COMMITTEE OF PUBLIC ACCOUNTS díospóireacht -
Thursday, 26 Apr 2007

Minutes of the Minister for Finance.

Mr. J. Purcell (An tArd Reachtaire cuntas agus ciste) called and examined.

Chairman

The first chapter deals with the Department of Communications, Marine and Natural Resources and specifically with chapter 8.1 of the Comptroller and Auditor General's report. The matter reported on concerned the development of a computerised inventory and planning system for the forestry sector. The committee found that the project was badly managed and that the Department was slow to take effective action to deal with the problems which emerged. The committee made three recommendations which have been accepted by the Minister for Finance. The status of the recommendations is that the matter is now closed. Is that agreed? Agreed.

The second chapter also deals with the Department of Communications, Marine and Natural Resources. The issue involved improving the levels of connectivity with Ireland and both the US and Europe. The committee found that the decision taken in 1999 to improve the levels of connectivity was "far-seeing", particularly in view of the aim to attract investment. However, the committee recommended that the State should endeavour to involve private companies in sharing the risks in investing in infrastructural projects in the sectors in which they operate. The committee's recommendations have been accepted by the Minister for Finance, so the matter is closed. Is that agreed? Agreed.

Chapter 3 related to the Department of Enterprise, Trade and Employment. This chapter of the interim report of the committee dealt with an oversight in the drawing up of a statutory instrument which in turn meant that almost 10,000 companies which had been charged for late filing were due refunds. This chapter also considered the Department's Vote. The three recommendations made by the Committee of Public Accounts which related to improvement of procedures with regard to statutory instruments, the need for the availability of modern financial systems in Departments, and the need for the Health and Safety Authority to have a random element to its inspections. All these recommendations were accepted by the Minister for Finance. The status is that these matters are closed. Is that agreed? Agreed.

Chapter 4 concerns the Competition Authority and specifically its accounts for 2002 and 2003. Two of the three recommendations made by the committee have been accepted by the Minister. The third, which related to giving consideration to amending competition legislation, has been rejected by the Minister on the grounds that it is a policy matter. However, he says that the matter will be reviewed on an ongoing basis. That is a reasonable response. Is it agreed that this chapter is closed? Agreed.

Chapter 5 relates to the Department of the Environment, Heritage and Local Government, specifically the scheme for urban regeneration. The committee found that €72 million was spent in four years from 1999 to 2002. However, this was a significant underspend on the amounts that had been allocated. Both of the committee's recommendations have been accepted by the Minister. These matters are now closed. Is that agreed? Agreed.

Chapter 6 again refers to the Department of the Environment, Heritage and Local Government, specifically the financial procedures within local authorities. Again the committee's recommendations have been accepted by the Minister. The matters are now closed. Is that agreed? Agreed.

Chapter 7 dealt with the accounts for 2002 of the Environmental Protection Agency. The committee made a number of recommendations all of which, except one, have been accepted by the Minister for Finance. The introduction of the Protection of the Environment Act 2003 is cited by the Minister as the reason for the non-acceptance of the committee's recommendation, which seems reasonable. Is that agreed? Agreed.

Chapter 8 related to the value for money report carried out by the Comptroller and Auditor General on the collection of television licence fees. Once more, the Minister has accepted the committee's recommendations. The matter of recommendations is now closed. Is that agreed? Agreed.

The ninth and final report on the interim report relates to the OPW's acquisition of land at the site of the battle of the Boyne. In making its recommendation the committee was conscious that nugatory expenditure should be avoided where possible. The recommendation has been accepted by the Minister. Is it agreed that recommendations now close? Agreed. The committee's consideration of the minute of the Minister has concluded. Is it agreed to note the minute? Agreed.

The eighth interim report on the 2003 report of the Comptroller and Auditor General relates to the Department of Education and Science. The report contains chapters on various activities of the Department, including the provision of psychological services, schools by way of public private partnership and the Department's Votes. It is now governed by a single Vote. Chapter 1 relates to the committee's consideration of the chapter in the Comptroller and Auditor General's report on the National Educational Psychological Service. While the committee recognises that significant advances have been made in the last ten years, there were still problems at the time the report was compiled. The committee's recommendations have been accepted, with the exception of the recommendation to provide more flexible access to private services in the light of the inability of the psychological service to fully meet its original brief. While the Minister does not directly say the recommendation has been accepted, it is pointed out that it is being considered in the context of a review of the scheme for commissioning psychological assessments. It seems a reasonable point. Is it agreed the first chapter should be closed? Agreed.

The second chapter covers the value for money report compiled by the Comptroller and Auditor General on the group schools pilot partnership project. The committee made a number of findings and recommendations which the Minister has accepted for the most part. In the case of the first two recommendations which have not been accepted, the Minister explains in detail various procedures outlined in the Department of Finance's guidelines. The recommendations will be revised further this year. On the second recommendation which has not been accepted, the Minister informs the committee that the Department of Education and Science will undertake in 2008 a value for money review of the grants paid to first and second level schools.

Mr. John Purcell

The Department got the wrong end of the stick in this instance. The committee recommended that the Department should report on the level of funding provided for the maintenance of schools and examine whether there had been good value outcomes. The recommendation stemmed from a comment in the VFM report that the Department did not have prior estimates of the full cost of maintenance of second level schools when it came to compiling the public sector comparator. However, it was recognised that the amounts provided for schools through capitation payments were insufficient to cover full running costs. The committee's intention was to require a comparison to be made between the provision for maintenance under the conventional arrangements and the maintenance element of public private partnerships to establish where best value was being achieved. While there was a slight misunderstanding, it should be overcome, as the Chairman suggested, by the review the Department has scheduled for 2008 of grants paid to first and second level schools. On any reasonable interpretation, the significant maintenance element of the grants will mean the matters in question will be examined in the review. The recommendation as intended by the committee will thus have been taken on board, despite the Department's misunderstanding.

Deputy Deasy

I wish to raise the issue of the cost of renting prefabricated buildings, as it is germane to the issue of value for money in primary and post-primary schools. I have raised the matter at the committee before. In the last week I discovered that three primary schools in Tramore, County Waterford, were collectively paying between €200,000 and €250,000 per year to rent prefabricated buildings. One of them is paying approximately €150,000 to €180,000 per annum. This information was given to me by the principals of the three schools. Many of the building programmes referred to have been ongoing for eight or nine years. No company would waste money in this way. It is only when dealing with Government one notices such waste. From what I have been told, it appears there has been a dearth of anticipation in planning and managing the growth of these schools, resulting in hundreds of thousands of euro going down the drain. I have raised this issue previously with the committee and ask if the Comptroller and Auditor General will undertake to examine it? Effectively, what I am asking him to do is to investigate whether value for money has been received. The programmes involved have been delayed and put on the long finger for many years. I do not believe this is the proper way to spend this amount of money. There is not only the financial cost. It is generally accepted that educational standards for children in classes of 36 or 37 pupils are low. I, therefore, ask that the Comptroller and Auditor General investigate the matter. The programmes are archaic and take too long; there is no expedition. The end result is that the State is out of pocket by hundreds of thousands of euro. I was told in response to a parliamentary question on this matter last year that approximately €15 million per annum was spent each on renting prefabricated buildings. This amounts to a sum of approximately €60 million over four years. This is wasted money. The systems used must be investigated.

Mr. Purcell

Some years ago I prepared a value for money report on the provision of school accommodation in which I commented on the deficiencies in the system for planning ahead. Following this, matters seemed to improve, at least on the surface. I will undertake to review what has happened as a result of that report and take on board the Deputy's specific concerns about the cost of renting prefabricated buildings, particularly where they are used year after year. I will also undertake to examine the question of whether it would be better to purchase rather than rent them. I accept that is not the core issue but it does have direct financial repercussions for the State.

Deputy Deasy

There are two aspects to the matter and the schools in Tramore are perfect examples. The Department of Education and Science purchased prefabricated buildings for the gaelscoil at a cost of €200,000. One has to ask whether it would be better to take out a loan to finance the building of a new school rather than spend money on renting prefabricated buildings. More importantly, why would one spend hundreds of thousands of euro in this way? There is no logic to this. There does not appear to be insightful long-term planning. One school has been told it may have to wait another four years for a new building. The cost of building this school will be eaten up by rental costs over the course of those four years.

Chairman

Will Mr. Purcell undertake to examine the matter in the context of the education Vote for 2006? Is it worth commenting on it in the 2007 report?

Mr. Purcell

I will take on board the comments made. I will also undertake to examine the specific case mentioned and consider the economic case for continuing along the lines indicated.

Deputy Deasy

I thank Mr. Purcell.

Chairman

The clerk to the committee will correspond with the Department of Finance on the matter and request it to take this information into account in its 2008 review of grants paid to first and second level schools. Is it agreed to close this chapter? Agreed.

The third and final chapter of this interim report concerns the various subjects which are considered under what was then the four separate Votes of the Department. The matters considered by the committee for the most part involved systems for dealing with young offenders. All these recommendations have been accepted by the Minister for Finance, who also included in his minute that an executive office of the Department of Justice, Equality and Law Reform, namely, the Irish Youth Justice Service, has been set up to manage and develop all aspects of youth justice. It is a fair response to our recommendations. Is it agreed to close the chapter? Agreed. This concludes the committee's consideration of this minute of the Minister of Finance. Is it agreed that the committee notes the minute? Agreed.

The fifth interim report of the committee on the 2003 report of the Comptroller and Auditor General related to Teagasc and the Departments of Agriculture and Food and Community, Rural and Gaeltacht Affairs. The first chapter concerned the committee's examination of the Teagasc accounts for 2003. Findings were made regarding the breakdown of internal financial control and the non-revaluing of property assets in the balance sheet of the agency. The Minister accepted all but one of the committee's recommendations, the exception being the call for consideration to be given to amending the Comptroller and Auditor General (Amendment) Act 1993. The Minister states that the measures in the current Act are sufficient.

Mr. Purcell

The committee will recall this arose as a result of an audit supplement to my report on the 2003 accounts of Teagasc which covered two specific matters — an inadequate response by senior management in Teagasc to indications of fraudulent activity on the part of a member of staff, and another case in one of the regional offices where a staff member was providing services under contract to the agency.

While they were not material in the financial sense, I felt these issues were serious enough to merit public accountability. The only vehicle I had for doing that was through the annual financial audit because they were not value for money issues. I felt a more flexible means of reporting, which would not involve associating an audit supplement with the formal financial audit report, might address this difficulty.

The suggestion by the Minister will not solve the problem, as expressed by some members. However, we are examining the 1993 Act, which at the time was modernising and has stood us in good stead over the years. While it is fundamentally sound, aspects of it might need to be tweaked to meet developments in the meantime. It is 14 years since the legislation was enacted.

Another issue was mentioned in the report on Media Lab Europe, where the right of inspection did not give us the access we might have envisaged to remuneration details for senior executives. Other issues relating to local government and so on have also arisen. It may well be that there is a case for some amendment of the governing legislation. We are examining that and I intend contacting the Department of Finance when we finish that analysis about these issues and, hopefully, entering into dialogue with officials about how the existing difficulties can be overcome. Perhaps in that context it would enable the committee to accept the report.

Chairman

Is it agreed to close the chapter? Agreed.

The next chapter of the interim report concerns the committee's consideration of examinations carried out by the Comptroller and Auditor General on the disposal of meat and bonemeal, redundancies from the Dublin and Cork milk boards and other issues relating to the Department's Vote. As the Minister accepted the committee's recommendations, I propose that they are now closed. Is that agreed? Agreed.

The final chapter relates to the Department of Community, Rural and Gaeltacht Affairs. Specifically the committee made recommendations on the need to document the objectives, results and funding priorities of the RAPID programme, the need for the development of a proper control and accountability framework for the administration of community grants and the need to streamline the management of the Leader and partnership programmes. All of the committee's recommendations were accepted by the Minister. Is it agreed to close the chapter? Agreed.

That concludes the committee's consideration of the minute. Is it agreed that the committee should note it? Agreed.

I thank members for their service to the committee. I wish them every success in the upcoming general election. We will not arrange a meeting for next week.

The committee adjourned at noon sine die.