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COMMITTEE OF PUBLIC ACCOUNTS díospóireacht -
Thursday, 19 Jan 2017

Business of Committee

We are joined by the Comptroller and Auditor General, Mr. Seamus McCarthy, who is a permanent witness. Apologies have been received from Deputy Marc MacSharry.

The first item on the agenda is the minutes of the meeting of 14 December 2016. Are the minutes agreed to? Agreed.

As there are no matters arising from the minutes, we will proceed to correspondence received since the previous meeting. We have a considerable amount of correspondence with which to deal as the committee has not met since before Christmas.

The first item is No. 258A, a briefing document from the Department of Children and Youth Affairs in connection with today's meeting. We will note and publish the document. The next item is the opening statement of Dr. Fergal Lynch, Secretary General, Department of Children and Youth Affairs, which we will also note and publish.

The next item on the agenda is correspondence received from Accounting Officers and-or Ministers and follow-up documents on issues discussed at previous meetings. The first is No. 229B, correspondence dated 14 December 2016 from Mr. Tom Rice, chief legal officer of PIMCO. We have received a number of other items of correspondence in connection with Project Eagle which we will note and publish. As they will form part of the committee's work in drafting its report, we will not discuss them. If members wish to respond to any of the documents, they should speak to the secretariat. We will note and publish Nos. 229B, 230B, 235B-----

We have not considered a large amount of the correspondence received. The issue is becoming more complex as more material is received.

I will help on that. The first two items we have to deal with are the opening statements for this morning.

I am talking about Project Eagle.

I will explain what we are doing. The correspondence has come in. Some people might only get to look at them today or tomorrow. We have received two items of correspondence from NAMA in the past week. They are detailed letters. Today, we are noting them and publishing them. We are making no comment on them.

I understand that. Perhaps later in our session on Project Eagle we might look at how we are dealing with that.

I will explain the position for the benefit of people here. We will deal with correspondence reports in our work programme. Before we start the session dealing with the Department of Children and Youth Affairs we will go into private session briefly to discuss the progress report and so on.

We might look at that correspondence and decide what we are doing.

We will have a brief discussion at that stage in private session and then we will go back into public session. For now, we will note and publish them. We can discuss them later.

Items Nos. 230B, 235B, 236B, 237B, 255B and 260B are next. We have received these six detailed letters from NAMA since our last meeting. They have not been published previously. Some people will want to see them published and therefore they are being published today.

Items Nos. 233B(i) and 233B(ii) are next. These are e-mails from NAMA dealing with statements by a member of a committee and the right of NAMA to fair procedure. The remark relates to Deputy McDonald. Have you had an opportunity to look at it?

Seemingly, after the original PIMCO letter, which I have before me, you issued a press release in a personal capacity challenging the previous NAMA evidence base. NAMA has written to the committee calling for fair procedure. The document is coming up on the screen. If you want to take a moment and come back to us, Deputy McDonald, that is fine. It is a comment. It is a response to a press release you issued. NAMA has sent a response to the committee with comments. The NAMA officials want to ensure they will get fair procedure. Obviously, they were not fully happy with your personal comments. Do you want to come back to it, Deputy?

For what purpose? They did not like my press statement. Is that it?

There is no purpose. The only reason is that NAMA sent an e-mail arising from your press release. This is correspondence from NAMA and we have to record it.

That is fine. In fact, the remarks I made were simply to clear an inaccuracy. I will have to look again at the transcript of the meeting. NAMA officials had posited a scenario as to where this had originated and we had established that it was not true. To me, that much is duly noted.

It is there for the record because NAMA has sent us an e-mail.

There is no question of NAMA not receiving fair procedure. The agency got a perfectly fair hearing.

We will ensure that before the completion of our work.

That is appropriate.

Items Nos. 239B(i) and 239B(ii) are correspondence from the Secretary General of the Department of Social Protection with follow-up information after an appearance before the committee to discuss debts owed by companies or business to the Social Insurance Fund. Essentially, the correspondence outlines that we asked detailed questions, the Department is preparing a report and we will have it shortly. That is the essence of the letter.

Next we have items Nos. 245B(i) and 245B(ii). This is correspondence dated 29 December 2016 from the HSE in reply to the request of the committee for information on the patient private property account. We will note and publish that. I think we will be putting that on our work programme shortly.

Items Nos. 246B(i) and 246B(ii) are correspondence dated 29 December 2016 from the HSE regarding the discrepancies in the fair deal scheme fees. We will send that to the original correspondent and bear it in mind for the work programme. No doubt we will be discussing the matter. We will note and publish it.

Items Nos. 249B (i) to 249B(vii) are correspondence dated 4 January 2017 from the Department of Finance relating to meetings held between the Department and bidders on Project Eagle. We will note and publish it.

Category C is correspondence relating to private individuals who have written to us or any other correspondence. Item No. 225C is correspondence from Deputy Mattie McGrath relating to the expenditure incurred in the refurbishment of Our Lady's County and Surgical Hospital, Cashel, County Tipperary. The correspondence states that the project is €7 million over budget already. I propose that we write to the HSE, enclosing a copy of the correspondence and seek a full explanation of the overspend and any other issues raised. When we get a reply, we can discuss it in further detail.

This is a unique moment since I agree with Deputy McGrath from County Tipperary. It is probably a first. We have been well aware of health issues in recent months, especially with regard to emergency departments.

This is an incredible story. It goes back 20 years to agreements on a new role for this hospital. I visited the hospital with the Minister for Health. The committee should know that there was not one patient in the building. It is not simply a question of where the €7 million went. It is a case of what it is being used for and what it will be used for. All the while South Tipperary General Hospital remains one of the most over-crowded hospitals. We should write to the HSE on the matter. I would be surprised if we did not bring them in to explain not only the capital differential but the question of value for money with regard to what the hospital is being used for.

The €7 million is not the cost of the project. It is the over-spend. Is that correct?

The cost of the project is a little under €27 million.

The amount in question is the over-spend. Is that correct?

They said it would cost a little under €15 million. It is either not being used or there is minimal use. It is incredible.

I agree. There is a strong argument for calling in the HSE promptly either on this issue alone or to discuss related issues as well. The correspondence from Deputy McGrath suggests not only that there is no one in the hospital but that it will never have patients on beds. That is his assertion. Whether it is correct is another matter.

I support Deputy McDonald. Basically, in the discussions relating to South Tipperary General Hospital, many of us have argued that the facility has been left as it has. Not alone has it been left in that manner, but the HSE is refusing to use it as a step-down facility for people who are going to emergency theatre and into South Tipperary General Hospital to have procedures. If it is not going to be used as a step-down facility, then what, in the name of God, will it be used for?

Deputy Cullinane is next. Then we will move on.

I agree we should bring in the HSE. However, it is not simply a question of this project. A number of over-spend projects arise. It might be useful if we ask the HSE to supply us with detail on capital projects going back three or four years and establish the estimated and actual spend. In other words, we should not only examine this project but the complete picture. This might or might not be an outlier. If we get that information it could frame our discussion in a national context.

When we are writing to the HSE, as well as the letter from Deputy McGrath we will give the executive the transcript of this meeting. It will accompany the letter to the HSE. We will come back to this topic.

Next we have items Nos. 226C, 256C and 259C. They are from an individual and relate to previous correspondence to the committee alleging corruption and illegality in the trade unions as well as censorship in the Arts Council and other publicly funded bodies. The individual has also asked to appear before the committee.

I propose we advise the individual that any illegality or corruption should be brought to the attention of the Garda or police. The issue of the alleged censorship is a policy matter for the Arts Council and is not for the Committee of Public Accounts. I propose that the clerk should write to the individual informing him of this. Is that agreed? Agreed. We are not dealing with allegations of corruption here. That is not our department.

Next we have items Nos. 227C(i) and 227C(ii). This correspondence has been received from Mr. Sean Quigley of the Courts Service. It includes a Courts Service report entitled Independent Review of The Wards of Courts Growth Fund. This has been a long-running matter and I welcome the report. We should consider this when we are looking at our work programme. I know certain individuals have been in contact with members of the committee. Does anyone wish to comment?

Can we ensure this is dealt with at an early stage? You are right, Chairman. We have all been contacted by people. Some people are tired and have been campaigning for a long time. If we could timetable this as one of the earlier parts of the programme, it would be beneficial.

We will come back to the work programme in a few minutes. We can deal with it at the work programme stage.

Next is item No. 231C, correspondence from an individual based in Australia relating to alleged Government corruption. A number of allegations have been made but there is no specific detail. I propose that we write to the individual and explain that if he has evidence of corruption or other illegal practices, he should report them to the Garda. Is that agreed? Agreed.

The next item is No. 232, correspondence received from an individual at a company called Sager Management Limited who alleges failure by NAMA to provide for transparency in the sale of a property in Dublin 8. I propose that we write to NAMA forwarding a copy of the letter and requesting a response. Is that agreed? Agreed.

The next items are Nos. 242C and 254C, e-mails received from an individual who has been in contact previously about an investigation into practices at the University of Limerick. The person is requesting permission to appear before the committee in hearings with the university and also states others wish to have an input into the hearings. I propose that we write to the individual to explain that the committee's work begins with the Accounting Officer of the relevant Department or body. We have already said we will add the University of Limerick to our work programme when we are engaging with third level institutions. We will hold and consider the correspondence, but as regards individuals making presentations, we will explain how we start the process and see what happens after that. There is no commitment to invite the person in question. Is that agreed? Agreed.

The next items are No. 238C (i) and (ii), correspondence received from an individual working in a translation company who is raising issues about the response of the Office of Government Procurement regarding a tender for translation services for immigrants. In October the committee agreed, following the last response on the matter and given the fact that there was an ongoing legal case, to consider the matter closed from its point of view. I do not believe we can take it further and we have responded fully. As there is a legal case ongoing, we have to leave it to the court. As we cannot take it any further at this point, I propose that we close and note the correspondence accordingly. Is that agreed? Agreed.

The next item is No. 240C, correspondence received from the Minister for Health, Deputy Simon Harris, regarding the North Meath Communities Development Association. The correspondence states the Department is examining the matter which has to do with a lease in north Meath. When the two gentlemen involved in the organisation came to my constituency office last week to discuss the matter further, I told them that we were writing to the Minister. We have received a response which states the Department is examining the issue. It is really only an acknowledgment from the Minister. The matter came up at the last meeting. We have written to the Minister and received an acknowledgment. When we receive the full reply, we can take the matter further at that stage. There might be a limit to whether we can do anything further, but we will deal with it when we receive a reply from the Minister. We will note the correspondence.

The next items are Nos. 241 and 248C, correspondence received from an individual who has highlighted problems in Caranua. We will note the correspondence which will be taken into consideration when engaging on the matter once the report of the Comptroller and Auditor General on the redress system has been laid before the committee. I understand it has been completed and is with the Minister and due for publication shortly. The issue concerns the residue in the fund arising from the Redress Board, of which the public might not be fully aware. In a sentence will Mr. McCarthy tell us what is involved?

Mr. Seamus McCarthy

The report is with the Minister. The timing of its presentation is a matter for him. In addition, there are Caranua's financial statements for 2014. Just before the end of the year I signed off on the financial statements for 2015 which should also be presented.

When was the report given to the Minister?

Mr. Seamus McCarthy

On 9 January.

It has just been given to him.

Mr. Seamus McCarthy

Yes.

Technically, he has 90 days; therefore, he could release it next week or in 80 days time, but we will be dealing with it in the near future. It will be included in our work programme.

Mr. Seamus McCarthy

We will keep in touch.

Is it a special report?

Mr. Seamus McCarthy

It is.

It is a special report by the Comptroller and Auditor General and we will certainly deal with it as soon as it is cleared by the Cabinet and published by the Minister. For our information, does the Cabinet or the Minister have any other role apart from publishing the report? Can they change it?

Mr. Seamus McCarthy

No; the report has been finished.

They will just note and publish it.

Mr. Seamus McCarthy

It is a question of timing.

That is up to the Minister, but we will deal with it as soon as it is published.

The next item is No. 242C, correspondence received from the chairman, supposedly, of the public accounts committee in Bangladesh asking for permission to visit the committee. The clerk has suggested further work needs to be done to check the veracity and authenticity of the request. We often receive such requests. Did they offer us €2 million or anything like it?

That is a great joke made by the Chairman of the Committee of Public Accounts.

We will note the correspondence. It is agreed that the clerk will put the matter before the committee at a future date if he is satisfied that the correspondence is bona fide.

For the record, I was only joking.

Absolutely. We all know the story - "Send your bank account details and we will send you the money."

Item No. 243C is correspondence received from an individual which follows previous correspondence on Caranua and refers to the matters raised by the Comptroller and Auditor General. It is separate correspondence which we will include in the conversation we just had. We will note it.

The next item is No. 244C, correspondence received from an individual with further information on the payment of an Aosdána grant. The correspondent takes issue with a number of things, including the committee forwarding his letter to Aosdána and use of his e-mail address, and refers to the committee's obligation in criminal matters and the discourtesy it has shown to him. The clerk has drafted a reply to the letter addressing the issues raised, a copy of which is on members' screens. I ask them to take a moment to read it. If it is agreed, the clerk can issue it on our behalf. The person in question sent us an e-mail, but he does not want us to respond to him by e-mail but to write letters to him. We forwarded a copy of his e-mail, as we would normally do, to Aosdána for a response, but he is not happy that we sent his details to it. Separately, he is unhappy that I, as Chairman, did not personally write back to him, but as pointed out in the letter, once correspondence is received, it becomes committee documentation and the response is sent by the clerk. Can we agree to issue the letter drafted by the clerk? Agreed. I hope I have not shown any discourtesy to the correspondent in my summarising of the letter.

The next item is No. 247C, a letter received from TASC, Think-tank for Action on Social Change, enclosing a policy paper which proposes the reform of practices in Government and public bodies. I thank the organisation for its paper which certainly raises some important issues that need to be addressed, particularly in the area of record keeping by public sector organisations. It arose from the fact that NAMA had not retained its contemporaneous notes on board decisions. TASC has a view on the matter and thinks there should be greater record keeping and transparency. I suggest we note the letter and take it on board. Members can read it and use the documentation. It is interesting correspondence. We thank TASC for sending it to us and we will take it into account.

The next item is No. 250C, correspondence received from Professor Philip Lane, Governor of the Central Bank of Ireland, in reply to correspondence received by the committee on alleged breaches of prudential requirements by significant financial institutions. The letter states such breaches have to be dealt with by the European Central Bank as the Central Bank can forward such allegations to it. The correspondence does not state if the Central Bank has actually sent the complaint to the ECB. I propose that we write to the Central Bank asking if the allegations have been forwarded to the ECB and, if not, to request that the information be referred as quickly as possible. If it has not been so referred, we should ask why it has not done so.

It is an incredibly disappointing reply. There is no indication whether the rules about which it talks were actually applied. For what did it think we were looking?

It is very complicated. Without getting into the details, Professor Lane thinks that because the ECB was providing credit for the banks, they did not fully own the assets transferred to NAMA. However, I agree with the Deputy. When I saw the reply, I submitted a parliamentary question to the Minister of Finance for a written answer on Tuesday to tease out the role of the Central Bank in investigating complaints before the ECB took over responsibility for prudential supervision. As his answer was unsatisfactory, this morning I submitted a further question. I was not happy with the reply to the parliamentary question from the Minister. We will come back to this correspondence.

It is very complicated, but the more complicated something is, the more we need to understand it. It goes to the core of many of the assets transferred from Bank of Ireland to NAMA and whether it has the legal standing to dispose of them. It is also at the heart of Project Eagle-----

The NAMA project.

-----and the NAMA project, or at least part of it, specifically as it concerns Bank of Ireland. It would be useful for us to have a full understanding of what is at the heart of the matter.

I have tried to get my head around a lot of the documentation that was sent to us but the point being made is substantial in nature. It is not just about oversight, it revolves around the legal standing of NAMA in the context of disposing of those assets.

We will write back. I was extremely disappointed with the response from the Governor of the Central Bank, which is why I followed it up directly with the Minister by way of parliamentary question. I am actually not happy with the reply I received from the Minister either. That letter from the Governor was a brush-off and we will not take it. That is all I will say. As such, we will ask the clerk to take on board what has been said and to seek a more detailed response. The one we received is not satisfactory. We will come back to that. We will want a further explanation and to know whether they have sent the thing on. The essence of this is that some of these complaints pre-date the point at which the European Central Bank became the prudential supervisor of the significant financial institutions. Who is responsible? The response from the Central Bank and the reply to the parliamentary question did provide an answer. We will come back to this correspondence when we get further information.

Can the Chairman ensure that the Central Bank gets back to us in a timely way?

Absolutely. That is agreed. The replies I get to parliamentary questions on this issue can also be placed on the record and form part of this correspondence.

The next item is No. 251C (i) to (iv), received by Deputy Catherine Murphy from an accounting firm with concerns about the impact on the SME sector of the change in the method of calculating interest rates by banks. Does the Deputy wish to comment?

No. It is recent.

Would it be more appropriate to the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach? It relates to interest rates. The Deputy gave us the example of a letter from the Bank of Ireland to a customer. Does she want to comment?

I was forwarding correspondence I received because I thought this was the appropriate place to send it.

It is really a matter for the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach. It is about the interest rates charged to customers by banks.

I am happy to send it to that committee

We will forward it because we received it. We will formally forward it to the committee on the Deputy's behalf.

The next item is No. 252C, correspondence from an individual following up earlier correspondence regarding salmon stocks. This has been sent to the relevant Department and the EPA and we await a response. We will update the individual concerned when we get it. We note that.

No. 253C is correspondence from an anonymous source in respect of the returns to Cerberus on its purchase of Project Eagle. We note it and will include it as part of our correspondence on Project Eagle. The final item is No. 261C, correspondence from Deputy Catherine Murphy on our hearing in respect of NAMA and Project Eagle. Is it agreed that we note and deal with this matter in private session shortly? Agreed. We will have a discussion on Project Eagle and the drafting of the report in private session.

That is the end of correspondence. There was a lot to deal with because it has been a few weeks since the previous meeting, which took place before Christmas. Next, we turn to the reports and accounts received since the previous meeting. They are going up on the screen and I will try to move quickly through them. There are about 30. A lot of them have a clear audit opinion. I will take a shortcut on this. We will note all the ones with a clear audit opinion. I will just call them out. However, there are a number in respect of which the Comptroller and Auditor General has a clear comment. Sometimes the comment relates to public sector pensions and a lot of them relate to procurement. I will pass on a bit of work to the Comptroller and Auditor General and ask him for his 2015 audit schedule, which should have been cleared by about this time. Perhaps, he will draft and present a report to the committee on all of the organisations in respect of which he has completed an audit where there was not a clear audit opinion. I think he audits 300 organisations. There were probably comments in respect of 50 or 60 or some fraction. We might just get a report on all of those that did not get a clear audit opinion. They would be collated then because we are getting them bit by bit, meeting by meeting. It would be good to get a full summary. The Comptroller might put them into the different categories of comment, such as procurement, pensions, etc.

Mr. Seamus McCarthy

We can certainly do that. It might take two weeks to summarise the position.

It would be helpful both for him and for ourselves. We are getting bits here and there every week. Is the 2015 audit cycle complete?

Mr. Seamus McCarthy

More or less. There were approximately 20 that were not completed.

It is 95% there.

Mr. Seamus McCarthy

It is very substantially completed.

A lot of third-level institutions are mentioned. I ask the Comptroller to pick the categories under which he thinks it would be helpful to summarise them.

I presume that will not include looking at the national procurement policy because there is plenty of evidence that we apply a very rigid standard here, unlike other European member states. In fact, the proportion of contracts that go out of the country is something like 28%.

It is higher here than anywhere else, yes.

That merits some discussion. I do not know if it is a matter for the Committee on Public Accounts, but a recent case was brought to my attention where Irish companies lost out. I may well bring it in terms of whether it was a fair contract. They were making the point that 28% of contracts go out of the country where it is 1% to 1.5% in the case of France and Germany. There was a significant loss of jobs in this particular case. Is that something that could be looked at?

It is probably a matter for the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach in the context of procurement because of where the rules come from. However, the Deputy is correct. It is remarkable. Ours is an island nation but we actually give more Government contracts outside Ireland than the continental countries which have companies operating right around. It is extraordinary how things are happening. We will have a quick word on it, but I think it is really a matter for the Committee on Finance, Public Expenditure and Reform and Taoiseach which covers procurement.

Proposals on breaking down procurement because of those very issues have been given to the spokespersons on public expenditure and reform by the Department. As such, there have been briefing and I think the Minister is going to bring forward heads of a Bill in the near future. Hopefully, that will solve some of those problems. Non-compliance with public procurement rules has come up with the HSE in some of its audits also. It seems to be a yearly recurrence. If we get this breakdown, that could itself be the focus of a stand-alone discussion with the HSE or other agencies that are constantly failing to comply with the guidelines.

Deputy Cullinane has made the point about compliance in this instance. This recurs. One can set one's clock by it. One could nearly name the institutions. Are we making any progress with these systems in terms of actually complying with the rules?

Getting a full and systematic sweep of the 300 or so organisations' audits and the problems arising broken down by category, including procurement specifically, would be a very useful exercise for the committee.

Does that include the Social Insurance Fund? While there is a clear audit, there is then a material matter. Will the report include that?

Mr. Seamus McCarthy

It will. I will be identifying each.

We will be coming back to that. That is fine.

Anything that is not a clear audit.

This is a clear audit.

Sometimes there is a clear audit, but the Comptroller still draws attention to a technical difference.

Mr. Seamus McCarthy

It is called an "emphasis of matter".

Every body which did not get a clear audit or in respect of which the Comptroller drew attention to something will be included.

Mr. Seamus McCarthy

Almost all bodies have a clear audit opinion because that points to the financial information presented and whether it gives a true and fair view or accurately represents the transactions in the year. If there are other areas of concern to which we want to draw attention, we include what is called an "emphasis of matter" whereby we draw to the attention of the committee matters of which we are aware involving a public or committee concern so that the members are aware that it has arisen. There are other lower-level issues we raise with a Department or agency in management letters where there might be a weakness of control and so on. If there is a breach of controls, we will generally bring that to the attention of the committee so that members are aware of ongoing or recurring issues.

That will be a good report when we get it in the next couple of weeks. For now, I must formally name the organisations and that the Committee of Public Accounts has noted the laying of the accounts before the Oireachtas.

We normally name the organisations and that the Committee of Public Accounts has noted the laying of the accounts in the Oireachtas. Any query anyone has will come back to us when we get the summarised report.

The following financial statements and accounts have been received since our meeting on Wednesday, 14 December 2016: the Social Insurance Fund; the Irish Sports Council; Garda Síochána Ombudsman Commission; Foyle, Carlingford and Irish Lights Commission - the Loughs Agency; the Commission for Energy Regulation; the National University of Ireland Maynooth; the Digital Hub Development Agency; the Commission for Aviation Regulation; Oifig Choimisinéir na dTeangacha Oifigiúla; State Examinations Commission; the Adoption Authority of Ireland; Special EU Programmes Body; National Standards Authority of Ireland; the Commission for Communications Regulation; the Environmental Protection Agency; University College Dublin; Údarás na Gaeltachta; the National Tourism Development Authority; Tourism Ireland Limited; Commission for Railway Regulation; National University of Ireland; the Institute of Technology Blanchardstown; Galway and Roscommon Education and Training Board; City of Dublin Education and Training Board; National Economic and Social Development Office; Institute of Technology Sligo; Ollscoil na hÉireann Gaillimh; Fishery Harbour Centres; Marine Casualty Investigation Board; Irish Water Safety; An Bord Iascaigh Mhara; Competition and Consumer Protection Commission; Institute of Technology Tallaght; and Dundalk Institute of Technology. They are all formally noted and we will discuss the ones by exception which had issues that the Comptroller and Auditor General drew to our attention when we get that report.

The next item on our agenda is the work programme. We will have a brief discussion on this. I have noted the following items, based on what members have said: the Health Service Executive, HSE, ongoing work on sections 38 and 39; the patients' fund; nursing homes; and we have just mentioned the capital expenditure issue. We have also said we want to deal with the third level institutions and with procurement. Our basic function is the Comptroller and Auditor General's report which he published last autumn. It has 18 chapters. We have already dealt with some of them and plan to deal with one or two next week. The outstanding areas we have to deal with over the coming months will be the Department of Finance, and the three chapters - Exchequer, outturn, Government debt and accounting and budget management. A meeting has to be held to discuss that because it is in the Comptroller and Auditor General's report. We will then have to have a meeting with the Department of Housing, Planning, Community and Local Government because there is a chapter there about funding for local authorities and progress under the land aggregation schemes. There will be a meeting on procurement and management of contracts for direct provision, with the Department of Justice and Equality. There will also be a discussion of EU refunds and levies in the agriculture sector. There is nothing else for the Department of Agriculture, Food and the Marine specifically. When the Departments appear before us we will deal with their total Vote and the specific issue that the Comptroller and Auditor General has raised. We will have to bring the Revenue Commissioners in once or twice to deal with their general revenue activities and there are chapters on trafficking, fuel laundering, the Revenue Commissioners' review of medical consultants' tax affairs, research and development tax credits, taxpayer compliance and deferral of tobacco stamp duty liability. We would not do all that in one day.

I am glad the Chairman will not overwhelm us.

This will take us to July with the other matters, such as finishing Project Eagle and the special report that we get on the redress board. Will we get any other special reports?

Mr. Seamus McCarthy

Two other special reports have gone to Ministers, one relates to financial reporting in the public sector which is really about the timeliness of completion of accounts and the presentation of accounts, and one on administration and collection of motor tax which was done in co-operation with the local government audit service. We also have a report at a fairly advanced stage on the school transport scheme.

Does the patient fund refer to the nursing home patient pocket money? Is that what we are investigating and when will we deal with that?

They are two different issues. One is the nursing home issue, the fair deal scheme costs and so on but the second issue is that there is up to €180 million of patient funds managed by the HSE on behalf of patients. That is the patients' money which they let the HSE manage when they are in an institution. It is a separate topic from the fair deal scheme.

When will we investigate that?

Both are on our list.

When will that come up?

That is what we have to discuss. No date has been set.

We have referred Horseracing Ireland for a legal opinion. There is an individual who contacts me regularly. Where is that at?

We all have those people.

We have no timescale for these matters. We will prioritise them in the next few minutes. We decided in December or November to send the correspondence about Horseracing Ireland to the parliamentary legal adviser to give us a clear opinion. We were to have that within the next two weeks.

Will we wait for the legal opinion to come back before we do anything about it?

It will be back on our agenda and we will decide then.

Can the Chairman give an approximate timescale?

A fortnight.

I have a strong opinion on the section 38 and 39 issue. We had a full hearing on Console. The HSE director appeared before the committee and we found out that he is not the Accounting Officer but that the Secretary General of the Department of Health was.

The internal HSE audit was devastating and pointed out systemic failures yet there has not been a single change in policy, that I am aware of, since then. Since then Console problems have arisen in respect of at least three section 38 organisations. The last time the Secretary General of the Department and the HSE appeared before us they passed the buck back to these organisations. It is clear that there are issues in respect of financial and governance controls which need to be considered. When I raised this with the Comptroller and Auditor General he said he does comment on section 38. Would it be wise for this committee to ask the Comptroller and Auditor General to do a special report on the financial and governance controls within these organisations and examine where there have been internal report or audit failures? It seems to be one organisation after another. The last time the HSE came before us I feel we were stonewalled. The officials passed the buck. There was no acceptance of any failures yet its internal audit pointed out potential systemic failures. It is such an important issue, involving hundreds of millions of euro of taxpayers' money but we only glanced at it once and then because of all the other work we parked it. I do not want to impose more work on the Comptroller and Auditor General but I feel it is an important issue.

We cannot direct the Comptroller and Auditor General but he can listen to us.

Mr. Seamus McCarthy

Absolutely and this is something we examine every year in the HSE audit. For the past few years we have encouraged it to write more about it in the statement on internal financial control. There is a fairly comprehensive piece of work that would be a focus every year for the committee to examine. We are considering our programme for 2017 and going forward and we will consider the health sector as a whole to decide what areas to examine and report on specifically in 2017 and in later years. If it was an agreed view of the committee that we should examine that I would take that very seriously but I have limited resources. We have already talked about capital projects and that is one of the things I wanted to consider this year. There are issues around drug procurement that I want to examine. I want to look into the fair deal scheme and the collection of debts due and the control of that. There is no shortage of issues to consider. I will prioritise, as is my prerogative, but I would certainly take very seriously a view of the committee expressed formally to me.

That is probably the best way to do that.

It sounds to me as if we could have a public accounts committee specifically for the HSE at the rate we are going. We are putting it all in the mix. I think the Deputy would agree that if we were to stand back until there was a report in 2018, we could probably still do some more-----

The Comptroller and Auditor General spoke about the extensive reporting that gives us an opportunity to comment.

That is its annual report.

When is the next one due?

Mr. Seamus McCarthy

It is due in about May. It is normally completed in May and would be presented in June so it would be available to the committee to revisit.

The annual report normally comes out around June.

This is a separate topic.

It is related to the work programme?

Yes. It relates the issue of wards of court and where that might fall. We talked about a number of things. Are they always captured? Is a list of these things kept? Can I ask that this be done as early as possible in the work programme?

Mr. Seamus McCarthy

The matter of the funds of the wards of court is not within my remit and, therefore, not within the remit of the committee. They have spoken about it here previously but I cannot examine and report on it. If the committee is scheduling that, it must schedule the Courts Service.

The Courts Service is under our remit-----

Mr. Seamus McCarthy

Yes, but wards of court are not.

It is a separate stand-alone organisation that is not under our remit.

Mr. Seamus McCarthy

It is a separate fund with separate governance structures.

Whom is it accountable to?

Mr. Seamus McCarthy

It is accountable to the courts.

We are then into whether it is the Judiciary or the Courts Service.

Mr. Seamus McCarthy

The Judiciary. There are parameters.

The Courts Service is accountable to us but the judges are not and it is judges who have oversight on this matter instead of the Courts Service. That is the dilemma we have. Clearly, there is a lack of public accountability and perhaps that is something we have to deal with.

The Comptroller and Auditor General made reference to this and I agree with the sentiment expressed by Deputy Cullinane regarding that area. Did the Comptroller and Auditor General say he should have another report that we could look at in June?

Mr. Seamus McCarthy

No, the HSE will be completing its annual statements, which it publishes with an annual report.

My only issue is that, as the Chairman said, we could nearly have a public accounts committee for the HSE. I had already written down the three issues referred to by the Comptroller and Auditor General. I would like to see the issue of capital spending in the HSE dialled up in here as soon as possible across a range of different areas. Everyone has been talking about the issue of drugs for many years. It is one we need to go through, along with the fair deal scheme, which everyone accepts needs to change. These are three very important items. I suggest to the Chairman that we have a HSE week in respect of a number of these issues if the committee agrees because they are very important issues.

The HSE has its annual report, some of which contains financial statements, but there are probably 100 other pages in it where the HSE tells us all the good news and how wonderful it is in respect of the different things it is doing. The committee might consider writing to the HSE about the three, four or five items and telling it that it wants a specific section in the annual report on the fair deal scheme, patients' income, capital expenditure and procurement or whatever, rather than just a paragraph. We want to see the HSE devoting a bit of effort before it produces its next annual report such that when it produces this report, there is something specific on these issues. We do not have to agree that today but I think we can put the onus on the HSE to be forewarned and have the information for us and tell it that before it produces its annual report, we will be focusing on these areas.

Can I ask about a procedural matter? How do we decide what and when? I know a lot will fall to the secretariat and the clerk but-----

The only immediate urgency is the fact that we have meetings arranged for next week and the following week. It takes a couple of weeks lead-in for a Department to get ready to come here so we must decide the next one or two straight away and maybe have the full list of everything we mentioned here today next week. It is up to us then. The secretariat can give us a draft and we can move something up or down at next week's meeting. In terms of the February meeting, we want to indicate something fairly promptly. The simplest thing to do is take one or two of the chapters from the Comptroller and Auditor General's report because they in the system. We could take funding of local authorities and the land aggregation scheme. There is a chapter on that. Alternatively, we could take the procurement and management of contracts for direct provision straight away. We need to get about two meetings up and running straight away and then we have a little breathing time to put the timetable on the rest of our work.

We are in a strange situation where there are lots of things we need to do yet we are trying to fill a hiatus. I am not taking from the importance of the matters mentioned by the Chairman, not least the issue of direct provision. I endorse what Deputy Cullinane said regarding the HSE and the arm's length organisations. We talked about this previously. I am mindful that resources are not unlimited but it is something we need to look at unless we are going to stumble from one crisis to another and say "oh dear, here we go again", which is very debilitating to public confidence. I am anxious that the committee look at the fair deal scheme and not long-finger it. I do not know if it is possible to do it in February or early March but it is a very pressing issue.

The secretariat has heard all the topics we have mentioned and will circulate them to us with a draft timetable and at next week's meeting, we will amend and finalise matters. I want to get agreement for one meeting. Perhaps we will pick the issue of direct provision. Will we go with that? I think two meetings are booked - one on the sale of the Government jet and the other on the change of rostering in the public service. I will make one change. The only reason, which is a pragmatic one, is the fact that in two weeks' time, the Department of Justice and Equality will come before us regarding the special report on the change of working arrangements in the Prison Service and suggested savings that were not achieved. Consequently, we cannot bring the same Department in two weeks later.

Land aggregation schemes are very succinct.

We will take land aggregation and the funding of local authorities and go with that Department in the second week of February. We will finalise our timescale from now until at least Easter by next week.

Can we investigate individual local authorities?

I will ask the Comptroller and Auditor General to answer that.

Mr. Seamus McCarthy

The answer is "No".

I thought that we could not.

Mr. Seamus McCarthy

I do not audit the local authorities.

What are we looking at in respect of the funding of the local authorities?

Mr. Seamus McCarthy

Essentially, it is a chapter we produce every year to try to give an overview of the amount of resources that come from central government Departments and go to local authorities. They are generally in the nature of capital contributions for capital spending at local authority level. It is quite difficult to identify the level of transfers if you do not have that kind of composite chapter. Land aggregation was a programme run to take land for residential development purposes from local authorities. Deputy Kelly might be able to brief us more on that.

Which side will Deputy Kelly be sitting on during that meeting - that side or this side?

Actually, I think it predates me so it is okay. It involved a more controversial Minister before me.

What is the relationship, if any, between the Comptroller and Auditor General and the people responsible for auditing local authorities?

Mr. Seamus McCarthy

There is no relationship structurally or formally.

It is a unit within the Department of Housing, Planning, Community and Local Government.

Is Mr. McCarthy saying that outside the Department, which is the main source of funding for local authorities, there is no independent audit function?

Mr. Seamus McCarthy

There is.

I said outside of the Department.

Mr. Seamus McCarthy

There is an oversight commission.

What is it called?

Mr. Seamus McCarthy

The group is appointed by the Minister and it effectively oversees the local government audit service and the results of the local government audit work. It also commissions and carries out investigations by means of which it tries to look across the local authorities.

On the basis that the commission is appointed by the Minister, it must come within our remit. We can call the commission before us.

We can call the commission to appear but we cannot call the local authorities.

The Comptroller and Auditor General has told me that the commission is appointed by the Minister and that costs are covered by the Department. He can see where I am going. The commission falls within our remit. Am I stretching things?

Mr. Seamus McCarthy

I think, formerly, the Accounting Officer was answerable to the committee. I just wanted to make that distinction.

In other words, the Secretary General.

Mr. Seamus McCarthy

Yes.

Would he be responsible for answering on behalf of the commission before this committee?

Mr. Seamus McCarthy

Yes, in the first instance.

We will bear that information in mind. We have an in as far as the commission is concerned but not when it comes to the local authorities.

Mr. Seamus McCarthy

That is the other aspect of the report on the transfers to local authorities where we try to draw attention to the structures that are in place for oversight and for the Department - and Departments in general - to be satisfied that moneys transferred to local authorities are used for the purposes intended and to good effect.

For the immediate next meeting we will invite the Department in here to deal with the progress made under the land aggregation scheme, which has a specific chapter, and central Government funding of local authorities. We will tell the Secretary General that he will be asked about the commission that oversees the audit of local authorities.

Mr. Seamus McCarthy

It was referenced in the report.

That is good. From that point of view, the Secretary General will be ready to deal with the topic and we will take matters from there. Next week we will try to finalise a work programme for the coming month.

The next item on the agenda is any other business. I do not think there is any such business.

For the information of members, the Joint Committee on Health is sitting at the same time as this committee.

I understand that the Deputy must leave.

I have not managed bilocation yet. I am sure that all the members will miss me.

I propose that, before inviting the witnesses in to deal with the guardian ad litem report, we go into private session in order to discuss where matters stand regarding the draft report on Project Eagle. Is that agreed? Agreed.

The committee went into private session at 10.05 a.m. and resumed in public session at 10.35 a.m.
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