Are the minutes of the meeting of 5 November 2015 agreed?
Business of Committee
Something significant happened after our meeting last week. During that meeting with the officials from the Department of Justice and Equality, the debate strayed into the issue of burglary.
When the witnesses were being questioned, one of the senior officials in the Department of Justice and Equality made a comment that in their opinion judges were not taking burglaries seriously enough. It has transpired that some pressure was put on that official to apologise for that remark. That is quite significant. Our system of Government is not exactly like the US system in that we do have a separation of powers. Our Executive and our Legislature is rolled into one, and then we have the Judiciary. I do not believe that it is out of bounds for one arm of the State to criticise another arm of the State if it is a genuinely held belief which is based on policy. When I read the Criminal Justice (Burglary of Dwellings) Bill 2015, which is currently passing through the Oireachtas, it is clear that the Department of Justice and Equality felt it was necessary to restrict judges' ability to give bail in some circumstances. That is the essence of that piece of proposed legislation. When one reads the Bill it is clear that there is a view within the Department of Justice and Equality that some judges are not taking the issue of burglaries seriously. This is why the Bill was drafted. I believe that a Judiciary which does not hold back in criticising the Legislature or the Executive has no right to expect to be above general criticism. I do not think there is any bar within the Constitution on a senior official in the Department of Justice and Equality giving the kind of opinion that was given in this committee last week. The matter needs to be looked at and the question asked: why was the official forced to write an apology to the President of the District Court? What occurred at this committee last week, and after the fact, was very significant. I will not say it was a seminal moment with regard to the separation of powers in the State, but I have never come across an incident like this in which an apology was demanded by one arm of the State from another. This is a parliamentary committee and the official in question is a very senior official within the Department of Justice and Equality. His view would be agreed with by the vast majority of citizens and might even be agreed with by some members of the Judiciary. It is reasonable to ask who forced the official to write that apology. This incident should not be allowed to pass. There are checks and balances within the Constitution. I do not believe the official in question crossed the line, and that should be pointed out by this committee.
Is Deputy Deasy suggesting that this committee should write a letter? What is the Deputy suggesting?
I propose that the Department of Justice and Equality explain to this committee why the official in question was forced to apologise in writing to the President of the District Court. The official gave an honestly held opinion which is backed up by the legislation now going through Parliament. The pressure put on the official to write the apology was uncalled for. I believe the official was correct to express the view he expressed last week to this committee, and that right should be defended by the Oireachtas.
We can write to the Department to express those views and ask the question. When an answer is received the committee can discuss the matter further.
Sure.
I believe that Deputy Deasy's point is important but I am not sure that what actually did transpire is quite as clear as that. Rather than suggesting that there was interference at any level, a better approach might be to seek clarification on the remarks made in this committee and clarification on the statement that subsequently emanated from the Department.
I understand that what Deputy Deasy is doing now is expressing his opinion. In writing to the Department, we can put it in such a way as to seek the clarification that is needed. Thereafter, when it comes back to this committee, it could be dealt with in a more substantial manner.
I read the transcript of the committee meeting in question and it is very clear what the official said on the day. If the committee asks for clarification from the Department it will just be a regurgitation of "There was no attempt to criticise the Judiciary." I am afraid the committee will get nowhere with that approach. It was very clear, and I read the transcript a couple of times. I believe his right to make a criticism of the Judiciary should be protected. It was uncalled for to force a senior official to issue an apology after the fact. It is a serious matter if a person in his position cannot give an opinion or a criticism of the Judiciary; according to our Constitution the Judiciary are not above it completely. It should be perfectly okay for one arm of the State to make a criticism of another. If the official had mentioned one judge or member of the Judiciary specifically, then he would have crossed the line and an apology would have been warranted, but he had a right to comment on the Judiciary as a whole.
That requires clarification; was it a general criticism right across the board? There is a serious issue about criticism by one arm of the State of the Judiciary and how it conducts its business. We need to be delicate about how we approach the issue of criticism of the Judiciary, and clarification is required before any further action is taken by this committee.
It strikes me that there are two issues here. Everyone acknowledges the sensitivity and the caution which applies in making any comment on or criticising the Judiciary or anyone on the Bench. The actual issue Deputy Deasy raises is the concern over an instruction given to a senior official to apologise for a view which he expressed. If this committee sends a general letter it will, with respect to the system, receive a fudge in response. I hope I am not breaching anything by making that criticism. I would suggest that any correspondence by which we hope to gain clarification be hinged on the requirement on or the request to that senior official to write an apology. If the official had seriously overstepped and had identified an individual on the bench then I imagine other steps would have been taken, but I believe the point raised by Deputy Deasy is a fair one. It is ironic that there is a proposal for legislation around ethics and the conduct of public and elected officials. One of the problems stems from the culture within the system whereby raising a dissenting voice is frowned upon. Everyone recognises that this needs to be addressed. It is not in any way helpful if a senior official comes to an Oireachtas committee and gives a considered view and as a result gets a rap on the knuckles and is instructed to apologise. He was not making these comments on a bus or in a pub. It is a very worrying development which goes against the grain of what is being attempted by way of public sector reform.
If we are writing, we should ask some very specific questions of the Department. What motivated the official to do this? Did anyone, either political, internal within the Department or a member of the Judiciary, approach him in any way to apologise? It is important to know how these things work.
We will take the views of committee members as expressed. While it is considered by some to be a sensitive matter, the appropriate letter can be written to the Department to get the answers. I do not want to reduce the importance of the issue raised by Deputy John Deasy. In my thinking, it goes along the lines of controlling and policing the committees, having one voice in the committees that does not in any way upset the status quo. Frankly, this is more of the same. While the separation of powers is important, it is also important that we hear the views and opinions of officials. It is akin to asking the clerk not to speak at a meeting. When democracy goes to that extent, it is a step too far. We will write that letter.
The other matter arising from the minutes is the draft report on the issue of the Dublin Docklands Development Authority. We now have a copy of it. There is a request from the clerk that if there are amendments, members should let him have them because we will publish it next week. We have been making some changes to the draft. I think next week is the publication date.
On HL Commodity Foods, the clerk has circulated a note on the issue. When one reads it and recalls the meetings held, the company was treated most unfairly. It now falls on the Shannon Group to offer some remedy to the company. Will the committee agree to the proposals contained in the note circulated by the clerk? It details the key facts and gives an account of the review by the committee and suggests further action by it. In that regard, we are saying the committee can highlight what appears to have been an unwarranted action by a State agency. It also recommends that the Shannon Group, in consultation with the Minister, consider any remedy which may be appropriate in the case. It is extremely important that we state this clearly and make our views known. Is it agreed to endorse this proposal? Agreed.
We will now deal with correspondence received since the meeting on Thursday, 5 November. No. 3B.1 is correspondence, dated 9 November 2015, received from the Office of the Local Government Audit Service on the Louth Environmental Group. It will be noted and published.
No. 3C is documents for today’s committee meeting. Nos. 3C.1 to 3C.5, inclusive, are briefing documents and the opening statements for the meeting. The correspondence is to be noted and published.
Nos. 4.1 to 4.4, inclusive, are various reports, statements and accounts received since the meeting on 5 November. The Comptroller and Auditor General will take us through them.
Mr. Seamus McCarthy
No. 4.1 is the financial statements for University College Dublin for the year ending 30 September 2013. There is a clear audit opinion, but I draw attention to several issues. The first is a recognition of a deferred pension funding asset which, as I have said before, is standard for education bodies. I draw attention to the non-competitive procurement of €2.6 million worth of services by the college. A second point in the area of procurement is that UCD applies a threshold of €60,000 for the open tendering of contracts, rather than the Department of Public Expenditure and Reform’s requirement for open tendering for contracts with a value of €25,000.
The final point concerns a settlement with the Revenue Commissioners to a total value €2.28 million which was finalised in February 2014.
Does the settlement of €2.28 million include penalties and interest?
Mr. Seamus McCarthy
Yes.
What was the underlying figure in question?
Mr. Seamus McCarthy
I do not think I have that information to hand.
What was the settlement about?
Mr. Seamus McCarthy
It was for the under-declaration of VAT.
How would that have occurred?
Mr. Seamus McCarthy
Again, I do not have the details. It was a matter on which UCD had originally made a voluntary disclosure in December 2008. At the time it made a payment of €492,000. Subsequently, a Revenue audit was undertaken and further payments were made, the total value of which, including interest and penalties, was €2.28 million.
Are those who look after the accounts in the college qualified accountants?
Mr. Seamus McCarthy
Yes.
Was it an oversight issue?
Mr. Seamus McCarthy
I think it was an error.
Therefore, they are all making errors.
Mr. Seamus McCarthy
That happens.
The Health Service Executive and other universities are all making mistakes. If it was a private individual, he or she would be named in the newspapers.
If there are so many errors by all of the accountants in the various agencies, I suggest we bring in the accounting organisations to evaluate the training of accountants.
We could do that.
I have two questions. First, when are the financial statements for 2014 due? On the non-competitive procurement threshold of €60,000, was it an arbitrary figure? Is it related to the figure of €2.6 million worth of services? How are the two related?
Mr. Seamus McCarthy
They are two separate points. There were seven suppliers with combined transactions to a value of €2.6 million, which would be considerably above the €60,000 threshold. They were services that should have been procured in an open fashion. However, we have heard previously about the practice where, say, a contract is expiring and it is then rolled over, rather than going back to the market. Individual circumstances arise in individual cases. The Department of Public Expenditure and Reform requires open advertising on e-tenders of any contract expected to cost €25,000 or more. UCD takes a different view for efficiency and practical reasons. It only engages in open tendering on e-tenders for something it expects to cost €60,000 or more. That is its routine.
Is that still UCD’s practice?
Mr. Seamus McCarthy
Yes.
It is in contravention of what the Department of Public Expenditure and Reform requires of other State agencies.
Mr. Seamus McCarthy
UCD is non-compliant.
Does it see anything wrong with that?
Mr. Seamus McCarthy
It sees nothing wrong with it. I drew attention to it because to me it is a non-compliance issue. My job is to draw attention to such issues.
Is it the only university that is non-compliant in that regard?
Mr. Seamus McCarthy
It is as far as I can recall, but I will certainly check. I do not think it has come up as an issue in the case of other universities.
UCD is special.
Who was the internal auditor in this case?
Is it the same as with the institutes of technology, which have a centralised system?
Mr. Seamus McCarthy
They probably have contracted out but it is an individual college. The larger colleges may have an internally appointed internal auditor or may contract in themselves rather than going into a framework. Most of the institutes of technology - 13 of the 14, I believe - found it more efficient to engage in a framework contract because they operate on a somewhat smaller scale. The nature of the business is similar. DIT has an internal audit service. It has a number of staff who carry out internal audits.
What goes on in University College Dublin?
Mr. Seamus McCarthy
Again, I just do not have the detail at the level required. It may have contracted out to a firm of accountants or it may have an internal audit unit. I would have to check that.
It goes back to the point made by Deputy Collins. Are they trained at all? Most of the standard small businesses throughout the country would know their obligations in relation to VAT. It is only in the big area of transactions that it becomes technical and where these questions arise. One wonders whether one is included or excluded in terms of paying VAT. However, the university is providing education to future business and community leaders. Is it not just staggering that what has been described would happen and that it would just be passed over? Who conducts the audit and could I have a little more detail on what happened on the question of VAT? One gets fed up listening every Thursday to the excuse that it was an error. Usually, it is said that it is a systems failure or that it is systemic. It is never Joe Bloggs or Mary Bloggs; it is always somebody else's fault. I am not asking Mr. McCarthy to pin down a person but who in the college conducts the audit. What system has the college in place? Now that this has been flagged, how does Mr. McCarthy feel about the fact that next year, he could be doing exactly the same thing?
Mr. Seamus McCarthy
I may end up making the same point. I do not have the power to make the college change its practice.
Would Mr. McCarthy have the inclination at any time to stray into the policy area and perhaps suggest to the college what it should be doing?
Mr. Seamus McCarthy
We have recommended to it that it comply with the guideline of the Department of Public Expenditure and Reform, which has a €25,000 threshold for advertising.
Should we take it up with that Department in that case?
Mr. Seamus McCarthy
The Department is quite clear that this is what it expects.
Its representatives will be in next week.
Mr. Seamus McCarthy
Yes.
The Secretary General of the Department of Education and Skills is ultimately responsible for funding the universities.
No. Is it not the HEA?
Mr. Seamus McCarthy
The president is the person accountable to this committee in relation to these kinds of matters.
I could make an issue of this but will not delay the meeting. The college just continues doing what it wants to do. The Department of Public Expenditure and Reform is like a dog barking in the distance; it can be heard but, since it is so far away, it can be ignored in the belief it will go away. The threshold of €60,000 applies when it should be €25,000. Mr. McCarthy brings this to the college's attention. I will not say it ignores it. Whoever is here next year will see whether it ignores it. It seems there is a trend right across Government bodies and Government agencies to make themselves look good, by and large, on the day they appear before us, perhaps being half apologetic about what they are doing. The trend is to walk out the door thanking God the meeting is over and say one will go back to business. The bodies do not change their way of doing business. That is an issue for someone. I am only clarifying this in my head so we can take it up elsewhere. It is an issue for the president, who is the Accounting Officer, and for the HEA, which is responsible for this area. Is that right?
Mr. Seamus McCarthy
It is the HEA.
As Deputy Nolan says, it is also an issue for the Secretary General of the Department of Education and Skills. We will have it before us again in December. Perhaps it is an issue for next Thursday and the following week.
Is there not a centralised body that co-ordinates procurement with the various Departments?
Mr. Seamus McCarthy
The Office of Government Procurement. Its representatives are to be before the committee next week.
They are appearing before us. The office liaises with all the Departments and all the procurement agencies. It is surely the body that should be insisting on best practice. If the Department of Public Expenditure and Reform sets a procurement threshold of €25,000 according to best practice, surely the Office of Government Procurement has a major role to play to ensure all the entities under its remit adhere to the standard procurement threshold. When its representatives come in here, we should tease out with them whether what is occurring is the norm, why UCD is not adhering to the norm and why they are not policing the threshold to ensure UCD adheres to the standard? We are talking about almost €5 million in public moneys - a settlement of €2.28 million and €2.26 million of flawed procurement.
Mr. Seamus McCarthy
Non-competitive procurement.
Is some of the procurement flawed because those concerned did not adhere to the threshold of €60,000, or is it all in line with the threshold of €25,000?
Mr. Seamus McCarthy
As I said earlier, with seven contracts and a total of €2.6 million, it is in excess of the €60,000 contract. It did not comply with its own threshold in relation to those procurements.
It did not comply with the threshold of €60,000.
Mr. Seamus McCarthy
More generally in the college.
That makes it even worse.
Mr. Seamus McCarthy
It might be useful if I read the disclosure in the statement of internal control from the university in relation to this matter, as signed off on by the president on behalf of the governing body. It states:
UCD has put in place procurement policies and procedures and all non-pay expenditure is required to be procured in accordance with these policies and procedures. Instances of non-compliance identified by management or in Internal Audit reports are brought to the attention of the Head of the relevant School/Unit or budget-holder. In framing its procurement policies and procedures, UCD has applied a threshold of €60,000 above which all expenditure must be subject to tendering. UCD does not operate the €25,000 threshold set out in national public procurement guidelines as adherence to this level would be administratively challenging due to the limited procurement staffing resources available. The current threshold of €60,000 allows UCD to focus on getting best value from higher-value purchases. Expenditure under €60,000 requires competitive quotations to be obtained. In addition, the €25,000 threshold is applied to some research expenditure where this is required by the terms and conditions attaching to the particular research grant. The UCD Procurement Office runs tenders on behalf of the university and provides support and training to staff across the university.
That is the position.
We could put that on the agenda for the Office of Government Procurement.
I think what Mr. McCarthy has just read out smacks of the arrogance of the institution. It is as if it is asking why it should bother with what the national Parliament and Government have set down and saying it knows more than them and will set its own rules. If the HEA and the Department of Education and Skills are before us any time soon, the president of UCD will have to be here as well to explain the policy and why he has decided arbitrarily to pick and choose what he will and will not do regarding public money. I find it absolutely unbelievable that the president of an institution that is funded pretty much entirely by the State would decide in an arbitrary way that he will not comply with rules that are set down by the Oireachtas. I just find that absolutely staggering and I would like to see him appear before the committee to explain himself to us.
I agree with Deputy O'Donovan. So as not to delay this meeting, perhaps we should agree first to send a transcript of the proceedings of this meeting and the various questions that have been asked to the president for his response. Then we can judge what we will do thereafter, or the best course of action to take.
I invite Mr. McCarthy to comment on No. 4.3.
Mr. Seamus McCarthy
No. 4.3 relates to the Commissioners for Charitable Donations and Bequests for Ireland. This body has been dissolved since the financial statements were produced. It was, in fact, dissolved with effect from 16 October, which is why the financial statements are for the period ending 16 October 2014. A matter to which I did draw attention in that regard is note No. 7 of the financial statements, which outlines the circumstances in which €165,000 was distributed in error among charities in June 2014. The commissioners set about calling back the funding and redistributing it in a more appropriate manner but, as at the reporting date, €30,000 still remained to be recovered.
Could the Comptroller and Auditor General clarify that?
Mr. Seamus McCarthy
Essentially, the commissioners hold funds in trust for charities that do not have an immediate need to use them. They invest the funds. As I understand it, they distributed interest generated by making a set of decisions around the best way to apply it. They subsequently identified that they could have distributed it in proportion to the charities whose funds had generated the interest. They had distributed it to other charities. It was subsequently found that it was more appropriate and fair to distribute it in line with those who had deposited the funds.
I ask members to note all of these statements and accounts.
We will move on to No. 5, which is our work programme. It is now on the screen. Next week, representatives from the Department of Public Expenditure and Reform will come before us. I will ask the clerk if it would be possible to give us a list of the various breaches of procurement by the different universities, institutes of technology or the HSE or whatever it might be, so that members will have a list before them for next week. Also relevant will be any other matters pertaining to the works of that Department relative to other agencies and Departments in respect of which we can raise issues of procurement guidelines and so on. Does anyone wish to raise an issue on the work programme? No.
I will also ask the clerk to circulate the OECD report which was published yesterday and presented to the Ceann Comhairle. The report concerns pre-budget arrangements, scrutiny and so on by various committees. It is a reasonable starting point for reform that might be taken up by the next Administration. I expressed disappointment that there is not sufficient commentary in the report on the workings of the Committee of Public Accounts and the Office of the Comptroller and Auditor General. That office was mentioned in respect of informing other committees on budgetary strategies. The one single reforming step that could be taken if an Administration were serious about controlling issues such as procurement overspend and inefficiencies within the State, would be to increase the level of resources available to the Office of the Comptroller and Auditor General and the Committee of Public Accounts. They should be made effective right across Government Departments and agencies from the point where money is allocated to that when it is spent. Funding and resources should be provided to cover forensic examination of different accounts where that is deemed to be warranted. There should also be an amalgamation of local government and the Comptroller and Auditor General's office. I made those points yesterday at the briefing session.
The sooner the Houses of the Oireachtas begin to examine that part of the balance, the better it will be for the taxpayer. I think it is urgent and every single political party in the forthcoming election should be making an issue of this part of the administration of the State in terms of public sector reform. We might have seen glimpses of reform but we have not seen what I would consider to be real reform, which would affect the quality of monitoring and control of the spend of taxpayers' money. The first step should be to amalgamate those two offices and centralise power with the Comptroller and Auditor General. The resources should then be given to that office. That would go a long way towards starting reform. What gets counted gets done. That is the way they should do it. I welcome the report although I was disappointed with that aspect of it. I ask that it be circulated to members and that we make our views known to the Ceann Comhairle.
Our agenda for next week is the appropriation accounts of the Office of the Minister for Public Expenditure and Reform: superannuation; retired allowances; shared services; the Office of Government Procurement; Vote accounting and budget management; management of Government grants; payroll accrual for national accounts; and the national lottery fund.
If I may, I wish raise one matter of which I have made the clerk aware. Mr. Douglas Fannin has been in touch with me again in respect of the special investigations unit of the Department of Agriculture, Food and the Marine. He is extremely anxious that his case and the issues arising receive proper scrutiny and examination. I wanted to raise this again with the committee and ask for confirmation that documentation from the special investigations unit is expected to us this week or perhaps next week.
At the hearing with the Department of Agriculture, Food and Marine we were promised that we would, within a week, have a written rebuttal of all the points and issues raised by members in the ten different cases we discussed. Despite our giving the Department a reminder every single week since then, we have not received a reply as promised. As Deputy McDonald has now raised the matter again, we can ask the clerk to remind the Department of that commitment and of the cases, including the one she has just mentioned, and ask the officials for their response.
Could the Chairman remind the committee how much time has elapsed since the Department was before us?
I think it was about two or three months ago. It was in July.
I thought so. It is just crazy that we are still waiting. I understand there is a commitment that we will have that document and the responses.
It is July since they were here and it was promised within a week. This feeds in to the whole issue of poor responses from Departments and agencies to the committee. It simply has to change. We are in the dying moments of this game but I would encourage any future members of the Committee of Public Accounts to be absolutely vigilant in their work and intolerant of the types of responses we have received from and delays to which we have been subjected by Departments and agencies. We get an immediate response if we even verge on asking a question that might discomfit someone from the State but when it comes to getting the replies that we ask for and to which we are entitled, there is a dragging of feet. It is poor practice and shows no courtesy or respect for a committee of this House.
I presume everybody has received a copy of the letter from Mary Farrell on behalf of the families of the wards of court. I received it on 10 November. She brings to our attention the recommendations that we made as a committee in terms of the depletion of that fund. Her letter addresses the Assisted Decision-Making (Capacity) Bill that is before the Seanad and suggests the recommendations by this committee should be included in that Bill.
Has that been circulated to anybody else? For example, there is the request that the Comptroller and Auditor General be able to audit the wards of court, that there would be a customer charter and an independent review and that the recommendations from this committee would be acted upon.
We would have sent our recommendations to the Department of Public Expenditure and Reform for the line Minister. The Department will appear before the committee next week. That correspondence, along with the fact that we have been waiting some time for that response from the Department, should be raised with the Department. It would be appropriate then to deal with that correspondence. Could the Deputy make sure that every member has a copy of that?
Perhaps we should check on the legislation because the Assisted Decision-Making (Capacity) Bill 2013 is reaching its final Stages. It is to be completed before the end of the year because that would be the appropriate mechanism to use.
It is before the Seanad.
I will give this letter to the clerk to circulate.
We will take it up next week as an agenda item.
I have raised the possibility of bringing in the developers who exited the National Asset Management Agency, NAMA.
Did the Deputy give some names to the clerk?
I did and I believe the Chair and other members were to do so as well.
We can set a date to meet those individuals before the Christmas break.
We will invite the witnesses in now.