Tipperary Education and Training Board and Kildare and Wicklow Education and Training Board: Financial Statements

Ms Fionnuala McGeever(Chief Executive, Tipperary Education and Training Board) and Mr. Seán Ashe (Chief Executive, Kildare and Wicklow Education and Training Board) called and examined.

We will continue our consideration of the education and training board sector. This is session 3, at which we are joined by the Tipperary Education and Training Board for its 2015 financial statements and by Kildare and Wicklow Education and Training Board for its 2014 financial statements. From Tipperary Education and Training Board, I welcome Mr. John Hogan, chairman; Ms Fionuala McGeever, chief executive; Mr. Frank Bermingham, director of organisation; and Mr. Liam McGrath, assistant principal officer. From Kildare and Wicklow Education and Training Board we are joined by Mr. Jim Ruttle, chairperson; Mr. Seán Ashe, chief executive; Ms Catherine Doran, Ms Linda Wynne and Ms Brigid Daly Lynam. We also have representatives from the Department of Public Expenditure and Reform and from SOLAS, and the Secretary General of the Department of Education and Skills.

In regard to the Kildare and Wicklow Education and Training Board, the Department of Education and Skills wrote to the committee on 4 October informing us that it was carrying out an investigation into the performance of the board and into its function, particularly in relation to public procurement, usage and disposal of assets and proprietary matters relating to the 2015 accounts. Professor Richard Thorn has been appointed to carry out the investigation and it is envisaged that this will be completed in quarter one of 2018. The accounts before us today are for 2014, not 2015. That said, care must be taken by witnesses and members of the committee to say nothing that might compromise the already mentioned investigation.

I wish to advise witnesses of the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. I welcome the witnesses and thank them for being here.

I forgot to ask the Comptroller and Auditor General to give a brief opening statement on the two previous education and training boards, ETBs. I invite him to do so now.

Mr. Seamus McCarthy

Any points I was going to make about the two previous ETBs were covered in their chief executives' opening statements.

The 2015 financial statements of Tipperary ETB will be examined today. Tipperary ETB is an amalgamation of the former vocational education committees, VECs, in Tipperary North and South Ridings. In 2015, the ETB had receipts of €42 million, matching payments of €42 million. Just under €31 million was received from the Department and €8 million from SOLAS. The audit opinion in respect of the financial statements was unqualified.

The Tipperary ETB financial statements for 2016 have been signed by the board and are being checked by my office. I expect to have the file presented to me for sign-off in the coming days, even possibly this evening.

The accounts of Kildare and Wicklow ETB are the first accounts of the ETB, relating to the 18 month period, July 2013 to December 2014. In that period, the ETB had receipts of just over €151 million, payments of almost €154 million and an overall deficit of €2.3 million. Just over €112 million was received from the Department and over €17 million was received from SOLAS.

Draft 2015 financial statements were received from the ETB on 12 December 2016 and the audit commenced in January 2017. Several issues arose during the audit, which resulted in a formal audit query being issued to the chief executive. Following receipt of his response, the audit team, at my direction, raised matters of concern with the chairperson of the board of the ETB and with the Department. Subsequent to their own further inquiries, the Minister for Education and Skills appointed a statutory investigator in October 2017. That investigation is ongoing. In the circumstances, I am not in a position currently to complete that audit. We will move to complete the process as soon as possible.

I call on Ms Fionuala McGeever to make her opening statement on behalf of Tipperary ETB, who will be followed by Mr. Seán Ashe, on behalf of Kildare and Wicklow ETB.

Ms Fionuala McGeever

Tipperary ETB was established on 1 July 2013 as a result of the amalgamation of north and south Tipperary VECs. It manages 11 second-level schools and one special school, St. Joseph's detention centre, Ferryhouse, Clonmel. In addition, it operates extensive further education and training programmes and has youth officers in both north and south Tipperary supporting the development of youth services. In total, Tipperary ETB manages 30 buildings including schools, further education and training centres and administration offices. The two offices are the headquarters in Nenagh and the designated sub-office in Clonmel, the result of a ministerial decision. The distance between the two offices is 90 km, a 180 km round trip. There is no administration office in Thurles.

In 2016, Tipperary ETB managed a budget of €50.6 million. The main elements of this budget were schools and administration, €32 million, further education and training, €13.7 million, youth services, €0.6 million, capital funding, €1.8 million, other programmes, €2.5 million. By far the largest element of our expenditure is staff pay costs. For the last full financial year, 2016, these costs were almost €35 million. The full-year expenditure in 2017 will be approximately €55 million.

County Tipperary has a population of just fewer than 160,000. It is the sixth largest and the largest inland county. Population growth in recent years has been modest and below the national average. Traditionally, north Tipperary has been aligned with the mid-west region and south Tipperary with the south east. This requires participation in regional boards in both areas. Estimated unemployment stands at approximately 9.3% against a national figure of 7.5%.

Several significant milestones have been achieved since the amalgamation in 2013. The highlights include the transfer of training services for the county from both Waterford and Wexford ETB and Limerick and Clare ETB in March 2016; the opening of the new €12 million public private partnership, PPP, school at Comeragh college, Carrick-on-Suir in 2016; and the opening of the new €1 million extension to Borrisokane community college in recent weeks. In each year, the financial statements have been signed by the Comptroller and Auditor General within the following 12 months. Unqualified Comptroller and Auditor General audit reports have issued since amalgamation. There has been a successful amalgamation of the two former VECs, including the merger of the financial database and the establishment of network connectivity between the two offices. We have also implemented a robust risk management process, including focused staff training.

During 2016, Tipperary ETB employed 1,200 staff. This includes full-time and part-time teachers, tutors, special needs assistants, caretakers, cleaners and administrative staff. This year Tipperary ETB provides education services across the county to 4,708 students at second level and post-leaving certificate, 9,809 people in further education, 662 people in training, and 583 people in part-time/night classes. Our 90 post-leaving certificate courses are provided at eight locations at levels five and six. Enrolments in schools and post-leaving certificate courses in 2017 have increased by 4.6% since 2016.

The main achievements since the amalgamation have been to maintain continuity, uphold standards of corporate governance and minimise risks of failure. The draft accounts produced by Tipperary ETB for 31 December 2014 were submitted to the Comptroller and Auditor General on 19 September 2015 and the final sign-off was 31 December 2015. The draft accounts for the year to 31 December 2015 were submitted to the Comptroller and Auditor General on 23 September 2016 and the final sign-off was on 16 December 2016. Our 2016 accounts will be signed off in the next day or so, or even possibly this evening.

At the end of 2016, the two databases of the former VECs were merged following the completion of the government network connection between the two offices. The 2016 accounts were the first set to be produced from the amalgamated database. Since 2013, priority has been given to producing the V15 in as timely a manner as possible. In each year, Tipperary ETB has had it statements signed by the Comptroller and Auditor General within the following year. In common with other ETBs which use the Manser/ESI system, production of the V15 is largely a manual exercise using Excel spreadsheets. The board and the finance and audit committee are continually updated on the expenditure throughout the year. This year will be the first set of accounts to be produced from a full year of operating the amalgamated database. We believe this will lead to a significant improvement in the timeliness of finalising the V15 for 2017.

Financial reporting is now managed centrally from the Nenagh office by the finance APO. All Comptroller and Auditor General audit reports have been unqualified. The merge of the main financial database was completed in 2016. The introduction of way-2-pay allowing students and parents to make online payments for books, contributions, tours, etc, has reduced the amount of cash managed by schools. Tipperary ETB has assumed responsibility for training services including new systems such as SAP, new payment and accounting processes. An automated system, DCS, is in place for part-time staff to submit their timesheets for payment. This is being rolled out to additional centres across the county. ·A portal is being tested which will allow staff travel claims to be submitted automatically and for staff P60s to be distributed electronically. The payroll function is being centralised in Clonmel and all other payment processes, creditors, travel, trainee payments, are being centralised in Nenagh in preparation for the move to shared services.

SOLAS introduced the Funding Allocations Request and Reporting, FARR, system and Tipperary ETB has introduced the FARR web application.

In terms of human resources, staff recruitment is managed from one office in Nenagh and the volume of recruitment has ramped up significantly, in particular in the further education and training area. Some 200 positions were advertised in 2017. Staff leave is managed and recorded from one office in Clonmel. Contract conversion for back to education initiative, BTEI, staff is currently in progress under a national initiative of which we are part. Continuing professional development, CPD, policies are in place that encourage all staff to upskill to meet the changing needs of Tipperary ETB. Arrangements are in place for part-time staff to join the superannuation scheme and staff training on the single public service pension scheme is ongoing.

As regards corporate services, including capital, procurement and ICT, additional work on freedom of information, FOI, data protection etc. has been taken on in this area and is managed centrally from Nenagh. All statutory committees are in place and are working effectively. They are also managed from Nenagh. Tippeary ETB complies with FOI reporting requirements and this is published on our website. A comprehensive risk management process is now in place and there is a regular review of risk registers. Comprehensive training for boards of management and board members has been completed. Tipperary ETB worked with Education and Training Boards Ireland, ETBI, to upgrade its website utilising the common design template and our site went live last week. School websites are currently being upgraded and new sites will go live in November 2017. Office 365 and related cloud-based services are being introduced in schools and further education and training, FET, centres. Encryption of mobile devices to improve security and comply with data protection is in progress. Several significant procurement processes have been completed by Tipperary ETB including print services, canteen provision, contracted cleaning, school books and all ICT hardware requirements. The capital programme includes a combination of major and minor capital works including the provision of new autism spectrum disorder, ASD, facilities, school extensions and various upgrade and repair works. Capital expenditure in 2016 was €1.8 million. The VSware administration platform has been introduced in schools.

The revised policy direction and funding model for further education and training resulting from the establishment of SOLAS has been embraced by Tipperary ETB. These changes have altered the structure of governance, strategy, focus and funding of FET provision. The integration of FET as a result of the establishment of Tipperary ETB has resulted in improved service provision to learners, the removal of duplication of programme provision and an extension of available course provision. Following the establishment of SOLAS, Tipperary ETB has fully implemented the additional reporting and other requirements including strategic planning, progress review, monitoring of outcomes, the FARR reporting requirements, adaption of the programme learner support system, PLSS, database and the revised QQI processes. The transfer of the training services function in March 2016 was a significant event in the history of Tipperary ETB. Prior to that, training services provided in the county had been managed from either Waterford or Limerick. With the transfer of training services, there has been an expansion in the volume of courses provided, additional staff have been hired to manage the service and in 2017 Tipperary ETB received sanction from SOLAS to operate national apprenticeship courses for the first time. Those courses will start in early 2018 and will be based in a new training centre in Thurles. In our written submission I have given a breakdown of our training programmes and numbers. The total programme provision is 10,101, including services for refugees and asylum seekers.

Highlights of the current youth services provision include two new sample projects in Cahir and Fethard-Killenaule that were established in 2016-17 with funding of €261,000 from the Department of Children and Youth Affairs. They are projects of national significance because that will be the way forward for funding of youth services. Local youth work equipment grants of €170,000 were allocated to 35 youth groups and 35 youth club groups benefitted from €45,000 under the local youth club grant scheme. The student leaders congress held recently in Nenagh College was the first of its kind in the country. All student leaders in our schools were represented and it provided a forum for us to listen to their voices. It was the first event of its kind in the country.

In articulating the progress that has been made in Tipperary ETB as outlined above, it is important to note that the staff employed by Tipperary ETB have tirelessly shown their commitment, dedication, adaptability, innovation and perseverance in moving through the most momentous period of change the education and training sector has ever seen. Our focus in the immediate future will include ongoing improvements in our service delivery including the introduction of new ICT services, managing the impact of shared services on our staff and services, the introduction of new apprenticeships, managing growth in our schools and expanding the scope of services delivered in further education and training.

Mr. Seán Ashe

I thank the Chair for inviting us to today's meeting and giving us the opportunity to make this opening statement. Kildare Wicklow ETB, KWETB, incorporated the former Wicklow VEC and Kildare VEC. Due to its size and geography, KWETB was established by ministerial order with a main office in Naas and a sub-office in Wicklow town, approximately 95 km apart. Following extensive discussions with administrative staff and others, we decided to locate the finance function in Wicklow town and the corporate services and human resource functions in Naas in an effort to bring cohesion and efficiency to our operations. KWETB manages a region that is part of the commuter belt outside the M50 and has experienced significant demographic change over the past five years and continues to expand exponentially. This generates significant workload and challenges for management.

The KWETB service plan budget is €138 million, with €30 million of that allocated to further education and training, an increase of 39% since the amalgamation. We have a projected capital budget between now and the end of 2018 of €50 million to €70 million. We have over 2,500 teachers and administrators as per the P35 total. We have in excess of 13,000 main scheme students, which is an increase of 15% since amalgamation. We have 16,251 beneficiaries of further education and training, an increase of 29% since amalgamation. We have issued 27,809 QQI awards since amalgamation. There are 21 post-primary schools, six community schools and one large stand-alone PLC college of over 1,100 pupils under our remit. We have recently been engaged in the development of two community national schools that are expanding rapidly and currently cater for 400 pupils. We have seven Youthreach centres, seven vocational training opportunities scheme, VTOS, centres, two youth officers, one apprenticeship centre and ten adult basic education centres. I am very proud to say that we piloted an innovative refugee education centre in Kildare town which became the model to be used elsewhere in the country. I thank the staff who set up that project for their dedication and commitment to supporting the Syrian population in Kildare town. We have one outdoor education centre. We have two trainee centres: Newbridge community and training workshop and the Racing Academy and Centre of Education, RACE, and farrier school in Kildare town. We are one of the largest providers of school completion programmes and have eight under our remit. We have two prison education centres operating out of Shelton Abbey and the Midlands Prison in Portlaoise. We have a music generation project, which is expanding, a sports promotion unit, a music education centre in Bray and five adult guidance services.

We are operating across the entity out of 79 locations, which is a fairly challenging task, but nevertheless, as my colleague who spoke previously said, our function is to get out there into the communities and deliver services at local level. In addition we have 23,000 co-operation hours, as they are known, where we provide local institutions with teaching support services.

I ask members to look at the chart - I will take the highlights out of it - of our comparative statistics between 2013 and 2016. Our operational budget, as I said, is up 39%. The staff pay budget is up 5%. The whole-time staff equivalent is up 21%. Post-primary students are up 15.5%. Post-primary-community national schools are up by 14.2%. Our FET students are up by 28.9% and our capital project spend is up 90%.

KWETB is delivering large capital projects, land purchase and project management in conjunction with the Department of Education and Skills and other patron bodies. This is in accordance with the expanded responsibilities under the Education and Training Boards Act 2013.

We are currently delivering on the following major capital projects. Naas community college is an €18 million project at stage 2B and I hope to have the stage 2B report in the Department next week. Maynooth community college and Maynooth post-primary school are in one campus now in Maynooth. That project is a €30 million-plus project; it is the largest second level project ever undertaken in the State. I am proud to state that project is progressing at a rapid rate and hopefully we will have buildings by September 2018. We have Greystones community national school going into the RAPID programme. We have St. Conleth's in Newbridge currently under construction. We have a PPP project, Coláiste Ráithín in Bray; that is due to hand over, I understand, at the end of the month.

In addition the ETB has progressed eight major capital projects into the 2018 capital building programme. That was a major challenge in itself. What it means is that the bulk of the schools in our ETB either have new buildings or will experience new extensions. KWETB is also providing or managing new start-up schools and extensions to existing schools for other patron bodies including Educate Together, An Foras Pátrúnachta, the Church of Ireland and the Diocese of Kildare and Leighlin. There are a total of nine major capital projects. Those projects are located in Wicklow town, Bray, three in Naas, two in Kildare town, Templerainey in Arklow, and Athy. That is a significant workload, but we undertook it. I think there is value for money in the way we approached it in that we are using existing stock of buildings to enable the Department start up these projects in these locations at no cost to the Exchequer.

The other thing to note about the entity when it was formed was that there was no training in KWETB. When the training function transferred from FÁS, we were challenged as to how we would deliver training facilities across the entity. I highlight three in my opening statement. Marine House is in Wicklow town. We have now developed a hospitality trainee centre of excellence. That will deliver the skill sets that are needed and currently in high demand from the hospitality industry. There is a major deficit there and I think this building and the staff we have put in there will meet the needs in our entity. I was over there yesterday and I was delighted to see that we have a group of Italian trainers teaching Irish people who are unemployed how to make pizzas. I asked one question, "What's the cost of the oven?" It was €30,000 supplied from Italy for this project, which is going to roll out a new line of pizza product across the State. I am delighted to say that with the initiative of our head of training and our head of FET we got that project into Wicklow town.

In conjunction with Intel and FIT, fast-track into technology, we also developed a new mechanical electronics course in Celbridge. The significance of that project is that all the trainees from the first cohort were employed directly by Intel. It has come back to us to train another cohort. It has asked us to expand that programme into pneumatics and we are currently working on that. They are innovative new courses. SOLAS has asked us to develop a centre of excellence to train apprentice electricians and we are dealing with that.

For an organisation or entity that had no training centre, what we are trying to do, as is the board's policy, is deliver locally and regionally. I think that policy is working. I would like to thank the board for supporting it.

We have noted the following challenges. There is a lack of authority to recruit staff for eight years and consequential lack of expertise. Because of the rate of expansion we have experienced, the shortfall in providing teaching staff is also caught in that statement. We have a high level of increase in responsibilities with, as I have said, no increase in staff. I think I have outlined the activity there. I will not go into the detail, but it is quite significant.

KWETB is a strong organisation in a continuous high-growth situation with student numbers increasing at a rate of 5% per annum.

A key management risk that is identified is the lack of an effective financial information technology system. I know the Department of Education and Skills, through the PMO, is working on that. I was privileged to chair the payroll shared services committee and still chair it.

I will outline our plans for the delivery of accounts and particularly to address the concern of this committee over the delivery of the accounts on time. We are working closely with the Comptroller and Auditor General and the ETBI finance forums and will continue to do so over the coming months to ensure on-time delivery of accounts. On reviewing the Comptroller and Auditor General report to this committee - this was the November 2016 report - I note that KWETB submitted our 2014 accounts. I think we were the second ETB to do so in that period. One thing that puzzled me was the length of time it took for the accounts to be processed. I am only assuming it was because we were also piloting new formats of the accounts for the Department and we were also piloting the merger of our software systems, our financial systems, our payroll systems and our creditor systems on behalf of nine other ETBs. We were the pilot scheme. I would like to thank the staff involved in that because it proved to be a very successful project and now we have an integrated system across those nine ETBs, using what is known as the ESI/Manser system.

I would hope and am confident that draft financial accounts can be produced within the timespan stipulated by statute going forward. Every effort is being made in-house to ensure that will be the case. I am confident that next year's set of accounts will be delivered in a timely manner.

KWETB is a dynamic and vibrant organisation prepared to engage and manage the challenges it faces. It is fortunate that its key operations staff will go the extra mile and continually upskill. It is committed to the delivery of excellent customer service and corporate governance. KWETB has operated within its sanctioned budgets and made the adjustments to its expenditure necessary to remain as far as possible within budget, but more importantly, even though we had sanctions from the Department and from our own board for borrowings, we have not borrowed since 2012.

The focus is on channels of funding but we also receive funding from the Department of Children and Youth Affairs, the Department of Health, Pobal and EU sources. A significant range of bodies fund the entity, all with different accounting requirements with which we have to deal.

We are educationalists and our primary focus is on the delivery of a first-class education system for our learners. We must keep them in our sights at all times to ensure we deliver a world-class education service.

Deputies have indicated in the following sequence: Deputy Mary Lou McDonald, Deputy David Cullinane, Deputy Alan Kelly, Deputy Catherine Connolly, Deputy Catherine Murphy and Deputy Bobby Aylward. We will start with a 15-minute slot but we will have ten-minute slots after that as quite a few members have indicated.

I welcome the witnesses from Wicklow and Kildare. Is this Mr. Ashe's first time before the Committee of Public Accounts?

Mr. Seán Ashe

No, I was here in 2012.

I remember. On that occasion, Mr. Ashe was with Kildare VEC.

Mr. Seán Ashe

I was.

We heard the sorry saga of €180,000 worth of computers and support services bought from a former employee. We heard of failings in Kildare VEC's handling of a €23 million school building development, as a consequence of which the Department had to bail out the VEC to the tune of €20 million. Issues were raised relating to land and property and a school development, with €139,150 paid to an auctioneer in 2008 without a competitive tender. A company was hired to work on a small scheme in 2004 but was kept on as project manager for the larger development and, between the jigs and the reels, the firm earned €830,000 between 2005 and 2011 without the work being tendered for. I know that Mr. Ashe's position was, and no doubt remains, that the Department had sight of all this and was informed, and that the VEC acted impeccably in this regard.

Mr. Seán Ashe

Correct. I acted in accordance with the proposals we put to the Department and which were adopted by the Department.

That remains the position.

Mr. Seán Ashe

It does. If I could further clarify-----

A year later, the amalgamation happens and Mr. Ashe is appointed chief executive to the new Kildare and Wicklow ETB.

Mr. Seán Ashe

Yes.

We had a conversation with the Department earlier and we teased out the fact that 20 people qualified but there were only 16 positions and Mr. Ashe was one of the 16 chosen.

Mr. Seán Ashe

Yes.

Who interviewed Mr. Ashe for the post?

Mr. Seán Ashe

I was interviewed by the Public Appointments Service, PAS, for the original appointment.

We do not have anybody here from that service. Without breaking any confidences, can Mr. Ashe tell me whether, in the course of the interview, the service explored the matters to which I referred?

Mr. Seán Ashe

My original appointment came through the PAS system.

Was this the appointment to Kildare VEC?

Mr. Seán Ashe

Yes. A process for redeployment was devised by the Department, through IR channels and with the support of the Labour Court, as it was at the time.

Mr. Ashe did not come into his current position through the Public Appointments Service. He came through the redeployment channel. Who from the Department spoke to Mr. Ashe? How was the happy news delivered to him?

Mr. Seán Ashe

It was not done like that. There was an actual formal process.

In the course of that formal process were the 2012 matters, which I have recited for Mr. Ashe, and which we dealt with at the Committee of Public Accounts, raised?

Mr. Seán Ashe

No. The process was a stand-alone process that applied to the sector.

Was any account taken of past performance or suitability? After all, there were 20 people and 16 posts. I am struck by the fact that Mr. Ashe was deemed to be one of the 16 on merit.

Mr. Seán Ashe

The process was rolled out across the 16 entities.

Can the Department cast any light on this? In 2012, Mr. Ashe appeared before the Committee of Public Accounts with a series of peculiarities and concerns raised by the then Comptroller and Auditor General, Mr. John Buckley, and we were very alarmed by the carry-on in respect of the lack of adherence to proper procurement and tendering processes, and so on. I acknowledge that Mr. Ashe made his defence at the committee. In 2013, Mr. Ashe was appointed to his current position and he has outlined, in painstaking detail, that this position carries a larger budget, more responsibility and a bigger workload. It seems, however, that the issues in 2012 were not referenced, considered or raised with him. Can Mr. Ó Foghlú tell me why this was the case?

Mr. Seán Ó Foghlú

The redeployment process was established by the Department in agreement with the union representing chief executive officers. It did not deal with individuals' competence but the individuals who were in the posts, who were redeployed on the basis of seniority and preference. As I recall, there was no criterion relating to performance.

I do not know any other circumstances in the real world where that would have happened.

Mr. Ashe has been in his job since 2013 and has set out what he sees as dilemmas in the job. He did not mention the fact, stated by the Chair, that an investigation under section 40 is under way.

Mr. Seán Ashe

I am precluded from discussing that matter, Deputy.

Let us see about that. I will put questions and we will see how we get on. I understand that the Minister for Education and Skills established this investigation on Wednesday 4 October this year.

Mr. Hubert Loftus

Yes. That is when the terms of reference were published, after the decision was made by the Minister to establish the inquiry.

The investigation was instituted because the current Comptroller and Auditor General, Mr. McCarthy, was dissatisfied with, and could not sign off on, the accounts. The investigation was launched by the Minister on the Wednesday and, on the Friday, Mr. Ashe told his board that he would be retiring some time next year. When is Mr. Ashe retiring?

Mr. Seán Ashe

I gave three months' notice. I am retiring at the end of December. I was 65 on 9 October.

The decision to retire was not influenced in any way by the fact that the investigation is under way.

Mr. Seán Ashe

Not in the slightest.

It is purely coincidental.

Mr. Seán Ashe

It is for personal reasons.

I will not ask Mr. Ashe to elaborate on those. The terms of reference for this investigation do not make very happy reading. The Comptroller and Auditor General was unhappy with the accounts.

It was stated that Mr. McCarthy "had sight" of the accounts. I want to ensure that I get my terminology right. He had sight of the accounts but could not complete the audit process. Am I right?

Mr. Seamus McCarthy

I would say the audit process is ongoing. I have not finished the work.

Mr. McCarthy then communicated with Mr. Ashe or with his organisation and sought further information. Is that not right?

Mr. Seamus McCarthy

I raised what we refer to as a formal audit query, which sets out findings of our audit work and requests clarifications, comments and so on.

What was the quality of the responses received?

Mr. Seamus McCarthy

I would prefer not to comment. I will form a view at the end of the process when all matters are before me. I cannot comment before that.

I appreciate that. Suffice it to say that, having raised issues and corresponding with Mr. Ashe's organisation, matters were not resolved, which led to this investigation. One of the terms of reference is "To examine and report on the robustness of the ETB’s responses to the issues raised in the C&AG Audit".

Can we get the document up on the screen so that everybody can see it?

What number is it?

It is the first bullet point.

We will try to get it up on the screen.

It is interesting that the investigation is to identify "any lacunae, inconsistencies or insufficient clarity in the responses provided" to the Comptroller and Auditor General. It is interesting that the first port of call for the investigation was to examine whether Mr. Ashe was less than forthcoming in his responses to the Comptroller and Auditor General. Who would have signed the letters and responses to Mr. McCarthy?

Mr. Seán Ashe

I am sorry. I must respectfully decline to answer that question.

I am only asking about the sequence of events.

Mr. Seán Ashe

It relates to a matter that is under investigation by the investigator appointed and which relates to section 40 of the Act.

I am aware of section 40 of the Act.

Mr. Seán Ashe

We will fully co-operate with the investigator and are doing so.

I would expect nothing less. I also expect Mr. Ashe to answer these questions, which do not trespass on the substantive matters or on any view at which the investigator might arrive. I am asking Mr. Ashe regarding who signed the letters when his organisation corresponded with Mr. McCarthy?

Mr. Seán Ashe

I am sorry. The Deputy is getting into matters which relate to the 2015 accounts. We are dealing with the 2013-2014 accounts. I am advised that, because of section 40-----

Who gave Mr. Ashe that advice?

Mr. Seán Ashe

The investigator.

Mr. Ashe has been incorrectly advised. When his organisation corresponded with Mr. McCarthy, who signed off on the letters? Whose signature was on them? Mr. McCarthy might clarify for me. What is the practice? When Ms McGeever's ETB corresponds with the Comptroller and Auditor General, who signs off on the letters?

Ms Fionuala McGeever

Myself and the chair.

Ms McGeever and the chair. I assume that would be standard practice, so the letters which went to the Comptroller and Auditor General would have carried the signatures of Mr. Ashe and Mr. Ruttle. Is that correct?

Mr. Jim Ruttle

They certainly did.

So the first item on the agenda of the investigator-----

May I just cut in?

I do not want to take up the Deputy's time, but I have a question on a matter that has been raised. Will Mr. Ó Foghlú tell us whether Mr. Thorn is independent? Is he appointed by the Department to conduct an independent investigation?

Mr. Seán Ó Foghlú

He is. That is correct.

If he is an independent investigator, why would he advise someone he is investigating about whom he or she should speak to? What is the Department's view on an independent investigator telling people what they should or should not say if asked a question? I am asking about Dr. Thorn. The committee received a letter from Mr. Ó Foghlú today. It states:

Given that the investigation is underway it will be important to ensure that nothing is said at the Committee hearing that would compromise the investigation. The investigator, Richard Thorn, has also requested the Committee be advised of the need to avoid discussion that would potentially do so.

Does the witnesses have a letter from Dr. Thorn asking them to tell us this?

Mr. Hubert Loftus

I do not have a letter from Dr. Thorn, but he was in contact with me. I was talking to him.

Who initiated the conversation?

Mr. Hubert Loftus

He would have initiated it.

Did he indicate that he was going to communicate with anyone else? There is an independent investigation. I would have thought he would be getting on with his job rather than tic-tacking with Mr. Loftus or anyone else.

Mr. Hubert Loftus

He is getting on with the job. As part of his investigation, he would have met the Department and the Comptroller and Auditor General. The investigation is well under way. It is on target to be completed within the timeframe set out.

If Deputy McDonald will allow, I will pursue this matter. The investigation is well under way. Dr. Thorn spoke to Mr. Ashe as well. Was it by means of a letter or a phone call?

Mr. Seán Ashe

We spoke in person.

Given the seriousness everybody has attached to the statutory investigation that is under way, it can be seen why I am already concerned if there are phone calls here and there from the investigator, tic-tacking, phone calls going unrecorded and communications with people under investigation and with individuals in the Department. There is nothing in writing. There is no record. We will ultimately be presented with a report in order to allow the Comptroller and Auditor General to conclude his work but we will not know who said what to whom during the course of this investigation. I am very concerned. Do the witnesses understand my concern?

Mr. Seán Ó Foghlú

I understand the Chairman's concern.

I will finish the question. We are here every week. The Charleton inquiry is ongoing and there is an investigation into the Grace case, which is another issue that has come before the committee. If we heard that Mr. Justice Charleton was making phone calls to potential witnesses and people who could potentially be investigated, that there was no record of such calls and that he was telling those individuals what to say, would Mr. Ó Foghlú be concerned about that modus operandi given that he has made it very clear that this is a statutory investigation? We are now beginning to discover that the investigation is being conducted in this manner. Will Mr. Ó Foghlú respond to this? Does he share my concern?

Mr. Seán Ó Foghlú

I understand what the Chairman is saying. I am not concerned about the independence of the investigation. I am of the view that it is being undertaken independently. Dr. Thorn asked that nothing would happen which could compromise the investigation. The Chairman said the same thing in his opening remarks. There is not constant tic-tacking between the investigator and the Department.

Did Dr. Thorn phone the Comptroller and Auditor General in this regard?

Mr. Seamus McCarthy

No. We have had no contact with Dr. Thorn in this regard.

Okay. We will return to Deputy McDonald. I hope the Deputy understands my intervention.

Of course. Has Mr. Ruttle been similarly advised by Dr. Thorn?

Mr. Jim Ruttle

It was outlined by Mr. Ó Foghlú in the morning session that Dr. Thorn had a meeting with the Kildare and Wicklow Education and Training Board yesterday regarding these matters. It was very lengthy and-----

That is very interesting. In the course of that meeting, did he advise Mr. Ruttle not to answer questions at this committee?

Mr. Jim Ruttle

He certainly advised us that it would be unhelpful to his investigation if matters were aired publicly. If certain intentions to do certain things were advanced, he could view it as interference with his investigation. The timescale involved is quite short. It is not months, it is approximately 20 days.

I am aware of the timescale.

Mr. Jim Ruttle

It will be out there.

I share the Chairman's concerns. With the greatest respect to Mr. Ó Foghlú, the Department, Mr. Ashe, Mr. Ruttle and Dr. Thorn, this is a committee of the Oireachtas; it is not the local bingo club or a forum one can attend and decide whether one will answer questions. The witnesses' organisations are in receipt of massive amounts of public money. There are now matters of controversy arising from their stewardship, oversight and expenditure of that money.

The witness comes here to answer our questions. It is not an optional extra for him. It is part of the democratic accountability of our structures and it is not for Dr. Thorn to advise anybody to come in here and not co-operate with our committee. I find that shocking and scandalous.

As a committee, we are aware of the provenance of this inquiry. It is a section 40 inquiry and so on. I do not accept, therefore, that a sub judice rule applies. I do not accept that anything that we do by way of carrying out our function can in any way skew an investigation that is truly independent and being carried out by an independent person. That is a farcical position.

Following on from the Chairman's point, the question now arises as to whether or not Dr. Thorn is actually a suitable person and whether this process has now been corrupted and polluted from the get-go. I think we have to consider all of that.

The Deputy is posing a question. She is not making a conclusion.

No, I am posing a question. I am saying that is a-----

The Deputy is posing a question.

I am saying that is a question we need to arrive at.

Another one of the terms of reference is around conflicts of interests. Can I ask Mr. Ashe if his son works in procurement for the Kildare and Wicklow ETB?

Deputy, to be fair Mr. Ashe's relation is not here now.

I am simply asking Mr. Ashe to establish the fact. Does his son work in that-----

Mr. Seán Ashe

The Deputy is referring to a matter that is under investigation under section 40-----

There is hardly an investigation as to whether or not the witness's son works in procurement.

Mr. Seán Ashe

Sorry, but having regard to the terms of reference the Deputy is reading from, I must respectfully decline to answer that question as it relates to the investigation.

I respectfully decline to accept Mr. Ashe's stonewalling.

Mr. Seán Ashe

I am not stonewalling.

Does Mr. Ashe's son work in a procurement function for the ETB and when did he enter into that position? That is all I want to know.

Mr. Seán Ashe

The Deputy is raising something from the terms of reference and I must respectfully decline to answer. We are co-operating fully with the investigator. When the report-----

Sorry. Mr. Ashe's primary responsibility is to co-operate with this committee. Does the witness not understand that?

Mr. Seán Ashe

I will co-operate with this committee when the section 40 is, in relation to this matter-----

No, the witness will co-operate with this committee today. He will demonstrate respect for the Oireachtas and for the people who are elected by the taxpayers, the same people who fund Mr. Ashe's operation, and who pay his salary. He will answer my question. It is a simple "Yes" or "No". Does Mr Ashe's son work in procurement? I am not casting an aspersion. I am trying to establish whether, "Yes" or "No", he is working in that capacity.

Mr. Seán Ashe

He works as administrative officer in the corporate services section and-----

Since when, Mr. Ashe?

Mr. Seán Ashe

-----he has a multitude of tasks.

I am sure he does. Since when is he in that position?

Mr. Seán Ashe

I cannot answer. I just do not know.

Sometime since 2013 anyway, is it? Or is it prior to that?

Mr. Seán Ashe

It is. No, it is 2014 I think. He is not in a decision-making post. He has no decision-making responsibilities. His function is functionality.

How does the witness manage conflicts of interest as a matter of interest as chief executive? What systems are in place to manage that?

Mr. Seán Ashe

There is an ethics document that all designated staff and all members of the board receive and complete.

Has the witness had occasion to declare a conflict of interest himself?

Mr. Seán Ashe

I did regarding a potential conflict of interest. I do not think I have a conflict of interest. However, I did one declaration in that there could be a perception that I could have a conflict of interest. That does not relate to the period the Deputy is referring to. I am here today to address my accounts for 2013 and 2014 and if it is matters pertaining to the section 40, I have to advise again that I am constrained from answering questions-----

Stop saying that, Mr. Ashe.

Mr. Seán Ashe

Sorry, Deputy?

It serves no useful purpose to repeat that ad nauseam bar to cause irritation on this side of the committee room, which I am sure is not the witness's aim.

Mr. Seán Ashe

I have received my advice. I do not-----

Mr. Seán Ashe

I respectfully decline. I am not in a position to answer today the questions that the Deputy is trying to pose to me. I have the height of respect for the Deputy. I am not being disrespectful to this committee, Chairman, or to anybody associated. I have a situation where I have a section 40. I have to comply with the terms of that section 40. We are and we will fully comply with it. I think the investigator that has been appointed has to be given the chance and the opportunity to deal with the task in hand and when his report issues, I assume it will appear in this committee. It is then that I will answer whatever outcomes-----

So, Mr. Ashe will come to the committee and answer-----

Mr. Seán Ashe

I will, yes.

-----when he adjudicates that it is the right time to come.

Mr. Seán Ashe

When the report is published and-----

The witness will have retired by then.

Mr. Seán Ashe

If the committee wants me to come in, I will come in.

From retirement?

Mr. Seán Ashe

Yes, I will.

Just to repeat that it is an astonishing thing that an independent investigator, and presumably Dr. Thorn, would advance the position of his independence, and would advise witnesses coming before an Oireachtas committee not to answer our questions.

Has the witness got that advice in writing?

The Secretary General of the Department presumably has some responsibility and can give some advice. I have never seen such hesitation in all my life as I have seen sitting here for the past hour.

I have two quick questions for two people here. Has Dr. Thorn put this in writing to anybody?

Mr. Seán Ó Foghlú

First of all, in my letter I advised and I also referred to Dr. Thorn advising. He has not put that in writing. My office discussed it with the clerk of the committee-----

I understand that.

Mr. Seán Ó Foghlú

-----and we put it in writing. The difficulty in answering detailed questions is that there is a risk that we may impact on the investigation which is under way. We asked for the investigation to be complete by quarter 1 of next year. The investigator has indicated to the ETB that he intends to get the draft report, which legally they need to have for four weeks, before the end of December. Hopefully, the investigative process can be complete early in 2018.

I want to ask the Comptroller and Auditor General a question on the terms of reference. In the course of the audit by the Comptroller and Auditor General of the Kildare and Wicklow ETB's financial statement 2015, which is ongoing, the Comptroller brought a number of issues to the attention of the Department of Education and Skills. Perhaps he could explain it to me. When the Comptroller and Auditor General is carrying out an audit of the Kildare and Wicklow ETB, surely that is his point of communication where, if he is not happy, he communicates that to it and issues his report as he sees fit? Is it normal when he is carrying out an audit of an organisation, and we have not seen great examples of oversight from the Department, that he would go to the Department during the course of his audit that he says is ongoing? Perhaps that mechanism could be explained to all of us because this initiated the process of an audit. Why did he not complete and call the audit as he saw it? Does the witness understand our question?

Mr. Seamus McCarthy

Yes, I do. There were issues that arose, as I said, and we issued a formal audit query. We did, in the first instance, contact the chair of KWETB about the matters and about the status of the audit. It was subsequent to that that we contacted the Department. There is the situation as well that in the legislation the Department has options specifically in relation to appointing an investigator.

That is not in dispute. The question is that the Comptroller and Auditor General was conducting an audit of the Kildare and Wicklow ETB and he chose to go outside of that relationship to a third party, the Department of Education and Skills, in relation to an audit that was ongoing.

That is my question. I know the Department has a right, but is it normal when conducting an audit of an organisation to go to a third party via the Department if there is a difficulty? Did Mr. McCarthy go to SOLAS as well?

Mr. Seamus McCarthy

No, we did not.

SOLAS is a significant funder of the ETB. We discussed that this morning. In the latest year for which information is available, SOLAS gave €26 million. It is a significant funder of the ETB so why did the Comptroller and Auditor General not go to SOLAS as a funder if he went to the Department as a funder? I am seeking to understand how it was initiated. Mr. Ruttle said he wrote to Mr. McCarthy as chairman and arising from his letter to the chairman, he went to the Department.

Mr. Seamus McCarthy

It was because the legislation was brought forward by the Department and the Department has formal legal oversight functions. Those were the reasons we felt, having approached the chair of the board first, that it was appropriate to go to the Department as well. Both the Department and the board would fall into the category of those who are charged with governance and oversight. It is unusual to take these steps but I felt it was appropriate in this situation.

The Comptroller and Auditor General has indicated that he wrote to Mr. Ruttle on this issue. Can he elaborate on that?

Mr. Jim Ruttle

Yes, he did. We met with the people involved and then liaised with the Department for advice on that.

The ETB contacted the Department?

Mr. Jim Ruttle

Yes.

I am trying to get the sequence. I inferred from his remark that he referred the matter to the Department, but that was afterwards. Mr. Ó Foghlú or whoever else in the Department was involved might give us the sequence of how this commenced.

Mr. Seán Ó Foghlú

We were contacted by both the chairman and the Comptroller and Auditor General and we met with the Comptroller and Auditor General's officials. We discussed with them the concerns they had. We sought answers to their queries and added to the questions being asked by the Comptroller and Auditor General's office. We met the CEO, the chairman and deputy chairman. We sought answers in writing twice. We were not satisfied with the answers we received so we initiated the investigation.

No. 3 in the terms of reference states that the investigation may encompass matters prior to 2015, so it could have an impact on the statements before us today for 2013 and 2014. This investigation can examine 2013.

Mr. Seán Ó Foghlú

If something emerged in the investigation, we did not wish to preclude a look back on it.

Mr. Hubert Loftus

Also, before we finalised the terms of reference, we would have engaged with the Office of the Comptroller and Auditor General to see if it had any comments or observations on the draft terms of reference. We would have worked in tandem with that office.

There may be concerns about the 2014 accounts, which have been signed off already, as a result of this investigation. Mr. Ó Foghlú may have provided for that in the terms of reference.

Mr. Seán Ó Foghlú

We have provided that the investigator may decide to look there if he finds a reason to do so.

Can the investigator look back as far as 2012 and before that to 2004? In other words, can the investigation reach back to the Kildare VEC?

Mr. Seán Ó Foghlú

The investigation is into Kildare and Wicklow ETB.

It is not into the former VEC.

Mr. Seán Ó Foghlú

No.

Mr. Hubert Loftus

No, but there is flexibility in the terms of reference if the investigator thinks there are other matters that should be brought to the Department's attention that do not come within the ambit of the terms of reference. He can highlight them in his report. The Department can then make a judgment on whether follow-up action is required.

Without delving into the substantive detail of the investigation, and I will choose my words carefully, we now know that the Comptroller and Auditor General was not satisfied with the responses from Kildare and Wicklow ETB. Similarly, the Department of Education and Skills was not satisfied and was concerned about the responses. Was Mr. Ruttle trying to mislead the Comptroller and Auditor General or the Department of Education and Skills?

Mr. Jim Ruttle

Mislead?

Mr. Jim Ruttle

Certainly not. It was never my intention to do anything like that. In all my years in public life I have never been charged with that at any level.

I am not charging the witness with that. I am clarifying-----

Mr. Jim Ruttle

It is a suggestion that I might-----

No, it is a question.

Mr. Jim Ruttle

I reject it in the strongest terms.

It is a question. The fact that the Comptroller and Auditor General and the Department did not get the information they needed or found themselves left with no option but to launch this investigation was not because Mr. Ruttle was in any way trying to frustrate or failing to provide the necessary information. That is what I am trying to ascertain.

Mr. Jim Ruttle

As I said, I have no intention, and never had any intention, of frustrating any investigation or anything like that.

Is Mr. Ruttle happy that the investigation is proceeding?

Mr. Jim Ruttle

Yes. As the Chairman knows, we are awaiting an imminent draft report. It is not elongated, so I believe that-----

Is Mr. Ruttle a councillor?

Mr. Jim Ruttle

Yes, I am.

In what area is Mr. Ruttle elected?

Mr. Jim Ruttle

Baltinglass electoral area.

Turning to Mr. Ashe, the Comptroller and Auditor General and the Department were not happy with the information he was providing. What is his response to that?

Mr. Seán Ashe

I will not respond to the Deputy, with respect. That will be dealt with fully by the investigator and I will fully co-operate with the investigator. I am in a difficult position here today-----

The witness is not.

Mr. Seán Ashe

-----in that I do not want to prejudice a statutory investigation.

Mr. Ashe will not be prejudicing anything.

Mr. Seán Ashe

I respect what the Deputy is saying-----

I am asking Mr. Ashe the question. The Comptroller and Auditor General and the Department were dissatisfied with the information in his correspondence. Was Mr. Ashe deliberately-----

Mr. Seán Ashe

Absolutely not.

-----trying to withhold information?

Mr. Seán Ashe

Absolutely not. The responses were done to the best of our ability at the time in question. Under no circumstances would I entertain that thought. We operate to the highest possible standards of corporate governance. We are doing a very-----

Clearly, Mr. Ashe does not, or at least there is a question mark over whether he operates to any level of corporate governance. I remind him that there is an investigation under way.

Mr. Seán Ashe

That is why-----

He should not put such a statement on the public record while this investigation is under way.

Mr. Seán Ashe

Okay, I will withdraw it.

He needs to withdraw that comment.

Mr. Seán Ashe

That is why I answered the Deputy in that way. With respect, I am constrained. I will deal with the 2013 and 2014 accounts and any matters arising from that. We got an audit report and that has been dealt with for the 2014 account. They were signed off.

I call Deputy Cullinane.

I will seek your guidance first, Chairman. I am not at all happy with how this has progressed and I wish to follow up on Deputy McDonald's questions. The committee has addressed a number of different issues where there were parallel examinations and investigations. In fact, in a number of instances there were criminal investigations. To take the example of the National Asset Management Agency, NAMA, there were three criminal investigations taking place, yet we still did our work on a loan sale known as Project Eagle and produced a report. The Chairman gave the example of the HSE hearings in which we discussed the Grace case while there was a commission of investigation examining that. Representatives of the Garda Síochána appeared before the committee while they were carrying out examinations and investigations of what happened in Templemore-----

The European Anti-Fraud office was as well.

Yes. I am trying to understand how the witnesses and, incidentally, the Secretary General of the Department, which worries me even more, believe they can stonewall this committee, refuse to answer questions or put forward the defence that they cannot answer questions on issues because of an examination being carried out. Was it the Department or the HEA that commissioned it?

Mr. Seán Ó Foghlú

The Department.

It is just a departmental examination or investigation. The matter has not been heard by a judge so Mr. Ó Foghlú cannot claim that it is sub judice. I am aghast that this has descended to this point and I am seeking guidance on this matter. If this were to be the modus operandi for how this committee works in the future, it would never get anything done.

I want to clarify a number of matters. Does Mr. Ashe know what his role is in the context of reporting back to the Committee of Public Accounts?

Mr. Seán Ashe

Yes.

Mr. Seán Ashe

I am a witness here.

No, Mr. Ashe is more than a witness. Does he know the nature of his role here?

Mr. Seán Ashe

I am an accountable officer.

Mr. Ashe is an accountable person, not an accountable officer, which means he accounts to the Committee of Public Accounts, which he is not doing today. He is offering as a defence a refusal to answer questions because Dr. Thorn, who was simply appointed by the Department to carry out an examination, gave him advice. That is not acceptable. I need guidance from the Chair as to how we should proceed. Before I get that guidance, I will ask Mr. Ashe if Dr. Thorn advised him not to appear before the Committee of Public Accounts.

Mr. Jim Ruttle

Is the Deputy referring to me?

I am talking to Mr. Ashe.

Mr. Seán Ashe

No.

Did Dr. Thorn advise Mr. Ruttle not to appear?

Mr. Jim Ruttle

No.

I have been informed that Dr. Thorn advised Mr. Ashe not to appear before the Committee of Public Accounts. I will ask him again. He is here as a witness so I want him to be clear in order that he does not mislead the committee. It is not a good position for someone to be in if he or she misleads the Committee of Public Accounts. Did Dr. Thorn advise Mr. Ashe not to appear before the Committee of Public Accounts? Did he offer that opinion at any time?

Mr. Seán Ashe

I recall that Dr. Thorn had concerns about us appearing here today.

Did he advise Mr. Ashe not to appear before the Committee of Public Accounts?

Mr. Seán Ashe

My recollection is that he did not.

When was this?

Mr. Seán Ashe

This was when he started his investigation. He advised us that he was in charge of matters and that we were not to discuss matters germane to the investigation anywhere.

Is that in writing?

Mr. Seán Ashe

No.

Was it all verbal?

Mr. Seán Ashe

Yes.

I want to understand when Dr. Thorn assumed the role of advising witnesses about what they should or should not say to the Committee of Public Accounts. Since when did Dr. Thorn - in the course of his work - seek to subvert the work of the Committee of Public Accounts? I want to put this to Mr. Ó Foghlú. I can tell him now that whatever report comes from Dr. Thorn will be absolutely prejudiced and will not be worth the paper on which it is written. Mr. Ó Foghlú will have to go back to the drawing board. How was Dr. Thorn picked to carry out the examination?

Mr. Seán Ó Foghlú

He is an independent investigator.

That is Mr. Ó Foghlú's view. I will give him my view. I asked when Dr. Thorn was appointed.

Mr. Seán Ó Foghlú

The Deputy said Dr. Thorn's report would not be worth anything. It is an independent report.

That is a personal observation of one Deputy-----

-----not the view of the committee.

Mr. Hubert Loftus

It is a statutory investigation.

It is not the view of the committee but a personal opinion. Will our guests tell us about the procurement process and how Dr. Thorn came to be appointed.

Mr. Hubert Loftus

We estimated that the cost of the procurement process to be around-----

I cannot hear Mr. Loftus.

I cannot hear half of what is going on.

Will Mr. Loftus lean forward?

Mr. Hubert Loftus

We estimated the cost of the procurement process to be approximately €12,000 to €13,000. Within the Department, we identified a number of persons we might approach to seek a quotation. We contacted one other person who was unavailable to undertake the inquiry and then we contacted Dr. Thorn who, at the time, was undertaking an inquiry into the University of Limerick. That was near completion.

I apologise. I do not have the witness' name.

Mr. Hubert Loftus

Hubert Loftus.

Will Mr. Loftus talk me through the process of how Dr. Thorn was appointed? He said the Department evaluated a number of people. How many?

Mr. Hubert Loftus

We contacted another person to see whether that person would be available.

Did this go out to tender?

Mr. Hubert Loftus

No. Given the cost involved, it would not be for public tender. It would be more for quotations.

Dr. Thorn had just finished a separate report. Was it for the HEA or the Department?

Mr. Hubert Loftus

That was a HEA report.

Is Dr. Thorn on a retainer with the HEA and the Department?

Mr. Hubert Loftus

No. We invited a proposal from him and the terms of that proposal, based on the cost per day, were similar to what applied in respect of the University of Limerick inquiry.

Nobody on this committee would in any way seek to tell Dr. Thorn what he should do, how he should carry out his examination or how he should report back to the Department. That is entirely a matter for the Department and whatever process it has with Dr. Thorn. How is it acceptable that Dr. Thorn would believe that he can in any way dictate to this committee how it does its job or advise witnesses who come before it, including an accountable person, about what they can or cannot say? How is that acceptable to Mr. Ó Foghlú, as Secretary General of the Department?

Mr. Seán Ó Foghlú

He offered advice that he did not wish to have the investigation compromised. He knew the investigation was being undertaken speedily. I know, since he was here in recent months, that he respects the committee greatly. He undertook a fair and deep investigation-----

Mr. Ó Foghlú is missing the point entirely. With respect, he is avoiding the point I am putting to him. We are not going to dictate to Dr. Thorn how he carries out his review. Mr. Ó Foghlú, as Accounting Officer for the Department, needs to understand that we have a statutory responsibility to probe systems, processes and procedural failures. That is our role. That is our function regardless of whether there are parallel investigations or examination processes ongoing. Mr. Ó Foghlú needs to understand that a person he has appointed is attempting, perhaps not deliberately - and it may be unintentional - to subvert the work of the Committee of Public Accounts. Teachta McDonald put questions to Mr. Ashe that he is not answering. That is not because of legal advice he received but as a result of the fact that Dr. Thorn told him in conversation - I imagine during a phone call - that he should not answer. He said the same to Mr. Ruttle. I cannot understand that and I find it deeply troubling. I want Mr. Ó Foghlú to understand from where we are coming.

Does Mr. Ruttle agree with that?

Mr. Jim Ruttle

I do not recall any direction from Dr. Thorn on this at all. I would be an independent-minded person on matters like that. I would turn up where I want to if I am asked to. I have not received any direction from Dr. Thorn whatsoever.

Is Mr. Ruttle telling me that he did not get advice from Dr. Thorn about what he can or cannot say at this committee?

Mr. Jim Ruttle

No. I did not get advice from him at all.

Can Mr. Ruttle answer the questions for us then? Perhaps we should put the questions to him and not to Mr. Ashe.

The inquiry is into the board, not Dr. Thorn.

Can we start the clock again? Perhaps at this point we can put the questions to Mr. Ruttle. From what he said, not only did he not get advice on what he can or cannot say, he is of the view that he is independent and can speak freely. He can, therefore, help this committee, notwithstanding the accountable person's view.

Mr. Jim Ruttle

I respectfully suggest that an investigation is in process.

So we have the same line.

Mr. Jim Ruttle

No.

With respect-----

Mr. Jim Ruttle

No. An investigation is in process. It has a very short timeline. I think Dr. Thorn deserves the time and space to carry out his investigation and I am certainly willing to return here at any time in the not-too-distant future to deal with that after the report.

I am deeply frustrated and annoyed with the witnesses, including the Secretary General of the Department. I want clarification from the Chairman. If we have to suspend the meeting-----

We could go into private session.

-----return to this matter and bring the witnesses back again at some point, we will. We will stay here all night if we have to. We are not going to have witnesses come before the Committee of Public Accounts and either subvert its work or prevent it from doing its job. That is not going to happen. There is no legal impediment whatsoever to the witnesses answering the questions that are being posed.

Will we go into private session?

I think the legal adviser in the Oireachtas-----

They are here, so-----

Chairman, I am sorry but I do not agree that we should go into private session. We have a job to do here in public session. We have two-----

We will go back into public session.

I ask the Chairman to let me finish. We have two ETBs before us. We have a job to do in terms of value for money and asking questions. Let that process proceed. We cannot compel a witness to answer our questions. The witnesses are here in a voluntary capacity. Obviously, they are accountable to the Committee of Public Accounts. Let us deal with what we have in as fair a manner as we can. I do not think there is a need to go into private session at this point. We have to deal with what is emerging before us, and the questions that we need to put should be put. It is on the record if a chairperson or a CEO cannot answer. That is what we are here to do now.

I do not accept the witnesses are here in a voluntary capacity. They are here because they are spending taxpayers' money. It is not voluntary.

I use the word "voluntary" in the sense that they are here to help us. They are accountable, of course - let me finish, please. In that capacity, they are not compelled to be here at this point. We have to deal with what we are getting, and I think we should go ahead and deal with it. We are not in a court of law; we are here to bring as much accountability as we can. There are two ETBs here that should be asked questions by each of us in turn.

I ask the Chairman to make a ruling.

Deputy Connolly is proposing we continue to put questions and the answers we receive will be the answers we receive. That is what Deputy-----

I do not agree with that because I do not think we can do our job, and I am not happy with that. We should go into private session and discuss this.

I will ask the views of the members. Do we want a brief discussion among ourselves for a few moments in private session as to how we proceed? What do members think? I am only asking members.

I would prefer we stayed in public session.

My preference is always for public session, but I do understand that we have hit a brick wall here and we need to decide what we are going to do.

I agree with the previous speaker.

I think at this stage we probably need to get legal advice ourselves to know what we can actually do. We are after hitting a brick wall and we seem to be going nowhere. We need to move this on.

It has been suggested by a member that we get some legal advice, which is available to us now if we go into private session. We will do that briefly. When we go into private session, we have to clear the room for ourselves to have our own private discussion. I ask the witnesses to be on hand for the end of the private session.

The committee went into private session at 5.33 p.m. and resumed in public session at 6.16 p.m.

During our brief discussion with members in private session on our questions to the Kildare and Wicklow ETB we got the benefit of legal advice. We will proceed with our meeting, but I remind the witnesses that they are here in a voluntary capacity and are not compelled to be present. They are free at any time to leave. They are here of their own volition. We will continue to put questions and our legal advice is that there is no legal impediment to the witnesses answering questions.

I apologise to everybody for the late hours, especially the witnesses from Tipperary who have not had an opportunity to have some of their issues discussed.

Mr. John Hogan

We are disappointed.

There is a second half. We will continue and I will call speakers in the following sequence, Deputies Alan Kelly, Catherine Connolly, Catherine Murphy and Bobby Aylward. There are witnesses from two ETBs and members are free to put questions to either or both ETBs as they choose.

On a light note, on the two or three occasions when I stood in for the Chairman, I was accused of running long meetings. We commenced the meeting nine hours and 20 minutes ago and I think the Chairman will beat the record.

I have a number of questions. I found today's meeting very revealing - but not in a good way. I believe the Department of Education and Skills has had a bad today as I do not think many of our questions have been answered. I have serious concerns about oversight, as well as the process in which funds are being accounted for, value for money and performance and a range of other issues. I look forward to the report we will write. The Chairman and I have sought for a long time to bring the people together. I look forward to the information we have sought and that we will seek shortly being provided.

I welcome the witnesses from the ETBs, in particular the witnesses from Tipperary ETB. I have to declare that I know three of the witnesses for some time. I thank them for coming before the committee. The response I am seeking to a number of my questions is a simple yes or no answer, or witnesses can provide the information to the committee secretariat. May I remind the witnesses that when we put questions to the officials from the Department, we asked them to put all the missing board minutes up online and to submit a copy of all internal audit reports.

Are there any conflicts of interest, or has there been any conflict of interest, declared by anyone in either ETB in the past number of years, bar the ones already stated by the Kildare and Wicklow ETB?

Mr. John Hogan

I welcome the opportunity to assist the committee and will respond to Deputy Kelly's questions.

We are open to sharing any information we have with the committee and working with it to ensure, as Deputy Mary Lou McDonald stated, that we have good stewardship, accountability and oversight. As a standing agenda item on our board each month I ask if anyone there has any conflicts of interest. That is one of the first agenda items. The only conflict of interest declared was a recent declaration by one lady that she was related to Deputy Alan Kelly. When the Deputy had questions in the Dáil the lady wondered if she had a conflict of interest in that she was there when she also worked with him. We were quite happy to leave the lady in place because we believed she worked in good faith and we thanked her for declaring it. We did not ask her to leave the meeting. That was the only conflict of interest I have had.

That is a third cousin. Are there any for the Kildare and Wicklow Education and Training Board, outside of what has been-----

Mr. Seán Ashe

Not that I am aware of.

I am not sure what that answer means.

Mr. Seán Ashe

Nobody has declared a conflict of interest.

That is what I mean, there was nothing to declare. I asked a question earlier on to two other ETBs around ICT school grants and the percentage that would be used by schools or used in any way centrally. The ETBs said that in one case it was 100% and in another case it was 90%. I pose the same question to the ETBs here.

Mr. Seán Ashe

It is 100% to the schools.

Ms Fionuala McGeever

Yes. It is 100% to the schools.

Nothing is used centrally. Okay. There was a query earlier from Deputy MacSharry, who is probably at home in Sligo four or five hours at this stage, requesting information on board members' travel and subsistence payments for the last years. I would like to extend that query to the chief executives and directors of all the ETBs since their inauguration in 2013, across the board.

I have some specific questions on the special school at Ferryhouse in Clonmel. We could be able to help the ETB with this. What is going on there? Is it being used and are the staff being paid?

Ms Fionuala McGeever

To answer the Deputy, the school is managed by Tipperary Education and Training Board. It was transferred to us some years back and the entire centre is managed by Tusla. There are 14 staff in the school; teachers and special needs assistant, SNAs. I understand that in the entire centre there is approximately 60 staff. I am not 100% sure because we do not manage the care side. At this moment in time we are unaware of Tusla's plans. We have sought meetings on several occasions over the last weeks with Tusla. Only yesterday Tusla wrote to us. A meeting has been organised for Friday week. Some weeks back we also notified the Department on concerns we had with plans that Tusla may or may not have regarding the future development of the centre. It is currently a detention centre. It is currently a centre where young people are placed through the courts. By that very nature, students are at the centre for varying periods of time. We do not know what the future plans are for the centre and we have asked for clarification.

I appreciate that-----

Ms Fionuala McGeever

That is the latest and as much as I know.

In answer to the Deputy's second question, yes the staff are being paid and there are some students there. As we sit here I do not know how many students are there today.

Okay. If I interrupt Ms McGeever I am not being rude. As we are all aware we are caught for time all the time. If I interrupt the witness it is purely for that. Please appreciate that.

I am trying to help in this regard. I accept that this situation is not of the Tipperary ETB's making but it has to fund part of it and pay for components of this. It is rather odd that we have a scenario where the ETB is expected to pay out but there is a decision-making process going on in another State organisation that blocks the school from actually operating. There may be other legitimate reasons for that but the fact is that there is still a cost on the accounts of the ETB. Is this fair to say?

Mr. Liam McGrath

Yes.

Ms Fionuala McGeever

That is absolutely correct.

Can we evaluate how much that cost is?

Ms Fionuala McGeever

I would not have that figure to hand here but we would be able to estimate that the cost is the pay. All other grants to the school are processed from the Department to Tusla, not to us.

How many staff does the Tipperary ETB pay for at the centre?

Ms Fionuala McGeever

That is 14 staff.

How long has this been going on?

Ms Fionuala McGeever

We became aware of it in the middle of September and we alerted the Department immediately to it.

So it has gone on for a few months.

Mr. John Hogan

It has been identified by the board as a major risk. All board members are aware of it and concerned about it.

May I make a suggestion that may be helpful? Sometimes we can help witnesses. I propose that the committee writes to Tusla to ask for an explanation on this.

Definitely, yes.

I shall now move on to the chief executive. The witness is aware that I have asked a number of questions about head offices. In Tipperary the ETB has a head office in Nenagh and a sub-office in Clonmel. Which of the two is Ms McGeever's base or office?

Ms Fionuala McGeever

I go between the two offices.

Which is Ms McGeever's assigned office?

Ms Fionuala McGeever

The head office of Tipperary ETB is Nenagh.

Which is Ms McGeever's office?

Ms Fionuala McGeever

Both offices. I go between both offices. My headquarters is Nenagh.

Which is Ms McGeever's assigned office, if I could put it that way?

Ms Fionuala McGeever

I do not understand what the Deputy is saying.

It is a very simple question. Which office is Ms McGeever assigned to? Everyone is assigned to some office I presume.

Ms Fionuala McGeever

It is Nenagh.

The Secretary General, who is sitting in front of me, wrote to me that " ... it is the expectation and understanding of the Department that each Chief Executive would be headquartered in the head office ...". The Minister wrote to me and said that "... an estimate of time allocation would be: Nenagh (20%)". I asked the two previous witnesses, the chief executive of SOLAS and the Secretary General of the Department, about the period of time they would normally spend in their head office and they both said in excess of 70%, if I remember rightly. Is the Minister's comment accurate?

Ms Fionuala McGeever

No. In Tipperary it would be-----

Perhaps the Secretary General might verify if that is that case.

Mr. Hubert Loftus

The chief executive would be headquartered in Nenagh for travel and subsistence purposes also, so if the chief executive was based in Clonmel there would not be travel or subsistence arising from going from the headquarters.

The important point is about the head office. I shall move on now and maybe we could come back to that issue. Directors were appointed for ETBs across the board and three directors were appointed, like every other ETB, in Tipperary. Where are they based?

Ms Fionuala McGeever

The director of schools is based in the Nenagh office. The director of further education and training is based in the Clonmel office. The director of organisation support and development, OSD, is based in the Clonmel office.

Given that the Minister said to me the chief executive spends more time in Clonmel than in Nenagh is it not strange that we have a head office in one location and we have three people who work more out of Clonmel, out of a sub-office, than out of the head office? Is that not strange?

Ms Fionuala McGeever

The statutory obligations we must comply with and implement on a daily basis require the directors and me to be available to other centres at all times. We go between the two offices and we go to all other relevant meetings that are required of us, be they in the county or outside the county. That is an integral part of the work we do.

Okay fair enough. That is fine. Consider, however, if the Secretary General of the Department had his assistant secretaries based all around, or if the chief management team of the head of SOLAS was not based close to him.

It would be very strange if they said that that was the optimal way in which to run their organisation. It is very strange that three of the four senior staff of Tipperary ETB are based in a sub-office. What is the volume of staff in both locations?

Ms Fionuala McGeever

There are 37 staff based across the two offices.

How many are in each location?

Ms Fionuala McGeever

There are 21 in Nenagh and 16 in Clonmel.

The chief executive and two directors are based in Clonmel and one director is based in Nenagh. Does the staff complement of 37 include the chief executive and the directors?

Ms Fionuala McGeever

Correct.

From a performance point of view, how is it optimal that a management team is not based out of head office?

Ms Fionuala McGeever

Tipperary ETB is running effectively. Our audits have been completed and they are clean.

I am not asking about audits.

Ms Fionuala McGeever

We have adhered to our code of governance. We have audited our code of governance and we are in adherence in that regard. Tipperary ETB is one of the best performing ETBs in this country at this point in time.

I am aware of that because the turnaround in some of the schools in Tipperary has been excellent. I acknowledge that and I compliment the people who are working in them.

In terms of the Committee of Public Accounts, the financial auditing process is as much a part of its work as are accounts. From a performance point of view and a risk point of view, it cannot be optimal that the head office is separate to the office where four senior management personnel are based. In any walk of life that would not be right.

Ms Fionuala McGeever

The nature of our work is such that we are not always office based. Our work requires us to be involved in a variety of different inter-agency groupings. We have to represent the ETB on different groupings. In my opening statement I mentioned that we are aligned to the south east and the mid-west. There are a lot of demands on our time. This week alone I have not been in the Clonmel office. That is a fact.

I accept that.

Ms Fionuala McGeever

We are extremely busy people. We have a lot of work.

I am sorry, I am not being rude but I need to preserve my time and ask-----

Ms Fionuala McGeever

At the end of the day we are delivering the service in the manner in which it is required by the State to be implemented.

If I have to interrupt, I do so to save time more than anything else.

According to the information provided by the Minister Ms McGeever spends 20% of her time in Nenagh, 25% in Clonmel and 55% in other areas. Presumably, Ms McGeever agrees with that.

Ms Fionuala McGeever

The percentages that were supplied to the Minister are in writing to the Deputy.

Is Ms McGeever happy with them?

Ms Fionuala McGeever

I would love to be able to spend more time in both offices but the demands on my schedule do not allow me to do so.

Fair enough but are the percentages accurate?

Ms Fionuala McGeever

As per the information I have provided today, they would not reflect the position this week. The situation changes every week.

Fine but in general is the information provided accurate?

Ms Fionuala McGeever

It is difficult to give an accurate percentage because unlike clerical officers, I do not clock in and clock out. I cannot comment on it.

For the record, is Ms McGeever saying that the information provided to me in writing by the Minister to the effect that she spends 20% of her time in the Nenagh office, 25% in the Clonmel office and 55% in other areas is not accurate? Perhaps the Department officials would note that.

Mr. Hubert Loftus

Maybe I can clarify that for the Deputy. For the record, I have been informed by the ETB that while specific details on the time spent by the chief executive in specific locations are not recorded, an estimate of time allocation would be Nenagh, 20%, Clonmel, 25%; and others 55%.

I will note that for the record.

Mr. Hubert Loftus

I will come back to the committee with a note on the locations for the directors. In regard to the bases for the directors, in terms of Kilkenny and Carlow ETB, which appeared before the committee this morning and is seen as a good example of an ETB that works well in terms of completing its accounts, its chief executive and one director are in one location and two other directors are in another location.

That is not the case in this instance.

Mr. Hubert Loftus

Okay.

From a risk point of view in regard to data protection, at what location does the chief executive keep her files?

Ms Fionuala McGeever

There are files in all locations.

Where are the principal files held?

Ms Fionuala McGeever

The principal files are with the relevant functions, which are spread across the two offices. I do not have files personally. They are all with the heads of departments and their teams.

Ms McGeever as chief executive does not have any files.

I must ask the Deputy to conclude. He will have a second opportunity later to put more questions.

In regard to teaching allocations, we heard earlier from the Department officials that they have an audit process through which they ensure that allocations are distributed pro rata across ETBs and then pro rata across schools within each ETB. Is McGeever 100% confident that the allocations made internally by Tipperary ETB to the schools within its remit are pro rata to the volume and pupils and activities of individual schools?

Ms Fionuala McGeever

Teacher allocation at all times is in accordance with the directions given to us by the Department of Education and Skills.

Is that a "Yes?"

Ms Fionuala McGeever

Absolutely.

Allocations are pro rata by school?

Ms Fionuala McGeever

Correct.

I will come back to my other questions later.

I note Tipperary ETB has received a clear audit from the Comptroller and Auditor General, with no issues raised. Well done. Ms McGeever is the CEO of Tipperary ETB and Mr. Hogan is its chairperson. Perhaps the other two gentlemen would identify who they are and their roles.

Mr. Frank Bermingham

I am Frank Bermingham and I am director of organisation support.

Mr. Liam McGrath

My name is Liam McGrath and I am assistant principal officer, finance.

Thank you. I have two questions, one of which is in regard to the deficit, which we put to all the other ETBs. Can Ms McGeever clarify the nature of the deficit?

Ms Fionuala McGeever

The deficit is a carryover from 2012.

Ms Fionuala McGeever

As in the case of all ETBs we were instructed by the Department to adhere to the budget spend of 2012.

As in the case of the other ETBs, did it result from under-funding by the Department?

Ms Fionuala McGeever

Correct.

In regard to the note regarding a refugee resettlement programme, can Ms McGeever tell me a bit about that expenditure?

Ms Fionuala McGeever

It relates to groups of families from Syria that were relocated and settled in the Thurles area. The ETB was party to the inter-agency committee. We played our role in terms of-----

Was it a once-off involvement?

Ms Fionuala McGeever

No, the families are still there and they are still part of-----

In terms of the expenditure was that a one-off expense?

Ms Fionuala McGeever

Yes.

Mr. John Hogan

Yes. The local authority initiated it and the ETB participated. It was very successful.

How many families are involved?

Ms Fionuala McGeever

I cannot remember.

Mr. John Hogan

I am open to correction but I think there are 57 people involved. They were all family units.

Ms Fionuala McGeever

They are involved in our schools and adult education programmes, including the literacy programme and the English for speakers of other languages, ESOL, programme.

I welcome that. How was the grant of €37,500 spent?

Ms Fionuala McGeever

It would have been spent on tuition fees and literacy programmes such as the English for speakers of other languages, ESOL, programme.

Was that a once-off grant?

Ms Fionuala McGeever

The individuals have integrated into the regular schemes and programmes.

In regard to Kildare and Wicklow ETB, unfortunately, I cannot offer any congratulations in terms of its accounts. Mr. Ashe is the CEO. Perhaps the other officials would identify themselves.

Ms Bridget Daly Lynam

I work in corporate services as an administrative officer.

Ms Daly Lynam is very welcome.

Ms Catherine Doran

I am a finance officer.

Serious issues have been raised with the Comptroller and Auditor General's audit. Is that right? Matters have been raised. Is that correct?

Mr. Jim Ruttle

Yes.

That audit is on hold for the moment because an independent investigation is ongoing. Is that right?

Mr. Jim Ruttle

That is right.

We are here to ensure that public money is spent properly and, as best we can with our foolish questions, we try to hold witnesses to account. We look at governance, procedures and so on and we are always learning. The finance officer might be the best person to answer my questions in a second, but I will ask the vice chairman a number of questions first. Did Mr. Ruttle discuss with the board the witnesses' presence here today?

Mr. Jim Ruttle

Yes, the board is aware of it.

I ask Mr. Ruttle to listen to my question. Did he discuss it with the board? Was his presence before the Committee of Public Accounts an item on the agenda?

Mr. Jim Ruttle

Yes, it was brought up yesterday and discussed.

Was it an item on the agenda?

Mr. Jim Ruttle

No, not yesterday, but it was brought up at the meeting.

It was not an item on the agenda.

Mr. Jim Ruttle

No, it was not.

Why was that? Why was such a serious matter not an item on the agenda?

Mr. Jim Ruttle

I suppose the item had not come up that long ago and it was best that it be dealt with at the board meeting, and-----

Good, but why was it not put down as an item? Mr. Ruttle is before the Committee of Public Accounts.

Mr. Jim Ruttle

Yes.

I will speak to the vice chairman, if that is okay, for a moment. I will come to other witnesses in a second. Who made the decision not to put that serious item down on the agenda?

Mr. Jim Ruttle

I certainly was prepared to raise the issue because it had to be raised-----

When did Mr. Ruttle become aware that he had to appear here today?

Mr. Jim Ruttle

A request was made a while back.

Mr. Jim Ruttle

I cannot specify the exact time.

Two weeks, five weeks, four weeks - when?

Mr. Jim Ruttle

About two weeks.

This is a serious matter. I am not going into the independent investigation - I respect what is happening - but there is a board here, and it is the board I want to talk to. The board has oversight of the CEO and all the processes. When the Comptroller and Auditor General's audit has been held up, parked, there is an independent investigation of taxpayers' money. What does the board know about this? First of all, why was the witnesses' appearance before the Committee of Public Accounts today not put down as an item on an agenda for the board to discuss the serious issues involved?

Mr. Jim Ruttle

Issues relating to 2013-----

That is okay. I am not going to compromise anything. I am asking the vice chairman a very factual question. Why was it not down as an item on the agenda to show to the board and discuss with it?

Mr. Jim Ruttle

It was probably an oversight, but the decision was made that we would inform-----

Who made the decision not to put it down as an item on the agenda?

Mr. Jim Ruttle

I certainly did not.

Who runs the agenda?

Mr. Jim Ruttle

The agenda is normally done in consultation.

Good, and Mr. Ruttle is the main person.

Mr. Jim Ruttle

Yes.

Good. Did someone ask Mr. Ruttle whether KWETB's appearance before the Committee of Public Accounts should go down on the agenda? Did Mr. Ruttle say to the person who types it up that it should have been an item on an agenda?

Mr. Jim Ruttle

As I said, there might have been an oversight in that, but-----

I am referring just to Mr. Ruttle. Did he ask for it to go down as an item on an agenda?

Mr. Jim Ruttle

No, I do not think I did.

Had Mr. Ruttle any input into the opening statement?

Mr. Jim Ruttle

No. I am well aware of the items in it.

He had no input into this?

Mr. Jim Ruttle

No.

I thank Mr. Ruttle for the opening statement. I think it is four pages long. The issues regarding the Comptroller and Auditor General are not mentioned in it. Does Mr. Ruttle think that is good?

Mr. Jim Ruttle

Pardon?

Does Mr. Ruttle think that is a good way of doing business - an opening statement laid before the Committee of Public Accounts with no mention of the matters that have been raised? KWETB has - I do not know if it is called a qualified account. Perhaps the Comptroller and Auditor General could help me here. Was it a clear audit, with an opinion?

Mr. Seamus McCarthy

For 2013-14?

Mr. Seamus McCarthy

Clear.

Mr. Seamus McCarthy

No.

Was the concern in respect of 2015?

Mr. Seamus McCarthy

Yes.

Regarding the opening statement, did Mr. Ruttle not think it would be appropriate to put in under a risk or an alert that this matter is outstanding?

Mr. Jim Ruttle

The opening statement was essentially prepared by the chief executive, who is the chief accounting officer of the ETB.

Did the chief executive officer not think it would be appropriate to put in even two lines regarding a risk outstanding or a matter of such seriousness?

Mr. Seán Ashe

We were before the committee to discuss the 2013-14 accounts.

The KWETB was sticking to that.

Mr. Seán Ashe

That is right. That was the basis of the invite-----

I understand that.

Mr. Seán Ashe

-----and I immediately responded that I would be available, and I am here to deal with those issues.

Did Mr. Ashe stick in the word "advice" again?

Mr. Seán Ashe

Sorry?

Sorry, I know we are all tired. What is Mr. Ashe saying about advice?

Mr. Seán Ashe

No, when I was invited here-----

Mr. Seán Ashe

-----I replied immediately that I would willingly come in to deal with the 2013-14 accounts.

However, KWETB has put in more than the 2013 and 2014 accounts. It outlines lots of very positive things in this.

Mr. Seán Ashe

That is an outline of what the ETB is doing.

There is more than just the 2013 and 2014 accounts.

Mr. Seán Ashe

Yes.

KWETB chose to put in the good things, which is great, but it did not choose to put in a serious matter.

Mr. Seán Ashe

That matter is being dealt with separately under a section 40.

Mr. Ashe made that decision.

Mr. Seán Ashe

Yes.

I see. Let us go back to the board. Does Ms Doran advise the board? Is she on the board?

Ms Catherine Doran

No, I am not on the board; I am just a member of the administration staff.

Is she the finance director?

Ms Catherine Doran

No. I am the finance APO.

What does that mean?

Ms Catherine Doran

I work in the finance department, I head up the finance department, but I am not the director of organisational services, who would be ahead of-----

Ms Catherine Doran

Joe Kelly. He is not here today. He is a new appointment.

Have these outstanding issues been brought before the board at any stage in the past year or two? Has the fact that the Comptroller and Auditor General's audit could not be completed been discussed before the board in the past year?

Mr. Seán Ashe

That only surfaced, to the best of my knowledge - maybe the C&AG can help me here - in June.

Mr. Seamus McCarthy

June.

June of this year?

Mr. Seán Ashe

Yes.

Did it go down as an item on the agenda then for the board to make its members aware? These are just simple questions. Did it go down as an item for a board meeting - yes or no?

Mr. Seán Ashe

Yes.

How many times did it go down? Was it openly discussed at the board and were the members made aware of this very serious issue?

Mr. Seán Ashe

No.

Mr. Seán Ashe

We were still researching the responses to the C&AG, and the normal procedure is that one waits for the C&AG to give his-----

Mr. Seán Ashe

Yes?

These questions are for the vice chair, really, and the board.

Mr. Seán Ashe

Sorry.

No - I thank Mr. Ashe for coming in.

Mr. Seán Ashe

My apologies.

Not at all. Since Mr. Ashe has come in and told me, this is for the board to decide. Mr. Ashe is there in a paid capacity to serve the board and the board is there to serve the people. We are also here to serve the people so, in that regard, we are all servants. Did the vice chairman not think that this was serious enough to put down as an item and-----

Mr. Jim Ruttle

As far as I know, it arose under the finance report that there were issues outstanding and that the executive side was liaising with the C&AG on the matter.

Does Mr. Ruttle realise that he is ultimately responsible? The board has oversight of the CEO - any CEO - and the board is in the oversight position-----

Mr. Jim Ruttle

Yes.

-----with serious responsibilities. I have been on boards and I would not wish it on anyone. It is extremely difficult with very little training, which I will come back to in a minute. Does Mr. Ruttle realise the seriousness of his role and the board, and each member of that board?

Mr. Jim Ruttle

I think the members of the board of KWETB take their responsibilities very seriously.

Does Mr. Ruttle take his responsibilities very seriously?

Mr. Jim Ruttle

I try to, yes.

Great, so why did he not put this down as an item on the agenda and say, "Oh dear, we are in trouble here" or "There is an issue here, and we all need to be aware of it"?

Mr. Jim Ruttle

To my knowledge, it arose under the finance report, as it would.

Regarding the finance committee and the audit committee, how often has the audit committee met each year?

Ms Catherine Doran

I can jump in with that information if the Deputy wants me to. The finance committee has met three times this year so far, and one more meeting is planned.

Are there minutes for each meeting?

Ms Catherine Doran

Yes, and the committee gives a report. The minutes are not brought to each board meeting, but after each board meeting the committee will give a report.

At that finance committee would various issues be raised, including the outstanding report from the Comptroller and Auditor General?

Ms Catherine Doran

Yes.

Does Ms Doran attend those meetings?

Ms Catherine Doran

When invited. We are not normally members of the committee, but we attend if we are invited to do so.

Three meetings have taken place, there will be one more before the end of the year-----

Ms Catherine Doran

Yes.

-----and the minutes are not brought to the meeting but a presentation is made. I think we heard some other ETB say that as well.

There is an organisation support development, OSD, role. What is that?

Ms Catherine Doran

There is a director of organisation support and development.

Tell me about that role.

Ms Catherine Doran

I am not the OSD director.

Perhaps the chairman of the board could tell me.

Mr. Jim Ruttle

It deals with organisation, schools and support for the organisation. It is a recent appointment in our case. Perhaps the chief executive would outline the responsibilities of the OSD role. It is a very recent appointment.

A very recent appointment. I will leave that for a moment.

In Mr. Ashe's opening statement, he clearly told us that he has been given advice by Mr. Thorn, and questions have been put to which he cannot reply.

Mr. Seán Ashe

I have got legal advice on that as well.

When did you get the legal advice?

Mr. Seán Ashe

During the break.

That is new information.

Mr. Seán Ashe

I can provide it when I get it in hard copy. I can forward an email I received.

You have had a conversation with your legal adviser-----

Mr. Seán Ashe

I did, yes.

----while we were having our discussion.

Mr. Seán Ashe

Yes.

I shared with you the legal advice to the committee, which was that you are not legally prevented from answering the question, but what is your legal advice?

Mr. Seán Ashe

I am told I should not engage while there is a section 40 progressing.

That is your legal advice.

Mr. Seán Ashe

Yes.

Which you did not have earlier but you have got it now.

Mr. Seán Ashe

Yes, I have got it since.

Is Mr. Ashe in a position to answer any questions?

Mr. Seán Ashe

I can answer questions pertaining to my opening statements or the 2013-14 accounts.

Okay. Mr. Ashe got legal advice today.

Mr. Seán Ashe

Yes.

Mr. Ashe got Mr. Thorn's advice before this.

Mr. Seán Ashe

Yes.

That is okay. I ask Mr. Ruttle if that advice was discussed at board level?

Mr. Jim Ruttle

No, not to my knowledge.

It was not. The chief executive officer, CEO, and Mr. Ruttle are here to account to us. The CEO cannot talk really.

Mr. Jim Ruttle

May I interject for a moment? We came here and we brought our staff with us today, having done research on what we were asked to discuss, the 2013-14 accounts, that 18-month period of the transition period. Our staff have spent a lot of time and effort trying to get this together and to be as helpful as they can to the Committee of Public Accounts, for which I assure the Deputy we have the greatest respect. We were not informed of the development of delving into 2015 and the matters under investigation with the Thorn inquiry. I have advice as well on that.

What advice and from whom?

Mr. Jim Ruttle

Legal advice from our legal adviser.

During the period when we were in private session.

Mr. Jim Ruttle

Yes, I have legal advice.

You did not have it earlier but you have it now.

Mr. Jim Ruttle

I have it.

Mr. Ruttle said "our legal adviser", who is "our"?

Mr. Jim Ruttle

Our legal adviser?

I do not need the person's name but what does Mr. Ruttle mean by "our legal adviser"?

Mr. Jim Ruttle

The legal adviser to the Kildare and Wicklow Education and Training Board, KWETB-----

Mr. Jim Ruttle

-----who advises us.

Okay, Mr. Ruttle is chair of a board-----

Mr. Jim Ruttle

Yes.

-----and he got legal advice for the board today. Is that right?

Mr. Jim Ruttle

Yes. I have it.

When there was a break Mr. Ruttle went out and sought legal advice for the board.

Mr. Jim Ruttle

Yes.

Had Mr. Ruttle permission to do that?

Mr. Jim Ruttle

That is not the point. I, like others here today and our staff, would be definitely of the opinion that we were invited here to deal with the 2013-14 accounts. We would love to do that. Our officers are here to do that. We would dearly love to do that and deal with any other issues that arise later, and they will arise and we will be here again-----

Did Mr. Ruttle go out and get legal advice today for the board?

Mr. Jim Ruttle

Yes, from the legal adviser to the board.

That legal advice will have to be paid by the board.

Mr. Jim Ruttle

Yes.

Can Mr. Ruttle make that decision unilaterally without the board?

Mr. Jim Ruttle

We have to have legal advice, like the committee took legal advice itself this evening. We have to take legal advice. I have taken it and it is to defend the integrity of the Thorn inquiry. It is not that long and we are willing to be here-----

Just a minute. I am on record as saying that inquiry will take its course. I am not saying one thing about that inquiry. I am not sure why Mr. Ruttle was getting advice, I am simply asking him questions regarding his role as chairman of a board and that comes down to giving us confidence in regard to governance. Certainly I accept that he is here for the 2013-14 accounts but the issue that has arisen since leads to questions, and we have to ask questions about governance procedures. Mr. Ruttle went off today, of his own bat as chairman, to get legal advice that will be paid by taxpayers' money but he got it for the board, with no sanction from the board.

Mr. Jim Ruttle

I believe it is incumbent upon me as chairman of the board to seek legal advice and the board is aware of the legal advice.

Okay. Mr. Ruttle got advice from Mr. Thorn. He rang Mr. Ruttle as well, I think that is what Mr. Ruttle said earlier, is it not?

Mr. Jim Ruttle

No. He did not ring me.

That is okay. Therefore, Mr. Ruttle did not have any advice from him.

Mr. Jim Ruttle

He expressed general views.

What does Mr. Ruttle mean by saying he expressed general views?

Mr. Jim Ruttle

Of the nature of his inquiry and that kind of thing.

Mr. Jim Ruttle

In general, with the people as well.

I am just trying to establish clearly if Mr. Thorn spoke to Mr. Ruttle and if Mr. Ruttle shared that with the board or did Mr. Thorn speak with the board?

Mr. Jim Ruttle

Dr. Thorn - I believe he is Dr. Thorn - spoke at length to the board yesterday. Between him and our legal adviser, we had a meeting of four hours.

Mr. Jim Ruttle

Yesterday, yes. I was in receipt of an invitation to come here with our staff to deal with the 2013-14 accounts. Any other issues that arise post the production of the Thorn inquiry, I am available at any time-----

I understand all that.

Mr. Jim Ruttle

Do not level it on co-operation, Deputy.

That has been said and I accept that from you. I am not casting any doubt on that. I am just asking very specific questions. Mr. Ruttle had a four-hour meeting yesterday. Did he discuss with the board yesterday, or did the board discuss getting legal advice?

Mr. Jim Ruttle

We always have been and are in a position at the moment to have a legal adviser, and that is it.

Okay. In regard to governance, what issues arose in the 2013-14 accounts, if any, from the audit committee in terms of risk assessment?

Mr. Jim Ruttle

My knowledge of the 2013-14 accounts - again I could defer to somebody else - is that we are talking about delays in lodging accounts. The board is very conscious, and it was mentioned earlier today about the statutory requirements of a board to get things in on time, but-----

No, Mr. Ruttle-----

Mr. Jim Ruttle

-----I cannot alter the past; that is the problem.

-----that is not the question. The delays have been clearly set out by the Comptroller and Auditor General. I am accepting that in respect of 2013-14. My question was: what issues, risks, or conflicts of interest, if any, arose during that period of time? I am interested to know what happened and how Mr. Ruttle dealt with it.

Mr. Jim Ruttle

For starters, I would not be aware of any conflicts of interest in particular of that nature. I would not have been the chairman in 2013-14 either by the way. I am a much more recent vintage than that.

Mr. Ruttle is here to answer for 2013-14.

Mr. Jim Ruttle

We have staff here who are prepared to deal with 2013-14.

My question still remains who can answer that question? Is the Chairman indicating that I should finish?

The Deputy is on time.

Mr. Jim Ruttle

I will ask Ms Catherine Doran to do that.

Ms Catherine Doran

Does the Deputy want me to talk about the audit report for 2013-14?

I want Ms Doran just to answer my question. What issues, matters or conflicts of interest arose and how were they handled?

Ms Catherine Doran

There were no conflicts of interest raised in the audit report. There was one high level risk named, three medium level risks and a couple of low level risks named. The one high level risk was to do with payroll overpayments to a small group of staff, which has since been recouped. It was pointed out to the Comptroller and Auditor General at the time. The money has been recouped since. On the three medium level risks, if I can go through them-----

Ms Catherine Doran

-----one was money we had not recouped from the Department for two capital projects, the money for one of the projects has been since recouped in full and the money for the other one has been recouped, bar about €3,000 which we have since written off. On the other two areas of medium risk, one was that all bank balances for some of our schools were not included in the accounts. We responded that we would make sure to include that and we have since done a full audit of all bank accounts in schools. We are confident that in our later accounts all bank balances are there. The last medium risk was that in six instances of procurement there were no unsuccessful tenderers' letters kept on file. We have said that in future we will always keep the unsuccessful tenderers' letters on file. They are the only medium risk ones. I can go through the low risk ones.

No, that is okay. I will ask a final question. What training has the board got on governance issues?

Mr. Jim Ruttle

Sadly, not an awful lot in many ways.

Mr. Jim Ruttle

Can I make a general comment if the Deputy would be interested?

I am absolutely interested but I ask Mr. Ruttle to first answer my question on what training, if any, the members of the board got.

Mr. Jim Ruttle

I would imagine very little. Is that not correct?

Mr. Seán Ashe

Training was provided through Education and Training Boards Ireland, ETBI, and members were advised of it.

Mr. Jim Ruttle

It is voluntary.

It sounds very difficult, which is why I am asking about training. Huge issues arise for every board and these can be difficult to deal with. What training was provided by the Department?

Mr. Jim Ruttle

ETBI provided the training. Perhaps the chief executive could-----

No, I do not want the chief executive. He has taken a vow of silence for now.

Mr. Jim Ruttle

The ETBI would have run some training courses, but they are optional. People are not forced into it.

Did Mr. Ruttle identify training as an issue or risk to the board if it was not done?

Mr. Jim Ruttle

Training is certainly an issue, particularly when one has a new set-up as was the case here with the amalgamation of two counties - a much smaller board and fewer meetings.

Did Mr Ruttle listen to my question? Was training identified by the board members or by Mr. Ruttle himself as an issue that needed to be addressed?

Mr. Jim Ruttle

I would say so, yes. Members raised it as an issue, particularly members who might not have been involved in the old VEC system.

Absolutely. What was done about that then?

Mr. Jim Ruttle

To my knowledge, courses were made available by the ETBI, but we cannot force people to go.

I would first like to ask Mr. McCarthy how unusual it is to issue a formal audit query. He obviously has a lot of engagement with the entities he audits, but how unusual is it to take that step?

Mr. Seamus McCarthy

It is relatively unusual. If one looks, for example, at the annual report that we produce, each of the chapters would have been preceded by an audit query setting out findings and asking for comments and so on. If one considers that we have 20 chapters or so in the report, perhaps half of those would have been preceded by an audit query. That is on 41 Votes and that is quite a wide spectrum of spending. It is relatively unusual, but it is not a unique situation.

When the Comptroller and Auditor General had the engagement with, in this case, the KWETB, was it with the executive or with the board? Who was it with? What happens there?

Mr. Seamus McCarthy

In the normal case, the exchange would be with the accountable person, or an Accounting Officer if we were dealing with a Department. In a Department, of course, the Accounting Officer is the sole person who is accountable. In a board situation in a semi-State body, there is a different structure and there is an oversight function usually between the chief executive and the board. I would expect that, through the audit committee and the chief executive, the board would be kept informed of issues that are raised so that there would be no surprises.

I will return to that particular point in a few minutes.

I would like to ask Mr. Ó Foghlú about the formal inquiry that has been initiated in the Department. Is such a formal inquiry unusual? How often have such inquiries been initiated in the past five years?

Mr. Seán Ó Foghlú

This is the first inquiry under the ETB legislation. As Deputy Murphy is aware, the Department has had statutory investigations into the institutes of technology. We have also had a review of the handling of intellectual property generally in the higher education sector and a review into the University of Limerick. There were different bases but they were all investigation of sorts.

It is unusual. Regarding the Comptroller and Auditor General, has that happened? Is that unusual as well?

Mr. Seán Ó Foghlú

We have a close relationship with the Comptroller and Auditor General. We also have an early warning system so that we are aware of issues, whether it is through the Higher Education Authority, HEA, with higher education institutions or with ourselves on the ETBs. What caused us to eventually have a statutory investigation was that this was the first time that anything like that had happened in the ETB sector since ETBs were established.

The terms of reference were not cut and pasted. They were very deliberate.

Mr. Seán Ó Foghlú

It was quite a challenging job to draft the terms of reference.

I would like to ask Mr. Ruttle about the board and the issue of governance, and about the relationship between the board and the executive. Does the same legal adviser work with both?

Mr. Jim Ruttle

Yes.

Is there not a conflict or potential conflict there in the current environment?

Mr. Jim Ruttle

It has been said to us that the one person, group or company can advise both. Anybody in a private capacity can hire legal-----

Following on from some of the earlier questions, has there been a conflation of the board and the executive?

Mr. Jim Ruttle

Has there been a conflation?

Mr. Jim Ruttle

In conflict?

No. Is there a very clear separation between the board and the executive?

Mr. Jim Ruttle

I would say so, yes. The board operates as it should.

In terms of putting items on the agenda and being made fully aware of, for example, the issues raised by the Comptroller and Auditor General, how transparent was that for the rest of the board?

Mr. Jim Ruttle

I wrote to members of the board individually, explaining that a difficulty had arisen. That is what was done. I feel as if I may be treading into an area that-----

With regard to governance, was this a regular item for consideration on the board's agenda?

Mr. Jim Ruttle

Sometimes, Deputy, it was nearly the only item. It was a huge item.

Was Mr. Ruttle aware of the previous history in relation to the report done by the Comptroller and Auditor General on the Kildare VEC?

Mr. Jim Ruttle

I am from Wicklow, as the committee knows, so I was not aware of that report.

Was Mr. Ruttle not made aware of it?

Mr. Jim Ruttle

In very recent times. If the Deputy is asking if I was made aware before, the answer is "No".

Mr. McCarthy gave us dates for when the report was done and then it would have found its way to the board after that. Could he give us the date on which there would have been a debate here, for example?

Mr. Seamus McCarthy

I think it was February 2012 that it was discussed. It related to the 2010 financial statements for Kildare VEC.

The education and training boards were set up in 2013.

Mr. Seamus McCarthy

Yes, 2013.

Would that not have been put on a risk register? My question is for Mr. Ashe.

Mr. Seán Ashe

There was a new statutory basis from June 2013 and the risk register emerged from there. It is continually updated.

Were the items concerning procurement not very specifically put on a risk register? The letter we have from the Department states that the Department would continue to insist on adherence to proper procurement practices in VECs and to remind VECs of their obligations in that regard.

Mr. Seán Ashe

When we got down to work at the very outset of the formation of the new ETBs, policy documents were prepared on all governance areas. These were brought to the board and adopted by it.

Was there particular attention given that there had been an issue in Kildare? Was there particular attention to not letting this happen again? Did that arise? Was there a discussion of this?

Mr. Seán Ashe

From an executive point of view, yes. We were very conscious of the fact that we had been with this committee before and we did not want that to happen again. We are in a complex position so I am confining myself to where we were in 2013 and 2014. We produced the policies for operational purposes and the board got all of those policies. That is the basis on which we carry out our operations.

Was there any dialogue between the Department and the KWETB? This particular report had been produced so one would have expected that the Department would have had a particular concern to make sure it did not happen again.

Mr. Seán Ashe

Parallel with the work of the Comptroller and Auditor General, a targeted internal audit was conducted on key areas of our operations. Those audits went through 2013, 2014 and 2015. They dealt with particular aspects of our remit, how we carried them out and whether any exposure or risk was emerging from the methodologies used in-house.

What lessons were learned from this process conducted in 2010 that was bought into the KWETB? Was there a learning process on procurement, for example?

Mr. Seán Ashe

On the procurement side, honestly I cannot recall the issue because I did not brief myself on it. The Deputy is reading from a document of which I do not have sight. The procurement side issue that surfaced related to the sale, or potential sale, of property and the risk that came from that.

We understand the property issue. I remind Mr. Ashe that €1.9 million was spent on ICT and there were five transactions over €50,000. One purchase did not evidence tendering. There were 17 transactions of between €5,000 and €50,000. Five purchases did not have evidence of quotes sought. Of the €1.9 million, expenditure payments of more than €400,000 were made to one company that was formed by a person who had worked for a period in the VEC. There was a contract for computer maintenance that was a roll-over rather than seeking fresh tenders. There was a range of issues-----

Mr. Seán Ashe

All of those issues were dealt with, as far as I can recall, at a hearing of the Committee of Public Accounts and responses were offered on each and every one of them. I do not have the documents in front of me to respond to it.

The point I am trying to get to is that they were sufficient to have a special report done by the Comptroller and Auditor General. I suspect if someone has been invited in here once, one does not want to come back again.

Mr. Seán Ashe

I know. I agree with the Deputy.

I would have thought these issues would be indelibly marked on Mr. Ashe's brain not to allow this to happen again-----

Mr. Seán Ashe

Yes.

-----and that antennae would go up and the ETB would pay very strict attention to procurement-----

Mr. Seán Ashe

And we do.

-----as a consequence. I am trying to find out what governance aspects were specifically included to ensure this was not going to be something that would be repeated by the new entity.

Mr. Seán Ashe

I would like to see the response we made at the meeting of the Committee of Public Accounts. I am certain that many of the issues that arose in the report were dealt with satisfactorily following our visit here. As far as I can recall, there was a fairly detailed response to each item. Unfortunately, I do not have it to give the Deputy the information on what was the outcome, but I know we implemented procedures and policies to ensure we were carrying out our remit in accordance with the corporate governance policy in play at the time and in accordance with subsequent updated corporate governance policies.

Now we have an inquiry, and we will not have a discussion about that inquiry, with a very detailed set of terms of reference. One could assume there has been a failure by virtue of the fact there is a formal audit query and there is now an independent inquiry.

Has an instruction been given to each board member that he or she should not have discussions with other board members outside of the board and that they have been forbidden to have discussions with each other? Is that true?

Mr. Jim Ruttle

I do not think that can be done. I do not think that is practical. Some board members have cited something of that nature, but I do not think it can be done. Board members can of course speak to each other.

Has an instruction been given?

Mr. Seán Ashe

An email was issued of that nature, but I do not see how. Board members can of course talk to each other. There are structures. We cannot have a situation where there is a parallel organisation, but I do not see how anyone can limit communication.

Who issued the email?

Mr. Jim Ruttle

I think it was one of the directors.

So it has come from the executive.

Mr. Jim Ruttle

The executive side.

I want to ask about the legal advice. I understand the ETB has new legal advisers. Are the legal advisers engaged to advise the ETB, the board or the executive? Is there conflating whereby they are one and the same thing? Is there the natural tension that should be there in the arrangements being put in place?

Mr. Jim Ruttle

I do not detect that.

There should be tension. That is the point I am making. The board is supposed to be holding the executive to account. It is supposed to be satisfied about issues. It is not just supposed to take it from the executive that it received legal advice that it can and cannot do certain things. It strikes me there is a significant governance deficit that requires immediate attention and I have very serious concerns about the same legal advice being available to both in this scenario. I do not think it is good enough. All it will do is continue a problem that is evident now. I do not see how the executive has been held to account by the board in this type of environment. It is like it is being contained rather than being held to account.

I do not think I have ever questioned witnesses who have come before the Committee of Public Accounts at 7.15 p.m. on a Thursday. If we stay any longer, it is beds we will want. That is the way we are going. At this hour of the night everyone is getting tired so I will be quick and fast. I will address my questions to both ETBs. Why were the audits late, in Tipperary's case in 2015 and in the case of Kildare and Wicklow ETB in 2013 and 2014? Will the witnesses give us the reason they were so late?

Mr. John Hogan

I will go back for a second to what the Chairman said. He asked earlier whether there were staffing issues. He also said how important it is to fulfil statutory duties. He is absolutely correct. When I studied the code of governance for State bodies, it stated "comply or explain". In our case, we would like to explain there were staffing issues. We do not blame the Department or anybody for this. We went through a serious recession. There was an embargo and a moratorium on staff. The two VECs in Tipperary were merged and we were not given the support we have now, such as a director of organisational support, a director of schools and a director of further education and training. We had no senior middle management team as such, and we had two financing systems in operation, one in Nenagh and another in Clonmel. Both of these were manually done through spreadsheets. We had no high speed connection between the two offices. We had a serious lack of IT infrastructure and a lack of staff due to the moratorium. We were also constrained by the 90 km between the offices.

We think we had a fantastic achievement in submitting our accounts in 2015. I say "fair play" to Carlow-Kilkenny ETB because it is an excellent board. Its final accounts for 2015 were submitted approximately two weeks before our final accounts were submitted. I know its draft accounts were in by the statutory deadline. We have been contending with infrastructure and staff deficits. The 2016 accounts for Kilkenny were submitted two or three weeks ago. We are told that our accounts will be done tomorrow. Thanks to the Department, at long last we have the staff and the high-speed interconnection between the offices. We have everything in place now. I am setting a constructive challenge to be met by our board this time next year. Kilkenny pipped us in 2014 and 2015, but in 2016-----

It was not the first time.

Mr. John Hogan

We will challenge Kilkenny this time. We welcome the questions. We are glad to be able to clarify them. We are doing everything we can. Our staff are excellent. We have an excellent relationship. We had 13 training sessions on corporate governance for our board over the past three years. We really take it seriously. We are delighted to have an opportunity to come here. If there is any feedback to the effect that we need improvement, we will welcome and listen to it and take it on board. That is all I will say.

Mr. Jim Ruttle

For a start, we were dealing with an 18-month period. It was an overlapping period. That made it difficult. There were different systems of accounting and codings, etc., in the two different structures. This caused immense difficulty from an organisational perspective. As my colleague from Tipperary has outlined, we had strong staffing issues as well. There was organisational change. At the same time, we were taking over the training aspect. We cannot alter the past, but we can try to make the future better. We are fully committed to ensuring the accounts that are coming up now will be delivered on time. That was a particularly traumatic period of change. We were getting to know each other. Different structures within the system were based on codes and all sorts of things. Codes X and Y had to be changed to code W to unify them. All that kind of thing had to be done. This made it very hard. The then director of finance outlined to us at various meetings just how difficult this was. It was a sort of nightmare situation to get it all together. The board is hugely conscious of the statutory obligation to get things in on time and to do it in that way. I cannot alter the past. As the chairman of the board, I can give a commitment that we will do everything in our power. I have received constant commitments that they will be on time and things will work from now on in that regard. That is where we are. The issues we ran into were similar, to a great degree, to the issues encountered by our colleagues in Tipperary.

What plans do Mr. Hogan and Mr. Ruttle have to create more efficiencies within their respective ETBs? Since they became the chairpersons of the ETBs, what have they done to ensure both ETBs are operating effectively? This question is along the same lines. What have they done? What are they going to do in the future to make sure there are efficiencies?

Mr. Jim Ruttle

I cannot speak for my friend from Tipperary, but on our side we have certainly told the executive side to get things in place and get things together. There is no longer a transitional period. The transitional period is over. The 18-month period has been replaced by a 12-month period. We have asked the executive side to try to get it right. I have received commitments that it will work as it should on this occasion and going forward. Public bodies should lead the way in submitting accounts. They should be an example of how things should be done. The education sector has gone through a huge period of change with amalgamations, etc. Sadly, this kind of thing can happen. The Chairman pointed out earlier that the statutory obligation should be the first priority. I could not agree more. As far as I am concerned, the statutory obligation to get accounts in here should be the first priority. We are working very hard at Kildare-Wicklow ETB to make sure that happens. The excuses run out. We need to have it in place. We have to do it. I believe we have dedicated and highly committed staff who go the extra mile or work the extra hour. They rely on distances and size and all. They are very good. I believe that from now on, the issue before us will not be an issue again.

Mr. John Hogan

The simplest way of saying it is to mention that when we carried out a review in September 2016 of how our functions were comparing with the code of governance, we found we were generally compliant. We did it again in 2017. I also initiated a board self-evaluation programme. We looked at what we were doing. We found a couple of things we need to work on. We have not yet finished our statement of strategy. We have not developed a new programme for scholarships. We are still using the programmes that were there in the VEC era. Other than that, we believe we have done everything as it should be statutorily done. We have set up a finance committee and an audit committee. All the other things have been done. We have done our annual report. We have the power to borrow money. We have adopted an annual service plan. We have adopted a management risk framework and a code of conduct. We think we have audited our compliance with the code of governance.

Okay. My time is not up yet. I want to ask about the Comptroller and Auditor General because there is a conflict here. There is an issue. An investigation is going on. Do the ETBs have any issues with what the Comptroller and Auditor General does and the functions he carries out? Are they playing their part in co-operating with him?

Mr. John Hogan

Our audit committee carries out its functions. The only issue that has come up to me from finance or audit personnel is a feeling that more internal audits from the internal audit unit would be desirable. They would prefer more areas of the work they do to be examined so that deficits like those that have been highlighted today by this committee can be picked up on. That is what we would like. I understand that more staff are being employed. Maybe Mr. Loftus will comment on that.

Mr. Hubert Loftus

We are strengthening the internal audit unit. Traditionally, that function was carried out by one director and three internal auditors. A fourth auditor would have been in the City of Dublin ETB. We are building up that unit so that it comprises one director and seven internal auditors. As part of the recruitment process, there were interviews for some of those posts yesterday.

Has that been done on foot of a view in the Department that it is needed because the internal audit function has not been sufficiently efficient up to now? Was there a question mark over the way the audits were being done?

Mr. Hubert Loftus

Up to this point, we would have been conscious of the need to strengthen the unit by building it up as part of a suite of measures aimed at strengthening corporate governance. When we had gaps in the past, we outsourced the audit service to ensure that we had an appropriate level of function in that respect. Over the past three years, approximately 60 internal audit reports were done for the entire sector. We want to build that up further.

Mr. Jim Ruttle

From our point of view, the Office of the Comptroller and Auditor General is very professional and focused. We are there to co-operate fully. We have no reservations about how the Office of the Comptroller and Auditor General operates. It is incumbent on all of us in our own boards to make sure we have operational structures in place that are fit for purpose and deliver on time. The system that operates has to be correct for what needs to be done.

I would like to ask about overdrafts and loans. This issue was mentioned by the Chairman. What structures or procedures are in place for the ETBs to get loans or overdrafts? Some ETBs could run amok when borrowing money. It is easy to borrow money, but trying to pay it back is another thing. What kind of limitations are in place with the Department? How are the ETBs sanctioned for loans or overdrafts? Borrowing money is a dangerous area that needs a great deal of scrutiny and oversight.

Mr. John Hogan

We sought approval to get a loan or an overdraft if needs be. The deficit from the Department that we are currently trying to hold means it is not easy to have our cashflow in order. We got permission to have an overdraft or loan if needs be, but we have not actually used it. We have no loans.

Tipperary ETB has no loans.

Mr. John Hogan

No.

When I glanced through a document today, I saw that the ETB in Dublin has €2.5 million of a loan or overdraft. The Comptroller and Auditor General might be able to tell me whether this is right. I do not have the document in question in front of me.

Mr. Seamus McCarthy

I do not have the details in question.

Mr. Hubert Loftus

I can clarify the matter somewhat. There is a difference between having a deficit in a funding programme and having a loan. A deficit can be managed through cashflow. That is where deficits might have been mentioned by the Chairman.

Are there loans, as such, held by Education and Training Boards, ETBs?

Mr. Hubert Loftus

Loans can arise. ETBS are required to come to us for approval of a loan if it is deemed necessary for an overdraft facility. That might arise on occasion if it is deemed appropriate and if cashflow is not sufficient to manage the day-to-day-----

The Department has to sanction it, is that correct?

Mr. Hubert Loftus

That is the requirement under procedures, but that would be a rare event. There are deficits, which have their origins in the budget cuts that were made in order to ensure that funding could be managed. Those cuts were applied to the ETB sector, the primary school sector, the voluntary school sector and the other sectors.

Mr. Jim Ruttle

We have no loans. We have been sanctioned to borrow, but we have not had to do so.

I want to ask about information and communications technology, ICT, which the witnesses have made a lot of play about today. Can they explain how the operations have been enhanced? Witnesses spoke about having to have IT systems put in place when bodies amalgamated.

Mr. John Hogan

I might ask Mr. Frank Bermingham to answer that.

Mr. Frank Bermingham

We had two different systems in the old VECs, in Tipperary South and and Tipperary North. They were based on the same platform but had a different structure. The database was amalgamated at the end of 2016. As we said in our opening statement, 2017 is the first full year of operating on the amalgamated database. We think that will add to the efficiency of producing the accounts.

Two of the other main ICT initiatives were also mentioned in the opening statements. We have introduced a system called Way 2 Pay, which allows parents and students to pay contributions online. The benefit of this lies in taking a lot of cash out of the schools and reducing the amount of money in the school bank account, which was a big objective of the Comptroller and Auditor General. The other initiative is a system called DCS, which allows our part-time staff to claim their hours electronically. Those two systems have been successful, but there may be tinkering around the edges a little bit. The main system is the same one that we have had for a number of years. The big change in the last 12 months is that we have amalgamated the two databases, which will lead to some efficiencies.

My last question is about the merger of ETBs. Has the learner been affected in any way? How are the ETBs improving services provided to the learner through this better system that is now in place?

Mr. Seán Ashe

The service we are giving to our schools is second to none. I think it has improved. The main focus is on the learner, whether they are primary, post-primary or adult. Going through Kildare and Wicklow ETB's operations, one will find very positive observations on the way the learner is engaged with, the supports we give the learners and the supports we give our staff so that they can support the learners. That is what it is all about. I emphasise the efforts that have gone in at school level in particular. Our schools are the schools of choice in the vast majority of our locations. That makes its own statement, that is, that the emphasis has been on the delivery of a quality learner experience. The ethos that we have created is one where students want to go to school, want to be in school and want to learn. That is demonstrated in the reports we get at board level from our schools.

At school level, a lot of work goes into analysis and self-evaluation. We are among the first to bring in self-evaluation at school level, conducted by all parties. From an efficiency point of view, we are waiting for a fit-for-purpose IT system. It is taking longer than expected because of the process that must be gone through at national level. The Secretary General made reference to that in his opening statement. However, what we have done in-house is to bring in new systems to minimise the workload in trying to account for, as the chairman from Tipperary said, large volumes of cash coming in from schools. We are trying to eliminate that. This has spread to nine of the other ETBs.

Kildare and Wicklow ETB has one of the best records where paying our creditors on time is concerned. Some 85% of our creditors are paid within a two-week period, which is a fairly high success rate and one of the highest in the country.

On the risk register side, we have been able to track systems and reduce many of the risks. Our insurers tell us that we have brought our claims-to-premium ratio down to 82% or 83%, which is one of the best in the public sector. The IT systems are needed to track, to see what is going on out there and to give management good, regular updates on the issues as they emerge.

There is an Office of Government Procurement, OGP, procurement taking place for a new purchase-to-pay card system. As was noted this morning, that will provide an opportunity for the local school to purchase locally by, for example, buying goods in the local supermarket. One of the big criticisms that we have had of the OGP's "big bang" approach is that the local supplier lost out. I hope that the purchase-to-pay card system will bring some needed money back into the local economy because schools have a lot of relationships and contacts with local providers.

I thank the witness for telling us that. I had not heard of that. We will send a letter seeking information on that. That sounds like great news.

Local authorities should operate in the same way. I am always hearing that local people lose out to-----

There is something afoot. I had not heard about that before, and we will write to the Department of Public Expenditure and Reform for more information on that. I call on Deputy Kelly.

I wish to address the Kildare and Wicklow ETB. I am not being facetious in this, but it goes without saying that it will probably have to keep an eye on legal fees going forward.

I appreciate that both chairs have said that there is a learning process in the role around the boards and always trying to improve. I appreciate those comments. I think they are very welcome. Obviously as part of this process we will be writing up a report, and we will send it to the Department of Education and Skills and to all ETBs. We will expect the witnesses to take due cognisance of what we say in this, the only constitutionally mandated committee in the country.

To save time, I will ask for a written response to these questions, or we will be here all night. I request that both ETBs outline the financial savings that they feel have been made yearly since 2013 because of the amalgamation, in total rather than in individual areas. By the way, if witnesses feel that the merger has in essence cost money, by all means they should say that as well.

I have already brought up the issue of expenses, so I will not repeat that. My colleague, Deputy MacSharry, has asked about that and I have expanded on it.

I also request that the witnesses outline in writing what their key performance indicators are, how they manage them and how long they have been in place for. I presume they have been in place for years. Next, I would like the witnesses to confirm that all staff, from the level of school principal and higher executive officer rank upwards, receive induction training and corporate governance training. I would like an outline of how that happens. I presume they do receive training and it is at the appropriate level because nowadays there is a governance responsibility at all levels.

I have a few specific questions, and then one comment to my colleagues in Tipperary. How many jobs were advertised externally in recent years? Why were they advertised externally as opposed to internally, or is it the case that they were advertised internally and there were not enough quality candidates?

Ms Fionuala McGeever

A range of jobs on the training side have been recently advertised externally. They were sanctioned by the Department and SOLAS and required to be externally advertised. One administration post was externally advertised in recent times. An internal competition took place for that post but no candidate was recommended and, with the permission of the Department, it was externally advertised. A person accepted the post and secondment arrangements were put in place.

What grade is the post and where is it located?

Ms Fionuala McGeever

It is at assistant principal officer, APO, level and located in Clonmel.

I appreciate I asked questions of SOLAS earlier regarding the new training centre being set up in Thurles and it will come back to me on the general issue. Is it a condition in the contracts of the few training staff who are currently getting internally-advertised positions that they would potentially have to move to Thurles after taking up the role?

Mr. John Hogan

It is. When we were given------

I am just trying to get the facts. There is no hidden question.

Mr. John Hogan

------an allocation for training we had many discussions. We first applied for an apprenticeship programme and there was an expression of interest invited and we applied. When we looked at various centres, in consultation with SOLAS staff, we eventually settled on a fantastic facility in Thurles.

I appreciate-------

Mr. John Hogan

We could not interview people without stating that they may be moved to Thurles because it was identified that------

I appreciate that.

Mr. John Hogan

The job advertisements informed applicants that, if successful, they would start in our Clonmel office but we envisaged that they may move to Thurles or Nenagh. It was not exclusively to one place but, rather, that they may be located anywhere in the county. I did the interviews and I said that to each applicant and we discussed it. It was part of our move------

A successful applicant could be moved anywhere.

Mr. John Hogan

Anywhere in the county.

It said that in the job advertisement.

Mr. John Hogan

We asked people and one or two said-------

The advertisement did not just say there was a possibility of being moved to Thurles.

Mr. John Hogan

No, it said there was a possibility of being moved anywhere in the county. I mentioned to each applicant the towns to which they may be moved and asked how he or she would feel about that. One applicant said he or she would be willing to work only in Clonmel. We asked the question for that specific reason. Our aim was to have a training centre but we were not 100% sure where it was going to be.

I offer my congratulations to Tipperary ETB on winning the expression of interest. When was the decision to locate in the building in Thurles made?

Mr. John Hogan

The decision was made following an extensive process.

I asked for the date on which it was made.

Mr. John Hogan

I have it here somewhere. One of the other witnesses might have it.

Ms Fionuala McGeever

The decision was approved by the Department and SOLAS. Mr. Bermingham has the dates.

Mr. Frank Bermingham

It was approved by our committee on 4 April 2017.

By the committee.

Mr. Frank Bermingham

Yes.

What committee?

Mr. Frank Bermingham

The board of the ETB.

And was the board informed on that date of the costs of rent and so on, or when were they informed of that?

Mr. John Hogan

I cannot remember. I will come back to the Deputy on that point. The board would be kept up to speed on everything. Mr. Bermingham might have that information.

Mr. Frank Bermingham

The board was given an indication of the costs. We had not finalised an agreement at that stage------

The question for Mr. Bermingham is very simple: when was the board told of the costs that would be involved?

Mr. John Hogan

The board was told that we looked at several centres in Thurles and the cheapest one-----

Only in Thurles.

Mr. John Hogan

We looked at other areas as well but when we, in consultation with SOLAS, finally decided upon Thurles, the cheapest centre we could find that was not suitable was €10 per square foot. We told the board that our preferred location would be considerably cheaper. It ended up being €6.65 or €6.50 per square foot. The exact details had not been worked out at that stage.

That is fine. All I really wanted------

Ms Fionuala McGeever

The board of Tipperary ETB was informed at all times and at every meeting about the progress.

I asked a very specific question. Mr. Bermingham gave me the dates and I want him to tell me when the board was made aware of the cost.

Mr. Frank Bermingham

I am relatively sure it was in June but I will confirm that.

Mr. Frank Bermingham

Yes, June.

I have to do my public duty. Some great work has been done by the ETB in Tipperary. I see the evidence of that every day. There are some incredible statistics and people. However, a number of people who work in its head office have expressed deep concern for many different reasons about the head office and where it is going. It is not a small number of people. In particular, concern has been expressed that three of the four senior people in the organisation are not based at the head office. I would be failing in my duty and would not be comfortable to leave here without raising that issue with the Chair. I ask that he take it on board. We are all on a learning curve or whatever the expression is that was used earlier. These are not just my views, they are the views of several people. That concern creates a risk in terms of the administration of the ETB, as does the concern that those at the most senior level in the organisation are not based in the head office and very little time is spent there by the chief executive. I express that view on behalf of those who have approached me in regard to the issue on several occasions.

Mr. John Hogan

The Deputy directed the question at me and, therefore, I will------

I did not ask a question; I made a statement.

Mr. John Hogan

The Deputy made his point and we will take it on board.

I thank Mr. Hogan.

Ms Fionuala McGeever

I go between both offices. There is no risk. We have a very robust risk register in Tipperary ETB. All senior staff go between the two offices. There is no risk. The job is done every single day. We do not have any additional office space in Nenagh. There are no tables or chairs there at which people can sit. My office has to be used for interview purposes because we are landlocked and cannot go up or down. However, we are in negotiations with various people in Nenagh via an auctioneer for several places for development of the further education centre and, possibly, a new head office. We have put the Department on notice that we need additional support in that area. It is a significant problem that the offices in Nenagh currently restrict how many people we can place there and so on. That has to be put on the record. It is not that we do not want to place people in Nenagh but that we simply do not have the space. We are desperately trying to address that.

I ask the Department to take note of all contributions and, in particular, what I have said and the documentation and the letters that have come from the Department to me on this issue.

I have a final question which Mr. Loftus may be able to answer. He twice mentioned an internal audit unit. Is that in the Department or in each ETB?

Mr. Hubert Loftus

It operates as a shared service for all ETBs.

How many staff will it have?

Mr. Hubert Loftus

For administration and salary purposes, it is housed via the Cavan Monaghan ETB. The auditors in the advanced service will be based around the country------

If there is a requirement in three or four counties for work to be done at ETBs, who decides which gets priority?

Mr. Hubert Loftus

A work programme has been drawn up and there is an oversight steering group chaired by an------

I ask Mr. Loftus to send the committee a note on the issue. I would hate to think an ETB felt it needed an internal audit and the auditors were working elsewhere.

Mr. Hubert Loftus

No, it is a central work programme overseen by an external person.

Mr. Loftus will send us a note in that regard.

Mr. Hubert Loftus

We will send a note.

I am worried that ETBs would feel they have less control over an internal audit. Does Mr. Loftus understand my question?

Mr. Hubert Loftus

I do.

We will now conclude the meeting. Does the committee agree to dispose of the Tipperary ETB 2015 financial statements? Agreed. I do not propose to dispose of the Carlow Kilkenny ETB 2014 financial statements because the investigation under way may examine a period prior to 2015.

Mr. John Hogan

It is Kildare and Wicklow.

I meant to say that but I am confused at this hour of the night. On behalf of the committee I thank our witnesses from the Departments of Education and Skills and Public Expenditure and Reform, SOLAS and the four education and training boards. Is it agreed to dispose of the SOLAS accounts? Agreed. I thank the witnesses for their attendance and the Comptroller and Auditor General and his staff. We will have representatives of An Garda Síochána before us at our next meeting.

The committee adjourned at 7.50 p.m. until 9 a.m. on Thursday, 23 November 2017.