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COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 13 Jul 2023

Business of Committee

Fáilte ar ais. The public business before us this afternoon is as follows: accounts and financial statements; correspondence; work programme; and any other business.

Before we go on to accounts and financial statements, members might note that today is the last day for Shane O'Connor to be here and acknowledge his work. Mr. O'Connor was seconded from the Comptroller and Auditor General's office to work with the committee. I want thanks Shane for the work that he has done. The help that he has given the committee and its members, particularly new members coming onto the committee and new members who had just been elected and who were elected to the Dáil for the first time, was valuable. He always put things in digestible form, with all briefing notes. Any explanations were always provided. There was no such things as, if a member needed something after 5 p.m., that it could not be got. It could be got anytime. I want to acknowledge that and thank Shane for his work. I know he is going back. He is moving up the ladder a little bit. I wish him well in his new position.

I want to acknowledge Katherine too. Katherine is taking over from him. Katherine has been here at the latest few meetings but, officially, she will take up Shane's role from the first meeting in September. I wish Katherine well. I look forward to working with her over the coming period.

I thank Shane. I really mean that. He was a great help to everybody.

Members may want to make a brief comment as well.

I would like to echo what the Cathaoirleach said. It has been very easy to interact and that has made all the difference. We are dealing with a different topic every week and trying to get our heads around that is quite difficult. Mr. O'Connor's help has been enormous. I wish him the very best of luck in the future, and good luck to Katherine as well.

I thank Shane for all the help he has given to me, and all the other members of the committee as well, since I joined it. Without his help, it would have been far more difficult to deal with the issues coming up. He has made our job that much easier. I thank him for the work. Likewise, I wish Katherine every success in her new role and wish Shane every success in his new role as well.

Absolutely, only for him. Like new members, how are you? All of the secretariat but, in particular, the members, will miss Shane. Katherine has big shoes to fill but I wish her the best of luck.

We are acknowledging it is Shane's last day, if Deputy Dillon wishes to say a few words.

I thank the Cathaoirleach. As a fellow Mayo man, I am happy to congratulate him.

There you are.

He is flying now.

His heart is in Mayo. That is for sure.

Shane has been a great support for us within the committee. I wish him the very best of luck and thank him for his professionalism and his courtesy, along with the Comptroller and Auditor General.

Absolutely. Deputy Devlin is online and indicated. He might want to say a few words.

I thank the Cathaoirleach. I just want to join my colleagues in thanking Shane for everything he has done. The briefing packs and even, sometimes, the non-written briefing that he can give as one is walking in the door, are always very helpful. I wish him all the very best in his new role and, obviously, as well, congratulate Katherine. I am looking forward to working with her in the next little while.

Deputy McAuliffe, we are acknowledge Shane. It is his last day today.

As I just walk in the door, I asked Shane what should I say. I join with everybody else. As Deputy Murphy and others said, sometimes it was the stuff outside of the pack that one would receive. It was the check-ins to make sure that one had a good grasp of whatever it was. Shane was also led by what we brought forward. That was important that he took his lead from the interests of the committee as well. It is a balance of bringing forward what the Comptroller and Auditor General had and maybe putting shape on what we brought forward.

Absolutely, and that is always acknowledged. With the reports and recommendations as well, Shane has played an active role in that. Sometimes people say that civil servants are civil servants but I have been very impressed with the dedication. In the future, may he have every good wish.

Katherine will ably fill those shoes. Hopefully, she will not be long settling into it. We look forward to working with her. I thank Shane and wish Katherine the best of luck.

Moving on to the accounts and financial statements, and back to the money, I call the Comptroller and Auditor General.

Mr. Seamus McCarthy

The first set of financial statements to introduce relate to the Health Service Executive for 2022. It received a clear audit opinion. However, there were a number of matters that I drew attention to. First, the disclosure that charges totalling €94.4 million related to the obsolescence of Covid-19 vaccine stocks were recognised in 2022 and also €1.7 million spent on the storage of obsolete protective suits and hand gel. These were stocks that were previously written off but they are still in storage at cost. The second item is that there is a continuing material level of non-compliance with procurement rules. The HSE has estimated that at 7% of its spend on goods and service but it is using a methodology that the HSE accepts has limitations. It is accepted that it is a sizeable problem of non-competitive procurement but there is not an absolutely accurate estimation of that. The third item is an increasing trend of transfers to the section 38 and 39 bodies not being covered by a relevant form of funding agreement. Depending on the amount they are paid, there are different forms of contract to be put in place but there has been some slippage there in the extent of coverage in the period when funding is being given. Finally, I am drawing attention to very high remuneration payments to certain employees with the highest earner receiving almost €1 million in 2022 and some weaknesses in controls over payments to high earners.

No. 2, the Carbon Fund financial statements for 2022, received a clear audit opinion. No. 3, the Defence Forces Canteen Board, for 2022, received a clear audit opinion.

On No. 4, a number of the following are National Treasury Management Agency accounts. The National Debt of Ireland, for 2022, received a clear audit opinion. The National Treasury Management Agency administration account for 2022 received a clear audit opinion. The Post Office Savings Bank Fund account for 2022 received a clear audit opinion. The State Claims Agency accounts for 2022 received a clear audit opinion. The Dormant Accounts Fund account for 2022 received a clear audit opinion. The National Surplus (Exceptional Contingencies) Reserve Fund for 2022 received a clear audit opinion.

The Ireland Strategic Investment Fund 2022 also received a clear audit opinion. The following is in a separate category but it comes from the National Treasury Management Agency, NTMA, as well. The Ireland Apple escrow fund for 2022 received a clear audit opinion.

On the national debt one, does the €3.8 billion take in the residue from the bank debt and all of that? Is everything in that?

Mr. Seamus McCarthy

All of the bank debt is in there. On the schedule, the actual national debt at the year end was €231 billion. The turnover figure that is given there is €3.8 billion. That is the debt service cost in the year; effectively the interest cost on the debt.

Is that likely to decrease in the coming years as trends are going? It is not?

Mr. Seamus McCarthy

No. It is going to go in the other direction.

I refer to the HSE and the fourth bullet point on high remuneration. One of the highest earners is receiving €1 million.

Mr. Seamus McCarthy

Almost €1 million. It is just slightly under €1 million.

Is that part salary and part-----

Mr. Seamus McCarthy

It is all salary. It is remuneration.

Does Mr. McCarthy have any idea what position the person has?

Mr. Seamus McCarthy

It seems to be a working out of the contract in the individual case. While one earner is receiving almost €1 million, seven others were paid in excess of €500,000 each.

Are they in management or medical?

Mr. Seamus McCarthy

They are all medical.

Is the €1 million salary medical?

Mr. Seamus McCarthy

My understanding is it is medical.

Does it relate to payment for work carried out in one year?

Mr. Seamus McCarthy

Yes.

Mr. Seamus McCarthy

Yes.

It is not like a lump sum payment at the end of a year because somebody is leaving, with something accruing in it?

Mr. Seamus McCarthy

It is remuneration for service rendered in the year.

That is an amazing amount. Can we get some information and a breakdown of that?

Mr. Seamus McCarthy

That would have to come from the HSE.

We should look for that.

On the same point, this is a serious revelation on high earners within the HSE. Mr. McCarthy talked about one employee earning over €1 million and seven employees earning over €500,000. We need to get a breakdown on other remuneration to do with this. We all know about the new consultancy contracts that have been issued and we know about the GP contracts but if there is another issue with these high earners and how this is calculated then this must be discussed at the Committee of Public Accounts with the HSE as a matter of urgency.

In my innocence I thought the CEO was the highest-paid employee of the HSE, and that salary was around €400,000. That figure, for medical staff, is-----

Mr. Seamus McCarthy

Coming up on screen at the bottom of the document are the remuneration bands. The payment bands are in bands of ten thousand euro, starting with €450,000 to €460,000 and then it runs. There are gaps in it and you only have the bands where there is a payment but the top payment is between €970,000 and €980,000, so it is just under €1 million in the individual case. There is another staff member in the band of €710,000 to €720,000 and then you have a couple who are around €570,000 to €590,000 and so on.

I suggest that we look for the positions held by the people who received this pay, including the highest number of €980,000, which is double what Ryan Tubridy was getting. We will ask for an explanation note on it from the HSE.

We are acutely aware of the large budget the HSE has and you are expecting to see a return on the other side. We are strictly talking about value for money, better services and that. I note on that list that there is a difference between 2021 and 2022. For example, there were three people who did not appear on that figure in 2021. There are people earning €460,000 and €470,000, for example. We should look at what the trends are. Some of them are in reverse but when we start segmenting what we will be talking about with the HSE, when we inevitably have it in, that has to be one of the items we talk about. We must specifically identify that but there are a few other things as well. Like others, I was across the road in Buswells Hotel yesterday meeting people from the Irish Nurses and Midwives Organisation, INMO, and they said they love the job and they want to do it but that they are worried about safe staff levels. Then we are looking at this and you can understand why there would be discontent within an organisation when you see that.

I want to mention two of the other items, beginning with the obsolescence. Why is something that will not be used being held on to? Is there any value in it if storage is being paid for? It is almost like the voting machines again. If it is not of value then losses should be cut. That would strike me as the obvious thing to do. Second, on the vaccines that were retained rather than exported, I remember that other countries were looking for vaccines but they were allowed to expire. Presumably they have been dumped.

Mr. Seamus McCarthy

I do not know what has happened since. The write-off was effectively decided in December. For some of them, the explanation is that based on stocks that are out of date as at the end of December, those that are due to be out of date are no longer considered to have utility in the programme during 2023. Some of it could be due to a decision not to use certain vaccines. Their use has been discontinued and other ones are expected to go out of date in 2023.

We have it on our work programme for September and October to have the HSE in.

My understanding was that some of those payments were back payments to consultants where there was a dispute going on about the level of pay and as a result, all of that pay came in together. None of the contracts are on that kind of basis, even for overtime. There is an upper limit. My understanding is that there are basic contracts where a high fee is paid and then there is a number in the contract that you can only claim overtime for.

Mr. Seamus McCarthy

In the past, there were arrears that were distorting the patterns but I specifically asked if there was any element of arrears involved in the highest level of payment and it appears that it is remuneration for services rendered in the year. There may be elements of arrears but they are not the predominant figure.

The fact is that there is a set upper figure in the contract for what you can get in overtime. Therefore, it cannot be overtime. Say you are on a one and two rota, for example. By the end of March you will have used up all of your overtime. In other words, even if you come in and do extra hours after that you will not get paid for it, even though you have to come in because of the service you are providing. That should have all of your overtime claimed by the end of March in a lot of those contexts as I understand it.

Mr. Seamus McCarthy

There is a variety of contracts in place in the system. I understand that the particular contract form that the Deputy describes exists but it does not apply in all cases. There may be local or specific contracts for individuals.

I suggest that when we are corresponding back with the HSE, we ask them if there is an element of accrual in it, and to explain what it is.

This is just to clarify. Of course, what Mr. McCarthy is saying is-----

Mr. Seamus McCarthy

An element of arrears.

Yes. We need to know if there were arrears or accrual by some other means.

Did the HSE provide Mr. McCarthy with a title or description of that post?

Mr. Seamus McCarthy

Yes.

Mr. Seamus McCarthy

I would prefer not to release it.

Mr. Seamus McCarthy

It is not really about the individual. It is about the contract that is in place and the system governing it.

Was it a consultant? Was it an accountant?

Mr. Seamus McCarthy

I understand it is a consultant.

Mr. Seamus McCarthy

If I can mention one other thing, the section 227 report in relation to the National Asset Management Agency, NAMA, was published yesterday. Members may have missed the fact that the report is now available and was circulated yesterday.

Is the list of accounts and financial statements agreed?

I presume we will come back to that NAMA report in September.

Yes. We will have NAMA before the committee.

I certainly want to have time to read it.

NAMA is on our work programme. Are the accounts and financial statements agreed?

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

We will move on to correspondence. As previously agreed, items that are 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 B, correspondence from Accounting Officers and-or Ministers and follow-up to committee meetings. The first is No. R2025B from Ms Katherine Licken, Secretary General of the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media. It is dated 7 July and provides information we requested arising from our meeting with the Department on 22 June regarding the cost of hosting the Ryder Cup. It is proposed to note and publish this correspondence. Is that agreed? Agreed. We discussed this previously and Deputy Catherine Murphy wanted to mention it again today.

I will try to be brief. This will be useful information. Having been in a county in which the Ryder Cup was held, I know it can have benefits both when the event is being held and afterwards. I just want to say that. It would be useful for us to get a schedule of meetings, the minutes and information on the resources and budget. Is there a role for Golf Ireland? It does not look like there is one. As part of this, is there a proposal for some kind of upgrading of Shannon Airport? In Kildare, we saw that things were upgraded as a consequence of the Ryder Cup coming to the county. The Department might also let us know if other events are tied to this. For example, the Walker Cup is coming. I only found that out the other day. Are there other events tied to this and being funded as a consequence of having the Ryder Cup held there?

The Deputy is seeking information on that and on any upgrades to Shannon Airport.

That is fine. We will move on to Nos. R2035B, R2036B and R2037B. They have been received from RTÉ in relation to documents provided to this committee on Monday of this week. I propose that we discuss them in private. Is that agreed? Agreed.

The next category of correspondence is category C, correspondence from and related to private individuals. The following items have been held over from the meeting of 22 June. The first is No. R1931C from Deputy Verona Murphy, dated 12 June, regarding issues arising from the committee’s report on engagements with the Department of Transport, the National Transport Authority, NTA, and Transport Infrastructure Ireland, TII. This report was launched on Tuesday of last week. The Minister for Public Expenditure, National Development Plan Delivery and Reform is required to formally respond to the recommendations through the minute of the Minister. I propose we note and publish this correspondence. Is that agreed? Agreed. Deputy Verona Murphy wished to flag this.

I felt, based on the report and soundings that there will be a significant announcement of funding from the Department of Transport, that we have to look more seriously at how projects will be funded, given the waste that was recorded in our report. We should be asking NewERA to look at projects before moneys are sanctioned to ensure they are viable. Members should have a chance to read the report. I do not know whether they concur with me.

We had hearings on that and launched the report last week. Sums of money have been spent without any physical works being commenced. I do not know if we are any nearer to starting them. It is incredible. It has been jaw-dropping. We need to use whatever leverage we have. The Minister does have to respond through the minute of the Minister. The Deputy is saying the time has surely come for the Committee of Public Accounts to explore some sanctions and processes that can be applied where an Accounting Officer is remiss in his or her responsibility. Having someone responsible for poor performance and public contracts is key to improving the outcomes. Perhaps I am right. In terms of sanctions, the sanction we can impose is to make a report and recommendations to the Minister and, by extension, the senior staff in the Department will have to respond.

The proposal was made after the report when it should have been before the report. We could have discussed it then. However, I am sure members want to move on, so I have no difficulties with noting and publishing the correspondence.

Yes. We might take advice on what can be done and if there is any more we could do, other than making recommendations and seeking accountability through the minute of the Minister. We can explore that.

Yes. I thank the Cathaoirleach.

We will see what options are open to us.

I will make a very quick point on that.

It is important that we do not blame the Accounting Officer if there has been a political decision to change something, and I think some of these were political decisions. Let us make sure we apportion blame where it is supposed to be.

That is what I mean by going through NewERA first to determine if the projects are viable in the first place and to ensure there is some oversight of them.

We will keep in mind the recommendation regarding NewERA.

Deputy Verona Murphy has touched on a broader point around how we price, plan and fund infrastructure projects. Perhaps that is a different piece of work that the Committee of Public Accounts could look at. It does not come from any one set of accounts that comes to us from Mr. McCarthy, but we are starting to see a pattern across a number of different Departments, specifically the Departments of Health and Transport. Maybe the committee could look at that.

Part of the problem, though, as mentioned by Deputy Verona Murphy, is that some of these have been talked about for nearly 20 years. They are taken off the agenda and then they come back on it and there are changes made.

The Deputy is right.

That is a point as well.

One problem with the contracts is the variations that are occurring in the middle of contracts.

Do not go there, Deputy.

I know but what I am saying is that----

In fairness-----

-----it is one of the reasons it then adds to the cost-----

-----and why we are not able to tie down the description part better.

That is a very topical ongoing debate. I agree with the Deputy.

Mr. Seamus McCarthy

This is just an idea. Deputy Verona Murphy referenced NewERA but there is a section within the National Treasury Management Agency, NTMA, which is a national development finance agency, that looks at public-private partnership proposals and so on. It might actually be the vehicle within the NTMA that would be better suited to report on it. However, a focus could be put on making available the business case and the whole issue around reporting on projects as they are in process and getting meaningful information.

I thank Mr. McCarthy for that. Moving on, we have received documents from RTÉ and we have agreed to deal with them in private where they relate to individuals. We have dealt with the matter flagged by Deputy Verona Murphy.

The next correspondence is No. R2032C from Ms Breda O’Keeffe is dated 10 July and relates to the committee’s invitation to attend today’s meeting. I propose we note this item. Is that agreed? Agreed. Deputy Catherine Murphy flagged it.

That is all right.

That was the whole point: once we got to it at this point in the meeting it was gone.

As Deputy Murphy said, we can just express disappointment that we did not have the benefit of having her at this morning's hearing. I think it would have been helpful in terms of having everybody in the room where we could perhaps have got a clearer picture of what happened.

There has been a change in the order. The next is No. 2043.

Perhaps it is better discussed in private session, but I do think Ms O'Keeffe, for example, was a witness who was asked to come before this committee, and she did not come before it on any occasion, although she was invited once. We need to consider that as a committee, but perhaps it is something we can do along with our work plan on this topic in private session. I think it is worth noting, in the context of Deputy Catherine Murphy's correspondence as well.

Okay. That is agreed. The next one then is No. 2043. It is from Moya Doherty and it is dated 12 July. It is in relation to the committee's invitation to attend today's meeting. It is proposed to note this item. Is that agreed? Agreed. It just says:

Thank you for the invitation to attend the PAC proceedings on Thursday 13th July.

Regrettably I am not in a position to attend the proceedings tomorrow.

Please pass on my regrets to the Cathaoirleach and to the committee members.

Kind Regards

Moya Doherty

Do members wish to say anything else on that? No. We will just say we are disappointed.

No. 2038 is from the clerk of the committee on remit and oversight. I propose that we consider this in private session. Is that agreed? Agreed.

We will move on to the work programme. Members have been circulated with the draft work programme for discussion, which is displayed on their screens. The first meeting of the Committee of Public Accounts after the recess will take place on Thursday, 21 September. I propose that we use our first meeting back to deal with correspondence and business of the committee. Is that agreed? We normally have a substantial amount of correspondence and other matters to deal with. I suggest that we use the meeting for that purpose. Is that okay? Are members happy enough with that? Agreed.

I propose that we engage with the National Asset Management Agency, NAMA, on 28 September to discuss its 2022 financial statements and the Comptroller and Auditor General's special report that has just been referred to, No. 116, which was published earlier today. Is that agreed? Agreed.

We are going well. I propose that we schedule the following meetings as follows. There might be slight differences between what is in print and what is on the screen. I am going by what is in print because that reflects the notes that were taken. I propose that we schedule the following meetings. I suggest we invite the HSE on 5 October to specifically discuss the ten highest paid positions in the HSE. Are people happy enough with that?

Are you rescheduling, a Chathaoirligh?

Could you clarify that for us again, a Chathaoirligh?

No. I propose that we schedule the following meetings: the HSE on 5 October.

How about 21 September and 28 September?

On 21 September we agreed to discuss correspondence. On 28 September we will have NAMA and the special report. I think there will be enough in that.

Do we have RTÉ on 5 October?

The 5 October is the HSE.

Not according to what we can see.

Mr. Seamus McCarthy

What is on the screen is different.

That is what I said, there has been a mistake. We must bear in mind the fact that the secretariat has been literally running to keep ahead of events.

That is no problem at all.

Of course. Are you proposing, a Chathaoirligh, that RTÉ would come in on 12 October?

Should we swap them around?

That is what I was coming to, that RTÉ would come in on 12 October.

How does that align with our obligations to do a report to the Dáil? Is there a date on that?

I think it is by the end of the year. We are only meeting to the end of the year on this subject. That is what the CRO powers give us. We do need to have it done before then. I think we could have the meeting on 12 October.

It is a very complex area. I think we should give the secretariat four or five or even more weeks to conclude the report and then for us to do amendments. I am just worried that we are coming very close to the end of the year if we add that period in.

All meetings have to take place before the end of the year, according to the CRO's response, but we can report afterwards, if people are happy enough with that. I think all meetings will be out of the way by then. I agree with Deputy McAuliffe that it would be nice to have the report within the year as well. If we have the meeting on 12 October that should sort that out.

Just in time for "The Toy Show".

We can schedule the following meetings then: the National Paediatric Hospital Development Board and Children Health Ireland on 19 October and the IDA on 26 October. Do members have any comments on the work programme?

Is there a purpose to the meeting with the IDA?

Somebody wanted it to come in. We will leave it there as an option. If members want, they can put something else in that slot.

After the last few weeks - and we could see with Inland Fisheries Ireland, IFI, and the Irish Horseracing Regulatory Board - our real value is where there are very obvious issues. They should always come in first, if you like, rather than the routine ones.

We should tidy up those ones.

I had requested that, but there is no obvious reason for it at the moment. I have to check that. I will defer to Deputy Catherine Murphy's suggestion in the absence of a reason.

It is fair to say that Inland Fisheries Ireland needs further attention. The meeting with it was on the morning of the meeting with RTÉ.

IFI will have another set of accounts at some point. We can even see with the National Paediatric Hospital Development Board we are still working off the 2020 accounts. Does Mr. McCarthy think we will have the 2021 accounts by then?

Mr. Seamus McCarthy

Yes.

This is in the hands of the committee. Is the most appropriate thing perhaps that we would bring the IFI in on-----

Could I suggest that we leave 26 October and come back to that at our first meeting?

By the way, Deputy Dillon was the one who requested that the IDA would come in.

That makes sense.

I knew somebody did.

Are you talking, a Chathaoirligh, about bringing IFI back in on 26 October?

I think there will be a new set of accounts. Is that correct?

Mr. Seamus McCarthy

There should be, but I am not sure that they will be finished.

I do not think we should bring them in until we have something definitive on that.

We could maybe leave that hanging there and we can decide it later. For now, we might leave the IDA. One of the Deputies asked for the IDA to come in and he had specific reasons. We can talk to him again about that. Is that all right? Agreed. We can leave it open. If we need to change the agenda for that day, which I suspect might be the case, we can.

We had correspondence with the City of Dublin Education and Training Board and the Office of Public Works, OPW, on Whitehall College. There is a sizeable piece of work there for us. We suggested that we would defer it until the autumn period. I wonder if we could give it some consideration. It does not neatly fall into a category. The education and training board is separate from the Comptroller and Auditor General but the OPW is not.

Mr. Seamus McCarthy

I audit both.

I am sorry. Of course he does, yes. Are we in a position yet to bring them forward?

Mr. Seamus McCarthy

That is an ongoing project, so it relates to any set of financial statements of theirs. The committee has not looked at them for a number of years.

The building is lying idle for nearly ten years.

Is there anything we can do? It is in Deputy McAuliffe's locality or fairly close to him. Is there anything we can do in the short term?

No, Chair. In my view the ETB would welcome us examining the issue as well.

There is an ongoing legal issue with the contractor that may stymie it. If we cannot deal with it in the autumn term, I would like it dealt with early in the spring term.

I thank the Deputy.

That concludes our consideration of the work programme. Since there is no more business, that concludes the proceedings. I thank the members for their hard work and dedication during this Dáil term, particularly in the past month or so. It has been particularly busy. I acknowledge the teamwork and that, despite the fact that there was a lot of pressure on us and many in attendance at meetings, members co-operated with the Chair. This made my job very manageable. It has been remarked upon beyond the walls of this building that the members of the committee have performed well and done a very diligent job on behalf of the public over the past term. I acknowledge that and thank every member for it. I may give out to them sometimes but not today.

We will now go into private session briefly before adjourning until 9.30 a.m. on 21 September.

The committee went into private session at 3.42 p.m. and adjourned at 4.10 p.m. until 9.30 a.m. on Thursday, 21 September 2023.
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