COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 30 Mar 2023

Business of Committee

An Cathaoirleach

The public business before us this afternoon relates to the minutes, accounts, financial statements, correspondence, the work programme and any other business. The first item is the minutes of the meeting of 23 March, which have been circulated to members. Are the minutes agreed? Agreed. They will be published on the committee’s webpage.

Four sets of accounts and financial statements were laid before the Houses of the Oireachtas between 20 and 24 March this year. I will ask Mr. McCarthy, the Comptroller and Auditor General, to address them.

Mr. Seamus McCarthy

No. 1, Cork Education and Training Board, for 2021, received a clear audit opinion. However, I drew attention to the disclosure of a material level of non-compliance with procurement rules.

No. 2, the Western Development Commission, for 2021, received a clear audit opinion.

No. 3, the Sustainable Energy Authority of Ireland, SEAI, for 2021, received a clear audit opinion. I remind the committee that the annual financial statements for 2021 were presented to the Oireachtas Library and Research Service to correct the record in respect of a previous incorrect version presented on 19 December 2022. The matter was discussed when SEAI appeared before the committee a couple of weeks ago.

No. 4, An Bord Pleanála, for 2021, received a clear audit opinion. However, I draw attention to two matters outlined by the board in the statement on internal control. First, a number of matters of serious concern that arose in 2022 relating to the board's operations required reviews or reports. The statement on internal control outlines the status of the reviews of those matters at the signing date, 22 December 2022. Second, I draw attention to penalty payments incurred by the board in 2021, amounting to €10,000, and in 2022, amounting to €1.34 million, relating to delays by the board in decision-making on strategic housing development applications.

An Cathaoirleach

I thank Mr. McCarthy. As no members wish to comment, I propose we agree and note the listing of accounts and financial statements. Agreed. As usual, they will be published as part of the minutes.

Deputy Catherine Murphy

The correspondence from An Bord Pleanála sets out the €1.34 million. That is a huge sum.

An Cathaoirleach

Moving to correspondence, as previously agreed, items that were not flagged for discussion at this meeting will continue to be dealt with in accordance with the proposed actions that have been circulated. Decisions taken by the committee in respect of correspondence are recorded in the minutes of committee meetings and published on the committee's webpage. The first category under which members have flagged items for discussion is B, correspondence from Accounting Officers or their Ministers in follow-up to committee meetings. Three items have been held over from our previous meeting. I propose we deal with them one way or the other way today.

The first item, No. 1777B, from Mr. John McKeon, Secretary General of the Department of Social Protection, dated 7 March, provides information we requested arising from our meeting with the Department on 1 December last. It is proposed to note and publish the item. Deputy Munster flagged it for discussion but she is as láthair because she was not feeling well earlier. I propose we note and publish the item. Is that agreed? Agreed.

No. 1784B, from Mr. Jim Breslin, Secretary General of the Department of Further and Higher Education, Research, Innovation and Science, dated 8 March, provides information we requested regarding Whitehall College of Further Education and was flagged by Deputy McAuliffe. No. 1802B, from Ms Bernie McNally, Secretary General of the Department of Education, dated 16 March, and No. 1807B, from Mr. Maurice Buckley, chair of the Office of Public Works, OPW, dated 20 March, also provide information requested by the committee regarding Whitehall College of Further Education. At our meeting last week, we agreed to note and publish No. 1784B, and it is now proposed to note and publish Nos. 1802B and 1807B.

Deputy Catherine Murphy

It is not entirely clear whether there is more than one case. Are the Department of Education and the OPW each taking cases or is there just one case? Is there a combined approach?

An Cathaoirleach

The man to answer that has just arrived. It is a local issue for Deputy McAuliffe. He might like to address it.

Deputy Paul McAuliffe

I was kidnapped by the Committee on Public Petitions, which was seeking a quorum, so I apologise for not having been here. My intention in flagging this item and seeking the information stems from the fact this issue concerns more than any one constituency.

I appreciate there are open legal cases, so I will be careful in what I say. Ultimately, a building has been lying idle for nearly 16 years and there are ongoing legal cases. As a member of the Committee of Public Accounts who sees the work of the education and training board, ETB, and the constraints it is under regarding space and so on, it is bizarre that there is no way of finding some accountability for what happened while those legal cases take place. I would appreciate the guidance of other members of the committee who have been here longer than me. As long as those legal cases are ongoing, we are in some ways constrained. There is a significant issue involving a building, a location and a service being delivered. Legal cases are to recoup public money or prevent the misspending of public money, so I am not undermining the legal strategy, but there is a significant issue, of which I will provide an example. Home Farm Football Club is a local football club in the area impacted by metro works. The proposal was for a temporary all-weather pitch to be located somewhere in the area so the club could continue. The ideal location would have been beside this site but that was not possible because of the legal constraints. Any land in Dublin is valuable, so that a building could sit on it and, equally, that there is a legal strategy which may not even be completed in a decade is not acceptable. I understand that we are constrained but the OPW and the Department have a role to be accountable to the committee regarding overall spending, what may have been spent and the legal fees accruing, the strategy and costs of that also.

An Cathaoirleach

The site was bought by Whitehall college.

Deputy Paul McAuliffe

The site is owned by the City of Dublin Education and Training Board, the old vocational education committee, VEC. The building was built by Western Building Systems. Arising from an inspection report, the building is no longer occupied.

An Cathaoirleach

It is one of that group.

Deputy Paul McAuliffe

That is correct.

An Cathaoirleach

There is also a site.

Deputy Paul McAuliffe

There are adjoining sites. The City of Dublin Education and Training Board is now progressing with the construction of two new second-level schools on adjoining sites. All of this site is impacted by what happens in one section. It is an eyesore in the community. It is off the road so not many people see it on a daily basis but if we as a committee went to look at it, members would see it is in bits and is lying idle.

An Cathaoirleach

It is a relatively new building.

Deputy Paul McAuliffe

It was a brand-new building.

An Cathaoirleach

It was built ten or 15 years ago.

Deputy Paul McAuliffe

It was built in 2007.

An Cathaoirleach

I am aware the Deputy must be careful in what he says. For the information of the committee, is it unsafe to use? Is that the problem?

Deputy Paul McAuliffe

There is some dispute as to why it is not occupied. It is safe to say it is not occupied at the moment and there is a legal action as a result. I am afraid to say any more. I see the clerk to the committee being cautious. The building was never fully utilised.

Deputy Catherine Murphy

I understand we cannot get into anything of the substance of which court cases are under way because there is a separation of powers. The correspondence says the Department is aware of the dispute relating to Whitehall College of Further Education as it too has cases against the same contractor currently before the courts and continues to be advised by the Attorney General. I am confused about how many cases there are. It is the OPW and-----

Mr. Seamus McCarthy

I think the Department of Education has an issue, which it disclosed in its appropriation accounts in respect of - from memory - 40 schools, I think, in which there were problems. The problems were remediated and the schools were brought back into use. There is still an action against the contractors in that case. This seems to have predated the construction works that were part of the Department's claim. It is all the State against the same contractor. It seems to be saying in the letter that it may be better legally to have a coordinated approach.

Deputy Paul McAuliffe

This is not dissimilar to other instances in which legal cases are pending. There is an issue of the public interest. Is there any advice or any area in which the Comptroller and Auditor General thinks the committee could inquire further without interfering with the restrictions in terms of legal cases?

Mr. Seamus McCarthy

There is the question, which I think prompted the Deputy's concern, that there is a building that is not being used. Making a determination as to whether it can ever be used or whether it would be more feasible to knock it down and start again and use the site may be the question.

An Cathaoirleach

Has the building been vandalised?

Deputy Paul McAuliffe

No, to be fair, it has not. There have been small elements but not to any significant degree.

An Cathaoirleach

Have there been fires or anything like that?

Deputy Paul McAuliffe

No.

Mr. Seamus McCarthy

We have seen it with other ETBs. I drew attention to, I think, two cases in County Cork and another ETB similarly where, in the course of construction, a contractor runs into difficulty, the project may have to stop and very quickly the building deteriorates because it is not in use, is not heated and there is no security around it. It may even be security from things like wind and rain and so on. A building will deteriorate very quickly. Then, to remobilise and get somebody else in, they are fixing problems from the previous contractor but also dealing with vandalism and tearing stuff out to rebuild.

Deputy Paul McAuliffe

This is one of the first modular builds. It was built in the space of a month on site. My instinct would be to call-----

An Cathaoirleach

It is a modular building?

Deputy Paul McAuliffe

It was at the time.

An Cathaoirleach

All of it?

Deputy Paul McAuliffe

Yes. I think at the time the principal was quoted in the newspaper remarking on how quickly it had been built in the space of a few weeks. The Dublin Inquirer had a very good article about it in 2017. In some sense, the City of Dublin Education and Training Board is not the victim, but it is certainly not the cause. I am reluctant to bring its representatives before the committee to be the centre of a Committee of Public Accounts hearing. We need to hear from the Office of Public Works, the Department of Education or the City of Dublin Education and Training Board about what the coordinated response is. I will put pressure on them to provide more information. I have approached this gingerly by way of correspondence but it needs to be escalated to a hearing.

Mr. Seamus McCarthy

The committee could establish who is in charge of the building or in whose charge the building is at the moment. If that party could brief the committee on the state of it and the plan for it, it might be a starting point.

Deputy Paul McAuliffe

My understanding is it is the City of Dublin Education and Training Board at this point. I may be wrong. It would be beneficial to do that and to get a briefing on the state of the building. That does not interfere with the legal strategy, if I understand what the Comptroller and Auditor General is saying correctly.

Mr. Seamus McCarthy

It should not, under advice from the parties. The difficulty is that Whitehall College of Further Education, which is continuing to deliver services, is doing so from temporary accommodation which may not be ideal either from the students' perspective.

An Cathaoirleach

It is a very difficult situation. How much was spent on it?

Deputy Paul McAuliffe

I do not have that figure.

An Cathaoirleach

We will seek information as to who is in charge. I think it will be the ETB.

Deputy Paul McAuliffe

It is the best place to start

Mr. Seamus McCarthy

The City of Dublin Education and Training Board.

An Cathaoirleach

We will follow up for that information and come back with it.

No. R1790B is from Mr. Niall Cody, Commissioner, Office of the Revenue Commissioners, dated 9 March 2023, providing information requested by the committee arising from the meeting with Revenue on 8 December 2022. It is proposed to note and publish this item of correspondence. Is that agreed? Agreed. Deputy Munster flagged it but she is not present. I propose that we take that as dealt with today.

The next item of correspondence is No. 1806 from Oonagh McPhillips, Secretary General at the Department of Justice. It is dated 20 March and provides information we requested regarding tribunals of inquiries and commissions of investigation. It is proposed to note and publish that item of correspondence. Is that agreed? Agreed. I flagged this item because one of the issues is where it states the Department is not currently undertaking any research on international examples of best practice. I am at a loss as to why that would be the case, considering the length of time tribunals have dragged on in this country as well as their cost. Apart from what they have uncovered, which has been useful, there is the fact they cost so much money.

I propose to the committee that we inform the Department of the Taoiseach of our dissatisfaction with this response. This correspondence is coming from the Department of Justice and that is fair enough. However, it is my understanding that the Department of the Taoiseach is the overseeing Department in the State. We should forward this correspondence to the Office of the Taoiseach, pointing out that the statement in the last paragraph, that the Department is not currently undertaking any research on international examples of best practice, is not adequate and we are not happy with it, and asking what the review of it is. Is that agreed? Agreed.

We will move on to No. 1808 from Francis O'Donnell, who is the chief executive officer of Inland Fisheries Ireland. That is dated 20 March. It is in response to a request by the committee for an analysis and advice document by a legal firm. It is proposed to note and publish that item of correspondence and to consider it in private session. Is that agreed? Agreed.

No. 1811P, from Mr. Robert Watt, Secretary General of the Department of Health, dated 21 March 2023, provides information we requested regarding the contract for the national children's hospital. It is proposed to note and publish this item of correspondence. Is that agreed? Agreed. I flagged this item of correspondence because this is something we need to monitor continuously. We asked questions around the timeline for dealing with claims, the overall cost of construction, the supplementary budget, the legal position with the handover and outstanding claims, and what happens in that case. There are some answers in it but there are couple of things that are not there. It states the Department's position remains unchanged in that definitive updates on costs cannot be provided and that live contracting claims are subject to dispute. The correspondence points out that the assessment at this point of the capital programme for this year is that it has adequate provision to ensure the national children's hospital can meet its timelines, financial obligations and contractual obligations. It also states it is not envisaged a Supplementary Estimate process will be required in respect of the project for the coming year. A timeline is set out, which I have not seen before. We have been trying to get some information on this and it will be useful for members to have it. It relates to the different stages. If a claim is lodged, there is a further 20-day period for full substantiation of claims and all of that. It is useful for us to know that because there was a concern among the members that these things could drag on indefinitely. This is an issue we need to keep monitoring. Does Deputy Murphy wish to comment on it?

Deputy Catherine Murphy

Not at this stage.

Mr. Seamus McCarthy

The timeline that has been outlined in the correspondence is what is provided for in the contract. The moratorium they agreed with the contractor may have suspended some of that processing within those timeframes. That is obviously at an end, so there is a question then whether everything starts to move at the same pace and picks up where it had stopped.

An Cathaoirleach

The other thing that is noted is that the transfer of the three hospitals to the site, including fit-out etc., will bring it up to €1.73 billion. That is the nearest we have seen to a final-----

Mr. Seamus McCarthy

No, that is the budget figure that was approved in 2019.

Deputy Catherine Murphy

It is for the fit-out and the build.

Mr. Seamus McCarthy

Exactly. The construction project was for €1.433 billion and there was €300 million, which was a separate budget provision, that was envisaged for the amalgamation, decanting and commencement.

An Cathaoirleach

It states that additional costs in relation to the integration and transfer of services of the three children's hospitals to the new site brings the total programme costs - they are not saying budget, rather total costs - to €1.73 billion.

Mr. Seamus McCarthy

I think that is the budget cost, is it not?

An Cathaoirleach

It does not say that, though. It only says "costs". That is the way it is worded in the letter. It is the first time I have seen any-----

Mr. Seamus McCarthy

It states that it brings the total programme costs to €1.73 billion. I think what they mean there is this is what they budgeted that the works would cost.

An Cathaoirleach

The claims, any overrun, and inflation would obviously bring it higher.

Mr. Seamus McCarthy

Yes. That would be additional.

An Cathaoirleach

This is an issue we will revisit during the year, I am sure.

Deputy Colm Burke

One of the problems with this contract is that there are a lot items that are disputed or are going to be disputed. The project will be completed, but the dispute regarding outstanding, additional works where the contractor is looking for payment could go on for at least 18 months, if not two to three years, after the project is fully finished. That would be one of the problems regarding getting a final figure.

An Cathaoirleach

Given that a lot of this will find itself across the river in the courts, we could be looking at any length of time up to a couple of years before something is sorted.

Deputy Colm Burke

Absolutely.

An Cathaoirleach

That is something no one has control over. However, if the budget is €1.73 billion at the moment and it is safe to say it will extend well beyond that by the time everything is wrapped up and completed and all claims are sorted, I think that is the point.

Deputy Catherine Murphy

That figure is very optimistic, I would say.

An Cathaoirleach

I think so.

An Cathaoirleach

Yes, once you get into the legal territory. We will note and publish that item of correspondence.

We will move on No. 1812 from Mark Griffin, Secretary General of the Department of the Environment, Climate and Communications. It is dated 21 March and provides information requested by the committee regarding the quarterly report on the national broadband plan and the number of premises connected to the broadband network. It is proposed to note and publish that item of correspondence. Is that agreed? Agreed. Deputy Murphy also flagged this item.

Deputy Catherine Murphy

Yes, I am looking for some additional information. We know the contractors have been passing premises. People can take the broadband if they wish. However, we would have expected, for example, public buildings, schools, libraries and hubs to have been connected. Can we ask about specifically about those types of buildings in the intervention area, which are non-domestic and non-firm buildings but are public buildings such as schools, libraries and hubs? What are the numbers that are passed and the numbers that are connected? Also, are they included in terms of targets and timelines or are they just geographic?

An Cathaoirleach

I think I received a figure for schools in particular. I remember there was a figure. We will ask for an update on that.

Deputy Catherine Murphy

Yes, but for public buildings and not exclusively for schools.

An Cathaoirleach

Is the Deputy including local authority buildings in that?

Deputy Catherine Murphy

I think we should ask about public buildings. You would have an expectation that they would be connected.

An Cathaoirleach

Are local health centres in that as well?

Deputy Catherine Murphy

Yes.

An Cathaoirleach

Okay. We will do that. Some 34,000 are connected, comprising all houses and premises, which is quite low. They were to pass 115,000 by January 2022. They were to pass 204,000 by 1 January 2023, but by the end of February, two months later, 120,000 had been passed with 34,000 connected. That is the pace it is moving at. We will request that information as well.

We will move on to No. 1813 from Ms Oonagh Buckley, who is interim chairperson of An Bord Pleanála. That is dated 21 March and she is providing information we requested regarding reviewing planning permissions and decision-making processes for planning applications. It is proposed to note and publish this item of correspondence. Is that agreed? Agreed. Deputy Murphy flagged this.

Deputy Catherine Murphy

Obviously this follows on from the financial statements and the fact there is €1.34 million in fines.

Mr. Seamus McCarthy

I think it may be a separate point. What the letter is talking about is decisions that have been made which there might be a question over but which the board cannot revisit, which I think is the point she is making, whereas the fines I referred to when I spoke about the financial statements relate to situations in relation to strategic housing developments, SHDs, where a decision was not made within the statutory time period and an automatic fine was imposed on An Bord Pleanála as a result. The legislation has been changed and the same liability to a fine is no longer there. Obviously SHDs, I think, are not proceeding in the same way.

An Cathaoirleach

On that point and the accounts, the penalty payments incurred by An Bord Pleanála were €10,000 in 2021 and were €1.34 million in 2022. Was that a large number of-----

Mr. Seamus McCarthy

There was a rush of SHD applications in the back end of 2021 and into 2022 because of an impending change in the legislation. It was just too much for An Bord Pleanála. It was not able to process them in the time that was available, because presumably it was not available. When the fine was thought of, it was not thought of there being an unusual rush of applications at the same time. An Bord Pleanála kind of got caught, and there were obviously other difficulties in the organisation, so it effectively incurred those fines. I would not expect it to continue. We will see when we come to do the 2022 financial statements.

Deputy Catherine Murphy

Some of the SHDs are still in process. You cannot apply, but they have not concluded.

Mr. Seamus McCarthy

Yes.

Deputy Catherine Murphy

We are all aware of the length of time it is now taking even to get decisions on very basic building appeals, like a house extension or something. It is taking about 12 months.

Mr. Seamus McCarthy

There are obviously significant capacity issues there.

Deputy Catherine Murphy

There is no doubt about that, and those capacity issues have costs in terms of fines. That was part of the reason the board could not, apart from the other issues that arose in An Bord Pleanála.

An Bord Pleanála has given us this reply, but I do not know if we were looking for it to tell us there was a mechanism to pause the decision-making process. That may well be to do with the SHDs and where there had been the kind of issues that were in the news and the flawed process. I am not sure whether we asked the board if it could pause them. This goes to what we see in the reports over recent years regarding the amount of money in the board's overall budget that is taken up by judicial reviews and whether that is to make sure they are properly examined so that we do not end up with judicial reviews with some of the issues that have arisen in a lot of the cases that were subject to judicial review.

An Cathaoirleach

Nearly all of which were being lost. That is the point Deputy Murphy is making - an examination at that point.

Deputy Catherine Murphy

Yes.

An Cathaoirleach

Okay. Deputy Murphy's proposal is-----

Deputy Catherine Murphy

No, I am-----

Mr. Seamus McCarthy

The board is due to come before the committee in the next few weeks, so maybe members should signal to the board in advance that the committee will have an interest in exploring that issue further.

An Cathaoirleach

We will flag that with it for the meeting. Is that all right, Deputy Murphy?

Deputy Catherine Murphy

Yes.

An Cathaoirleach

It might be the best way of dealing with it. Regarding No. 1814, I propose that we deal with that in private session. No. 1818 is from Ms Mary Hurley, Secretary General of the Department of Rural and Community Development. It is dated 23 March and relates to Pobal and the potential for a national funding platform of community and voluntary organisations. It is proposed to note and publish that item of correspondence. Is that agreed? Deputy Murphy flagged that item.

Deputy Catherine Murphy

We dealt with that largely this morning.

An Cathaoirleach

Deputy Murphy is happy enough with that.

The following item is not flagged, and I propose that we hold it over for consideration next week. That is No. 1819 and it is from Mr. Niall Cody, Chair of the Office of the Revenue Commissioners. It provides information requested by the committee regarding VRT and its relationship with EU law. In the meantime, we have also received a related response from the Department of Finance. I propose to hold that over and to consider both at our next meeting after Easter. Is that agreed? Agreed. That concludes our consideration of correspondence for this week.

I am moving on to our work programme. At our meeting of 20 April, we will resume our meeting with the Central Bank, the Department of Finance and the Revenue Commissioners on the insurance compensation fund, and the Comptroller and Auditor General's section 2 report on the unauthorised release of funds from the Central Exchequer. The Governor of the Central Bank and the Secretary General of the Department of Finance have confirmed their attendance, so members will be happy to know that.

We will engage with An Bord Pleanála on 27 April on its 2021 financial statements. I ask members to flag any areas of interest for that meeting so they can be added. There is one from today, and if members have anything else, they can put it onto it.

The secretariat is making arrangements to schedule a meeting with the HSE, the Department of Health, the University of Limerick and the Department of Agriculture, Food and the Marine. The secretariat is working on making these arrangements for 4, 11 and 18 May. Last week, it was agreed to schedule a meeting with the Department of Justice. Is it agreed to hold that meeting on 25 May? I take that as agreed.

Does any member wish to raise any other matter in relation to the work programme? No, okay. I ask members to flag any areas of interest for our upcoming meetings. I have received a letter from the Governor of the Central Bank, and I have it here with me if anyone wants to see it. It concerns the reasons he was not in attendance at the previous meeting when he was invited.

That concludes our consideration of the work programme for today.

No members have flagged anything under any other business. Go raibh míle maith agaibh, and we will move into private session.

The committee went into private session at 2.08 p.m. and adjourned at 2.28 p.m. until 9.30 a.m. on Thursday, 20 April 2023.