COMMITTEE of PUBLIC ACCOUNTS díospóireacht -
Thursday, 11 Nov 1999

Vol. 1 No. 12

National University of Ireland, Maynooth. Annual Financial Statements 1995, 1996, 1997 and 1998.

Dr. William J. Smyth (President, National University of Ireland, Maynooth) called and examined.

Acting Chairman

The college is represented by Dr. William J. Smyth, President and Mr. Pat Dalton, Bursar. I should also mention John Hayden, secretary and chief executive of the Higher Education Authority. Witnesses who come before the Committee should be aware they do not enjoy absolute privilege and should be apprised as follows. Members and witnesses' attention is drawn to the fact that as of and from 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunity of Witnesses) Act, 1997, grants certain rights to persons who are identified in the course of the Committee's proceedings. These rights include the right to give evidence, the right to produce or send documents to the Committee, the right to appear before the Committee either in person or through a representative, the right to make a written and oral submission, the right to request the Committee to direct the attendance of witnesses, the production of documents and the right to cross-examine the witnesses. For the most part, these rights may be exercised only with the consent of the Committee. Persons being invited before the Committee are made aware of these rights and any persons identified in the course of the proceedings who are not present may have to be made aware of these rights and provided with the transcript of the relevant parts of the Committee's proceedings if the Committee consider it appropriate in the interests of justice.

Notwithstanding this provision in the legislation, I remind Members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official, either by name or in such a way as to make him or her identifiable.

I welcome Dr. Smyth. I must state my declaration of interest as we are neighbours and St. Patrick's College, Maynooth is in my constituency. Perhaps the Comptroller and Auditor General will introduce the report.

Mr. Purcell

To recapitulate for the Committee some of the information it already has, my audit of the National University of Ireland, Maynooth, as it is now known, places a good deal of reliance on the audit carried out by the auditors engaged by the governing authority of the university. The Committee will recall this is more or less the normal arrangement for audit in the university sector. The 1997-98 account reflects the full adoption of the harmonisation of accounts proposals worked out by the Higher Education Authority with the universities, in consultation with my office. So, at long last, we have a basis for financial comparison across the universities. This was something I mentioned at a previous Committee as being long overdue. In my opinion, there is still some refinement needed, but at least a major part of the exercise is complete and the basic account format is sound.

One difficulty that was particular to the university at Maynooth, because of its origins, was who owns what - I am thinking in terms of the NUI and St. Patrick's College as regards property and equipment. As I understand it, a resolution to this matter has recently been reached, certainly within the past year. The objective of providing full accountability and transparency for all publicly funded assets associated with NUI, Maynooth is now attainable. Other than that, I do not have any specific observations to make on the accounts.

Acting Chairman

Perhaps Dr. Smith wishes to make an opening statement.

Dr. Smyth

In view of the time, and not to consume the time of the Committee any further, I would prefer to answer any questions rather than make an opening statement.

Deputy C. Lenihan

I presume the Acting Chairman will have many questions to ask on this as St. Patrick's is in his constituency. The issue which struck me as odd is that, on the assets side, there is a category of staff house loans. What are those?

Dr. Smyth

That is an item which is long standing in Maynooth and not unique to that university. There is a provision that new staff coming to the university receive bridging finance which is equal to half their salary. That bridging finance is payable over seven years and the rate charged is the full triple A rate made available to the university by the banks. It is a facility where the university acts as a conduit to allow incoming staff members to get some bridging finance, particularly if they are coming from abroad and have not got an established foothold. It dates back to the time when it was much more difficult to get mortgages than it is now. The amount of money on loan is, in my recollection, somewhere in the order of £300,000. It is relatively small.

Deputy C. Lenihan

In other words, you facilitate the transfer of an academic from the UK and provide bridging finance if he or she has two houses or is buying a house here.

Dr. Smyth

Very often, particularly if people are coming from the UK, or more importantly now, from the United States - as some Irish academics are coming back - they may well find they need bridging finance for a deposit on a house in the vicinity. It is a finance neutral element, it is a facility.

Deputy C. Lenihan

On the general income side, other income amounts to about 3 per cent of your general income. What other income comes into a university like Maynooth?

Dr. Smyth

If I may confer with the bursar for a moment, Chairman.

Deputy C. Lenihan

I would be interested to hear from the Comptroller and Auditor General on this. If comparisons have been drawn, how did other incomes in other universities compare?

Mr. Purcell

The Deputy has put his finger on one of the points of refinement I think is necessary now the basic format is complete. Matters such as student levies etc. are not clearly shown in the accounts. I feel strongly about the need to show such income separately and that there would be greater categorisation of miscellaneous or other income in universities, for comparison purposes and purposes of transparency.

Deputy C. Lenihan

Are student levies for student services?

Mr. Purcell

It used to be £150 but I think it has increased to £250. There might also be levies in respect of certain services. Some concern was expressed to this Committee - not emanating from Maynooth, but from UCD - regarding identification of these amounts and a clear sign in the accounts as to how those moneys were being used. I would have some sympathy with that view.

Deputy C. Lenihan

I would too because student levies seem to increase arbitrarily in different colleges. It is never explained or detailed to the students what the levy is going towards and what element of it is administrative costs or whatever. I share the concerns of the Comptroller and Auditor General and I hope he takes this into consideration in his next report. What about the wider question of the other income, which Dr. Smyth was preparing to answer?

Dr. Smyth

The other income is made up from a number of sources - any bank income derived from bank deposits and treasury management of the institution's funds. Any conference income is put in there. Research overheads are put in and any other miscellaneous income, for example, foreign students who pay fees over and above the EU level. Under the procedures of harmonisation, that can now be counted for other income. For example, if an American student is paying an American, non-EU fee, the difference between the two fees comes under other income.

Deputy C. Lenihan

From a comparison point of view - I am not making a specific criticism of Maynooth, which seems to have started very well - bona fide commercial activity by the university, using its infrastructure, should be separately noted in the accounts. It is important to know how dynamic the different universities are in a commercial sense. We would all appreciate if this could be evaluated better.

Dr. Smyth

That is a fair comment.

Acting Chairman

Taking up from where the Comptroller and Auditor General left off, perhaps Dr. Smyth would give an indication of the development of the ownership of the properties, the degree to which the university has developed since being a seminary and its plans for further development.

Dr. Smyth

I will give the abbreviated version because this is the stuff of which history is written.

The college opened its doors to the public in 1966 and, for the past 33 years has been enrolling lay students. Prior to that, it was solely a seminary. At present, about 97 per cent of the population of the two institutions on campus are in the National University of Ireland and about 3 per cent in the seminary. There has been an almost 100 per cent shift in the 33 year period.

In that context, the pivotal legal point was the passing of the Universities Act in 1997 which came into effect on 16 June 1997. Since then, NUI Maynooth has been a stand-alone legal entity and a constituent university of the NUI federal system. It came into existence without title to property but obviously had been occupying and using property for a significant period prior to that. My first task was to ensure the orderly and proper transfer of property and assets into the name of the new university. Coincidentally, there was also the transfer of upwards of 400 employees from St. Patrick's College to the new entity. That transfer has been part of an ongoing set of negotiations, which as the controller rightly points out have now been largely concluded by agreement between the two parties using advice external to the university.

There are two sections. One is part of NUI Maynooth located in buildings in the older campus leased from St. Patrick's College which is the historic core of Maynooth. The new campus is on the northern side of the Kilcock road where all the State funded buildings of the past 20 to 25 years are located and where the main thrust of development will continue in future because there is a space constraint in the historic core. Discussions have arrived at the suggestion along the lines of a lease arrangement being put in place for continued use of the buildings on the old campus at an agreed rate. Where there are shared buildings on the old campus, such as a kitchen, there is a licensed agreement. Where the buildings are stand-alone, a lease is in place.

It is a purchase option for the north campus. The agreement is for the purchase of the land surrounding the buildings and underlying the buildings built over the past 25 years. The matter rests there in so far as a sum of money has been agreed by resorting to external valuers and the matter has been considered by the Higher Education Authority and the Office of Public Works to ascertain value for money. While this agreement was reached in January 1999, the ongoing march of property prices has made what was a good deal in January an even better one. We await clarification of funding for the finalisation of that.

Acting Chairman

Is the availability of funding satisfactory?

Dr. Smyth

The amount of funds being discussed is a sum of £4.5 million for the purchase of, subject to finite measurement, 67 to 68 acres of land on the north campus which works out at about £66,000 an acre. That is the matter which is before the Department at present.

Acting Chairman

Regarding the future development of the university, are you satisfied you have adequate space and that your plans are sufficient to meet requirements given demographic trends in the region?

Dr. Smyth

That is an important issue which involves strategic management and planning for the university. Land is available to the west of the campus which is owned by St. Patrick's College. Whether that land is put on the market to NUI Maynooth in future is a matter for negotiation and discussion. It would not be put on the market at a future time at a rate commensurate with the rate we have negotiated for the existing 69 acres. Land is certainly available there but the growth and vitality of the university is quite striking.

Many Deputies may be aware that the population of the university has trebled over the past 15 years. Proportionately, it has been the fastest growing third level institution in the country, although in absolute terms, it would be still among the smallest. The proportionate rate has been dramatic. Notwithstanding the demographic downswing in the cohort of school leavers, the regional dimension of the western metropolitan fringe of Dublin and the growth area of north Kildare and south Meath is one which will allow the university to grow.

Growth will also be characterised by other factors. We have been trying to diversify the course offerings. What was traditionally an arts-science establishment now has softer engineering. Next year, we will have electronic engineering. Psychology was introduced two months ago. There is also a general development of curricula.

Acting Chairman

How many students do you have in the university at present?

Dr. Smyth

We are coming close to 5,000 at present. About 4,700 regular students are either part-time or full-time and about 250 occasional students come from outside the jurisdiction. It is a little short of 5,000 at present and our target in the development plan published when I came into office in 1994 indicated reaching a target of 5,000 by 2000. That will be achieved.

Deputy C. Lenihan

I am intrigued because a number of my constituents attend the university. How heavily does the university draw on the western suburbs of Dublin? Does Dr. Smyth have any percentages?

Dr. Smyth

We have considerable data on that. One of the striking characteristics of Maynooth which is not normally recognised is that it has a national catchment area, so every county, North and South, is represented in it. If one were to draw a crude geographical line, approximately 50 per cent of students come from within a 30 mile radius of the university, which would be Dublin, Kildare, Meath and adjoining areas. Within Dublin, the commuter rail line allows a number of students to come from places such as Malahide or even the Bray-Dún Laoghaire area, but the bulk would tend to come from west Dublin. The other 50 per cent come from a national spread.

It is striking that, when one moves from the core area around the university, the next most important counties are on the west coast. Donegal has always been a strong provider, and it is north rather than south Donegal which dominates. Mayo and Kerry would be the two next most important. We even have 160 students from Galway county and city, even though it has its own university. NUI Maynooth has always had a tradition of a national catchment, while increasingly we try to develop close links with the local community.

Deputy Gildea

I have one question. You obviously have a pension scheme for past employees. Are you confident you can continue with that?

Dr. Smyth

Yes. The pension fund was one which was split when the Universities Act was passed in 1997 and it was split on the advice of the actuaries of Irish Pensions Trust, who are the trustees of the pension fund. They certified it in the last actuarial evaluation in October 1998. It was solvent and will remain solvent.

Acting Chairman

Thank you very much. There being no further questions, the Committee notes the accounts and thanks the witnesses for attending.

The witness withdrew.

Acting Chairman

The next meeting is at 10 a.m. on Thursday, 18 November 1999 on Vote 35 - Department of Tourism, Sport and Recreation.

The Committee adjourned at 12.11 p.m.