Dáil Éireann Debate, Thursday - 29 November 2012
62. Deputy John Lyons asked the Minister for Finance further to the alleged fraud reported by the National Treasury Management Agency (details supplied), if he is confident that the NTMAs internal controls are sufficient; and if he will make a statement on the matter. [53485/12]
View answer63. Deputy John Lyons asked the Minister for Finance his plans to change internal processes or review the appointment of external auditors in view of reported fraud by the National Treasury Management Agency (details supplied); and if he will make a statement on the matter. [53486/12]
View answerI propose to take Questions Nos. 62 and 63 together.
I am informed by the National Treasury Management Agency, as Manager of the National Pensions Reserve Fund (NPRF), that the Comptroller and Auditor General (C&AG), the NPRF’s external auditor, in Chapter 4 of his 2011 Report (the C&AG Report) examined in considerable detail the overcharging on transition number 14 of the NPRF by State Street Bank Europe Ltd.
Transition management is a specialized service requiring significant expertise, the purpose of which is to execute large volumes of securities transactions seeking to minimise the costs of market impact through careful timing of the execution of trades. The purpose of transition management is to enable the market risks, operational risks and costs incurred to be managed systematically.
The C&AG Report states that the NTMA outlined the context for the overcharging and that it engages large regulated organisations of scale and substance as transition managers and implements robust contractual arrangements. The NTMA noted that the pricing amendments improperly applied by State Street Bank Europe Ltd were never visible to the NTMA and that the NPRF had been reimbursed for the overcharged amounts. The NTMA stated that it had identified three actions, which were set out in the C&AG Report, which it will implement to mitigate risks specifically associated with activities similar in nature to those encountered on transition number 14. The C&AG made four recommendations which the NTMA will implement to the greatest extent possible, as reflected in the Chief Executive’s responses as set out in the C&AG Report.
I am satisfied that there is no requirement for any additional measures to be taken.
