COMMITTEE OF PUBLIC ACCOUNTS díospóireacht -
Thursday, 26 Mar 2015

Business of Committee

Chairman

The first item on the agenda is the minutes of our meeting of 5 March 2015 and 12 March 2015. Are these minutes agree? Agreed.

At our last meeting there was an issue in regard to correspondence around HSBC. The clerk, who was away on other business on the day, has confirmed that he was in touch with the chief executive's office of HSBC and had called them but unfortunately they did not take up the offer to attend the meeting. So the correspondence may not have been there but the contact was indeed made and that was the response.

No. 3 is correspondence received since our meeting of Thursday, 5 March 2015.

Deputy John Deasy

Would it be useful if the clerk let us know what he said?

Chairman

They said they were not available and that they had appeared before the Public Accounts Committee in the UK and they did not have anything further to add here. That is all they said.

Deputy Joe Costello

Did the HSBC bank in London indicate that they had nothing to say here and that there was no connection with the HSBC bank in Dublin?

Chairman

No, it is just that they were not available.

Deputy Joe Costello

What about the request to the London centre to see whether or not they would appear?

Chairman

That is what we are talking about. They would not make themselves available. They did not respond. They basically said they would not be here.

No. 3A.1 is correspondence, dated 2 March 2015, from Ms Julie Sinnamon, CEO of Enterprise Ireland. It is a follow-up from the PAC meeting of 12 February 2015. That correspondence is to be noted and published.

No. 3A.2 is correspondence, dated 4 March 2015, from Mr. Robert Watt re the minutes for the Minister for Public Expenditure and Reform re report 1, Review of Medical Card Eligibility, and report 2, Fixed Charge Processing System. That is to be noted and published.

These are the replies to our reports; the majority of the recommendations of the committee have been accepted.

No. 3A.3, correspondence, dated 6 March 2015, from Mr. John McCarthy, Secretary General, Department of Environment, Community and Local Government re follow up from our meeting on 5 February 2015, to be noted and published.

Deputy Sean Fleming

The information supplied about the public private partnership contracts transferred to Irish Water is incomplete and does not provide the information the Secretary General was in a position to provide and that he was asked to provide on the day. On page 5 of the letter there is a mechanism to deal with him. The chart deals with the extent of the design, build and operate contracts in the water services sector for February 2015. It gives a cost of €123,045,700 for those contracts and breaks down the number of contracts, sites and how many are wastewater treatment and how many are water treatment contracts.

I asked all day for the total liability for the contracts. The Secretary General is giving us the annual operating cost for 2015. These are 20 year contracts. In his letter he writes that it is not possible to provide a breakdown on a contract basis as the information in regard to the payments under individual contracts is commercially sensitive. I had specifically asked that the information be provided to us even on a local authority basis to avoid that kind of problem. The Secretary General could have been more helpful. He was well able to give us the operating cost based on the 115 contracts in situ, broken down by region, the south, the east, the north west and the total. All I am asking for is the total cost of those 115 contracts. I do not need to know about the individual contracts for wastewater treatment plants in Ringsend, Portlaoise, Mullingar or Roscrea. He was able to give us the information year by year on a regional basis. I want the total liability on the same basis, urgently.

This dates from our meeting on 6 February. I want this within seven days or I want the Secretary General to return here next Thursday for 15 minutes to explain why it is not here. Seven weeks on we do not have the information we sought. He said on the day he did not have it but he has been able to produce the operating annual costs. I want to know the total liability in the format he has provided. I will not dictate the format. He has avoided the issue again.

Chairman

We will send the Secretary General the Official Report of the meeting and ask for an immediate response from him on that matter.

On No. No. 7, in that correspondence we asked for the unit cost of producing the litre of water. In spite of the fact that it took almost half an A4 page to define no answer was given. I thought that was a simple enough question to determine the cost. As far as I can see there is nothing here but a lot of hot air. I will ask again specifically for that cost. It had nothing to do with the water lost. We can calculate that afterwards. We have not got the production costs. I will remind the Secretary General of the question asked and the fact that it was not answered in spite of the waffle in that reply. The other issue was the transfer of assets from the local authority. It is listed here in terms of the book value. I am bringing that to the attention of members. We can consider it again in the context of the replies to the two questions.

No. 3A.4 correspondence, dated 9 March 2015, from Mr. Robert Watt, Secretary General, Department of Public Expenditure and Reform re minute from Minister for Public Expenditure and Reform re composite reports arising from examination of (1) land sway arrangement; (2) State Pathology Building Project; (3) appointment of the Director of the National Gallery of Ireland and (4) Waterford Institute of Technology, to be noted and published.

Deputy Sean Fleming

That is the response to all our work.

Chairman

We can put it on the agenda for the next meeting. I think we should discuss No. 4, lapses in controls at Waterford Institute of Technology, WIT. The issues raised there had to do also with Carlow, Cork and Tralee. We should put it on the agenda for our next meeting.

Deputy John Deasy

There has been significant movement in regard to Carlow, Waterford, the HEA and education. I understand the President of Waterford IT has left and is now working with the Higher Education Authority. Mr. Michael Kelly, who is carrying out a report on the merger between Waterford and Carlow Its, is probably finalising that work. Would it be useful to invite Mr. Kelly to present to committee after he makes his report?

Chairman

I understand the report has to go to the Minister before it is available to us. We have already agreed to bring back the Department and the HEA and we can ask them to invite in Mr. Kelly to discuss his report. Then, we could perhaps bring into that discussion the report here relating to the WIT and the reports on the other institutes. We are still awaiting the report from the Department on the Vocational Education Committees, which is before the Minister.

Deputy John Deasy

It would be useful to have Mr. Kelly come before us. I believe the hearing we had with the HEA and the Department of Education and Skills woke some people up and that some issues were resolved after that hearing. We should continue with that to bring this to a conclusion, if possible. Having Mr. Kelly appear would be useful in that regard.

Chairman

We do not have a date set for that meeting. If we can find out when the report will be available after the Minister completes her examination of it, we can set an early date for that hearing. We should also write to the Minister again in regard to the report on Cork VEC to ask when it will be laid before the House.

No. 3A.5 relates to correspondence dated 11 March 2015 from NAMA outlining the mediation process. This will be noted and published. No. 3A.6 is correspondence dated 4 March 2015 from Mr. Aidan O'Driscoll, Secretary General of the Department of Agriculture, Food and the Marine. This is a follow-up to our meeting regarding Bord na gCon. This is to be noted and published. As we have now received replies from both the Department and Bord na gCon, I will ask the secretariat to proceed to draft a report on the matters covered in our examination of the topic.

No. 3A.7 concerns correspondence dated 16 March 2015 from Mr. Martin Shanahan, CEO of the IDA. This is a follow-up from our meeting of 12 February and is to be noted and published. No. 3A.8 is correspondence dated 19 March 2015 from Mr. John McCarthy, Secretary General of the Department of the Environment, Community and Local Government and is a follow-up to our meeting of 15 February 2015.

The correspondence is to be noted and published.

No. 3A.9 is correspondence, dated Monday, 23 March 2015, from the HSE on section 38 agencies. The correspondence is to be noted and published. We will be able to have an in-depth discussion on this matter and other issues and the general accounts of the HSE next Thursday, 2 April. We have indicated to the HSE that because of the number of items on the agenda the meeting may last a full day.

No. 3B.1 is correspondence, dated Monday, 23 February 2015, from Mr. Seamus Carroll regarding moneys owed for works carried out at Ennis General Hospital. The committee has come across a number of these cases - Deputy Deasy referred to one such case - in relation to the payment of contractors and subcontractors. This case involves Glenbeigh Construction which I understand is a firm that procures many public capital projects. It appears that this small firm is losing out. The State should not facilitate this. The committee will again write to the HSE to ask it to review the case to see if steps could be taken which would result in the contractor being paid. This is an issue across Departments where contracts are made available and something needs to be done to protect the small firms and individuals who end up doing this work in order that issue will not continue to arise. The committee will write to the Department about it and will raise it again at next week's meeting.

No. 3B.2 is correspondence, dated Tuesday, 3 March 2015, received from the HSE on the payment of allowances at St. James's Hospital. The committee can discuss this issue next week with the HSE and will forward the correspondence to the Department of Education and Skills and the HEA to ensure salaries should not be paid to public servants for lecturing.

No. 3B.3 is correspondence received from Ms Susan Gray, chairperson of PARC, the road safety group. It concerns the recording of information by court clerks on drivers who are disqualified but who do not have their licences endorsed. The correspondence is to be noted. This matter was raised when we discussed the issue of penalty points. We have made a recommendation which is being considered by the criminal justice working group, from which we should receive an update. I propose that the committee request the secretariat to write to the group or the Minister to request an update on the matter.

No. 3B.4 is correspondence, dated Thursday, 5 March 2015, received from Mr. Seán Ó Foghlú, Secretary General, Department of Education and Skills. It concerns the review of spousal travel arrangements in FÁS in the period 2002 to 2008. The correspondence is to be noted and published. I suggest the committee write to the Department and SOLAS to find out how it is planned to recoup the moneys owed. A considerable amount of almost €30,000 is involved and little progress has been made to date in collecting the money owed.

Deputy Joe Costello

It really is not good enough that such an important organisation should have operated in the manner it did for such a long period. It is only now being brought to the committee's attention that most of the money has not been paid back. The same seems to apply in a number of other State bodies. The committee has seen that there is no proper policy being pursued in the HSE on travel or entertainment. It is clearly not good enough that FÁS should have taken it on itself to provide the same services for its members' spouses as it did for its members in certain categories. The committee needs to look at the issue on a broader basis and write to all of the agencies involved requesting them to examine their practices to ensure they are in compliance with proper standard practices. This issue comes up from time to time in the case of the HSE, FÁS and other agencies. In the case of FÁS, there is a legacy issue, it pertains also during the years in a number of agencies. As well as ensuring the committee has it finally sorted out, I suggest it write to all bodies in receipt of public funds and that are using taxpayers' money to fund their operations to ensure they are compliant and that they write back to confirm the practices in place.

Chairman

I know that in 2008 and 2010 the Department of Public Expenditure and Reform took up this matter. That Department might be a first port of call to see what progress it has made. The committee can look at what action it took to deal with it. Perhaps it might then revisit Deputy Joe Costello's proposal.

Correspondence, dated Friday, 6 March 2015, has been received from Ms Eileen Creedon, Office of the Chief State Solicitor. It concerns costs borne by the State in cases taken by the special investigations unit of the Department of Agriculture, Food and the Marine. This is a holding matter, in respect of which Ms Creedon is going to give us some details. We have a date set for representatives of the Office of the Chief State Solicitor to come before the committee to deal with the issue. It is relevant to the issue of costs and the committee wants to have an understanding of how the office takes cases and the costs that arise.

No. 3B.6 is correspondence, dated Monday, 9 March 2015, received from NAMA. It is a reply on the issue of access to contracts. The correspondence is to be noted and published.

No. 3B.7 is correspondence, dated Friday, 6 March 2015, received from Mr. Tom O’Mahony, Secretary General, Department of Transport, Sport and Tourism on the Kilkenny central access road. The correspondence is to be noted and forwarded to Ms Anne Marie Swift who raised the issue. This is a matter for the local authority to which the committee will forward the correspondence and request a response.

No. 3B.8 is correspondence, dated Wednesday, 11 March 2015, received from Professor Niamh Brennan concerning the DDDA and the Irish Glass Bottle site. The correspondence is to be noted and published. I thank Professor Brennan for her submission and ask Members to take note of it, as it may be of interest to them in the context of today's hearing.

No. 3B.9 is correspondence, dated Wednesday, 11 March 2015, from Mr. Aidan O’Driscoll, Secretary General, Department of Agriculture, Food and the Marine, concerning vacant properties at fishery harbour centres. The correspondence is to be noted and published and a copy forwarded to Mr. Rodney Gillen. We are now in a position to report on the fishery harbour centres.

Deputy Joe Costello

It appears that the number of vessel lifts at Howth shipyard was 43 in 2012, 39 in 2013 and 48 in 2014. On average, the return in 2014 from each would have been about €1,700. This is described as an operational shipyard in which full marine repair facilities are provided. If that is the average return from the 48 ships or boats that visited the yard in 2014, it seems that it did not do much more than lift up the boats. There is no indication that substantial repairs were carried out, as the entire return for the 48 boats was €84,000. It does not seem as though that yard is undertaking major repairs. May the committee obtain a breakdown of the size of the boats involved and the work that was done on these boats to determine if it was operating to full capacity because it certainly does not look like it was?

Chairman

The figure represents the cost of vessel lifts. The work to vessels is carried out by contractors, not the harbour. Having said that, on the day the committee visited, it was quite clear that the yard was not operating to its full capability. Contractors are also not being catered for in a way that one would expect to generate further business and prevent business from moving elsewhere. It appears that in providing the information the underlining difficulty is being ignored - the attitude to the development of Howth Harbour.

With regard to the individuals in business whom we met at Howth there are significant questions regarding a number of matters that we need to deal with in the context of our report. While that may be the response of the Department it certainly falls way short of what is required with regard to the response that the business people in that locality are asking for. From looking at the different sites there the response falls far short of what a commercial operator might do in terms of the development of Howth. There are lots of issues still to be dealt with and we can deal with these issues in the context of the report and raise the fact that there are many other issues at ports around the country of which we are aware. Although it is in court now, the John Shine case is a typical example of how the State ignores the efforts of a businessman to conduct his business and at the same time to resolve issues. It is no way to carry on a business, in my view. The State has a lot to learn from the commercial world which it seems to continue to ignore.

How long will it take for the report to be compiled?

Clerk to the Committee

A couple of weeks I suppose.

Chairman

Members will have input in the report as a result of our visit that day. I ask that we would pay particular attention to it because it is probably the best example I have seen to date of poor practice and poor commercial insights or poor commercial knowledge on the part of the State.

Deputy John Deasy

I agree with the Chairman in so far as Howth is concerned and it is hard not to agree. The situation might not be as bad with regard to the other State ports. I did some checking with regard to Dunmore East where there are some vacant buildings and they are looking for leaseholds. There is a difference of opinion among people who actually use the port as to the utilisation of certain buildings within the port but certainly it would not be as bad as Howth.

I am not familiar with the situation in the other four State ports but I spoke to the Minister about this after we had visited Howth. I think it is fair to say that he has an open mind with regard to what the committee might report on. My question is as to where we are going with this report. Are we going to suggest that another State agency be involved in these properties to assist the Department when it comes to the utilisation of the vacant buildings? Sometimes if one takes an adversarial attitude with the Department, one will not get anywhere, but there is probably an opportunity to get something done here. That is the attitude that was registered. What direction does the committee plan to take with regard to the buildings?

Deputy Joe Costello

Can we compile further information about the actual situation? Some 48 boats is a lot of boats. What sort of work was conducted on those boats? Why did Howth have to bring in all that skilled work from outside? It was suggested that other boats were not being catered for in Howth and had to go to other areas to be repaired. I refer to the information in appendix B about the various sites and the stages of work, which shows that there are three properties in Howth which are ready to be considered for tender. Have we any idea of the timescale? I refer to table No. 2 which shows that five properties in Howth not currently in use are subject to legal, operational or planning considerations. I suggest that we request a breakdown of the category of consideration, whether legal, operational or planning and the nature of the difficulty. Such further material would be very useful before we make recommendations as to how to move forward.

Chairman

We will ask for that material. In reply to Deputy Deasy's question, we visited Howth and we have had a hearing with the Department. We will set out what we found and we will make recommendations arising from the input of members. As with other reports we will set out our findings followed by our recommendations. We will have a draft report in a couple of weeks with some recommendations. The members can then decide on the tone and extent of the report.

Deputy John Deasy

From my cursory conversations with the Minister, Deputy Coveney, I think there is probably a willingness to deal with it. There is probably an agreement that, in many cases, some of these buildings are vacant for too long and the processes involved are too lengthy. If we were to collaborate with the Department I think some progress would be made.

Chairman

The same applies to Killybegs. If there was a collaborative effort and a willingness to co-operate, there might not be the conflicts between the Department and individuals. Perhaps the Minister should reconsider the action being taken by the Department in relation to that particular case. We should make that suggestion to the Minister, in view of his willingness, as mentioned by Deputy Deasy. I think we should test his willingness.

No. 3C contains documents relating to today’s committee meeting. Nos. 3C.1 and 3C.2 comprise a briefing document and opening statement for today’s meeting, all to be noted and published. No. 4 - these are reports, statements and accounts received since the meeting of 5 March 2015.

Deputy Sean Fleming

I refer to the accounts. With regard to the annual financial statement for Cork VEC there was a problem with internal control and disclosure of details of tax settlements to the Revenue Commissioners in 2013 relating to underpayment of tax. The Comptroller and Auditor General has prepared a special report. Is that report available to the committee?

Mr. Seamus McCarthy

It is with the Minister.

Chairman

We spoke about that report earlier. It is still with the Minister. We are writing to the Minister to ask for the report to be released. There is no reason it should remain with the Minister for this length of time.

Deputy Sean Fleming

That was all I wanted to know.

Chairman

The remainder of the list are all clear audits. We will deal with Dublin Docklands Development Authority later. All these accounts are to be noted.

The next item is the committee's work programme which is shown on the screen. The HSE will appear before the committee next week. On 16 April the Department of Communications, Energy and Natural Resources will attend the committee to discuss the Bytel report, the cross-Border broadband initiative which was the reason for our visit to Stormont some weeks ago. Is the work programme agreed? Agreed.

I refer to the committee's hearing with Údarás na Gaeltachta on the sale of the seaweed. Some issues were raised in a media report on 21 March. With the agreement of members I will ask the clerk to the committee to look at the transcript of that meeting and what is now being reported on in the media, in order to determine that the information we were given was true and accurate and that it does not reflect any discrepancies between the views now being expressed in the media and what was said at the meeting. I will ask the clerk to carry out that short exercise.

Deputy Paul J. Connaughton

Were we made aware at the time of the meeting that due to the sensitive nature of the deal we would only find out the actual price given for the company when the accounts were released the following year? Has it now transpired that they are saying it could take ten years before we will know what that figure was?

Chairman

We were told there was a confidentiality clause in the deal and that they would not reveal the figure until some set of accounts were ready. That was the issue raised in the media report. Does Mr. McCarthy wish to comment?

Mr. Seamus McCarthy

I would expect that there will be information. The deal was done in 2014 so I would expect the 2014 accounts to give some information about the sale.

Chairman

When are the 2014 accounts likely to be available?

Mr. Seamus McCarthy

I do not know whether we have received the draft financial statements yet. In general, Údarás accounts are done in the first half of the year.

Chairman

Some of the information will pertain to the accounts. We will check what was said against what is being reported now. Is the work programme agreed? Agreed. Is there any other business?

Deputy John Deasy

A couple of months ago the Department of the Arts, Heritage and Gaeltacht came before the committee and the spend on the 1916 commemoration was discussed. At the meeting the Secretary General committed to getting back to the committee specifically on how the money will be spent this year when it comes to remembering the people who died in 1916. He sent us back what I thought was a pretty derisory response approximately five weeks ago. We committed to contacting him and the Department again.

Chairman

There is no reply as of yet. We can send a reminder.

Deputy John Deasy

I am not so sure there will be a reply unless we are persistent. We are speaking about very serious money. I believe €22 million will be spent this year, and the Department has listed six flagship projects, including works at Cathal Brugha Barracks, Kilmainham Gaol and the GPO, the construction of a new visitor centre at Pearse's cottage in Ros Muc and the development of a tenement museum. There does not seem to be any funding to commemorate the people who actually died. Deputy Costello was involved in the conversation we had with the Secretary General, and what we asked was very clear. We should go back and ask the Department what are its additional plans for the €22 million.

Chairman

We can go back and ask.

Deputy Joe Costello

I support Deputy Deasy. There was not a clear indication of how the money is being spent or a full list of activities. It was a very general and limited presentation in this respect. It would be very valuable to have a more thorough and comprehensive account of what is being planned.

Chairman

With regard to correspondence No. 3B.1 on the non-payment of contracts with regard to moneys owed, we will send it to the HSE to alert it to the fact that we will raise it at the meeting next week.

The agenda for Thursday, 2 April is, from the appropriation accounts for 2013, Vote 39 - Health Service Executive, Chapter 14 - Procurement by the Health Service Executive. Today we will examine the Dublin Docklands Development Authority.