COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 6 Oct 2022

Business of Committee

Chairman

The business before the committee this afternoon is as follows: minutes, accounts and financial statements, correspondence, work programme and any other business. We will then go into private session to report on our engagement with the Department of Agriculture, Food and the Marine. The first item is minutes from the meeting dated 29 September 2022, which have been circulated to members. Do members wish to raise any matters regarding the minutes? Are the minutes agreed? Agreed. As usual, they will be published on the committee's web page.

I will move on to accounts and financial statements. Some 56 sets of financial statements and accounts, including appropriation accounts, were laid before the Houses of the Oireachtas between 26 and 30 September 2022. I ask the Comptroller and Auditor General to address these before opening the floor to members.

Mr. Seamus McCarthy

The first set of financial statements is the export credit guarantee account for 2021. This is effectively a dormant account. There are no transactions on it, and it received a clear audit opinion.

The next couple are subsidiaries of Rásaíocht Con Éireann - Greyhound Racing Operations Ireland Limited for 2021, which got a clear audit opinion; Abergrove Limited got a clear audit opinion for 2021; and Shelbourne Greyhound Stadium Limited got a clear audit opinion for 2021. Also related to Rásaíocht Con Éireann is the Irish Retired Greyhound Trust.

The account for 2021 received a clear audit opinion. No. 6 is the Ciste Pinsean Thithe an Oireachtais, Comhaltaí, account and it received a clear audit opinion. No. 7 is the National Oil Reserves Agency designated activity company, DAC, for 2021 and it received a clear audit opinion. No. 8 is Teilifís na Gaeilge for 2021 and it received a clear audit opinion. No. 9, the Broadcasting Authority of Ireland for 2021, received a clear audit opinion. No. 10, the Broadcasting Fund, which is managed by the Broadcasting Authority of Ireland, received a clear audit opinion. No. 11 is the Pensions Authority for 2021 and that received a clear audit opinion.

Nos. 12 to 56 are the 45 appropriation accounts for Government Departments and together they have an expenditure in aggregate of approximately €74.5 billion. I issued a clear audit opinion in all cases. I do not propose to recite all their names. I did, however, draw attention to certain matters in the audit certificates. Obviously, where relevant, I referred to chapters that were published and that dealt with issues. I also drew attention in a number of cases to material instances of non-compliant procurement. This is where the aggregate level of identified non-compliant procurement was in excess of €500,000 each. In relation to four of the appropriation accounts, I drew attention to specific matters. For Vote 11, Office of the Minister for Public Expenditure and Reform, I drew attention to a payment of €460,000 to a supplier in settlement of arbitration proceedings. For Vote 13, Office of Public Works, I drew attention to the continuing operation of a maintenance contract where the expenditure incurred is significantly greater than that envisaged when the contract was put in place. This places it in the category of non-compliant procurement. For Vote 34, Housing, Local Government and Heritage, similar to last year, I drew attention to a continuing large EU fine incurred in 2021 in respect of a wind farm constructed in County Galway. Finally, for Vote 42, Rural and Community Development, I drew attention to the recovery of grant funding of €1.09 million from Mayo County Council following the termination of funding agreements for four projects under the Department-funded outdoor recreation infrastructure scheme due to identified irregularities.

Chairman

Regarding the OPW contract that is now considerably more expensive than when it was signed, what is this about?

Mr. Seamus McCarthy

If I may, I will look and find the detail for the Chair. My recollection, however, is that when the contract was put out to tender it was relatively small. I think the OPW expected to spend about €5 million a year on it but multiples of that is being spent.

Chairman

Is it four or five times greater?

Mr. Seamus McCarthy

It is at least that.

Chairman

Can Mr. McCarthy remember what that is for?

Mr. Seamus McCarthy

It is for maintenance works and small development works. I cannot remember what the limit is but capital works expected to cost up to about €1.5 million, in certain categories, do not go out to tender and are given under this type of contract.

Chairman

Is it a framework agreement?

Mr. Seamus McCarthy

It is not a framework agreement. It is called a drawdown contract, where the entire service is provided by one supplier. A price is obtained for the job and agreed, and then it is proceeded with.

Deputy Matt Carthy

Would it be fair to say that a proportion of that work would previously have been carried out in-house by the OPW?

Mr. Seamus McCarthy

It certainly would have had maintenance workers, but for many years now it has been a contracted out service.

Deputy Matt Carthy

I suggest we write to the OPW. Representatives of the organisation are scheduled to appear before the committee later this year. In advance of that, I suggest that we ask for a note on this contract, specifically whether it has carried out an examination to determine if restoring at least some of these types of work to in-house staff would have a cost benefit.

Mr. Seamus McCarthy

Outside Dublin, I think the OPW may have its own staff.

Deputy Matt Carthy

That is what I would have thought.

Mr. Seamus McCarthy

This contract was placed for Dublin, but works outside Dublin have been carried out under the same arrangement.

Deputy Matt Carthy

We asked questions about this in previous deliberations with the OPW, but it would be useful to receive a note on this matter in advance of our next engagement with it.

Chairman

Documentation has been provided that may be of some help. Would other members like to comment on these financial statements and accounts?

Deputy Catherine Murphy

Is the fine that was mentioned ongoing?

Mr. Seamus McCarthy

As far as I know, it is. I do not think the issue has been resolved yet.

Deputy Catherine Murphy

Was it a daily fine?

Mr. Seamus McCarthy

It was based on a daily fine.

Chairman

It was incurred because the wind farm has not ceased operation.

Mr. Seamus McCarthy

I think a decision to cease has been taken. I do not know whether energy generation has physically stopped on the site.

Chairman

Who owns the wind farm?

Mr. Seamus McCarthy

I think it is the ESB.

Chairman

I think it is. I thank Mr. McCarthy. Can we agree and note the financial statements and accounts? Agreed. As usual, they will be published as part of the minutes.

As previously agreed, items of correspondence 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 in relation to correspondence are recorded in the minutes of the committee’s meetings and published on the committee’s web page. The first category of correspondence under which members have flagged items for discussion is that from Accounting Officers and-or Ministers and follow-up to committee meetings.

No. R1476B is correspondence from Ms Cathy Bryan, public transport and corporate services division, Department of Transport, dated 22 September 2022, explaining why the financial statements of the National Transport Authority, NTA, were not laid before the Houses within the timelines set down in Circular 24/21. To put this in context, Circular 24/21 included the timelines within which accounts and funds audited by the Comptroller and Auditor General should be laid before the Houses of the Oireachtas. The circular states that:

If exceptional or unusual circumstances arise which cause an unavoidable delay beyond these time limits, either for a body or fund in submitting its financial statements/accounts to the parent Department or for the Department in laying the financial statements or accounts of the body or fund before the Houses of the Oireachtas, the clerk to the Committee of Public Accounts [...] should be informed of this by the relevant Department.

Due to a widespread failure to comply with this provision, we have a standing agreement to request explanations from State bodies that do not meet the timelines set down in the circular. As is the case with Nos. R1475B and R1476B, which are also on today’s correspondence list, this item of correspondence is proactive notification of a delay to the laying of accounts before the Houses of the Oireachtas and is unusual in that it demonstrates compliance with the circular. That is welcome, and we should see more of this type of correspondence, as it removes the need for us to monitor compliance and request explanations. It is proposed to note and publish this correspondence. Is that agreed? Agreed. Deputy Catherine Murphy flagged this correspondence for discussion.

Deputy Catherine Murphy

In 2021, all revenue generated by bus advertising was taken over by the NTA. Dublin Bus raised approximately €1.6 million in advertising revenue in 2020. I presume this figure will not differ hugely, given only so much advertising space is available. A division within CIÉ manages the contract on behalf of the NTA. It is doing the work, but the money is being taken by the NTA. It seems to be a very clumsy arrangement.

Does it do exactly the same in relation to Go-Ahead advertising or any other organisation. To be honest, I have never had as many complaints as I have had since the National Transport Authority, NTA, has taken over responsibility for bus services. It is quite chaotic.

Deputy Matt Carthy

I support Deputy Murphy on that point.

In respect of the correspondence itself and the laying of the accounts, I note the Chair's positive remarks but think it would be more positive if the accounts were actually produced on time. There is a number of items of correspondence from different bodies - I cannot clarify how many - but they indicate that the delay to the laying of the accounts relates to the fact that the budget was brought forward. It was announced that the budget would be brought forward in July. That is seven months into the year. I would have thought that there would have been still sufficient time for accounts to have been prepared beforehand. The cited circular is exactly one year old. Within its first incarnation there are a number of bodies that are not providing their accounts on time. There needs to be an improvement across all bodies in respect of that. Of course it is better for somebody to proactively let us know that they will be late as opposed to us having to chase accounts up. It would save on the paper in the correspondence if the accounts were actually submitted on time.

The NTA were in before the committee not too long ago and there are a couple of outstanding questions which we might follow up on over the coming weeks as well.

Chairman

Okay, I will follow up on that. The word "unusual" was in my comment.

Deputy Matt Carthy

It was.

Chairman

The Deputy might have noticed that.

Deputy Paul McAuliffe

I think Deputy Murphy is right on the NTA. As it has grown it is having a greater impact. Its representatives were in before with regard to the capital projects that were taking place. These are incredibly significant. This week both the BusConnects and metro projects for my area are being published in tandem. It would be useful to have the NTA in again. The area I would like us to focus on is the area of fines for non-delivery of service. If I am correct, we have seen Go-Ahead, the Luas, and one other operator that I cannot recall here, all being issued fines up to a value of approximately €5 million. It would be interesting to understand what happens those fines when they are collected, the economic calculation of whether they have any real impact on the service providers, and whether they are pitched at the right level. The service delivery side mentioned by Deputy Murphy and also the capital projects the NTA operate under Transport Infrastructure Ireland, TII, are things we should look at when they come before the committee.

Chairman

Okay. We will follow up on the information requested by Deputy Carthy.

Next is correspondence is No. R1478, dated 22 September 2022, from Mr. Robert Watt, Secretary General of the Department of Health, providing the information requested by the committee regarding the National Maternity Hospital. It is proposed to note and publish this item of correspondence. It is Is that agreed? Agreed.

Deputy Murphy flagged this item of correspondence.

Deputy Catherine Murphy

I presume that the Department of Public Expenditure and Reform is kept in the loop on this. Have the Department officials been provided with the business case for the proposed project? Has the external assurance process, required under the public spending code, happened? I think they are called decision gates and it would be quite useful to know what they are. Are we likely to see, for example, the HSE putting together a board like the National Pediatric Hospital Development Board as a subset? How is it going to be managed? We can keep on talking about learning lessons but there is something live at the moment and we need to be watching this process to make sure it is managed in a way that is not as frustrating as the children's hospital.

Chairman

I know they outlined that the multistorey carpark extension project and the pharmacy was a single contract of €30.128 million, and that both are now fully operational on site. Is that correct?

Deputy Catherine Murphy

This was before a decision was ever made. They allocated-----

Chairman

They were putting the cart before the horse.

Deputy Catherine Murphy

All that money was spent so then you are put in a position of no alternative.

This is a separate thing entirely. The question is whether the Department of Public Expenditure and Reform has received the business case for the project.

Chairman

I was interested in how it happened before an actual decision was made on it. It is putting the cart before the horse, so to speak.

There is a considerable amount of documentation with that item which members may find useful and wish to refer to again.

Crrespondence No. 1494B is from Mr. Michael Fitzgerald, chief officer, HSE community healthcare organisation, 4. It arises from last week’s engagement with the HSE, during which certain information provided by the HSE was subsequently queried. This item got a fair thrashing out this morning. I know Deputy Hourigan had a particular interest in it. If members are okay with that, we will move on.

I want to revert to No. R1492 as it was not addressed. Correspondence No. 1492, dated 20 October 2022, is from Mr. David Moloney, Accounting Officer and Secretary General, related to our work programme and the engagements we have scheduled with the Department of Public Expenditure and Reform and concerns on the agenda for the engagement. This item was only received yesterday and I am not sure if members have had a chance to consider it. At our meeting last week, we agreed that the agenda is as follows: taken from the Report on the Accounts of the Public Services 2021, chapter 3, on Vote accounting and budget management; and chapter 4, on the re-allocation of Voted funding; format and content of the appropriation accounts and the associated circular; and value for money and spending reviews, which is an area we have been dealing with recently.

We also agreed to advise the Department of Public Expenditure and Reform that the closure of the Benefacts database and the Department's correspondence concerning expenditure on the National Maternity Hospital, considered the week before last, in correspondence No. R1426, might also be raised. The Benefacts database is an area which we have been trying to give attention to and scrutinise.

Given the range of material to be covered, and to avoid crowding the agenda, it was decided not to include the appropriation accounts for this meeting and to consider scheduling a further meeting at a later date. The Secretary General has requested the committee to consider including the relevant appropriation accounts which are: Vote 11 - Office of the Minister for Public Expenditure and Reform; Vote 12 - superannuation and retired allowances; Vote 39 - Office of Government Procurement, and Vote 43 - Office of the Government Chief Information Officer. The Secretary General makes the case that this was done at the meeting last May, and that the appropriation accounts provide the basis for discussing some of the other matters that will be raised.

Are members happy to proceed with the agenda as agreed last week or is there a preference to examine the relevant appropriation accounts as requested by Mr. Moloney?

It was left off because we felt it was crowding out the meeting but the Secretary General is making the case here that the appropriation accounts would provide the basis for discussing some of the matters that will be raised and that we have highlighted. It is in the committee members' hands at this stage.

Deputy Catherine Murphy

I would have thought that we set our own agenda.

I found the last experience with that Department frustrating because every time we asked questions we were told they were for the Department of Transport or we needed to talk to the Department of Health or some other Department. It was nearly impossible to get responses. I think we decided it for a particular purpose in order to look at particular topics. I am happy enough with that.

Deputy Paul McAuliffe

I think the Secretary General is being helpful in trying to ensure he has one appearance at the committee but the Committee of Public Accounts has determined that he may have more than one and we should go with our own view.

Chairman

We will stay with the agenda as proposed by committee members and inform the Secretary General of that. We can always have him back for a second appearance.

We move on to item No. 4, which is the work programme. At last week's meeting, we agreed to proceed with the following engagements: on 13 October, we have the Department of the Environment, Climate and Communications; 20 October is the Department of Public Expenditure and Reform; 27 October-----

Deputy Catherine Murphy

We had not finished correspondence, had we?

Chairman

Apologies, I was going back and forward through notes because there was a slight change made to bring forward the Department of Public Expenditure and Reform. That is what threw me. We have to move into private session to deal with some of this.

Deputy Catherine Murphy

I have a piece of correspondence in and thought I had flagged another one.

Chairman

Which one is it? I have a couple marked.

Deputy Catherine Murphy

I thought I had flagged No. 1480, and then I had No. 1485.

Chairman

No. 1480 did not go through on my list. Does the Deputy want to address that?

Deputy Catherine Murphy

I do. It is point 4. Members might remember that the Corporate Enforcement Authority, CEA, was to be set up on 1 January this year to replace the Office of the Director of Corporate Enforcement, ODCE. One big impediment to the effective running of the ODCE was that there was an inadequate number of gardaí assigned to it. The director had come out and been critical of that. A memorandum of understanding was signed by the Garda and the new CEA. I was given the assurance in the Dáil that would be the case. It says on item 4 that there were to be 16. I understand there are, according to this, seven members assigned. This agency cannot function unless the gardaí are assigned. There are high-profile cases like the one in relation to the FAI and John Delaney, pending a long time, and the one for Independent Newspapers. People lose confidence in an agency if it cannot do its work in a timely way. This agency was to be set up with the appropriate complement of gardaí, who are required because they have the power to arrest, for example. Something may be pending and you can do nothing unless you have the power to arrest.

We need a quarterly report on progress on this recruitment. It should have been ready to go when the new agency was set up. We will be serious about corporate crime or we will not. We end up having to do things retrospectively that cost way more money. There is significant value for money in this. Given the director of the ODCE was so critical of the inadequate number of gardaí and the assurances we have been given, the idea this did not happen from day one is not acceptable. I want a close eye kept on that.

Chairman

They state that seven members are seconded to the Corporate Enforcement Authority and seem to be making a commitment here that this will be increased to 16. They include one detective inspector, three detective sergeants-----

Deputy Catherine Murphy

It was supposed to be 16 from day one.

Chairman

----12 detective gardaí. A Public Appointments Service competition is under way. Interviews for detective gardaí were conducted during August. It is appropriate that we look for regular updates on that. Is that agreed? Agreed.

Does the Deputy wish to raise No. 1485 as well?

Deputy Catherine Murphy

Yes. This is Maynooth University but could equally relate to any of the universities where additional resources are sought from students in relation to student services. I welcome where these are treated separately. There were referendums in Maynooth to collect an additional amount going back to the 1990s. The money was to be borrowed from the European Investment Bank and then paid back by the levy. That levy was increased in 2015 to provide the new building, which had commenced. Now the project has terminated.

There is a big protest outside Maynooth today. Maynooth started as a college with about 5,000 students. There are now about 15,000 so it is one of the more rapidly growing universities. There are people from all parts of the country attending it and there are many positive things to say about it. However, where there is a dedicated amount of money for particular projects, is it set out in the accounts that it is used for the purpose for which it is collected? It appears this project has been ended and, instead of that facility being provided, they are told there will be additional spaces in other buildings around the campus, seating and things like that. It is not what the students voted for. The issue is about how it is accounted for and holding them to account for delivering things that are collected for. It is a big deal to be paying €150 on top of the €3,000. The student body has got bigger there over the years.

Chairman

I have had letters from constituents. One paid in money over a four-year period for this project and raised the issue of the project not going ahead. It seems there was just a decision taken to end it. They are saying if the money was collected for that purpose, what happens? That is an issue we need to follow up with the university. I will bring in the Comptroller and Auditor General on this. Does he want to offer a view?

Mr. Seamus McCarthy

I would prefer not to offer a view on it until I have examined it fully in the context of the 2021-22 annual financial statements. It would be premature for me to give a view. The issues the Deputy has outlined deserve answers. The committee may want to write to the university and set out those questions. We will examine it as part of the audit.

In terms of the way it is accounted for, the student levy income is taken as an income into the university. There is not a restricted reserve in which that money has been accumulating. Some of it has been spent. It is all intended to be spent on student services or student-related services, societies and so on.

Obviously, a large part of it was for the infrastructure development and there was an accumulated fund. Even as far back as 2014, it already had a certain amount in it which was being earmarked for expenditure on the centre. In a way, there is a general issue coming out of the hyperinflation impacting on a capital project because the same rules apply to capital projects everywhere, and this may not be the only capital project that will find itself in difficulties like this.

Chairman

I suggest that we write to the university seeking an explanation and asking it to outline how much was collected in this fund over what number of years, how much has been collected each year and, if money has been taken out of it at this point, what is it is being used for and what the remaining balance is.

Deputy Catherine Murphy

I completely agree with writing to the university and to the president of the college, which would be appropriate, but there is another view on this because the students are not at all happy with how the thing has been portrayed. I may well talk to them, as the Chairman may also do. A key condition attached to the 1999 levy referendum was that if any of the conditions were broken, the referendum would be deemed null and void, so they were being very clear about what was expected and that was set out. I completely understand about the hyperinflation and I believe this project has gone something like 50% over what was originally tendered. We need to understand that. To go back to the 1990s, there was a €40 per student fee at that time and that went up to €150 in 2015. That was to be discontinued when the facilities were in place but none of the facilities that were supposed to be in place have been provided. That is why there is such frustration that the money was collected but the services have not been delivered. There is a wider issue and I believe we should be looking at this when we are looking at the universities and, in particular, where there are additional charges, how they are handled and what is delivered from them. There cannot be a university without students.

Mr. Seamus McCarthy

It is a thing that is general across the university sector that they have these levies in place and these kinds of agreements.

Chairman

It would be useful to have some kind of uniformity in terms of procedures and rules.

Mr. Seamus McCarthy

As the Deputy has suggested, identifying reserves and having a separate account and separate accountability in regard to it, and maybe not a separate set of financial statements but at least a proper identification within the financial statements that these are reserved funds, could be discussed.

Chairman

That completes the public correspondence. We move to the work programme. At last week’s meeting, we agreed to proceed with the following engagements: 13 October, Department of the Environment, Climate and Communications; 20 October, Department of Public Expenditure and Reform; 27 October, Department of Children, Equality, Disability, Integration and Youth; 10 November, Greyhound Racing Ireland; and 17 November, Department of Finance.

The Comptroller and Auditor General’s 2021 report on the accounts of the public services and the 2021 appropriation accounts of Government Departments and offices was published last Friday. We begin examining the publications next week when we engage with the Department of the Environment, Climate and Communications to examine its 2021 appropriation account and a chapter from the Comptroller and Auditor General’s 2021 report on the implementation of the national broadband plan.

Other chapters that we will examine during October include the re-allocation of voted funds with the Department of Public Expenditure and Reform, and a guardian ad litem follow-up report with the Department of Children, Equality, Disability, Integration and Youth. We will also examine that Department’s expenditure on direct provision. In November, we will hold an engagement with the regulator of the national lottery to examine Exchequer receipts from national lottery ticket sales.

If there any other matters that members wish to raise, they can put them forward now. As there are not, that concludes our public session for today. The committee will now move into private session.

The committee went into private session at 2.46 p.m. and adjourned at 3.08 p.m. until 9.30 a.m. on Thursday, 13 October 2022.