the total cost of landfill remediation. On the national broadband plan, this related to the failure of National Broadband Ireland to meet its targets for the roll-out of the national broadband plan and the need for the Department to develop an in-house expertise to reduce reliance on external consultants for advice relating to the national broadband plan contract. It is proposed to note and publish this item of correspondence. Is that agreed? Agreed.

As it was the Chairman, Deputy Stanley, who sought that, I am inclined to hold that item over in order that he can ask the questions. We will have a chance to return to that item next week.

No. 1281B is from Ms Vivienne Flood, head of public affairs, RTÉ, dated 31 May 2022 providing information requested by the committee regarding revenue generated by advertising on the RTÉ Player. It is proposed to note and publish this item of correspondence. Is that agreed? Agreed.

Deputy Munster and I flagged this item.

There is another piece of correspondence which I wish to refer to. There are currently appeal notifications in hand from RTÉ for approximately 29% of all cases taken as referred to in this correspondence but we do not know how many cases these refer to. This is 29% of what?

Mr. Seamus McCarthy

That is it exactly. It is not very clear.

It would be useful to find out the actual number of cases and to find out if litigation fees have been incurred already. It would be possible to calculate or to see the extent of those at the end of the process but it would be no harm to have an idea of them at this stage.

Mr. Seamus McCarthy

I think that this matter relates to No. 1290B, Vice Chairman.

It does, yes.

Mr. Seamus McCarthy

It concerns the Department of Social Protection.

It is to do with the scope. The other issue in this is that the Eversheds Sutherland’s contractor review process in RTÉ reviewed all active contractors at the time. There may well have been former contractors and a scope investigation will not exclude former contractors and it is, therefore, important that we ask RTÉ about the number of former contractors and if they are part of the work that the scope department is doing.

No. 1285B is from Mr. John Hogan, Secretary General of the Department of Finance dated 2 June 2022 and providing information requested by the committee arising from our meeting with the Department of Finance on 5 May 2022. The correspondence draws attention to the transcript of our meeting with the Department. Page 6 of the transcript refers to the Apple escrow fund. The Secretary General states “The financial statements for 2020, published on 22 June, set out that the net assets at the end of 2020 totalled €13. 98 million”. In order to correct the record, the Secretary General clarifies that the correct figure is €13.98 billion.

It is incorrect to state "million" here.

Mr. Seamus McCarthy

There is a slight difference.

Yes, a slight one when it gets in to the billions.

I believe that when it gets into the stratosphere, people start losing perspective. Otherwise, this correspondence provides detailed responses to 20 questions arising from our meeting with the Department, which is welcome. I propose that we note and publish this correspondence and that we make it available to the relevant sectoral committees as there is a wide range of information contained in it. Is that agreed? Agreed.

Looking through some of this material, we may hold it as Deputy Carthy wished to come in on this item. There is just one thing that it would be useful to go back to the Department on, namely, No. 6, on page 12 of the reply, which refers to progress to date on the separation of Irish Water from Ervia, where it states that Irish Water’s borrowings are likely to be impacted by that separation. There are a number of questions there on things that jumped out at me.

No 1290B is from Mr. John McKeon, Secretary General, Department of Social Protection, dated 2 June 2022 and providing further information requested by the committee regarding the investigation of contractors engaged by RTÉ. That was the item I referred to earlier and is linked to the RTÉ item of correspondence. I had flagged that item for discussion, as had Deputy Munster. I hate to add to our workload for next week but if it is a question that the Deputies are not here next week, we can move on from it.

The next category of correspondence is in category C, which is correspondence from and related to private individuals and any other correspondence.

No. 1268C is from an individual on behalf of Louth Environmental Group dated 25 May 2022 and enclosing correspondence regarding funding for coastal greenways in Dundalk, County Louth. It is proposed to note this item, which is addressed to the clerk to the Committee on Finance, Public Expenditure and Reform, and Taoiseach. Is that agreed? Agreed. Deputy Munster flagged that item and we will take the same approach as with other correspondence already referred to, if the committee is agreeable to that.

Finally, a number of further items of correspondence have been received in respect to the closure of Owenacurra Centre, County Cork, namely, Nos. 1277, 1280, 1287 and 1291. Following receipt of correspondence on this matter last year, we wrote to the HSE and the matter was raised with this body when it appeared before the committee earlier this year.

The Joint Committee on Health has also previously advised that it was examining this issue and had visited the centre. To avoid duplicating the work of that committee and because the decision to close the centre is a policy decision more appropriate to the remit of that committee, we did not consider the matter further. While I understand that this is a terrible situation for some of the residents and their families, I am not sure that we can assist in any meaningful way in preventing the closure of the centre. I will open the floor to any members who might wish to address this issue.

I want to address this issue as I am also a member of the Joint Committee on Health and I will bring our committee here up to speed now on it. The health committee looked at this issue in respect of the health impacts for those people, it met the HSE and, to be honest, got very little good out of that body on this. This issue has now been referred to the HSE board for independent overview in respect of the impacts as they relate to health.

In the process of doing the work on Owenacurra, the committee has gathered into the discussion a significant amount of additional material around building and capital spending in the Cork area, when it comes to mental health facilities. We are talking in the region of seven buildings now. A piece of work has been done since this time last year around this issue, because it was announced in June or July. There have been many freedom of information, FOI, requests and almost no information has been received through those FOI requests.

This has gone beyond Owenacurra. I understand the frustration of the individual families. I have met some of them. Their frustration and fear are very real. To keep it on money issues relevant to the committee, there seems to be a nest of questions on the decision-making process on capital spending in this area. It has proved to be almost impossible to get answers to questions on why certain spending decisions were made. It looks as though it will end up spending a much larger amount going about it the way it has and it will do a huge amount of damage to patients. I have yet to see a good explanation of why it has happened. For argument's sake we could probably pick a few other CHOs around the country on which we could do this type of review of decision-making on spending and capital costs. The CHO in Cork is the one on which I have the most information and where I have the most questions. We are not speaking anymore about one building in Owenacurra and the distress of one set of families. We are now speaking about a web of very strange decision-making when it comes to capital spending. I put it to the committee that this is exactly the type of thing the committee should be doing.

It is how we go about it.

I am a relatively new member of the committee. I will take it under advisement.

It strikes me that if the Deputy were to document the questions and write to the committee, we could then ask the questions of the HSE. It would begin to address the issue that is in our remit.

That is a very fair proposal. I propose to return with a one- or two-page document with a set of questions. Perhaps we can then decide where to proceed from there. I thank the Vice Chair.

No other items of correspondence have been flagged for consideration today so we will move onto the work programme. On 23 June, we will engage with the Department of Housing, Local Government and Heritage to examine its oversight of local government expenditure of central government funds. The Department has confirmed availability for the meeting and the Association of Irish Local Government has indicated it will nominate representatives to attend.

On 30 June, we will engage with the Department of Foreign Affairs on its appropriation accounts. The Department has been advised that the committee is interested in examining expenditure related to the Passport Office and consular activity. There are issues we have examined previously regarding leasing and ownership of buildings. Sometimes it makes sense to lease buildings and sometimes it makes sense to own them. It would be useful to address this issue again to see where we are at. There have been some changes and purchases in recent years. It could certainly be an item that is added.

We had agreed to schedule an engagement with the Central Bank and the Office of the Revenue Commissioners on 7 July to examine an outstanding chapter on the assessment and collection of insurance compensation fund levies. While the Chairman of Revenue has indicated he is available, as detailed in correspondence No. R1300, the relevant officials at the Central Bank are unavailable on that date.

In terms of matters reported upon by the Comptroller and Auditor General, there are a number of outstanding matters for examination with the Department of Education. There is Special Report 112 on financial governance and reporting in education and training boards as well as chapters on management of the schools estate and the purchase of sites for school provision and the Department's 2020 appropriation accounts. The Department of Education has confirmed its availability to appear before the committee on 7 July. Is it agreed to proceed with this engagement? Agreed. The special report is on an area where there was concern. It is something we should have on our agenda.

I have a question regarding the session with the Department of Foreign Affairs. Is it too late to add to the specific areas of interest? I would like to discuss trade desks. We have a trade desk for every country with which we substantially trade. Could we flag this as an issue as I have questions on it?

The passport issue is not the ongoing passport issue, which we all know from our emails is never-ending. There has been investment and it is this particular aspect we will examine. If we are to invest further, then technology should do the job. I am sure somebody will not be able to stop themselves from asking about passports because it is causing such a monumental increase in our workload.

A meeting with An Bord Pleanála is scheduled for 14 July, which is our last scheduled sitting for this term. A representative from the Department of Housing, Local Government and Heritage will also be in attendance.

Will the legal situation that is arising with regard to An Bord Pleanála bring us into conflict? I very much want to have the session but I do not want to be shut down every time I ask particular questions.

I imagine the Remy Farrell report should be completed at that stage.

Even if it is not, it pertains to planning decisions as opposed to financial issues. Perhaps I am wrong.

Mr. Seamus McCarthy

That would be the distinction. It is about the resources and use of resources by the agency. The operation of governance and control are matters for the committee but members would not be able to discuss individual decisions.

Governance and control might overlap with it. I want to flag that it might be problematic.

One of the issues we raised previously was the cost of the judicial reviews.

I look forward to seeing what it is this year.

It was one third of its overall budget.

It was €9 million.

We estimate it might be in the range of €20 million.

We will note what Deputy Hourigan has said.

I just wanted clarity as to whether there would be an issue.

I do not think there is any expectation that we could stray into individual cases. As there are no other matters that members wish to raise on the work programme, that concludes our consideration of the work programme for today.

The last item on the public agenda for today is any other business. Do members wish to raise any other matters? As they do not, we will now briefly go into private session before adjourning until Thursday, 23 June, when we will engage with the Department of Housing, Local Government and Heritage.

The committee went into private session at 2.19 p.m.and adjourned at 2.21 p.m. until 9.30 a.m. on Thursday, 23 June 2022.