(Secretary General, Department of Foreign Affairs) called and examined.
Chapter 8.1 — Overseas Development Aid.
Mr. D. Gallagher
The witnesses should be aware they do not enjoy absolute privilege. Their attention and that of members is drawn to the fact that, as and from 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act 1997 grants certain rights to persons identified in the course of the committee's proceedings. These rights include: the right to give evidence; the right to produce and 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 or oral submission; the right to request the committee to direct the attendance of witnesses and the production of documents; and the right to cross-examine witnesses. For the most part, these rights may be exercised only with the consent of the committee. Persons invited before the committee are made aware of these rights and any person identified in the course of proceedings who is not present may have to be made aware of them and provided with a transcript of the relevant part of the committee's proceedings, if the committee considers 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 by name or in such a way as to make him or her identifiable. They are also reminded of the provisions of Standing Order 156 that the committee shall refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government, or the merits of the objectives of such policy or policies.
I ask Mr. Dermot Gallagher to introduce his officials who are all welcome.
Mr. Dermot Gallagher
I have four colleagues with me. Mr. Ray Bassett is the head of the consular and passport division and the Irish abroad unit. Mr. Adrian O'Neill is head of corporate services. Mr. Brendan Rogers is the deputy director general of Irish Aid and responsible for the operation of the programme. Mr. Finbar O'Brien is head of the evaluation and audit unit.
Mr. Colm Gallagher
I am assistant secretary at the Department of Finance and I am accompanied by Ms Joan Daly.
Chapter 8.1 of the annual report of the Comptroller and Auditor General reads:
8.1 Overseas Development Aid
Background
Irish Aid, formerly Development Co-operation Ireland, which is a directorate of the Department of Foreign Affairs (the Department) is responsible for the administration of Ireland's programme of assistance to developing countries. The largest proportion of assistance is provided for in Subhead B — Bilateral and Other Co-operation. Expenditure from this subhead in 2005 amounted to almost €340 million.
Irish Aid programme expenditure comprises grants to third parties such as partner governments, non-governmental organisations (NGOs), United Nations agencies, other multilateral bodies and aid partners. It also involves an element of direct expenditure. Funding may be disbursed from Departmental Headquarters or through Overseas Offices in the developing world. Table 30 shows the make up of expenditure for the years 2003 – 2005.
|
2003 |
2004 |
2005 |
|
|
€m |
€m |
€m |
|
|
Grants to Countries having Irish Aid Overseas Offices. |
130 |
143 |
145 |
|
Other Grants (e.g. to NGOs, Multilateral agencies) |
110 |
146 |
189 |
|
Direct Expenditure |
14 |
6 |
6 |
|
Total Charge to Subhead B |
254 |
295 |
340 |
Additional direct expenditure of €11 million (2003), €9 million (2004) and €11 million (2005) is included in Subhead A – Salaries, Wages and Allowances.
Bilateral Assistance
Bilateral Assistance comprises support for eight specific programme countries and certain other regions and countries, assistance through non-governmental organisations (NGOs), support for the fight against HIV/AIDS and rehabilitation assistance.
Since 2005 eight countries — Ethiopia, Lesotho, Mozambique, Tanzania, Uganda, Zambia, Timor Leste and Vietnam – have been designated as programme countries by Irish Aid. These countries have a very low ranking in terms of human development indicators such as the percentage living in absolute poverty, life expectancy, adult literacy, infant mortality, access to safe water, sanitation and health services. In addition, assistance is provided for specific projects in a number of other regions and countries for example the western Balkans, Eastern Europe, Zimbabwe, South Africa and Palestine.
The bilateral relationship between Irish Aid and programme countries is governed by individual country strategy plans. These are negotiated between Irish Aid, and the relevant national government. Other donors and a number of the larger international organisations are consulted as appropriate. The plans are focused round the achievement of sustainable poverty reduction targets and are typically reviewed every three years. The percentage of aid channelled through government institutions at national and local government level was 68% in 2003, 74% in 2004 and 72% in 2005. Details of 2003 and 2004 expenditure, which can be directly related to the Department's most recent Annual Consolidated Audit Reports for those years, are shown in Table 31.
|
Country |
Through National Government Systems |
Through Local Government Systems |
Other |
Total Support Managed by Overseas Offices |
||||
|
2003 |
2004 |
2003 |
2004 |
2003 |
2004 |
2003 |
2004 |
|
|
€m |
€m |
€m |
€m |
€m |
€m |
€m |
€m |
|
|
Ethiopia |
1.5 |
8.2 |
15.2 |
12.8 |
9.1 |
8.3 |
25.8 |
29.3 |
|
Uganda |
25.8 |
27.2 |
0.6 |
.5 |
7.9 |
4.6 |
34.4 |
32.3 |
|
Mozambique |
15.6 |
14.7 |
5.8 |
8.1 |
11.5 |
7.5 |
32.9 |
30.3 |
|
Tanzania |
14.4 |
15.2 |
1.9 |
3.4 |
4.4 |
4.6 |
20.7 |
23.2 |
|
Zambia |
4.9 |
5.9 |
2.4 |
4.0 |
7.3 |
7.8 |
14.6 |
17.7 |
|
Lesotho |
8.2 |
9.1 |
0.0 |
0.0 |
2.6 |
2.3 |
10.7 |
11.4 |
|
Timor Leste |
1.5 |
2.0 |
0.0 |
0.0 |
1.4 |
2.0 |
2.9 |
4.0 |
|
South Africa |
5.3 |
3.4 |
1.6 |
2.5 |
4.8 |
4.1 |
11.7 |
10.0 |
|
Zimbabwe |
0.0 |
0.0 |
0.0 |
0.0 |
0.8 |
0.8 |
0.8 |
0.8 |
|
Total |
77.2 |
85.7 |
27.5 |
31.3 |
49.8 |
42.0 |
154.5 |
159 |
The aid delivered through national government involves a range of aid instruments the majority of which relate to moneys that are clearly earmarked for specific purposes e.g. health, education, agriculture, water and sanitation, or specific projects. In Tanzania and Mozambique some of this funding is delivered as general budget support to the Treasury.
The balance of Irish Aid programme money, not delivered via national or local government, includes administration, support to NGOs, UN and other multilateral agencies and moneys spent directly by Irish Aid on behalf of various programmes and partners.
I undertook an examination of Irish Aid audit and evaluation procedures with particular emphasis on projects funded through bilateral assistance in the programme and other countries in 2003 and 2004 as these are the most recent years for which consolidated results of the evaluation procedures used are available.
Examination Findings
Financial Control and Accountability
All assistance budgets are submitted annually, in advance, for approval by an interdepartmental committee, set up by Government decision, on which the Department of Finance and other Departments with an involvement in development co-operation are represented.
This interdepartmental committee, acting as the Programme Appraisal and Evaluation Group (PAEG) under the authority of the same Government decision, approves all new expenditure proposals. The group is assisted by external consultants who evaluate the proposals before submission for consideration.
Both direct and indirect aid expenditure are extensively audited. The audit of indirect expenditure relies increasingly on the work of auditors external to the Department. The Auditors General of partner governments account for the largest proportion of other auditors on whom Irish Aid relies, with the larger audit firms contributing most of the remainder. Irish Aid works closely with the Auditors General to strengthen their capacity (e.g. funding of training initiatives, development of IT audit and equipment purchases).
In the eight programme countries in receipt of bilateral assistance, Ireland's aid programmes, are subject to annual external audit by
The Department's Evaluation and Audit Unit (EAU) or
Professional auditors commissioned by Irish Aid, or jointly with other aid donors or independently by development partners or
Other countries' Auditors General.
Area-based programmes (programmes which operate in specific local authority districts) and sector support programmes (which cover specific sectors such as health or education) in these programme countries are also subject to annual audit.
There are accounting staff in all of the Overseas Offices in the African programme countries.
Evaluation and Audit Unit
The EAU is an independent unit within the Department. Its mission is to provide an efficient, effective, relevant and independent evaluation and audit function and to contribute to policy development within the overall assistance programme. The unit is currently staffed by a head of unit, three auditors two evaluators and three support staff based in headquarters and six auditors based locally in the Department's Overseas Offices in programme countries.
The work of the EAU is carried out in accordance with an annual work plan and the Strategic and Multi-annual Work Plan 2006 to 2008. The plan notes that progress has been achieved recently in strengthening evaluation and audit in Irish Aid but does, however, state that staff shortages limit the unit's ability to deliver adequate coverage across the whole programme.
I inquired as to the EAU's ability to deliver adequate audit coverage across the whole aid programme in light of the staff shortages and the implications of these shortages for the unit's stated mission.
In reply, the Accounting Officer stated that Irish Aid recognises that, as the aid programme grows, the capacity of the EAU will need to be enhanced in order to ensure effective audit and evaluation. He stated that Irish Aid recognises that the EAU has experienced some limitations due to staffing, particularly in developing a programme of value for money audits, and on providing audit support to other sections of Irish Aid. The EAU had at all times aimed to deploy available resources efficiently and effectively with a particular focus on the overseas offices and to maximise assurance by reliance on the work of others and through the use of consultants.
In relation to staff numbers, he stated that identifying and retaining staff for this highly skilled area presented a challenge to Irish Aid. In the programme countries three additional local staff have been recruited since 2003 bringing the total to six local audit staff.
He further stated that the implication of staff shortages had been delays in feeding back to and supporting line management in the interpretation of partners' audit reports. However, this had to be considered in the context that support is available immediately from the six internal auditors in the programme countries and via the in-country management structures in Irish Aid and other donors in the field.
The Accounting Officer also stated that the EAU utilises audits commissioned by various partners, where these audits include Irish funds. The largest proportion of these audits consists of audits carried out by national Auditors General and audits carried out by recognised audit firms. This practice of reliance on the audit work of others in relation to grants to development partners assisted Irish Aid to fulfil its requirements under the Rome Declaration on Harmonisation.
Annual Consolidated Audit Report
The EAU produces an annual Consolidated Audit Report, which covers direct expenditure by Irish Aid and the disbursement of grants to development partners. The reports for 2003 and 2004 summarise all the audit activity completed in respect of expenditure in those years. They are intended to inform line management, support the Audit Committee in its oversight of the audit and evaluation function and assist the annual audit by my Office.
The objectives of the Consolidated Audit Report are to
Identify gaps in audit assurance by detailing what expenditure has not been audited or for which audit reports have not been received
Summarise the findings of the large number of audits and management letters to identify key deficiencies in accounting procedures and internal control
Show the status of recommendations arising from previous years' audits
Highlight whether financial statements give a true and fair view of the financial position of the entity or programme being audited.
Overall Audit Coverage 2003 and 2004
The 2004 Consolidated Audit Report, which was completed in March 2006, included an update of the original 2003 report completed in October 2005. This showed that the audit coverage of expenditure had increased from 78% to 85% (this had increased again to 89% by mid-July 2006) for 2003. The audit coverage for 2004, as at April 2006, was 63%. This had increased to 84% by mid-July 2006. The Department's policy is that the level of audit coverage should aim to be greater than 85% each year. The audit coverage of 2003 and 2004 expenditure as at mid-July 2006 is outlined Table 32.
|
|
2003 |
2004 |
||||
|
Country |
Amount Audited |
Amount Unaudited |
% Audited |
Amount Audited |
Amount Unaudited |
% Unaudited |
|
€ |
€ |
€ |
€ |
|||
|
Ethiopia |
18,994,084 |
6,785,836 |
26 |
23,775,744 |
5,533,305 |
19 |
|
Lesotho |
10,573,256 |
109,525 |
1 |
11,474,867 |
— |
0 |
|
Mozambique |
28,583,553 |
4,351,987 |
13 |
20,278,900 |
10,005,227 |
33 |
|
South Africa |
9,782,614 |
1,961,627 |
17 |
9,186,856 |
886,920 |
9 |
|
Tanzania |
20,359,075 |
357,025 |
2 |
19,283,474 |
3,940,000 |
17 |
|
Timor Leste |
2,485,743 |
450,420 |
15 |
3,915,727 |
9,900 |
0 |
|
Uganda |
33,448,892 |
878,779 |
3 |
30,424,011 |
1,848,152 |
6 |
|
Zambia |
12,188,710 |
2,460,231 |
17 |
14,941,533 |
2,712,642 |
15 |
|
Zimbabwe |
368,195 |
394,313 |
52 |
275,704 |
482,475 |
64 |
|
Total |
136,784,122 |
17,749,743 |
11 |
133,556,816 |
25,418,621 |
16 |
|
Total for Year |
€154,533,865 |
€158,975,437 |
As audit reports had not been received at the time of my examination in respect of 37% (this had improved to 16% at 30 June 2006) of 2004 expenditure, I inquired as to the total number of reports receivable for 2003 and 2004 and how many of these were currently outstanding. I also inquired as to the limitations on the Department's scope to take effective action in respect of material adverse findings or significant audit recommendations as a result of delayed receipt of audit reports. I further inquired as to how the Department ensured that the stated mission of EAU to maintain an efficient, effective, and relevant evaluation and audit function is achieved and how the risks to public funds from irregularities or misappropriations remaining undetected, due to delays in receiving reports, are minimised.
The Accounting Officer stated that Irish Aid's overseas office audit policy emphasises that audit coverage is a tool and does not, in itself, give complete assurance. The policy outlines 85% as a guide figure only and the specific circumstances in each country must also be taken into account. There are many additional processes and tools in place that inform Irish Aid's assurance. These include partner Governments' own public expenditure reviews, tracking studies, work by other donors, internationally conducted national assessments (typically led by IMF/World Bank), day to day monitoring and discussions by line management based in the overseas offices.
Audit Reports and Opinions Received
Over 450 audit reports were received in respect of 2003 and 2004 expenditure. The Accounting Officer pointed out that these fell into two distinct categories: internal audits relating to Irish Aid and audits relating to the use of grants by the Department's development partners. The 355 audit reports relating to the use of grants by development partners are analysed in Table 33, which shows, by country, the percentage of reports, which contained a qualification or disclaimer. The Accounting Officer said that it was important to note that none of the qualified reports related to Irish Aid's direct expenditure.
|
|
2003 Audit Reports |
2004 Audit Reports |
||||
|
Received |
Qualified or Disclaimer Opinions |
% Qualified or Disclaimer |
Received |
Qualified or Disclaimer Opinions |
% Qualified or Disclaimer |
|
|
Ethiopia |
13 |
2 |
15 |
31 |
2 |
6 |
|
Lesotho |
25 |
5 |
20 |
20 |
4 |
20 |
|
Mozambique |
33 |
12 |
36 |
29 |
13 |
45 |
|
South Africa |
22 |
12 |
55 |
12 |
9 |
75 |
|
Tanzania |
25 |
10 |
40 |
20 |
14 |
70 |
|
Timor Leste |
2 |
0 |
0 |
2 |
0 |
0 |
|
Uganda |
11 |
3 |
27 |
24 |
1 |
4 |
|
Zambia |
33 |
2 |
6 |
43 |
3 |
7 |
|
Zimbabwe |
6 |
5 |
83 |
4 |
3 |
75 |
|
Total |
170 |
51 |
30 |
185 |
49 |
26 |
Regarding 2003, the Accounting Officer stated that two audit reports were outstanding at 1 June 2006. These reports were due from an Auditor General and the delay was due to local factors. The office of the Auditor General concerned had not yet completed all audits in relation to the financial year ended 7 July 2004, which includes Irish Aid grants issued after 7 July 2003. The outstanding audits were currently in progress.
In regard to the risk to public funds, he informed me that development activities by their nature take place in a high-risk environment. There are delays in receiving certain types of partners' audit reports, but the effect of timing on the risk of misappropriation or irregularities is lower than might initially appear. Irish Aid line management is usually aware of the issues raised by an audit before the field work is fully completed.
He also stated that risk is minimised by the extensive management systems in place in Irish Aid to manage the aid programme. However, he stated that it must be acknowledged that on occasion delay does affect Irish Aid's reaction to audit issues and the ability to follow-up. Irish Aid responds in a number of ways
Working with partners' line management to agree a programme of remedial action
Withdrawing funding or temporarily withholding funding or part funding pending the implementation of reforms, including staff changes
Working with partners to conduct detailed investigations.
Consolidated Audit Report — Audit Findings
Audit findings are classified by EAU according to the level of seriousness
Category A findings relate to major weaknesses in financial controls or a recurring issue that it is considered must be urgently addressed.
Category B findings are important matters that will significantly improve the control environment, the accounting system or the operations of the entity but are not so serious or prevalent as to be considered major weaknesses.
Category C are minor or isolated weaknesses that should nevertheless be addressed to improve the control environment, the accounting system or the operations of the entity.
Many findings are in respect of projects/ programmes that are co-funded by Ireland with other donors.
Table 34 analyses the number of audit reports received and the related number of Category A findings by each aid supported country.
|
|
2003 |
2004 |
||
|
Country |
No. of Reports Received |
No. of Category A Findings |
No. of Reports Received |
No. of Category A Findings |
|
Ethiopia |
12 |
16 |
28 |
7 |
|
Lesotho |
37 |
32 |
23 |
36 |
|
Mozambique |
30 |
46 |
36 |
51 |
|
Tanzania |
28 |
62 |
34 |
64 |
|
Timor Leste |
2 |
4 |
2 |
1 |
|
Uganda |
9 |
16 |
27 |
16 |
|
Zambia |
53 |
24 |
74 |
38 |
|
South Africa |
24 |
9 |
14 |
2 |
|
Zimbabwe |
6 |
2 |
5 |
3 |
|
Total |
201 |
211 |
243 |
218 |
In regard to the nature of the Category A findings, the following are examples of some of the more common themes noted
Lack of supporting documentation for expenditure
No tendering for contracts or comparative quotations for purchases
Expenditure not always authorised
Use of funds for other than intended purposes
Weak internal controls
Long outstanding unsettled advances
Stores discrepancies.
I inquired what the Department's approach was to the management of Category A findings disclosed in the audit reports and as to how the Department can ensure that the appropriate action in these cases is timely and relevant given the delays in the Department becoming aware of them.
In reply, the Accounting Officer stated that the follow-up to partners' audit reports is about addressing issues arising in third parties that have received Irish funding and funds from other donors, and this affects the nature of that follow-up. He stated that all of the programmes are implemented in partnership with developing countries and other donor countries and follow-up is conducted in this context. Follow-up with partners is aimed at the strategic level, with the intention of improving the overall financial management and accountability of the partners.
He also stated that working with other donors to support the implementation of ongoing public sector financial management and administrative reform processes is the key to rectifying many of the issues identified in audit reports. In addition, the joint donor/government co-ordination committees that exist in programme countries are also a platform for follow-up actions to audit and other programme issues. In non-governmental partners, the follow-up is usually via discussion between Irish Aid and the partners' senior management. All audit reports on partners commissioned by Irish Aid and the reports of most Auditors General include follow-up on the issues raised in the previous year's audits.
He informed me that Irish Aid's approach to the Category A issues arising in the programme varies depending on the particular structure and type of programme and the level of influence Irish Aid can bring to bear. The ranking system was introduced so that Category A issues could be clearly identified and could be emphasised by line management in follow-up. This is particularly important when the line managers do not have a financial background. The intention of the ranking is to assist them to identify the key areas to focus their follow-up efforts. The ranking should assist line managers to check that they have already identified the key issues arising from the underlying individual audit reports that would have been available to line management for some time.
He further stated that, in many cases, Ireland is a contributor to programmes along with many other donors who share information and work closely together. In such programmes, each donor does not conduct individual follow-up, but rather a lead donor is designated to take primary responsibility for the programme. In such cases, it is the lead donor who is responsible for following up on audits on behalf of all donors and sharing information on actions taken.
In this context, the follow-up to each partner's qualified audit reports is different, but influenced by
The nature of the aid in question and the corresponding donor/government management structures
The amount of expenditure in the programme from all donors and government
The strategic importance of the programme/project
The timeframe of the programme
The partner's line management's ability to implement a programme of action.
Risk Assessment and Value for Money
I inquired if a risk assessment of overseas projects had been carried out and, if so, what was the outcome in terms of risk identification and management. In reply, the Accounting Officer stated that the PAEG approval process is a comprehensive appraisal system to which all country aid programmes are subjected to test for quality, poverty focus, sustainability and adherence to policy priorities. In addition to the PAEG system, a specific example of the outcome of the introduction of risk assessment methodology in Irish Aid is the inclusion of a section on risks in the quarterly reports submitted by the programme countries to Departmental headquarters.
He also stated that the wider international donor community carries out a wide range of assessments, which include risk analyses, and these studies are utilised by Irish Aid. At a national partner Government level, these assessments are usually led by the IMF/World Bank using formal tools that have gained international acceptance. Most developing country partners do not yet have sophisticated and effective risk management and mitigation systems integrated into their own internal management systems. An important objective of the donor community (including Ireland) in working together with partner Governments through national plans is to develop all aspects of public sector performance, including risk management. He added that progress varies from country to country and significant challenges remain.
Finally, I asked how many value for money reports had been completed or planned since 2003. In reply, the Accounting Officer stated that Irish Aid has completed six value for money studies since 2003, two were currently in progress and at least one is planned for 2007. He also stated that Irish Aid is engaged in value for money studies via the Expenditure Review Initiative of the Department of Finance.
I ask Mr. Purcell to introduce Votes 28 and 29 and chapter 8.1.
Mr. Purcell
Helpful briefing material on both Votes was furnished by the Department to the committee. Chapter 8.1 records the results of an examination by my staff of how the Department keeps tabs on the growing amount of State funds allocated for bilateral aid to some of the least developed countries in the world. In 2005, approximately €340 million or €350 million was set aside for this purpose. It is intended to substantially increase the allocation in the coming years as part of the overall increase in overseas development aid.
Apart from grants given to NGOs and multilateral agencies, the main thrust of the programme is focused on eight countries designated as priorities for Irish development aid. The Department maintains a permanent office presence in those countries to co-ordinate the aid effort. While a certain amount of aid is directly delivered by Department staff, for the most part it is channelled through Government institutions at central and local level and may involve interaction with other donor countries to maximise the impact in particular sectors such as education and health.
Our examination concentrated on the arrangements for ensuring these funds were properly used and accounted for. The primary way to achieve this is through a system of audit provided by the evaluation and audit unit. At the time of our examination, the unit was staffed by nine personnel based in headquarters and six auditors based locally in the programme countries. Their efforts are supplemented by professional auditors commissioned by Irish Aid or jointly with other aid donors or independently by the aid recipients. Increasingly, reliance is placed on the work of the auditors general in the priority countries. I should also mention an extremely active audit committee exists comprising external experts, which spends much of its time overseeing the work of the evaluation and audit unit. That is the general framework.
Overall, we found the Department does a reasonably good job in controlling the disbursement and use of funding in what is often an extremely difficult operating environment. At the same time, as one might expect, we felt room for improvement exists, particularly in following up adverse audit findings and taking timely remedial action. I understand formal tracking and documenting action taken was recently introduced to meet this concern.
More work also needs to be carried out on the impact of specific aid initiatives, either separately or where appropriate in conjunction with other donors. In light of the growing reliance of the work of auditors general, another important factor to be addressed is the capacity of the offices of my counterparts in the programme countries to provide meaningful assurance that the funds channelled through Government were used to proper effect.
Over and above possible capacity problems in terms of resources and skill levels, the practical problem may exist of auditing in an environment that does not have the benefit of a sound governance tradition. The resources and skill sets available to the evaluation and audit unit in the Department will continue to be a key factor in the effective oversight of the aid programme, particularly in the context of the significant increase in the quantum and type of development aid and the risks associated with the move of Irish Aid to Limerick during the coming year.
I ask Mr. Dermot Gallagher to make his opening statement.
Mr. D. Gallagher
I am pleased to meet again with the committee to discuss our appropriation accounts for 2005 and the report of the Comptroller and Auditor General for that year. I would like once again to express my appreciation to the Comptroller and Auditor General and his colleagues for their professional and constructive approach.
Significant progress was achieved in 2005 in pursuit of the Department's core goals. The IRA statement confirming its armed campaign was at an end followed by the decommissioning of its weapons facilitated a further political initiative to achieve a fully-functioning Assembly and Executive. Members are up to date on subsequent developments.
In the European Union, we saw a very favourable outcome on EU finances at the December 2005 European Council and we established embassies in five new or accession member states, namely, Latvia, Lithuania, Malta, Bulgaria and Romania. The Department provided comprehensive support to the Minister for Foreign Affairs following his appointment by the UN Secretary General, Kofi Annan, as his special envoy for UN reform. Regarding overseas development aid, the Taoiseach gave a commitment to the UN General Assembly in September that Ireland would reach the UN aid spending target of 0.7% of GNP by 2012.
During 2005, the Department experienced continuing growth in demand for its services. This was reflected in another record year of passport issue and a significantly increased level of support provided to our citizens overseas, especially to the most vulnerable and needy. We achieved major advances in our passport service. The automated passport system project was completed and production of the new machine-readable Irish passport commenced at the beginning of 2005 in our dedicated production facility in Balbriggan, as well as in our Molesworth Street office. The automated passport systems have now been extended to our missions abroad. At the same time, the Department processed a record 680,000 passport applications in 2005 while maintaining a high level of customer service.
The procurement process for the project to improve the security of Irish passports further through the introduction of biometric features commenced towards the end of 2005. The lessons learned from the earlier automated passport system procurement, including the advice of the Comptroller and Auditor General and the discussion in this committee, assisted us in ensuring that the biometrics project was completed on time and under budget in October. The introduction of the new e-passport ensured Ireland's continued participation in the US visa waiver programme, saving the Irish traveller considerable inconvenience and expense.
Support for our citizens overseas, especially the most vulnerable and disadvantaged, increased significantly during 2005. A total of €8.2 million was provided, which represented an increase of €3 million on 2004. The bulk of this funding was allocated to organisations in Britain but organisations in the United States, Australia and, for the first time, Canada also benefited. Supports for Irish immigration centres in the US is of particular value to undocumented Irish people at this time of uncertainty for them and helping to relieve their plight remains a priority for the Department.
The Department also responded effectively in providing emergency consular support to our citizens in the aftermath of a number of natural disasters and terrorist atrocities, including the Asian tsunami, the London bombings and hurricane Katrina. This year, the Department's crisis response arrangements were mobilised following the outbreak of violence in Lebanon, which was the first time the Department itself organised and carried out a major evacuation of Irish citizens.
In his report, the Comptroller and Auditor General paid particular attention to Vote 29, relating to our development aid programme. Poverty reduction as the overarching objective of Irish Aid was reaffirmed in the recent White Paper on Irish Aid. The White Paper acknowledges, from a range of outside sources, the high quality of Ireland's aid programme to date. It also provides the framework for expenditure into the future, having regard to the great challenges and opportunities presented by the forthcoming expansion in the Irish Aid budget. In that regard, we have unprecedented financial resources to provide assistance.
In 1981, when, by coincidence, I was head of the programme, the total official aid budget was just €23 million. This year, the total ODA spend will be more than €730 million, of which €600 million will be funded through Vote 29. Spending will continue to grow in line with the commitment to reach the UN target of 0.7% of GNP. By the time we reach that target in 2012, Ireland will be spending around €1.6 billion on ODA. In delivering a programme of this magnitude, our aim is to manage aid to the highest standards of international best practice, including full accountability, transparency and value for money. The main activities towards which funds are directed are the bilateral aid programme, emergency humanitarian assistance, international funds for developing countries and contributions to UN and other development agencies.
We have some degree of involvement in more than 90 countries worldwide, but the main focus of our attention is directed towards our eight programme countries, Uganda, Tanzania, Ethiopia, Mozambique, Lesotho, Zambia, Vietnam and Timor Leste. Following recent Government approval for the White Paper, a ninth programme country, Malawi, has been added. Significant expenditure is allocated in 2006 to the areas of health, education, HIV-AIDS and civil society. Approximately €80 million is allocated from the Vote to education. HIV-AIDS expenditure accounts for more than €100 million and aid to non-governmental organisations, NGOs, now accounts for more than €140 million.
While it is hard to overstate the extent of the continuing development challenges in least developed countries, it is important to recognise that Irish Aid assistance has contributed to some real achievements in our target countries. Our aid is making a real difference. Poverty levels in Uganda have been reduced from 56% in 1992 to 38% in 2005 and the HIV rate among the adult population has decreased from over 30% to 4% in the past eight years. Primary education enrolment in Tanzania reached 7.5 million, or 95% of the schoolgoing population, in 2005, compared with just 57% in 2000. Finally, 500 wells, 100 water points and 145 primary schools were built in Tigré in northern Ethiopia in 2006.
Over recent years the Irish Aid programme has been favourably reviewed by a range of independent organisations from the OECD to Action Aid. The entire programme has recently undergone a major public review process in the context of the preparation of the White Paper on Irish Aid, which has been widely welcomed.
Robust evaluation and audit procedures are clearly more important in light of the current and future expansion of the overseas aid programme. The mission of Irish Aid's evaluation and audit unit is to provide an efficient, effective, relevant and independent evaluation and audit function, and to contribute to policy development within the Irish Aid programme. The work of the unit is undertaken in accordance with an annual work plan and a strategic and multi-year work plan for the period 2006 to 2008. In addition to its existing responsibilities for Vote 29, and to strengthen the corporate governance across the Department, the unit was assigned responsibility this year for the audit of Vote 28. The evaluation and audit unit meets the Office of the Comptroller and Auditor General when requested and operates under the direction of the Department's fully independent audit committee.
Development activities by their nature take place in high risk environments with relatively weak institutional arrangements. Risks are minimised by the extensive management systems in place in Irish Aid and active engagement with our partners to strengthen accountability arrangements. Irish Aid responds to critical audit findings by working with the partner concerned to agree a programme of remedial action and may, where warranted, withdraw or temporarily withhold funding pending the implementation of reforms. In all cases, follow-up consultations are aimed at the strategic level, with a view to improving overall financial management and accountability of partners.
Some recent and forthcoming initiatives in the finance and audit area include the recent appointment, on foot of the advice received from this committee, of an audit tracking officer who will engage with management to follow through and report on the implementation of audit recommendations requiring action at headquarters. There has been nothing I have found more irritating over the years than decent reports and recommendations which were never implemented. Meetings with heads of mission in Africa and Africa-based accountants and auditors focus on the areas of financial, evaluation and audit procedures. A review is forthcoming of Irish Aid's manual of financial guidelines and procedures.
Irish Aid is due to decentralise to Limerick in the second half of 2007. The potential for an advance move is being actively pursued with the Department of Finance and the Office of Public Works. We envisage that approximately 30 staff will be in temporary accommodation in Limerick by May 2007. Staff arrangements for decentralisation are well in hand. Over 69% of the posts to be decentralised have already been assigned. Several difficult issues remain to be addressed with regard to the technical and specialist posts which are scheduled to be transferred to Limerick, but discussions are ongoing to resolve the outstanding issues and I am hopeful of progress in that regard.
The challenges presented by decentralisation, particularly when combined with the concurrent increase in the aid budget, are also being addressed through planning and risk management strategies. I will endeavour to answer the questions the Chairman and members of the committee put to me. My colleagues are also here to assist as necessary and in any manner the committee sees fit.
May we publish Mr. Dermot Gallagher's statement?
Mr. D. Gallagher
Yes.
I welcome Mr. Dermot Gallagher and his officials. I want to link two topics he mentioned in his address. Under international co-operation I see a schedule in one of the reports we have that support is managed by overseas offices in nine countries under review: Ethiopia, Uganda, Mozambique, Zambia, Lesotho, East Timor, South Africa and Zimbabwe. Do we have support offices in those countries?
Mr. D. Gallagher
Yes. In almost all of them we have an embassy staffed by officers from the Department who are largely dedicated to managing the aid programme. Under these officers are an auditor in almost every office, an accountant, an evaluation team and a financial unit. Much of the programme is managed and audited in the countries. When I became head of the programme in approximately 1977 we had no offices overseas. It was daft that we were trying to manage an aid programme and work with sovereign governments from Dublin without offices in the countries. It is a privilege to be invited to work in somebody else's country. So we opened four aid offices each staffed by one person, and they have developed into integrated teams including auditors and experts in areas such as health, education and HIV-AIDS.
Are they Irish Department staff?
Mr. D. Gallagher
While the core staff are Irish, we employ local staff with expertise in areas such as education. For example the Lesotho ambassador to Ireland was previously employed as a local expert in the Irish Aid office in Maseru.
Is it difficult to get these specialised staff such as accountants and health workers from Ireland?
Mr. D. Gallagher
No, it is part of their contract and that is why our specialists are different from those of other Departments. When they are recruited the job advertisement specifies that they will serve overseas. They are an important and valuable part of the programme and are committed to it. They join because they want to work in developing countries and have probably previously worked with voluntary agencies or NGOs.
Mr. Dermot Gallagher mentioned the voluntary organisations and NGOs his Department works with. Would some of them be the Irish NGOs working in the field?
Mr. D. Gallagher
Yes. Concern and GOAL are the main agencies and have people in the field who work closely with us. They have some of their own people from Ireland and other countries such as the UK, the US and people recruited locally. Trócaire works exclusively through local people.
Given that Mr. Dermot Gallagher can work with the NGOs and have specialist staff in these nine countries, it is difficult to understand why there is such reluctance, although it is abating, from many people to decentralise Irish Aid to Limerick. It is difficult to reconcile how, while we can work in all these parts of the world with all these specialist staff, the proposal to go an hour and a half down the road is viewed as a major catastrophe that will destroy the procedure. Can Mr. Dermot Gallagher understand that I find it difficult to reconcile this?
Mr. D. Gallagher
I can understand fully. The question has been put to me before. It is not easy for me because I want to move. Our colleagues from the Department of Finance have been helpful on this. We want to resolve it because specialists are an important and valuable part of the programme. Part of the difficulty with some of them is that they are on contract for a certain number of years. They have brought a court case, which is being appealed to Europe, arguing that because they have contracts for a certain number of years and have worked with the Department for a certain number of years, they are entitled to permanent status. That is a difficulty and is part of the issue.
That is fine. Mr. Dermot Gallagher mentioned that some of the NGOs such as Concern and GOAL manage some of the projects. How much money does the Exchequer give to such agencies?
Mr. D. Gallagher
On Vote 29, between 25% and 30% of the money goes to a range of NGOs including five bigger ones and a number of smaller ones. The figure for GOAL in 2006 is €19 million and for Concern it is in the €20 millions. It is significant money and they are doing good work.
I do not dispute that. Would that money be a substantial proportion of the total income of those NGOs? If the Department is giving an organisation €19 million surely it has some information on it. Would that be 10% or 90% of their income?
Mr. D. Gallagher
It would be 25% or more. Some organisations have more fund-raising capacity and are more dedicated to fund-raising than others. Trócaire collects through the churches during Lent. It is significant money. I worked in Nigeria for several years. It reflects a continuation of the great missionary tradition. When I went to Nigeria I immediately had access to people at the highest level. This was due not to any innate qualities I had, but to the fact that a significant number of them had been educated by Irish missionaries, who were development workers at the time because they were involved in work such as education, health and providing wells and clean water. That tradition is continued in a lay form by agencies such as Concern, GOAL and Trócaire.
On the international co-operation budget, I see that approximately €47 million is paid to various United Nations development agencies. Is that separate from UN peacekeeping?
Mr. D. Gallagher
It is separate. UN peacekeeping is a separate department and budget in the UN.
Is it done by the Department of Foreign Affairs or the Department of Defence?
Mr. D. Gallagher
The Department of Defence.
So it is not under Mr. Dermot Gallagher's Vote?
Mr. D. Gallagher
It is under Vote 28. For years we were owed a considerable amount of money by the UN and that has been cleared. Our troops are in Liberia and some of that money has already been paid.
That is what I was coming at. Have we caught up on the funds due from the UN?
Mr. D. Gallagher
It took a considerable battle but we are up to date.
That is significant improvement. What was the approximate cost of the new biometric passports project?
Mr. D. Gallagher
The approximate cost was €6.6 million. At the beginning we envisaged €11.2 million and there was a procurement process which I stopped because neither contract gave us value for money.
There was a question as to whether the United States would introduce a biometric requirement for the visa waiver scheme in 2005. As I could not get a straight answer, I went directly to the United States and was told it would not be introduced until this year. This gave us extra time.
Last year the Comptroller and Auditor General said the fact that someone had had a contract for a related project might discourage others from applying in the procurement. We visited and told every company that it was a stand-alone project and that every application would be welcomed. We gave them as much information as possible.
Our estimate was that the second procurement would cost €8.8 million but the figure came to €6.6 million. It entailed very tight management and we held meetings every fortnight. The first time there was slippage in the timetable we imposed a fine of €25,000 on the company involved and it did not happen again. We also prohibited restrictive practices in the procurement process which involved state-of-the-art technology in which one or two companies might provide a small but essential ingredient. There was a tendency to suggest that companies should only form part of one bid but we rejected this and prohibited other restrictive practices. Two telephone calls were made to the Department of Finance about my attitude but my colleagues in the Department robustly supported my position.
Management was hands-on and we engaged an external independent assessor, Mr. Tim Dalton, whom members will know as the former Secretary General of the Department of Justice, Equality and Law Reform. We also appointed an outside expert, Mr. John Cousins of the Open University in Belfast and an expert in change management, as one of the judges of the tender. Therefore, we were very tough in that regard.
The discussion at this committee last year was very fair but sometimes difficult, It was, however, very helpful to me in the whole process.
I may have asked this question last year. If so, I have forgetten the answer. Does Mr. Gallagher know how many passports there are? He said the Passport Office had issued 680,000 in 2005 but obviously some are of three years duration and some, ten. I am trying to determine the percentage of the population who hold a passport.
Mr. D. Gallagher
I will ask Mr. Bassett to answer.
Mr. Ray Bassett
We estimate that approximately 4.2 million passports are operational. We issue approximately 160,000 per year outside the State. We issue approximately 40,000 in Northern Ireland, close to 60,000 in Britain and some 60,000 in the rest of the world. Many Irish passport holders do not live in the State; we believe somewhere between 80% and 90% of adults in the State have a passport.
That must be one of the highest figures in the world.
Mr. Bassett
It is close to being the highest in the world. The reason it is so high is that we do not issue ID cards.
Might that have something to do with Ryanair?
Mr. Bassett
It might but passports are also used internally. A person who reaches the age of 18 years often gets a passport because it is the best authenticated form of ID, as one must apply through the Garda Síochána and undergo several other tests. Apart from its use for travel, it has acquired a status within the country. As the Chairman will know, national ID or student cards are not always accepted in bars but passports are.
It would be very easy to develop this into a national ID card system. We have discussed that possibility, using PPS numbers.
Mr. D. Gallagher
I will repeat a story I told the Deputy last year. An elderly woman sitting beside me on a bus asked where I worked. When I told her, she produced a brand new Irish passport. I asked her where she was going and she replied the bank. I asked her why she needed a passport and she replied that it was a form of ID.
To open a bank account.
Mr. D. Gallagher
Yes, assuming she did not already have one.
To open a bank account a person needs photo ID.
Mr. D. Gallagher
Some 500,000 Irish people visit the United States each year.
There are many there this weekend.
Mr. D. Gallagher
Perhaps some have multiple visas; we have one of the highest numbers in that regard. It was a good idea to opt for participation in the visa waiver scheme because otherwise a visa would be required. The French failed to meet the date set and as a consequence, there were delays of up to six weeks at the United States embassy in Paris. Some French people sought interviews at the United States embassy in Dublin because the wait was shorter. It costs $100 for a visa, although some of the 500,000 applicants probably use multiple visas. Thanks to Mr. Bassett and his team, the project came in on time and well under budget.
I note that the income from passport activities comes to approximately €41 million. It seems to be a profitable line of business, if Mr. Gallagher does not mind me saying so. That is not a criticism.
Mr. D. Gallagher
The Deputy mentioned this the last time I appeared before the committee and because I considered it so important, I made a note of it. Passport fees during the year amounted to €32.6 million, with total expenditure at €31 million, giving a surplus of over €1 million. This figure is arrived at using cash-based accounting methods. Using accrual-based accounting methods, involving a depreciation charge for capital investment on the APS project, there may be a slight deficit but it probably just about breaks even. Income does not derive solely from the Passport Offices in Dublin, Balbriggan and Cork; there is a huge Passport Office in London, while a passport service is provided in every Irish embassy.
Because such a high percentage of the population have a passport and adults use their passports extensively, for example, in getting into nightclubs, there must be security issues involved, as many must go missing in the early hours of the morning. What controls are in place? How many passports are returned to the Passport Office? Can they be returned to the holder?
Mr. D. Gallagher
Interestingly, the figure for lost and misplaced passports has not changed much during the years. It stands at approximately 25,000, or between 3% and 4%. We calculate that approximately 22,000 are misplaced — put in the washing machine or lost in a drawer — because they later turn up and must be cancelled. Approximately 3,000 are stolen. The basic data included in the new passport such as the photograph, passport number, date of birth and name are provided in a biometric chip which cannot be broken. Most attempts at passport fraud involve efforts to change the photograph but the new style will prevent this.
It will not work.
Mr. D. Gallagher
The Americans believe we have one of the best, if not the best, system in the world.
On a different subject, Ireland makes contributions to the World Bank for international development projects. Are contributions made through Mr. Gallagher's Department or the Department of Finance?
Mr. D. Gallagher
They are made through the Department of Finance.
The figures to which Mr. Gallagher referred add to the percentage of GNP directed towards overseas development aid. How is the Department progressing towards the stated targets?
Mr. D. Gallagher
We had an interim target figure of 0.5% of GNP to be reached in 2007. We have achieved this figure. The target figure for 2010 is 0.6% and for 2012, 0.7%. Our colleagues in the Department of Finance were rigorous in adjusting the figure, even from week to week, to meet the interim target figure of 0.5% which I am very confident we have achieved.
Significant progress has been made on the issue of Irish homeless, particularly in London, and emigrant funding. Would many of the Irish homeless in London like to come home or is there any arrangement between the Department and the Simon Community to bring them home? I know homeless people who are originally from Laois can be assessed for housing needs in the Laois County Council area by an agency in London. Is much being done in trying to assist those people to come home rather than giving a grant towards a centre out there? Is this relevant to the Department of Foreign Affairs?
Mr. D. Gallagher
It is very much so. The Irish abroad unit is headed by Mr. Ray Bassett and both of us would have a very strong instinctive and professional sympathy and solidarity with anyone who is homeless. The Simon Community estimated that there were 600 Irish homeless in London, but this is down to 100. It has gone on record as saying the work of the Government has had a significant impact, and it has paid tribute to the Irish taxpayer.
There is still more work to be done, and we give grants to organisations who would like to bring Irish people back. It is not easy for somebody who has lived all his or her life in London to return to a town or parish in rural Ireland, as there have been radical changes. I know a father of a particular friend who comes home for the Leinster hurling final every year and stays in his home parish for approximately a week.
He must be from Kilkenny if he comes every year for the Leinster final.
Mr. D. Gallagher
He is from Wexford but he has not had too much to come home for in recent years. There appears to be only one hurling county in Leinster currently, unless Galway goes into that competition. He told me he does not know anyone anymore, and it is not the same. People may have spent all their lives abroad and had families there. Although there may be exceptions, these people may prefer to get support and company. Mr. Bassett has many creative ideas for those in Britain and the United States.
We are trying to reach out beyond the ordinary society, and we are working very closely with GAA clubs in Britain currently, for example, as well as the Davitt clubs in the north of England. It has been one of the most exciting and effective developments that the Department has been involved in.
Are any embassy properties being rented abroad that would be worth buying? The Department would rent some properties and own others, but would it be beneficial to purchase any more? Can this information be divulged, or has the topic been considered?
Mr. D. Gallagher
The topic has been raised here and we have actively taken it up with our colleagues in the Department of Finance. Any time we go to the Department of Finance with a convincing or reasonable case it will respond positively. Every year we have access to approximately €20 million from the Estimates to purchase properties.
In 2005, we owned 29 properties abroad and I was asked by this committee for an up-to-date estimate of the combined value, which is €112.823 million. In 2006, we purchased four properties, which is a normal action to take in preference to paying inflationary rents. They are in Strasbourg, the Hague, Ljubljana and Ankara, and we are actively in the market in New Delhi, Beijing and a number of other places. It makes sense.
Before calling Deputy Joe Higgins, I wish to ask if there are any circumstances where passports are issued outside normal procedures?
Mr. D. Gallagher
We have what are termed emergency passports, and we try to respond to the needs of people. In emergencies we will provide a 24-hour service, and on Saturdays and Sundays an officer from the Passport Office is available. When the passport officer is not available, we have a 24-hour duty officer, a third secretary in the Department of Foreign Affairs, who can issue passports in emergencies.
I go into work on some Saturdays and there are quite a few people there. They can be out at the airport and if a person has a couple of hours to spare we can do it.
Mr. Bassett
We have extended that emergency service to Cork also.
Mr. D. Gallagher
It is not easy abroad as our offices are normally staffed by two or three people, but we provide a 24-hour service nonetheless.
There was a scheme of issuing passports for investment some years ago, but does the Department of Foreign Affairs or the Department of Justice, Equality and Law Reform perform ongoing monitoring of those passports issued relative to the investment made? Is there an ongoing consideration of the passports issued to ensure the conditions of the scheme at that time are continuing to be met relative to the investment made?
Mr. D. Gallagher
That is primarily within the ambit of the Department of Justice, Equality and Law Reform as that Department gives Irish citizenship. We cannot give a passport to a person unless that person is an Irish citizen. An Irish citizen is entitled to a passport, but certain criteria must be met to become an Irish citizen. The Department of Justice, Equality and Law Reform had to take a decision on those criteria, and I am not sure what they are. Residency in Ireland is an element and investment was clearly an element at the time.
A person's entitlement to Irish citizenship, having met these criteria or continuing to meet them, is the issue. It is not applicable to us, as if the person is an Irish citizen, he or she is entitled to an Irish passport. We do not monitor that. If there was a question over the matter, we might put a person on a stop list. If any such person applied for a passport we would know and be able to alert relevant people that such a person had applied.
That particular scheme is the ongoing responsibility of the Department of Justice, Equality and Law Reform.
Mr. D. Gallagher
It is in my view as the core entitlement arises from Irish citizenship.
Cuirim fáilte roimh an foireann ón Roinn Gnóthaí Eachtracha. I wish to go straight to the most controversial issue debated in recent times relating to Irish aid, the method by which it is dispensed in the target countries. In the documents relating to overseas development aid agencies, the Department has indicated that approximately 70% of funding is dispersed through what are termed "partner governments". What is Mr. Gallagher's view on the notion that this might be an unfortunate phrase considering the nature of some of these governments?
To take Ethiopia as an example, a controversial target country, the civil rights situation there is a nightmare, opposition politicians and journalists are jailed and the regime is very repressive. How does the Secretary General balance what I know to be his own personal views on these matters and what Irish people would accept as basic human and democratic rights, with the dispersal of aid through a Government like that of Ethiopia?
Mr. D. Gallagher
This is obviously a difficult question as the countries in question are not easy to deal with but our priority must be to get aid, be it related to health, education, HIV-AIDS or clean water, to the poorest of the poor. The Organisation for Economic Co-operation and Development, OECD, stated "the programme distinguishes itself by its sharp focus on poverty reduction". ActionAid Ireland distinguished between what it called real aid which makes a difference in the lives of the poorest people and phantom aid.
Unlike other countries, we do not have budget support for Ethiopia and are compelled to work with the government. It is a sad country in which there is famine and conflict but we are committed to improving people's lot, in some cases, keeping them alive. We have a programme of what we call safety nets, whereby, in return for work, we give over €6 million in payments to poor people who have no other income. This is not like the Famine scheme and some of the daft ideas applied in Ireland in 1847; the work involves building rural roads, health clinics and schools.
When I visited Ethiopia earlier this year, we had tough discussions with the President and others on human rights issues. With the Minister for Foreign Affairs, Deputy Dermot Ahern, I met some of the leading dissenting opposition figures privately in prison. The majority have been released because of the pressure applied by the Irish Government and others who are at the table and have access to the President and Prime Minister. The situation is not ideal and there are many concerns but we believe aid is getting through to the people who need it and that we are having an effect on the Ethiopian Government. Ours is only one voice but the entire group sitting around the table is having an impact.
There is some distance to travel and we would not engage in providing central budget support but if we believe in helping the people of Ethiopia — this also applies to GOAL and Concern — it is necessary to work with the government.
In 2004 about €29 million in aid went to Ethiopia and €32 million to Uganda. These are significant sums of taxpayers' money which would not fund large-scale projects here but which would be very significant amounts in those countries. Does the Secretary General know what the equivalent spending power of these figures is? For example, what value does €29 million have in Ethiopia and €32 million in Uganda? How many hundreds of millions of euro would we need to spend here to match the effect of those figures in those countries?
Mr. D. Gallagher
I might ask Mr. Rogers who has a particular knowledge of the details relating to those countries to answer.
Mr. Brendan Rogers
The value in those countries is hundreds of times greater. Of the €29 million mentioned, €6 million is being used to keep 7 million people alive in Ethiopia. Approximately €3 million to €4 million is being used to provide wells and water for over 100,000 people. This exercise might require an economist to examine the complexities of international currency exchange and finance but I would say €30 million in Ethiopia could be the equivalent of €500 million here in buying the same services.
That is very significant and highlights to an even greater extent the obscene international wastage of funds on armaments. If the money was channelled to this area, life could be utterly transformed, bringing structural change. Taking this effect into account, with the Secretary General's comments and statements from other countries and international agencies, those advocating civil and human rights in delivering this funding should have a great influence because it represents such an important part of people's lives. Is there co-operation with other agencies on a joint approach to civil rights and the release of opposition figures, journalists and so on?
Mr. D. Gallagher
The donors co-ordinate very closely. We hold a very strong position. Some success has been achieved in Ethiopia and most of the prisoners have now been released. Some opposition Members of Parliament have taken their seats and I met them when I visited the region. However, we have not been as successful as we would have wished. We emphasised that genuine court cases, with evidence, should be accelerated and people brought to justice quickly, if there was a case against them, rather than leaving them languishing in jail without trial. I was very impressed by some of the opposition leaders I met in prison who spoke very openly. There is more work to be done. In the cases of Ethiopia and Uganda, the Government has deliberately not appointed ambassadors to send a clear signal of our feelings.
The point people such as John O'Shea of GOAL make is that there is a contradiction between taking that position and continuing with the provision of aid through the government.
Mr. D. Gallagher
John O'Shea has been a close, personal friend of mine for 30 years. When I visited Calcutta with him, I saw the street children and went out to the islands. We watched the Kerry versus Tyrone match on the Internet.
Opposition leaders in Ethiopia, both inside and outside prison, had a particular knowledge of and respect for Ireland and asked us to continue with our programmes. They were conscious that our aid was reaching the people who desperately needed it and their firm advice was that we should continue. I said this to Mr. O'Shea and will repeat it when I see him before the end of the week.
We are in difficult territory. In researching for today's meeting I read what Amnesty International in Uganda stated opposition figures there had to endure. In the past month a certain newspaper published lists of women it claimed were lesbians — it is seen as a criminal offence — with a view to having them hounded from their homes. This is done with the blessing of the Government and the police. I accept that these regions are extremely difficult places in which to function but the Irish Government should be uncompromising in tackling these matters.
The Secretary General has given a detailed breakdown of the evaluation and auditing process and results. Category (A) refers to major weaknesses in financial controls or a recurring issue that must be urgently addressed. There were 16 category (A) findings in Ethiopia in 2003, 32 in Lesotho and 46 in Mozambique. This is rather alarming. This is where our local officers are stating that they are not satisfied that they have a full account of how a certain amount of money was spent and then attempt to do something about it. The incidence is very high.
Mr. D. Gallagher
It is high. I should say that the amounts of money involved are not significant. However, there is an encouraging element — most of these instances have been drawn to our attention by the local auditor general. They are enhancing their own capacity and we are helping them do that. They have drawn these to our attention and our people have got in early; a stitch in time saves nine, as they say.
From my experience in Africa, and the advice of experts, the real corruption is on major infrastructural projects. Much of this occurs with companies from outside Africa. The Department of Finance wants us to look at infrastructural projects, and we will do so carefully. We are not currently involved in such major projects. We are mostly involved in health clinics, schools, wells, and rural bridges and roads.
For example, in one country the local auditor general pointed out that significantly more workers were being paid than he felt were actually working. We checked it out and discovered that, because of AIDS and other diseases, many workers had died but the money was still being paid to them. I have an instinctive sympathy for that because the people were so poor. A proper head count was undertaken and proper procedures were put in place and a clean bill of health was given. The amounts of money involved are not significant. We use an internal mechanism tool and everyone finds it helpful. It signals at an early stage that there may be difficulties. For example, while we are supposed to get three bids for a project, in some rural areas only one may be received. If the location is a long distance from Addis Ababa or Kampala, it is not easy to get three bids.
The documentation supplied indicated that the Department wants to see the evaluation and audit units beefed up. Is this ongoing?
Mr. D. Gallagher
There are currently two vacancies which we hope to advertise soon. Our audit unit members are usually specialists in the area and know the developing countries well. If the head of the audit unit feels he or she needs further staff, I am prepared to meet with the Department of Finance to provide that. I do not think I will have any difficulty in providing for further staff.
The White Paper contains a section that provides for a fundamental review of resources to be undertaken by my Department and the Department of Finance. The purpose of this is to ensure we have the quality assurances which the comptroller rightly mentioned in his opening remarks.
My final question is for Mr. Rogers. The last time he came before the committee I mentioned a particular group in Matto Grosso do Sul in Brazil. I have a particular link with this group and have visited it and seen the good work it does for indigenous peoples. It was seeking a modest grant to continue the work because its grant from Amnesty International finishes at the end of this year. Can Mr. Rogers be flexible in looking at this? He previously told me that all the work in Brazil is done through Trócaire. However, as I pointed out at the time, there are groups who do not agree with Trócaire and there have been disagreements on the ground. Nevertheless, groups which are not within Trócaire's ambit are doing extremely good work. I have travelled to the villages of the indigenous people and they are extremely difficult to get to. I ask Mr. Rogers to examine this again. From my personal experience, it is an area where funds would make a real difference to the lives of people who are struggling against huge odds for land. They have frequently been murdered by large ranchers. A small amount of aid, perhaps one third of the annual salary of the Minister for Foreign Affairs, would make a massive difference to advocacy for these peoples.
There is a vote in the Dáil. I propose that we suspend and resume when the vote is finished.
Mr. D. Gallagher
Given that Deputy Higgins knows the area and based on the information he has conveyed, we would be sympathetic to looking positively at that at an early stage. However, I do not know the salary of the Minister for Foreign Affairs of Brazil.
I was referring to the Irish Minister for Foreign Affairs.
Sitting suspended at 12.57 p.m. and resumed at 1.20 p.m.
I welcome the representatives from the Department of Foreign Affairs. Regarding the last discussion, I have a slightly different question. It strikes me that with the volume of money increasing for Irish Aid, there is an issue for the Department as to how to increase the volume of spending in a way that is imaginative, effective and targeted at the poorest countries.
In that context, in the recent Estimates I noticed that regarding the increases for multilateral and international organisations like the World Bank and organisations associated with Bretton Woods, the range of increases was between 21% and 37% whereas the increase in the bilateral programme, that is the country to country aid, to some of Africa's poorest countries and to a number of other countries is only 16%. That is disappointing. I do not know the view of the Department but I noticed in the Secretary General's comments that Ireland took part again in the reform process in the UN but at this point has it delivered much? To appease the criticisms of the John O'Sheas of this world, are we now writing blank cheques to UN organisations to make safe payments which may not be as critically scrutinised as the money given on the bilateral side, often in very difficult circumstances, to remote regions far from capitals where I acknowledge accountability is a difficult issue.
Mr. D. Gallagher
I thank the Deputy for her welcome. I agree entirely that the priority and the focus must be on the bilateral programme. That reflects the Deputy's strategic thinking when she was political head of the aid programme. To reflect that priority both in the existing countries but also in the new countries, including Malawi and Vietnam — Vietnam will cover Laos and Cambodia — there is a range of new priority programme countries but it will take a little time to build up the programme there. What we will see progressively in the coming years is an increasing growth of the bilateral element of the programme as the developing programme in Malawi, Liberia and Sierra Leone, where we have an office, continues. These are difficult countries as members know but it is important we are in Liberia and Sierra Leone because it complements what the Defence Forces are doing there, and also in Vietnam, but there will be a particular focus on Laos and Cambodia. That will take a year or two to work up. What we will see then is a substantial growth of the bilateral programme and the priority is very much on that, which reflects the Deputy's own strategic thinking. It is not a question of giving a blank cheque. We are selective about the UN programmes. We would like to see more UN reform, and we are involved in that, but it is a slow process. To come back to the core point, the priority area will be the bilateral programme.
In that context, will it be difficult to achieve the decentralisation process? Specifically, how many of the development specialists, who I understand work on the development aid programme and have experience of working in developing countries, have indicated that they are willing to move to Limerick?
Mr. D. Gallagher
I would make two points on that. Development specialists can be divided into two. Approximately half of them are based here in Dublin and half work in the programme countries. Of the development specialists there are three principal development specialists. None of those have applied to decentralise to Limerick.
How many of those——
Mr. D. Gallagher
None of the three principal development specialists have applied. There are 12 senior development specialist posts. Two originally applied to decentralise but, as I understand it, in liaison with their union decided to withdraw their applications. There are nine development specialists. Five originally applied to decentralise to Limerick and subsequently withdrew their application. At present, the posts of four people, who commenced employment since the announcement of the decentralisation programme, are scheduled to decentralise.
As I explained earlier, there are two dimensions. Very sensitive talks are going on currently. I am determined to resolve this issue because specialists are a valuable part of the programme and do enormously valuable work. I am determined, working closely with the Department of Finance, to resolve it and I will be as flexible as possible in doing so.
One reason people are doubtful about going to Limerick is that there is a court case about their contracts. They believe, having worked a certain number of years in the Department, that they are entitled to the same terms and conditions as everybody else. They brought a case, which they won. That case is being appealed to Europe but I will be as flexible as possible in ensuring that arrangements are in place. I hope the issue is resolved very quickly. As I said, sensitive discussions are taking place, which I would prefer not to go into, but I will be as flexible as possible in resolving this in a satisfactory way.
The current position, therefore, is that no development specialists have committed to going to Limerick.
Mr. D. Gallagher
At present there are four who——
They were recruited after decentralisation was announced and part of their recruitment conditions was an agreement to decentralisation.
Mr. D. Gallagher
That is right. As I said in my opening remarks, it is a major challenge and a difficulty but I hope for progress. We are working intensively to try to resolve the issue.
I put it to the Secretary General that in the context of the concerns our colleague expressed earlier and as often relayed in the media by John O'Shea, the development specialists are often at the heart of the programme. If the Department is to guard against recipient countries making fast and loose with Irish money, and perhaps being seen as a soft touch where ethical and governance standards are concerned, would losing the expertise of these very experienced people not be a disaster for the overall governance of the programme?
Mr. D. Gallagher
If that happened it would be very serious but I have no intention of seeing it happen and unlike in other Departments, development specialists were recruited and a basic requirement of their recruitment was that they would be prepared to serve overseas. Effectively, half of our development specialists work in the programme countries and therefore regarding a project being submitted to us in Lesotho or Tanzania, there would be development specialists, including auditors and accountants, in the local mission who would assess it in the first instance.
I presume there are, for example, payroll functions and so forth for the Department as a whole which are located in a particular place. Would there not be a significant number of staff in the Department who might well be, for example, processing payroll and so forth who might have an interest? The development specialists are working abroad. Presumably, some of them maintain a home and if they have been working in the Department for some time their home is likely to be in the greater Dublin area. Would the same be true of some of the diplomatic officers? I understand diplomats are expected to go abroad every five years or so for up to five years.
Mr. D. Gallagher
Yes, four or five years.
Their home base and the head office will still be St. Stephen's Green. If they are expected to progress in the Department, they must go abroad and probably work some of the time in the head office in St. Stephen's Green. If they had an interest as a career diplomat in working in Africa and are working on the administration of the aid programme, they might also have to go to Limerick as well. Would that not be tough on the families involved, even if the officers might find it relatively easy?
Mr. D. Gallagher
It might depend on the age or the marital status or otherwise of the officer. A total of 124 posts are being decentralised to Limerick. The applications totalled approximately 230. I do not have the——
How many of those were from the Department of Foreign Affairs?
Mr. D. Gallagher
Quite a few. I felt strongly that the head of Irish Aid should be in place as quickly as possible and the head of Irish Aid, who was our ambassador in Vienna, expressed a wish to go to Limerick, so it was being driven at the very top. I am pleased with the number in the Department who are interested in going. In the next batch of the third secretaries we recruit every year it will be part of their recruitment that they will go to Limerick.
Some people raise the question of coherence and joined up government but we have 74 missions overseas and I believe we work in a seamless, coherent, joined-up way with them. I do not see a problem with decentralisation. The one difficulty is the specialists, and I am hopeful that can be resolved at an early date.
A couple of years ago the Department closed down APSO, the Agency for Personal Services Overseas. I understood that a number of officials of that agency were absorbed into Irish Aid. What did that cost? The Minister, in a speech a couple of weeks ago, said Irish Aid will open a street-front office in O'Connell Street, in the former Eircom building, to have a street presence for people who might be interested in offering services in the developing world. Why did the Department close APSO and now open APSO, mark II, in O'Connell Street? What is the cost and the implications of that?
Mr. D. Gallagher
Mr. Rogers might be able to reply on the cost. It was not our decision to close APSO. There was a review of Irish aid and we took the recommendations on board. One of the recommendations was that APSO, while it had performed valuable work, had outlived its usefulness and should be absorbed into the Department of Foreign Affairs. We acted on that recommendation.
Mr. Rogers
All the staff were incorporated into the Department of Foreign Affairs. Their salaries were simply continued so there were no costs. There probably were some costs in terms of ending the rent of the premises it had in Merrion Square. I can get that for the Deputy. The office in O'Connell Street will perform different functions from APSO. APSO sent people abroad directly to directly-funded volunteer assignments in the developing world. The building on O'Connell Street will be an information centre for people who are interested in volunteering across the developing world and will link them with NGOs and UN voluntary agencies. It will also act as a showcase for the Irish development programme. There will be interactive displays and it will, hopefully, bring into the public domain the work done by Irish Aid. It will be responsible for a different set of tasks from APSO.
My recollection is that what has been described is more or less what APSO did. It took applications from people who wished to work in developing countries and worked as a link with the various missionary organisations. When the decision was made to close APSO there was no outlet left in Ireland for volunteering. The VSO, the British volunteer organisation, had to come into Ireland to recruit. The implication of the Secretary General's remark is that it was a political decision to close APSO.
Mr. D. Gallagher
No, it was an expert group which was set up to review——
It was not very expert if the decision had to be changed a couple of years later.
Mr. D. Gallagher
I can mention one example. It had a rapid response list but anybody could go on that list and it was not specialised. What we are proposing is a rapid response list with 30 to 50 professional people who link fully to the UN. If there is a tsunami, therefore, Ireland will be able to make a distinctive input into the relief. If, for example, there was a shortage of people in a certain area of logistics, that expertise is in the Defence Forces and they would be part of the rapid response. It is qualitatively very different. It is extremely focused. Rather than sending people with general skills to a place, we would home in on exactly what was required with a distinctive Irish input.
What is the cost of the new establishment?
Mr. D. Gallagher
It is located both in the Curragh and Italy where we have placed emergency food and equipment, such as blankets, tents and water. I do not have a cost for it.
Mr. Rogers
We have put aside €5 million for the rapid response initiative this year. There are three elements to that. One of them is to preposition emergency stocks so we can respond very quickly to sudden onset disasters or complex emergencies throughout the world. The second is to create a small register of highly experienced, competent people who are willing to respond and work with humanitarian agencies. The third element is to improve the capacity of NGOs and international humanitarian agencies to respond generally. Approximately the same amount of money has been put aside for next year as well.
I have a few brief questions about tables 30 and 31 in the Comptroller and Auditor General's report and what they represent in terms of trends for spending on overseas development aid. Table 30 measures the moneys given between 2003 and 2005. It refers to grants to countries with Irish Aid overseas offices. It also refers to other grants, mainly to NGOs and multilateral agencies. There is a small category involving direct expenditure. It seems to indicate little growth in the first category of grants to countries with Irish Aid overseas offices, whereas there have been large grants to NGOs and multilateral agencies. In the context of this timespan, especially with the large increase in the Estimates, is the trend intensifying? Is there any explanation for the change in spending that this seems to indicate?
Mr. D. Gallagher
No. Obviously, in a particular country we will only spend if we are happy that projects will bring real added value and make a real impact. The White Paper involved a consultative process which was followed by production of the text. As a result, we have opened an office in Vietnam which has responsibility for projects in Laos and Cambodia. We have designated Malawi as a programme country and will become more deeply involved in Liberia and Sierra Leone. That will take a little time but I hope it will happen rapidly. The programmes will be on the same scale as those in sub-Saharan countries, currently costing around €30 million. In coming years there will be a particular focus on them.
Mr. Gallagher pre-empted questions I was going to pose on Table 31. My question on Table 30 is about the funding avenue, as such. Logic dictates that the more money is spent directly, the better value one gets from that expenditure. I realise we have a particular relationship with Irish NGOs but going through multilateral agencies more frequently would mean money was being diminished before delivery. Why is this trend apparent between these years when there is more money going to other agencies, rather than to Irish Aid overseas offices? Is it due to a lack of infrastructure?
Mr. Rogers
In general, if one looks at ODS spending over a period of years, about two thirds has gone to bilateral projects and about one third to multilateral projects. In our own Vote the figures are about 80% and 15% or 16%, respectively. To balance the Government system approach, we are trying to build the capacity of civil society in some of the countries concerned. More funding is going to NGOs and community groups to balance what we are doing through governments to ensure civil society is empowered to make demands of government. We are funding governments to ensure they can meet these demands. There are certain changes over a period of one or two years but if one looks over a period of five years, generally, one will see that the figures are about 80% for bilateral aid, 15% for multilateral aid and 5% for administration. That is the way I would see the figures in the next few years.
Mr. D. Gallagher
Some of the multilateral spending figures are obligatory.
I can understand that, with certain agencies. Is Mr. Rogers indicating it is less direct with the first category than with the second?
Mr. Rogers
Yes. The aim is to strike a balance in the programmes. Generally, we want to build the funding that goes to build the capacity of civil society. That is what we will be doing in the next year or two. Malawi is our ninth programme country. Vietnam is also a programme country. As the Secretary General said, we will operate a regional programme in that area. As the programme continues to grow, one will see an increase in the bilateral aid element to countries in which we have offices. We also fund countries in which we do not have offices. This also falls into the bilateral aid category. We are pouring funds through NGOs into Zimbabwe for HIV-AIDS projects. We do not fund through the government. We are also pouring money into other countries in which we do not have offices but in which we use partnerships.
Part of the question I wished to ask about Table 31 has been answered. Mr. Gallagher referred to South-East Asia, Malawi and Sierra Leone which are to be added to list of countries where Irish Aid is working. More money is to be provided for these countries. Table 31 refers to the sums going through national and local government structures, as well as other means. I am conscious of the answers provided for Deputy Higgins about Ethiopia and Uganda. It seems strange, however, that different approaches are taken to both countries in terms of whether aid goes through national or local government systems, given that the questions about both countries are serious. With the second system, in particular, if questions arise about the efficacy of a national government, would the concerns not be even more marked at local government level in some of the countries concerned?
Mr. D. Gallagher
No. The basic question one poses is that if one funds through local government, will it be effective and get it to the people? For instance, if the department of education decides to build 30 schools and supply them with textbooks, we have a tracking system. With other donors, we select a certain number of schools to visit to see if they have been built and, if so, do they have the necessary school books. There is now a system in place, whereby a big table or billboard is erected at the school, stating X amount of books have been delivered for pupils. Therefore, instead of nine or ten sharing one book, each child has his or her own. Parents see what is happening and will make demands if the books have not been delivered. This is what we mean by building local assertiveness. Ultimately, be it in Ireland where in 1921 there was probably not one tarred road or any of the developing countries, one must work through the government if one is fundamentally to improve the country and have an equalised system. One can pick one area with a brilliant school but that will not increase the numbers of children attending school throughout the country. One must work with the country to try to develop systems that will apply throughout the entire country. It is a little like EU money come here, although on a different scale, at a different time and in a different context — it had to go through the national government plan if it was to work and have an impact. Everybody, including organisations such as Concern and GOAL, must work with the national government within some overall strategy to lift people up from the bottom.
Yes, except that in the case of European moneys, we invented structures to give the appearance they were going through an open system.
Mr. D. Gallagher
The minute I said it, I knew I would be hoisted on my own petard. I tried to say it was in a completely different context but I take the Deputy's point.
I wish to ask about some NGO issues, although I am not sure if Mr. Gallagher will be in a position to answer. There have been reports recently about a reconsideration by the Department of the Self Help organisation. Can Mr. Gallagher give us an update? There is another matter, of which he is probably not aware. Comhlámh, the returned aid workers organisation, has been influential in helping to shape policy. It developed outside Dublin, yet seemingly is on the verge of being centralised in Dublin. That seems somewhat incongruous, given the Department's difficulties concerning its location. Is the Department aware of this matter and, if so, is it interacting with Comhlámh?
Mr. D. Gallagher
I think Comhlámh is closing its office in Cork.
Yes.
Mr. D. Gallagher
When I was head of the programme in the 1970s, I was one of the first to support the organisation. We give it a substantial grant but it is up to Comhlámh how it is used. I would not get involved in telling an organisation how it should administer its funds or organise itself. Coming from rural Ireland, I am in favour of decentralisation. As I said, 69% of the posts for Limerick have been allocated, a high percentage. We are in a good position to decentralise but it is up to Comhlámh to decide. We are happy to support it because it is a good organisation.
Self Help runs a good programme. We are sad and concerned to see the difficulties at board level, with people resigning and terminating their relationship with the IFA, because its core support was to be found in rural Ireland. It was one of the five top voluntary agencies and was receiving significant support from us on a multi-annual basis. We are still working with it and want to help it to resolve the problem. I believe it will continue to get support from us but not at the same level. Quite frankly, I would be failing in my duty if I said it was business as usual with it given the clear divisions which have been so publicly expressed. I have a duty to the taxpayer to say we cannot continue as before. It has a very good programme and we are sad to see this happening.
Mr. Rogers
It does a very good job. I visited its programmes in Ethiopia and we are very happy with the work it does on the ground. However, we need to engage with it in these difficult times. As the Secretary General said, we will continue to engage with it.
I refer to the call by Dóchas on the attainment of 0.7% by 2012. The Department has laid out a programme on how it envisages the increases being achieved on a year by year basis. However, Dóchas has said that without it being put in legislation, we may return to the situation in 2004 when the 2007 figure was abandoned and that it could be claimed that resources are not available to allow the long-term or the medium-term targets to be achieved. Does the Department have any plans to put the funding programme on a legislative basis so that concern can be dissipated?
Mr. D. Gallagher
No. On this occasion, as the Deputy rightly and helpfully implied, it was not just a case of the Government saying we will reach the target by 2012. It put clear interim targets of 0.5% and 0.6% in place. I have found the Department of Finance robustly correct in pursuit of this and even, as I said, adjusting the figures on a weekly basis to ensure we make this commitment. It is now a formal commitment.
There is an EU commitment for 15 member states to reach the target by 2015 and we are ahead of that by three years. It is a formal commitment warmly welcomed by all the aid agencies. I see no possibility whatsoever of slippage. For instance, in the annual discussions with the Department of Finance on this year's Estimates, it was very reassuring and welcome that this issue had been decided at another level. It was automatically included in the Estimates.
Does Mr. Purcell have any comments to make?
Mr. Purcell
As the aid programme gears more towards a sector-wide approach and, to a lesser extent, direct budget support, it has implications for audit as well. I am very conscious of that when we talk about my counterparts in the programme countries. With this sector-wide approach, there will be many donors, including the World Bank, individual countries, etc. That should also be reflected in the audit arrangements and there is some evidence of that happening. There is a harmonisation of the overseas audit practice group, of which we are not part. We have been invited to become part of it and it may well be the case that as the aid programme and this type of multidonor aid increases, it would be useful for us to be part of it. However, we have access to its papers, reports and so on which gives us some reassurance.
I wish to echo something said today. Where regimes are in place which are not fully democratic, it causes a problem for the independence of the national audit office in those countries. As part of the international community of auditors general and their equivalents, we try to help capacity building in these countries. There are long-term training programmes and so on and we give what support we can from that point of view.
There are also practical problems that perhaps would not come to mind immediately but which were raised in a report issued by the harmonisation group about which I spoke. In a pilot audit it carried out on aid to the education sector in Zambia, the local auditor general's office had a general concern about it giving an adverse opinion on a particular account because if it did so, it could have national repercussions. I remember facing this in a small way some years ago in the EU. If one had an adverse opinion on some EU funding, it could result in disallowances. There are natural concerns such as that which must be taken on board.
As the national audit office of a major donor, which we are becoming in some of these programmes, we will have to rethink our way around this and how to work with the recipient countries' national audit offices because more reliance is being placed on their work in this area.
I thank Mr. Purcell and Mr. Gallagher. We have now concluded our examination of Votes 28 and 29. Is it agreed to note them? Agreed. Chapter 8.1 is disposed of. Do members have any matters they wish to raise? No.
The witnesses withdrew.
The agenda for the meeting of Thursday, 7 December 2006 is as follows: 2005 Appropriation Accounts and Annual Report of the Comptroller and Auditor General, Vote 8 — Office of Appeal Commissioners, Vote 9 — Office of the Revenue Commissioners, chapter 2.7 — international aspects of revenue operations; chapter 2.8 — VAT and e-commerce; chapter 2.9 — assessment and collection of capital gains tax; and chapter 2.10 — management of tax appeals. Is that agreed? Agreed.
The committee adjourned at 2 p.m. until11 a.m. on Thursday, 7 December 2006.