COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 19 Oct 2023

Business of Committee

An Cathaoirleach

The business before the committee this afternoon is as follows: minutes, accounts and financial statements, correspondence, work programme and any other business. The first item is the minutes of the meetings of 11 and 12 October 2023, which have been circulated to members. Do members wish to raise any matters? No. Are the minutes agreed? Agreed. As usual, they will be published on the committee's website.

The second item is accounts and financial statements. Just one set of accounts and financial statements has been laid before the Houses of the Oireachtas between 9 October and 13 October. I call Mr. Seamus McCarthy, the Comptroller and Auditor General, to address these before I open up the floor.

Mr. Seamus McCarthy

The financial statements of the National Museum of Ireland for 2022 were presented and they received a clear audit opinion.

An Cathaoirleach

If there are no other comments, is it agreed to note the listing of the accounts and financial statements? Agreed. As usual, the accounts and financial statements will be published as part of the minutes.

The third item is correspondence. No items of correspondence were flagged for discussion for this meeting so the correspondence will be dealt with in accordance with the proposed actions that have been circulated. The decisions taken by the committee in regard to the correspondence will be recorded in the minutes of the committee's meetings and published on the committee’s website. Members will note that one of those items of correspondence is from the Secretary General of the Department of Health, Mr. Robert Watt, and we would have dealt with that this morning as part of our meeting. We will note that.

The fourth item is the work programme. A draft work programme discussion document has been circulated to members, which is displayed on the screens.

Next week, we engage with the Department of Housing, Local Government and Heritage in regard to the Department's 2022 appropriation accounts, the central funding of local authorities and chapter 4 on accountability for central funding to local authorities. The delivery of social housing by local authorities and the funding of and governance of Uisce Éireann have been flagged as specific areas of interest, and representatives of Uisce Éireann and the Commission for Regulation of Utilities have been requested to attend with the Department.

On 9 November, we will meet with the Sustainable Energy Authority of Ireland and the Department of the Environment, Climate and Communications to discuss chapter 8 of the report of the accounts of public services on the performance of certain residential retrofit schemes.

On 16 November, we will meet with the Department of Public Expenditure, National Development Plan Delivery and Reform in regard to its 2022 appropriation accounts and chapter 5 of the reports of the accounts of public services, and the format and content of those appropriation accounts.

Moving on, is it agreed that on 23 November we meet again with the Department of Housing, Local Government and Heritage to examine chapter 9, on the utilisation of the land aggregation scheme sites? Members will note that this arose out of a meeting we had and figures we got that showed that most of the sites have not been utilised for housing. It is proposed to invite the Housing Agency to the meeting on 23 November alongside the Department. Is that agreed?

Deputy Catherine Murphy

Yes.

An Cathaoirleach

There is a connection between the two. It is also proposed that we focus on the relevant subhead from the Appropriation Account. Is that agreed?

Deputy Catherine Murphy

Agreed.

An Cathaoirleach

Next, 23 November-----

Deputy Catherine Murphy

Going back to the meeting on 16 November, as regards those particular Votes, relating to the Minister, the retired allowances, government procurement, the Chief Information Officer and then the Appropriation Accounts, the national development plan aspect of the Department of Public Expenditure, National Development Plan Delivery and Reform and slippage on that are within the Department's remit. Where is that captured in the Votes?

Mr. Seamus McCarthy

Most of the spending on the national development plan would be accounted for under other Votes. Obviously, however, the name of the Department indicates that it has responsibility for national development plan, NDP, delivery as a programme, so the staff working on that would be paid for under Vote 11. I imagine, therefore, that questions relating to that - obviously, those not of a policy nature - would fall to be discussed under that Vote.

Deputy Catherine Murphy

For example, the transport Vote will deal with transport.

Mr. Seamus McCarthy

Yes. More generally, the Department of Public Expenditure, National Development Plan Delivery and Reform also has responsibility for things like the public spending code, the capital project appraisal methodology and so on, so there is a general expenditure oversight question. As regards the chapter listed here, Vote accounting and budget management, that is where the spending passes through the Votes. Again, that is a kind of overview chapter.

Deputy Catherine Murphy

As regards the public spending code, some of that came up this morning-----

Mr. Seamus McCarthy

It did.

Deputy Catherine Murphy

-----as regards, say, ceramic hand basins as opposed to stainless steel hand basins and-----

Mr. Seamus McCarthy

I think that was a procurement question whereby you cannot specify the brand name of something you want to acquire, but if you decide that ceramic basins are the type to use, you specify that they have to be ceramic basins. You cannot, however, specify the brand or the manufacturer.

Deputy Catherine Murphy

That is fine. It is just that I would have thought that the public spending code is quite important for the Department of Public Expenditure, National Development Plan Delivery and Reform. In fact, we are engrossed in something in my constituency involving the purchase of land around Castletown House. The public spending code comes into that and, obviously, it is there for very good reasons. Will that then span the whole lot if we are going to be dealing with the Department that day?

Mr. Seamus McCarthy

The committee might put the Accounting Officer on notice that it is interested to talk about those types of issues. In fact, I was looking at the PricewaterhouseCoopers report on the children's hospital, and a couple of the recommendations were addressed really to the Department of Public Expenditure, National Development Plan Delivery and Reform. I think the representative from the Department of Health referred to changes that were made in 2019 in the public spending code. He referred to the form of contract, which, again, is specified at the direction of the Department. In a way, that is the value of getting the Department of Public Expenditure, National Development Plan Delivery and Reform in early - to be able to talk about these matters at a higher level, as they affect other Votes, and to be briefed on the implications of-----

Deputy Catherine Murphy

Yes. If we are to make changes, recommendations that will come from this committee, it would be quite important from that point of view, even in reminding the Department, because there is no doubt with the children's hospital that the type of contract - I think this has been accepted - was a major contributor to the delays to and the cost of it.

Mr. Seamus McCarthy

The committee should be aware as well that the Department's circular regarding the format of Appropriation Accounts for 2023 will issue probably in early December. The meeting is therefore an opportunity for the committee to engage and, if there are areas where members feel that something extra is needed or a slightly different presentation would be useful in the Appropriation Accounts, an opportunity to have that engagement with the Accounting Officer.

An Cathaoirleach

We will include delivery of the national development plan for discussion with the Department of Public Expenditure, National Development Plan Delivery and Reform that day.

On 23 November we will have the Department of Housing, Local Government and Heritage before us. There is a proposal that we invite in the Housing Agency as well on that occasion.

Moving on, on 30 November we will meet with the Department of Finance to discuss its Appropriation Account for 2022. Areas of interest will include reports on accounts for public services 2022, chapter 1, relating to Exchequer financial outturn for 2022; the report on Ireland's EU transactions; the performance of the Apple escrow account, which is decreasing in size; and the Irish Fiscal Advisory Council. Is that agreed up to that point? Agreed.

There will be two more meetings before Christmas. We have had discussions here before in the context of the Department of Health budget overruns and budget controls. It is suggested that we bring in the Department of Health on agency costs. As regards the financial management of and the progress towards Sláintecare, we are about five years into it. I know Covid disrupted it seriously, but the regional structures and the financial management and governance around that are areas we need to look at, along with the agency costs. We need to look at budgets and controls and a few other things. I suggest we try to get the Department of Health in, more so than even the HSE, and not leave this too far out. We might look for a representative from the HSE on the same date. It would be worthwhile getting them in.

Deputy Catherine Murphy

When we deal with the HSE we have to really cut it down to certain aspects because we just get buried in it otherwise.

An Cathaoirleach

Yes. We get lost in it because there is so much there.

The Comptroller and Auditor General might want to comment on this. Is there anything we can do about the fact that the Department of Health provides the budget, the HSE comes up with a service plan, and budgets are then put in place for each section, under each heading? Is there any way we can work through that with the Department and try to get to a point where it is clearer that the budget is for a specific service or treatment or whatever else and then what the performance and the outcomes of that are? Should that be done with the Department of Health?

Mr. Seamus McCarthy

From what has been reported publicly, I think the Department seems to be struggling with that as well. On the one hand, the format of the Vote is within the Department's control. It has presented it with, I think, 13 or 14 subheads and it is trying to realign it in order that it is closer to the nature of the delivery by the HSE rather than the nature of the inputs.

An Cathaoirleach

I am saying this in the context of the new regional health structures. There is a need to question what is being done and that there should be a governance structure at regional level. Within that governance, accountancy and accountability, service delivery should be clearly linked up to budget and service delivery.

Mr. Seamus McCarthy

Per region.

An Cathaoirleach

Yes. How is that going to be done, from the point of view of the Committee of Public Accounts? If we do not, what is going to happen is that we are going to have nine regional health areas, or nine smaller versions of what we had. That is where the whole thing gets lost in the middle.

Deputy Catherine Murphy

The HSE addressed some of that last week. It was clear that it was working to a programme. Obviously, the community health organisation, CHO, areas differ from the hospital groups. One of the key issues with Sláintecare is the regionalisation, and the responsibility then also has to be taken at that level for the budgets. That is critically important.

An Cathaoirleach

Deputy Murphy is correct, and that is one part of it. The part of it I am trying to nail down is from the point of view of the budget being allocated for a particular service within the new health areas, and how we see delivery. The point that has been made before is that in some places one has budgets but little or no outcome. Yet, there is a budget there. What happens to the budget in between, where does it go to and what is it used for? It is not clear. The Comptroller and Auditor General might want to comment on it but from what I have seen to date, any time we have had documentation supplied, one cannot actually track that. There is no mechanism to track it.

Mr. Seamus McCarthy

Yes, that is the difficulty.

An Cathaoirleach

The money gets lost along the way. There seems to be the budget outcome but in the middle one has this. It is correct to say that because the areas are not aligned, it allows for a situation where people can say they are not aligned or whatever else. If they are going to be aligned, we need to know the road that money travels between the budget and actual dental services or hip replacements. That is what I am coming to.

Mr. Seamus McCarthy

Yes, it is being able to follow the money to the service delivery. Obviously, if there is going to be a significant reform of the system, which is in planning, it is a legitimate question to ask. If one is developing a single and integrated financial management system, is that in place before the regional structures? At least, if everybody was operating under a single financial management system, one would have a better chance of being able to link the money going into the system with the service coming out at the other side.

Deputy Catherine Murphy

I am trying to visualise. Regionalising and taking responsibility for the budget at that level is really important. We do not want a postcode lottery at the end of it. How is that accounted for? Will there be a difference? Each of those regions will have to be audited separately.

Mr. Seamus McCarthy

Yes, depending on the way they are set up.

Deputy Catherine Murphy

Yes, so we need to find out how they will be set up, and to see how they will be audited.

An Cathaoirleach

That is another question.

Deputy Catherine Murphy

Would Mr. McCarthy's function then change with regard to the HSE, in terms of sub-audits or anything like that?

Mr. Seamus McCarthy

It depends on what the structure is. If the regional units are units of the HSE, then is it a single audit or separate audits?

Deputy Catherine Murphy

Yes.

Mr. Seamus McCarthy

If they are separate statutory bodies with their own set of financial statements, then that would have to be audited. What then is the role of what we might call the central HSE? Is there a residual entity? The accounting will follow the legal structure, and the auditing will follow the accounting.

An Cathaoirleach

With regard to framing it and bringing in the Department of Health, we can talk about the establishment of the new regional health areas, budget controls, budgets and outcomes-----

Mr. Seamus McCarthy

Yes, and governance.

An Cathaoirleach

-----and governance, and the connections between these. Agency costs is one that we could put in again, according to what was said the last day Mr. McCarthy was in. There is also the question of the regional structures trying to move to a public health system in the context of Sláintecare.

Are there are any other matters that members want to include on the work programme?

Deputy Catherine Murphy

I think we still have to hold on to a space. We have until the end of the year to deal with finalising RTÉ. I am not mad about the idea of having it in and out unless there is a purpose to it but we are expecting to get that McCann FitzGerald report. We are looking for that document but we have not had a response.

An Cathaoirleach

We have a response in correspondence. It is there today.

Deputy Catherine Murphy

Okay. I am sorry I missed that.

An Cathaoirleach

It is No. 2171. There is a letter there from Mr. Donal Hamilton of McCann FitzGerald in response to a request for a progress update on the ongoing review of the RTÉ's voluntary exit programmes.

Deputy Catherine Murphy

No, I am talking about the-----

An Cathaoirleach

It is due for completion by the end of October. That is what it is saying in that.

Deputy Catherine Murphy

I am talking about the document that we looked for regarding the note that-----

An Cathaoirleach

That would be 7 May 2020?

Deputy Catherine Murphy

Exactly. I do not think we should fill the slots. We should hold onto a slot because we have a time limit on this, and at least-----

An Cathaoirleach

Might we get it for Christmas?

Deputy Catherine Murphy

We have to.

An Cathaoirleach

Just one second, please. I call Deputy Burke.

Deputy Colm Burke

Where are we with regard to that document? Have we got a formal reply?

An Cathaoirleach

No. We have just gone through the request for it. There is a request drafted and it is ready to go.

Deputy Colm Burke

Okay, my apologies.

An Cathaoirleach

We made slight alterations to it today. It is this document here. It is a request that the Committee on Parliamentary Privileges and Oversight, CPPO extends its powers to request to compel that. It does not have to go to the Dáil. It is just the CPPO, and hopefully that will be forthcoming. When we will have it, I do not know.

We will keep one slot but bear in mind the six weeks' notice for meetings. It is a month's notice that we have to give but we try to give around six weeks for our own sake. It is to help the committee but also to help the witnesses from whatever body has been asked in, and the Comptroller and Auditor General's office.

Deputy Catherine Murphy

We have until the end of the year, and then after that we write the report. We cannot be looking at going into the new year. That is the reason I am saying we should at least have a slot there to finalise matters, if it is necessary. If we can do it without having another hearing, that would mean we would have to look at what comes back to us with regard to that report. Is it going to be sufficient for us to address that issue in the report that we write, or can we satisfy it by a back-and-forth with RTÉ? That note from 7 May 2020 is going to be one.

An Cathaoirleach

There are two documents. One relates to McCann FitzGerald, and that correspondence should be straightforward. The note and record of the meeting of 7 May 2020 should also be straightforward. We could always use an afternoon session, if we have to, to deal with that.

Deputy Catherine Murphy

It might not be a full session. It might be an hour.

An Cathaoirleach

Yes, that is it. We may not even require a meeting, which would be a better situation. We also have the option of using the afternoons.

The Department of Health is one with regard to some of those matters mentioned. Do members have any other ones they want to put in? I do not recall us having the Competition and Consumer Protection Commission in. Then there is the Irish Human Rights and Equality Commission. We will add them onto the wish list. Are there any other ones?

Deputy Catherine Murphy

Yes. I am inclined to think that we should be looking at ones where there was not a clear audit opinion, and where there was an issue. They are the ones that should really be our primary focus.

They involve the areas in the report where there are stand-out issues.

An Cathaoirleach

SEAI is coming before us so that is why we decided to bring that in.

Deputy Catherine Murphy

We are not just trying to fill space and time.

An Cathaoirleach

Absolutely-----

Deputy Catherine Murphy

It has to be more than that.

Deputy Colm Burke

Were people from the horse racing industry to come back before us? One of them could come before us in the morning. Were they to come back before us or are we waiting for further information from them? On the morning they came before us, they announced that one of the people-----

An Cathaoirleach

That is right - back in June. It was the Irish Horse Racing Regulatory Board

Deputy Colm Burke

Were they to come back before us?

Deputy Catherine Murphy

It was an investigation.

Mr. Seamus McCarthy

I think the expectation was that it would come back when the 2022 financial statements were ready.

Deputy Colm Burke

Is it that they will not be available?

Mr. Seamus McCarthy

They are not yet finished.

Deputy Colm Burke

It is something we might-----

An Cathaoirleach

For the new year. What was mentioned earlier regarding the Comptroller and Auditor General's annual report is-----

Deputy Colm Burke

The health budget is about €1.5 billion over budget but one issue that arises is the fact that the HSE is paying out well over €6 billion to about 2,500 different organisations. I know an organisation previously appeared before the committee that subsequently ended up in the High Court but is it worth going back and looking at the checks and balances the HSE has in place regarding those 2,500 organisations it is funding? We may be happy about this as it is but is it something we should consider? When I get a letter from someone saying they are representing 120 different organisations, I worry whether efficiencies are there if you have 120 different organisations dealing with a particular aspect of healthcare. Number one, do you need 120 different organisations? Number two, how efficient is having 120 different organisations focusing on the same area?

An Cathaoirleach

If the Deputy wants to include that issue for the HSE or the Department of Health-----

Deputy Colm Burke

I am not sure what it comes under because we do not go into all of those accounts because we do not have the right to.

Mr. Seamus McCarthy

Where there are bodies in receipt of substantial funds, we try to visit a sample of them but obviously we would not get around to-----

Deputy Colm Burke

It is impossible to do-----

Mr. Seamus McCarthy

It is impossible for us to do that but they should all be audited independently and there should be audit reports. We have reported previously on the governance arrangements in place in the HSE in terms of its oversight of what is happening in those organisations from a governance point of view but also from a funding, sustainability and service delivery point of view. Every year, the HSE explains the system that is place in the statement on internal control. That gives you an "in" with the HSE regarding that. The Deputy's point is probably more strategic or possibly at a higher level.

Deputy Colm Burke

If you take the accountancy body, or the solicitors' body, we have the Legal Services Regulatory Authority or the Law Society. There are more than 2,500 legal practices but they have the right to go in and conduct an audit of a legal practice. We do not have the same right to go into any of those organisations in real terms to conduct an audit.

Mr. Seamus McCarthy

No. The HSE has probably written that into the service agreements with them. That is one of the reasons I drew attention to the fact that there was no agreement in place for a significant proportion of those bodies even by the end of a funding year. The funding is being provided but-----

Deputy Colm Burke

The Law Society has a specialist team and will audit a practice at least once every five or six years. Is Mr. McCarthy satisfied that the HSE has a sufficient audit team that go in and conduct an audit, for example, to take 100 different organisations in any one year?

Mr. Seamus McCarthy

It will do so if necessary or on a risk basis. Its internal audit will go into organisations and carry out reviews. Generally though, it goes in where there is some indication of a problem as opposed to going in on a systematic basis to look at systems.

Deputy Colm Burke

Is it not time that we looked at this area? It is a lot of money - more than €6 billion. In fairness to these organisations, many of them are doing far more than what they are required to do and I have said this-----

An Cathaoirleach

The chief executive officer of the HSE recently said these organisations are essential. The health service could not function without them.

Deputy Colm Burke

Absolutely.

An Cathaoirleach

Section 38 and section 39 organisations are crucial. The absence of a service-level agreement in all and every case is a gap, particularly if an organisation is getting significant funding.

Mr. Seamus McCarthy

And early in the year.

An Cathaoirleach

Absolutely.

Mr. Seamus McCarthy

I do not have the split between section 38 and section 39 organisations. The bulk of that money would go to section 38 organisations.

An Cathaoirleach

I suggest to the Deputy that we could raise that issue when representatives from the Department of Health appear before us.

Deputy Colm Burke

We might raise that issue.

An Cathaoirleach

We could raise the issue of service-level agreements with section 38 and section 39 organisations.

Deputy Colm Burke

It is a substantial portion of the budget.

An Cathaoirleach

Is the work programme agreed? Agreed.

Deputy Catherine Murphy

The Charities Regulator could look at it some time. It is on that list.

An Cathaoirleach

That completes our consideration of the work programme. The last item is any other business. Do any members wish to raise any other matter?

Deputy Colm Burke

I wish to raise one issue. It is where one State company sues another State company. The best example I can give is where Inland Fisheries Ireland, which is a State company, takes the Department of Education all the way to An Bord Pleanála over a planning application. By the time the thing is dealt with, the cost for the Department has gone up by €2 million. Have we any idea of the number of State organisations that are involved in litigation with another State body at any one time?

An Cathaoirleach

We do not know.

Mr. Seamus McCarthy

I do not know offhand where you would get that kind of information.

Deputy Colm Burke

If one State agency decides that it is not happy with what the other State agency is doing and ends up in court, there is no mechanism to stop that from happening.

Mr. Seamus McCarthy

Not that I am aware of. I know the Department of Public Expenditure, National Development Plan Delivery and Reform did issue directions around that kind of case to the effect that litigation between State bodies should be at the minimum that is achievable. Sometimes State bodies have legal obligations to carry out certain functions and the only way they may be able to give effect to that may be by taking legal proceedings. It cannot be avoided in certain circumstances. Short of doing a massive survey of them, I do not know whether you would be able to get at how many cases in the courts or in gestation.

An Cathaoirleach

We could request information from the Department of Public Expenditure, National Development Plan Delivery and Reform and ask its estimate. Is the Deputy happy with that? I know he has raised this issue previously but sometimes there are legitimate reasons for a State body to go down the legal route.

Mr. Seamus McCarthy

Another avenue might be cases being taken that are being handled by the Chief State Solicitor's Office. It might have an overview of what cases are being pursued against Government bodies by other Government bodies that it is handling. That might be a start.

An Cathaoirleach

We will request a note from the Chief State Solicitor's Office and the Department of Public Expenditure, National Development Plan Delivery and Reform. Is that agreed? Agreed. There is no other item of business.

We do not have anything to discuss in private session. Unless members have anything else to discuss I will adjourn the meeting until next Thursday, when we will engage with the Department of Housing, Local Government and Heritage. Go raibh míle maith agaibh.

The committee adjourned at 2.20 p.m. until 9.30 a.m. on Thursday, 26 October 2023.